Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2023 | Aug. 09, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | DERMATA THERAPEUTICS, INC. | |
Entity Central Index Key | 0001853816 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Jun. 30, 2023 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2023 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 3,189,034 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-40739 | |
Entity Incorporation State Country Code | DE | |
Entity Tax Identification Number | 86-3218736 | |
Entity Address Address Line 1 | 3525 Del Mar Heights Rd. | |
Entity Address Address Line 2 | 322 | |
Entity Address City Or Town | San Diego | |
Entity Address State Or Province | CA | |
Entity Address Postal Zip Code | 92130 | |
City Area Code | 858 | |
Local Phone Number | 800-2543 | |
Security 12b Title | Common Stock, $0.0001 Par Value | |
Trading Symbol | DRMA | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Warrants Member | ||
Document Information Line Items | ||
Security 12b Title | Warrants, exercisable for one share of Common Stock | |
Trading Symbol | DRMAW | |
Security Exchange Name | NASDAQ |
Balance Sheets
Balance Sheets - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Assets: | ||
Cash and cash equivalents | $ 8,438,530 | $ 6,241,294 |
Prepaid expenses and other current assets | 274,351 | 703,194 |
Total assets | 8,712,881 | 6,944,488 |
Liabilities: | ||
Accounts payable | 437,778 | 496,702 |
Accrued and other current liabilities | 245,084 | 425,932 |
Total liabilities | 682,862 | 922,634 |
Stockholders' Equity: | ||
Common Stock, par value $0.0001, 250,000,000 shares authorized, and 3,189,034 shares issued and outstanding as of June 30, 2023; and 250,000,000 shares authorized, and 770,115 shares issued and outstanding as of December 31, 2022, respectively. | 319 | 77 |
Additional paid-in capital | 57,564,394 | 51,614,965 |
Accumulated deficit | (49,534,694) | (45,593,188) |
Total stockholders' equity | 8,030,019 | 6,021,854 |
Total liabilities and stockholders' equity | $ 8,712,881 | $ 6,944,488 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2023 | Dec. 31, 2022 |
Balance Sheets | ||
Common stock shares, par value | $ 0.0001 | $ 0.0001 |
Common stock shares, authorized | 250,000,000 | 250,000,000 |
Common stock shares, issued | 3,189,034 | 770,115 |
Common stock shares, outstanding | 3,189,034 | 770,115 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Operating expenses: | ||||
Research and development | $ 838,931 | $ 1,612,552 | $ 2,031,564 | $ 3,208,391 |
General and administrative | 893,483 | 1,118,021 | 1,978,532 | 2,308,334 |
Total operating expenses | 1,732,414 | 2,730,573 | 4,010,096 | 5,516,725 |
Loss from operations | (1,732,414) | (2,730,573) | (4,010,096) | (5,516,725) |
Other income and expenses: | ||||
Interest income, net | 31,050 | 0 | 68,590 | 0 |
Net loss | $ (1,701,364) | $ (2,730,573) | $ (3,941,506) | $ (5,516,725) |
Net loss per share of common stock, basic and diluted | $ (0.63) | $ (3.90) | $ (2.13) | $ (9.02) |
Weighted-average basic and diluted common shares | $ 2,704,987 | $ 699,679 | $ 1,850,167 | $ 611,344 |
Statements of Stockholder's Equ
Statements of Stockholder's Equity (Unaudited) - USD ($) | Total | Common Stock | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) |
Balance, shares at Dec. 31, 2021 | 520,539 | |||
Balance, amount at Dec. 31, 2021 | $ 10,107,104 | $ 52 | $ 46,089,327 | $ (35,982,275) |
Stock-based compensation | 531,566 | 0 | 531,566 | 0 |
Net loss | (2,786,151) | $ 0 | 0 | (2,786,151) |
Balance, shares at Mar. 31, 2022 | 520,539 | |||
Balance, amount at Mar. 31, 2022 | 7,852,519 | $ 52 | 46,620,893 | (38,768,426) |
Balance, shares at Dec. 31, 2021 | 520,539 | |||
Balance, amount at Dec. 31, 2021 | 10,107,104 | $ 52 | 46,089,327 | (35,982,275) |
Net loss | (5,516,725) | |||
Balance, shares at Jun. 30, 2022 | 631,389 | |||
Balance, amount at Jun. 30, 2022 | 9,659,970 | $ 63 | 51,158,906 | (41,498,999) |
Balance, shares at Mar. 31, 2022 | 520,539 | |||
Balance, amount at Mar. 31, 2022 | 7,852,519 | $ 52 | 46,620,893 | (38,768,426) |
Stock-based compensation | 205,947 | 0 | 205,947 | 0 |
Net loss | (2,730,573) | $ 0 | 0 | (2,730,573) |
Issuance of Common Stock and warrants, net of issuance costs, shares | 56,162 | |||
Issuance of Common Stock and warrants, net of issuance costs, amount | 4,276,365 | $ 6 | 4,276,359 | 0 |
Issuance of Common Stock upon exercise of pre-funded warrants, shares | 54,688 | |||
Issuance of Common Stock upon exercise of pre-funded warrants, amount | 87 | $ 5 | 82 | |
Issuance of restricted stock unit awards | 55,625 | $ 0 | 55,625 | 0 |
Balance, shares at Jun. 30, 2022 | 631,389 | |||
Balance, amount at Jun. 30, 2022 | 9,659,970 | $ 63 | 51,158,906 | (41,498,999) |
Balance, shares at Dec. 31, 2022 | 770,115 | |||
Balance, amount at Dec. 31, 2022 | 6,021,854 | $ 77 | 51,614,965 | (45,593,188) |
Stock-based compensation | 131,260 | 0 | 131,260 | 0 |
Net loss | (2,240,142) | $ 0 | 0 | (2,240,142) |
Issuance of Common Stock and warrants, net of issuance costs, shares | 85,000 | |||
Issuance of Common Stock and warrants, net of issuance costs, amount | 4,174,985 | $ 9 | 4,174,976 | 0 |
Issuance of Common Stock upon exercise of pre-funded warrants, shares | 1,533,123 | |||
Issuance of Common Stock upon exercise of pre-funded warrants, amount | 153 | $ 153 | 0 | 0 |
Settlement of fractional shares paid in cash, shares | (81) | |||
Settlement of fractional shares paid in cash, amount | (40) | $ 0 | (40) | 0 |
Balance, shares at Mar. 31, 2023 | 2,388,157 | |||
Balance, amount at Mar. 31, 2023 | 8,088,070 | $ 239 | 55,921,161 | (47,833,330) |
Balance, shares at Dec. 31, 2022 | 770,115 | |||
Balance, amount at Dec. 31, 2022 | 6,021,854 | $ 77 | 51,614,965 | (45,593,188) |
Net loss | (3,941,506) | |||
Balance, shares at Jun. 30, 2023 | 3,189,034 | |||
Balance, amount at Jun. 30, 2023 | 8,030,019 | $ 319 | 57,564,394 | (49,534,694) |
Balance, shares at Mar. 31, 2023 | 2,388,157 | |||
Balance, amount at Mar. 31, 2023 | 8,088,070 | $ 239 | 55,921,161 | (47,833,330) |
Stock-based compensation | 131,177 | 0 | 131,177 | 0 |
Net loss | (1,701,364) | $ 0 | 0 | (1,701,364) |
Issuance of Common Stock and warrants, net of issuance costs, shares | 458,555 | |||
Issuance of Common Stock and warrants, net of issuance costs, amount | 1,512,102 | $ 46 | 1,512,056 | 0 |
Issuance of Common Stock upon exercise of pre-funded warrants, shares | 342,322 | |||
Issuance of Common Stock upon exercise of pre-funded warrants, amount | 34 | $ 34 | 0 | 0 |
Balance, shares at Jun. 30, 2023 | 3,189,034 | |||
Balance, amount at Jun. 30, 2023 | $ 8,030,019 | $ 319 | $ 57,564,394 | $ (49,534,694) |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (3,941,506) | $ (5,516,725) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 262,437 | 474,452 |
Increase (decrease) in cash resulting from changes in: | ||
Prepaid expenses and other current assets | 428,843 | 426,591 |
Accounts payable | (58,924) | 93,566 |
Accrued and other current liabilities | (180,848) | 74,753 |
Total adjustments to reconcile net loss to net cash used in operations | 451,508 | 1,069,362 |
Net cash used in operating activities | (3,489,998) | (4,447,363) |
Cash flows from financing activities: | ||
Proceeds from issuance of Common Stock and warrants, net of expenses | 5,687,087 | 4,276,365 |
Proceeds from exercise of pre-funded warrants | 187 | 87 |
Payment for fractional shares in reverse stock split | (40) | 0 |
Net cash provided by financing activities | 5,687,234 | 4,276,452 |
Net increase (decrease) in Cash and cash equivalents | 2,197,236 | (170,911) |
Cash and cash equivalents at beginning of period | 6,241,294 | 10,798,806 |
Cash and cash equivalents at end of period | $ 8,438,530 | $ 10,627,895 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2023 | |
Organization and Basis of Presentation | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Dermata Therapeutics, Inc., (the “Company”), was formed in December 2014 as a Delaware limited liability company (“LLC”) under the name Dermata Therapeutics, LLC. On March 24, 2021, the Company converted from an LLC to a Delaware C-corporation and changed its name to Dermata Therapeutics, Inc. The Company is a clinical-stage biotechnology company focused on the treatment of medical and aesthetic skin conditions and diseases. Initial Public Offering On August 17, 2021, the Company completed its initial public offering (“IPO”), in which it sold 160,714 shares of its Common Stock, par value $0.0001 per share (“Common Stock”), together with 160,714 warrants to purchase one share of Common Stock with an exercise price of $112.00 per share, at a combined offering price of $112.00. Additionally, the underwriters exercised their option to purchase an additional 24,106 warrants to purchase Common Stock with an exercise price of $112.00 per share, resulting in total IPO warrants issued of 184,820 at an exercise price of $112.00. The Company received net cash proceeds of approximately $15.4 million from the IPO after deducting underwriters’ discounts and offering expenses of approximately $2.6 million. The Company’s shares of Common Stock and warrants are listed on the Nasdaq Stock Market LLC (“Nasdaq”) under the symbols “DRMA,” and “DRMAW,” respectively, and both began trading in August 2021. Reverse Stock Split On March 13, 2023, the Company effected a reverse split of shares of the Company’s Common Stock at a ratio of 1-for-16 pursuant to an amendment to the Company’s certificate of incorporation approved by the Company’s board of directors and stockholders. The par value was not adjusted as a result of the reverse split. All issued and outstanding Common Stock shares and per share amounts contained in the financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. Liquidity and Going Concern Uncertainty Since its inception, the Company has devoted substantially all of its resources to research and development activities and has not generated any revenue or commercialized any product candidates. As of June 30, 2023, cash and cash equivalents totaled $8.4 million and the Company had an accumulated deficit of $49.5 million. For the six months ended June 30, 2023, and the year ended December 31, 2022, the Company used cash of $3.5 million and $8.8 million, respectively, in operations. During May 2023, the Company raised $1.8 million in gross proceeds from a private placement of Common Stock and warrants. The Company’s cash and cash equivalents are expected to fund operations into the second quarter of 2024. The Company anticipates that it will continue to incur net losses for the foreseeable future. These factors raise substantial doubt about the Company’s ability to continue as a going concern for the one-year period following the date that these financial statements were issued. Historically, the Company’s principal sources of cash have included proceeds from the issuance of common and preferred equity securities and proceeds from the issuance of debt. The Company’s principal uses of cash have included cash used in operations and payments for license rights. The Company expects that the principal uses of cash in the future will be for continuing operations, funding of research and development, conducting preclinical studies and clinical trials, and general working capital requirements. The Company expects that as research and development expenses continue to grow, it will need to raise additional capital to sustain operations and research and development. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of the Company to continue as a going concern. Management’s Plan to Continue as a Going Concern To continue as a going concern, the Company will need, among other things, to raise additional capital resources. Until the Company can generate significant cash from operations, management’s plans to obtain such resources for the Company include proceeds from offerings of the Company’s equity securities or debt, or transactions involving product development, technology licensing or collaboration. Management can provide no assurance that any sources of a sufficient amount of financing or collaboration agreements will be available to the Company on favorable terms, if at all. The Company’s ability to raise additional capital may be adversely impacted by potential worsening of global economic conditions, potential future global pandemics or health crises, and the recent disruptions to, and volatility in, the credit and financial markets in the United States. The Company has raised additional capital through the initial public offering of its Common Stock and warrants, as well as a private placement financing in April 2022, an at-the-market public offering in March 2023, and an at-the-market private placement in May 2023; however, prior completed financings do not alleviate substantial doubt about the Company’s ability to continue as a going concern. Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair statement of the financial position, results of operations, cash flows, and stockholders’ equity for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ materially from those estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The Company’s financial statements are prepared in accordance with GAAP. The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, and expenses and disclosure of contingent assets and liabilities in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments, including those related to accrued research and development expenses, stock-based compensation, and the estimated fair values of equity instruments. Management evaluates its estimates on an ongoing basis. The Company bases its estimates on various assumptions that it believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company and the Company’s chief operating decision maker view the Company’s operations and manage its business in one operating segment, which is the business of developing and commercializing pharmaceuticals. The Company operates in only one segment. Cash and Cash Equivalents The Company deposits its cash and cash equivalents with reputable financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”), which are held in checking and cash sweep accounts. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company maintains an insured cash sweep account in which cash from its main operating checking account is invested overnight in highly liquid, short-term investments. The Company considers all highly liquid investments with a maturity date of 90 days or less at the date of purchase to be cash equivalents. Fair Value Measurement The Company uses a three-tier fair value hierarchy to prioritize the inputs used in the Company’s fair value measurements. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets for identical assets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company believes the carrying amount of cash and cash equivalents, accounts payable and accrued expenses approximate their estimated fair values due to the short-term nature of these assets and liabilities. Interest Income Interest income consists of interest income earned on cash and cash equivalents from interest bearing demand accounts. Patent Costs Patent costs related to obtaining and maintaining patent protection in both the United States and other countries are expensed as incurred. Patents costs are classified as general and administrative expenses. Research and Development Research and development costs consist of expenses incurred in connection with the development of the Company’s product candidates. Such expenses include expenses incurred under agreements with contract research organizations, manufacturing and supply scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial supply, outsourced laboratory services, including materials and supplies used to support the Company’s research and development activities, and payments made for license fees and milestones that have not been demonstrated to have commercial value. Such costs are expensed in the periods in which they are incurred. Upfront payments and milestone payments for licensed technology are expensed as research and development as incurred or when the milestone is achieved or is determined to be probable of being achieved. Advanced payments for goods or services to be received in the future for research and development activities are recorded as prepaid expenses and expensed as the related goods are received or services are performed. Income Taxes From inception until March 24, 2021, the Company operated as a limited liability company taxed as a partnership. Therefore, any income tax liability or benefit through that date accrued to the Company’s members. Since March 24, 2021, the Company has operated as a C-Corporation and accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. Stock-Based Compensation In March 2021, the Company’s board of directors and shareholders approved the Dermata Therapeutics, Inc. 2021 Omnibus Equity Incentive Plan (the “2021 Plan”). For stock options granted under the 2021 Plan, the Company measures and recognizes compensation expense for all stock-based awards made to employees, directors, and non-employees, based on estimated fair values recognized using the straight-line method over the requisite service period. The fair value of options to purchase Common Stock granted to employees is estimated on the grant date using the Black-Scholes valuation model. The calculation of stock-based compensation expense requires that the Company make certain assumptions and judgments about variables used in the Black-Scholes model, including the expected term of the stock-based award, expected volatility of the underlying Common Stock, dividend yield, and the risk-free interest rate. Forfeitures are accounted for in the period they occur. Restricted stock units (“RSUs”) granted under the 2021 Plan are measured at the grant date fair value of the Common Stock, with corresponding compensation expense recognized ratably over the requisite service period. Refer to Note 5 - Equity Incentive Plan for further discussion. Comprehensive Loss Comprehensive loss includes net loss and other comprehensive income (loss) for the periods presented. The Company did not have other comprehensive income (loss) items such as unrealized gains and losses and so for the three and six months ended June 30, 2023, and 2022, comprehensive loss was equal to the net loss. Net Loss Per Common Share Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of shares outstanding during the period, contingently issuable restricted stock units for which no future service is required as a condition to the delivery of the underlying Common Stock, and pre-funded warrants because their exercise requires only nominal consideration for the delivery of shares (collectively, “basic shares”), without consideration of common share equivalents. Diluted net loss per share is calculated by adjusting basic shares outstanding for the dilutive effect of common share equivalents outstanding for the period. For purposes of the diluted net loss per share calculation, preferred shares, and warrants to purchase preferred shares are considered to be common share equivalents but are excluded from the calculation of diluted net loss per common share if their effect would be anti-dilutive. As the Company has reported a net loss for the periods presented, diluted net loss per common share is the same as the basic net loss per common share for the periods presented. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net loss $ (1,701,364 ) $ (2,730,573 ) $ (3,941,506 ) $ (5,516,725 ) Weighted-average basic and diluted common shares 2,704,987 699,679 1,850,167 611,344 Basic and diluted net loss per common share $ (0.63 ) $ (3.90 ) $ (2.13 ) $ (9.02 ) The common share equivalents that are not included in the calculation of diluted net loss per common share but could potentially dilute basic earnings per share in the future are as follows: As of June 30, 2023 2022 Common Stock options 102,074 62,582 Common Stock warrants 4,643,555 437,102 Total potentially dilutive securities 4,745,629 499,684 Recent Accounting Pronouncements For the six months ended June 30, 2023, the Company has reviewed recent accounting standards and does not expect the future adoption of recently issued accounting pronouncements to have a material impact on the Company's financial position and results of operations. |
Balance Sheet Details
Balance Sheet Details | 6 Months Ended |
Jun. 30, 2023 | |
Balance Sheet Details | |
Balance Sheet Details | 3. Balance Sheet Details The following provides certain balance sheet details: June 30, December 31, 2023 2022 Prepaid expenses and other current assets: Prepaid insurance $ 146,221 $ 586,407 Prepaid research and development costs 66,712 92,581 Prepaid other 60,628 11,604 Interest receivable 790 12,602 Total prepaid expenses and other current assets $ 274,351 $ 703,194 Accrued and other current liabilities: Accrued research and development costs $ 33,070 $ 254,787 Accrued compensation and benefits 181,967 170,389 Accrued legal fees 22,000 - Accrued other 8,047 756 Total accrued and other current liabilities $ 245,084 $ 425,932 |
Equity Securities
Equity Securities | 6 Months Ended |
Jun. 30, 2023 | |
Equity Securities | |
Equity Securities | 4. Equity Securities Common Stock On May 26, 2023, the Company closed a private placement (the “2023 PIPE”) priced at the market under Nasdaq rules, in which it sold 458,555 shares of its Common Stock together with 342,322 pre-funded warrants to purchase up to an aggregate of 342,322 shares of Common Stock with an exercise price of $0.0001 per share (the “May 2023 Pre-Funded Warrants”), and 800,877 warrants to purchase up to an aggregate of 800,877 shares of Common Stock with an exercise price of $2.16 per share (the “May 2023 PIPE Common Warrants”) at a combined offering price of $2.285. The May 2023 PIPE Common Warrants expire on November 27, 2028. The Company received net cash proceeds of approximately $1.5 million from the 2023 PIPE after deducting underwriters’ discounts and offering expenses of approximately $0.3 million. The May 2023 Pre-Funded Warrants were exercised by June 30, 2023, and no May 2023 Pre-Funded Warrants were outstanding as of June 30, 2023. On March 20, 2023, the Company closed a public offering (the “March 2023 Offering”) priced at the market under Nasdaq rules, in which it sold an aggregate of (i) 85,000 shares of Common Stock, (ii) pre-funded warrants (the “March 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 1,533,123 shares of Common Stock with an exercise price of $0.0001 per share, (iii) Series A warrants (the “Series A Common Warrants”) to purchase up to an aggregate of 1,618,123 shares of Common Stock, and (iv) Series B warrants (the “Series B Common Warrants” and collectively with the Series A Warrants, the “2023 Offering Warrants”) to purchase up to an aggregate of 1,618,123 shares of Common Stock. The March 2023 Offering Warrants have an exercise price of $2.82 per share. The Company received net cash proceeds of approximately $4.2 million after deducting underwriters’ discounts and offering expenses of approximately $0.8 million. The March 2023 Pre-Funded Warrants were fully exercised by March 31, 2023, adding 1,533,123 shares to Common Stock outstanding. No March 2023 Pre-Funded Warrants were outstanding as of June 30, 2023. On April 25, 2022, the Company closed a private placement (the “April 2022 PIPE”), in which it sold 56,161 shares of its Common Stock together with 179,687 pre-funded warrants to purchase up to an aggregate of 179,687 shares of Common Stock with an exercise price of $0.0001 per share (the “April 2022 PIPE Pre-Funded Warrants”), and 235,849 warrants to purchase up to an aggregate of 235,849 shares of Common Stock with an exercise price of $21.20 per share (the “April 2022 PIPE Common Warrants”) at a combined offering price of $21.20. The April 2022 PIPE Common Warrants related to the private placement expire on May 12, 2027. The Company received net cash proceeds of approximately $4.3 million from the April 2022 PIPE after deducting underwriters’ discounts and offering expenses of approximately $0.7 million. The April 2022 PIPE Pre-Funded Warrants were exercised fully during 2022, and no April 2022 PIPE Pre-Funded Warrants were outstanding as of December 31, 2022, or June 30, 2023. In connection with the March 2023 Offering, the Company agreed to amend the terms of the April 2022 PIPE Common Warrants, which are held by the purchaser in the March 2023 Offering. The exercise price of the April 2022 PIPE Common Warrants were reduced from $21.20 to $2.82 per share upon closing of the March 2023 Offering. The original expiration date of the April 2022 PIPE Common Warrants was May 12, 2027, which was extended to five years after the closing of the March 2023 Offering, or March 20, 2028. The modification of the April 2022 PIPE Common Warrants resulted in an increase in additional paid-in capital since the warrants are equity classified before and after the modification in connection with the March 2023 Offering. Stockholders’ Agreements On March 13, 2023, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware on March 14, 2023, a 1-for-16 reverse stock split of the Company’s issued and outstanding shares of Common Stock. All issued and outstanding Common Stock shares and per share amounts contained in the financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. On July 11, 2022, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to increase the number of authorized shares of the Company’s Common Stock from 90,000,000 shares to 250,000,000 shares. The increase in the number of authorized shares was approved by the holders of a majority of the outstanding shares of Common Stock of the Company at its annual meeting on July 11, 2022. Preferred Stock While the Company has 10,000,000 shares of preferred stock authorized with a par value of $0.0001, no shares of preferred stock are outstanding as of June 30, 2023, or December 31, 2022. Warrants The Company performs an assessment of warrants upon issuance to determine their proper classification in the financial statements based upon the warrant’s specific terms, in accordance with the authoritative guidance provided in Financial Accounting Standards Board Accounting Standards Codification, or ASC, 480 Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480 and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed in the Company’s own common stock and whether the warrant holders could potentially require cash settlement of the warrants. Additional accounting guidance regarding modifications is provided in Accounting Standards Update, or ASU, 2021-04 Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options (a consensus of the Emerging Issues Task Force), effective as of January 1, 2022. For issued or modified warrants that meet all the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be liability classified and recorded at their initial fair value on the date of issuance and remeasured at fair value at each balance sheet date thereafter. The Company has performed an assessment of all warrants issued and modified and determined that the Company’s warrants are equity classified. Common and Pre-Funded Warrants issued in the 2023 PIPE In May 2023, the Company completed the 2023 PIPE, in which it sold 458,555 shares of its Common Stock together with 342,322 May 2023 Pre-Funded Warrants to purchase up to an aggregate of 342,322 shares of Common Stock with an exercise price of $0.0001 per share, and 800,877 May 2023 PIPE Common Warrants to purchase up to an aggregate of 800,877 shares of Common Stock with an exercise price of $2.16 per share, at a combined offering price of $2.285. Each May 2023 Common Warrant is immediately exercisable at the option of the holder and expires November 27, 2028. In connection with the 2023 PIPE, the Company issued Placement Agent Warrants to purchase up to 56,061 shares of Common Stock at an exercise price equal to $2.8563 per share (the “May 2023 PIPE Placement Agent Warrants”). The May 2023 PIPE Placement Agent Warrants are exercisable immediately upon issuance and expire on May 23, 2028. During the quarter ended June 30, 2023, all 342,322 of the May 2023 Pre-Funded Warrants were exercised. No additional May 2023 Pre-Funded Warrants are outstanding as of June 30, 2023. Common and Pre-Funded Warrants issued with March 2023 Offering In March 2023, the Company completed the March 2023 Offering, in which it sold 85,000 shares of its Common Stock together with 1,533,123 2023 Pre-Funded Warrants to purchase up to an aggregate of 1,533,123 shares of Common Stock with an exercise price of $0.0001 per share, and 1,618,123 Series A Common Warrants to purchase up to an aggregate of 1,618,123 shares of Common Stock with an exercise price of $2.82 per share, and 1,618,123 Series B Common Warrants to purchase up to an aggregate of 1,618,123 shares of Common Stock with an exercise price of $2.82 per share, at a combined offering price of $3.09. Each Series A Common Warrant is immediately exercisable at the option of the holder and expires March 20, 2028. Each Series B Common Warrant is immediately exercisable at the option of the holder and expires July 20, 2025. In connection with the March 2023 Offering, the Company issued Placement Agent Warrants to purchase up to 113,269 shares of Common Stock at an exercise price equal to $3.8625 per share (the “March 2023 Offering Placement Agent Warrants”). The March 2023 Offering Placement Agent Warrants are exercisable immediately upon issuance and expire on March 16, 2028. During the quarter ended March 31, 2023, 1,533,123 of the 2023 Pre-Funded Warrants were exercised. No additional 2023 Pre-Funded Warrants are outstanding as of June 30, 2023. Summary of Warrants Outstanding The table below lists outstanding warrants for the dates presented. The aggregate intrinsic value of warrants outstanding as of June 30, 2023 is calculated as the difference between the exercise price of the warrants and the closing market price of the Company's Common Stock on that date, which was $1.65 per share. The intrinsic value of warrants outstanding as of June 30, 2023, was zero due to the warrants' exercise prices above market value. Quantity of Warrants Outstanding as of Exercise Expiration Description June 30, 2023 December 31, 2022 Price Date Series 1a Warrants 4,321 4,321 $ 328.00 11/15/2026 Class B Common Warrants 4,077 4,077 $ 91.84 12/31/2024 IPO Warrants 184,820 184,820 $ 112.00 8/17/2026 IPO Underwriter Warrants 8,035 8,035 $ 128.80 8/17/2026 April 2022 PIPE Common Warrants 235,849 235,849 $ 2.82 3/20/2028 Series A Common Warrants 1,618,123 - $ 2.82 3/20/2028 Series B Common Warrants 1,618,123 - $ 2.82 7/20/2025 March 2023 Offering Placement Agent Warrants 113,269 - $ 3.8625 3/16/2028 May 2023 PIPE Common Warrants 800,877 - $ 2.16 11/27/2028 May 2023 PIPE Placement Agent Warrants 56,061 - $ 2.8563 5/23/2028 Total warrants outstanding 4,643,555 437,102 |
Equity Incentive Plan
Equity Incentive Plan | 6 Months Ended |
Jun. 30, 2023 | |
Equity Incentive Plan | |
Equity Incentive Plan | 5. Equity Incentive Plan Under the Company’s 2021 Omnibus Equity Incentive Plan (the “2021 Plan”), the Company may grant options to purchase Common Stock, restricted stock awards, performance stock awards, incentive bonus awards, other cash-based awards or directly issue shares of Common Stock to employees, directors, and consultants of the Company. Effective January 1, 2022, an evergreen provision contained in the Company’s 2021 Plan increased the total number of shares of common shares issuable under the 2021 Plan in an amount equal to one percent of the Company’s common shares outstanding as of December 31, 2021. This evergreen provision resulted in an additional 5,205 common shares issuable pursuant to the 2021 Plan as of January 1, 2022. This evergreen provision resulted in an additional 7,701 common shares issuable pursuant to the 2021 as of January 1, 2023, increasing the total authorized shares available for issuance under the 2021 Plan to 115,919 as of January 1, 2023. Stock awards may be granted at an exercise price per share of not less than 100% of the fair market value at the date of grant. Stock awards granted are exercisable over a maximum term of 10 years from the date of grant and generally vest over a period of four years for employees and one year for directors of the Company’s board and consultants. As of June 30, 2023, there remain an additional 127 shares reserved for issuance under the 2021 Plan. Fair Value Measurement The Company uses the Black-Scholes option valuation model, which requires the use of highly subjective assumptions, to determine the fair value of stock-based awards. The fair value of each employee stock option is estimated on the grant date under the fair value method using the Black-Scholes model. The estimated fair value of each stock option is then expensed over the requisite service period, which is generally the vesting period. The assumptions and estimates that the Company uses in the Black-Scholes model are as follows: · Fair Value of Common Stock. · Risk-Free Interest Rate. · Expected Term. · Volatility. · Dividend Yield. The following table presents the weighted-average assumptions used for the stock option grants: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Grant date fair value $4.23 $25.12 $4.23 $ 25.12 Risk-free rate 3.9% 1.39% 3.9% 1.39% Dividend yield 0.00% 0.00% 0.00% 0.00% Expected life in years 6.1 5.3 6.1 5.3 Expected volatility 112% 122% 112% 122% Stock-based Compensation Expense In general, stock-based compensation is allocated to research and development expense or general and administrative expense according to the classification of cash compensation paid to the employee, director, or consultant to whom the stock award was granted. The following table summarizes the total stock-based compensation expense related to stock options and RSUs included in the Company’s statements of operations: Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 48,425 $ 53,309 $ 96,850 $ 108,510 General and administrative 82,752 208,263 165,587 365,942 $ 131,177 $ 261,572 $ 262,437 $ 474,452 Stock Option Award Activity A summary of the Company’s Equity Plan stock option activity is as follows: Number of Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in Years) Balance at December 31, 2022 65,983 $ 60.32 8.2 Options granted 36,091 4.96 9.5 Options exercised - - - Options cancelled - - - Balance at June 30, 2023 102,074 $ 40.77 8.3 Options exercisable at June 30, 2023 48,300 $ 64.49 7.8 The aggregate intrinsic value of options exercisable as of June 30, 2023, is calculated as the difference between the exercise price of the underlying options and the closing market price of the Company’s Common Stock on that date, which was $1.65 per share. The intrinsic value of options outstanding and exercisable as of June 30, 2023, was zero. As of June 30, 2023, total unrecognized compensation cost related to stock options was approximately $0.8 million and the weighted average period over which this cost is expected to be recognized is 2.1 years. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies (see Note 6) | |
Commitments and Contingencies | 6. Commitments and Contingencies License Agreements On March 31, 2017, the Company entered into a license agreement, as amended (the “License Agreement”) with Villani, Inc. whereby Villani has granted the Company an exclusive, sub-licensable, royalty-bearing license (the “License”) under the Licensed Patents (as defined in the License Agreement), to formulate, develop, seek regulatory approval for, make or sell products that contain Spongilla lacustris Supplier Agreement As a result of Russia’s invasion of Ukraine, the United States, the United Kingdom, and the European Union governments, among others, have developed coordinated sanctions and export-control measure packages against Russian individuals and entities. The Company is currently a party to an exclusive supply agreement for the supply of the Spongilla Spongilla Spongilla Spongilla Legal Proceedings In the normal course of business, the Company may be involved in legal proceedings or threatened legal proceedings. The Company is not a party to any legal proceedings or aware of any threatened legal proceedings which are expected to have a material adverse effect on its financial condition, results of operations or liquidity. |
Subsequent Event
Subsequent Event | 6 Months Ended |
Jun. 30, 2023 | |
Subsequent Event | |
Subsequent Event | 7. Subsequent Event On August 3, 2023, at the Company’s 2023 Annual Meeting, stockholders approved an amendment to the Company’s 2021 Omnibus Equity Incentive Plan to increase the number of shares of Common Stock authorized for issuance by 513,150 shares to 629,069 shares. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Use of Estimates | The Company’s financial statements are prepared in accordance with GAAP. The preparation of the Company’s financial statements requires management to make estimates and assumptions that impact the reported amounts of assets, liabilities, and expenses and disclosure of contingent assets and liabilities in the financial statements and accompanying notes. On an ongoing basis, management evaluates these estimates and judgments, including those related to accrued research and development expenses, stock-based compensation, and the estimated fair values of equity instruments. Management evaluates its estimates on an ongoing basis. The Company bases its estimates on various assumptions that it believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. |
Segment Information | Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company and the Company’s chief operating decision maker view the Company’s operations and manage its business in one operating segment, which is the business of developing and commercializing pharmaceuticals. The Company operates in only one segment. |
Cash and Cash Equivalents | The Company deposits its cash and cash equivalents with reputable financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”), which are held in checking and cash sweep accounts. At times, deposits held may exceed the amount of insurance provided by the FDIC. The Company maintains an insured cash sweep account in which cash from its main operating checking account is invested overnight in highly liquid, short-term investments. The Company considers all highly liquid investments with a maturity date of 90 days or less at the date of purchase to be cash equivalents. |
Fair Value Measurement | The Company uses a three-tier fair value hierarchy to prioritize the inputs used in the Company’s fair value measurements. These tiers include Level 1, defined as observable inputs such as quoted prices in active markets for identical assets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The Company believes the carrying amount of cash and cash equivalents, accounts payable and accrued expenses approximate their estimated fair values due to the short-term nature of these assets and liabilities. |
Interest Income | Interest income consists of interest income earned on cash and cash equivalents from interest bearing demand accounts. |
Patent Costs | Patent costs related to obtaining and maintaining patent protection in both the United States and other countries are expensed as incurred. Patents costs are classified as general and administrative expenses. |
Research and Development | Research and development costs consist of expenses incurred in connection with the development of the Company’s product candidates. Such expenses include expenses incurred under agreements with contract research organizations, manufacturing and supply scale-up expenses and the cost of acquiring and manufacturing preclinical and clinical trial supply, outsourced laboratory services, including materials and supplies used to support the Company’s research and development activities, and payments made for license fees and milestones that have not been demonstrated to have commercial value. Such costs are expensed in the periods in which they are incurred. Upfront payments and milestone payments for licensed technology are expensed as research and development as incurred or when the milestone is achieved or is determined to be probable of being achieved. Advanced payments for goods or services to be received in the future for research and development activities are recorded as prepaid expenses and expensed as the related goods are received or services are performed. |
Income Taxes | From inception until March 24, 2021, the Company operated as a limited liability company taxed as a partnership. Therefore, any income tax liability or benefit through that date accrued to the Company’s members. Since March 24, 2021, the Company has operated as a C-Corporation and accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date. The Company recognizes net deferred tax assets to the extent that the Company believes these assets are more likely than not to be realized. In making such a determination, management considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning strategies, and results of recent operations. If management determines that the Company would be able to realize its deferred tax assets in the future in excess of their net recorded amount, management would make an adjustment to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. The Company records uncertain tax positions on the basis of a two-step process whereby (1) management determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, management recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. The Company recognizes interest and penalties related to unrecognized tax benefits within income tax expense. Any accrued interest and penalties are included within the related tax liability. |
Stock-Based Compensation | In March 2021, the Company’s board of directors and shareholders approved the Dermata Therapeutics, Inc. 2021 Omnibus Equity Incentive Plan (the “2021 Plan”). For stock options granted under the 2021 Plan, the Company measures and recognizes compensation expense for all stock-based awards made to employees, directors, and non-employees, based on estimated fair values recognized using the straight-line method over the requisite service period. The fair value of options to purchase Common Stock granted to employees is estimated on the grant date using the Black-Scholes valuation model. The calculation of stock-based compensation expense requires that the Company make certain assumptions and judgments about variables used in the Black-Scholes model, including the expected term of the stock-based award, expected volatility of the underlying Common Stock, dividend yield, and the risk-free interest rate. Forfeitures are accounted for in the period they occur. Restricted stock units (“RSUs”) granted under the 2021 Plan are measured at the grant date fair value of the Common Stock, with corresponding compensation expense recognized ratably over the requisite service period. Refer to Note 5 - Equity Incentive Plan for further discussion. |
Comprehensive Loss | Comprehensive loss includes net loss and other comprehensive income (loss) for the periods presented. The Company did not have other comprehensive income (loss) items such as unrealized gains and losses and so for the three and six months ended June 30, 2023, and 2022, comprehensive loss was equal to the net loss. |
Net Loss Per Common Unit/Share | Basic net loss per share is calculated by dividing net loss attributable to common shareholders by the weighted-average number of shares outstanding during the period, contingently issuable restricted stock units for which no future service is required as a condition to the delivery of the underlying Common Stock, and pre-funded warrants because their exercise requires only nominal consideration for the delivery of shares (collectively, “basic shares”), without consideration of common share equivalents. Diluted net loss per share is calculated by adjusting basic shares outstanding for the dilutive effect of common share equivalents outstanding for the period. For purposes of the diluted net loss per share calculation, preferred shares, and warrants to purchase preferred shares are considered to be common share equivalents but are excluded from the calculation of diluted net loss per common share if their effect would be anti-dilutive. As the Company has reported a net loss for the periods presented, diluted net loss per common share is the same as the basic net loss per common share for the periods presented. Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net loss $ (1,701,364 ) $ (2,730,573 ) $ (3,941,506 ) $ (5,516,725 ) Weighted-average basic and diluted common shares 2,704,987 699,679 1,850,167 611,344 Basic and diluted net loss per common share $ (0.63 ) $ (3.90 ) $ (2.13 ) $ (9.02 ) The common share equivalents that are not included in the calculation of diluted net loss per common share but could potentially dilute basic earnings per share in the future are as follows: As of June 30, 2023 2022 Common Stock options 102,074 62,582 Common Stock warrants 4,643,555 437,102 Total potentially dilutive securities 4,745,629 499,684 |
Recent Accounting Pronouncements | For the six months ended June 30, 2023, the Company has reviewed recent accounting standards and does not expect the future adoption of recently issued accounting pronouncements to have a material impact on the Company's financial position and results of operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of earnings per share, basic and diluted | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Net loss $ (1,701,364 ) $ (2,730,573 ) $ (3,941,506 ) $ (5,516,725 ) Weighted-average basic and diluted common shares 2,704,987 699,679 1,850,167 611,344 Basic and diluted net loss per common share $ (0.63 ) $ (3.90 ) $ (2.13 ) $ (9.02 ) |
Schedule of potentially diluted basic earnings | As of June 30, 2023 2022 Common Stock options 102,074 62,582 Common Stock warrants 4,643,555 437,102 Total potentially dilutive securities 4,745,629 499,684 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Balance Sheet Details | |
Schedule of balance sheet details | June 30, December 31, 2023 2022 Prepaid expenses and other current assets: Prepaid insurance $ 146,221 $ 586,407 Prepaid research and development costs 66,712 92,581 Prepaid other 60,628 11,604 Interest receivable 790 12,602 Total prepaid expenses and other current assets $ 274,351 $ 703,194 Accrued and other current liabilities: Accrued research and development costs $ 33,070 $ 254,787 Accrued compensation and benefits 181,967 170,389 Accrued legal fees 22,000 - Accrued other 8,047 756 Total accrued and other current liabilities $ 245,084 $ 425,932 |
Equity Securities (Tables)
Equity Securities (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity Securities | |
Schedule of outstanding warrants | Quantity of Warrants Outstanding as of Exercise Expiration Description June 30, 2023 December 31, 2022 Price Date Series 1a Warrants 4,321 4,321 $ 328.00 11/15/2026 Class B Common Warrants 4,077 4,077 $ 91.84 12/31/2024 IPO Warrants 184,820 184,820 $ 112.00 8/17/2026 IPO Underwriter Warrants 8,035 8,035 $ 128.80 8/17/2026 April 2022 PIPE Common Warrants 235,849 235,849 $ 2.82 3/20/2028 Series A Common Warrants 1,618,123 - $ 2.82 3/20/2028 Series B Common Warrants 1,618,123 - $ 2.82 7/20/2025 March 2023 Offering Placement Agent Warrants 113,269 - $ 3.8625 3/16/2028 May 2023 PIPE Common Warrants 800,877 - $ 2.16 11/27/2028 May 2023 PIPE Placement Agent Warrants 56,061 - $ 2.8563 5/23/2028 Total warrants outstanding 4,643,555 437,102 |
Equity Incentive Plan (Tables)
Equity Incentive Plan (Tables) | 6 Months Ended |
Jun. 30, 2023 | |
Equity Incentive Plan | |
Weighted-average assumptions used for the stock option grants | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Grant date fair value $4.23 $25.12 $4.23 $ 25.12 Risk-free rate 3.9% 1.39% 3.9% 1.39% Dividend yield 0.00% 0.00% 0.00% 0.00% Expected life in years 6.1 5.3 6.1 5.3 Expected volatility 112% 122% 112% 122% |
Schedule of stock-based compensation expense | Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Research and development $ 48,425 $ 53,309 $ 96,850 $ 108,510 General and administrative 82,752 208,263 165,587 365,942 $ 131,177 $ 261,572 $ 262,437 $ 474,452 |
Schedule of stock option activity | Number of Options Outstanding Weighted- Average Exercise Price Weighted- Average Remaining Contractual Term (in Years) Balance at December 31, 2022 65,983 $ 60.32 8.2 Options granted 36,091 4.96 9.5 Options exercised - - - Options cancelled - - - Balance at June 30, 2023 102,074 $ 40.77 8.3 Options exercisable at June 30, 2023 48,300 $ 64.49 7.8 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Aug. 17, 2021 | Jun. 30, 2023 | Dec. 31, 2022 | Mar. 31, 2023 | |
Accumulated deficit | $ (49.5) | |||
Common stock shares, par value | $ 0.0001 | $ 0.0001 | ||
Cash and cash equivalents | $ 8.4 | |||
Net Cash Used In Operation | $ 3.5 | $ 8.8 | ||
Sale of stock | 160,714 | |||
Warrant exercise price | $ 112 | |||
Warrant exercise price | $ 0.0001 | |||
Initial Public Offering [Member] | ||||
Common stock shares, par value | $ 0.0001 | |||
Warrants to purchase one share of common stock | 160,714 | |||
Warrant exercise price | $ 112 | |||
Combined Offering Price | $ 112 | |||
Warrants issued | 24,106 | 184,820 | ||
Option exercise price | $ 112 | |||
Gross Proceeds from warrants purchase of common stock | $ 15.4 | $ 1.8 | ||
Issuance costs | $ 2.6 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Mar. 31, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Summary of Significant Accounting Policies | ||||||
Net loss | $ (1,701,364) | $ (2,240,142) | $ (2,730,573) | $ (2,786,151) | $ (3,941,506) | $ (5,516,725) |
Weighted-average basic and diluted common shares | 2,704,987 | 699,679 | 1,850,167 | 611,344 | ||
Basic And Diluted Net Loss Per Common share | $ (0.63) | $ (3.90) | $ (2.13) | $ (9.02) |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details 1) - shares | 6 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Total Potentially Dilutive Securities | 4,745,629 | 499,684 |
Warrants Member | ||
Common Stock | 4,643,555 | 437,102 |
Stock Option | ||
Common Stock | 102,074 | 62,582 |
Balance Sheet Details (Details)
Balance Sheet Details (Details) - USD ($) | Jun. 30, 2023 | Dec. 31, 2022 |
Total prepaid expenses and other current assets | $ 274,351 | $ 703,194 |
Total Accrued And Other Current Liabilities | 245,084 | 425,932 |
Balance Sheet [Member] | ||
Prepaid Insurance | 146,221 | 586,407 |
Prepaid research and development costs | 66,712 | 92,581 |
Prepaid other | 60,628 | 11,604 |
Interest receivable | 790 | 12,602 |
Total prepaid expenses and other current assets | 274,351 | 703,194 |
Accrued Research And Development Costs | 33,070 | 254,787 |
Accrued Compensation And Benefits | 181,967 | 170,389 |
Accrued legal fees | 22,000 | 0 |
Accrued other | 8,047 | 756 |
Total Accrued And Other Current Liabilities | $ 245,084 | $ 425,932 |
Equity Securities (Details)
Equity Securities (Details) - $ / shares | 1 Months Ended | 6 Months Ended | |
May 26, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | |
Total warrants outstanding | 4,643,555 | 437,102 | |
Series 1a Warrants | |||
Total warrants outstanding | 4,321 | 4,321 | |
Exercise price | $ 328 | ||
Expiration Date | 11/15/2026 | ||
PIPE Common Warrants | |||
Total warrants outstanding | 235,849 | 235,849 | |
Exercise price | $ 2.82 | ||
Expiration Date | 3/20/2028 | ||
PIPE Placement Agent Warrants | |||
Total warrants outstanding | 56,061 | ||
Exercise price | $ 2.8563 | ||
Expiration Date | 5/23/2028 | ||
Class B Common Warrants | |||
Total warrants outstanding | 4,077 | 4,077 | |
Exercise price | $ 91.84 | ||
Expiration Date | 12/31/2024 | ||
IPO Warrants | |||
Total warrants outstanding | 184,820 | 184,820 | |
Exercise price | $ 112 | ||
Expiration Date | 8/17/2026 | ||
IPO Underwriter Warrants | |||
Total warrants outstanding | 8,035 | 8,035 | |
Exercise price | $ 128.80 | ||
Expiration Date | 8/17/2026 | ||
Series A Common Warrants | |||
Total warrants outstanding | 1,618,123 | ||
Exercise price | $ 2.82 | ||
Expiration Date | 3/20/2028 | ||
Series B Common Warrants | |||
Total warrants outstanding | 1,618,123 | ||
Exercise price | $ 2.82 | ||
Expiration Date | 7/20/2025 | ||
Placement Agent Warrants | |||
Total warrants outstanding | 113,269 | ||
Exercise price | $ 3.8625 | ||
Expiration Date | 3/16/2028 | ||
May 2023 | PIPE Common Warrants | |||
Total warrants outstanding | 800,877 | ||
Exercise price | $ 2.16 | $ 2.16 | |
Expiration Date | 11/27/2028 |
Equity Securities (Details Narr
Equity Securities (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 6 Months Ended | ||
May 26, 2023 | Mar. 31, 2023 | Apr. 25, 2022 | Jun. 30, 2023 | |
Reverse stock split | 1-for-16 | |||
Warrant reduced description | from $21.20 to $2.82 per share upon closing of the March 2023 Offering | |||
Net cash proceeds from PIPE | $ 1.5 | |||
Underwriters discounts and offering expenses | $ 0.3 | |||
Common stock, shares issued | 85,000 | |||
Increasing shares authorized for issuance | 1,533,123 | |||
Preferred stock authorized | 10,000,000 | |||
Preferred stock par value | $ 0.0001 | |||
Exercise price per share | $ 0.0001 | |||
Warrants, exercised during period | 1,533,123 | |||
Common Stock and Preferred Stock | ||||
Exercise price per share | $ 0.0001 | |||
Fair value Exercise price per share | $ 1.65 | |||
PIPE Common Stock, Conversion of Stock, Shares Issued | 235,849 | |||
Warrants to purchase shares of Common Stock | 235,849 | |||
Net cash proceeds | $ 4.2 | $ 4.3 | ||
Underwriters' discounts and offering expenses | $ 0.8 | $ 0.7 | ||
Common stock, shares sold | 458,555 | 85,000 | 56,161 | |
Pre funded | 179,687 | |||
Pre-funded warrants to purchase shares of Common Stock | 179,687 | |||
Warrants sold to purchase one share of common stock | 113,269 | |||
Warrants sold to purchase one share of common stock, Exercise price | $ 21.20 | $ 21.20 | ||
Options exercised to purchase additional warrants, Exercise price | $ 3.8625 | |||
PIPE Common Warrants | ||||
Exercise price | $ 2.82 | |||
PIPE Placement Agent Warrants | ||||
Warrants, expire date | May 23, 2028 | |||
Exercise price | $ 2.285 | |||
Exercise price | $ 2.8563 | |||
Warrants sold to purchase one share of common stock | 56,061 | |||
Class B Common Units | Warrants | ||||
Warrants, expire date | July 20, 2025 | |||
Exercise price per share | 2.82 | |||
Fair value Exercise price per share | $ 3.09 | |||
Warrants to purchase shares of Common Stock | 1,618,123 | |||
PIPE | Warrants | ||||
Warrant units to purchase stocks | 1,618,123 | |||
Warrants sold to purchase one share of common stock | 1,618,123 | |||
Exercisable warrant outstanding | 1,533,123 | |||
Exercise price | $ 2.82 | |||
Common and Pre-Funded Warrants [Member] | ||||
Warrant units to purchase stocks | 342,322 | 342,322 | ||
Warrant exercised | 342,322 | |||
Warrants to purchase shares of Common Stock | 1,618,123 | |||
Common stock, shares sold | 458,555 | |||
Pre-funded warrants to purchase shares of Common Stock | 1,533,123 | |||
Warrants sold to purchase one share of common stock | 342,322 | 342,322 | ||
Exercise price | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
May 2023 | PIPE Common Warrants | ||||
Warrants, expire date | November 27, 2028 | November 27, 2028 | ||
Exercise price | $ 2.16 | $ 2.16 | ||
Offering price | $ 2.285 | |||
Warrant units to purchase stocks | 800,877 | 800,877 | ||
Warrants sold to purchase one share of common stock | 800,877 | 800,877 |
Equity Incentive Plan (Details)
Equity Incentive Plan (Details) - Stock Option - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Grant Date Fair Value | $ 4.23 | $ 25.12 | $ 4.23 | $ 25.12 |
Risk-free Interest Rate | 3.90% | 1.39% | 3.90% | 1.39% |
Dividend Yield | 0% | 0% | 0% | 0% |
Expected Life In Years | 6.1 | 5.3 | 6.1 | 5.3 |
Expected Volatility | 112% | 122% | 112% | 122% |
Equity Incentive Plan (Details
Equity Incentive Plan (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Jun. 30, 2023 | Jun. 30, 2022 | |
Stock-based Compensation Expense | $ 262,437 | $ 474,452 | ||
Stock Option | ||||
Research And Development | $ 48,425 | $ 53,309 | 96,850 | 108,510 |
General And Administrative | 82,752 | 208,263 | 165,587 | 365,942 |
Stock-based Compensation Expense | $ 131,177 | $ 261,572 | $ 262,437 | $ 474,452 |
Equity Incentive Plan (Detail_2
Equity Incentive Plan (Details 2) - Stock Option - $ / shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2023 | Dec. 31, 2022 | |
Number of option outstanding, Begining balance | 65,983 | |
Number of Options Outstanding, Options granted | 36,091 | |
Number of Options Outstanding, Ending balance | 102,074 | 65,983 |
Number of Options Outstanding, Options exercisable | 48,300 | |
Weighted-Average Exercise Price, Options begining | $ 60.32 | |
Weighted-Average Exercise Price, Options granted | 4.96 | |
Weighted-Average Exercise Price, Ending balance | 40.77 | $ 60.32 |
Weighted-Average Exercise Price, Options exercisable | $ 64.49 | |
Weighted Average Remaining Contractual Term in Years, Beginning | 8 years 3 months 18 days | 8 years 2 months 12 days |
Weighted average Remaining Contractual Term in Years Options Granted | 9 years 6 months | |
Weighted Average Remaining Contractual Term in Years Options exercisable | 7 years 9 months 18 days |
Equity Incentive Plan (Detail_3
Equity Incentive Plan (Details Narrative) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | ||
Jun. 30, 2023 | Dec. 31, 2022 | Jan. 01, 2022 | |
Common stock, authorized | 250,000,000 | 250,000,000 | |
2021 Omnibus Equity Incentive Plan [Member] | |||
Weighted-Average Recognized Remaining Contractual Term (in Years) | 2 years 1 month 6 days | ||
Additional shares reserved for future issuance | 127 | 5,205 | |
Stock awards granted, exercisable period | 10 years | ||
Unrecognized stock based compensation expense | $ 0.8 | ||
Common stock, authorized | 7,701 | ||
Stock awards granted, vesting period | four years for employees and one year for directors of the Company’s board and consultants | ||
Common stock traded price | $ 1.65 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - Licensing Agreements Member | 6 Months Ended |
Jun. 30, 2023 | |
March 31, 2017 | First Amendment Member | |
Future milestone payments description | the Company was required to make future milestone payments to Villani in an aggregate amount of up to $20.25 million upon the achievement of specified development and sales milestones, payable in cash or in equity |
July 30, 2021 | Second Amendment Member | |
Future milestone payments description | the Company is required to make future milestone payments to Villani in an aggregate amount of up to $40.5 million upon the achievement of specified development and sales milestones, payable in cash or in equity |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) | Aug. 03, 2023 shares |
Subsequent Event [Member] | |
Issuance of increase common stock, shares | 629,069 |