Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 11, 2021 | |
Document Information Line Items | ||
Entity Registrant Name | TFF PHARMACEUTICALS, Inc. | |
Trading Symbol | TFFP | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 25,371,781 | |
Amendment Flag | false | |
Entity Central Index Key | 0001733413 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Entity Ex Transition Period | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39102 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 82-4344737 | |
City Area Code | (737) | |
Local Phone Number | 802-1973 | |
Entity Address, Address Line One | 2600 Via Fortuna | |
Entity Address, Address Line Two | Suite 360 | |
Entity Address, City or Town | Austin | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 78746 | |
Title of 12(b) Security | Common stock: Par value $0.001 | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 44,715,743 | $ 35,300,805 |
Receivable due from collaboration agreement | 831,061 | |
Research and development tax incentive receivable | 1,111,540 | |
Prepaid assets and other current assets | 833,630 | 2,258,229 |
Total current assets | 47,491,974 | 37,559,034 |
Property and equipment, net | 1,810,235 | 1,102,808 |
Total assets | 49,302,209 | 38,661,842 |
Current liabilities: | ||
Accounts payable | 1,557,612 | 1,297,725 |
Deferred research grant revenue | 24,315 | |
Total liabilities | 1,557,612 | 1,322,040 |
Commitments and contingencies (see Note 4) | ||
Stockholders’ equity: | ||
Common stock; $0.001 par value, 45,000,000 shares authorized; 25,371,781 and 22,534,874 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 25,372 | 22,535 |
Additional paid-in capital | 103,158,144 | 71,648,453 |
Accumulated other comprehensive loss | (170,328) | (51,538) |
Accumulated deficit | (55,268,591) | (34,279,648) |
Total stockholders’ equity | 47,744,597 | 37,339,802 |
Total liabilities and stockholders’ equity | $ 49,302,209 | $ 38,661,842 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 45,000,000 | 45,000,000 |
Common stock, shares issued | 25,371,781 | 22,534,874 |
Common stock, shares outstanding | 25,371,781 | 22,534,874 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Grant revenue | $ 50,000 | $ 76,165 | ||
Operating expenses: | ||||
Research and development | 6,339,993 | 2,823,669 | 14,380,415 | 7,626,982 |
General and administrative | 2,387,585 | 2,254,912 | 7,386,007 | 5,147,639 |
Total operating expenses | 8,727,578 | 5,078,581 | 21,766,422 | 12,774,621 |
Loss from operations | (8,677,578) | (5,078,581) | (21,690,257) | (12,774,621) |
Other income: | ||||
Other income (expense) | (13,129) | 659,695 | ||
Interest income | 12,051 | 20,546 | 41,619 | 102,809 |
Total other income (expense) | (1,078) | 20,546 | 701,314 | 102,809 |
Net loss | $ (8,678,656) | $ (5,058,035) | $ (20,988,943) | $ (12,671,812) |
Net loss per share, basic and diluted (in Dollars per share) | $ (0.34) | $ (0.24) | $ (0.85) | $ (0.61) |
Weighted average common shares outstanding, basic and diluted (in Shares) | 25,371,781 | 20,867,526 | 24,635,350 | 20,810,004 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | ||||
Net loss | $ (8,678,656) | $ (5,058,035) | $ (20,988,943) | $ (12,671,812) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | (53,498) | (28,172) | (118,790) | (67,663) |
Comprehensive loss | $ (8,732,154) | $ (5,086,207) | $ (21,107,733) | $ (12,739,475) |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Stockholders’ Equity - USD ($) | Common Stock | Additional Paid- in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total |
Balance at Dec. 31, 2019 | $ 18,451 | $ 43,338,710 | $ (15,712,414) | $ 27,644,747 | |
Balance (in Shares) at Dec. 31, 2019 | 18,450,992 | ||||
Issuance of common stock for accrued research and development expense | $ 221 | 1,131,792 | 1,132,013 | ||
Issuance of common stock for accrued research and development expense (in Shares) | 220,666 | ||||
Stock-based compensation | 425,844 | 425,844 | |||
Foreign currency translation adjustment | (20,283) | (20,283) | |||
Net loss | (3,797,198) | (3,797,198) | |||
Balance at Mar. 31, 2020 | $ 18,672 | 44,896,346 | (20,283) | (19,509,612) | 25,385,123 |
Balance (in Shares) at Mar. 31, 2020 | 18,671,658 | ||||
Stock-based compensation | 295,356 | 295,356 | |||
Foreign currency translation adjustment | (19,208) | (19,208) | |||
Net loss | (3,816,579) | (3,816,579) | |||
Balance at Jun. 30, 2020 | $ 18,672 | 45,191,702 | (39,491) | (23,326,191) | 21,844,692 |
Balance (in Shares) at Jun. 30, 2020 | 18,671,658 | ||||
Sale of common stock, net of offering costs | $ 3,048 | 24,277,235 | 24,280,283 | ||
Sale of common stock, net of offering costs (in Shares) | 3,048,654 | ||||
Issuance of common stock in connection with cashless warrant exercises | $ 506 | (506) | |||
Issuance of common stock in connection with cashless warrant exercises (in Shares) | 505,972 | ||||
Stock-based compensation | 546,120 | 546,120 | |||
Foreign currency translation adjustment | (28,172) | (28,172) | |||
Net loss | (5,058,035) | (5,058,035) | |||
Balance at Sep. 30, 2020 | $ 22,226 | 70,014,551 | (67,663) | (28,384,226) | 41,584,888 |
Balance (in Shares) at Sep. 30, 2020 | 22,226,284 | ||||
Balance at Dec. 31, 2020 | $ 22,535 | 71,648,453 | (51,538) | (34,279,648) | 37,339,802 |
Balance (in Shares) at Dec. 31, 2020 | 22,534,874 | ||||
Sale of common stock, net of offering costs | $ 2,140 | 28,021,424 | 28,023,564 | ||
Sale of common stock, net of offering costs (in Shares) | 2,140,000 | ||||
Issuance of common stock for stock option exercises | $ 245 | 655,008 | 655,253 | ||
Issuance of common stock for stock option exercises (in Shares) | 244,656 | ||||
Issuance of common stock for warrant exercises | $ 444 | 179,768 | 180,212 | ||
Issuance of common stock for warrant exercises (in Shares) | 444,751 | ||||
Stock-based compensation | 1,030,415 | 1,030,415 | |||
Foreign currency translation adjustment | (37,958) | (37,958) | |||
Net loss | (7,654,575) | (7,654,575) | |||
Balance at Mar. 31, 2021 | $ 25,364 | 101,535,068 | (89,496) | (41,934,223) | 59,536,713 |
Balance (in Shares) at Mar. 31, 2021 | 25,364,281 | ||||
Additional offering costs related to the sale of common stock | (8,545) | (8,545) | |||
Issuance of common stock for stock option exercises | $ 8 | 34,492 | 34,500 | ||
Issuance of common stock for stock option exercises (in Shares) | 7,500 | ||||
Stock-based compensation | 740,535 | 740,535 | |||
Foreign currency translation adjustment | (27,334) | (27,334) | |||
Net loss | (4,655,712) | (4,655,712) | |||
Balance at Jun. 30, 2021 | $ 25,372 | 102,301,550 | (116,830) | (46,589,935) | 55,620,157 |
Balance (in Shares) at Jun. 30, 2021 | 25,371,781 | ||||
Stock-based compensation | 856,594 | 856,594 | |||
Foreign currency translation adjustment | (53,498) | (53,498) | |||
Net loss | (8,678,656) | (8,678,656) | |||
Balance at Sep. 30, 2021 | $ 25,372 | $ 103,158,144 | $ (170,328) | $ (55,268,591) | $ 47,744,597 |
Balance (in Shares) at Sep. 30, 2021 | 25,371,781 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (20,988,943) | $ (12,671,812) |
Adjustment to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation | 2,627,544 | 1,267,320 |
Depreciation and amortization | 34,426 | |
Changes in operating assets and liabilities: | ||
Receivable due from collaboration agreement | (831,061) | |
Research and development tax incentive receivable | (1,168,553) | |
Prepaid assets and other current assets | 1,407,862 | 519,816 |
Accounts payable | 269,433 | 501,877 |
Deferred revenue | (24,315) | |
Net cash used in operating activities | (18,673,607) | (10,382,799) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (741,853) | (293,243) |
Net cash used in investing activities | (741,853) | (293,243) |
Cash flows from financing activities: | ||
Net proceeds from issuance of common stock | 28,015,019 | 24,280,283 |
Proceeds from issuance of common stock for stock option exercises | 689,753 | |
Proceeds from issuance of common stock for warrant exercises | 180,212 | |
Net cash provided by financing activities | 28,884,984 | 24,280,283 |
Effect of exchange rate changes on cash and cash equivalents | (54,586) | (81,286) |
Net change in cash and cash equivalents | 9,414,938 | 13,522,955 |
Cash and cash equivalents at beginning of period | 35,300,805 | 28,094,936 |
Cash and cash equivalents at end of period | 44,715,743 | 41,617,891 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Issuance of common stock for accrued research and development expense | 1,132,013 | |
Cashless exercise of warrants | $ 416 | 506 |
Purchases of property and equipment included in accounts payable | $ 652,122 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND DESCRIPTION OF BUSINESS | NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS TFF Pharmaceuticals, Inc. (the “Company”) was incorporated in the State of Delaware on January 24, 2018 by Lung Therapeutics, Inc. (“LTI”), at which time the Company and LTI entered into a Contribution and Subscription Agreement (“Contribution Agreement”) pursuant to which LTI agreed to transfer to the Company certain of LTI’s non-core intellectual property rights and other assets, including LTI’s rights under a patent license agreement with the University of Texas at Austin (see Note 5), in exchange for 4,000,000 shares of the Company’s common stock. The transactions under the Contribution Agreement closed in March 2018. LTI’s basis in such assets were minimal. LTI is an early-stage biotechnology company focused on the development of certain technologies in the pulmonary field. The Company’s initial focus is on the development of inhaled dry powder drugs to enhance the treatment of pulmonary diseases and conditions. In December 2019, the Company established a wholly-owned Australian subsidiary, TFF Pharmaceuticals Australia Pty Ltd (“TFF Australia”), in order to conduct clinical research. TFF Pharmaceuticals, Inc., along with TFF Australia, are collectively referred to as the “Company”. The Company is in the development stage and is devoting substantially all of its efforts toward technology research and development. March 2021 Public Offering On March 30, 2021, the Company completed a public offering (“March 2021 Offering”), selling 2,140,000 shares of common stock at an offering price of $14.00 per share. The Company received gross proceeds of approximately $30,000,000. The Company received net proceeds of approximately $28,015,000, after deducting underwriting discounts and commissions and offering-related expenses. COVID-19 As of the date of this report, the COVID-19 pandemic has had a limited impact on our operations. During 2020, we experienced a temporary suspension of dosing in the Phase I clinical trial for our TFF Tac-Lac due to the COVID-19 pandemic, and the pandemic has otherwise caused minor slowing in the timing of certain non-clinical and clinical activities by us and our collaborators and service providers during 2020 and the first nine months of 2021. However, the COVID-19 pandemic has not caused us to forego, abandon or substantially delay any proposed activities. While we believe we have been able to effectively manage the disruption caused by the COVID-19 pandemic to date, there can be no assurance that our operations, including the development of our drug candidates, will not be disrupted or materially adversely affected in the future by the COVID-19 pandemic or an epidemic or outbreak of an infectious disease like the outbreak of COVID-19. |
Liquidity and Management_s Plan
Liquidity and Management’s Plans | 9 Months Ended |
Sep. 30, 2021 | |
Liquidity and Managements Plans [Abstract] | |
LIQUIDITY AND MANAGEMENT’S PLANS | NOTE 2 - LIQUIDITY AND MANAGEMENT’S PLANS As of September 30, 2021, the Company had cash and cash equivalents of approximately $44,716,000 and a working capital of approximately $45,934,000. The Company has not generated revenues from commercial operations since inception and has incurred recurring operating losses. The Company expects to continue incurring losses for the foreseeable future and may need to raise additional capital to pursue its product development. The Company expects to further increase its research and development activities, which will increase the amount of cash utilized subsequent to September 30, 2021. Specifically, the Company expects increased spending on research and development activities and higher payroll expenses as it increases its professional and scientific staff and continues to prepare for anticipated manufacturing activities. If we encounter unforeseen delays or expenses, we have the ability to curtail our presently planned level of operations. The Company currently believes its existing cash and cash equivalents will be sufficient to fund its operating expenses and capital expenditure requirements for at least the next 12 months from the date of issuance of these condensed consolidated financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2021 and the results of operations, changes in stockholders’ equity and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. Principles of Consolidation The consolidated financial statements include the accounts of TFF Pharmaceuticals, Inc. and its wholly-owned subsidiary, TFF Australia. All material intercompany accounts and transactions have been eliminated in consolidation. Foreign Currency The currency of TFF Australia, the Company’s international subsidiary, is in Australian dollars. Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at each balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). Cash and Cash Equivalents The Company maintains its operating accounts in financial institutions in the U.S. and in Australia. The balances are insured up to specified limits. The Company’s cash is maintained in checking accounts and money market funds with maturities of less than three months when purchased, which are readily convertible to known amounts of cash, and which in the opinion of management are subject to insignificant risk of loss in value. As of September 30, 2021 and December 31, 2020, the Company had cash in Australia of AUD$307,053 (US$221,521) and AUD$214,240 (US$165,092), respectively. Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. The Company calculates depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to five years for furniture, fixtures, lab and computer equipment and software. Assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for its intended use. As of September 30, 2021 and December 31, 2020, approximately $304,000 and $1,103,000, respectively, of the Company’s property and equipment consisted of lab equipment that are considered construction in progress. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Fair Value of Financial Instruments Authoritative guidance requires disclosure of the fair value of financial instruments. The Company’s financial instruments consist of cash and cash equivalents and accounts payable, the carrying amounts of which approximate their estimated fair values primarily due to the short-term nature of the instruments or based on information obtained from market sources and management estimates. The Company measures the fair value of certain of its financial assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Revenue Recognition The Company has entered into feasibility and material transfer agreements (“Feasibility Agreements”) with third parties that provide the Company with funds in return for certain research and development activities. Revenue from the Feasibility Agreements is recognized in the period during which the related qualifying services are rendered and costs are incurred, provided that the applicable conditions under the Feasibility Agreements have been met. The Feasibility Agreements are on a best-effort basis and do not require scientific achievement as a performance obligation. All fees received under the Feasibility Agreements are non-refundable. The costs associated with the Feasibility Agreements are expensed as incurred and are reflected as a component of research and development expense in the accompanying condensed consolidated statements of operations. Funds received from the Feasibility Agreements are recorded as revenue as the Company is the principal participant in the arrangement because the activities under the Feasibility Agreements are part of the Company’s development programs. In those instances where the Company first receives consideration in advance of providing underlying services, the Company classifies such consideration as deferred revenue until (or as) the Company provides the underlying services. In those instances where the Company first provides the underlying services prior to its receipt of consideration, the Company records a grant receivable. During the three and nine months ended September 30, 2021, the Company rendered the related services and recognized revenue and research and development expenses of $50,000 and $76,165, respectively. As of September 30, 2021 and December 31, 2020, the Company had receivables due related to Feasibility Agreements of $25,000 and $0, respectively, which is included in prepaid assets and other current assets in the accompanying condensed consolidated balance sheets, and deferred grant revenue of $0 and $24,315, respectively. Collaborative Arrangements The Company considers the nature and contractual terms of arrangements and assesses whether an arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity. If the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity, the Company accounts for such arrangement as a collaborative arrangement under Accounting Standards Codification (“ASC”) 808, Collaborative Arrangements For arrangements determined to be within the scope of ASC 808 where a collaborative partner is not a customer for certain research and development activities, the Company accounts for payments received for the reimbursement of research and development costs as a contra-expense in the period such expenses are incurred. This reflects the joint risk sharing nature of these activities within a collaborative arrangement. The Company classifies payments owed or receivables recorded as other current liabilities or prepaid expenses and other current assets, respectively, in the Company’s consolidated balance sheets. Please refer to Note 5, “Joint Development Agreement” for additional details regarding the Company’s joint development agreement (“JDA”) with Augmenta Bioworks, Inc. (“Augmenta”). If payments from the collaborative partner to the Company represent consideration from a customer in exchange for distinct goods and services provided, then the Company accounts for those payments within the scope of ASC 606, Revenue from Contracts with Customers Research and Development Tax Incentive The Company is eligible to obtain a cash refund from the Australian Taxation Office for eligible research and development expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Company recognizes the Australian Tax Incentive when there is reasonable assurance that the cash refund will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. During the period ended September 30, 2021, the Company received its first cash refund under the Australian Tax Incentive, which was for expenditures incurred during 2020. Therefore, the Company recorded amounts received, or that it expects to receive, for expenditures incurred during 2020 as other income in the condensed consolidated statements of operations. As the Company has determined that it has reasonable assurance that it will receive the cash refund for eligible research and development expenditures, beginning with expenditures incurred during the three and nine months ended September 30, 2021, the Company records the Australian Tax Incentive as a reduction to research and development expenses as the Australian Tax Incentive is not dependent on the Company generating future taxable income, the Company’s ongoing tax status, or tax position. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. This percentage of eligible research and development expenses reimbursable under the Australian Tax Incentive is 43.5% for the three and nine months ended September 30, 2021 and for the year ended December 31, 2020. The research and development incentive receivable represents an amount due in connection with the Australian Tax Incentive. The Company has recorded a research and development tax incentive receivable of $1,111,540 and $0 as of September 30, 2021 and December 31, 2020, respectively, in the condensed consolidated balance sheets. The Company has recorded other income (expense) of $(13,129) and $659,695, in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021, respectively, related to refundable research and development incentive program payments for expenditures incurred during 2020. The Company recorded a reduction to research and development expenses of $219,520 and $735,927 during the three and nine months ended September 30, 2021, respectively, for expenditures incurred during 2021. Basic and Diluted Earnings per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive share equivalents outstanding for the period, determined using the treasury-stock and if-converted methods. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Basic weighted average shares outstanding for the three and nine months ended September 30, 2020 include 400,000 shares underlying a warrant to purchase common shares. As the shares underlying this warrant can be issued for little consideration (an aggregate exercise price of $0.01 per share), these shares are deemed to be issued for purposes of basic earnings per share. The warrant was exercised during the nine months ended September 30, 2021. For the nine months ended September 30, 2021 and 2020, the Company had the following potential common stock equivalents outstanding which were not included in the calculation of diluted net loss per common share because inclusion thereof would be anti-dilutive: Nine Months Ended Nine Months Ended September 30, September 30, Stock Options 2,723,339 2,871,123 Warrants 389,233 460,526 3,112,572 3,331,649 Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include the fair value of stock-based compensation and warrants and the valuation allowance against deferred tax assets and related disclosures. Actual results could differ from those estimates. Recent Accounting Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, In January 2020, the FASB issued ASU 2020-01, Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging – Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 4 - COMMITMENTS AND CONTINGENCIES Operating Leases In October 2018, the Company entered into a lease agreement for office space in Doylestown, Pennsylvania. The lease commenced on October 15, 2018 and expires on October 31, 2022, as amended. The lease has an additional one-year option for renewal, and the base rent is $36,000 per year. The Company has determined that the lease agreement is considered a short-term lease under ASC 842 and has not recorded a right-of-use asset or liability. The Company rents another office space on a month-to-month basis with no long-term commitment, which is considered a short-term lease as well. Short-term lease expense for the three and nine months ended September 30, 2021 was approximately $20,000 and $54,000, respectively. Short-term lease expense for the three and nine months ended September 30, 2020 was approximately $9,000 and $27,000, respectively. Approximate future minimum lease payments required under the operating leases are as follows: Year ending December 31, Amount 2021 – Remaining $ 9,000 2022 30,000 Total $ 39,000 Legal The Company may be involved, from time to time, in legal proceedings and claims arising in the ordinary course of its business. Such matters are subject to many uncertainties and outcomes and are not predictable with assurance. While management believes that such matters are currently insignificant, matters arising in the ordinary course of business for which the Company is or could become involved in litigation may have a material adverse effect on its business and financial condition. To the Company’s knowledge, neither the Company nor any of its properties are subject to any pending legal proceedings. |
License and Agreements
License and Agreements | 9 Months Ended |
Sep. 30, 2021 | |
License And Agreement Disclosure [Abstract] | |
LICENSE AND AGREEMENTS | NOTE 5 - LICENSE AND AGREEMENTS In July 2015, the University of Texas at Austin (“UT”) granted to the Company’s former parent, LTI, an exclusive worldwide, royalty bearing license to the patent rights for the TFF platform in all fields of use, other than vaccines for which LTI received a non-exclusive worldwide, royalty bearing license to the patent rights for the TFF platform. In March 2018, LTI completed an assignment to the Company all of its interest to the TFF platform, including the patent license agreement with UT, at which time the Company paid UT an assignment fee of $100,000 in accordance with the patent license agreement. In November 2018, the Company and UT entered into an amendment to the patent license agreement pursuant to which, among other things, the Company’s exclusive patent rights to the TFF platform were expanded to all fields of use. The patent license agreement requires the Company to pay royalties and milestone payments and conform to a variety of covenants and agreements, and in the event of the Company’s breach of agreement, UT may elect to terminate the agreement. For the period ended December 31, 2018, the Company did not achieve any of the milestones and, as such, was not required to make any milestone payments. During the ended December 31, 2019, the Company achieved one milestone by gaining IND approval on first indication of a licensed product on November 24, 2019. The milestone fee associated with this achievement to be paid is $50,000 and the Company must issue UT common shares equal to 1% of the Company’s outstanding shares of common stock, on a fully diluted basis, as of 30 days after IND approval, which was December 24, 2019. The Company paid the $50,000 and issued the shares in January 2020. As of the date of these condensed consolidated financial statements, the Company is in compliance with the patent license agreement as all required amounts have been paid in accordance with the agreement. In May 2018, the Company entered into a master services agreement and associated individual study contracts with ITR Canada, Inc. (“ITR”) to provide initial contract pre-clinical research and development services for the Company’s drug product candidates. In January 2019, the Company cancelled all of the individual study contracts with ITR and entered into contracts with 11036114 Canada Inc. (initially dba VJO Non-Clinical Development and now dba Strategy Point Innovations (“SPI”)) and 11035835 Canada Inc., (dba Periscope Research) to complete additional pre-clinical research and development services in order to take advantage of eligible Canadian Tax Credits. The services related to the contract with SPI were sub-contracted to ITR and others under substantially the same terms as the initial contract with ITR. Desire Ventures, LLC facilitates the invoicing for the various affiliates. There was no accounts payable due in connection with this agreement as of September 30, 2021 and the accounts payable was approximately $56,000 as of December 31, 2020. During the three and nine months ended September 30, 2021, the Company recorded research and development costs of approximately $0 and $2,380,000, respectively, pertaining to this agreement. During the three and nine months ended September 30, 2020, the Company recorded research and development costs of approximately $709,000 and $1,713,000, respectively, pertaining to this agreement. In April 2019, the Company entered into a master services agreement with Irisys, LLC to provide contract manufacturing services for one of the Company’s drug product candidates, Voriconazole. The accounts payable due in connection with this agreement was approximately $142,000 and $59,000 as of September 30, 2021 and December 31, 2020, respectively. During the three and nine months ended September 30, 2021, the Company recorded research and development costs of approximately $639,000 and $1,436,000, respectively, pertaining to this agreement. During the three and nine months ended September 30, 2020, the Company recorded research and development costs of approximately $249,000 and $1,266,000, respectively, pertaining to this agreement. In January 2020, TFF Australia entered into a master consultancy agreement with Novotech (Australia) Pty Ltd. (formally known as Clinical Network Services Pty Ltd.) to provide initial contract clinical research and development services for the Company’s drug product candidates. The accounts payable due in connection with this agreement was approximately AUD$105,000 (US$76,000) and AUD$170,000 (US$131,000) as of September 30, 2021 and December 31, 2020, respectively. During the three and nine months ended September 30, 2021, the Company recorded research and development costs of approximately AUD$547,000 (US$402,000) and AUD$1,468,000 (US$1,113,000), respectively, pertaining to this agreement. During the three and nine months ended September 30, 2020, the Company recorded research and development costs of approximately AUD$139,000 (US$99,000) and AUD$323,000 (US$218,000), respectively, pertaining to this agreement. In May 2020, TFF Australia entered into an amended clinical trial research agreement with Nucleus Network Pty Ltd. to provide a Phase I study of one of the Company’s drug candidates, Tacrolimus. The accounts payable due in connection with this agreement was approximately AUD$3,000 (US$2,000) and AUD$51,000 (US$40,000) as of September 30, 2021 and December 31, 2020, respectively. During the three and nine months ended September 30, 2021, the Company recorded research and development costs of approximately AUD$119,000 (US$87,000) and AUD$565,000 (US$429,000), respectively, pertaining to this agreement. During the three and nine months ended September 30, 2020, the Company recorded research and development costs of approximately AUD$61,000 (US$44,000) and AUD$437,000 (US$295,000), respectively, pertaining to this agreement. On August 12, 2020, the Company entered into a licensing and collaboration agreement with UNION therapeutics A/S in which UNION acquired an option to obtain a worldwide exclusive license for the TFF technology in combination with niclosamide. Pursuant to the terms of the license agreement, UNION can exercise its option to obtain the license within 45 days after the complete data has been received by UNION from investigator-initiated trials. Upon exercise of the option, UNION shall be responsible to pay all expenses incurred in the development of any licensed product. The Company will be eligible to receive milestone payments upon the achievement of certain milestones in the development the licensed products, based on completion of clinical trials, pre-marketing approvals and/or the receipt of at least $25,000,000 of grant funding. The Company will receive a single-digit tiered royalty on net sales. The Company will also be entitled to receive sales-related milestone payments based on the commercial success of the licensed products. In January 2021, the Company entered into a master services agreement with Experic to provide contract manufacturing services for one of the Company’s drug product candidates, Voriconazole. The accounts payable due in connection with this agreement was approximately $360,000 as of September 30, 2021. During the three and nine months ended September 30, 2021, the Company recorded research and development costs of approximately $735,000 and $1,036,000, respectively, pertaining to this agreement. Joint Development Agreement On November 2, 2020, the Company and Augmenta entered into the JDA pursuant to which the Company and Augmenta (collectively the “Parties”) agreed to work jointly to develop one or more novel commercial products incorporating Augmenta’s human derived monoclonal antibody for the treatment of patients with COVID-19 and the Company’s patented Thin Film Freezing technology platform. Each party retains full ownership over its existing assets. The Parties will share development costs with each party funding its fifty-percent-share at specified times. In the event that one of the Parties fails to make its pro rata share payment, the other party may terminate the JDA. In lieu of terminating the JDA, the non-defaulting party may elect to continue the JDA by paying the delinquent amount and each party’s pro rata share of the JDA will automatically adjust by the amount paid. In addition, in the event Augmenta experiences a default on its required payment, Augmenta will have the one-time right to elect to require the Company to purchase Augmenta’s interest in the JDA (“Put Right”) for a one-time fee of $500,000. Upon exercise of the Put Right and payment by the Company, Augmenta will grant the Company an exclusive, worldwide, royalty-free, transferable, sublicensable license to the Augmenta antibody and Augmenta’s rights to the property developed under the JDA. The Company has determined that the likelihood of the Put Right being exercised to be remote. The JDA is within the scope of ASC 808 as the Company and Augmenta are both active participants in the research and development activities and are exposed to significant risks and rewards that are dependent on commercial success of the activities of the arrangement. The research and development activities are a unit of account under the scope of ASC 808 and are not promises to a customer under the scope of ASC 606. The Company records its portion of the research and development expenses as the related expenses are incurred. All payments received or amounts due from Augmenta for reimbursement of shared costs are accounted for as an offset to research and development expense. During the three and nine months ended September 30, 2021, the Company recorded research and development expenses of $341,840 and $828,511, respectively, and has recorded a receivable of $831,061 for reimbursement due from Augmenta as of September 30, 2021. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 6 – STOCKHOLDERS’ EQUITY Common Stock March 2021 Offering On March 30, 2021, the Company completed the March 2021 Offering, selling 2,140,000 shares of common stock at an offering price of $14.00 per share. The Company received gross proceeds of approximately $30,000,000. The Company received net proceeds of approximately $28,015,000, after deducting underwriting discounts and commissions and offering-related expenses. Stock Option Exercises During the nine months ended September 30, 2021, 252,156 shares of common stock were issued in connection with the exercise of stock options for total proceeds of $689,753. Warrant Exercises During the nine months ended September 30, 2021, 415,917 shares of common stock were issued in connection with the cashless exercise of 424,288 common stock warrants. During the nine months ended September 30, 2021, 28,834 shares of common stock were issued in connection with the exercise of common stock warrants for total proceeds of $180,212. |
Stock Based Compensation
Stock Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-Based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | NOTE 7 – STOCK BASED COMPENSATION In January 2018, the Company’s board of directors approved its 2018 Stock Incentive Plan (“2018 Plan”). The 2018 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock, the grant of restricted and unrestricted share awards and grant of restricted stock units. The Company has 3,284,480 shares of its common stock reserved under the 2018 Plan. All of the Company’s employees and any subsidiary employees (including officers and directors who are also employees), as well as all of the Company’s nonemployee directors and other consultants, advisors and other persons who provide services to the Company will be eligible to receive incentive awards under the 2018 Plan. In September 2021, the Company’s board of directors approved its 2021 Stock Incentive Plan (“2021 Plan”), which was also approved by the stockholders of the Company at the Company’s annual meeting of stockholders held on November 4, 2021. The 2021 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock, the grant of restricted and unrestricted share awards and grant of restricted stock units. The Company has 4,200,000 shares of its common stock reserved under the 2021 Plan. All of the Company’s employees and any subsidiary employees (including officers and directors who are also employees), as well as all of the Company’s nonemployee directors and other consultants, advisors and other persons who provide services to the Company will be eligible to receive incentive awards under the 2021 Plan. The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the three and nine months ended September 30, 2021 and 2020 for stock options and warrants: Three Months Nine Months Three Months Nine Months Research and development $ 137,549 $ 274,285 $ 34,430 $ 78,035 General and administrative 719,045 2,353,259 511,690 1,189,285 $ 856,594 $ 2,627,544 $ 546,120 $ 1,267,320 As of September 30, 2021, there was approximately $9,316,000 of total unrecognized compensation expense related to non-vested share-based compensation arrangements that are expected to vest. This cost is expected to be recognized over a weighted-average period of 2.6 years. The Company records compensation expense for awards with graded vesting using the straight-line method. The Company recognizes compensation expense over the requisite service period applicable to each individual award, which generally equals the vesting term. The Company estimates the fair value of each option award using the Black-Scholes-Merton option pricing model. Forfeitures are recognized when realized. The Company estimated the fair value stock options using the Black-Scholes option pricing model. The fair value of stock options is being amortized on a straight-line basis over the requisite service periods of the respective awards. The fair value of stock options issued was estimated using the following assumptions: Nine Months Ended Weighted average exercise price $ 9.33 Weighted average grant date fair value $ 6.97 Assumptions Expected volatility 89%-97 % Weighted average expected term (in years) 6.0-10.0 Risk-free interest rate 0.81%-1.09 % Expected dividend yield 0.00% The risk-free interest rate was obtained from U.S. Treasury rates for the applicable periods. The Company’s expected volatility was based upon the historical volatility for industry peers and used an average of those volatilities. The expected life of the Company’s options was determined using the simplified method as a result of limited historical data regarding the Company’s activity for employee awards and the contractual term for nonemployee awards. The dividend yield considers that the Company has not historically paid dividends, and does not expect to pay dividends in the foreseeable future. The Company uses the closing stock price on the date of grant as the fair value of the common stock. The following table summarizes stock option activity during the nine months ended September 30, 2021: Number of Weighted- Weighted- Intrinsic Outstanding at January 1, 2021 2,610,495 $ 5.63 8.60 $ 22,789,233 Granted 365,000 9.33 — — Exercised (252,156 ) 2.74 — — Outstanding at September 30, 2021 2,723,339 $ 6.40 8.19 $ 7,113,579 Exercisable at September 30, 2021 1,049,615 $ 4.73 7.68 $ 3,789,466 The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had strike prices lower than the fair value of the Company’s common stock. The intrinsic value of the options exercised during 2021 was approximately $3,751,000. Warrants On February 1, 2021, the Company issued a five-year warrant to purchase 25,000 shares of common stock at $15.90 per share to a consultant. The fair value of the warrant on the grant date was estimated using the Black-Scholes-Merton option pricing model with a common stock value of $16.13 per share, a contractual life of 5.0 years, a dividend yield of 0%, volatility of 97.09% and an assumed risk-free interest rate of 0.42%. The warrant is immediately exercisable. The fair value of the warrant was determined to be approximately $293,000 and was recorded in general and administrative expenses in the condensed consolidated statement of operations during the nine months ended September 30, 2021. In determining the fair value for warrants, the expected life of the Company’s warrants was determined using the contractual life. The methodology in determining all other inputs to calculate the fair value utilizing the Black-Scholes-Merton option pricing model is the same as the stock option methodology described in above for stock options. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 8 – SUBSEQUENT EVENTS The Company has performed an evaluation of events occurring subsequent to September 30, 2021 through the filing date of this Quarterly Report. Based on its evaluation, nothing other than the events below need to be disclosed. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial statements and with Form 10-Q and Article 10 of Regulation S-X of the United States Securities and Exchange Commission (“SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all the adjustments necessary (consisting only of normal recurring accruals) to present the financial position of the Company as of September 30, 2021 and the results of operations, changes in stockholders’ equity and cash flows for the periods presented. The results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the operating results for the full fiscal year or any future period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of TFF Pharmaceuticals, Inc. and its wholly-owned subsidiary, TFF Australia. All material intercompany accounts and transactions have been eliminated in consolidation. |
Foreign Currency | Foreign Currency The currency of TFF Australia, the Company’s international subsidiary, is in Australian dollars. Foreign currency denominated assets and liabilities are translated into U.S. dollars using the exchange rates in effect at each balance sheet date. Results of operations and cash flows are translated using the average exchange rates throughout the period. The effect of exchange rate fluctuations on translation of assets and liabilities is included as a separate component of stockholders’ equity in accumulated other comprehensive income (loss). |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company maintains its operating accounts in financial institutions in the U.S. and in Australia. The balances are insured up to specified limits. The Company’s cash is maintained in checking accounts and money market funds with maturities of less than three months when purchased, which are readily convertible to known amounts of cash, and which in the opinion of management are subject to insignificant risk of loss in value. As of September 30, 2021 and December 31, 2020, the Company had cash in Australia of AUD$307,053 (US$221,521) and AUD$214,240 (US$165,092), respectively. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost less accumulated depreciation and amortization. The Company calculates depreciation using the straight-line method over the estimated useful lives of the assets, which range from two to five years for furniture, fixtures, lab and computer equipment and software. Assets held within construction in progress are not depreciated. Construction in progress is related to the construction or development of property and equipment that have not yet been placed in service for its intended use. As of September 30, 2021 and December 31, 2020, approximately $304,000 and $1,103,000, respectively, of the Company’s property and equipment consisted of lab equipment that are considered construction in progress. Expenditures for repairs and maintenance of assets are charged to expense as incurred. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Authoritative guidance requires disclosure of the fair value of financial instruments. The Company’s financial instruments consist of cash and cash equivalents and accounts payable, the carrying amounts of which approximate their estimated fair values primarily due to the short-term nature of the instruments or based on information obtained from market sources and management estimates. The Company measures the fair value of certain of its financial assets and liabilities on a recurring basis. A fair value hierarchy is used to rank the quality and reliability of the information used to determine fair values. Financial assets and liabilities carried at fair value which is not equivalent to cost will be classified and disclosed in one of the following three categories: Level 1 — Quoted prices (unadjusted) in active markets for identical assets and liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as unadjusted quoted prices for similar assets and liabilities, unadjusted quoted prices in the markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
Revenue Recognition | Revenue Recognition The Company has entered into feasibility and material transfer agreements (“Feasibility Agreements”) with third parties that provide the Company with funds in return for certain research and development activities. Revenue from the Feasibility Agreements is recognized in the period during which the related qualifying services are rendered and costs are incurred, provided that the applicable conditions under the Feasibility Agreements have been met. The Feasibility Agreements are on a best-effort basis and do not require scientific achievement as a performance obligation. All fees received under the Feasibility Agreements are non-refundable. The costs associated with the Feasibility Agreements are expensed as incurred and are reflected as a component of research and development expense in the accompanying condensed consolidated statements of operations. Funds received from the Feasibility Agreements are recorded as revenue as the Company is the principal participant in the arrangement because the activities under the Feasibility Agreements are part of the Company’s development programs. In those instances where the Company first receives consideration in advance of providing underlying services, the Company classifies such consideration as deferred revenue until (or as) the Company provides the underlying services. In those instances where the Company first provides the underlying services prior to its receipt of consideration, the Company records a grant receivable. During the three and nine months ended September 30, 2021, the Company rendered the related services and recognized revenue and research and development expenses of $50,000 and $76,165, respectively. As of September 30, 2021 and December 31, 2020, the Company had receivables due related to Feasibility Agreements of $25,000 and $0, respectively, which is included in prepaid assets and other current assets in the accompanying condensed consolidated balance sheets, and deferred grant revenue of $0 and $24,315, respectively. |
Collaborative Arrangements | Collaborative Arrangements The Company considers the nature and contractual terms of arrangements and assesses whether an arrangement involves a joint operating activity pursuant to which the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity. If the Company is an active participant and is exposed to significant risks and rewards dependent on the commercial success of the activity, the Company accounts for such arrangement as a collaborative arrangement under Accounting Standards Codification (“ASC”) 808, Collaborative Arrangements For arrangements determined to be within the scope of ASC 808 where a collaborative partner is not a customer for certain research and development activities, the Company accounts for payments received for the reimbursement of research and development costs as a contra-expense in the period such expenses are incurred. This reflects the joint risk sharing nature of these activities within a collaborative arrangement. The Company classifies payments owed or receivables recorded as other current liabilities or prepaid expenses and other current assets, respectively, in the Company’s consolidated balance sheets. Please refer to Note 5, “Joint Development Agreement” for additional details regarding the Company’s joint development agreement (“JDA”) with Augmenta Bioworks, Inc. (“Augmenta”). If payments from the collaborative partner to the Company represent consideration from a customer in exchange for distinct goods and services provided, then the Company accounts for those payments within the scope of ASC 606, Revenue from Contracts with Customers |
Research and Development Tax Incentive | Research and Development Tax Incentive The Company is eligible to obtain a cash refund from the Australian Taxation Office for eligible research and development expenditures under the Australian R&D Tax Incentive Program (the “Australian Tax Incentive”). The Company recognizes the Australian Tax Incentive when there is reasonable assurance that the cash refund will be received, the relevant expenditure has been incurred, and the consideration can be reliably measured. During the period ended September 30, 2021, the Company received its first cash refund under the Australian Tax Incentive, which was for expenditures incurred during 2020. Therefore, the Company recorded amounts received, or that it expects to receive, for expenditures incurred during 2020 as other income in the condensed consolidated statements of operations. As the Company has determined that it has reasonable assurance that it will receive the cash refund for eligible research and development expenditures, beginning with expenditures incurred during the three and nine months ended September 30, 2021, the Company records the Australian Tax Incentive as a reduction to research and development expenses as the Australian Tax Incentive is not dependent on the Company generating future taxable income, the Company’s ongoing tax status, or tax position. At each period end, management estimates the refundable tax offset available to the Company based on available information at the time. This percentage of eligible research and development expenses reimbursable under the Australian Tax Incentive is 43.5% for the three and nine months ended September 30, 2021 and for the year ended December 31, 2020. The research and development incentive receivable represents an amount due in connection with the Australian Tax Incentive. The Company has recorded a research and development tax incentive receivable of $1,111,540 and $0 as of September 30, 2021 and December 31, 2020, respectively, in the condensed consolidated balance sheets. The Company has recorded other income (expense) of $(13,129) and $659,695, in the condensed consolidated statements of operations for the three and nine months ended September 30, 2021, respectively, related to refundable research and development incentive program payments for expenditures incurred during 2020. The Company recorded a reduction to research and development expenses of $219,520 and $735,927 during the three and nine months ended September 30, 2021, respectively, for expenditures incurred during 2021. |
Basic and Diluted Earnings per Common Share | Basic and Diluted Earnings per Common Share Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and dilutive share equivalents outstanding for the period, determined using the treasury-stock and if-converted methods. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Basic weighted average shares outstanding for the three and nine months ended September 30, 2020 include 400,000 shares underlying a warrant to purchase common shares. As the shares underlying this warrant can be issued for little consideration (an aggregate exercise price of $0.01 per share), these shares are deemed to be issued for purposes of basic earnings per share. The warrant was exercised during the nine months ended September 30, 2021. For the nine months ended September 30, 2021 and 2020, the Company had the following potential common stock equivalents outstanding which were not included in the calculation of diluted net loss per common share because inclusion thereof would be anti-dilutive: Nine Months Ended Nine Months Ended September 30, September 30, Stock Options 2,723,339 2,871,123 Warrants 389,233 460,526 3,112,572 3,331,649 |
Use of Estimates | Use of Estimates The preparation of condensed consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Significant estimates include the fair value of stock-based compensation and warrants and the valuation allowance against deferred tax assets and related disclosures. Actual results could differ from those estimates. |
Recent Accounting Standards | Recent Accounting Standards In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Income Taxes (Topic 740), Simplifying the Accounting for Income Taxes, Investments – Equity Securities, Investments – Equity Method and Joint Ventures, and Derivatives and Hedging – Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Schedule of potential common stock equivalents outstanding | Nine Months Ended Nine Months Ended September 30, September 30, Stock Options 2,723,339 2,871,123 Warrants 389,233 460,526 3,112,572 3,331,649 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Year ending December 31, Amount 2021 – Remaining $ 9,000 2022 30,000 Total $ 39,000 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense stock options and warrants | Three Months Nine Months Three Months Nine Months Research and development $ 137,549 $ 274,285 $ 34,430 $ 78,035 General and administrative 719,045 2,353,259 511,690 1,189,285 $ 856,594 $ 2,627,544 $ 546,120 $ 1,267,320 |
Schedule of fair value of employee stock options | Nine Months Ended Weighted average exercise price $ 9.33 Weighted average grant date fair value $ 6.97 Assumptions Expected volatility 89%-97 % Weighted average expected term (in years) 6.0-10.0 Risk-free interest rate 0.81%-1.09 % Expected dividend yield 0.00% |
Schedule of stock option activity | Number of Weighted- Weighted- Intrinsic Outstanding at January 1, 2021 2,610,495 $ 5.63 8.60 $ 22,789,233 Granted 365,000 9.33 — — Exercised (252,156 ) 2.74 — — Outstanding at September 30, 2021 2,723,339 $ 6.40 8.19 $ 7,113,579 Exercisable at September 30, 2021 1,049,615 $ 4.73 7.68 $ 3,789,466 |
Organization and Description _2
Organization and Description of Business (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Mar. 30, 2021 | Jun. 30, 2021 | Jan. 24, 2018 | |
Accounting Policies [Abstract] | |||
Exchange of common stock | 4,000,000 | ||
Stock issued | 2,140,000 | ||
Share price | $ 14 | ||
Stock issued, value | $ 30,000,000 | $ (8,545) | |
Received net proceeds | $ 28,015,000 |
Liquidity and Management_s Pl_2
Liquidity and Management’s Plans (Details) | Sep. 30, 2021USD ($) |
Liquidity And Managements Plans [Abstract] | |
Cash and cash equivalents | $ 44,716,000 |
Working capital surplus | $ 45,934,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Dec. 31, 2020USD ($) | Sep. 30, 2021AUD ($) | |
Accounting Policies [Abstract] | ||||||
Due from related parties | $ 221,521 | $ 307,053 | ||||
Cash | 165,092 | $ 214,240 | ||||
Property and equipment | $ 304,000 | $ 304,000 | 1,103,000 | |||
Research and development | 50,000 | 76,165 | ||||
Prepaid assets and other current assets | 25,000 | 25,000 | 0 | |||
Deferred research grant revenue | $ 0 | 24,315 | ||||
Research and development tax percentage | 43.50% | |||||
Research and development tax incentive | 1,111,540 | $ 1,111,540 | $ 0 | |||
Other income (expense) | (13,129) | 659,695 | ||||
Research and development expense | $ 219,520 | $ 735,927 | ||||
Basic weighted average shares outstanding (in Shares) | shares | 400,000 | 400,000 | ||||
Aggregate exercise price (in Dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of potential common stock equivalents outstanding - shares | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Summary of Significant Accounting Policies (Details) - Schedule of potential common stock equivalents outstanding [Line Items] | ||
Potential common stock equivalents outstanding | 3,112,572 | 3,331,649 |
Stock Options [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of potential common stock equivalents outstanding [Line Items] | ||
Potential common stock equivalents outstanding | 2,723,339 | 2,871,123 |
Warrants [Member] | ||
Summary of Significant Accounting Policies (Details) - Schedule of potential common stock equivalents outstanding [Line Items] | ||
Potential common stock equivalents outstanding | 389,233 | 460,526 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Oct. 31, 2018 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |||||
Commitments and contingencies, description | the Company entered into a lease agreement for office space in Doylestown, Pennsylvania. The lease commenced on October 15, 2018 and expires on October 31, 2022, as amended. The lease has an additional one-year option for renewal, and the base rent is $36,000 per year. The Company has determined that the lease agreement is considered a short-term lease under ASC 842 and has not recorded a right-of-use asset or liability. The Company rents another office space on a month-to-month basis with no long-term commitment, which is considered a short-term lease as well. | ||||
Rent expenses | $ 36,000 | ||||
Short-term lease expense | $ 20,000 | $ 9,000 | $ 54,000 | $ 27,000 |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of future minimum lease payments | Sep. 30, 2021USD ($) |
Schedule of future minimum lease payments [Abstract] | |
2021 – Remaining | $ 9,000 |
2022 | 30,000 |
Total | $ 39,000 |
License and Agreements (Details
License and Agreements (Details) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||||
May 31, 2020 | Jan. 31, 2020USD ($) | Dec. 24, 2019USD ($) | May 31, 2018 | Sep. 30, 2021USD ($) | Sep. 30, 2021AUD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020AUD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2021AUD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020AUD ($) | Sep. 30, 2021AUD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020AUD ($) | Jul. 31, 2015USD ($) | |
License and Agreements (Details) [Line Items] | ||||||||||||||||
Assignment fee | $ 100,000 | |||||||||||||||
Milestone fee | $ 50,000 | |||||||||||||||
Common stock outstanding, percentage | 1.00% | |||||||||||||||
Payments of shares | $ 50,000 | |||||||||||||||
Accounts payable due | $ 76,000 | $ 76,000 | $ 105,000 | $ 131,000 | $ 170,000 | |||||||||||
Research and development expense | 639,000 | $ 249,000 | 1,436,000 | $ 1,266,000 | ||||||||||||
Pre-marketing approvals | 25,000,000 | |||||||||||||||
Research and development costs | 735,000 | 1,036,000 | ||||||||||||||
Interest fee | 500,000 | |||||||||||||||
Master Services [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Agreement term, description | In January 2019, the Company cancelled all of the individual study contracts with ITR and entered into contracts with 11036114 Canada Inc. (initially dba VJO Non-Clinical Development and now dba Strategy Point Innovations (“SPI”)) and 11035835 Canada Inc., (dba Periscope Research) to complete additional pre-clinical research and development services in order to take advantage of eligible Canadian Tax Credits. | |||||||||||||||
Accounts payable due | 142,000 | 142,000 | 56,000 | |||||||||||||
Research and development cost | 0 | 709,000 | 2,380,000 | 1,713,000 | ||||||||||||
Master Services [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Accounts payable due | $ 59,000 | |||||||||||||||
Novotech (Australia) Pty Ltd. [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Research and development costs | 402,000 | $ 547,000 | 99,000 | $ 139,000 | 1,113,000 | $ 1,468,000 | 218,000 | $ 323,000 | ||||||||
Nucleus Network Pty Ltd. [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Research and development costs | 87,000 | $ 119,000 | $ 44,000 | $ 61,000 | 429,000 | $ 565,000 | $ 295,000 | $ 437,000 | ||||||||
Augmenta [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Research and development costs | 341,840 | 828,511 | ||||||||||||||
Receivable for reimbursement amount | 831,061 | |||||||||||||||
Clinical Network Services Pty Ltd. [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Agreement description | to provide initial contract clinical research and development services for the Company’s drug product candidates. The accounts payable due in connection with this agreement was approximately AUD$105,000 (US$76,000) and AUD$170,000 (US$131,000) as of September 30, 2021 and December 31, 2020, respectively. | |||||||||||||||
Clinical trial research agreement with Nucleus Network Pty Ltd. [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Agreement description | to provide a Phase I study of one of the Company’s drug candidates, Tacrolimus. The accounts payable due in connection with this agreement was approximately AUD$3,000 (US$2,000) and AUD$51,000 (US$40,000) as of September 30, 2021 and December 31, 2020, respectively. | |||||||||||||||
Master Services Agreement [Member] | ||||||||||||||||
License and Agreements (Details) [Line Items] | ||||||||||||||||
Accounts payable due | $ 360,000 | $ 360,000 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Mar. 30, 2021 | Sep. 30, 2021 | |
Stockholders' Equity Note [Abstract] | ||
Shares of common stock | 2,140,000 | |
Offering price (in Dollars per share) | $ 14 | |
Gross proceeds (in Dollars) | $ 30,000,000 | |
Net proceeds (in Dollars) | $ 28,015,000 | |
Issuance of common stock for stock option exercises | 252,156 | |
Stock option exercises total proceeds (in Dollars) | $ 689,753 | |
Common stock cashless exercise | 415,917 | |
Common stock warrants | 424,288 | |
Exercise of common stock warrants | 28,834 | |
Total proceeds (in Dollars) | $ 180,212 |
Stock Based Compensation (Detai
Stock Based Compensation (Details) - USD ($) | Feb. 01, 2021 | Sep. 30, 2021 | Jan. 31, 2018 | Sep. 30, 2021 |
Share-based Payment Arrangement [Abstract] | ||||
Stock based compensation, description | the Company’s board of directors approved its 2021 Stock Incentive Plan (“2021 Plan”), which was also approved by the stockholders of the Company at the Company’s annual meeting of stockholders held on November 4, 2021. The 2021 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock, the grant of restricted and unrestricted share awards and grant of restricted stock units. The Company has 4,200,000 shares of its common stock reserved under the 2021 Plan. All of the Company’s employees and any subsidiary employees (including officers and directors who are also employees), as well as all of the Company’s nonemployee directors and other consultants, advisors and other persons who provide services to the Company will be eligible to receive incentive awards under the 2021 Plan. | the Company’s board of directors approved its 2018 Stock Incentive Plan (“2018 Plan”). The 2018 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock, the grant of restricted and unrestricted share awards and grant of restricted stock units. The Company has 3,284,480 shares of its common stock reserved under the 2018 Plan. All of the Company’s employees and any subsidiary employees (including officers and directors who are also employees), as well as all of the Company’s nonemployee directors and other consultants, advisors and other persons who provide services to the Company will be eligible to receive incentive awards under the 2018 Plan. | ||
Unrecognized compensation expense | $ 9,316,000 | $ 9,316,000 | ||
Weighted-average period | 2 years 7 months 6 days | |||
Intrinsic value | $ 3,751,000 | $ 3,751,000 | ||
Warrant description | the Company issued a five-year warrant to purchase 25,000 shares of common stock at $15.90 per share to a consultant. The fair value of the warrant on the grant date was estimated using the Black-Scholes-Merton option pricing model with a common stock value of $16.13 per share, a contractual life of 5.0 years, a dividend yield of 0%, volatility of 97.09% and an assumed risk-free interest rate of 0.42%. The warrant is immediately exercisable. The fair value of the warrant was determined to be approximately $293,000 and was recorded in general and administrative expenses in the condensed consolidated statement of operations during the nine months ended September 30, 2021 |
Stock Based Compensation (Det_2
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and warrants - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and warrants [Line Items] | ||||
Stock based compensation expense | $ 856,594 | $ 546,120 | $ 2,627,544 | $ 1,267,320 |
Research and development [Member] | ||||
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and warrants [Line Items] | ||||
Stock based compensation expense | 137,549 | 34,430 | 274,285 | 78,035 |
General and administrative [Member] | ||||
Stock Based Compensation (Details) - Schedule of stock-based compensation expense stock options and warrants [Line Items] | ||||
Stock based compensation expense | $ 719,045 | $ 511,690 | $ 2,353,259 | $ 1,189,285 |
Stock Based Compensation (Det_3
Stock Based Compensation (Details) - Schedule of fair value of employee stock options | 9 Months Ended |
Sep. 30, 2021$ / shares | |
Stock Based Compensation (Details) - Schedule of fair value of employee stock options [Line Items] | |
Weighted average exercise price (in Dollars per share) | $ 9.33 |
Weighted average grant date fair value (in Dollars per share) | $ 6.97 |
Expected dividend yield | 0.00% |
Minimum [Member] | |
Stock Based Compensation (Details) - Schedule of fair value of employee stock options [Line Items] | |
Expected volatility | 89.00% |
Weighted average expected term (in years) | 6 years |
Risk-free interest rate | 0.81% |
Maximum [Member] | |
Stock Based Compensation (Details) - Schedule of fair value of employee stock options [Line Items] | |
Expected volatility | 97.00% |
Weighted average expected term (in years) | 10 years |
Risk-free interest rate | 1.09% |
Stock Based Compensation (Det_4
Stock Based Compensation (Details) - Schedule of stock option activity | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Schedule of stock option activity [Abstract] | |
Number of Shares, Outstanding, beginning balance shares | 2,610,495 |
Weighted-Average Exercise Prices, Outstanding, beginning balance (in Dollars per share) | $ / shares | $ 5.63 |
Weighted-Average Remaining Contractual Term, Outstanding beginning balance | 8 years 7 months 6 days |
Intrinsic Value, Outstanding beginning balance (in Dollars) | $ | $ 22,789,233 |
Number of Shares, Outstanding, Granted | 365,000 |
Weighted-Average Exercise Prices, Outstanding, Granted (in Dollars per share) | $ / shares | $ 9.33 |
Weighted-Average Remaining Contractual Term, Granted | |
Intrinsic Value, Granted (in Dollars) | $ | |
Number of Shares, Outstanding, Exercised | (252,156) |
Weighted-Average Exercise Prices, Outstanding, Exercised (in Dollars per share) | $ / shares | $ 2.74 |
Weighted-Average Remaining Contractual Term, Exercised | |
Intrinsic Value, Exercised (in Dollars) | $ | |
Number of Shares, Outstanding, Outstanding ending balance | 2,723,339 |
Weighted-Average Exercise Prices, Outstanding, Outstanding ending balance (in Dollars per share) | $ / shares | $ 6.4 |
Weighted-Average Remaining Contractual Term, Outstanding ending balance | 8 years 2 months 8 days |
Intrinsic Value, Outstanding ending balance (in Dollars) | $ | $ 7,113,579 |
Number of Shares, Outstanding, Exercisable | 1,049,615 |
Weighted-Average Exercise Prices, Outstanding, Exercisable (in Dollars per share) | $ / shares | $ 4.73 |
Weighted-Average Remaining Contractual Term, Exercisable | 7 years 8 months 4 days |
Intrinsic Value, Exercisable | 3,789,466 |