The Company and Summary of Significant Accounting Policies (Policies)	9 Months Ended
Sep. 30, 2022
The Company and Summary of Significant Accounting Policies
Basis of Presentation	Basis of Presentation The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States for interim financial information and with the instructions of the SEC on Quarterly Reports on Form 10-Q and Article 8 of Regulation S-X. Accordingly, such financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the financial position and of the results of operations and cash flows of the Company for the periods presented. These financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2021 included in the Company’s 2021 Annual Report on Form 10-K. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The information as of and for the three and nine months ended September 30, 2022 is unaudited. The balance sheet at December 31, 2021 was derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company has no off-balance-sheet concentrations of credit risk, such as foreign exchange contracts, option contracts or foreign currency hedging arrangements. The Company consistently maintains its cash and cash equivalent balances in the form of bank demand deposits, United States federal government backed treasury securities and fully liquid money market fund accounts with financial institutions that management believes are creditworthy. The Company periodically monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. During the three and nine months ended September 30, 2022, and as consistent with prior reporting periods, the Company maintained balances in excess of federally insured limits.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, and related disclosures in the financial statements and accompanying notes. The Company bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates. Significant items subject to such estimates and assumptions primarily include the Company’s projected current and long-term liquidity, the clinical trial closeout costs accrual, projected useful lives and the assessment of impairment of long-lived assets. The Company develops these estimates using its judgment based upon the facts and circumstances known to it at the time.
Liquidity / Going Concern	Liquidity / Going Concern We are a pre-revenue stage biopharmaceutical company that has incurred an accumulated deficit of $231.7 million as of September 30, 2022. We expect to use cash in operations and generate continued operating losses for the foreseeable future while the Company’s management and the board of directors considers strategic alternatives. As of September 30, 2022, we had $16.9 million of cash and cash equivalents. The sufficiency of our cash resources and our capital needs are based upon management estimates as to future operations and expense, which involve significant judgment particularly given that we are in the middle of the strategic alternatives process and cannot predict the duration or expense associated with this process. Additionally, the expense associated with and outcome of any legal proceeding is not possible to determine at this time. In order to preserve our cash resources with the goal of maximizing the opportunities available to the Company during the Board’s pursuit of strategic alternatives, the Board has implemented measures to manage costs and conserve cash resources. On August 31, 2022, the Company executed a reduction in force that resulted in the termination of 9 of the Company’s then existing 18 employees, or 50%. As part of this reduction, five non-terminated employees have accepted conditional retention and severance arrangements with the Company pursuant to which it is expected that they will continue to provide services for a period ending December 31, 2022 in exchange for retention and severance payments should the full term of service be completed. The Company provided notice of termination on August 5, 2022 of a personal services agreement with Dr. Bar-Or and research services agreement with Trauma Research, which is owned by Dr. Bar-Or. Based on the above, these existing and ongoing factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited interim financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any separate adjustments relating to the recovery of recorded assets or the classification of liabilities, which adjustments may be necessary in the future should the Company be unable to continue as a going concern. If the Company is unable to successfully advance AR-300 into clinical trials and/or complete a strategic transaction with its existing capital resources or is unable to raise additional capital in a sufficient amount to allow additional time and resources to successfully advance AR-300 and/or complete a strategic transaction, the Company may implement further cost reduction and other cash-focused measures to manage liquidity and the Company may pursue a plan of liquidation or dissolution of the Company or seek bankruptcy protection. The Company believes that raising additional capital will be especially challenging given that the Company’s common stock is currently subject to proceedings to be delisted from the NYSE American and is trading on the OTC Pink.
Adoption of Recent Accounting Pronouncements	Adoption of Recent Accounting Pronouncements The Company has not adopted any recent accounting pronouncements during the three and nine months ended September 30, 2022, as none were deemed to be applicable. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, “Debt (Subtopic 470-20); Debt with Conversion and Other Options and Derivatives and Hedging (Subtopic 815-40) Contracts in Entity’s Own Equity”. The updated guidance is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. Consequently, more convertible debt instruments will be reported as single liability instruments with no separate accounting for embedded conversion features. The ASU 2020-06 also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. In addition, ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The updated guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted for periods beginning after December 15, 2020. The Company has evaluated the impact of ASU 2020-06 on the Company’s financial statements and is considering early adoption of ASU 2020-06 in 2023. The impact of the adoption of this standard, would be a reclassification of liability classified warrant to equity, which is based upon the volatility of the company’s stock price. The Company does not expect a significant impact at this point. Should the company’s stock price increase in the future, the adoption of this standard could become material. This Quarterly Report on Form 10-Q does not discuss recent pronouncements that are not anticipated to have a current and/or future impact on or are unrelated to the Company’s financial condition, results of operations, cash flows or disclosures.

The Company and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2022

The Company and Summary of Significant Accounting Policies

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) in the United States for interim financial information and with the instructions of the SEC on Quarterly Reports on Form 10-Q and Article 8 of Regulation S-X. Accordingly, such financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. In the opinion of management, the financial statements include all adjustments necessary, which are of a normal and recurring nature, for the fair presentation of the financial position and of the results of operations and cash flows of the Company for the periods presented.

These financial statements should be read in conjunction with the audited financial statements and accompanying notes thereto for the year ended December 31, 2021 included in the Company’s 2021 Annual Report on Form 10-K. The results of operations for the interim period shown in this report are not necessarily indicative of the results that may be expected for any other interim period or for the full year. The information as of and for the three and nine months ended September 30, 2022 is unaudited. The balance sheet at December 31, 2021 was derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company has no off-balance-sheet concentrations of credit risk, such as foreign exchange contracts, option contracts or foreign currency hedging arrangements. The Company consistently maintains its cash and cash equivalent balances in the form of bank demand deposits, United States federal government backed treasury securities and fully liquid money market fund accounts with financial institutions that management believes are creditworthy. The Company periodically monitors its cash positions with, and the credit quality of, the financial institutions with which it invests. During the three and nine months ended September 30, 2022, and as consistent with prior reporting periods, the Company maintained balances in excess of federally insured limits.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and expenses, and related disclosures in the financial statements and accompanying notes. The Company bases its estimates on historical experience and on assumptions believed to be reasonable under the circumstances. Actual results could differ materially from those estimates.

Significant items subject to such estimates and assumptions primarily include the Company’s projected current and long-term liquidity, the clinical trial closeout costs accrual, projected useful lives and the assessment of impairment of long-lived assets. The Company develops these estimates using its judgment based upon the facts and circumstances known to it at the time.

Liquidity / Going Concern

We are a pre-revenue stage biopharmaceutical company that has incurred an accumulated deficit of $231.7 million as of September 30, 2022. We expect to use cash in operations and generate continued operating losses for the foreseeable future while the Company’s management and the board of directors considers strategic alternatives.

As of September 30, 2022, we had $16.9 million of cash and cash equivalents. The sufficiency of our cash resources and our capital needs are based upon management estimates as to future operations and expense, which involve significant judgment particularly given that we are in the middle of the strategic alternatives process and cannot predict the duration or expense associated with this process. Additionally, the expense associated with and outcome of any legal proceeding is not possible to determine at this time.

In order to preserve our cash resources with the goal of maximizing the opportunities available to the Company during the Board’s pursuit of strategic alternatives, the Board has implemented measures to manage costs and conserve cash resources. On August 31, 2022, the Company executed a reduction in force that resulted in the termination of 9 of the Company’s then existing 18 employees, or 50%. As part of this reduction, five non-terminated employees have accepted conditional retention and severance arrangements with the Company pursuant to which it is expected that they will continue to provide services for a period ending December 31, 2022 in exchange for retention and severance payments should the full term of service be completed.

The Company provided notice of termination on August 5, 2022 of a personal services agreement with Dr. Bar-Or and research services agreement with Trauma Research, which is owned by Dr. Bar-Or.

Based on the above, these existing and ongoing factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying unaudited interim financial statements were prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. These financial statements do not include any separate adjustments relating to the recovery of recorded assets or the classification of liabilities, which adjustments may be necessary in the future should the Company be unable to continue as a going concern.

If the Company is unable to successfully advance AR-300 into clinical trials and/or complete a strategic transaction with its existing capital resources or is unable to raise additional capital in a sufficient amount to allow additional time and resources to successfully advance AR-300 and/or complete a strategic transaction, the Company may implement further cost reduction and other cash-focused measures to manage liquidity and the Company may pursue a plan of liquidation or dissolution of the Company or seek bankruptcy protection. The Company believes that raising additional capital will be especially challenging given that the Company’s common stock is currently subject to proceedings to be delisted from the NYSE American and is trading on the OTC Pink.

Adoption of Recent Accounting Pronouncements

The Company has not adopted any recent accounting pronouncements during the three and nine months ended September 30, 2022, as none were deemed to be applicable.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06, “Debt (Subtopic 470-20); Debt with Conversion and Other Options and Derivatives and Hedging (Subtopic 815-40) Contracts in Entity’s Own Equity”. The updated guidance is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. Consequently, more convertible debt instruments will be reported as single liability instruments with no separate accounting for embedded conversion features. The ASU 2020-06 also removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for the exception. In addition, ASU 2020-06 also simplifies the diluted net income per share calculation in certain areas. The updated guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, with early adoption permitted for periods beginning after December 15, 2020. The Company has evaluated the impact of ASU 2020-06 on the Company’s financial statements and is considering early adoption of ASU 2020-06 in 2023. The impact of the adoption of this standard, would be a reclassification of liability classified warrant to equity, which is based upon the volatility of the company’s stock price. The Company does not expect a significant impact at this point. Should the company’s stock price increase in the future, the adoption of this standard could become material.

This Quarterly Report on Form 10-Q does not discuss recent pronouncements that are not anticipated to have a current and/or future impact on or are unrelated to the Company’s financial condition, results of operations, cash flows or disclosures.