Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2021shares | |
Entity Addresses [Line Items] | |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2021 |
Entity Central Index Key | 0001671502 |
Entity Registrant Name | Quoin Pharmaceuticals, Ltd. |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Entity File Number | 001-37846 |
Entity Incorporation, State or Country Code | L3 |
Entity Address State Or Province | IL |
Entity Address, Address Line One | Azrieli Center, Round Tower |
Entity Address, Adress Line Two | 30th Floor 132 Menachem Begin Blvd |
Entity Address, City or Town | Tel Aviv |
Entity Address, Postal Zip Code | 6701101 |
Entity Address, Country | IS |
Title of 12(b) Security | American Depositary Shares |
Trading Symbol | QNRX |
Security Exchange Name | NASDAQ |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Document Accounting Standard | U.S. GAAP |
Entity Common Stock, Shares Outstanding | 3,354,650,799 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Document Fiscal Period Focus | FY |
Amendment Flag | false |
Auditor Name | Friedman LLP |
Auditor Location | East Hanover, New Jersey |
Auditor Firm ID | 711 |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Contact Personnel Name | Dr. Michael Myers |
Entity Address, Address Line One | 42127 Pleasant Forest Court |
Entity Address, City or Town | Ashburn, VA |
Entity Address, Postal Zip Code | 20148 |
City Area Code | 703 |
Local Phone Number | 980-4182 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash | $ 7,482,773 | $ 323,832 |
Prepaid expenses | 1,015,474 | |
Deferred offering costs | 141,338 | |
Total current assets | 8,498,247 | 465,170 |
Intangible assets, net | 808,604 | 912,648 |
Other Assets | 50,000 | |
Total assets | 9,356,851 | 1,377,818 |
Current liabilities: | ||
Accounts payable | 923,239 | |
Accrued expenses | 1,685,409 | 960,848 |
Accrued license acquisition | 250,000 | 875,000 |
Accrued interest and amounts due under convertible notes payable | 743,840 | 47,041 |
Due to officers | 4,723,732 | 4,888,913 |
Convertible notes payable | 1,213,313 | |
Warrant liability | 373,599 | |
Total liabilities | 8,699,819 | 7,985,115 |
Commitments and contingencies | ||
Shareholders' equity (deficit): | ||
Treasury Stock, 2,641,693 ordinary shares, at cost | (2,932,000) | |
Additional paid in capital | 31,659,017 | 100 |
Accumulated deficit | (28,069,985) | (6,607,397) |
Total shareholders' equity (deficit) | 657,032 | (6,607,297) |
Total liabilities and shareholders' equity (deficit) | 9,356,851 | 1,377,818 |
ADS | ||
Shareholders' equity (deficit): | ||
Ordinary shares, no par value, 12,500,000,000 ordinary shares authorized - 3,354,650,799 and 1,201,460,800 (8,386,627 and 3,003,651 ADSs) ordinary shares issued and outstanding at December 31, 2021 and 2020, respectively | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Ordinary shares, par value | $ 0 | $ 0 |
Ordinary shares, shares authorized | 12,500,000,000 | 12,500,000,000 |
Ordinary shares, shares issued | 3,354,650,799 | 1,201,460,800 |
Ordinary shares, shares outstanding | 3,354,650,799 | 1,201,460,800 |
Treasury Stock, ordinary shares | 2,641,693 | |
ADS | ||
Ordinary shares, shares issued | 8,386,627 | 3,003,651 |
Ordinary shares, shares outstanding | 8,386,627 | 3,003,651 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue | $ 0 | $ 0 | $ 0 |
Operating expenses | |||
General and administrative | 4,499,923 | 1,425,855 | 1,514,751 |
Research and development | 1,562,927 | 244,155 | 45,650 |
Total operating expenses | 6,062,850 | 1,670,010 | 1,560,401 |
Other expenses | |||
Fair value adjustment to convertible notes payable | 1,250,000 | 378,333 | |
Warrant liability expense | 12,784,329 | ||
Financing expense | 275,000 | ||
Interest expense | 1,090,409 | 47,021 | |
Total other expense | 15,399,738 | 425,354 | |
Net loss | $ (21,462,588) | $ (2,095,364) | $ (1,560,401) |
Loss per share | |||
Basic | $ (0.01) | $ (0.70) | $ (0.52) |
Fully-diluted | $ (0.01) | $ (0.70) | $ (0.52) |
Weighted average number of shares outstanding | |||
Basic | 1,584,905,594 | 1,201,460,800 | 1,201,460,800 |
Fully-diluted | 1,584,905,594 | 1,201,460,800 | 1,201,460,800 |
ADS | |||
Loss per share | |||
Basic | $ (5.42) | $ (0.70) | $ (0.52) |
Fully-diluted | $ (5.42) | $ (0.70) | $ (0.52) |
Weighted average number of shares outstanding | |||
Basic | 3,962,264 | 3,003,652 | 3,003,652 |
Fully-diluted | 3,962,264 | 3,003,652 | 3,003,652 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders Equity (Deficit) - USD ($) | Common Stock | Treasury Stock | Additional Paid In Capital | Accumulated Deficit | ADS | Total |
Balance at beginning of year at Dec. 31, 2018 | $ 100 | $ (2,951,632) | $ (2,951,532) | |||
Balance at beginning of year (in shares) at Dec. 31, 2018 | 1,201,460,800 | 3,003,652 | ||||
Net loss | (1,560,401) | (1,560,401) | ||||
Balance at end of year at Dec. 31, 2019 | 100 | (4,512,033) | (4,511,933) | |||
Balance at ending of year (in shares) at Dec. 31, 2019 | 1,201,460,800 | 3,003,652 | ||||
Net loss | (2,095,364) | (2,095,364) | ||||
Balance at end of year at Dec. 31, 2020 | 100 | (6,607,397) | $ (6,607,297) | |||
Balance at ending of year (in shares) at Dec. 31, 2020 | 1,201,460,800 | 3,003,651 | 1,201,460,800 | |||
Net loss | (21,462,588) | $ (21,462,588) | ||||
Conversion of "2020 Notes" into ordinary shares | 1,213,313 | 1,213,313 | ||||
Conversion of "2020 Notes" into ordinary shares (in shares) | 25,913,600 | 64,784 | ||||
Sale of equity securities, including conversion of "Bridge Notes" | 17,000,000 | 17,000,000 | ||||
Sale of equity securities, including conversion of "Bridge Notes" (in shares) | 1,710,500,800 | 4,276,252 | ||||
Costs associated with sale of equity securities | (1,897,126) | (1,897,126) | ||||
Merger recapitalization of Cellect | $ (2,932,000) | 2,932,000 | ||||
Merger recapitalization of Cellect (in shares) | 416,775,599 | 1,041,939 | ||||
Reclassification of warrants upon issuance of exchange warrants | 12,410,730 | 12,410,730 | ||||
Balance at end of year at Dec. 31, 2021 | $ (2,932,000) | $ 31,659,017 | $ (28,069,985) | $ 657,032 | ||
Balance at ending of year (in shares) at Dec. 31, 2021 | 3,354,650,799 | 8,386,627 | 3,354,650,799 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows provided by (used in) operating activities | |||
Net loss | $ (21,462,588) | $ (2,095,364) | $ (1,560,401) |
Fair value adjustment to convertible notes payable | 1,250,000 | 378,333 | |
Warrant liability expense | 12,784,329 | ||
Financing expense | 275,000 | ||
Amortization of intangibles | 104,043 | 104,043 | 20,710 |
Changes in assets and liabilities: | |||
Increase in accounts payable and accrued expenses | 1,347,801 | 227,313 | 240,833 |
Increase in accrued interest | 696,799 | 47,042 | |
Increase in prepaid expenses | (715,474) | ||
Net cash used in operating activities | (5,720,090) | (1,338,633) | (1,298,858) |
Cash flows used in investing activities | |||
Payment for license acquisition | (625,000) | (125,000) | |
Net cash used in investing activities | (625,000) | (125,000) | |
Cash flows provided by financing activities: | |||
Increase (decrease) in deferred offering costs | 141,338 | (141,338) | |
Increase in other assets | (50,000) | ||
Increase in due to officers | 139,285 | 1,068,823 | 1,298,818 |
Payments of amounts due to officers | (304,466) | (50,000) | |
Proceeds from issuance of "Bridge Notes", net | 3,475,000 | 909,980 | |
Proceeds from sale of equity securities, net | 10,102,874 | ||
Net cash provided by financing activities | 13,504,031 | 1,787,465 | 1,298,818 |
Net change in cash | 7,158,941 | 323,832 | (40) |
Cash - beginning of year | 323,832 | 40 | |
Cash - end of year | 7,482,773 | $ 323,832 | |
Supplemental information: | |||
License of acquisition payable | $ 1,000,000 | ||
Interest paid | 393,611 | ||
Exchange of "2020 Notes" for Ordinary shares | 1,213,313 | ||
Exchange of "Bridge Notes" for Ordinary shares | 5,000,000 | ||
Reclassification of warrant liability to equity upon issuance of "Exchange Warrants" | $ 12,410,730 |
ORGANIZATION, BUSINESS AND BASI
ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2021 | |
ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION | |
ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION | NOTE 1 – ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION Quoin Pharmaceuticals Ltd. (“Quoin Ltd.”or the “Company”), formerly known as Cellect Biotechnology Ltd. (“Cellect”), is the holding company for Quoin Pharmaceuticals, Inc., a Delaware corporation (“Quoin Inc.”). On October 28, 2021, Cellect completed the business combination with Quoin Inc., in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of March 24, 2021 (the “Merger Agreement”), by and among Cellect, Quoin Inc. and CellMSC, Inc., a Delaware corporation and wholly-owned subsidiary of Cellect (“Merger Sub”), pursuant to which Merger Sub merged with and into Quoin Inc., with Quoin Inc. surviving as a wholly-owned subsidiary of Cellect (the “Merger”). Immediately after completion of the Merger, Cellect changed its name to “Quoin Pharmaceuticals Ltd.” The Company has accounted for the transaction as a reverse recapitalization with Quoin Inc. as the accounting acquirer. Because Quoin Inc. is the accounting acquirer, its historical financial statements became the Company’s historical financial statements and such assets and liabilities continued to be recorded at their historical carrying values. The impact of the recapitalization has been retroactively applied to all periods presented. All equity related disclosures are presented in American Depositary Shares (“ADSs”), unless the context indicates otherwise. One ADS represents 400 ordinary shares of the Company. Quoin Inc. was incorporated in Delaware on March 5, 2018. Quoin Inc. is a specialty pharmaceutical company focused on developing and commercializing therapeutic products that treat rare and orphan diseases. The first lead product is QRX003, a once daily, topical lotion comprised of a broad-spectrum serine protease inhibitor, formulated with the proprietary Invisicare® technology, to treat Netherton Syndrome (NS). In addition, the Company. intends to pursue the clinical development of QRX003 in additional rare dermatological diseases, including Peeling Skin Syndrome, SAM Syndrome and Palmoplantar Keratoderma. To date, no products have been commercialized and revenue has not been generated. The majority of the operating expenses since inception have been associated with completing due diligence on various technologies, asset technology acquisitions, negotiating and finalizing potential funding agreements, costs related to the Merger and building the pipeline of preclinical product candidates. The founders of Quoin Inc. funded all related expenditures through September 2020. On October 28, 2021, Cellect sold the entire share capital of its subsidiary, Cellect Biotherapeutics Ltd., which essentially included all of Cellect’s then existing net assets, to EnCellX Inc. (“EnCellX”), a newly formed U.S. privately held company based in San Diego, CA (the “Share Transfer”), pursuant to an Amended and Restated Share Transfer Agreement. Quoin Ltd. has no interests in EnCellX subsequent to the closing of the Merger. See Note 12. On October 28, 2021, the Company completed the private placement transaction with an investor (the Investor”) for an aggregate purchase price of approximately $17.0 million (comprised of the set off of approximately $5 million of senior secured notes issued in connection with the bridge loan that the Investor previously made to Quoin Inc. and approximately $12 million in cash from the Investor (the “Primary Financing”). See Note 5 . Immediately after the closing of the Merger, there were approximately 8,386,627 ADSs issued and outstanding . The former holders of common stock of Quoin Inc. (including shares delivered to the Investor and the escrow account for the Investor) owned, in the aggregate, approximately 88% of the ordinary shares, with Cellect’s shareholders immediately prior to the Merger owning approximately 12% of ordinary shares. |
LIQUIDITY RISKS AND UNCERTAINTI
LIQUIDITY RISKS AND UNCERTAINTIES AND GOING CONCERN | 12 Months Ended |
Dec. 31, 2021 | |
LIQUIDITY RISKS AND UNCERTAINTIES | |
LIQUIDITY RISKS AND UNCERTAINTIES | NOTE 2 - LIQUIDITY RISKS AND UNCERTAINTIES AND GOING CONCERN The Company has incurred net losses every year since inception and had an accumulated deficit of approximately $28.1 million at December 31, 2021. The Company funded its operations through the issuance of the 2020 Notes (as defined below) and the Bridge Financing (as defined below) prior to the Merger and the Primary Financing completed on October 28, 2021, whereby the Company received funding of approximately $12 million ($10.1 million after offering costs) at the closing of the Merger. Further, the Company expects to receive additional funding through the mandatory exercise provision of the Series C Warrant issued to the Investor in March 2022 which would result in proceeds of approximately $9.5 million. In the event the requirements of the mandatory exercise provision of such warrant are not met (see Note 5), the Company has a written commitment from the Investor to provide funding equal to the $9.5 million expected upon exercise of the Series C Warrant, at prevailing market rates. As such, the Company believes that it has sufficient resources to affect its business plan for at least one year from the issuance of these consolidated financial statements. The Company is also in the process of negotiating a line of credit with a bank which has not yet been closed as of the financial statement filing date and is likely to be conditional on additional equity funding which could be satisfied by the aforementioned Investor funding, as well as the achievement of clinical development milestones. Additional financing will be required to complete the research and development of the Company’s therapeutic targets and its other operating requirements, which may not be available at acceptable terms, if at all. If the Company is unable to obtain the additional funding when it becomes necessary, the development of its product candidates will be impacted and the Company would likely be forced to delay, reduce, or terminate some or all of its development programs, all of which could have a material adverse effect on the Company’s business, results of operations and financial condition. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation: The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), which have been consistently applied, reflecting the operations of Quoin Inc. since inception and include the accounts of Quoin Ltd. since the date of the Merger. Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. In addition, other factors may affect estimates, including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: Other risks and uncertainties: The Company is subject to risks common to development stage biopharmaceutical companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, pre-clinical and clinical trial outcome risks, regulatory approval risks, uncertainty of market acceptance and additional financing requirements. The Company’s products require approval or clearance from the U.S. Food and Drug Administration (“FDA”) prior to commencing commercial sales in the United States. There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company may license or sell its products. There can be no assurance that the Company’s products, if approved, will be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. The Company is also dependent on several third party suppliers, in some cases single-source suppliers which include the supplier of the active pharmaceutical ingredient (API) as well as the contract manufacturer of the drug substance for the expected clinical development. A novel strain of coronavirus (“COVID-19”) created a global pandemic, which commenced in 2020. The Company’s operations, to date, have not been dramatically affected by COVID-19. However, the extent of any future impact on the Company’s operational and financial performance will depend on the possibility of a resurgence and resulting severity of COVID-19 with respect to the Company’s access to API and drug substance, the potential disruption in global freight networks, as well as our ability to safely and efficiently conduct planned clinical trials. Cash and cash equivalents: The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. The Company, from time to time during the periods presented, has had bank account balances in excess of federally insured limits where substantially all cash is held in the United States. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. Long-lived assets: Long-lived assets are comprised of acquired technology and licensed rights to use technology, which are considered platform technology with alternative future uses beyond the current products in development. Such intangible assets are being amortized on a straight-line basis over their expected useful life of 10 years . The Company assesses the impairment for long-lived assets whenever events or circumstances indicate the carrying value may not be recoverable. Factors we consider that could trigger an impairment review include the following: ● Significant changes in the manner of our use of the acquired assets or the strategy for our overall business, ● Significant underperformance relative to expected historical or projected development milestones, ● Significant negative regulatory or economic trends, and ● Significant technological changes which could render the platform technology obsolete. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. During the years ended December 31, 2021, 2020 and 2019, there were no impairment indicators which required an impairment loss measurement. Deferred Offering Costs: Deferred offering costs are expenses directly related to the Primary Financing. These costs consisted of legal, accounting, printing, and filing fees that the Company capitalized which were offset against the proceeds upon completion of the Primary Financing. Research and development: Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials when applicable, administrative costs incurred by third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. Income taxes: The Company accounts for its income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company also accounts for uncertain tax positions using the more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the Company’s income tax returns. As of December 31, 2021 and 2020, the Company had no uncertain tax positions which affected its financial position and its results of operations or its cash flows and will continue to evaluate for uncertain tax positions in the future. If at any time the Company should record interest and penalties in connection with income taxes, the interest and the penalties will be expensed within the interest and general and administrative expenses, respectively. Fair value of financial instruments: The Company considers its cash, accounts payable, accrued expenses and the convertible and bridge notes payable to meet the definition of financial instruments. The convertible and bridge notes payable are recorded at fair value, see Notes 4, 5 and 6. The warrants are recorded at fair value, see Notes 4, 5 and 6. The carrying amounts of the remaining financial instruments approximated their fair values due to the short maturities. The Company measures fair value as required by ASC Topic 820, Fair Value Measurements and Disclosures Earnings (loss) per share: The Company reports loss per share in accordance with ASC 260-10, Earnings Per Share For the year ended December 31, 2021, the number of shares excluded from the diluted net earnings (loss) per share included outstanding warrants to purchase 1,787,844 ADS or 715,137,600 Ordinary Shares and warrants to purchase 15,721,514 ADS or 6,288,605,600 Ordinary Shares issuable pursuant to Primary Financing. For the year ended December 31, 2020, the number of shares issuable upon the conversion of both the Convertible Notes Payable (as defined below) and the Bridge Notes (as defined below) as well as the warrants issued in connection with both of these convertible instruments are not included in the denominator since their inclusion would be anti-dilutive. New accounting pronouncements: The Company has evaluated all recent accounting pronouncements and believes that none of them will have a material effect on the Company’s financial position, results of operations or cash flows except as discussed below. Debt with Conversion and Other Options and Derivatives and Hedging The FASB recently issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Earnings Per Share Earnings Per Share In May 2021, the FASB issued ASU 2021-04, Earnings Per Share Compensation-Stock Compensation Derivatives and Hedging-Contracts in Entity’s Own Equity Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures. |
CONVERTIBLE NOTES PAYABLE
CONVERTIBLE NOTES PAYABLE | 12 Months Ended |
Dec. 31, 2021 | |
CONVERTIBLE NOTES PAYABLE. | |
CONVERTIBLE NOTES PAYABLE | NOTE 4 – CONVERTIBLE NOTES PAYABLE On October 2, 2020, Quoin Inc. commenced an offering of promissory notes (the “2020 Notes” or “Convertible Notes Payable”) and warrants. The 2020 Notes were issued at a 25% original issue discount and bear interest at a rate of 20% per annum. The 2020 Notes are due one year from their respective dates of issuance. In October through December 2020, Quoin Inc. received an aggregate of approximately $910,000 pursuant to this offering, resulting in the issuance of 2020 Notes with an aggregate face value of $1,213,313 and an original issue discount of $303,333. Approximately 23% of such financing was received from parties who are related to or affiliated with members of Quoin Inc.’s board of directors. No additional funding from the 2020 Notes was received in the year ended December 31, 2021. Based upon the terms agreed to in March 2021 in the Primary Financing (see Note 5), the 2020 Notes were mandatorily convertible into 64,784 ADSs in the Primary Financing, subject to adjustment. The Company elected to account for the Convertible Notes Payable using the fair value model due to the short maturity and likely conversion at the date of the Merger. The fair value of the Convertible Notes Payable was estimated to be approximately $1.2 million at the date of issuance, resulting in a $378,000 expense recognized in the fourth quarter of 2020. There was no material change in the fair value from issuance until the conversion to equity on the Merger date. The noteholders also were entitled to receive warrants exercisable at any time after the issuance date for a number of shares of Quoin Inc.’s common stock that equates to 100% of the “as if converted” shares as if the 2020 Notes principal and interest were convertible at the lowest price any securities are sold, convertible, or exercisable into in the Primary Financing or the next round of financing (whichever is lower). The exercise price was based on a valuation equal to the next financing round and since the number of shares issuable upon the exercise of the warrants and exercise price were not knowable at the time of the financing and as of December 31, 2020 they were not recognized. After entering into the Merger Agreement in March 2021, the terms of the warrants became measurable and were exercisable for 367,356 ADSs at an initial exercise price of $3.98 per ADS. The Company determined that these warrants met the criteria to be recorded as a liability instrument. Each holder agreed to exchange its warrant for warrants on substantially the same terms as the Investor Exchange Warrants (See Note 5) with the same number of shares issuable upon the exercise of an Exchange Warrant as upon the exercise of the original warrant and the same exercise price as under the original warrant and have a contractual term of 5 years At the closing of the Merger, 64,784 ADSs were issued upon the conversion of the principle of the Convertible Notes Payable. In addition, effective as of March 13, 2022, the Company exchanged noteholders’ warrants for warrants on substantially the same terms as the Investor Exchange Warrants (See Note 5), exercisable for 367,356 ADSs, in the aggregate, at the exercise price of $3.98 per ADS. The Exchange Warrants have been determined to warrant equity classification and, as such, the fair value change through the exchange date will be included in warrant liability expense in the accompanying statement of operations. In December 2021, the Company concluded that the calculation of ADSs due to the 2020 Noteholders did not account for accrued interest due when the ADSs were issued. The Company reached cash settlements with, and plans to issue additional ADSs to, the 2020 Noteholders to account for this. The estimated amount required to settle these obligations was determined to be approximately $744,000 at December 31, 2021 and is included in accrued liabilities in the accompanying consolidated balance sheet and in interest expense in the accompanying consolidated statement of operations. Interest expense, at the stated interest rate, recognized in the year ended December 31, 2021, 2020 and 2019 was approximately $202,000, $47,000, and $0, respectively. Accrued interest and estimated settlement costs at December 31, 2021, 2020 and 2019 was approximately $744,000, $47,000, and $0, respectively, of which $697,000 was recognized in the year ended December 31, 2021. |
BRIDGE FINANCING AND SECURITIES
BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) | 12 Months Ended |
Dec. 31, 2021 | |
BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) | |
BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) | NOTE 5 – BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) Bridge Financing In connection with the Merger Agreement and the Securities Purchase Agreement (described below), Quoin Inc. entered into a “Bridge Purchase Agreement” on March 24, 2021 with the Investor, pursuant to which the Investor agreed to purchase, and Quoin Inc. agreed to issue notes (the “Bridge Notes”) in the aggregate principal amount of up to $5.0 million in exchange for an aggregate purchase price of up to $3.8 million together with warrants. The Bridge Notes were purchased in three closings: (i) the first purchase of $2.0 million on March 25, 2021 (Quoin Inc. received proceeds of $1.5 million less fees of $90,000); (ii) the second purchase of $1.7 million in April 2021 (Quoin Inc. received proceeds of $1.25 million) ; and (iii) a third purchase of $1.3 million in May 2021 (Quoin Inc. received proceeds of $1.0 million less fees of $185,000). The Bridge Notes were secured by a lien on Quoin Inc.’s current and future assets, were senior to all other outstanding and future indebtedness of Quoin Inc. and included covenants limiting future indebtedness, among others. The Bridge Notes were issued with a 25% original issue discount, at an interest rate of 15% per annum and had a maturity date of the earliest to occur of: (i) December 25, 2021, (ii) the date on which Quoin Inc.’s equity is registered under the Exchange Act or is exchanged for equity so registered or (iii) immediately prior to the closing of the Merger The Investor and Quoin Inc. agreed that if the Primary Financing is consummated, the Investor may, at its election, offset the purchase price otherwise payable by Investor to Quoin Inc. pursuant to the Securities Purchase Agreement related to the Primary Financing, by an amount equal to the outstanding amount under this Bridge Note, and, upon such set-off, the portion of this Bridge Note shall be deemed to have been paid in its entirety and all obligations thereunder shall be deemed to be fully satisfied without any further obligations on, or liability to, Quoin Inc. The Company elected to account for the Bridge Notes using the fair value model due to the short maturity and likely conversion at the closing of the Merger. The cumulative fair value of the Bridge Notes was estimated to be approximately $5.0 million at the date of issuances, resulting in an increase in the fair value of approximately $1,250,000, which was recognized in the statement of operations for the year ended December 31, 2021. The fair value adjustments also included $275,000 of debt issuance costs which was also immediately recognized as a component of other expense. Management has estimated that the fair value had not significantly changed from issuance to the Merger date. See Note 6. The Bridge Notes were offset against the purchase price under the Securities Purchase Agreement related to the Primary Financing and converted into 1,257,721 ADSs (including shares held in escrow for the benefit of the Investor) upon the closing of the Primary Financing. The accrued interest amounting to $393,611 was paid in cash. Interest expense, at the stated interest rate, recognized in the year ended December 31, 2021 was $393,611. Warrants Upon the funding of each Bridge Note tranches described above, the Investor received warrants (the “Bridge Warrants”) to purchase a number of shares of Quoin Inc.’s common stock equal to the aggregate principal amount of the Bridge Notes. The Bridge Warrants have a term of five years from the date all of the shares underlying the Bridge Warrants are freely tradable. The Bridge Warrants also contain certain rights with regard to asset distributions and fundamental transactions. Quoin Inc. issued a total of 1,238,429 Bridge Warrants in the year ended December 31, 2021. Following the closing date of the Merger, on each of the tenth trading day, the forty-fifth day, the ninetieth day, and the one hundred thirty-fifth day thereafter (each, a “Reset Date”), if the initial exercise price of the Bridge Warrants is greater than the arithmetic average of 85% of the three lowest weighted average prices of the post-Merger ordinary shares of the combined company during the ten trading day period immediately preceding the applicable Reset Date (the “Reset Price”), the exercise price of the Bridge Warrants will be reset to the Reset Price. Furthermore, the number of shares underlying Bridge Warrants will be adjusted such that the aggregate number of shares of common stock issuable to the Investor reflects the Reset Price instead of the initial exercise price. Adjustments to the exercise price and number of warrant shares are available to the Investor until the second anniversary of the Registration Date, as defined in the Bridge Warrants. Upon the occurrence of a Fundamental transaction, as defined in the Bridge Warrants, the warrant holder has the right to elect a cash settlement for the value of the warrant base on the Black Scholes options pricing model. The Company determined that the warrants met the criteria to be recorded as a liability instrument through the exchange date upon the closing of the Primary Financing. The fair value of warrants was determined by a MonteCarlo simulation model to be approximately $1.6 million at the date of issuance of the 495,374 warrants in connection with the first closing and $2.2 million at the date of issuance of the 743,055 (post exchange ratio) in connection with the second and third closing of the Bridge Notes See Note 6. Upon the closing of the Primary Financing, the Bridge Warrants were exchanged for warrants to purchase 1,238,429 ADSs at a fixed per share exercise price of $3.98 (“Investor Exchange Warrants”), as amended, which replaced the reset provisions and modified the fundamental transaction requirements of the Bridge Warrants. The Investor Exchange Warrants and ordinary shares underlying the Investor Exchange Warrants were registered with the SEC on the Registration Statement on Form F-4. An amendment to the Investor Exchange Warrants was entered into in September 2021, which replaced the reset provisions with a fixed number of shares and exercise price. Primary Financing On October 28, 2021, the Company completed the private placement transaction with the Investor for an aggregate purchase price of approximately $17.0 million (comprised of (x) the set off of approximately $5 million of Bridge Notes, and (y) approximately $12 million in cash from the Investor) (the “Primary Financing”), and the Investor paid the Company approximately $11,504,000, which was net of $393,611 in accrued interest on the Bridge Notes. The Company incurred an additional approximate $1.4 million in costs associated with the Primary Financing, which resulted in the net proceeds of approximately $10.1 million. The Company issued 4,276,252 ADSs to the Investor, consisting of 833,773 delivered to the Investor on or after the Merger closing and 3,442,479 initially held in an escrow account for the benefit of the Investor as per the terms of the Securities Purchase Agreement. All such escrow shares were released to the Investor prior to December 31, 2021. Quoin Ltd. also was required to issue to the Investor, effective as of March 13, 2022, the 136 th day following the consummation of the Merger (i) Series A Warrant to purchase 4,276,252 ADSs (the “Series A Warrant”) (ii) Series B Warrant to purchase 4,276,252 ADSs (the “Series B Warrant”) and (iii) Series C Warrant to purchase 2,389,670 ADSs (“Series C Warrant” and, together with the Series A Warrant and Series B Warrant, the “Investor Warrants”). The exercise price for the Investor Warrants is $3.98 per ADS, with Series A Warrant having a five-year maturity, and Series B Warrant and Series C Warrant having a two-year maturity. The Company has the right to require the mandatory exercise of the Series C Warrant, subject to an effective registration statement being in place for the resale of the shares underlying such warrants and the satisfaction of equity market conditions, as defined in the Series C Warrant. As of the financial statement filing date, not all of the market related conditions were met. Upon the exercise of the Series C Warrant in full, the Investor would also be granted an additional Series A Warrant to purchase 2,389,670 ADSs and an additional Series B Warrant to purchase 2,389,670 ADSs at an exercise price of $3.98 per ADS. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2021 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities the Company considers the principal or most advantageous market in which it would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. For certain instruments, including cash and cash equivalents, accounts payable, and accrued expenses, it was estimated that the carrying amount approximated fair value because of the short maturities of these instruments. Fair value is estimated using various valuation models, which utilize certain inputs and assumptions that market participants would use in pricing the asset or liability. The inputs and assumptions used in valuation models are classified in the fair value hierarchy as follows: Level 1: Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs. Level 2: Quoted market prices for similar instruments in an active market; quoted prices for identical or similar assets and liabilities in markets that are not active; and model-derived valuations inputs of which are observable and can be corroborated by market data. Level 3: Unobservable inputs and assumptions that are supported by little or no market activity and that are significant to the fair value of the asset and liability. The fair value hierarchy gives the lowest priority to Level 3 inputs. In determining the appropriate hierarchy levels, the Company analyzes the assets and liabilities that are subject to fair value disclosure. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to their fair value measurement. The significant estimates used in the determining the fair value of the 2020 Notes warrants (Note 4) were as follows: 12/31/2021 (1) 12/31/2020 Stock price $ 1.82 $ 3.98 Initial exercise price $ 3.98 $ 3.98 Contractual Term 5.0 5.0 Volatility 89.2 % 98 % Discount rate 1.26 % 0.81 % (1) The warrants issued during 2020 were not exchanged for fixed term warrants until 2022, therefore the existing warrants were still considered outstanding at December 31, 2021 and classified as a liability instrument. The significant estimates used in such calculation of the fair value of the warrants issued in connection with the Bridge Financing (Note 5) were as follows: Transaction Date Merger Date March - May 2021 10/28/2021 Stock price $ 3.98 (post exchange ratio) $ 11.64 (post exchange ratio) Initial exercise price $ 3.98 (post exchange ratio) $ 3.98 (post exchange ratio) Contractual Term 5.0 5.0 Volatility 92 % 89.2 % Discount rate 0.98 % 1.18 % The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy at December 31, 2021 and 2020: December 31, 2021 Level 1 Level 2 Level 3 Total 2020 Notes warrants — — $ 373,599 $ 373,599 Total Warrant Liability — — $ 373,599 $ 373,599 December 31, 2020 Level 1 Level 2 Level 3 Total 2020 Notes payable $ — $ — $ 1,213,333 $ 1,213,333 Total Liabilities $ — — $ 1,213,333 $ 1,213,333 The fair value of the convertible notes payable issued in 2020 was determined to be $1,213,333, resulting in a charge to operations of $378,333 during 2020. The fair value adjustment from December 31, 2020 to their conversion to ADSs at the Merger date was not material. The initial fair value of the Bridge Notes issued in 2021 was determined to be approximately $5,000,000, resulting in a charge to operations of $1,250,000 during 2021. The fair value adjustment from the Bridge Notes issuances to their conversion to ADSs upon the Merger date was not significant. The Bridge Notes and 2020 Notes were converted into ADSs at the Merger date. See Notes 4 and 5. The following shows the movement of the warrant liability balance during 2021. Bridge Financing 2020 Notes Warrants Warrants Beginning Balance $ — $ — Warrant value at issuance (recorded as warrant liability expense) 3,783,079 894,113 Change in Fair value of warrants 8,627,651 (520,514) Reclassification of warrant liability to an equity instrument (12,410,730) — Ending Balance $ — $ 373,599 The change in fair value of the Bridge Note warrants are included in other expense in the accompanying consolidated financial statements from the issuance date to the Merger Date. The Exchange warrants issued to the Investor on the Merger date was determined to be an equity-classified instrument, and accordingly the warrant liability on such date of $12,410,730 was reclassified to additional paid in capital on that date. |
PREPAID EXPENSES
PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
PREPAID EXPENSES | |
PREPAID EXPENSES | NOTE 7 – PREPAID EXPENSES Prepaid expenses are as follows: December 31, 2021 2020 Prepaid R&D costs $ 329,033 $ — Prepaid insurance 684,191 — Prepaid other expenses 2,250 — Total $ 1,015,474 $ — |
ACCRUED EXPENSES
ACCRUED EXPENSES | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | NOTE 8 – ACCRUED EXPENSES Accrued expenses are as follows: December 31, 2021 2020 Professional fees $ 144,377 $ 173,095 Investor Relations fees 584,000 528,000 Payroll taxes 199,582 148,899 Payroll 557,937 — Research contract expenses 193,537 105,052 Other expenses 5,976 5,802 Total $ 1,685,409 $ 960,848 |
ASSET ACQUISITION AND IN-LICENS
ASSET ACQUISITION AND IN-LICENSED TECHNOLOGY | 12 Months Ended |
Dec. 31, 2021 | |
ASSET ACQUISITION AND IN-LICENSED TECHNOLOGY | |
ASSET ACQUISITION AND IN-LICENSED TECHNOLOGY | NOTE 9 – ASSET ACQUISITION AND IN-LICENSED TECHNOLOGY Polytherapeutics On March 24, 2018, Quoin Inc. entered into a securities purchase agreement (the “Acquisition Agreement”), in which it agreed to acquire all of the equity interests in Polytherapeutics, Inc. (the “Seller” or “Polytherapeutics”) for $40,833 and future royalties provided Quoin Inc. commercializes products using the technology developed by the Seller. The terms of any royalty payments to the Seller are 4.0% of the net revenue of royalty products, as defined in the Acquisition Agreement, received by Quoin Inc. during the ten ( 10 ) year period commencing from the date of first sale of a royalty product. If a generic product is introduced by a third party to the market, during the royalty period, the royalty fees shall be reduced from 4% to 2% . If, during the royalty period, two or more generic products are introduced, the royalty fees shall be reduced from 2% to 0% . The Seller had the option to repurchase the intellectual property for $100,000 if there were no products in clinical development using such technology. Quoin Inc. also entered into a research and consulting agreement which commits Quoin Inc. to pay the Seller for additional research and development consulting services (See Notes 12 and 15). Skinvisible On October 17, 2019, Quoin Inc. entered into an exclusive license agreement with Skinvisible Inc. (“Skinvisible”), pursuant to which Skinvisible granted a license to use certain patented technology for the development of products for commercial sale in the orphan rare skin disease field, and for the use of a proprietary polymer deliver system technology. This technology is currently being used in the development of QRX003. In exchange for the license, Quoin Inc. agreed to pay Skinvisible $1,000,000, as well as development and sales milestone payments and a single digit royalty on all net sales, as defined. The development milestones originally required payments upon achieving development milestones for the first Rare Skin Disease drug product developed using the licensed technology and the first two Ketamine products, as defined. Payments were originally due upon successful completions of certain clinical milestones ($7.5 million) and obtaining US and EU regulatory approval ($15 million). The sales milestones required for every licensed product commercialized by Quoin Inc. are $10 million upon achievement of $100 million in sales being achieved in the annual period; $25 million upon achievement of $250 million in sales and $50 million upon the achievement of $400 million in sales in an annual period. On January 27, 2021, Quoin Inc. and Skinvisible entered into an amendment which modified the clinical milestone payment requirements such that $750,000 would be payable to Skinvisible upon achievement of specified clinical milestones, and $21.75 million upon regulatory approval in the U.S. and EU respectively. The agreement has a termination clause that is triggered if no product has commenced clinical testing 12 months after the date of the agreement or the latest subsequent amendment. On April 19, 2021, Quoin Inc. and Skinvisible entered into another amendment which established the development deadline as December 31, 2022. Should the Company not commence clinical testing as defined by the development deadline, the license agreement will terminate immediately except in certain circumstances as specified in the agreement. The license fee was originally due in two equal installments of $500,000 payable no later than December 31, 2019 and June 30, 2020, which were not paid. The agreement was subsequently amended for payment due on July 31, 2020. On July 31, 2020, the agreement was amended to further extend the payment until September 30, 2020. On September 30, 2020, the agreement was again amended, requiring payment of the license fee only when outside financing is received, as defined in the agreement. On June 21, 2021, the parties entered into an additional amendment which modified the payment terms and required a payment of $107,500 on June 26, 2021, a payment of $250,000 within 10 days of the Primary Financing, and the remaining $250,000 upon the earlier of approval of an Investigatory New Drug application by the FDA or December 31, 2021. This amendment also eliminated the $750,000 clinical milestone payments described above and reduced the milestone payment upon regulatory approval of the product containing the Skinvisible technology in either the U.S. or E.U., whichever happens first to a total of $5,000,000. At December 31, 2021 and December 31, 2020, the license acquisition liability due was $250,000 and $875,000 respectively. In March 2022, the Company paid $50,000 against this liability. The remaining license acquisition liability has not been paid in accordance with the terms but has not impaired the Company’s rights to the technology as the Company is in the process of renegotiating this payment with Skinvisible. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 10 - INTANGIBLE ASSETS Intangible assets are as follows: December 31, 2021 2020 Acquired technology – Polytherapeutics $ 40,433 $ 40,433 Technology license – Skinvisible 1,000,000 1,000,000 Total cost 1,040,433 1,040,433 Accumulated amortization (231,829) (127,785) Net book value $ 808,604 $ 912,648 The Company recorded amortization expense of approximately $104,000 , $104,000 , and $21,000 in the years ended December 31, 2021, 2020 and 2019, respectively. Amortization expense for each of the next 5 years is expected to be approximately $104,000 , and then approximately $288,000 thereafter. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 11 – RELATED PARTY TRANSACTIONS Employment Agreements and Due to Officers/Founders In March 2018, Quoin Inc. executed employment agreements with both of its officers who are also co-founders of Quoin Inc. The employment agreements for both officers/founders allow for a onetime expense that covers the salaries they would have otherwise been paid for efforts they undertook in the periods since inception. The salaries and benefits allowances provided for under the employment agreements began to accrue as the services were being provided by the officers/founders and are included in Due to Officers on the accompanying balance sheet. Amounts due to the officers/founders consist of amounts specified in the employment agreements since inception through December 31, 2021 as well as reimbursable travel expenses and other amounts paid by them to third parties on behalf of Quoin Inc. The Company repaid $304,466, $50,000, and $0 of such amounts due to officers/founders in the year ended December 31, 2021, 2020 and 2019, respectively. Since the Merger closing, the Company has been repaying amounts due to officers/founders at a rate of $25,000 each per month (See Note 17). Amounts due to officers at December 31, 2021 and 2020 consisted of the following: December 31, 2021 2020 Salaries and allowances $ 4,108,500 $ 3,984,000 Invoices paid on behalf of the Company 615,232 904,913 Total $ 4,723,732 $ 4,888,913 During 2021, the Company incurred $108,000 of consulting expense from related parties, primarily from a related party company controlled by a member of the Board of Directors. See Note 4 for related party debt and Note 12 for employment agreements. |
RESEARCH, CONSULTING AGREEMENTS
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | 12 Months Ended |
Dec. 31, 2021 | |
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | NOTE 12 – RESEARCH, CONSULTING AGREEMENTS AND COMMITMENTS Research and consulting agreement Quoin Inc. entered into a research and consulting agreement (the “Research Agreement”) which commits it to pay the former owner of Polytherapeutics (the “Consultant” or “Seller”) to transfer the technical know-how of Polytherapeutics with respect to (i) good manufacturing practices (“GMP”), clinical and commercial manufacturing of the Company’s PolyDur polymer and (ii) formulation development of products utilizing the Company’s PharmaDur polymer (See Note 9). The agreement required monthly consulting payments of $20,833 beginning on July 31, 2018 and ending February 28, 2021 (the “Post-Closing Period”) for a total of $666,667 over the consulting period. Pursuant to an amendment, the Post-Closing Period was revised to terminate on December 31, 2020. Through December 31, 2021 and the financial statement issuance date, the Company has not made any payments, the Consultant has not performed any services and the Company has not incurred or accrued for any expenses. See Note 15 for Consultant’s notification of breach of contract. Other research consulting agreements Quoin Inc. entered into three consulting agreements with Axella Research LLC (“Axella”) to provide regulatory and pre- clinical/clinical services to the Company with respect to QRX003 and QRX004. The combined fees of the three agreements are approximately $270,000 , payable as milestones under the three agreements are met. Quoin Inc. has also engaged Axella for additional services pursuant to separate work orders. Further, Quoin Inc. has two options to pay the milestones due 1) one half in equity of Quoin Inc. (at a pre-negotiated valuation) and one-half in cash or 2) entirely in cash, in which case a discount of approximately 20% would be applicable. The Company recognized research and development expenses for services provided and milestones met of approximately $247,000 , $50,000 and $25,000 for the years ended December 31, 2021, 2020 and 2019, respectively and has accrued expenses of $ 193,537 , $105,052 and $24,940 at December 31, 2021, 2020 and 2019, respectively. In November 2020, Quoin Inc. entered into a Master Service Agreement for an initial term of three years with Therapeutics Inc. for managing preclinical and clinical development for new products in the field of dermatology. The agreement required the execution of individual work orders. Quoin Inc. may terminate any work order for any reason with 90 days written notice subject to costs incurred through termination and a defined termination fee, unless there is a material breach by Therapeutics Inc. The first work order was entered into in late 2020 for a clinical study at an expected estimated cost of approximately $3.5 million and expected timing through the first quarter of 2023. For the year ended December 31, 2021, the Company incurred approximately $340,000 of research and development costs related to this agreement. In November 2021, the Company entered into a commitment for research related services associated with Netherton Syndrome of approximately $250,000 for an expected period of eighteen months, of which an initial $25,000 expense was incurred in 2021. Employment agreements The employment agreements entered into by Quoin Inc. with its two founders/officers provide for a combined base salary, including monthly allowances, of $996,000 per annum, a discretionary bonus and certain allowances and benefits. In the event of termination of the two founders/officers for reason other than cause, as defined in the employment agreements, the founders shall be entitled to two years of based salary and bonus. In November 2021, the Company appointed and entered into an employment agreement with its Chief Financial Officer which provides for a base salary of $360,000 per annum, a discretionary bonus and certain allowances and benefits. In November 2021, the Board of Directors of the Company approved amendments to the employment agreements increasing base level compensation by 10% for the two founders and increasing the annual target discretionary bonus to not less than 45% of base salary for the two founders and the Chief Financial Officer. Further a transaction bonus related to the closing of the Merger and private placements aggregating approximately $324,000 was paid to the two founders in November 2021. See Note 17 describing subsequent shareholder approval of the employment agreements of the two founders/officers. Performance milestones and Royalties See Note 9 for asset and in-licensed technology commitments. Merger agreement commitment In consideration for the Share Transfer disclosed in Note 1, the pre-closing Cellect shareholders received a contingent value right (“CVR”) entitling the holders to earnouts during the Payment Period (as such term is defined in the Share Transfer Agreement), comprised mainly of payments upon sale, milestone payments, license fees and exit fees realized by EnCellX. In order to secure such right, shares constituting 40% of EnCellX share capital are held in escrow by Altshuler Shaham Trusts Ltd. In connection with the Share Transfer, Cellect entered into a CVR Agreement with Mr. Eyal Leibovitz, in the capacity of Representative for the holders of CVRs, and Computershare Trust Company, N.A., a federally chartered trust company (the “Rights Agent”). Under the terms of the CVR Agreement, the holders of the Cellect ADSs immediately prior to the Merger had the right to receive, through their ownership of CVRs, their pro-rata share of the net Share Transfer consideration, making such holders of CVRs the indirect beneficiaries of the net payments under the Share Transfer. CVRs were recorded in a register administered by the Rights Agent but were not certificated. Since the Company will not receive any net proceeds from the CVR’s, there is no asset or liability recorded in the consolidated financial statements. |
SHAREHOLDERS' EQUITY AND SHARE
SHAREHOLDERS' EQUITY AND SHARE OWNERSHIP AND RIGHTS | 12 Months Ended |
Dec. 31, 2021 | |
SHAREHOLDERS' EQUITY AND SHARE OWNERSHIP AND RIGHTS | |
SHAREHOLDERS' EQUITY AND SHARE OWNERSHIP AND RIGHTS | NOTE 13 – SHAREHOLDERS’ EQUITY AND SHARE OWNERSHIP AND RIGHTS Quoin Inc. Quoin Inc.’s authorized capital stock consisted of 10,000 shares of common stock. On March 5, 2018, in connection with the incorporation as a Delaware corporation, Quoin Inc. issued 100 shares for a consideration of $100 split equally between the two founders and officers of Quoin Inc. In connection with the Merger transaction, the two founders exchanged their shares in Quoin Inc. for 3,003,652 ADSs in Quoin Ltd. All share and per share amounts have been adjusted to reflect this recapitalization. Quoin Ltd. As of December 31, 2021, Quoin Ltd.’s authorized share capital consisted of 12,500,000,000 ordinary shares, no par value. These ordinary shares are not redeemable and do not have any preemptive rights. However, the Investor has certain approval rights in connection with the issuance of additional shares. Holders of our ordinary shares have one vote for each ordinary share held on all matters submitted to a vote of shareholders at a shareholders meeting. Shareholders may vote at shareholders meetings either in person, by proxy or by written ballot. Israeli law does not allow public companies to adopt shareholder resolutions by means of written consent in lieu of a shareholders meeting. The board of directors shall determine and provide a record date for each shareholders meeting and all shareholders at such record date may vote. Unless stipulated differently in the Companies Law or in the articles of association, all shareholders’ resolutions shall be approved by a simple majority vote. Under Israeli law, the Company may declare and pay dividends only if, upon the determination of our board of directors, there is no reasonable concern that the distribution will prevent us from being able to meet the terms of our existing and foreseeable obligations as they become due. Under the Companies Law, the distribution amount is further limited to the greater of retained earnings or earnings generated over the two most recent years legally available for distribution according to our then last reviewed or audited financial statements, provided that the date of the financial statements is not more than six months prior to the date of distribution. In the event that the Company does not have retained earnings or earnings generated over the two most recent years legally available for distribution, the Company may seek the approval of the court in order to distribute a dividend. The court may approve our request if it determines that there is no reasonable concern that the payment of a dividend will prevent the Company from satisfying our existing and foreseeable obligations as they become due. The Bank of New York Mellon, as depositary, has registered and delivered American Depositary Shares, also referred to as ADSs. Each ADS represents four hundred (400) ordinary shares (or a right to receive four hundred (400) ordinary shares). Each ADS will also represent any other securities, cash or other property which may be held by the depositary. ADSs may be held either (a) directly (1) by having an American Depositary Receipt, also referred to as an ADR, which is a certificate evidencing a specific number of ADSs or (2) by having uncertificated ADSs, or (b) indirectly by holding a security entitlement in ADSs through a broker or other financial institution that is a direct or indirect participant in The Depository Trust Company, also called DTC. Warrants and Options The following vested stock options and warrants were outstanding at December 31, 2021, exercisable into ADSs: ADSs Exercise Price Year of maturity Warrants held by 2020 noteholders 367,356 $ 3.98 2026 Warrants held by Investor 1,238,429 $ 3.98 2026 Warrants held by former Cellect warrantholders 110,263 $ 0.20-$11.00 2022-2024 Options held by former Cellect optionholders(1) 71,796 $ 8.60-$217.00 2022 Total 1,787,844 1) The options held by former Cellect optionholders fully vested at the closing of the Merger and expire between January and October 2022. The incremental fair value of the stock options at the closing of the Merger was not significant. The options were issued under the Cellect Ltd. Employee Shares Incentive Plan (the “2014 Plan”). The 2014 Plan was amended and restated and initial grants were made to Company officers and directors, approved at the Company Annual General Meeting held on April 12, 2022. See Note 17. The intrinsic value of the above stock options and warrants at December 31, 2021 was negligible. Effective as of March 13, 2022, the Company issued warrants to the Investor under the terms of the Primary Financing, exercisable into ADSs in the following aggregate amounts. See Note 17. ADSs Exercise Price Series A warrants 6,665,922 $ 3.98 Series B warrants 6,665,922 $ 3.98 Series C warrants (1) 2,389,670 $ 3.98 Total 15,721,514 (1) The Company expects to issue each of 2,389,670 additional Series A and Series B Warrants to the Investor upon exercise of the Series C Warrant, which are included in the totals in the table above. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 14 – INCOME TAXES The Company’s deferred tax assets relate primarily to its net operating loss carryforwards and other balance sheet basis differences. The Company maintains a valuation allowance to fully offset the gross deferred tax asset because it is not more likely than not that the Company will realize future benefits associated with these deferred tax assets at December 31, 2021 and 2020. The valuation allowance increased by approximately $2,178,000 and $515,000 for the years ended December 31, 2021 and 2020, respectively. Significant components of the Company’s deferred tax assets are as follows: December 31, 2021 2020 Deferred tax assets: Net operating losses carryforward $ 1,945,000 $ 355,000 Due to officers 1,411,000 1,467,000 Accrued expenses and other 212,000 44,000 R&D credit carryforward 102,000 — Debt related attributes 375,000 — Total deferred tax assets 4,045,000 1,866,000 Valuation allowance (4,045,000) (1,866,000) Deferred tax asset, net of valuation allowance $ — $ — At December 31, 2021 and 2020, the Company had U.S. federal and state income tax net operating loss (“NOL”) carryforward of approximately $6,482,000 and $1,180,000 , respectively, that may be used to offset future taxable income. The Internal Revenue Code (the “IRC”) contains limitations on the use of net operating loss carryforwards after the occurrence of a substantial ownership change as defined by IRC Section 382. The Company has not performed a detailed analysis, however utilization of such net operating loss carryforwards will likely be significantly limited due to the shares issued in the Primary Financing and the Merger. At December 31, 2021, the Company had approximately $102,000 of federal research and development (“R&D”) tax credit carryforwards. If not utilized, the federal R&D credits will begin to expire in 2038. The income tax benefit for the years ended December 31, 2021 and 2020 differed from the amounts computed by applying the US federal income tax rate of 21% primarily because of the increase in the valuation allowance and the tax impact of fair value adjustments and other permanent items, which resulted in an effective tax rate of zero for both years. On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The CARES Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19. While the CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act. The Company has concluded that the CARES Act did not have a material impact on its financial position, results of operations, or cash flows. On December 27, 2020, the United States enacted the Consolidated Appropriations Act which extended many of the benefits of the CARES Act that were scheduled to expire. The Company evaluated the impact of the Consolidated Appropriations Act on its consolidated financial statements and related disclosures and concluded that the impact is immaterial. |
CONTINGENCIES
CONTINGENCIES | 12 Months Ended |
Dec. 31, 2021 | |
CONTINGENCIES | |
CONTINGENCIES | NOTE 15 - CONTINGENCIES From time to time, the Company may become involved in various legal matters arising in the ordinary course of business. Management is unaware of any matters requiring accrual for related losses in the financial statements. In February 2020, the seller of the equity interests in Polytherapeutics and party to the Research Agreement communicated with Quoin Inc. threatening litigation for non-payment and related breach of contract and immediate payment of all monthly payments in the amount of $666,667. See Notes 9 and 12. The Consultant has not provided any services and has not complied with other technical requirements under the Research Agreement, and therefore is considered to be in breach of contract. The Company and the Consultant have had communications with respect to the duration, commencement date and payment of the consulting services, but a revised agreement has not been reached. No lawsuits have been filed as of the financial statement issuance date. Should a formal claim or lawsuit be filed, the Company believes it has meritorious defenses. |
LICENSE AGREEMENTS
LICENSE AGREEMENTS | 12 Months Ended |
Dec. 31, 2021 | |
LICENSE AGREEMENTS | |
LICENSE AGREEMENTS | NOTE 16 – LICENSE AGREEMENTS In November and December 2021, the Company entered into three license and supply agreements, whereby the Company is entitled to a royalty or other proceeds from the specified product revenues in select non-US markets from the licensee, if and when the underlying products are approved and commercialized. No royalty revenues were received in 2021. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2021 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | NOTE 17 - SUBSEQUENT EVENTS In March 2022, the Company paid an aggregate of $311,670 to two out of five 2020 noteholders in settlement of the amounts included in accrued interest payable at the closing of the Merger. See Note 4. In the first quarter of 2022, the Company entered into four license and supply agreements, whereby the Company will receive a royalty or other proceeds from the specified product revenues in select non-US markets from the licensor, if and when the underlying products are approved and commercialized. Effective as of March 13, 2022, the Company issued warrants to purchase ADSs as follows: ● Exchanged the existing warrants of 2020 noteholders (Note 4) for warrants on substantially the same terms as the Investor Exchange Warrant (See Note 5), exercisable for 367,356 ADSs, in the aggregate, at the exercise price of $3.98 per ADS. ● Issued Series A Warrant, Series B Warrant and Series C Warrant to purchase 4,276,252 ADSs, 4,276,252 ADSs and 2,389,670 ADSs, respectively, at the exercise price of $3.98 per ADS, based on the terms of the Primary Financing. The Company held a Special General Meeting on February 28, 2022, at which the Company’s shareholders adopted the Amended and Restated Articles of Association of the Company. In March 2022, the board of directors of the Company approved the Amended and Restated Equity Incentive Plan (the “Amended Plan”) which increased the number of ordinary shares reserved for issuance under such equity incentive plan to 15% of the Company’s outstanding ordinary shares on a fully-diluted basis, or 1,826,991,616 ordinary shares, represented by 4,567,479 ADSs. The board of directors further approved the award of options to Officers and Directors in aggregate to acquire 3,957,142 ADSs under the Amended Plan, and annual discretionary bonuses for Officers of $472,500 in aggregate. The Amended Plan and certain individual option grants and bonuses were subject to shareholder approval at our Annual General Meeting, as described below. The Company held its Annual General Meeting on April 12, 2022, and which the Company’s shareholders approved, among other items, the following: ● The increase in authorized share capital from 12.5 billion to 50 billion ordinary shares. ● Modification of the annual compensation of the two founders to a combined base salary of $990,000 and to increase the annual discretionary bonus to not less than 45% of the annual base salary. ● The grant of an option to purchase up to 1,071,429 ADSs to each of the two founders under the Amended Plan, at an exercise price per ADS of $1.40 , to vest over a four-year period. ● The grant of an option to purchase 117,857 ADSs to each non-employee director under the Amended Plan at an exercise price per ADS of $1.40 , to vest over a three-year period, and (as an annual grant for 2022) an option to purchase 42,857 ADSs at an exercise price per ADS of $1.40 , to vest over a three-year period. ● The terms of repayment of indebtedness to the two founders by providing monthly payments of $25,000 to each founder. |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2021 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation | Basis of Presentation: The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), which have been consistently applied, reflecting the operations of Quoin Inc. since inception and include the accounts of Quoin Ltd. since the date of the Merger. |
Use of estimates | Use of estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Actual results could materially differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls, and in developing the estimates and assumptions that are used in the preparation of these financial statements. In addition, other factors may affect estimates, including: expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: |
Other risks and uncertainties: | Other risks and uncertainties: The Company is subject to risks common to development stage biopharmaceutical companies including, but not limited to, new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, product liability, pre-clinical and clinical trial outcome risks, regulatory approval risks, uncertainty of market acceptance and additional financing requirements. The Company’s products require approval or clearance from the U.S. Food and Drug Administration (“FDA”) prior to commencing commercial sales in the United States. There can be no assurance that the Company’s products will receive all of the required approvals or clearances. Approvals or clearances are also required in foreign jurisdictions in which the Company may license or sell its products. There can be no assurance that the Company’s products, if approved, will be accepted in the marketplace, nor can there be any assurance that any future products can be developed or manufactured at an acceptable cost and with appropriate performance characteristics, or that such products will be successfully marketed. The Company is also dependent on several third party suppliers, in some cases single-source suppliers which include the supplier of the active pharmaceutical ingredient (API) as well as the contract manufacturer of the drug substance for the expected clinical development. A novel strain of coronavirus (“COVID-19”) created a global pandemic, which commenced in 2020. The Company’s operations, to date, have not been dramatically affected by COVID-19. However, the extent of any future impact on the Company’s operational and financial performance will depend on the possibility of a resurgence and resulting severity of COVID-19 with respect to the Company’s access to API and drug substance, the potential disruption in global freight networks, as well as our ability to safely and efficiently conduct planned clinical trials. |
Cash and cash equivalents | Cash and cash equivalents: The Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. The Company, from time to time during the periods presented, has had bank account balances in excess of federally insured limits where substantially all cash is held in the United States. The Company has not experienced losses in such accounts. The Company believes that it is not subject to unusual credit risk beyond the normal credit risk associated with commercial banking relationships. |
Long-lived assets | Long-lived assets: Long-lived assets are comprised of acquired technology and licensed rights to use technology, which are considered platform technology with alternative future uses beyond the current products in development. Such intangible assets are being amortized on a straight-line basis over their expected useful life of 10 years . The Company assesses the impairment for long-lived assets whenever events or circumstances indicate the carrying value may not be recoverable. Factors we consider that could trigger an impairment review include the following: ● Significant changes in the manner of our use of the acquired assets or the strategy for our overall business, ● Significant underperformance relative to expected historical or projected development milestones, ● Significant negative regulatory or economic trends, and ● Significant technological changes which could render the platform technology obsolete. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value. During the years ended December 31, 2021, 2020 and 2019, there were no impairment indicators which required an impairment loss measurement. |
Deferred Offering Costs | Deferred Offering Costs: Deferred offering costs are expenses directly related to the Primary Financing. These costs consisted of legal, accounting, printing, and filing fees that the Company capitalized which were offset against the proceeds upon completion of the Primary Financing. |
Research and development | Research and development: Research and development costs are expensed as incurred. Research and development expenses include personnel costs associated with research and development activities, including third-party contractors to perform research, conduct clinical trials and manufacture drug supplies and materials. The Company accrues for costs incurred by external service providers, including contract research organizations and clinical investigators, based on its estimates of service performed and costs incurred. These estimates include the level of services performed by third parties, patient enrollment in clinical trials when applicable, administrative costs incurred by third parties, and other indicators of the services completed. Based on the timing of amounts invoiced by service providers, the Company may also record payments made to those providers as prepaid expenses that will be recognized as expense in future periods as the related services are rendered. |
Income taxes | Income taxes: The Company accounts for its income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company also accounts for uncertain tax positions using the more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken in the Company’s income tax returns. As of December 31, 2021 and 2020, the Company had no uncertain tax positions which affected its financial position and its results of operations or its cash flows and will continue to evaluate for uncertain tax positions in the future. If at any time the Company should record interest and penalties in connection with income taxes, the interest and the penalties will be expensed within the interest and general and administrative expenses, respectively. |
Fair value of financial instruments | Fair value of financial instruments: The Company considers its cash, accounts payable, accrued expenses and the convertible and bridge notes payable to meet the definition of financial instruments. The convertible and bridge notes payable are recorded at fair value, see Notes 4, 5 and 6. The warrants are recorded at fair value, see Notes 4, 5 and 6. The carrying amounts of the remaining financial instruments approximated their fair values due to the short maturities. The Company measures fair value as required by ASC Topic 820, Fair Value Measurements and Disclosures |
Earnings (loss) per share | Earnings (loss) per share: The Company reports loss per share in accordance with ASC 260-10, Earnings Per Share For the year ended December 31, 2021, the number of shares excluded from the diluted net earnings (loss) per share included outstanding warrants to purchase 1,787,844 ADS or 715,137,600 Ordinary Shares and warrants to purchase 15,721,514 ADS or 6,288,605,600 Ordinary Shares issuable pursuant to Primary Financing. For the year ended December 31, 2020, the number of shares issuable upon the conversion of both the Convertible Notes Payable (as defined below) and the Bridge Notes (as defined below) as well as the warrants issued in connection with both of these convertible instruments are not included in the denominator since their inclusion would be anti-dilutive. |
New accounting pronouncements | New accounting pronouncements: The Company has evaluated all recent accounting pronouncements and believes that none of them will have a material effect on the Company’s financial position, results of operations or cash flows except as discussed below. Debt with Conversion and Other Options and Derivatives and Hedging The FASB recently issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470- 20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity Earnings Per Share Earnings Per Share In May 2021, the FASB issued ASU 2021-04, Earnings Per Share Compensation-Stock Compensation Derivatives and Hedging-Contracts in Entity’s Own Equity Recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures. |
FAIR VALUE OF FINANCIAL INSTR_2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Schedule of assets and liabilities measured at fair value on a recurring basis | December 31, 2021 Level 1 Level 2 Level 3 Total 2020 Notes warrants — — $ 373,599 $ 373,599 Total Warrant Liability — — $ 373,599 $ 373,599 December 31, 2020 Level 1 Level 2 Level 3 Total 2020 Notes payable $ — $ — $ 1,213,333 $ 1,213,333 Total Liabilities $ — — $ 1,213,333 $ 1,213,333 |
Schedule of movement of the warrant liability | Bridge Financing 2020 Notes Warrants Warrants Beginning Balance $ — $ — Warrant value at issuance (recorded as warrant liability expense) 3,783,079 894,113 Change in Fair value of warrants 8,627,651 (520,514) Reclassification of warrant liability to an equity instrument (12,410,730) — Ending Balance $ — $ 373,599 |
2020 Notes Warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Schedule of significant estimates used in the determining the fair value of warrants | 12/31/2021 (1) 12/31/2020 Stock price $ 1.82 $ 3.98 Initial exercise price $ 3.98 $ 3.98 Contractual Term 5.0 5.0 Volatility 89.2 % 98 % Discount rate 1.26 % 0.81 % (1) The warrants issued during 2020 were not exchanged for fixed term warrants until 2022, therefore the existing warrants were still considered outstanding at December 31, 2021 and classified as a liability instrument. |
Bridge Financing Warrants | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Schedule of significant estimates used in the determining the fair value of warrants | Transaction Date Merger Date March - May 2021 10/28/2021 Stock price $ 3.98 (post exchange ratio) $ 11.64 (post exchange ratio) Initial exercise price $ 3.98 (post exchange ratio) $ 3.98 (post exchange ratio) Contractual Term 5.0 5.0 Volatility 92 % 89.2 % Discount rate 0.98 % 1.18 % |
PREPAID EXPENSE (Tables)
PREPAID EXPENSE (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
PREPAID EXPENSES | |
Schedule of Prepaid expenses | December 31, 2021 2020 Prepaid R&D costs $ 329,033 $ — Prepaid insurance 684,191 — Prepaid other expenses 2,250 — Total $ 1,015,474 $ — |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | December 31, 2021 2020 Professional fees $ 144,377 $ 173,095 Investor Relations fees 584,000 528,000 Payroll taxes 199,582 148,899 Payroll 557,937 — Research contract expenses 193,537 105,052 Other expenses 5,976 5,802 Total $ 1,685,409 $ 960,848 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | December 31, 2021 2020 Acquired technology – Polytherapeutics $ 40,433 $ 40,433 Technology license – Skinvisible 1,000,000 1,000,000 Total cost 1,040,433 1,040,433 Accumulated amortization (231,829) (127,785) Net book value $ 808,604 $ 912,648 |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
RELATED PARTY TRANSACTIONS | |
Amounts due to offices | December 31, 2021 2020 Salaries and allowances $ 4,108,500 $ 3,984,000 Invoices paid on behalf of the Company 615,232 904,913 Total $ 4,723,732 $ 4,888,913 |
SHAREHOLDERS' EQUITY AND SHAR_2
SHAREHOLDERS' EQUITY AND SHARE OWNERSHIP AND RIGHTS (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
SHAREHOLDERS' EQUITY AND SHARE OWNERSHIP AND RIGHTS | |
Schedule of stock options and warrants outstanding | The following vested stock options and warrants were outstanding at December 31, 2021, exercisable into ADSs: ADSs Exercise Price Year of maturity Warrants held by 2020 noteholders 367,356 $ 3.98 2026 Warrants held by Investor 1,238,429 $ 3.98 2026 Warrants held by former Cellect warrantholders 110,263 $ 0.20-$11.00 2022-2024 Options held by former Cellect optionholders(1) 71,796 $ 8.60-$217.00 2022 Total 1,787,844 1) The options held by former Cellect optionholders fully vested at the closing of the Merger and expire between January and October 2022. The incremental fair value of the stock options at the closing of the Merger was not significant. The options were issued under the Cellect Ltd. Employee Shares Incentive Plan (the “2014 Plan”). The 2014 Plan was amended and restated and initial grants were made to Company officers and directors, approved at the Company Annual General Meeting held on April 12, 2022. See Note 17. ADSs Exercise Price Series A warrants 6,665,922 $ 3.98 Series B warrants 6,665,922 $ 3.98 Series C warrants (1) 2,389,670 $ 3.98 Total 15,721,514 (1) The Company expects to issue each of 2,389,670 additional Series A and Series B Warrants to the Investor upon exercise of the Series C Warrant, which are included in the totals in the table above. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
INCOME TAXES | |
Schedule of deferred tax assets | December 31, 2021 2020 Deferred tax assets: Net operating losses carryforward $ 1,945,000 $ 355,000 Due to officers 1,411,000 1,467,000 Accrued expenses and other 212,000 44,000 R&D credit carryforward 102,000 — Debt related attributes 375,000 — Total deferred tax assets 4,045,000 1,866,000 Valuation allowance (4,045,000) (1,866,000) Deferred tax asset, net of valuation allowance $ — $ — |
ORGANIZATION, BUSINESS AND BA_2
ORGANIZATION, BUSINESS AND BASIS OF PRESENTATION (Details) - USD ($) $ in Millions | Oct. 29, 2021 | Oct. 28, 2021 | Dec. 31, 2021 | Mar. 24, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Sale of stock | |||||||
Ordinary shares, shares issued | 3,354,650,799 | 1,201,460,800 | |||||
Ordinary shares, shares outstanding | 3,354,650,799 | 1,201,460,800 | |||||
Shares owned (as a percent) | 88.00% | ||||||
Bridge Notes | |||||||
Sale of stock | |||||||
Debt instrument, face amount | $ 5 | ||||||
Cellect shareholders immediately prior to the merger | |||||||
Sale of stock | |||||||
Shares owned (as a percent) | 12.00% | ||||||
Private Placement | |||||||
Sale of stock | |||||||
Aggregate purchase price | $ 17 | ||||||
Debt instrument, face amount | 12 | ||||||
Private Placement | Bridge Notes | |||||||
Sale of stock | |||||||
Aggregate purchase price | $ 5 | ||||||
ADS | |||||||
Sale of stock | |||||||
Number of shares represented for one ADS | 400 | ||||||
Ordinary shares, shares issued | 8,386,627 | 8,386,627 | 3,003,651 | ||||
Ordinary shares, shares outstanding | 8,386,627 | 8,386,627 | 3,003,651 | 3,003,652 | 3,003,652 |
LIQUIDITY RISKS AND UNCERTAIN_2
LIQUIDITY RISKS AND UNCERTAINTIES AND GOING CONCERN (Details) - USD ($) | Oct. 28, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Substantial Doubt About Going Concern Line Items | |||
Accumulated deficit | $ 28,100,000 | ||
Proceeds from exercised warrants | $ 9,500,000 | ||
Deferred Offering Costs | $ 141,338 | ||
Warrant exercises | 9,500,000 | ||
Investors | |||
Substantial Doubt About Going Concern Line Items | |||
Warrant exercises | $ 9,500,000 | ||
2020 Notes | |||
Substantial Doubt About Going Concern Line Items | |||
Proceeds received | 12,000,000 | ||
Proceeds received net of offering costs | 10,100,000 | ||
Deferred Offering Costs | $ 10,100,000 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Long-lived assets & Income taxes (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||
Intangible assets, useful life | 10 years | ||
Impairment loss measurement | $ 0 | $ 0 | $ 0 |
Uncertain tax positions | $ 0 | $ 0 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Earnings per share (Details) | 12 Months Ended |
Dec. 31, 2021shares | |
Outstanding warrants | |
Antidilutive securities excluded from diluted computation | |
Antidilutive securities | 715,137,600 |
Outstanding warrants | ADS | |
Antidilutive securities excluded from diluted computation | |
Antidilutive securities | 1,787,844 |
Warrants | |
Antidilutive securities excluded from diluted computation | |
Antidilutive securities | 6,288,605,600 |
Warrants | ADS | |
Antidilutive securities excluded from diluted computation | |
Antidilutive securities | 15,721,514 |
CONVERTIBLE NOTES PAYABLE - 202
CONVERTIBLE NOTES PAYABLE - 2020 Notes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Oct. 02, 2020 | |
Debt Instrument [Line Items] | |||||
Proceeds notes payable | $ 3,475,000 | $ 909,980 | |||
Fair value of convertible notes | $ 1,213,313 | 1,213,313 | |||
Warrant liability at date of issuance | $ 373,599 | ||||
Convertible Notes Warrants, Common Stock | |||||
Debt Instrument [Line Items] | |||||
Proceeds notes payable | $ 910,000 | ||||
Financing received from related party (as a percent) | 23.00% | ||||
Fair value of convertible notes | $ 1,200,000 | 1,200,000 | |||
Increase in fair value of convertible notes payable | 378,000 | ||||
Shares warrants may purchase | 367,356 | ||||
Warrants, exercise price of warrants (in dollars per share) | $ 3.98 | ||||
Contractual term | 5 years | ||||
2020 Notes | |||||
Debt Instrument [Line Items] | |||||
Shares issued upon conversion | 64,784 | ||||
Shares warrants may purchase | 367,356 | ||||
Warrants, exercise price of warrants (in dollars per share) | $ 3.98 | ||||
2020 Notes | Convertible Notes Warrants, Common Stock | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, par, discount percentage (as a percent) | 25.00% | ||||
Debt instrument, interest rate, stated percentage (as a percent) | 20.00% | ||||
Convertible notes payable | 1,213,313 | 1,213,313 | |||
Original issue discount | $ 303,333 | $ 303,333 | |||
Additional funding received from convertible notes | $ 0 | ||||
Shares issued upon conversion | 64,784 | ||||
Equivalent percentage of warrants received | 100.00% |
CONVERTIBLE NOTES PAYABLE - Int
CONVERTIBLE NOTES PAYABLE - Interest Expense (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||
Accrued interest and amounts due under convertible notes payable | $ 743,840 | $ 47,041 | |
2020 Notes | |||
Debt Instrument [Line Items] | |||
Interest expense | 202,000 | 47,000 | $ 0 |
Other expense | 697,000 | ||
Accrued interest and amounts due under convertible notes payable | $ 744,000 | $ 47,000 | $ 0 |
BRIDGE FINANCING AND SECURITI_2
BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) - Bridge Financing (Details) - USD ($) | Mar. 24, 2021 | Dec. 31, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||
Fair value adjustment to convertible notes payable | $ (1,250,000) | $ (378,333) | |
Interest paid | 393,611 | ||
Bridge Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 5,000,000 | ||
Debt instrument, aggregate purchase price | $ 3,800,000 | ||
Debt instrument, par, discount percentage (as a percent) | 25.00% | ||
Debt instrument, interest rate, stated percentage (as a percent) | 15.00% | ||
Long-term debt, fair value | 5,000,000 | ||
Fair value adjustment to convertible notes payable | 1,250,000 | ||
Debt issuance costs | $ 275,000 | ||
Bridge Notes, First Closing, March 25, 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 2,000,000 | ||
Proceeds from convertible debt | 1,500,000 | ||
Payments of debt issuance costs | 90,000 | ||
Bridge Notes, Second Purchase, April 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 1,700,000 | ||
Proceeds from convertible debt | 1,250,000 | ||
Bridge Notes, Third Purchase, May 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | 1,300,000 | ||
Proceeds from convertible debt | 1,000,000 | ||
Payments of debt issuance costs | $ 185,000 | ||
Convertible notes payable | |||
Debt Instrument [Line Items] | |||
Debt conversion, converted instrument, shares issued | 1,257,721 | ||
Interest paid | $ 393,611 | ||
Interest expense | $ 393,611 |
BRIDGE FINANCING AND SECURITI_3
BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) - Bridge Warrants - General Information (Details) - USD ($) | Dec. 31, 2021 | Oct. 28, 2021 | Jun. 30, 2021 | Mar. 31, 2021 |
Class of Warrant or Right [Line Items] | ||||
Warrant liability | $ 373,599 | |||
Bridge Warrants, Common Stock | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants, term | 5 years | |||
Warrants, number of securities called by warrants (in shares) | 1,238,429 | |||
Warrants, exercise price of the three lowest weighted-average prices of post-merger ordinary shares, threshold, percentage (as a percent) | 85.00% | |||
Bridge Warrants, Common Stock, First Closing | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants, number of securities called by warrants (in shares) | 495,374 | |||
Warrant liability | $ 1,600,000 | |||
Bridge Warrants, Common Stock, Second and Third Closings | ||||
Class of Warrant or Right [Line Items] | ||||
Warrants, number of securities called by warrants (in shares) | 743,055 | |||
Warrant liability | $ 2,200,000 |
BRIDGE FINANCING AND SECURITI_4
BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) - Exchange Warrants (Details) - Exchange Warrants, American Depositary Shares | Dec. 31, 2021$ / sharesshares |
Class of Warrant or Right [Line Items] | |
Warrants, number of securities called by warrants (in shares) | shares | 1,238,429 |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 |
BRIDGE FINANCING AND SECURITI_5
BRIDGE FINANCING AND SECURITIES PURCHASE AGREEMENT (Primary Financing) - Investor Warrants (Details) - USD ($) | Oct. 28, 2021 | Mar. 24, 2021 | Dec. 31, 2021 |
Class of Warrant or Right [Line Items] | |||
Proceeds from sale of common stock, net | $ 11,504,000 | ||
Payment of stock issuance cost | 1,400,000 | ||
Net proceeds | 10,100,000 | $ 10,102,874 | |
Warrants, issued, period after purchase agreement closing | 136 days | ||
Investor warrants maturity term | 5 years | ||
Bridge Notes | |||
Class of Warrant or Right [Line Items] | |||
Debt Instrument, Face Amount | $ 5,000,000 | ||
Private Placement | |||
Class of Warrant or Right [Line Items] | |||
Aggregate purchase price | 17,000,000 | ||
Debt Instrument, Face Amount | 12,000,000 | ||
Proceeds from sale of common stock, net of accrued interest and legal fess | $ 393,611 | ||
Sale of common stock, including conversion of Bridge Notes | 4,276,252 | ||
Sale of common stock, including conversion of Bridge Notes, delivered | 833,773 | ||
Sale of common stock, including conversion of Bridge Notes, held in escrow | 3,442,479 | ||
Private Placement | Bridge Notes | |||
Class of Warrant or Right [Line Items] | |||
Aggregate purchase price | $ 5,000,000 | ||
Series A Warrants, American Depositary Shares | |||
Class of Warrant or Right [Line Items] | |||
Warrants, number of securities called by warrants (in shares) | 4,276,252 | ||
Warrants, exercise price of warrants (in dollars per share) | $ 3.98 | ||
Series B Warrants, American Depositary Shares | |||
Class of Warrant or Right [Line Items] | |||
Warrants, number of securities called by warrants (in shares) | 4,276,252 | ||
Warrants, exercise price of warrants (in dollars per share) | $ 3.98 | ||
Series C Warrants, American Depositary Shares [Member] | |||
Class of Warrant or Right [Line Items] | |||
Warrants, number of securities called by warrants (in shares) | 2,389,670 | ||
Warrants, exercise price of warrants (in dollars per share) | $ 3.98 | ||
Series A Warrants, American Depositary Shares, Series C Warrants Exercised in Full | |||
Class of Warrant or Right [Line Items] | |||
Warrants, number of securities called by warrants (in shares) | 2,389,670 | ||
Warrants, exercise price of warrants (in dollars per share) | $ 3.98 | ||
Series B Warrants, American Depositary Shares, Series C Warrants Exercised in Full | |||
Class of Warrant or Right [Line Items] | |||
Warrants, number of securities called by warrants (in shares) | 2,389,670 | ||
Warrants, exercise price of warrants (in dollars per share) | $ 3.98 |
FAIR VALUE OF FINANCIAL INSTR_3
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) | Dec. 31, 2021Y$ / shares | Oct. 28, 2021$ / sharesY | May 31, 2021$ / sharesY | Dec. 31, 2020$ / sharesY |
Stock price | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Measurement input | 1.82 | 11.64 | 3.98 | 3.98 |
Initial exercise price | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Measurement input | 3.98 | 3.98 | 3.98 | 3.98 |
Contractual Term | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Measurement input | Y | 5 | 5 | 5 | 5 |
Volatility | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Measurement input | 89.2 | 89.2 | 92 | 98 |
Discount rate | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Measurement input | 1.26 | 1.18 | 0.98 | 0.81 |
FAIR VALUE OF FINANCIAL INSTR_4
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair value on a recurring basis (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Assets and liabilities measured on a recurring basis | ||
Warrant liability | $ 373,599 | |
Convertible notes payable | $ 1,213,313 | |
Total liabilities | (1,250,000) | (378,333) |
Bridge warrants | ||
Assets and liabilities measured on a recurring basis | ||
Warrant liability | 5,000,000 | |
Recurring | ||
Assets and liabilities measured on a recurring basis | ||
Warrant liability | 373,599 | |
Convertible notes payable | 1,213,333 | |
Total liabilities | 1,213,333 | |
Recurring | 2020 Notes Warrants | ||
Assets and liabilities measured on a recurring basis | ||
Warrant liability | 373,599 | |
Recurring | Level 3 | ||
Assets and liabilities measured on a recurring basis | ||
Warrant liability | 373,599 | |
Convertible notes payable | 1,213,333 | |
Total liabilities | $ 1,213,333 | |
Recurring | Level 3 | 2020 Notes Warrants | ||
Assets and liabilities measured on a recurring basis | ||
Warrant liability | $ 373,599 |
FAIR VALUE OF FINANCIAL INSTR_5
FAIR VALUE OF FINANCIAL INSTRUMENTS - Change in fair value (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
Change in fair value | ||
Convertible notes payable | $ 1,213,313 | |
Warrant liability | $ 373,599 | |
Fair value adjustment to convertible notes payable | 1,250,000 | 378,333 |
Bridge Financing Warrants | ||
Movement of warrant liability | ||
Beginning Balance | 0 | |
Warrant value at issuance (recorded as warrant liability expense) | 3,783,079 | |
Change in Fair value of warrants | 8,627,651 | |
Reclassification of warrant liability to an equity instrument | (12,410,730) | |
Ending Balance | 0 | 0 |
2020 Notes Warrants | ||
Movement of warrant liability | ||
Beginning Balance | 0 | |
Warrant value at issuance (recorded as warrant liability expense) | 894,113 | |
Change in Fair value of warrants | (520,514) | |
Ending Balance | $ 373,599 | $ 0 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) | Dec. 31, 2021USD ($) |
PREPAID EXPENSES | |
Prepaid R&D costs | $ 329,033 |
Prepaid insurance | 684,191 |
Prepaid other expenses | 2,250 |
Total | $ 1,015,474 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
ACCRUED EXPENSES | ||
Professional fees | $ 144,377 | $ 173,095 |
Investor Relations fees | 584,000 | 528,000 |
Payroll taxes | 199,582 | 148,899 |
Payroll | 557,937 | |
Research contract expenses | 193,537 | 105,052 |
Other expenses | 5,976 | 5,802 |
Total | $ 1,685,409 | $ 960,848 |
ASSET ACQUISITION AND IN-LICE_2
ASSET ACQUISITION AND IN-LICENSED TECHNOLOGY - Polytherapeutics (Details) - Polytherapeutics - USD ($) | Mar. 24, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2021 |
Asset acquisitions and in-licensed technology | ||||
Purchase price agreement | $ 40,833 | |||
Royalty payments, as a percent of net revenue | 4.00% | |||
Royalty payment period | 10 years | |||
Royalty payments with one generic product introduced, as a percent of net revenue | 2.00% | 4.00% | ||
Royalty payments with two generic product introduced, as a percent of net revenue | 0.00% | 2.00% | ||
Intellectual property repurchase price | $ 100,000 |
ASSET ACQUISITION AND IN-LICE_3
ASSET ACQUISITION AND IN-LICENSED TECHNOLOGY - Skinvisible (Details) - Skinvisable - USD ($) | Oct. 17, 2019 | Mar. 31, 2022 | Dec. 31, 2021 | Jul. 10, 2021 | Jun. 26, 2021 | Jan. 27, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Asset acquisitions and in-licensed technology | ||||||||
Purchase price agreement | $ 1,000,000 | |||||||
Clinical milestones | $ 7,500,000 | |||||||
Regulatory approval milestones | 15,000,000 | $ 21,750,000 | ||||||
Installment payments | $ 500,000 | |||||||
License acquisition liability | 250,000 | $ 875,000 | ||||||
Amount paid against consideration liability | $ 50,000 | |||||||
Sales Milestone Tier One | ||||||||
Asset acquisitions and in-licensed technology | ||||||||
Sales milestones | 10,000,000 | |||||||
Sales achievement | 100,000,000 | |||||||
Sales Milestone Tier Two | ||||||||
Asset acquisitions and in-licensed technology | ||||||||
Sales milestones | 25,000,000 | |||||||
Sales achievement | 250,000,000 | |||||||
Sales Milestone Tier Three | ||||||||
Asset acquisitions and in-licensed technology | ||||||||
Sales milestones | 50,000,000 | |||||||
Sales achievement | 400,000,000 | |||||||
Amendment 3 | ||||||||
Asset acquisitions and in-licensed technology | ||||||||
Clinical milestones | 750,000 | |||||||
Regulatory approval milestones | $ 5,000,000 | |||||||
Amendment 5 | ||||||||
Asset acquisitions and in-licensed technology | ||||||||
First payment | $ 107,500 | |||||||
Second payment | $ 250,000 | |||||||
Third payment | $ 250,000 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Intangible assets | ||
Total cost | $ 1,040,433 | $ 1,040,433 |
Accumulated amortization | (231,829) | (127,785) |
Net book value | 808,604 | 912,648 |
Acquired technology - Polytherapeutics | ||
Intangible assets | ||
Total cost | 40,433 | 40,433 |
Technology license - Skinvisible | ||
Intangible assets | ||
Total cost | $ 1,000,000 | $ 1,000,000 |
INTANGIBLE ASSETS (Details)_2
INTANGIBLE ASSETS (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of intangibles | $ 104,043 | $ 104,043 | $ 20,710 |
Expected amortization expense | |||
2022 | 104,000 | ||
2023 | 104,000 | ||
2024 | 104,000 | ||
2025 | 104,000 | ||
2026 | 104,000 | ||
Thereafter | $ 288,000 |
RELATED PARTY TRANSACTIONS - Na
RELATED PARTY TRANSACTIONS - Narrative (Details) - USD ($) | Oct. 28, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Consulting expense | ||||
Related Party Transaction [Line Items] | ||||
Consulting expense from related party | $ 108,000 | |||
Officers and Founders | ||||
Related Party Transaction [Line Items] | ||||
Payment of amounts due to officers | $ 304,466 | $ 50,000 | $ 0 | |
Monthly payment amounts due to related party | $ 25,000 |
RELATED PARTY TRANSACTIONS - Am
RELATED PARTY TRANSACTIONS - Amounts due to officers (Details) - Officer [Member] - USD ($) | Dec. 31, 2021 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||
Due to officers | $ 4,723,732 | $ 4,888,913 |
Salaries and allowances | ||
Related Party Transaction [Line Items] | ||
Due to officers | 4,108,500 | 3,984,000 |
Invoices paid on behalf of the Company | ||
Related Party Transaction [Line Items] | ||
Due to officers | $ 615,232 | $ 904,913 |
RESEARCH, CONSULTING AGREEMEN_2
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS - Research (Details) - USD ($) | Jul. 31, 2018 | Nov. 30, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 30, 2021 | Feb. 28, 2021 |
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||||||
Research and development | $ 1,562,927 | $ 244,155 | $ 45,650 | ||||
Accrued expenses | 1,685,409 | 960,848 | |||||
Research and consulting agreement | Polytherapeutics | |||||||
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||||||
Monthly payments | $ 20,833 | ||||||
Total amount of agreement | $ 666,667 | ||||||
Research and consulting agreement | Axella Research LLC | |||||||
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||||||
Total amount of agreement | $ 270,000 | ||||||
Number of agreements | 3 | ||||||
Number of options to pay | 2 | ||||||
Option 1, equity payment (as a percent) | 0.50% | ||||||
Option 1, cash payment (as a percent) | 0.50% | ||||||
Option 2, cash payment discount (as a percent) | 20.00% | ||||||
Research and development | 247,000 | 50,000 | 25,000 | ||||
Accrued expenses | 193,537 | $ 105,052 | $ 24,940 | ||||
Research and consulting agreement | Netherton Syndrome | |||||||
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||||||
Initial expenses | 25,000 | ||||||
Consulting agreements | Netherton Syndrome | |||||||
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||||||
Total amount of agreement | $ 250,000 | ||||||
Consulting agreements | Therapeutics Inc. | |||||||
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||||||
Total amount of agreement | $ 3,500,000 | ||||||
Research and development | $ 340,000 | ||||||
Initial term | 3 years | ||||||
Written termination notice period | 90 days |
RESEARCH, CONSULTING AGREEMEN_3
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS - Employment agreements (Details) - Employment Contracts [Member] | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2021USD ($)item | Dec. 31, 2021Y | Mar. 31, 2018USD ($) | |
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||
Number founders under employment agreement | 2 | 2 | |
Two Founders | |||
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||
Combine salary and benefits | $ 996,000 | ||
Number of years of salary and bonus equivalent for termination | Y | 2 | ||
Percentage of increase in base level compensation | 10.00% | ||
Annual target discretionary bonus (in percent) | 45.00% | ||
Amount of transaction bonus related to merger and private placement paid | $ 324,000 | ||
Chief Financial Officer | |||
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |||
Transaction bonus | $ 360,000 |
RESEARCH, CONSULTING AGREEMEN_4
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS - Merger agreement commitment (Details) | 12 Months Ended |
Dec. 31, 2021 | |
RESEARCH, CONSULTING AGREEMENTS AND OTHER COMMITMENTS | |
Percentage of share capital held in Escrow by Altshuler Shaham Trusts Ltd. | 40.00% |
SHAREHOLDERS' EQUITY AND SHAR_3
SHAREHOLDERS' EQUITY AND SHARE OWNERSHIP AND RIGHTS - Share Capital (Details) | Oct. 28, 2021shares | Mar. 05, 2018USD ($)shares | Dec. 31, 2021USD ($)VoteYshares | Dec. 31, 2020shares |
SHARE OWNERSHIP AND RIGHTS | ||||
Ordinary shares, shares authorized | 12,500,000,000 | 12,500,000,000 | ||
Shares issued, Value | $ | $ 17,000,000 | |||
ADS | ||||
SHARE OWNERSHIP AND RIGHTS | ||||
Shares issued (in shares) | 4,276,252 | |||
Shares issued upon conversion | 64,784 | |||
Quoin | ||||
SHARE OWNERSHIP AND RIGHTS | ||||
Ordinary shares, shares authorized | 10,000 | 12,500,000,000 | ||
Shares issued (in shares) | 100 | |||
Shares issued, Value | $ | $ 100 | |||
Number of founders | 2 | |||
Number of vote for each ordinary share | Vote | 1 | |||
Number of years of income that limits distribution | Y | 2 | |||
Maximum period between date of financial statements and distribution date | 6 months | |||
Quoin | ADS | ||||
SHARE OWNERSHIP AND RIGHTS | ||||
Shares issued upon conversion | 3,003,652 | |||
Number of ordinary shares for each ADS | 400 |
SHAREHOLDERS' EQUITY AND SHAR_4
SHAREHOLDERS' EQUITY AND SHARE OWNERSHIP AND RIGHTS - Warrants and Options (Details) | Dec. 31, 2021$ / sharesshares |
ADS | |
Equity | |
Outstanding warrants | shares | 1,787,844 |
Number issuable warrants | shares | 15,721,514 |
Warrants | 2020 note holders | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 |
Warrants | 2020 note holders | ADS | |
Equity | |
Outstanding warrants | shares | 367,356 |
Warrants | Investor | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 |
Warrants | Investor | ADS | |
Equity | |
Outstanding warrants | shares | 1,238,429 |
Warrants | Cellect warrantholders | Minimum | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 0.20 |
Warrants | Cellect warrantholders | Maximum | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 11 |
Warrants | Cellect warrantholders | ADS | |
Equity | |
Outstanding warrants | shares | 110,263 |
Series A warrants | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 |
Series A warrants | ADS | |
Equity | |
Number issuable warrants | shares | 6,665,922 |
Series B warrants | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 |
Series B warrants | ADS | |
Equity | |
Number issuable warrants | shares | 6,665,922 |
Series C warrants | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 |
Series C warrants | ADS | |
Equity | |
Number issuable warrants | shares | 2,389,670 |
Options | Cellect optionholders | Minimum | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 8.60 |
Options | Cellect optionholders | Maximum | |
Equity | |
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 217 |
Options | Cellect optionholders | ADS | |
Equity | |
Outstanding warrants | shares | 71,796 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2021 | Dec. 31, 2020 | |
INCOME TAXES | ||
Increase in valuation allowance | $ 2,178,000 | $ 515,000 |
Net operating loss carryforward | $ 6,482,000 | $ 1,180,000 |
Federal income tax rate | 21.00% | 21.00% |
Deferred tax assets: | ||
Net operating losses carryforward | $ 1,945,000 | $ 355,000 |
Due to officers | 1,411,000 | 1,467,000 |
Accrued expenses and other | 212,000 | 44,000 |
R&D credit carryforward | 102,000 | |
Debt related attributes | 375,000 | |
Total deferred tax assets | 4,045,000 | 1,866,000 |
Valuation allowance | $ (4,045,000) | $ (1,866,000) |
CONTINGENCIES (Details)
CONTINGENCIES (Details) | 1 Months Ended |
Feb. 29, 2020USD ($) | |
CONTINGENCIES | |
Possible damages sought | $ 666,667 |
LICENSE AGREEMENTS (Details)
LICENSE AGREEMENTS (Details) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2021item | Nov. 30, 2021item | Dec. 31, 2021USD ($) | |
LICENSE AGREEMENTS | |||
Number of license and supply agreements entered | item | 3 | 3 | |
Royalty revenues | $ | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) | Apr. 12, 2022USD ($)$ / sharesshares | Mar. 31, 2022USD ($)itemshares | Dec. 31, 2021item$ / sharesshares | Nov. 30, 2021item | Mar. 31, 2022itemshares | Apr. 11, 2022shares | Mar. 13, 2022$ / sharesshares | Dec. 31, 2020shares |
Subsequent Event [Line Items] | ||||||||
Number of license and supply agreements entered | item | 3 | 3 | ||||||
Ordinary shares, shares authorized | 12,500,000,000 | 12,500,000,000 | ||||||
2020 Notes | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants, number of securities called by warrants (in shares) | 367,356 | |||||||
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 | |||||||
Subsequent Event [Member] | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of license and supply agreements entered | item | 4 | |||||||
Number of ADSs acquirable for options | 42,857 | |||||||
Annual discretionary bonuses | $ | $ 472,500 | |||||||
Ordinary shares, shares authorized | 50,000,000,000 | 12,500,000,000 | ||||||
Combined base salary of two founders | $ | $ 990,000 | |||||||
Exercise price on grant date | $ / shares | $ 1.40 | |||||||
Vesting period | 3 years | |||||||
Monthly payments for repayment of indebtedness to 2 founders | $ | $ 25,000 | |||||||
Subsequent Event [Member] | Minimum | ||||||||
Subsequent Event [Line Items] | ||||||||
Percentage of annual discretionary bonus on annual base salary | 45.00% | |||||||
Subsequent Event [Member] | Amended Plan | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of ordinary shares reserved for future issuance (in percentage) | 15.00% | |||||||
Number of ordinary shares reserved for future issuance | 1,826,991,616 | 1,826,991,616 | ||||||
Number of ADSs represented by ordinary shares | 4,567,479 | 4,567,479 | ||||||
Number of ADSs acquirable for options | 3,957,142 | 3,957,142 | ||||||
Subsequent Event [Member] | Amended Plan | Two Founders | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of ADSs acquirable for options | 1,071,429 | |||||||
Exercise price on grant date | $ / shares | $ 1.40 | |||||||
Vesting period | 4 years | |||||||
Subsequent Event [Member] | Amended Plan | Directors | ||||||||
Subsequent Event [Line Items] | ||||||||
Number of ADSs acquirable for options | 117,857 | |||||||
Exercise price on grant date | $ / shares | $ 1.40 | |||||||
Vesting period | 3 years | |||||||
Subsequent Event [Member] | Series A warrants | ADS | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants, number of securities called by warrants (in shares) | 4,276,252 | |||||||
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 | |||||||
Subsequent Event [Member] | Series B warrants | ADS | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants, number of securities called by warrants (in shares) | 4,276,252 | |||||||
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 | |||||||
Subsequent Event [Member] | Series C warrants | ADS | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants, number of securities called by warrants (in shares) | 2,389,670 | |||||||
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 | |||||||
Subsequent Event [Member] | 2020 Notes | ||||||||
Subsequent Event [Line Items] | ||||||||
Aggregate payment for notes payables settlement | $ | $ 311,670 | |||||||
Number of note payables settled | item | 2 | |||||||
Number of notes payables | item | 5 | 5 | ||||||
Subsequent Event [Member] | 2020 Notes | Investor Exchange Warrants [Member] | ADS | ||||||||
Subsequent Event [Line Items] | ||||||||
Warrants, number of securities called by warrants (in shares) | 367,356 | |||||||
Warrants, exercise price of warrants (in dollars per share) | $ / shares | $ 3.98 |