0001493152-23-041151 | 10-Q | XBRL Viewer

Convertible notes payable – shareholders – long - term portion

$ 40

$ 15,407

Less: current portion

(40)

(15,407)

Convertible Notes Payable Shareholder One [Member]

Convertible Notes Payable Shareholder Two [Member]

^[1]

$ 7,778

7,838

^[1]

$ 7,988

Convertible Notes Payable Shareholder Three [Member]

^[2]

1,500

^[2]

$ 2,661

Convertible Notes Payable Shareholder Four [Member]

^[3]

700

^[3]

$ 700

Property, Plant and Equipment [Abstract]

^[4]

$ 5,369

^[4]

$ 5,369

[1]	During the years ended December 31, 2011 through 2016, the Company entered into convertible note payable agreements with individuals aggregating to a total amount of $7,988. The notes initially accrued interest at 8% per annum, are unsecured and are convertible into the Company’s Series K preferred stock at $25.73 per share.
[2]	In April 2016, the Company entered into a convertible note payable agreement with a shareholder in the amount of $2,661. The note accrued interest at 11.51% per annum, was unsecured, had an initial maturity date of May 2018 and was convertible into the Company’s common stock at the price of $6.78 per share. Interest payments are due monthly. In May 2018, the note was amended to include a provision under which the loan will accrue $10 per month of loan fees through the date the loan is repaid or is converted into the Company’s common stock. The loan fees can be converted into shares of the Company’s common stock at $6.78 per share.
[3]	In April 2018, the Company entered into two convertible note payable agreements with a shareholder under which the Company borrowed an aggregate total of $700. The notes accrue interest at 5.0% per annum, are unsecured, and are convertible into the Company’s common stock at the lesser of $12.00 per share, or 90% of the Company’s IPO price, if it were to occur.
[4]	During the years ended December 31, 2019 through 2021, the Company entered into convertible note payable agreements with several shareholders under which the Company borrowed an aggregate amount of $5,369. The notes accrue interest at 5.0% per annum, are unsecured, and are convertible into the Company’s common stock at the price of $12.00 per share, or 90% of the Company’s IPO price, if it were to occur.

PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2023

PROPERTY AND EQUIPMENT

NOTE 3 - PROPERTY AND EQUIPMENT

Property and equipment consisted of the following at September 30, 2023 and December 31, 2022:

SCHEDULE OF PROPERTY AND EQUIPMENT

	September 30, 2023			December 31, 2022
Furniture and office equipment	$	148		$	148
Laboratory equipment		2,762			2,762
Computer equipment		127			127
Leasehold improvements		557			557
Construction-in-progress		782			-
Property and equipment, gross		4,376			3,594
Less: accumulated depreciation and amortization		(3,354	)		(2,950	)

Property and equipment, net	$	1,022		$	644

Depreciation expense for the nine months ended September 30, 2023 and 2022 was $404 and $415, respectively.

NOTES PAYABLE – SHAREHOLDERS

9 Months Ended

Sep. 30, 2023

Notes Payable Shareholders

NOTES PAYABLE – SHAREHOLDERS

NOTE 6 – NOTES PAYABLE – SHAREHOLDERS

During the year ended December 31, 2022, the Company, in anticipation of closing its IPO, entered into note payable agreements with several shareholders totaling $1,100. The notes accrue interest at 12% per annum, are unsecured and are due at the earlier of June 15, 2023 or the month after the closing of the IPO. As of December 31, 2022, the outstanding principal and accrued and unpaid interest balances on the notes were $1,100 and $5, respectively.

During the nine months ended September 30, 2023, the Company extended the due date on the notes until April 30, 2023. During the nine months ended September 30, 2023, the Company borrowed an additional $900 from its shareholders, repaid $600 of principal and $11 of accrued interest, and $1,400 of principal and $63 of accrued interest was converted into 73,134 shares of the Company’s common stock with a fair value of $1,865. The notes accrued interest of $69 during the nine-month period. As of September 30, 2023, there was no outstanding principal and accrued and unpaid interest owed on the notes. Upon conversion of the notes payable, the Company incurred a debt extinguishment cost of $402, as the conversion price was lower than the fair value of the shares on the conversion date. This amount was recorded as debt extinguishment costs in the Statements of Operations during the nine months ended September 30, 2023.

In consideration for the notes issued in 2022, the Company issued the note holders stock warrants to purchase up to an aggregate total of 44,441 shares of its common stock with an exercise price per share equal to 90% of the IPO price, or $5.40 per share, based on the IPO closing price (see Note 9). The issuance of the warrants was contingent upon the closing of the IPO, and as such, were not formally granted until the closing of the IPO in January 2023. The warrants expire in December 2025. The Company determined the warrants should be accounted for as a liability on the date of issuance. The Company calculated the fair value of the warrants issued to the noteholders to be $169 using a Black Scholes option pricing model with the following assumptions:

SCHEDULE OF WARRANTS

Exercise price	$	6.00
Expected dividends		—
Expected volatility		96.0	%
Risk free interest rate		3.50	%
Life of the warrants		3.0

The Company recognized a liability and recorded a debt discount at the date of issuance in 2022 in the amount of $169. The Company recorded the fair value of the warrants as warrant liabilities as of December 31, 2022. The notes’ discounts are being amortized over the term of the notes and the unamortized portion is recognized as a reduction to the carrying amount of the notes (a valuation debt discount). During the year ended December 31, 2022, the Company amortized $61 of debt discount, leaving an unamortized balance of $108 at December 31, 2022. During the nine months ended September 30, 2023, the Company amortized $108 of debt discount, leaving no unamortized balance at September 30, 2023.

ACCRUED PAYROLL AND PAYROLL TAXES (Details Narrative) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Accured repaid	$ 385
Payroll tax liability	1,436
Accrued payroll and payroll taxes current	$ 4,101	$ 2,852
Chief Executive Officer [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Accrued compensation		$ 2,852

SCHEDULE OF OUTSTANDING AND EXERCISABLE OPTIONS (Details)	9 Months Ended
	Sep. 30, 2023 $ / shares shares
Exercise Price Range One [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, upper limit	$ 6.00
Options outstanding number of outstanding \| shares	3,903,617
Options outstanding average remaining contractual life	4 years 8 months 23 days
Options outstaning weighted average exercise price	$ 6.00
Options exercisable number of outstanding \| shares	3,738,336
Options exercisable average remaining contractual life	4 years 6 months 29 days
Options exercisable weighted average exercise price	$ 6.00
Exercise Price Range Two [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, upper limit	$ 10.50
Options outstanding number of outstanding \| shares	90,099
Options outstanding average remaining contractual life	2 years 3 months 10 days
Options outstaning weighted average exercise price	$ 9.52
Options exercisable number of outstanding \| shares	90,099
Options exercisable average remaining contractual life	2 years 3 months 10 days
Options exercisable weighted average exercise price	$ 9.52
Range of exercise prices, lower limit	9.00
Exercise Price Range Three [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, upper limit	$ 22.40
Options outstanding number of outstanding \| shares	1,103,938
Options outstanding average remaining contractual life	9 years 11 months 8 days
Options outstaning weighted average exercise price	$ 22.40
Options exercisable number of outstanding \| shares
Options exercisable weighted average exercise price
Exercise Price Range Four [Member]
Share-Based Payment Arrangement, Option, Exercise Price Range [Line Items]
Range of exercise prices, upper limit	$ 22.40
Options outstanding number of outstanding \| shares	5,097,654
Options outstanding average remaining contractual life	5 years 9 months 25 days
Options outstaning weighted average exercise price	$ 9.61
Options exercisable number of outstanding \| shares	3,828,435
Options exercisable average remaining contractual life	4 years 6 months 10 days
Options exercisable weighted average exercise price	$ 6.08
Range of exercise prices, lower limit	$ 6.00

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

Income (Loss) Per Share

Income (Loss) Per Share

	September 30, 2023		September 30, 2022
Convertible notes payable		-		3,367,486
Common stock equivalent of Series A through K convertible preferred stock		-		7,567,630
Stock options		5,097,654		4,201,018
Stock warrants		688,574		738,412
Restricted stock units		57,900		-
Stock warrants, issuable in connection with convertible notes payable		180		183,852
Total		5,844,308		16,058,398

Revenue Recognition

Revenue Recognition

The Company determines revenue recognition through the following steps:

	●	Identification of the contract, or contracts, with a customer

	●	Identification of the performance obligations in the contract

	●	Determination of the transaction price

	●	Allocation of the transaction price to the performance obligations in the contract

	●	Recognition of revenue when, or as, we satisfy a performance obligation.

Cash Equivalents

Cash Equivalents

Deferred Offering Costs

Deferred Offering Costs

Fair Value of Financial Instruments

Fair Value of Financial Instruments

	●	Level 1 — Quoted prices in active markets for identical assets or liabilities.

	●	Level 2 — Inputs, other than Level 1, that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in 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.

Stock-Based Compensation

Stock-Based Compensation

Recent Accounting Pronouncements

Recent Accounting Pronouncements

- Definition

Disclosure of accounting policy for award under share-based payment arrangement. Includes, but is not limited to, methodology and assumption used in measuring cost.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(ii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)(v)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.C.Q3)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.D.1.Q5)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.D.3.Q2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SAB Topic 14.D.2.Q6)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147479830/718-10-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//718/tableOfContent

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 718
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (f)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480429/718-10-50-2

+ Details

LEASE LIABILITIES (Details Narrative) - USD ($) $ in Thousands		1 Months Ended					9 Months Ended
	Jul. 31, 2023	Feb. 28, 2023	Apr. 30, 2022	Jul. 31, 2021	Dec. 31, 2020	Jul. 31, 2018	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Aggregate average monthly payments		$ 30		$ 10	$ 18	$ 10
Option to extend lease	extended the lease for an additional two-year period, through September 2030, with no changes to any of the other terms of the lease, and has the option to extend the lease for an additional five years. Prior to the extension, the remaining lease liability amounted to $701	extended the lease through December 2024, with no changes to any of the other terms of the lease	the option to extend the lease for an additional five years			option to extend for an additional five years
Operating lease right of use asset	$ 909		$ 860				$ 1,779		$ 1,335
Operating lease liability	$ 909	$ 649	$ 860	$ 656	$ 12	$ 174	1,856		$ 1,430
Operating lease discount rate	7.00%	5.50%	4.00%	4.00%	4.00%	4.00%
Increase in lease liability	$ 208	$ 637	$ 686				(431)	$ (283)
Payment for operating lease							431	283
Amortization of right of use assets							413	309
Rent expense							$ 27	$ 27
Accounting Standards Update 2016-02 [Member]
Operating lease right of use asset						$ 518
Operating lease liability					$ 439	$ 519

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Product Information [Line Items]
Revenue		$ 11,000	$ 170	$ 11,000
Deferred offering costs	303		303
Fair Value, Inputs, Level 3 [Member]
Product Information [Line Items]
Warrant liabilities					$ 169
IPO [Member]
Product Information [Line Items]
Deferred offering costs	1,871		1,871		1,568
Money Market Funds [Member]
Product Information [Line Items]
Cash	$ 2,254		$ 2,254
Newsoara Agreement [Member] \| Supplying Product [Member]
Product Information [Line Items]
Revenue					$ 170

NOTES PAYABLE – SHAREHOLDERS (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Outstanding principal amount					$ 1,100,000
Accrued and unpaid interest					5,000
Borrowings	$ 900,000		$ 900,000
Repayment of debt			600,000
Accrued interest	11,000		11,000
Borrowed principal			1,400
Debt accrued interest			$ 63,000
Conversion of convertible shares			73,134
Fair value on conversion of convertible			$ 1,865,000
Notes accrued interest			69,000
Gain (Loss) on Extinguishment of Debt			$ 402,000
Description of warrants			Company issued the note holders stock warrants to purchase up to an aggregate total of 44,441 shares of its common stock with an exercise price per share equal to 90% of the IPO price, or $5.40 per share, based on the IPO closing price
Fair value of warrants			$ 3,152,000
Debt discount of issuance amount	$ 169,000		169,000
Amortized debt discount			108,000		61,000
Unamortized debt discount					108,000
Note Holders [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Fair value of warrants			$ 169,000
IPO [Member] \| Common Stock [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Warrants issued	44,441		44,441
Note Payable Agreements [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Note payable					$ 1,100,000
Notes accrued interest					12.00%

Condensed Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Debt discount, current		$ 108
Convertible notes payable past due, current	$ 40	105
Debt discount, noncurrent		$ 541
Preferrred stock, par value		$ 22,095
Preferred stock, shares authorized		29,927,994
Preferred stock, shares issued		22,094,889
Preferred stock, shares outstanding		22,094,889
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	200,000,000
Common stock, shares issued	26,657,906	9,126,726
Common stock, shares outstanding	26,657,906	9,126,726
Treasury stock, shares	433,333	433,333
Series A Through K Preferred Stock [Member]
Preferrred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	29,927,994
Preferred stock, shares issued	0	22,094,889
Preferred stock, shares outstanding	0	22,094,889

BASIS OF PRESENTATION (Details Narrative) - USD ($) $ in Thousands	1 Months Ended		3 Months Ended		9 Months Ended		12 Months Ended
	Feb. 28, 2023	Aug. 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Nov. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2021
Subsidiary, Sale of Stock [Line Items]
Net income (loss)			$ 5,345	$ (4,909)	$ 21,530	$ 1,712	$ 5,207
Cash used in operations					13,365	2,053	3,571
Shareholders' deficit			(24,028)	32,331	(24,028)	32,331	35,783		$ (22,256)	$ 39,063	$ 33,111
Net proceeds					14,503
Cash and cash equivalents on hand			29,869		29,869		397
Additional commitments received			24,000		24,000
Shareholders' equity			$ 24,028	$ (32,331)	24,028	$ (32,331)	$ (35,783)		$ 22,256	$ (39,063)	$ (33,111)
Reverse stock split		1-for-3 reverse stock split
Subsequent Event [Member] \| March Thirty One Two Thousand Twenty Four [Member]
Subsidiary, Sale of Stock [Line Items]
Investments								$ 2,000
IPO [Member]
Subsidiary, Sale of Stock [Line Items]
Net proceeds	$ 15,918				$ 37,774
Private Placement [Member] \| Subsequent Event [Member]
Subsidiary, Sale of Stock [Line Items]
Investments								$ 22,000

SCHEDULE OF CONVERTIBLE NOTES PAYABLE TO SHAREHOLDERS (Details) (Parenthetical) - USD ($)
$ / shares in Units, $ in Thousands

1 Months Ended

9 Months Ended

Jan. 30, 2023

May 31, 2018

Sep. 30, 2023

Sep. 30, 2022

Dec. 31, 2022

Dec. 31, 2021

Apr. 30, 2018

Apr. 18, 2018

Dec. 31, 2016

Apr. 30, 2016

$ 40

$ 15,407

$ 69

Accrued interest on notes payable

73,134

Repayment of debt

$ 685

1,178

Warrants to purchase shares

217,591

Convertible Notes Payable Shareholder One [Member]

$ 7,778

$ 40

^[1]

7,838

^[1]

$ 7,988

8.00%

$ 6.78

Payment on accrued and unpaid interest

$ 2,867

$ 38

2,890

Repayment of debt

Nonconvertible accrued and unpaid interest

Notes payable

$ 58

Accrued interest on notes payable

1,554,814

Repayment of debt

Convertible Notes Payable Shareholder One [Member] | Series K Preferred Stock [Member]

Convertible Notes Payable Shareholder Two [Member]

$ 25.73

$ 1,500

^[2]

1,500

^[2]

$ 2,661

11.51%

$ 6.78

Accrued and unpaid loan fees owed on notes

303,835

Accrued loan fees

$ 10

$ 570

560

Convertible Notes Payable Shareholder Three [Member]

700

^[3]

700

^[3]

$ 700

500.00%

$ 12.00

$ 167

164

Initial public offering closing price

90.00%

Convertible Notes Payable Shareholder Three [Member] | Common Stock [Member]

$ 5.40

Initial public offering closing price

160,563

90.00%

Convertible Notes Payable Shareholder Four [Member]

$ 5,369

^[4]

5,369

^[4]

$ 5,369

5.00%

$ 5.40

$ 12.00

$ 780

$ 758

$ 22