10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2023

OR

☐ TRANSITION REPORT UNDER SECTION 13 OF 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

From the transition period from                   to                  

Commission File Number 001-37853

FIRST WAVE BIOPHARMA, INC.

(Exact name of registrant as specified in its charter)

Delaware	46-4993860
(State or other jurisdiction of incorporation or organization)	(I.R.S Employer Identification No.)

777 Yamato Road, Suite 502

Boca Raton, Florida 33431

(Address of principal executive offices) (Zip Code)

(561) 589-7020

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, par value $0.0001 per share	FWBI	The Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 7,152,204 shares of the registrant’s common stock, par value $0.0001 per share (the “Common Stock”), outstanding as of August 10, 2023.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Unaudited Condensed Consolidated Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
SIGNATURES

PART I

FINANCIAL INFORMATION

ITEM 1. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In our opinion, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly our financial position, results of operations, and cash flows for the interim periods presented. We have consolidated such financial statements in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). Therefore, such financial statements do not include all disclosures required by accounting principles generally accepted in the United States of America. In preparing these unaudited condensed consolidated financial statements, the Company (as defined below) has evaluated events and transactions for potential recognition or disclosure through the date the unaudited condensed consolidated financial statements were issued by filing with the SEC.

These financial statements should be read in conjunction with our audited financial statements for the year ended December 31, 2022 included in our Annual Report filed on Form 10-K, filed with the SEC on March 20, 2023.

The results of operations for the three and six months ended June 30, 2023 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, 2023.

-1-

FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Balance Sheets

	June 30,
	2023		December 31,
	(unaudited)		2022
ASSETS
Current Assets:
Cash and cash equivalents	$	1,236,054	$	1,362,910
Other receivables		—		93,014
Prepaid expenses		1,117,737		1,956,831
Total Current Assets		2,353,791		3,412,755
Property, equipment, and leasehold improvements, net		29,202		43,839
Other Assets:
Restricted cash		21,519		21,513
Goodwill		1,684,182		1,684,182
Operating lease right-of-use assets		227,927		259,261
Deposits		11,250		18,149
Total other assets		1,944,878		1,983,105
Total Assets	$	4,327,871	$	5,439,699
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	1,591,195	$	720,040
Accrued expenses		479,862		320,176
Accrued dividend payable		943,243		761,488
Note payable		153,478		603,494
Operating lease liabilities		63,564		66,151
Other current liabilities		29,907		12,138
Total Current Liabilities		3,261,249		2,483,487
Non-current operating lease liabilities		184,662		214,060
Total Liabilities		3,445,911		2,697,547
Stockholders’ Equity:
Common Stock - Par value $0.0001 per share; 50,000,000 shares authorized; 4,208,995 and 995,003 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		421		100
Series B preferred stock- Par value $0.0001 per share; 5,194.81 shares designated; 545.94 and 550.17 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		—		—
Series C preferred stock- Par value $0.0001 per share; 75,000 shares designated; 0 shares issued and outstanding at June 30, 2023 and December 31, 2022		—		—
Series D preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at June 30, 2023 and December 31, 2022		—		—
Series E preferred stock- Par value $0.0001 per share; 150 shares designated; 0 shares issued and outstanding at June 30, 2023 and December 31, 2023		—		—
Series F preferred stock- Par value $0.0001 per share; 7,000 shares designated; 0 shares issued and outstanding at June 30, 2023 and December 31, 2023		—		—
Additional paid-in capital		177,675,113		171,275,741
Accumulated deficit		(176,793,574)		(168,533,689)
Total Stockholders’ Equity		881,960		2,742,152
Total Liabilities and Stockholders’ Equity	$	4,327,871	$	5,439,699

See accompanying notes to unaudited condensed consolidated financial statements

-2-

FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Operating expenses:
Research and development expenses	$	1,353,095	$	2,906,896	$	2,714,778	$	7,883,413
General and administrative expenses		2,828,549		2,498,957		5,529,291		6,904,512
Total operating expenses		4,181,644		5,405,853		8,244,069		14,787,925
Loss from operations		(4,181,644)		(5,405,853)		(8,244,069)		(14,787,925)
Other (expenses) income:
Interest expense		(5,178)		(3,218)		(14,165)		(8,823)
Interest income		205		926		2,078		1,065
Other expense		(2,615)		—		(3,729)		(239,301)
Total other expenses		(7,588)		(2,292)		(15,816)		(247,059)
Net loss	$	(4,189,232)	$	(5,408,145)	$	(8,259,885)	$	(15,034,984)
Other comprehensive loss:
Foreign currency translation adjustment		—		(136,946)		—		(195,351)
Total comprehensive loss	$	(4,189,232)	$	(5,545,091)	$	(8,259,885)	$	(15,230,335)
Net loss	$	(4,189,232)	$	(5,408,145)	$	(8,259,885)	$	(15,034,984)
Deemed dividend on warrant modifications		—		(47,300)		—		(47,300)
Preferred stock dividends		(94,324)		(97,125)		(181,755)		(187,917)
Net loss applicable to common shareholders	$	(4,283,556)	$	(5,552,570)	$	(8,441,640)	$	(15,270,201)
Basic and diluted weighted average shares outstanding		2,270,922		103,844		2,725,755		89,015
Loss per share - basic and diluted	$	(1.89)	$	(53.47)	$	(3.10)	$	(171.55)

See accompanying notes to unaudited condensed consolidated financial statements

-3-

FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited)

	Series B Convertible						Additional				Total
	Preferred Stock			Common Stock			Paid In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance, April 1, 2023	546	$	—	1,549,581	$	155	$	175,316,783	$	(172,604,342)	$	2,712,596
Issuance costs related to issuance of Common Stock, pre-funded warrants and warrants in private placement	—		—	—		—		(78,938)		—		(78,938)
Issuance of Common Stock in connection with the exercise of warrants in the June 2023 Inducement Offering, net of offering costs	—		—	1,724,332		173		2,238,892		—		2,239,065
Exercise of pre-funded warrants into Common Stock	—		—	895,018		89		—		—		89
Deemed dividend of Series B preferred stock	—		—	—		—		(94,324)		—		(94,324)
Issuance of Common Stock from RSU vest	—		—	40,064		4		(4)		—		—
Stock-based compensation	—		—	—		—		292,704		—		292,704
Net loss	—		—	—		—		—		(4,189,232)		(4,189,232)
Balance, June 30, 2023	546	$	—	4,208,995	$	421	$	177,675,113	$	(176,793,574)	$	881,960

											Accumulated
	Series B Convertible						Additional				Other		Total
	Preferred Stock			Common Stock			Paid In		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Deficit
Balance, April 1, 2022	645	$	—	102,613	$	10	$	155,573,631	$	(163,530,886)	$	(1,282,540)	$	(9,239,785)
Issuance of Common Stock at-the-market for cash, net of offering costs	—		—	5,070		1		317,230		—		—		317,231
Deemed dividend of Series B preferred stock	—		—	—		—		(97,125)		—		—		(97,125)
Warrant modification	—		—	—		—		47,300		—		—		47,300
Deemed dividend on warrant modification	—		—	—		—		(47,300)		—		—		(47,300)
Conversion of Series B preferred shares into Common Stock	(14)		—	411		—		—		—		—		—
Stock-based compensation	—		—	—		—		374,907		—		—		374,907
Foreign currency translation adjustment	—		—	—		—		—		—		(136,946)		(136,946)
Net loss	—		—	—		—		—		(5,408,145)		—		(5,408,145)
Balance, June 30, 2022	631	$	—	108,094	$	11	$	156,168,643	$	(168,939,031)	$	(1,419,486)	$	(14,189,863)

See accompanying notes to unaudited condensed consolidated financial statements

-4-

FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (unaudited)

	Series B Convertible						Additional				Total
	Preferred Stock			Common Stock			Paid In		Accumulated		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Equity
Balance, January 1, 2023	550	$	—	995,003	$	100	$	171,275,741	$	(168,533,689)	$	2,742,152
Issuance of Common Stock, pre-funded warrants and warrants in private placement, net of issuance costs	—		—	128,000		13		3,690,960		—		3,690,973
Issuance of Common Stock in connection with the exercise of warrants in the June 2023 Inducement Offering, net of offering costs	—		—	1,724,332		173		2,238,892		—		2,239,065
Exercise of pre-funded warrants into Common Stock	—		—	1,324,493		131		259		—		390
Deemed dividend of Series B preferred stock	—		—	—		—		(181,755)		—		(181,755)
Conversion of Series B preferred shares into Common Stock	(4)		—	70		—		—		—		—
Issuance of Common Stock from RSU vest	—		—	40,064		4		(4)		—		—
Effect of cancelled shares from the 1-for-7 reverse stock split	—		—	(2,967)		—		—		—		—
Stock-based compensation	—		—	—		—		651,020		—		651,020
Net loss	—		—	—		—		—		(8,259,885)		(8,259,885)
Balance, June 30, 2023	546	$	—	4,208,995	$	421	$	177,675,113	$	(176,793,574)	$	881,960

											Accumulated
	Series B Convertible						Additional				Other		Total
	Preferred Stock			Common Stock			Paid In		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Shares	Amount		Capital		Deficit		Loss		Deficit
Balance, January 1, 2022	662	$	—	70,742	$	7	$	147,306,625	$	(153,904,047)	$	(1,224,135)	$	(7,821,550)
Issuance of Common Stock, pre-funded warrants and warrants in registered direct offering, net of issuance costs	—		—	7,857		1		7,972,090		—		—		7,972,091
Issuance of Common Stock at-the-market for cash, net of offering costs	—		—	5,070		1		317,230		—		—		317,231
Exercise of pre-funded warrants into Common Stock	—		—	23,086		2		48,480		—		—		48,482
Deemed dividend of Series B preferred stock	—		—	—		—		(187,917)		—		—		(187,917)
Warrant modification	—		—	—		—		47,300		—		—		47,300
Deemed dividend on warrant modification	—		—	—		—		(47,300)		—		—		(47,300)
Conversion of Series B preferred shares into Common Stock	(31)		—	910		—		—		—		—		—
Common Stock issued to consultants	—		—	429		—		118,999		—		—		118,999
Stock-based compensation	—		—	—		—		593,136		—		—		593,136
Foreign currency translation adjustment	—		—	—		—		—		—		(195,351)		(195,351)
Net loss	—		—	—		—		—		(15,034,984)		—		(15,034,984)
Balance, June 30, 2022	631	$	—	108,094	$	11	$	156,168,643	$	(168,939,031)	$	(1,419,486)	$	(14,189,863)

See accompanying notes to unaudited condensed consolidated financial statements

-5-

FIRST WAVE BIOPHARMA, INC.

Condensed Consolidated Statements of Cash Flows (unaudited)

	Six Months Ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(8,259,885)	$	(15,034,984)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation		14,637		14,635
Change in right-of-use assets		31,334		46,693
Stock-based compensation		651,020		593,136
Common Stock granted to consultants		—		118,999
Changes in assets and liabilities:
Other receivables		93,014		(70,429)
Prepaid expenses		839,094		612,607
Lease liabilities		(31,985)		(78,228)
Deposits		6,899		9,686
Accounts payable		871,155		1,258,632
Accrued expenses		159,686		32,982
Other liabilities		17,769		(1,410)
Net cash used in operating activities		(5,607,262)		(12,497,681)
Cash flows from financing activities:
Proceeds from issuance of Common Stock, pre-funded warrants and warrants, net of offering costs		3,690,973		8,289,322
Proceeds from exercise of warrants, net of issuance costs		2,239,455		48,482
Payment made related to acquisition		—		(2,414,955)
Repayments of note payable		(450,016)		(479,327)
Net cash provided by financing activities		5,480,412		5,443,522
Net decrease in cash		(126,850)		(7,054,159)
Effect of exchange rate changes on cash		—		(39,516)
Cash and restricted cash, beginning balance		1,384,423		8,248,684
Cash and restricted cash, ending balance	$	1,257,573	$	1,155,009
Supplemental disclosures of cash flow information:
Cash paid for interest	$	14,165	$	8,823
Non-cash investing and financing activities:
Deemed dividend on warrant modifications	$	—	$	(47,300)
Accrued dividends on preferred stock	$	(181,755)	$	(187,917)

See accompanying notes to unaudited condensed consolidated financial statements

-6-

FIRST WAVE BIOPHARMA, INC.

Notes to Unaudited Condensed Consolidated Financial Statements

June 30, 2023

Note 1 - The Company and Basis of Presentation

The Company

First Wave BioPharma, Inc. (“First Wave”) and its wholly-owned subsidiary, First Wave Bio, Inc. (“FWB”), are collectively referred to as the “Company”. Effective October 26, 2022, the Company’s wholly-owned subsidiary, AzurRx SAS, was dissolved. The Company is engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

The Company is currently focused on developing its pipeline of gut-restricted GI clinical drug candidates, including the biologic adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients, and niclosamide, an oral small molecule with anti-viral and anti-inflammatory properties. The Company’s adrulipase programs are focused on the development of an oral, non-systemic, biologic capsule for the treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic fibrosis (“CF”) and chronic pancreatitis (“CP”). The Company’s niclosamide programs leverage proprietary oral and topical formulations to address multiple GI conditions, including IBD indications and viral diseases.

The Company is developing its product candidates for a host of GI diseases where there are significant unmet clinical needs and limited therapeutic options, resulting in painful, life threatening and discomforting consequences for patients. Since its inception, the Company has devoted substantially all its efforts to research and development, business development, and raising capital, and has financed its operations through issuance of Common Stock, convertible preferred stock, convertible debt, and other debt/equity instruments.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development and regulatory success, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and ability to secure additional capital to fund clinical trials and operations.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

In addition, the Company is subject to other challenges and risks specific to its business, its ability to maintain compliance with the continued listing requirements of The Nasdaq Capital Market and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the biotechnology and pharmaceutical industries with development and commercial operations, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its drug candidates; delays or problems in the manufacture and supply of its drug candidates; loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or drug candidates; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; and complying with applicable regulatory requirements.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of First Wave and its wholly owned subsidiaries, FWB and AzurRx SAS, which was dissolved effective October 26, 2022. Intercompany transactions and balances have been eliminated upon consolidation.

-7-

In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2022, has been derived from audited financial statements of that date. The unaudited interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our Annual Report Form 10-K for the year ended December 31, 2022, filed with the SEC on March 20, 2023.

Going Concern Uncertainty

The accompanying unaudited interim condensed consolidated financial statements have been prepared as if the Company will continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. On June 30, 2023, the Company had cash and cash equivalents of approximately $1.2 million, an accumulated deficit of approximately $176.8 million and a working capital deficiency of approximately $0.9 million. Subsequent to June 30, 2023 through August 14, 2023, the Company has raised aggregate gross proceeds of approximately $2.1 million from the July 2023 Offering. The Company has incurred recurring losses, has experienced recurring negative operating cash flows, and requires significant cash resources to execute its business plans. The Company anticipates having sufficient cash to fund planned operations through September 2023, however, the acceleration or reduction of cash outflows by Company management can significantly impact the timing for the need to raise additional capital to complete development of its products. Historically, the Company’s major sources of cash have been comprised of proceeds from various public and private offerings of its capital stock. The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute its development plans and continue operations.

Without adequate working capital, the Company may not be able to meet its obligations and continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.

Reverse Stock Split

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock, but without any change in the number of authorized shares of Common Stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. All cash and cash equivalent balances were highly liquid at June 30, 2023 and December 31, 2022. As of June 30, 2023 and December 31, 2022, the Company has classified approximately $0.02 million as restricted cash.

-8-

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC insurance limits. At June 30, 2023 the Company had approximately $1.2 million in one account in the U.S. which was in excess of these limits. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.

Fair Value Measurements

The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions, which reflect those that a market participant would use.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.

Foreign Currency Translation

For foreign subsidiaries with operations denominated in a foreign currency, assets and liabilities were translated to U.S. dollars, which is the functional currency, at period end exchange rates. Income and expense items were translated at average rates of exchange prevailing during the periods presented. Gains and losses from translation adjustments were accumulated in a separate component of stockholders’ equity up until the dissolution of AzurRx SAS in October 2022, at which time cumulative translation adjustments were recognized as a loss for the year ended December 31, 2022.

Goodwill

Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. The Company has not recognized any impairment charges through June 30, 2023 related to goodwill.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through June 30, 2023.

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Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, and lease liability obligations are included in the Company’s balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Please refer to Note 12 for additional information.

Research and Development

Research and development costs are charged to operations when incurred and are included in operating expense, except for goodwill related to patents. Research and development costs consist principally of compensation of employees and consultants that perform the Company’s research activities, payments to third parties for preclinical and non-clinical activities, expenses with clinical research organizations (“CROs”), investigative sites, consultants and contractors that conduct or provide other services relating to clinical trials, costs to acquire drug product, drug supply and clinical trial materials from contract development and manufacturing organization (“CDMOs”) and third-party contractors relating to chemistry, manufacturing and controls (“CMC”) efforts, the fees paid for and to maintain the Company’s licenses, amortization of intangible assets related to the acquisition of adrulipase, and research and development costs related to adrulipase and niclosamide. Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved and experience with similar contracts. The Company monitors each of these factors and adjusts estimates accordingly.

Research and Development – Intellectual Property Acquired

The Company records intellectual property in asset acquisitions that have not reached technological feasibility and which have no alternative future use, as an expense at the acquisition date. On September 13, 2021, the Company entered into an agreement with FWB for the acquisition of intellectual property and patents for the worldwide, exclusive right to develop, manufacture, and commercialize proprietary formulations of niclosamide for the fields of treating ICI-AC and COVID-19 in humans, which was accounted for as an asset acquisition (see Note 4).

Stock-Based Compensation

The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.

For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable.

The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.

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Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (the “FASB”) issued accounting pronouncement ASU 2020-06 – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity’s own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity’s own equity. As a smaller reporting company, as defined by the U.S. Securities and Exchange Commission (the “SEC”), this pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 effective January 1, 2022.

In June 2016, the FASB issued accounting pronouncement ASU 2016-13 – Measurement of Credit Losses on Financial Statements (“ASU 2016-13”). The new standard requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. It also limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. In November 2019, the FASB issued ASU 2019-10 – Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date for certain companies. The standard is effective for public companies eligible to be smaller reporting companies for annual and interim periods beginning after December 15, 2022. The Company adopted ASU 2016-13 effective for the year ended December 31, 2022 and its adoption did not have a material effect on its financial statements and related disclosures.

In June 2022, the FASB issued ASU 2022-03 - Fair Value Measurement, or Topic 820: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). This new standard clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The Company has assessed the impact of the update and determined it does not have a material impact on the accompanying financial statements and disclosures.

The Company has evaluated other recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

Note 3 - Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

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The fair value of the Company’s financial instruments are as follows:

			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
June 30, 2023 (unaudited):
Money market funds	$	11,925	$	11,925	$	—	$	—	$	11,925
Note payable		153,478		—		153,478		—		153,478
December 31, 2022:
Money market funds		509,890		509,890		—		—		509,890
Note payable	$	603,494	$	—	$	603,494	$	—	$	603,494

At June 30, 2023 and December 31, 2022, the Company had no other assets or liabilities that are subject to fair value methodology and estimation in accordance with U.S. GAAP.

Note 4 – Asset Acquisition

The Asset Acquisition

During the six months ended June 30, 2022, the Company paid an aggregate of $2.4 million in cash towards the purchase price of FWB in accordance with the terms of an Agreement and Plan of Merger dated as of September 13, 2021 (the “Merger Agreement”) and a settlement agreement reached on November 21, 2021 (the “November 2021 Settlement Agreement”).

On May 19, 2022, Fortis Advisors LLC, the hired representative (in such capacity, the “Representative”) of the former stockholders of FWB in connection with the Merger Agreement, filed a complaint against the Company in the Court of Chancery in the State of Delaware (the “FWB Action”) for breach of contract and anticipatory repudiation or for unjust enrichment. The FWB Action sought specific performance of the Company’s obligations under the Merger Agreement and the November 2021 Settlement Agreement, including all payments then owed and to be owed to the Representative, and damages at the maximum amount permitted by law. On July 29, 2022, the Company reached an agreement with the Representative to settle the FWB Action and to restructure the Company’s obligations to the former FWB stockholders (the “July 2022 Term Sheet”). The Company agreed to pay the Representative: (i) $1.5 million in cash on July 29, 2022; (2) $1.0 million in cash no later than September 29, 2022 (the “Second Payment”); and (iii) $2.0 million on the earlier of November 30, 2022 and the completion by the Company of one or more qualifying equity offerings (collectively, the “Payments”). The Representative is also entitled to receive future cash payments conditioned on the achievement of certain development milestones for adrulipase and to a percentage of any consideration received by the Company in the event of a license or sale of adrulipase, subject to a cap. The Representative is also entitled to receive a percentage of the consideration received by the Company in the event of a license or sale of niclosamide and will retain its existing milestone payment rights with respect to niclosamide. In the event that the consideration received by the Company in connection with the sale or license of adrulipase or niclosamide consists of securities or other non-cash consideration, the Representative will have the right to elect either to receive its payment in such form of consideration or to cause the licensee or acquirer to assume the obligations described herein. In the event of a “Company Sale” (as defined in the July 2022 Term Sheet), the Representative is entitled to receive a pro rata share of the total consideration received by the Company or its stockholders up to $4.0 million (plus any unpaid Payments whether or not then due) based on a formula set forth in the July 2022 Term Sheet. In certain circumstances, the Representative has the right to treat a “Company Sale” as a sale of ardulipase or niclosamide, as applicable, and to treat the Company Sale as a sale of the related asset and to receive the consideration with respect thereto described herein.

In the July 2022 Term Sheet, the Representative agreed to stay the FWB Action for a period of 90 days and to eliminate the Company’s obligation to pay a portion of any offering proceeds to the Representative. In addition, the Company’s obligation to use commercially reasonable efforts to develop niclosamide will be deferred for a period of 24 months from the date of the July 2022 Term Sheet. Effective upon the Second Payment, the Representative dismissed the FWB Action with prejudice and extinguished the remaining fixed payment obligations owed to the former FWB shareholders. On November 30, 2022, the Company entered into a formal settlement agreement with the Representative on substantially the same terms as the July 2022 Term Sheet (the “November 2022 Settlement Agreement”).

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Accounting Treatment

Under the July 2022 Term Sheet, the $1.5 million in cash due and paid on July 29, 2022, as well as the Second Payment due and paid in September 2022, were recorded as a reduction to current liabilities for the three months ended September 30, 2022. Effective upon the Second Payment, the approximately $10.1 million of remaining fixed payment obligations previously owed to the former FWB shareholders was settled. The third payment obligation of $2.0 million due and paid by November 30, 2022 was recorded as research and development expense in the three months ended December 31, 2022.

The remaining unachieved potential milestone payments and revenue share are not yet considered probable, therefore have not been accrued as of June 30, 2023. Depending on the status of development at the time a contingent payment is recognized, the Company may determine that the payment should be expensed as research and development or be capitalized as an intangible asset. This determination will be based on the facts and circumstances that exist at the time a contingent payment is recognized.

Note 5 – Property, Equipment and Leasehold Improvements

Property, equipment, and leasehold improvements consisted of the following:

	June 30,
	2023		December 31,
	(unaudited)		2022
Computer equipment and software	$	11,540	$	11,540
Office equipment		48,278		48,278
Leasehold improvements		28,000		28,000
Total property, plant, and equipment		87,818		87,818
Less accumulated depreciation		(58,616)		(43,979)
Property, plant and equipment, net	$	29,202	$	43,839

Depreciation expense for the three months ended June 30, 2023 and 2022 was approximately $7,300 and $7,300, respectively, and for the six months ended June 30, 2023 and 2022 was approximately $14,600 and $14,600, respectively.

Note 6 –Goodwill

Goodwill is as follows:

	Goodwill
Balance on January 1, 2022	$	1,911,705
Foreign currency translation		(227,523)
Balance on December 31, 2022		1,684,182
Foreign currency translation		—
Balance on June 30, 2023 (unaudited)	$	1,684,182

Note 7 - Accrued Expenses

Accrued expenses consisted of the following:

	June 30,
	2023		December 31,
	(unaudited)		2022
Clinical trials	$	301,226	$	5,340
Professional fees		178,636		309,867
Consulting fees		—		4,969
Total accrued expenses	$	479,862	$	320,176

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Note 8 – Note Payable

Directors and Officer’s Liability Insurance

On November 30, 2022, the Company entered into 9-month financing agreements for its directors and officer’s liability insurance, as well as other corporate insurances, in the amount of approximately $677,000 that bears interest at an annual rate of 6.79%. Monthly payments, including principal and interest, of approximately $77,000 per month. The balance due under these financing agreements was approximately $153,000 and $603,000 at June 30, 2023 and December 31, 2022, respectively.

Note 9 – Capital Stock

Common Stock and Preferred Stock

The Company’s amended and restated certificate of incorporation, as amended to date, (the “Charter”) authorizes the issuance of up to 50,000,000 shares of Common Stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock, but without any change in the number of authorized shares of Common Stock and the par value per share.

On August 26, 2022, the Company effected a reverse stock split, whereby every thirty shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock, but without any change in the number of authorized shares of Common Stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

The Company had 4,208,995 and 995,003 shares of its Common Stock issued and outstanding on June 30, 2023 and December 31, 2022, respectively.

The Company had approximately 545.94 and 550.17 shares of Series B preferred stock issued and outstanding on June 30, 2023 and December 31, 2022, respectively.

The Company had 0 shares of Series C, Series D, Series E and Series F preferred stock issued and outstanding on June 30, 2023 and December 31, 2022.

Most Favored Nations Exchange Right and Waiver Agreements

In the event the Company effects any issuance by the Company or any of its subsidiaries of Common Stock or Common Stock equivalents for cash consideration, or a combination of units thereof (a “Subsequent Financing”), each holder of the Series B Preferred Stock had the right, subject to certain exceptions set forth in the Series B Certificate of Designations, at its option, to exchange (in lieu of cash subscription payments) all or some of the Series B Preferred Stock then held (with a value per share of Series B Preferred Stock equal to the stated value of each share of Series B Preferred Stock, or $7,700.00, plus accrued and unpaid dividends thereon, of the Series B Preferred Stock (the “Exchange Amount”)) for any securities or units issued in a Subsequent Financing on dollar-for-dollar basis (the “Series B Exchange Right”).

Between February 1, 2022 and February 7, 2022, the Company entered into waiver agreements (the “Waiver”) with certain holders of Series B Preferred Stock, pursuant to which the Company agreed to pay a cash waiver fee equal to ten percent of the stated value of the shares of Series B Preferred Stock held by such holder (other than holders who are insiders who did not receive a cash waiver fee) and such holder agreed to irrevocably waive its Series B Exchange Right with respect to any Subsequent Financing that occurred from and after the date of the Waiver until December 31, 2022.

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During the six months ended June 30, 2022, the Company entered into Waivers with holders of approximately $2.88 million of stated value of Series B Preferred Stock. The Company also entered into Waivers with Company insiders holding approximately $0.047 million of stated value of Series B Preferred Stock for which the Company did not pay a waiver fee. The cash waivers paid of approximately $0.233 million were recorded as other expense on the Company’s condensed consolidated statements of operations for the six months ended June 30, 2022.

Effective May 12, 2022, the holders of 81.3% of the outstanding shares of the Series B Preferred Stock (the “Consenting Holders”) permanently waived for themselves and all other holders of the Series B Preferred Stock the Series B Exchange Right with respect to any Subsequent Financing occurring on or after January 1, 2022 (the “Permanent Waiver”). Holders of Series B Preferred Stock as of the April 27, 2022 record date were entitled to notice of and to consent to the Permanent Waiver (the “Record Holders”).

Pursuant to the terms of a Waiver Agreement entered into by the Company and the Consenting Holders (the “Waiver Agreement”), the Company permanently reduced the exercise price of the Series B Warrants originally issued on July 16, 2020 (the “Series B Warrants”) held by the Consenting Holders to $52.50 per share or, in the case of Consenting Holders who are officers and directors of the Company, $69.174 (the “Exercise Price Reduction”). Only Consenting Holders are entitled to the Exercise Price Reduction. Series B Warrants to purchase an aggregate of approximately 1,196 shares of Common Stock received the Exercise Price Reduction which was effective as of the Expiration Date. As a result of the Exercise Price Reduction of the Series B Warrants described above, the Company recorded a deemed dividend of approximately $0.047 million for the year ended December 31, 2022.

From inception through June 30, 2023, (i) holders of approximately 1,839.76 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $14.4 million had previously elected to exercise their Series B Exchange Rights into Series C Preferred Stock, convertible into an aggregate of 9,058 shares of Common Stock (which conversion the Company has elected to make in full), and additional warrants exercisable for up to an aggregate of 9,058 shares of Common Stock, (ii) holders of approximately 99.200 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $880,000 had previously elected to exercise their Series B Exchange Rights into 1,552 shares of Common Stock with no warrants, and (iii) holders of approximately 30.91 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $265,000 had previously elected to exercise their Series B Exchange Rights into 909 shares of Common Stock, and additional Series C Warrants exercisable for up to an aggregate of 909 shares of Common Stock.

At The Market Agreement with H.C. Wainwright

On May 26, 2021, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which the Company may issue and sell, from time to time, through Wainwright, shares of its Common Stock, and pursuant to which Wainwright may sell its Common Stock by any method permitted by law deemed to be an “at the market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of Common Stock. As of May 24, 2022, the Company was authorized to offer and sell up to $8.0 million of its Common Stock pursuant to the ATM Agreement over 12-month periods. During the year ended December 31, 2022, the Company issued and sold an aggregate of 217,036 shares of Common Stock under the ATM Agreement for which the Company received gross proceeds of approximately $8.0 million less issuance costs incurred of approximately $309,000. As of June 30, 2023, the maximum dollars authorized under the ATM Agreement were issued.

June 2023 Inducement Offering

On June 13, 2023, the Company entered into warrant exercise inducement offer letters with certain holders (the “Holders”) of warrants to purchase shares of the Company’s Common Stock (the “Existing Warrants”) pursuant to which the Holders agreed to exercise for cash their Existing Warrants to purchase 1,724,332 shares of the Company’s Common Stock, in the aggregate, at a reduced exercised price of $1.15 per share, in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) on substantially the same terms as the Existing Warrants as described below, to purchase up to 3,448,664 shares of the Company’s Common Stock (the “Inducement Warrant Shares”) and a cash payment of $0.125 per Inducement Warrant Share which was paid in full upon the exercise of the Existing Warrants (the “June 2023 Inducement Offering”). The Company received aggregate gross proceeds of approximately $2.4 million from the exercise of the Existing Warrants by the Holders and the sale of the Inducement Warrants. The Company engaged Roth Capital Partners, LLC (“Roth”) to act as its financial advisor in connection with the transactions summarized above and paid Roth $150,000 for its services.

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March 2023 Private Placement

On March 15, 2023, the Company completed a private placement offering (the “March 2023 Offering”) priced at market under Nasdaq rules, for an aggregate of (i) 128,000 shares of Common Stock, (ii) pre-funded warrants (the “March 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 895,018 shares of Common Stock and (iii) common warrants (the “March 2023 Warrants”) to purchase up to an aggregate of 2,046,036 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2023 Warrant to purchase one share of Common Stock was $3.91 per share. The March 2023 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. The March 2023 Warrants have an exercise price of $3.66 per share, are exercisable immediately and will expire five years from the initial exercise date.

The Company received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $300,000.

March 2022 Registered Direct Offering

On March 2, 2022, the Company completed a registered direct offering (the “March 2022 Offering”) priced at the market under Nasdaq rules for an aggregate of 7,857 shares of Common Stock, pre-funded warrants exercisable for an aggregate of up to 23,086 shares of Common Stock (the “March 2022 Pre-Funded Warrants”), and warrants (the “March 2022 Warrants”) exercisable for an aggregate of up to 30,943 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2022 Warrant to purchase one share of Common Stock was $290.85, and the public offering price for each March 2022 Pre-Funded Warrant and accompanying March 2022 Warrant to purchase one share of Common Stock was $288.75. The total net proceeds from the March 2022 Offering were approximately $8.0 million. The March 2022 Warrants have an exercise price of $264.60 per share and will be exercisable for five years from the issuance date. The March 2022 Pre-Funded Warrants are exercisable for one share of Common Stock at an exercise price of $2.10 per share and will expire when exercised in full. Additionally, the Company issued warrants to the placement agent (the “March 2022 Placement Agent Warrants”) to purchase 1,856 shares of Common Stock, which was equal to 6.0% of the aggregate number of shares of Common Stock and March 2022 Pre-Funded Warrants placed in the March 2022 Offering. The March 2022 Placement Agent Warrants have a term of five years from the date of the prospectus supplement relating to the March 2022 Offering and an exercise price of $363.30 per share.

The Company received gross proceeds of approximately $9.0 million less placement agent’s fees and other offering expenses of approximately $1.0 million.

Common Stock Issuances

Issuances for the Three Months Ended June 30, 2023

During the three months ended June 30, 2023, the Company issued 1,724,332 shares of Common Stock upon the exercise of an aggregate of 1,724,332 investor warrants for which the Company received net proceeds of approximately $2.2 million (See Note 10).

During the three months ended June 30, 2023, the Company issued an aggregate of 895,018 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.0001.

During the three months ended June 30, 2023, the Company issued an aggregate of 40,064 shares of Common Stock upon the vesting of restricted stock units (“RSUs”) (See Note 11).

Issuances for the Six Months Ended June 30, 2023

During the six months ended June 30, 2023, the Company issued 128,000 shares of Common Stock under the March 2023 Offering for which the Company received net proceeds of approximately $3.7 million.

During the six months ended June 30, 2023, the Company issued 1,724,332 shares of Common Stock upon the exercise of an aggregate of 1,724,332 investor warrants for which the Company received net proceeds of approximately $2.2 million (See Note 10).

During the six months ended June 30, 2023, the Company issued an aggregate of 1,324,493 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.0001 (See Note 10).

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During the six months ended June 30, 2023, the Company issued an aggregate of 70 shares of Common Stock upon the exchange of an aggregate of 4.23 shares of Series B Preferred Stock with a stated value of approximately $32,600 plus accrued dividends of approximately $6,200.

During the six months ended June 30, 2023, the Company issued an aggregate of 40,064 shares of Common Stock upon the vesting of RSUs (See Note 11).

During the six months ended June 30, 2023, the Company cancelled an aggregate of 2,967 shares of Common Stock in connection with the 1-for-7 reverse stock split on January 18, 2023.

Issuances for the Three Months Ended June 30, 2022

During the three months ended June 30, 2022, the Company issued and sold an aggregate of 5,070 shares of Common Stock under the ATM Agreement for which the Company received net proceeds of approximately $317,000.

During the three months ended June 30, 2022, the Company issued an aggregate of 411 shares of Common Stock and accompanying warrants (the “Exchange Warrants”) upon the exchange of an aggregate of 13.87 shares of Series B Preferred Stock with a stated value of approximately $107,000 plus accrued dividends of approximately $13,000. The Exchange Warrants have an exercise price of $264.60 per share and will be exercisable for five years from the issuance date.

Issuances for the Six Months Ended June 30, 2022

During the six months ended June 30, 2022, the Company issued 7,857 shares of Common Stock under the March 2022 Offering for which the Company received net proceeds of approximately $8.0 million.

During the six months ended June 30, 2022, the Company issued and sold an aggregate of 5,070 shares of Common Stock under the ATM Agreement for which the Company received net proceeds of approximately $317,000.

During the six months ended June 30, 2022, the Company issued an aggregate of 23,086 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.01 (See Note 10).

During the six months ended June 30, 2022, the Company issued an aggregate of 910 shares of Common Stock and accompanying Exchange Warrants upon the exchange of an aggregate of 30.92 shares of Series B Preferred Stock with a stated value of approximately $238,000 plus accrued dividends of approximately $27,000. The Exchange Warrants have an exercise price of $264.60 per share and will be exercisable for five years from the issuance date.

During the six months ended June 30, 2022, the Company issued an aggregate of 429 shares of its Common Stock to consultants with a grant date fair value of approximately $119,000 for investor relations services provided, which was recorded as stock-based compensation and included as part of general and administrative expenses.

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Note 10 – Warrants

Warrant activity for the six months ended June 30, 2023 and 2022 was as follows:

		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2023	2,179,798	$	19.16	5.50
Issued	6,389,718		1.79	4.85
Expired	(116)		773.79	—
Exercised	(3,048,825)		0.65	4.94
Warrants outstanding and exercisable on June 30, 2023	5,520,575		7.85	4.86
Warrants outstanding and exercisable on January 1, 2022	26,089	$	1,992.90	3.95
Issued	56,795		161.70	4.67
Expired	(564)		7,755.30	—
Exercised	(23,087)		2.10	4.67
Warrants outstanding and exercisable on June 30, 2022	59,233	$	732.90	4.18

The outstanding warrants expire from 2024 through 2028.

During the six months ended June 30, 2023, the Company issued warrants and pre-funded warrants to purchase 2,941,054 shares of the Company’s Common Stock in connection with the March 2023 Offering. During the six months ended June 30, 2023, the Company issued warrants to purchase 3,448,664 shares of the Company’s Common Stock in connection with the June 2023 Inducement Offering (See Note 9).

During the six months ended June 30, 2023, an investor exercised pre-funded warrants to purchase 1,324,493 shares of the Company’s Common Stock in connection with previous offerings. During the six months ended June 30, 2023, an investor exercised warrants to purchase 1,724,332 shares of the Company’s Common Stock in connection with previous offerings as a result of the June 2023 Inducement Offering (see Note 9).

During the six months ended June 30, 2022, the Company issued warrants, pre-funded warrants, and placement agent warrants to purchase 55,883 shares of the Company’s Common Stock in connection with the March 2022 Offering, as well as Series C warrants to purchase 499 shares of the Company’s Common Stock in connection with a Series B Preferred Stock exchange (See Note 9).

During the six months ended June 30, 2022, an investor exercised pre-funded warrants to purchase 23,087 shares of the Company’s Common Stock in connection with previous offerings.

In connection with the March 2022 Offering, the Company entered into a warrant amendment agreement with an investor pursuant to which the Company agreed to amend the investor’s existing warrants to purchase up to 5,080 shares of Common Stock at an exercise price of $1,680.00 per share issued in January 2021 and warrants to purchase up to 1,872 shares of Common Stock at an exercise price of $2,541.00 per share issued in March 2021 (the “March Existing Warrants”), in consideration for such investor’s purchase of $9.0 million of securities in the March 2022 Offering and payment of $5.901 per share for each share of Common Stock issuable upon exercise of the March Existing Warrants to (i) lower the exercise price of the March Existing Warrants to $264.60 per share and (ii) extend the termination date of the March Existing Warrants to March 2, 2027.

Note 11 – Equity Incentive Plan

The Company’s Board and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which took effect on May 12, 2014. The Company’s Board and stockholders adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which took effect on September 11, 2020. From the adoption and approval of the 2020 Plan, no new awards have been or will be made under the 2014 Plan.

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The 2020 Plan allows for the issuance of securities, including stock options to employees, Board members and consultants. The initial number of shares of Common Stock available for issuance under the 2020 Plan was 4,761 shares, which will, on January 1 of each calendar year, unless the Board decides otherwise, automatically increase to equal ten percent (10)% of the total number of shares of Common Stock outstanding on December 31 of the immediately preceding calendar year, calculated on an As Converted Basis. As Converted Shares include all outstanding shares of Common Stock and all shares of Common Stock issuable upon the conversion of outstanding preferred stock, warrants and other convertible securities, but will not include any shares of Common Stock issuable upon the exercise of options and other convertible securities issued pursuant to either the 2014 Plan or the 2020 Plan. The number of shares permitted to be issued as “incentive stock options” (“ISOs”) is 7,142 under the 2020 Plan.

On April 20, 2023, the Company’s board of directors approved an amendment (i) increasing the number of shares of Common Stock available for issuance under the 2020 Plan from 317,480 to 1,167,480 and (ii) increasing the number of shares of our Common Stock otherwise available under the 2020 Plan that may be granted as ISOs to 5,000,000 shares. The board of directors directed that the amendment be submitted to the stockholders of the Company at the Company’s annual meeting of stockholders. On June 22, 2023, the stockholders approved the amendment to the 2020 Plan at the annual meeting of stockholders.

As of January 1, 2023, the number of shares of Common Stock available for issuance under the 2020 Plan automatically increased to 317,480 under the 2020 Plan’s evergreen provision.

As of June 22, 2023, as a result of approval at the annual shareholders’ meeting, the number of shares of Common Stock available for issuance under the 2020 Plan increased to 1,167,480.

As of June 30, 2023, there were an aggregate of 1,024 total shares available (but un-issuable) under the 2014 Plan, of which 732 are issued and outstanding, and 292 shares are reserved subject to issuance of restricted stock and RSUs.

As of June 30, 2023, 1,167,480 total shares were authorized under the 2020 Plan, of which 159,384 were issued and outstanding and 1,008,096 shares were available for potential issuances.

During the six months ended June 30, 2023 and 2022, stock option activity under the 2014 Plan and 2020 Plan was as follows:

		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2023	4,076	$	958.14	8.22	$	—
Granted	5,000		3.73	9.91		—
Forfeited	(11)		573.68	—		—
Expired	(109)		4,363.67	—		—
Outstanding at June 30, 2023	8,956	$	397.33	8.93	$	—
Exercisable at June 30, 2023	5,271	$	574.49	8.69	$	—
Outstanding at January 1, 2022	1,941	$	2,470.99	7.28	$	—
Granted	3,219		291.90	8.08		—
Cancelled	(202)		278.14	—		—
Forfeited	(475)		852.60	—		—
Outstanding at June 30, 2022	4,483	$	1,096.20	8.52	$	—
Exercisable at June 30, 2022	2,093	$	2,226.00	7.59	$	—

During the six months ended June 30, 2023 and 2022, the Board approved the grant of options to purchase 5,000 and 3,219 shares of Common Stock, respectively. All option grants were pursuant to the 2020 Plan. In general, options granted under the 2020 Plan vest monthly over a 36-month period.

During the six months ended June 30, 2023 and 2022, stock options to purchase 11 and 475 shares of Common Stock, respectively, were forfeited. During the six months ended June 30, 2023, stock options to purchase 109 shares of Common Stock expired. During the six months ended June 30, 2022, stock options to purchase 202 shares of Common Stock were cancelled.

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For the six months ended June 30, 2023 and 2022, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	2023		2022
Contractual term (in years)	6.50		6.50
Expected Volatility	98.80	%	90.92	%
Risk-free interest rate	4.08	%	1.11	%
Expected Dividend yield	0	%	0	%

Using the Black-Scholes option-pricing model, the estimated weighted average fair value of an option to purchase one share of Common Stock granted during the six months ended June 30, 2023 and 2022 was $3.05 and $258.30, respectively.

Restricted Stock and Restricted Stock Units

Restricted stock refers to shares of Common Stock subject to vesting based on certain service, performance, and market conditions. Restricted stock units (“RSUs”) refer to an award which constitutes a promise to grant shares of Common Stock at the end of a specified restriction period.

As of June 30, 2023 and 2022, under the 2014 Plan, the Company had 130 shares of restricted stock outstanding and an aggregate unrecognized restricted Common Stock expense of approximately $388,000, which will be recognized when vesting of certain milestones become probable.

During the six months ended June 30, 2023, RSU activity under the 2020 Plan was as follows:

		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2023	—	$	—	—
Awarded	160,239		6.20
Vested	(77,095)		6.20
Cancelled	(9,079)		6.20
Non-vested Outstanding at June 30, 2023	74,065	$	6.20	0.50

During the six months ended June 30, 2023, the Board approved the grant of 160,239 RSUs. All grants of RSUs were pursuant to the 2020 Plan, vest quarterly over a one-year period and are issued in the following quarter.

The total stock-based compensation expense for employees and non-employees is included in the accompanying condensed consolidated statements of operations and as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	38,165	$	24,839	$	76,245	$	71,246
General and administrative		254,539		350,068		574,775		521,891
Total stock-based compensation expense	$	292,704	$	374,907	$	651,020	$	593,136

As of June 30, 2023, the Company had unrecognized stock-based compensation expense related to stock options and RSUs of approximately $0.8 million. Approximately $0.6 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock awards of 0.78 years. Approximately $0.2 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.

As of June 30, 2022, the Company had unrecognized stock-based compensation expense of approximately $1.1 million. Approximately $0.6 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock options of 9.40 years. Approximately $0.5 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.

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Note 12 – Leases

The Company leases its office under an operating lease which is subject to various rent provisions and escalation clauses.

The Company is a party to one real property operating lease for the rental of office space. The Company has office space of 3,472 square feet in Boca Raton, Florida that is used for its corporate headquarters with a term through August 31, 2026. The Company previously had office space in Brooklyn, New York on a month-to-month basis, which was terminated in June 2023. The Company was also previously a party to office space in Hayward, California with a term through May 31, 2022, which was not renewed upon its expiration.

The Company’s lease expires in 2026. The escalation clause is indeterminable and considered not material and has been excluded from minimum future annual rental payments.

Lease expenses were approximately $35,000 and $50,000, respectively, for the three months ended June 30, 2023 and 2022 and $72,000 and $78,000, respectively, for the six months ended June 30, 2023 and 2022.

The weighted-average remaining lease term and weighted-average discount rate under operating leases as of June 30, 2023 are:

	June 30,
	2023
Lease term and discount rate
Weighted-average remaining lease term (years)	3.2
Weighted-average discount rate	7.00	%

Maturities of operating lease liabilities as of June 30, 2023, were as follows:

2023 (remainder of year)	$	42,360
2024		86,202
2025		88,788
2026		60,593
Total lease payments		277,943
Less imputed interest		(29,717)
Present value of lease liabilities	$	248,226

Note 13 - Net Loss per Common Share

Basic net loss per share is computed by dividing net loss available to Common Stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants and conversion of convertible debt that are not deemed to be anti-dilutive. The dilutive effect of the outstanding stock options and warrants is computed using the treasury stock method.

All shares of Common Stock that may potentially be issued in the future are as follows:

	June 30, 2023	June 30, 2022
	(unaudited)	(unaudited)
Common stock warrants	5,520,575	59,233
Stock options	8,956	4,483
RSUs not yet issued	160,239	—
Convertible preferred stock (1)	3,157	3,416
Restricted stock not yet issued	162	162
Total shares of Common Stock issuable	5,693,089	67,294

(1) Convertible preferred stock is assumed to be converted at the rate of $1,617.70 per common share, which is the conversion price as of June 30, 2023.

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Note 14 - Employee Benefit Plans

401(k) Plan

Since 2015, the Company has sponsored a multiple employer defined contribution benefit plan, which complies with Section 401(k) of the Internal Revenue Code covering substantially all employees of the Company. All employees are eligible to participate in the plan. Employees may contribute from 1% to 100% of their compensation and the Company matches an amount equal to 100% on the first 6% of the employee contribution and may also make discretionary profit-sharing contributions.

Employer contributions under this 401(k) plan amounted to approximately $21,000 and $29,000 for the three months ended June 30, 2023 and 2022, respectively, and approximately $47,000 and $76,000 for the six months ended June 30, 2023 and 2022, respectively.

Note 15 - Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements except for the items noted below.

Phase 2 SPAN Trial

On July 13, 2023, the Company announced initial topline results from the Phase 2b SPAN clinical trial investigating an enhanced enteric microgranule delivery formulation of adrulipase for the treatment of exocrine pancreatic insufficiency in patients with cystic fibrosis. Initial data from the study indicated that the enhanced adrulipase formulation was safe and well tolerated, as well as demonstrated an improvement over prior formulations of adrulipase. However, the preliminary data also indicated that it is likely that the primary efficacy endpoint was not achieved. The Company is continuing to assess the data and expects to report additional findings on primary and secondary endpoints in the third quarter of 2023.

July 2023 Public Offering

On July 21, 2023, the Company completed a public offering (the “July 2023 Offering”) for an aggregate of (i) 610,000 shares of Common Stock, (ii) pre-funded warrants (the “July 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 2,675,000 shares of Common Stock, and (iii) common warrants (the “July 2023 Warrants”) to purchase up to an aggregate of 6,570,000 shares of Common Stock. The public offering price for each share of Common Stock and accompanying July 2023 Warrant to purchase one share of Common Stock was $0.64 per share. The July 2023 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. To date, pre-funded warrants have been exercised to purchase 2,246,000 shares of Common Stock. The July 2023 Warrants have an exercise price of $0.64 per share, are exercisable immediately and will expire five years from the initial exercise date.

The Company received gross proceeds of approximately $2.1 million less placement agent’s fees and other offering expenses of approximately $350,000.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report to “First Wave,” “AzurRx,” “Company,” “we,” “us,” “our,” or similar references mean First Wave BioPharma, Inc. and its subsidiaries on a consolidated basis. References to “First Wave BioPharma” refer to First Wave BioPharma, Inc. on an unconsolidated basis. References to “AzurRx SAS” refer to First Wave BioPharma’s former wholly owned subsidiary through which we previously conducted our European operations. References to the “SEC” refer to the U.S. Securities and Exchange Commission.

Forward-Looking Statements

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this interim report. Our consolidated financial statements have been prepared in accordance with U.S. GAAP. The following discussion and analysis contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including, without limitation, statements regarding our expectations, beliefs, intentions or future strategies that are signified by the words “expect,” “anticipate,” “intend,” “believe,” or similar language. All forward-looking statements included in this document are based on information available to us on the date hereof, and we assume no obligation to update any such forward-looking statements. Our business and financial performance are subject to substantial risks and uncertainties. Actual results could differ materially from those projected in the forward-looking statements. In evaluating our business, you should carefully consider the information set forth under the heading “Risk Factors” included in our Annual Report filed on Form 10-K for the year ended December 31, 2022 filed with the SEC on March 20, 2023. Readers are cautioned not to place undue reliance on these forward-looking statements.

Overview

We are engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

We are currently focused on developing our pipeline of gut-restricted GI clinical drug candidates, including the biologic adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients, and niclosamide, an oral small molecule with anti-viral and anti-inflammatory properties.

Our adrulipase programs are focused on the development of an oral, non-systemic, biologic capsule for the treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic fibrosis (“CF”) and chronic pancreatitis (“CP”). Our goal is to provide CF and CP patients with a safe and effective therapy to control EPI that is non-animal derived and offers the potential to dramatically reduce their daily pill burden. In March 2021, we announced topline results from our Phase 2b OPTION 2 monotherapy trial, and in 2021, we announced positive topline results from our Phase 2 Combination trial in Europe. In November 2022 we filed a Phase 2b investigational new drug (“IND”) amendment for a bridging study using a new enteric microgranule formulation of adrulipase with the U.S. Food and Drug Administration (“FDA”). We initiated the Phase 2b monotherapy trial during the first quarter of 2023 and announced initial topline data in July 2023. While the initial data from the study indicated that the enhanced adrulipase formulation was safe and well tolerated and demonstrated an improvement over prior formulations of adrulipase, it also indicated that it is likely that the primary efficacy endpoint was not achieved. We are continuing to assess the data and expect to report additional findings on primary and secondary endpoints in the third quarter of 2023.

Our niclosamide programs leverage proprietary oral and topical formulations to address multiple GI conditions, including inflammatory bowel diseases (“IBD”) indications. In 2022 we advanced two separate Phase 2 clinical programs of our niclosamide formulations, including FW-COV for Severe Acute Respiratory Syndrome Coronavirus 2 (“COVID-19”) GI infections, and FW-UP for ulcerative proctitis (“UP”) and ulcerative proctosigmoiditis (“UPS”).

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We announced the completion of enrollment in the FW-COV trial in January 2022 and topline results in August 2022. In September 2022 we announced that we would no longer pursue the anti-viral COVID-GI clinical indication as a result of the mixed results from the FW-COVID-19 trial. Additionally, we are devoting fewer resources to the FW-UP/UPS niclosamide program due to inconclusive data from a small Phase 2 trial in Europe, the need for a new FDA-IND cleared protocol, and financial constraints.

We are further developing FW-ICI-AC for Immune Checkpoint Inhibitor-associated colitis (“ICI-AC”) and diarrhea in advanced stage oncology patients, which received FDA IND clearance for a Phase 2a clinical trial in October 2021, and two pre-IND programs of our niclosamide therapies for additional IBD indications, including FW-UC for ulcerative colitis (“UC”) and FW-CD for Crohn’s disease (“CD”). However, the FW-ICI-AC program is currently on hold due to financial constraints.

Liquidity and Capital Resources

To date, we have not generated any revenues and have experienced net losses and negative cash flows from our activities.

As of June 30, 2023, we had cash and cash equivalents of approximately $1.2 million, and had sustained cumulative losses attributable to common stockholders of approximately $176.8 million. Subsequent to June 30, 2023 through August 14, 2023, we have raised aggregate gross proceeds of approximately $2.1 million from the July 2023 Offering. We anticipate having sufficient cash to fund planned operations through September 2023, however, the acceleration or reduction of cash outflows by management can significantly impact the timing for the need to raise additional capital to complete development of our products. We have not yet achieved profitability and anticipate that we will continue to incur net losses for the foreseeable future. We expect that our expenses will continue to grow and, as a result, we will need to generate significant product revenues to achieve profitability. We may never achieve profitability. As such, we are dependent on obtaining, and are continuing to pursue, the necessary funding from outside sources, including obtaining additional funding from the sale of securities in order to continue our operations. Without adequate funding, we may not be able to meet our obligations. We believe these conditions may raise substantial doubt about our ability to continue as a going concern.

We have funded our operations to date primarily through the issuance of debt, convertible debt securities, preferred stock, as well as the issuance of Common Stock in various public offerings and private placement transactions. We expect to incur substantial expenditures in the foreseeable future for the development of adrulipase, niclosamide and any other drug candidates. We will require additional financing to develop our drug candidates, run clinical trials, prepare regulatory filings and obtain regulatory approvals, fund operating losses, and, if deemed appropriate, establish manufacturing, sales and marketing capabilities. Our current financial condition raises substantial doubt about our ability to continue as a going concern. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition, our ability to meet our obligations, and our ability to pursue our business strategies. We will seek funds through additional equity and/or debt financings, collaborative or other arrangements with corporate sources, or through other sources of financing.

Although, we are primarily focused on the development of our drug candidates, including adrulipase and niclosamide, we are also opportunely focused on expanding our product pipeline of clinical assets through collaborations, and also through acquisitions of products and companies. We are continually evaluating potential asset acquisitions business combinations, and other partnership opportunities. To finance such acquisitions, we might raise additional equity capital, incur additional debt, or both.

We are able to sell securities on a shelf registration statement pursuant to the ATM Agreement with H.C. Wainwright & Co., LLC. Under current SEC regulations, because our public float was less than $75 million at the relevant measurement period pursuant to General Instruction I.B.6. to Form S-3, the amount we can raise through primary public offerings of securities in any subsequent twelve-month period under our shelf registration statement is limited to an aggregate of one-third of our public float until such time, if any, as our public float is $75 million or more. As a result, we are currently restricted from using the ATM Agreement.

Our ability to issue securities is subject to market conditions. Each issuance under the shelf registration statements will require the filing of a prospectus supplement identifying the amount and terms of the securities to be issued.

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Consolidated Results of Operations for the Three Months Ended June 30, 2023 and 2022

The following table summarizes our consolidated results of operations for the periods indicated:

	Three Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Operating expenses:
Research and development expenses	$	1,353,095	$	2,906,896	$	(1,553,801)
General and administrative expenses		2,828,549		2,498,957		329,592
Total operating expenses		4,181,644		5,405,853		(1,224,209)
Other expenses		7,588		2,292		5,296
Net loss	$	4,189,232	$	5,408,145	$	(1,218,913)

Research and Development Expenses

Research and development expenses include expenses primarily relating to the development of our adrulipase and niclosamide drug candidates.

Research and development expenses for the three months ended June 30, 2023 totaled approximately $1.4 million, a decrease of approximately $1.5 million, or 53%, over the approximately $2.9 million recorded for the three months ended June 30, 2022.

The decrease in research and development expenses was primarily attributable to decreases of approximately $0.6 million in clinical related expenses in connection with our Phase 2b adrulipase SPAN clinical trial during the three months ended June 30, 2023, as compared to our Phase 2 RESERVOIR COVID-19 GI clinical trial during the three months ended June 30, 2022, approximately $0.6 million in manufacturing costs related to adrulipase, as well as approximately $0.3 million in personnel related costs.

We expect research and development expenses to decrease during the remainder of this fiscal year as we close out the Phase 2b adrulipase SPAN clinical trial.

General and Administrative Expenses

General and administrative expenses include expenses primarily relating to our overall operations and being a public company, including personnel, legal and financial professional services, insurance, corporate communication and investor relations, listing and compliance related costs, rent, and expenses associated with obtaining and maintaining intellectual property and patents, among others.

General and administrative expenses for the three months ended June 30, 2023 totaled approximately $2.8 million, an increase of approximately $0.3 million, or 13% over the approximately $2.5 million recorded for the three months ended June 30, 2022.

The increase in general and administrative expenses was primarily due to increases of approximately $0.6 million in public company costs, including investor relations and corporate communications, partially offset by decreases of approximately $0.3 million in professional fees and other corporate costs.

We expect general and administrative expenses to remain stable during the remainder of this fiscal year.

Other Expenses

Other expenses for the three months ended June 30, 2023 totaled approximately $7,600, an increase of approximately $5,300, or 231% over the approximately $2,300 of other expenses recorded for the three months ended June 30, 2022. The increase in other expenses was mainly due to higher interest expense.

Net Loss

As a result of the factors above, our net loss for the three months ended June 30, 2023 totaled approximately $4.2 million, a decrease of approximately $1.2 million, or 23%, over the approximately $5.4 million recorded for the three months ended June 30, 2022.

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Consolidated Results of Operations for the Six Months Ended June 30, 2023 and 2022

The following table summarizes our consolidated results of operations for the periods indicated:

	Six Months Ended
	June 30,				Increase
	2023		2022		(decrease)
Operating expenses:
Research and development expenses	$	2,714,778	$	7,883,413	$	(5,168,635)
General and administrative expenses		5,529,291		6,904,512		(1,375,221)
Total operating expenses		8,244,069		14,787,925		(6,543,856)
Other expenses		15,816		247,059		(231,243)
Net loss	$	8,259,885	$	15,034,984	$	(6,775,099)

Research and Development Expenses

Research and development expenses include expenses primarily relating to the development of our adrulipase and niclosamide drug candidates.

Research and development expenses for the six months ended June 30, 2023 totaled approximately $2.7 million, a decrease of approximately $5.2 million, or 66%, over the approximately $7.9 million recorded for the six months ended June 30, 2022.

The decrease in research and development expenses was primarily attributable to decreases of approximately $3.7 million in clinical related expenses in connection with our Phase 2b adrulipase SPAN clinical trial during the six months ended June 30, 2023, as compared to our Phase 2 RESERVOIR COVID-19 GI clinical trial during the six months ended June 30, 2022, approximately $0.8 million in manufacturing costs related to adrulipase, as well as approximately $0.7 million in personnel related costs.

We expect research and development expenses to decrease during the remainder of this fiscal year as we work to close out the Phase 2b adrulipase SPAN clinical trial.

General and Administrative Expenses

General and administrative expenses include expenses primarily relating to our overall operations and being a public company, including personnel, legal and financial professional services, insurance, corporate communication and investor relations, listing and compliance related costs, rent, and expenses associated with obtaining and maintaining intellectual property and patents, among others.

General and administrative expenses for the six months ended June 30, 2023 totaled approximately $5.5 million, a decrease of approximately $1.4 million, or 20% over the approximately $6.9 million recorded for the six months ended June 30, 2022.

The decrease in general and administrative expenses was primarily due to decreases of approximately $0.5 million in professional fees, approximately $0.3 million in personnel related costs, approximately $0.3 million in other corporate costs, and approximately $0.2 million in public company costs, including investor relations and corporate communications.

We expect general and administrative expenses to remain stable during the remainder of this fiscal year.

Other Expenses

Other expenses for the six months ended June 30, 2023 totaled approximately $16,000, a decrease of approximately $0.2 million, or 94% over the approximately $0.2 million of other expenses recorded for the six months ended June 30, 2022. The decrease in other expenses was mainly due to the approximately $0.2 million of cash fees paid during the six months ended June 30, 2022 related to the Series B Waiver agreements.

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Net Loss

As a result of the factors above, our net loss for the six months ended June 30, 2023 totaled approximately $8.2 million, a decrease of approximately $6.8 million, or 45%, over the approximately $15.0 million recorded for the six months ended June 30, 2022.

Cash Flows for the Six Months Ended June 30, 2023 and 2022

The following table summarizes our cash flows for the periods indicated:

	Six Months Ended
	June 30,
	2023		2022
Net cash (used in) provided by:
Operating activities	$	(5,607,262)	$	(12,497,681)
Financing activities		5,480,412		5,443,522
Net decrease in cash and cash equivalents	$	(126,850)	$	(7,054,159)

Operating Activities

Net cash used in operating activities during the six months ended June 30, 2023 of approximately $5.6 million was primarily attributable to our net loss of approximately $8.2 million, partially offset by non-cash expenses of approximately $0.7 million, mainly related to stock-based compensation, as well as a decrease in prepaid expenses of $0.9 million and increases in accounts payable and accrued expense of approximately $1.0 million.

Net cash used in operating activities during the six months ended June 30, 2022 of approximately $12.5 million was primarily attributable to our net loss of approximately $15.0 million, partially offset by non-cash expenses of approximately $0.8 million, mainly related to Common Stock issued to consultants of approximately $0.1 million and stock-based compensation of approximately $0.6 million, as well as increases in accounts payable and accrued expense of approximately $1.3 million and a decrease in prepaid expenses of $0.6 million.

Financing Activities

Net cash provided by financing activities of approximately $5.5 million for the six months ended June 30, 2023 was primarily due to the net proceeds of approximately $2.2 million from the exercise of warrants and $3.7 million from the March 2023 Offering, partially offset by approximately $0.4 million of cash repayments of the note payable financing for corporate insurances.

Net cash provided by financing activities of approximately $5.4 million for the six months ended June 30, 2022 was primarily due to the net proceeds of approximately $8.0 million from the March 2022 Offering of our Common Stock and warrants, partially offset by approximately $2.4 million of cash payments made related to the Merger Agreement repayments of approximately $0.5 million related to the note payable.

Critical Accounting Policies and Estimates

Our accounting policies are essential to understanding and interpreting the financial results reported on the consolidated financial statements. The significant accounting policies used in the preparation of our consolidated financial statements are summarized in Note 2 to the consolidated financial statements and notes thereto found in our Annual Report on Form 10-K for the year ended December 31, 2022. Certain of those policies are considered to be particularly important to the presentation of our financial results because they require us to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

During the six months ended June 30, 2023, there were no material changes to matters discussed under the heading “Critical Accounting Policies and Significant Judgments and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not applicable.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) our Chief Executive Officer (“CEO”) and our Chief Financial Officer (“CFO”) conducted an evaluation as of the end of the period covered by this Quarterly Report on Form 10-Q, of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based on that evaluation, our CEO and our CFO each concluded that our disclosure controls and procedures are effective to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act, (i) is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (ii) is accumulated and communicated to our management, including our CEO and our CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

-28-

PART II

OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On January 27, 2023, David Hoffman, a former member of the Company’s board of directors, filed a complaint in the Court of Chancery of the State of Delaware against the Company seeking advancement of his attorneys’ fees and expenses relating to certain aspects of his service as a director of the Company (the “Complaint”). The Complaint alleges that Mr. Hoffman is entitled to reimbursement of approximately $250,000 of alleged fees and expenses he has purportedly incurred in the lawsuit filed in the Court of Chancery. The case went to trial in May 2023 and the parties are awaiting a decision from the court. Mr. Hoffman may seek advancement of additional fees and expenses. If the Company does not prevail, the court may award Mr. Hoffman all or some lesser amount of the amount he is seeking.

ITEM 1A. RISK FACTORS

There have been no material changes in or additions to the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2022.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

-29-

ITEM 6. EXHIBITS

(b) Exhibits

Exhibit  No.	Description
4.1	Form of Inducement Warrant (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 16, 2023)
10.1	Form of Inducement Letter (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 16, 2023)
10.2	Amendment to the 2020 Omnibus Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed with the SEC on June 23, 2023)
31.1*	Certification of the Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certification of the Principal Executive Officer and Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL Document and included in Exhibit 101)

*filed herewith

**furnished, not filed

-30-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

FIRST WAVE BIOPHARMA, INC.
By	/s/ James Sapirstein
	James Sapirstein
	President, Chief Executive Officer and Chairman
	(Principal Executive Officer)

	By	/s/ Sarah Romano
		Sarah Romano
		Chief Financial Officer
Date: August 14, 2023		(Principal Financial and Accounting Officer)

-31-

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, James Sapirstein, Chief Executive Officer of First Wave BioPharma, Inc. (the “Company”), certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023	/s/ James Sapirstein
	James Sapirstein
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13A-14 OF THE SECURITIES EXCHANGE ACT OF 1934

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Sarah Romano, Chief Financial Officer of First Wave BioPharma, Inc. (the “Company”), certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of the Company;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report.

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of First Wave BioPharma, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, James Sapirstein, Chief Executive Officer of the Company, and Sarah Romano, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2023	/s/ James Sapirstein
	James Sapirstein
	President and Chief Executive Officer
	(Principal Executive Officer)
	/s/ Sarah Romano
	Sarah Romano
	Chief Financial Officer
	(Principal Financial and Accounting Officer)

XML

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2023	Aug. 10, 2023
Document And Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2023
Document Transition Report	false
Entity File Number	001-37853
Entity Registrant Name	First Wave BioPharma, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-4993860
Entity Address, Address Line One	777 Yamato Road, Suite 502
Entity Address, City or Town	Boca Raton
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33431
City Area Code	561
Local Phone Number	589-7020
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	FWBI
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,152,204
Entity Central Index Key	0001604191
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current Assets:
Cash and cash equivalents	$ 1,236,054	$ 1,362,910
Other receivables		93,014
Prepaid expenses	1,117,737	1,956,831
Total Current Assets	2,353,791	3,412,755
Property, equipment, and leasehold improvements, net	29,202	43,839
Other Assets:
Restricted cash	21,519	21,513
Goodwill	1,684,182	1,684,182
Operating lease right-of-use assets	227,927	259,261
Deposits	11,250	18,149
Total other assets	1,944,878	1,983,105
Total Assets	4,327,871	5,439,699
Current Liabilities:
Accounts payable	1,591,195	720,040
Accrued expenses	479,862	320,176
Accrued dividend payable	943,243	761,488
Note payable	153,478	603,494
Operating lease liabilities	63,564	66,151
Other current liabilities	29,907	12,138
Total Current Liabilities	3,261,249	2,483,487
Non-current operating lease liabilities	184,662	214,060
Total Liabilities	3,445,911	2,697,547
Stockholders' Equity:
Common Stock - Par value $0.0001 per share; 50,000,000 shares authorized; 4,208,995 and 995,003 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	421	100
Additional paid-in capital	177,675,113	171,275,741
Accumulated deficit	(176,793,574)	(168,533,689)
Total Stockholders' Equity	881,960	2,742,152
Total Liabilities and Stockholders' Equity	4,327,871	5,439,699
Series B Preferred Stock
Stockholders' Equity:
Preferred stock
Series C Preferred Stock
Stockholders' Equity:
Preferred stock
Series D Preferred Stock
Stockholders' Equity:
Preferred stock
Series E Preferred Stock
Stockholders' Equity:
Preferred stock
Series F Preferred Stock
Stockholders' Equity:
Preferred stock

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	4,208,995	995,003	995,003
Common stock, shares outstanding (in shares)	4,208,995	995,003
Preferred stock, par value (in dollars per share)	$ 0.0001
Preferred stock, shares designated (in shares)	10,000,000
Series B Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	5,194.81	5,194.81
Preferred stock, shares issued (in shares)	545.94	550.17
Preferred stock, shares outstanding (in shares)	545.94	550.17
Series C Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	75,000	75,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series D Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	150	150
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series E Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	150	150
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Series F Preferred Stock
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares designated (in shares)	7,000	7,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating expenses:
Research and development expenses	$ 1,353,095	$ 2,906,896	$ 2,714,778	$ 7,883,413
General and administrative expenses	2,828,549	2,498,957	5,529,291	6,904,512
Total operating expenses	4,181,644	5,405,853	8,244,069	14,787,925
Loss from operations	(4,181,644)	(5,405,853)	(8,244,069)	(14,787,925)
Other (expenses) income:
Interest expense	(5,178)	(3,218)	(14,165)	(8,823)
Interest income	205	926	2,078	1,065
Other expense	(2,615)		(3,729)	(239,301)
Total other expenses	(7,588)	(2,292)	(15,816)	(247,059)
Net loss	(4,189,232)	(5,408,145)	(8,259,885)	(15,034,984)
Other comprehensive loss:
Foreign currency translation adjustment		(136,946)		(195,351)
Total comprehensive loss	(4,189,232)	(5,545,091)	(8,259,885)	(15,230,335)
Net loss	(4,189,232)	(5,408,145)	(8,259,885)	(15,034,984)
Deemed dividend on warrant modifications		(47,300)		(47,300)
Preferred stock dividends	(94,324)	(97,125)	(181,755)	(187,917)
Net loss applicable to common shareholders	$ (4,283,556)	$ (5,552,570)	$ (8,441,640)	$ (15,270,201)
Basic weighted average shares outstanding	2,270,922	103,844	2,725,755	89,015
Diluted weighted average shares outstanding	2,270,922	103,844	2,725,755	89,015
Loss per share - basic	$ (1.89)	$ (53.47)	$ (3.10)	$ (171.55)
Loss per share -diluted	$ (1.89)	$ (53.47)	$ (171.55)	$ (3.10)

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($)	Convertible preferred stock Series B Convertible Preferred Stock	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Loss	Total
Balance at the beginning at Dec. 31, 2021		$ 7	$ 147,306,625	$ (153,904,047)	$ (1,224,135)	$ (7,821,550)
Balance at the beginning (in shares) at Dec. 31, 2021	662	70,742
Issuance of common stock, pre-funded warrants and warrants in Private placement and registered direct offering, net of issuance costs (in shares)		7,857
Issuance of common stock, pre-funded warrants and warrants in Private placement and registered direct offering, net of issuance costs		$ 1	7,972,090			7,972,091
Exercise of pre-funded warrants into common stock (in shares)		23,086
Exercise of pre-funded warrants into common stock		$ 2	48,480			48,482
Deemed dividend of Series B preferred stock			(187,917)			(187,917)
Issuance of common stock at-the-market for cash, net of offering costs (in shares)		5,070
Issuance of common stock at-the-market for cash, net of offering costs		$ 1	317,230			317,231
Warrant modification			47,300			47,300
Deemed dividend on warrant modifications			(47,300)			(47,300)
Conversion of Series B preferred shares into common stock (in shares)	(31)	910
Common Stock issued to consultants			118,999			118,999
Common stock and warrants issued to consultants (in shares)		429
Stock-based compensation			593,136			593,136
Foreign currency translation adjustment					(195,351)	(195,351)
Net loss				(15,034,984)		(15,034,984)
Balance at the end at Jun. 30, 2022		$ 11	156,168,643	(168,939,031)	(1,419,486)	(14,189,863)
Balance at the end (in shares) at Jun. 30, 2022	631	108,094
Balance at the beginning at Dec. 31, 2021		$ 7	147,306,625	(153,904,047)	(1,224,135)	(7,821,550)
Balance at the beginning (in shares) at Dec. 31, 2021	662	70,742
Balance at the end at Dec. 31, 2022		$ 100	171,275,741	(168,533,689)		2,742,152
Balance at the end (in shares) at Dec. 31, 2022	550	995,003
Balance at the beginning at Mar. 31, 2022		$ 10	155,573,631	(163,530,886)	(1,282,540)	(9,239,785)
Balance at the beginning (in shares) at Mar. 31, 2022	645	102,613
Deemed dividend of Series B preferred stock			(97,125)			(97,125)
Issuance of common stock at-the-market for cash, net of offering costs (in shares)		5,070
Issuance of common stock at-the-market for cash, net of offering costs		$ 1	317,230			317,231
Warrant modification			47,300			47,300
Deemed dividend on warrant modifications			(47,300)			(47,300)
Conversion of Series B preferred shares into common stock (in shares)	(14)	411
Stock-based compensation			374,907			374,907
Foreign currency translation adjustment					(136,946)	(136,946)
Net loss				(5,408,145)		(5,408,145)
Balance at the end at Jun. 30, 2022		$ 11	156,168,643	(168,939,031)	$ (1,419,486)	(14,189,863)
Balance at the end (in shares) at Jun. 30, 2022	631	108,094
Balance at the beginning at Dec. 31, 2022		$ 100	171,275,741	(168,533,689)		2,742,152
Balance at the beginning (in shares) at Dec. 31, 2022	550	995,003
Issuance of common stock, pre-funded warrants and warrants in Private placement and registered direct offering, net of issuance costs (in shares)		128,000
Issuance of common stock, pre-funded warrants and warrants in Private placement and registered direct offering, net of issuance costs		$ 13	3,690,960			3,690,973
Issuance of Common Stock in connection with the exercise of warrants in the June 2023 Inducement Offering, net of offering costs (in shares)		1,724,332
Issuance of Common Stock in connection with the exercise of warrants in the June 2023 Inducement Offering, net of offering costs		$ 173	2,238,892			2,239,065
Exercise of pre-funded warrants into common stock (in shares)		1,324,493
Exercise of pre-funded warrants into common stock		$ 131	259			390
Issuance of Common Stock from RSU vest (in shares)		40,064
Issuance of Common Stock from RSU vest		$ (4)	4
Deemed dividend of Series B preferred stock			(181,755)			(181,755)
Conversion of Series B preferred shares into common stock (in shares)	(4)	70
Effect of cancelled shares from the 1-for-7 reverse stock split (in shares)		(2,967)
Stock-based compensation			651,020			651,020
Net loss				(8,259,885)		(8,259,885)
Balance at the end at Jun. 30, 2023		$ 421	177,675,113	(176,793,574)		881,960
Balance at the end (in shares) at Jun. 30, 2023	546	4,208,995
Balance at the beginning at Mar. 31, 2023		$ 155	175,316,783	(172,604,342)		2,712,596
Balance at the beginning (in shares) at Mar. 31, 2023	546	1,549,581
Issuance of common stock, pre-funded warrants and warrants in Private placement and registered direct offering, net of issuance costs			(78,938)			(78,938)
Issuance of Common Stock in connection with the exercise of warrants in the June 2023 Inducement Offering, net of offering costs (in shares)		1,724,332
Issuance of Common Stock in connection with the exercise of warrants in the June 2023 Inducement Offering, net of offering costs		$ 173	2,238,892			2,239,065
Exercise of pre-funded warrants into common stock (in shares)		895,018
Exercise of pre-funded warrants into common stock		$ 89				89
Issuance of Common Stock from RSU vest (in shares)		40,064
Issuance of Common Stock from RSU vest		$ (4)	4
Deemed dividend of Series B preferred stock			(94,324)			(94,324)
Stock-based compensation			292,704			292,704
Net loss				(4,189,232)		(4,189,232)
Balance at the end at Jun. 30, 2023		$ 421	$ 177,675,113	$ (176,793,574)		$ 881,960
Balance at the end (in shares) at Jun. 30, 2023	546	4,208,995

XML

Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Parenthetical) - shares			6 Months Ended
	Jan. 18, 2023	Aug. 26, 2022	Jun. 30, 2022
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit)
Reverse stock splits (in shares)	7	30	1

XML

Condensed Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (8,259,885)	$ (15,034,984)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	14,637	14,635
Change in right-of-use assets	31,334	46,693
Stock-based compensation	651,020	593,136
Common Stock granted to consultants		118,999
Changes in assets and liabilities:
Other receivables	93,014	(70,429)
Prepaid expenses	839,094	612,607
Lease liabilities	(31,985)	(78,228)
Deposits	6,899	9,686
Accounts payable	871,155	1,258,632
Accrued expenses	159,686	32,982
Other liabilities	17,769	(1,410)
Net cash used in operating activities	(5,607,262)	(12,497,681)
Cash flows from financing activities:
Proceeds from issuance of Common Stock, pre-funded warrants and warrants, net of offering costs	3,690,973	8,289,322
Proceeds from exercise of warrants, net of issuance costs	2,239,455	48,482
Payment made related to acquisition		(2,414,955)
Repayments of note payable	(450,016)	(479,327)
Net cash provided by financing activities	5,480,412	5,443,522
Net decrease in cash	(126,850)	(7,054,159)
Effect of exchange rate changes on cash		(39,516)
Cash and restricted cash, beginning balance	1,384,423	8,248,684
Cash and restricted cash, ending balance	1,257,573	1,155,009
Supplemental disclosures of cash flow information:
Cash paid for interest	14,165	8,823
Non-cash investing and financing activities:
Deemed dividend on warrant modifications		(47,300)
Accrued dividends on preferred stock	$ (181,755)	$ (187,917)

XML

The Company and Basis of Presentation

6 Months Ended

Jun. 30, 2023

The Company and Basis of Presentation

The Company and Basis of Presentation

Note 1 - The Company and Basis of Presentation

The Company

First Wave BioPharma, Inc. (“First Wave”) and its wholly-owned subsidiary, First Wave Bio, Inc. (“FWB”), are collectively referred to as the “Company”. Effective October 26, 2022, the Company’s wholly-owned subsidiary, AzurRx SAS, was dissolved. The Company is engaged in the research and development of targeted, non-systemic therapies for the treatment of patients with gastrointestinal (“GI”) diseases. Non-systemic therapies are non-absorbable drugs that act locally, i.e., in the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation.

The Company is currently focused on developing its pipeline of gut-restricted GI clinical drug candidates, including the biologic adrulipase (formerly MS1819), a recombinant lipase enzyme designed to enable the digestion of fats and other nutrients, and niclosamide, an oral small molecule with anti-viral and anti-inflammatory properties. The Company’s adrulipase programs are focused on the development of an oral, non-systemic, biologic capsule for the treatment of exocrine pancreatic insufficiency (“EPI”) in patients with cystic fibrosis (“CF”) and chronic pancreatitis (“CP”). The Company’s niclosamide programs leverage proprietary oral and topical formulations to address multiple GI conditions, including IBD indications and viral diseases.

The Company is developing its product candidates for a host of GI diseases where there are significant unmet clinical needs and limited therapeutic options, resulting in painful, life threatening and discomforting consequences for patients. Since its inception, the Company has devoted substantially all its efforts to research and development, business development, and raising capital, and has financed its operations through issuance of Common Stock, convertible preferred stock, convertible debt, and other debt/equity instruments.

Risks and Uncertainties

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development and regulatory success, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, and ability to secure additional capital to fund clinical trials and operations.

In February 2022, the Russian Federation and Belarus commenced a military action with the country of Ukraine. As a result of this action, various nations, including the United States, have instituted economic sanctions against the Russian Federation and Belarus. Further, the impact of this action and related sanctions on the world economy are not determinable as of the date of these financial statements and the specific impact on the Company’s financial condition, results of operations, and cash flows is also not determinable as of the date of these financial statements.

In addition, the Company is subject to other challenges and risks specific to its business, its ability to maintain compliance with the continued listing requirements of The Nasdaq Capital Market and its ability to execute on its strategy, as well as risks and uncertainties common to companies in the biotechnology and pharmaceutical industries with development and commercial operations, including, without limitation, risks and uncertainties associated with: obtaining regulatory approval of its drug candidates; delays or problems in the manufacture and supply of its drug candidates; loss of single source suppliers or failure to comply with manufacturing regulations; identifying, acquiring or in-licensing additional products or drug candidates; pharmaceutical product development and the inherent uncertainty of clinical success; the challenges of protecting and enhancing our intellectual property rights; and complying with applicable regulatory requirements.

Principles of Consolidation

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and include the accounts of First Wave and its wholly owned subsidiaries, FWB and AzurRx SAS, which was dissolved effective October 26, 2022. Intercompany transactions and balances have been eliminated upon consolidation.

In our opinion, the accompanying unaudited interim condensed consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2022, has been derived from audited financial statements of that date. The unaudited interim condensed consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the SEC. The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim condensed consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our Annual Report Form 10-K for the year ended December 31, 2022, filed with the SEC on March 20, 2023.

Going Concern Uncertainty

The accompanying unaudited interim condensed consolidated financial statements have been prepared as if the Company will continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception. On June 30, 2023, the Company had cash and cash equivalents of approximately $1.2 million, an accumulated deficit of approximately $176.8 million and a working capital deficiency of approximately $0.9 million. Subsequent to June 30, 2023 through August 14, 2023, the Company has raised aggregate gross proceeds of approximately $2.1 million from the July 2023 Offering. The Company has incurred recurring losses, has experienced recurring negative operating cash flows, and requires significant cash resources to execute its business plans. The Company anticipates having sufficient cash to fund planned operations through September 2023, however, the acceleration or reduction of cash outflows by Company management can significantly impact the timing for the need to raise additional capital to complete development of its products. Historically, the Company’s major sources of cash have been comprised of proceeds from various public and private offerings of its capital stock. The Company is dependent on obtaining additional working capital funding from the sale of equity and/or debt securities in order to continue to execute its development plans and continue operations.

Without adequate working capital, the Company may not be able to meet its obligations and continue as a going concern. These conditions raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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Significant Accounting Policies and Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2023

Significant Accounting Policies and Recent Accounting Pronouncements

Significant Accounting Policies and Recent Accounting Pronouncements

Note 2 - Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.

Reverse Stock Split

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock, but without any change in the number of authorized shares of Common Stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. All cash and cash equivalent balances were highly liquid at June 30, 2023 and December 31, 2022. As of June 30, 2023 and December 31, 2022, the Company has classified approximately $0.02 million as restricted cash.

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC insurance limits. At June 30, 2023 the Company had approximately $1.2 million in one account in the U.S. which was in excess of these limits. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.

Fair Value Measurements

The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions, which reflect those that a market participant would use.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.

Foreign Currency Translation

For foreign subsidiaries with operations denominated in a foreign currency, assets and liabilities were translated to U.S. dollars, which is the functional currency, at period end exchange rates. Income and expense items were translated at average rates of exchange prevailing during the periods presented. Gains and losses from translation adjustments were accumulated in a separate component of stockholders’ equity up until the dissolution of AzurRx SAS in October 2022, at which time cumulative translation adjustments were recognized as a loss for the year ended December 31, 2022.

Goodwill

Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. The Company has not recognized any impairment charges through June 30, 2023 related to goodwill.

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through June 30, 2023.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, and lease liability obligations are included in the Company’s balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Please refer to Note 12 for additional information.

Research and Development

Research and development costs are charged to operations when incurred and are included in operating expense, except for goodwill related to patents. Research and development costs consist principally of compensation of employees and consultants that perform the Company’s research activities, payments to third parties for preclinical and non-clinical activities, expenses with clinical research organizations (“CROs”), investigative sites, consultants and contractors that conduct or provide other services relating to clinical trials, costs to acquire drug product, drug supply and clinical trial materials from contract development and manufacturing organization (“CDMOs”) and third-party contractors relating to chemistry, manufacturing and controls (“CMC”) efforts, the fees paid for and to maintain the Company’s licenses, amortization of intangible assets related to the acquisition of adrulipase, and research and development costs related to adrulipase and niclosamide. Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved and experience with similar contracts. The Company monitors each of these factors and adjusts estimates accordingly.

Research and Development – Intellectual Property Acquired

The Company records intellectual property in asset acquisitions that have not reached technological feasibility and which have no alternative future use, as an expense at the acquisition date. On September 13, 2021, the Company entered into an agreement with FWB for the acquisition of intellectual property and patents for the worldwide, exclusive right to develop, manufacture, and commercialize proprietary formulations of niclosamide for the fields of treating ICI-AC and COVID-19 in humans, which was accounted for as an asset acquisition (see Note 4).

Stock-Based Compensation

The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.

For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable.

The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (the “FASB”) issued accounting pronouncement ASU 2020-06 – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity’s own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity’s own equity. As a smaller reporting company, as defined by the U.S. Securities and Exchange Commission (the “SEC”), this pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 effective January 1, 2022.

In June 2016, the FASB issued accounting pronouncement ASU 2016-13 – Measurement of Credit Losses on Financial Statements (“ASU 2016-13”). The new standard requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. It also limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. In November 2019, the FASB issued ASU 2019-10 – Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date for certain companies. The standard is effective for public companies eligible to be smaller reporting companies for annual and interim periods beginning after December 15, 2022. The Company adopted ASU 2016-13 effective for the year ended December 31, 2022 and its adoption did not have a material effect on its financial statements and related disclosures.

In June 2022, the FASB issued ASU 2022-03 - Fair Value Measurement, or Topic 820: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). This new standard clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The Company has assessed the impact of the update and determined it does not have a material impact on the accompanying financial statements and disclosures.

The Company has evaluated other recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

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Fair Value Disclosures

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures

Fair Value Disclosures

Note 3 - Fair Value Disclosures

Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value.

The fair value of the Company’s financial instruments are as follows:

			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
June 30, 2023 (unaudited):
Money market funds	$	11,925	$	11,925	$	—	$	—	$	11,925
Note payable		153,478		—		153,478		—		153,478
December 31, 2022:
Money market funds		509,890		509,890		—		—		509,890
Note payable	$	603,494	$	—	$	603,494	$	—	$	603,494

At June 30, 2023 and December 31, 2022, the Company had no other assets or liabilities that are subject to fair value methodology and estimation in accordance with U.S. GAAP.

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Asset Acquisition

6 Months Ended

Jun. 30, 2023

Asset Acquisition

Asset Acquisition

Note 4 – Asset Acquisition

The Asset Acquisition

During the six months ended June 30, 2022, the Company paid an aggregate of $2.4 million in cash towards the purchase price of FWB in accordance with the terms of an Agreement and Plan of Merger dated as of September 13, 2021 (the “Merger Agreement”) and a settlement agreement reached on November 21, 2021 (the “November 2021 Settlement Agreement”).

On May 19, 2022, Fortis Advisors LLC, the hired representative (in such capacity, the “Representative”) of the former stockholders of FWB in connection with the Merger Agreement, filed a complaint against the Company in the Court of Chancery in the State of Delaware (the “FWB Action”) for breach of contract and anticipatory repudiation or for unjust enrichment. The FWB Action sought specific performance of the Company’s obligations under the Merger Agreement and the November 2021 Settlement Agreement, including all payments then owed and to be owed to the Representative, and damages at the maximum amount permitted by law. On July 29, 2022, the Company reached an agreement with the Representative to settle the FWB Action and to restructure the Company’s obligations to the former FWB stockholders (the “July 2022 Term Sheet”). The Company agreed to pay the Representative: (i) $1.5 million in cash on July 29, 2022; (2) $1.0 million in cash no later than September 29, 2022 (the “Second Payment”); and (iii) $2.0 million on the earlier of November 30, 2022 and the completion by the Company of one or more qualifying equity offerings (collectively, the “Payments”). The Representative is also entitled to receive future cash payments conditioned on the achievement of certain development milestones for adrulipase and to a percentage of any consideration received by the Company in the event of a license or sale of adrulipase, subject to a cap. The Representative is also entitled to receive a percentage of the consideration received by the Company in the event of a license or sale of niclosamide and will retain its existing milestone payment rights with respect to niclosamide. In the event that the consideration received by the Company in connection with the sale or license of adrulipase or niclosamide consists of securities or other non-cash consideration, the Representative will have the right to elect either to receive its payment in such form of consideration or to cause the licensee or acquirer to assume the obligations described herein. In the event of a “Company Sale” (as defined in the July 2022 Term Sheet), the Representative is entitled to receive a pro rata share of the total consideration received by the Company or its stockholders up to $4.0 million (plus any unpaid Payments whether or not then due) based on a formula set forth in the July 2022 Term Sheet. In certain circumstances, the Representative has the right to treat a “Company Sale” as a sale of ardulipase or niclosamide, as applicable, and to treat the Company Sale as a sale of the related asset and to receive the consideration with respect thereto described herein.

In the July 2022 Term Sheet, the Representative agreed to stay the FWB Action for a period of 90 days and to eliminate the Company’s obligation to pay a portion of any offering proceeds to the Representative. In addition, the Company’s obligation to use commercially reasonable efforts to develop niclosamide will be deferred for a period of 24 months from the date of the July 2022 Term Sheet. Effective upon the Second Payment, the Representative dismissed the FWB Action with prejudice and extinguished the remaining fixed payment obligations owed to the former FWB shareholders. On November 30, 2022, the Company entered into a formal settlement agreement with the Representative on substantially the same terms as the July 2022 Term Sheet (the “November 2022 Settlement Agreement”).

Accounting Treatment

Under the July 2022 Term Sheet, the $1.5 million in cash due and paid on July 29, 2022, as well as the Second Payment due and paid in September 2022, were recorded as a reduction to current liabilities for the three months ended September 30, 2022. Effective upon the Second Payment, the approximately $10.1 million of remaining fixed payment obligations previously owed to the former FWB shareholders was settled. The third payment obligation of $2.0 million due and paid by November 30, 2022 was recorded as research and development expense in the three months ended December 31, 2022.

The remaining unachieved potential milestone payments and revenue share are not yet considered probable, therefore have not been accrued as of June 30, 2023. Depending on the status of development at the time a contingent payment is recognized, the Company may determine that the payment should be expensed as research and development or be capitalized as an intangible asset. This determination will be based on the facts and circumstances that exist at the time a contingent payment is recognized.

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Property, Equipment and Leasehold Improvements

6 Months Ended

Jun. 30, 2023

Property, Equipment and Leasehold Improvements

Property, Equipment and Leasehold Improvements

Note 5 – Property, Equipment and Leasehold Improvements

Property, equipment, and leasehold improvements consisted of the following:

	June 30,
	2023		December 31,
	(unaudited)		2022
Computer equipment and software	$	11,540	$	11,540
Office equipment		48,278		48,278
Leasehold improvements		28,000		28,000
Total property, plant, and equipment		87,818		87,818
Less accumulated depreciation		(58,616)		(43,979)
Property, plant and equipment, net	$	29,202	$	43,839

Depreciation expense for the three months ended June 30, 2023 and 2022 was approximately $7,300 and $7,300, respectively, and for the six months ended June 30, 2023 and 2022 was approximately $14,600 and $14,600, respectively.

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Goodwill

6 Months Ended

Jun. 30, 2023

Goodwill

Goodwill

Note 6 –Goodwill

Goodwill is as follows:

	Goodwill
Balance on January 1, 2022	$	1,911,705
Foreign currency translation		(227,523)
Balance on December 31, 2022		1,684,182
Foreign currency translation		—
Balance on June 30, 2023 (unaudited)	$	1,684,182

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Accrued Expenses

6 Months Ended

Jun. 30, 2023

Accrued Expenses

Accrued Expenses

Note 7 - Accrued Expenses

Accrued expenses consisted of the following:

	June 30,
	2023		December 31,
	(unaudited)		2022
Clinical trials	$	301,226	$	5,340
Professional fees		178,636		309,867
Consulting fees		—		4,969
Total accrued expenses	$	479,862	$	320,176

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Note Payable

6 Months Ended

Jun. 30, 2023

Note Payable

Note Payable

Note 8 – Note Payable

Directors and Officer’s Liability Insurance

On November 30, 2022, the Company entered into 9-month financing agreements for its directors and officer’s liability insurance, as well as other corporate insurances, in the amount of approximately $677,000 that bears interest at an annual rate of 6.79%. Monthly payments, including principal and interest, of approximately $77,000 per month. The balance due under these financing agreements was approximately $153,000 and $603,000 at June 30, 2023 and December 31, 2022, respectively.

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Capital Stock

6 Months Ended

Jun. 30, 2023

Capital Stock

Capital Stock

Note 9 – Capital Stock

Common Stock and Preferred Stock

The Company’s amended and restated certificate of incorporation, as amended to date, (the “Charter”) authorizes the issuance of up to 50,000,000 shares of Common Stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share.

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock, but without any change in the number of authorized shares of Common Stock and the par value per share.

On August 26, 2022, the Company effected a reverse stock split, whereby every thirty shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock, but without any change in the number of authorized shares of Common Stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

The Company had 4,208,995 and 995,003 shares of its Common Stock issued and outstanding on June 30, 2023 and December 31, 2022, respectively.

The Company had approximately 545.94 and 550.17 shares of Series B preferred stock issued and outstanding on June 30, 2023 and December 31, 2022, respectively.

The Company had 0 shares of Series C, Series D, Series E and Series F preferred stock issued and outstanding on June 30, 2023 and December 31, 2022.

Most Favored Nations Exchange Right and Waiver Agreements

In the event the Company effects any issuance by the Company or any of its subsidiaries of Common Stock or Common Stock equivalents for cash consideration, or a combination of units thereof (a “Subsequent Financing”), each holder of the Series B Preferred Stock had the right, subject to certain exceptions set forth in the Series B Certificate of Designations, at its option, to exchange (in lieu of cash subscription payments) all or some of the Series B Preferred Stock then held (with a value per share of Series B Preferred Stock equal to the stated value of each share of Series B Preferred Stock, or $7,700.00, plus accrued and unpaid dividends thereon, of the Series B Preferred Stock (the “Exchange Amount”)) for any securities or units issued in a Subsequent Financing on dollar-for-dollar basis (the “Series B Exchange Right”).

Between February 1, 2022 and February 7, 2022, the Company entered into waiver agreements (the “Waiver”) with certain holders of Series B Preferred Stock, pursuant to which the Company agreed to pay a cash waiver fee equal to ten percent of the stated value of the shares of Series B Preferred Stock held by such holder (other than holders who are insiders who did not receive a cash waiver fee) and such holder agreed to irrevocably waive its Series B Exchange Right with respect to any Subsequent Financing that occurred from and after the date of the Waiver until December 31, 2022.

During the six months ended June 30, 2022, the Company entered into Waivers with holders of approximately $2.88 million of stated value of Series B Preferred Stock. The Company also entered into Waivers with Company insiders holding approximately $0.047 million of stated value of Series B Preferred Stock for which the Company did not pay a waiver fee. The cash waivers paid of approximately $0.233 million were recorded as other expense on the Company’s condensed consolidated statements of operations for the six months ended June 30, 2022.

Effective May 12, 2022, the holders of 81.3% of the outstanding shares of the Series B Preferred Stock (the “Consenting Holders”) permanently waived for themselves and all other holders of the Series B Preferred Stock the Series B Exchange Right with respect to any Subsequent Financing occurring on or after January 1, 2022 (the “Permanent Waiver”). Holders of Series B Preferred Stock as of the April 27, 2022 record date were entitled to notice of and to consent to the Permanent Waiver (the “Record Holders”).

Pursuant to the terms of a Waiver Agreement entered into by the Company and the Consenting Holders (the “Waiver Agreement”), the Company permanently reduced the exercise price of the Series B Warrants originally issued on July 16, 2020 (the “Series B Warrants”) held by the Consenting Holders to $52.50 per share or, in the case of Consenting Holders who are officers and directors of the Company, $69.174 (the “Exercise Price Reduction”). Only Consenting Holders are entitled to the Exercise Price Reduction. Series B Warrants to purchase an aggregate of approximately 1,196 shares of Common Stock received the Exercise Price Reduction which was effective as of the Expiration Date. As a result of the Exercise Price Reduction of the Series B Warrants described above, the Company recorded a deemed dividend of approximately $0.047 million for the year ended December 31, 2022.

From inception through June 30, 2023, (i) holders of approximately 1,839.76 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $14.4 million had previously elected to exercise their Series B Exchange Rights into Series C Preferred Stock, convertible into an aggregate of 9,058 shares of Common Stock (which conversion the Company has elected to make in full), and additional warrants exercisable for up to an aggregate of 9,058 shares of Common Stock, (ii) holders of approximately 99.200 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $880,000 had previously elected to exercise their Series B Exchange Rights into 1,552 shares of Common Stock with no warrants, and (iii) holders of approximately 30.91 shares of Series B Preferred Stock with an aggregate Exchange Amount of approximately $265,000 had previously elected to exercise their Series B Exchange Rights into 909 shares of Common Stock, and additional Series C Warrants exercisable for up to an aggregate of 909 shares of Common Stock.

At The Market Agreement with H.C. Wainwright

On May 26, 2021, the Company entered into an At The Market Offering Agreement (the “ATM Agreement”) with H.C. Wainwright & Co., LLC (“Wainwright”), as sales agent, pursuant to which the Company may issue and sell, from time to time, through Wainwright, shares of its Common Stock, and pursuant to which Wainwright may sell its Common Stock by any method permitted by law deemed to be an “at the market offering” as defined by Rule 415(a)(4) promulgated under the Securities Act of 1933, as amended. The Company will pay Wainwright a commission of 3.0% of the aggregate gross proceeds from each sale of Common Stock. As of May 24, 2022, the Company was authorized to offer and sell up to $8.0 million of its Common Stock pursuant to the ATM Agreement over 12-month periods. During the year ended December 31, 2022, the Company issued and sold an aggregate of 217,036 shares of Common Stock under the ATM Agreement for which the Company received gross proceeds of approximately $8.0 million less issuance costs incurred of approximately $309,000. As of June 30, 2023, the maximum dollars authorized under the ATM Agreement were issued.

June 2023 Inducement Offering

On June 13, 2023, the Company entered into warrant exercise inducement offer letters with certain holders (the “Holders”) of warrants to purchase shares of the Company’s Common Stock (the “Existing Warrants”) pursuant to which the Holders agreed to exercise for cash their Existing Warrants to purchase 1,724,332 shares of the Company’s Common Stock, in the aggregate, at a reduced exercised price of $1.15 per share, in exchange for the Company’s agreement to issue new warrants (the “Inducement Warrants”) on substantially the same terms as the Existing Warrants as described below, to purchase up to 3,448,664 shares of the Company’s Common Stock (the “Inducement Warrant Shares”) and a cash payment of $0.125 per Inducement Warrant Share which was paid in full upon the exercise of the Existing Warrants (the “June 2023 Inducement Offering”). The Company received aggregate gross proceeds of approximately $2.4 million from the exercise of the Existing Warrants by the Holders and the sale of the Inducement Warrants. The Company engaged Roth Capital Partners, LLC (“Roth”) to act as its financial advisor in connection with the transactions summarized above and paid Roth $150,000 for its services.

March 2023 Private Placement

On March 15, 2023, the Company completed a private placement offering (the “March 2023 Offering”) priced at market under Nasdaq rules, for an aggregate of (i) 128,000 shares of Common Stock, (ii) pre-funded warrants (the “March 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 895,018 shares of Common Stock and (iii) common warrants (the “March 2023 Warrants”) to purchase up to an aggregate of 2,046,036 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2023 Warrant to purchase one share of Common Stock was $3.91 per share. The March 2023 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. The March 2023 Warrants have an exercise price of $3.66 per share, are exercisable immediately and will expire five years from the initial exercise date.

The Company received gross proceeds of approximately $4.0 million less placement agent’s fees and other offering expenses of approximately $300,000.

March 2022 Registered Direct Offering

On March 2, 2022, the Company completed a registered direct offering (the “March 2022 Offering”) priced at the market under Nasdaq rules for an aggregate of 7,857 shares of Common Stock, pre-funded warrants exercisable for an aggregate of up to 23,086 shares of Common Stock (the “March 2022 Pre-Funded Warrants”), and warrants (the “March 2022 Warrants”) exercisable for an aggregate of up to 30,943 shares of Common Stock. The public offering price for each share of Common Stock and accompanying March 2022 Warrant to purchase one share of Common Stock was $290.85, and the public offering price for each March 2022 Pre-Funded Warrant and accompanying March 2022 Warrant to purchase one share of Common Stock was $288.75. The total net proceeds from the March 2022 Offering were approximately $8.0 million. The March 2022 Warrants have an exercise price of $264.60 per share and will be exercisable for five years from the issuance date. The March 2022 Pre-Funded Warrants are exercisable for one share of Common Stock at an exercise price of $2.10 per share and will expire when exercised in full. Additionally, the Company issued warrants to the placement agent (the “March 2022 Placement Agent Warrants”) to purchase 1,856 shares of Common Stock, which was equal to 6.0% of the aggregate number of shares of Common Stock and March 2022 Pre-Funded Warrants placed in the March 2022 Offering. The March 2022 Placement Agent Warrants have a term of five years from the date of the prospectus supplement relating to the March 2022 Offering and an exercise price of $363.30 per share.

The Company received gross proceeds of approximately $9.0 million less placement agent’s fees and other offering expenses of approximately $1.0 million.

Common Stock Issuances

Issuances for the Three Months Ended June 30, 2023

During the three months ended June 30, 2023, the Company issued 1,724,332 shares of Common Stock upon the exercise of an aggregate of 1,724,332 investor warrants for which the Company received net proceeds of approximately $2.2 million (See Note 10).

During the three months ended June 30, 2023, the Company issued an aggregate of 895,018 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.0001.

During the three months ended June 30, 2023, the Company issued an aggregate of 40,064 shares of Common Stock upon the vesting of restricted stock units (“RSUs”) (See Note 11).

Issuances for the Six Months Ended June 30, 2023

During the six months ended June 30, 2023, the Company issued 128,000 shares of Common Stock under the March 2023 Offering for which the Company received net proceeds of approximately $3.7 million.

During the six months ended June 30, 2023, the Company issued 1,724,332 shares of Common Stock upon the exercise of an aggregate of 1,724,332 investor warrants for which the Company received net proceeds of approximately $2.2 million (See Note 10).

During the six months ended June 30, 2023, the Company issued an aggregate of 1,324,493 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.0001 (See Note 10).

During the six months ended June 30, 2023, the Company issued an aggregate of 70 shares of Common Stock upon the exchange of an aggregate of 4.23 shares of Series B Preferred Stock with a stated value of approximately $32,600 plus accrued dividends of approximately $6,200.

During the six months ended June 30, 2023, the Company issued an aggregate of 40,064 shares of Common Stock upon the vesting of RSUs (See Note 11).

During the six months ended June 30, 2023, the Company cancelled an aggregate of 2,967 shares of Common Stock in connection with the 1-for-7 reverse stock split on January 18, 2023.

Issuances for the Three Months Ended June 30, 2022

During the three months ended June 30, 2022, the Company issued and sold an aggregate of 5,070 shares of Common Stock under the ATM Agreement for which the Company received net proceeds of approximately $317,000.

During the three months ended June 30, 2022, the Company issued an aggregate of 411 shares of Common Stock and accompanying warrants (the “Exchange Warrants”) upon the exchange of an aggregate of 13.87 shares of Series B Preferred Stock with a stated value of approximately $107,000 plus accrued dividends of approximately $13,000. The Exchange Warrants have an exercise price of $264.60 per share and will be exercisable for five years from the issuance date.

Issuances for the Six Months Ended June 30, 2022

During the six months ended June 30, 2022, the Company issued 7,857 shares of Common Stock under the March 2022 Offering for which the Company received net proceeds of approximately $8.0 million.

During the six months ended June 30, 2022, the Company issued and sold an aggregate of 5,070 shares of Common Stock under the ATM Agreement for which the Company received net proceeds of approximately $317,000.

During the six months ended June 30, 2022, the Company issued an aggregate of 23,086 shares of Common Stock upon the conversion of pre-funded warrants issued at a par value of $0.01 (See Note 10).

During the six months ended June 30, 2022, the Company issued an aggregate of 910 shares of Common Stock and accompanying Exchange Warrants upon the exchange of an aggregate of 30.92 shares of Series B Preferred Stock with a stated value of approximately $238,000 plus accrued dividends of approximately $27,000. The Exchange Warrants have an exercise price of $264.60 per share and will be exercisable for five years from the issuance date.

During the six months ended June 30, 2022, the Company issued an aggregate of 429 shares of its Common Stock to consultants with a grant date fair value of approximately $119,000 for investor relations services provided, which was recorded as stock-based compensation and included as part of general and administrative expenses.

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Warrants

6 Months Ended

Jun. 30, 2023

Warrants

Warrants

Note 10 – Warrants

Warrant activity for the six months ended June 30, 2023 and 2022 was as follows:

		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2023	2,179,798	$	19.16	5.50
Issued	6,389,718		1.79	4.85
Expired	(116)		773.79	—
Exercised	(3,048,825)		0.65	4.94
Warrants outstanding and exercisable on June 30, 2023	5,520,575		7.85	4.86
Warrants outstanding and exercisable on January 1, 2022	26,089	$	1,992.90	3.95
Issued	56,795		161.70	4.67
Expired	(564)		7,755.30	—
Exercised	(23,087)		2.10	4.67
Warrants outstanding and exercisable on June 30, 2022	59,233	$	732.90	4.18

The outstanding warrants expire from 2024 through 2028.

During the six months ended June 30, 2023, the Company issued warrants and pre-funded warrants to purchase 2,941,054 shares of the Company’s Common Stock in connection with the March 2023 Offering. During the six months ended June 30, 2023, the Company issued warrants to purchase 3,448,664 shares of the Company’s Common Stock in connection with the June 2023 Inducement Offering (See Note 9).

During the six months ended June 30, 2023, an investor exercised pre-funded warrants to purchase 1,324,493 shares of the Company’s Common Stock in connection with previous offerings. During the six months ended June 30, 2023, an investor exercised warrants to purchase 1,724,332 shares of the Company’s Common Stock in connection with previous offerings as a result of the June 2023 Inducement Offering (see Note 9).

During the six months ended June 30, 2022, the Company issued warrants, pre-funded warrants, and placement agent warrants to purchase 55,883 shares of the Company’s Common Stock in connection with the March 2022 Offering, as well as Series C warrants to purchase 499 shares of the Company’s Common Stock in connection with a Series B Preferred Stock exchange (See Note 9).

During the six months ended June 30, 2022, an investor exercised pre-funded warrants to purchase 23,087 shares of the Company’s Common Stock in connection with previous offerings.

In connection with the March 2022 Offering, the Company entered into a warrant amendment agreement with an investor pursuant to which the Company agreed to amend the investor’s existing warrants to purchase up to 5,080 shares of Common Stock at an exercise price of $1,680.00 per share issued in January 2021 and warrants to purchase up to 1,872 shares of Common Stock at an exercise price of $2,541.00 per share issued in March 2021 (the “March Existing Warrants”), in consideration for such investor’s purchase of $9.0 million of securities in the March 2022 Offering and payment of $5.901 per share for each share of Common Stock issuable upon exercise of the March Existing Warrants to (i) lower the exercise price of the March Existing Warrants to $264.60 per share and (ii) extend the termination date of the March Existing Warrants to March 2, 2027.

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Equity Incentive Plan

6 Months Ended

Jun. 30, 2023

Equity Incentive Plan

Equity Incentive Plan

Note 11 – Equity Incentive Plan

The Company’s Board and stockholders adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which took effect on May 12, 2014. The Company’s Board and stockholders adopted and approved the 2020 Omnibus Equity Incentive Plan (the “2020 Plan”), which took effect on September 11, 2020. From the adoption and approval of the 2020 Plan, no new awards have been or will be made under the 2014 Plan.

The 2020 Plan allows for the issuance of securities, including stock options to employees, Board members and consultants. The initial number of shares of Common Stock available for issuance under the 2020 Plan was 4,761 shares, which will, on January 1 of each calendar year, unless the Board decides otherwise, automatically increase to equal ten percent (10)% of the total number of shares of Common Stock outstanding on December 31 of the immediately preceding calendar year, calculated on an As Converted Basis. As Converted Shares include all outstanding shares of Common Stock and all shares of Common Stock issuable upon the conversion of outstanding preferred stock, warrants and other convertible securities, but will not include any shares of Common Stock issuable upon the exercise of options and other convertible securities issued pursuant to either the 2014 Plan or the 2020 Plan. The number of shares permitted to be issued as “incentive stock options” (“ISOs”) is 7,142 under the 2020 Plan.

On April 20, 2023, the Company’s board of directors approved an amendment (i) increasing the number of shares of Common Stock available for issuance under the 2020 Plan from 317,480 to 1,167,480 and (ii) increasing the number of shares of our Common Stock otherwise available under the 2020 Plan that may be granted as ISOs to 5,000,000 shares. The board of directors directed that the amendment be submitted to the stockholders of the Company at the Company’s annual meeting of stockholders. On June 22, 2023, the stockholders approved the amendment to the 2020 Plan at the annual meeting of stockholders.

As of January 1, 2023, the number of shares of Common Stock available for issuance under the 2020 Plan automatically increased to 317,480 under the 2020 Plan’s evergreen provision.

As of June 22, 2023, as a result of approval at the annual shareholders’ meeting, the number of shares of Common Stock available for issuance under the 2020 Plan increased to 1,167,480.

As of June 30, 2023, there were an aggregate of 1,024 total shares available (but un-issuable) under the 2014 Plan, of which 732 are issued and outstanding, and 292 shares are reserved subject to issuance of restricted stock and RSUs.

As of June 30, 2023, 1,167,480 total shares were authorized under the 2020 Plan, of which 159,384 were issued and outstanding and 1,008,096 shares were available for potential issuances.

During the six months ended June 30, 2023 and 2022, stock option activity under the 2014 Plan and 2020 Plan was as follows:

		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2023	4,076	$	958.14	8.22	$	—
Granted	5,000		3.73	9.91		—
Forfeited	(11)		573.68	—		—
Expired	(109)		4,363.67	—		—
Outstanding at June 30, 2023	8,956	$	397.33	8.93	$	—
Exercisable at June 30, 2023	5,271	$	574.49	8.69	$	—
Outstanding at January 1, 2022	1,941	$	2,470.99	7.28	$	—
Granted	3,219		291.90	8.08		—
Cancelled	(202)		278.14	—		—
Forfeited	(475)		852.60	—		—
Outstanding at June 30, 2022	4,483	$	1,096.20	8.52	$	—
Exercisable at June 30, 2022	2,093	$	2,226.00	7.59	$	—

During the six months ended June 30, 2023 and 2022, the Board approved the grant of options to purchase 5,000 and 3,219 shares of Common Stock, respectively. All option grants were pursuant to the 2020 Plan. In general, options granted under the 2020 Plan vest monthly over a 36-month period.

During the six months ended June 30, 2023 and 2022, stock options to purchase 11 and 475 shares of Common Stock, respectively, were forfeited. During the six months ended June 30, 2023, stock options to purchase 109 shares of Common Stock expired. During the six months ended June 30, 2022, stock options to purchase 202 shares of Common Stock were cancelled.

For the six months ended June 30, 2023 and 2022, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

	2023		2022
Contractual term (in years)	6.50		6.50
Expected Volatility	98.80	%	90.92	%
Risk-free interest rate	4.08	%	1.11	%
Expected Dividend yield	0	%	0	%

Using the Black-Scholes option-pricing model, the estimated weighted average fair value of an option to purchase one share of Common Stock granted during the six months ended June 30, 2023 and 2022 was $3.05 and $258.30, respectively.

Restricted Stock and Restricted Stock Units

Restricted stock refers to shares of Common Stock subject to vesting based on certain service, performance, and market conditions. Restricted stock units (“RSUs”) refer to an award which constitutes a promise to grant shares of Common Stock at the end of a specified restriction period.

As of June 30, 2023 and 2022, under the 2014 Plan, the Company had 130 shares of restricted stock outstanding and an aggregate unrecognized restricted Common Stock expense of approximately $388,000, which will be recognized when vesting of certain milestones become probable.

During the six months ended June 30, 2023, RSU activity under the 2020 Plan was as follows:

		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2023	—	$	—	—
Awarded	160,239		6.20
Vested	(77,095)		6.20
Cancelled	(9,079)		6.20
Non-vested Outstanding at June 30, 2023	74,065	$	6.20	0.50

During the six months ended June 30, 2023, the Board approved the grant of 160,239 RSUs. All grants of RSUs were pursuant to the 2020 Plan, vest quarterly over a one-year period and are issued in the following quarter.

The total stock-based compensation expense for employees and non-employees is included in the accompanying condensed consolidated statements of operations and as follows:

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	38,165	$	24,839	$	76,245	$	71,246
General and administrative		254,539		350,068		574,775		521,891
Total stock-based compensation expense	$	292,704	$	374,907	$	651,020	$	593,136

As of June 30, 2023, the Company had unrecognized stock-based compensation expense related to stock options and RSUs of approximately $0.8 million. Approximately $0.6 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock awards of 0.78 years. Approximately $0.2 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.

As of June 30, 2022, the Company had unrecognized stock-based compensation expense of approximately $1.1 million. Approximately $0.6 million of this unrecognized expense will be recognized over the average remaining vesting term of the stock options of 9.40 years. Approximately $0.5 million of this unrecognized expense will vest upon achieving certain clinical and/or corporate milestones. The Company will recognize the expense related to these milestones when the milestones become probable.

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Leases

6 Months Ended

Jun. 30, 2023

Leases

Leases

Note 12 – Leases

The Company leases its office under an operating lease which is subject to various rent provisions and escalation clauses.

The Company is a party to one real property operating lease for the rental of office space. The Company has office space of 3,472 square feet in Boca Raton, Florida that is used for its corporate headquarters with a term through August 31, 2026. The Company previously had office space in Brooklyn, New York on a month-to-month basis, which was terminated in June 2023. The Company was also previously a party to office space in Hayward, California with a term through May 31, 2022, which was not renewed upon its expiration.

The Company’s lease expires in 2026. The escalation clause is indeterminable and considered not material and has been excluded from minimum future annual rental payments.

Lease expenses were approximately $35,000 and $50,000, respectively, for the three months ended June 30, 2023 and 2022 and $72,000 and $78,000, respectively, for the six months ended June 30, 2023 and 2022.

The weighted-average remaining lease term and weighted-average discount rate under operating leases as of June 30, 2023 are:

	June 30,
	2023
Lease term and discount rate
Weighted-average remaining lease term (years)	3.2
Weighted-average discount rate	7.00	%

Maturities of operating lease liabilities as of June 30, 2023, were as follows:

2023 (remainder of year)	$	42,360
2024		86,202
2025		88,788
2026		60,593
Total lease payments		277,943
Less imputed interest		(29,717)
Present value of lease liabilities	$	248,226

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Net Loss per Common Share

6 Months Ended

Jun. 30, 2023

Net Loss per Common Share

Net Loss per Common Share

Note 13 - Net Loss per Common Share

Basic net loss per share is computed by dividing net loss available to Common Stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants and conversion of convertible debt that are not deemed to be anti-dilutive. The dilutive effect of the outstanding stock options and warrants is computed using the treasury stock method.

All shares of Common Stock that may potentially be issued in the future are as follows:

	June 30, 2023	June 30, 2022
	(unaudited)	(unaudited)
Common stock warrants	5,520,575	59,233
Stock options	8,956	4,483
RSUs not yet issued	160,239	—
Convertible preferred stock (1)	3,157	3,416
Restricted stock not yet issued	162	162
Total shares of Common Stock issuable	5,693,089	67,294

(1) Convertible preferred stock is assumed to be converted at the rate of $1,617.70 per common share, which is the conversion price as of June 30, 2023.

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Employee Benefit Plans

6 Months Ended

Jun. 30, 2023

Employee Benefit Plans

Employee Benefit Plans

Note 14 - Employee Benefit Plans

401(k) Plan

Since 2015, the Company has sponsored a multiple employer defined contribution benefit plan, which complies with Section 401(k) of the Internal Revenue Code covering substantially all employees of the Company. All employees are eligible to participate in the plan. Employees may contribute from 1% to 100% of their compensation and the Company matches an amount equal to 100% on the first 6% of the employee contribution and may also make discretionary profit-sharing contributions.

Employer contributions under this 401(k) plan amounted to approximately $21,000 and $29,000 for the three months ended June 30, 2023 and 2022, respectively, and approximately $47,000 and $76,000 for the six months ended June 30, 2023 and 2022, respectively.

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Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events

Subsequent Events

Note 15 - Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were available to be issued. The Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements except for the items noted below.

Phase 2 SPAN Trial

On July 13, 2023, the Company announced initial topline results from the Phase 2b SPAN clinical trial investigating an enhanced enteric microgranule delivery formulation of adrulipase for the treatment of exocrine pancreatic insufficiency in patients with cystic fibrosis. Initial data from the study indicated that the enhanced adrulipase formulation was safe and well tolerated, as well as demonstrated an improvement over prior formulations of adrulipase. However, the preliminary data also indicated that it is likely that the primary efficacy endpoint was not achieved. The Company is continuing to assess the data and expects to report additional findings on primary and secondary endpoints in the third quarter of 2023.

July 2023 Public Offering

On July 21, 2023, the Company completed a public offering (the “July 2023 Offering”) for an aggregate of (i) 610,000 shares of Common Stock, (ii) pre-funded warrants (the “July 2023 Pre-Funded Warrants”) to purchase up to an aggregate of 2,675,000 shares of Common Stock, and (iii) common warrants (the “July 2023 Warrants”) to purchase up to an aggregate of 6,570,000 shares of Common Stock. The public offering price for each share of Common Stock and accompanying July 2023 Warrant to purchase one share of Common Stock was $0.64 per share. The July 2023 Pre-Funded Warrants have an exercise price of $0.0001 per share, are exercisable immediately and will expire when exercised in full. To date, pre-funded warrants have been exercised to purchase 2,246,000 shares of Common Stock. The July 2023 Warrants have an exercise price of $0.64 per share, are exercisable immediately and will expire five years from the initial exercise date.

The Company received gross proceeds of approximately $2.1 million less placement agent’s fees and other offering expenses of approximately $350,000.

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Significant Accounting Policies and Recent Accounting Pronouncements (Policies)

6 Months Ended

Jun. 30, 2023

Significant Accounting Policies and Recent Accounting Pronouncements

Use of Estimates

Use of Estimates

The accompanying unaudited condensed consolidated financial statements are prepared in conformity with GAAP and include certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements (including goodwill), and the reported amounts of revenue and expense during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates.

Reverse Stock Split

Reverse Stock Split

On January 18, 2023, the Company effected a reverse stock split, whereby every seven shares of the Company’s issued and outstanding Common Stock was converted automatically into one issued and outstanding share of Common Stock, but without any change in the number of authorized shares of Common Stock and the par value per share.

All share and per share amounts have been retroactively restated to reflect the reverse stock splits referenced above.

Cash and Cash Equivalents and Restricted Cash

Cash and Cash Equivalents and Restricted Cash

The Company considers all highly liquid investments with maturities of three months or less from the date of purchase to be cash equivalents. All cash and cash equivalent balances were highly liquid at June 30, 2023 and December 31, 2022. As of June 30, 2023 and December 31, 2022, the Company has classified approximately $0.02 million as restricted cash.

Concentrations of Credit Risk

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC insurance limits. At June 30, 2023 the Company had approximately $1.2 million in one account in the U.S. which was in excess of these limits. The Company has not experienced any losses to date resulting from this practice. The Company mitigates its risk by maintaining the majority of its cash and equivalents with high quality financial institutions.

Fair Value Measurements

Fair Value Measurements

The Company follows Accounting Standards Codification (“ASC”) Topic 820-10, Fair Value Measurements and Disclosures (“ASC 820”), which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability.

As a basis for considering such assumptions, a three-tier fair value hierarchy has been established, which prioritizes the inputs used in measuring fair value as follows:

Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions, which reflect those that a market participant would use.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an instrument’s level within the fair value hierarchy is based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the financial instrument.

The Company recognizes transfers between levels as if the transfers occurred on the last day of the reporting period.

Foreign Currency Translation

Foreign Currency Translation

For foreign subsidiaries with operations denominated in a foreign currency, assets and liabilities were translated to U.S. dollars, which is the functional currency, at period end exchange rates. Income and expense items were translated at average rates of exchange prevailing during the periods presented. Gains and losses from translation adjustments were accumulated in a separate component of stockholders’ equity up until the dissolution of AzurRx SAS in October 2022, at which time cumulative translation adjustments were recognized as a loss for the year ended December 31, 2022.

Goodwill

Goodwill

Goodwill represents the excess of the purchase price of the acquired business over the fair value of amounts assigned to assets acquired and liabilities assumed. Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment annually or more frequently if events or circumstances indicate impairment may be present. Any excess in carrying value over the estimated fair value is charged to results of operations. The Company has not recognized any impairment charges through June 30, 2023 related to goodwill.

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic 360, Property, Plant and Equipment (“ASC 360”). Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has not recognized any impairment charges through June 30, 2023.

Leases

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use (“ROU”) assets, and lease liability obligations are included in the Company’s balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liability obligations represent its obligation to make lease payments arising from the lease. ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. As the Company’s leases typically do not provide an implicit rate, the Company estimates its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when readily determinable. The ROU asset also includes any lease payments made and excludes lease incentives and lease direct costs. The Company’s lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense is recognized on a straight-line basis over the lease term. Please refer to Note 12 for additional information.

Research and Development

Research and Development

Research and development costs are charged to operations when incurred and are included in operating expense, except for goodwill related to patents. Research and development costs consist principally of compensation of employees and consultants that perform the Company’s research activities, payments to third parties for preclinical and non-clinical activities, expenses with clinical research organizations (“CROs”), investigative sites, consultants and contractors that conduct or provide other services relating to clinical trials, costs to acquire drug product, drug supply and clinical trial materials from contract development and manufacturing organization (“CDMOs”) and third-party contractors relating to chemistry, manufacturing and controls (“CMC”) efforts, the fees paid for and to maintain the Company’s licenses, amortization of intangible assets related to the acquisition of adrulipase, and research and development costs related to adrulipase and niclosamide. Depending upon the timing of payments to the service providers, the Company recognizes prepaid expenses or accrued expenses related to these costs. These accrued or prepaid expenses are based on management’s estimates of the work performed under service agreements, milestones achieved and experience with similar contracts. The Company monitors each of these factors and adjusts estimates accordingly.

Research and Development – Intellectual Property Acquired

The Company records intellectual property in asset acquisitions that have not reached technological feasibility and which have no alternative future use, as an expense at the acquisition date. On September 13, 2021, the Company entered into an agreement with FWB for the acquisition of intellectual property and patents for the worldwide, exclusive right to develop, manufacture, and commercialize proprietary formulations of niclosamide for the fields of treating ICI-AC and COVID-19 in humans, which was accounted for as an asset acquisition (see Note 4).

Stock-Based Compensation

Stock-Based Compensation

The Company’s board of directors (the “Board”) and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”) which took effect on May 12, 2014, and the 2020 Omnibus Equity Incentive Plan, which took effect on September 11, 2020 (the “2020 Plan”). From the effective date of the 2020 Plan, no new awards have been or will be made under the 2014 Plan. The Company accounts for its stock-based compensation awards to employees, consultants, and Board members in accordance with ASC Topic 718, Compensation-Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, consultants, and Board members, including grants of employee stock options, to be recognized in the statements of operations by measuring the fair value of the award on the date of grant and recognizing this fair value as stock-based compensation using a straight-line method over the requisite service period, generally the vesting period.

For awards with performance conditions that affect their vesting, such as the occurrence of certain transactions or the achievement of certain operating or financial milestones, recognition of fair value of the award occurs when vesting becomes probable.

The Company estimates the grant date fair value of stock option awards using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the Common Stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the Common Stock.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In August 2020, the Financial Accounting Standards Board (the “FASB”) issued accounting pronouncement ASU 2020-06 – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) related to the measurement and disclosure requirements for convertible instruments and contracts in an entity’s own equity. The pronouncement simplifies and adds disclosure requirements for the accounting and measurement of convertible instruments and the settlement assessment for contracts in an entity’s own equity. As a smaller reporting company, as defined by the U.S. Securities and Exchange Commission (the “SEC”), this pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2023. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company early adopted ASU 2020-06 effective January 1, 2022.

In June 2016, the FASB issued accounting pronouncement ASU 2016-13 – Measurement of Credit Losses on Financial Statements (“ASU 2016-13”). The new standard requires that expected credit losses relating to financial assets measured on an amortized cost basis and available-for-sale debt securities be recorded through an allowance for credit losses. It also limits the amount of credit losses to be recognized for available-for-sale debt securities to the amount by which carrying value exceeds fair value and also requires the reversal of previously recognized credit losses if fair value increases. In November 2019, the FASB issued ASU 2019-10 – Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates, which amended the effective date for certain companies. The standard is effective for public companies eligible to be smaller reporting companies for annual and interim periods beginning after December 15, 2022. The Company adopted ASU 2016-13 effective for the year ended December 31, 2022 and its adoption did not have a material effect on its financial statements and related disclosures.

In June 2022, the FASB issued ASU 2022-03 - Fair Value Measurement, or Topic 820: Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). This new standard clarifies the guidance in Topic 820 when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security and introduces new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820. The Company has assessed the impact of the update and determined it does not have a material impact on the accompanying financial statements and disclosures.

The Company has evaluated other recently issued accounting pronouncements and has concluded that the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption.

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Fair Value Disclosures (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures

Schedule of fair value of the Company's financial instruments

			Fair Value Measured at Reporting Date
			Using
	Carrying
	Amount		Level 1		Level 2		Level 3		Fair Value
June 30, 2023 (unaudited):
Money market funds	$	11,925	$	11,925	$	—	$	—	$	11,925
Note payable		153,478		—		153,478		—		153,478
December 31, 2022:
Money market funds		509,890		509,890		—		—		509,890
Note payable	$	603,494	$	—	$	603,494	$	—	$	603,494

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Property, Equipment and Leasehold Improvements (Tables)

6 Months Ended

Jun. 30, 2023

Property, Equipment and Leasehold Improvements

Summary of property, equipment and leasehold improvements

	June 30,
	2023		December 31,
	(unaudited)		2022
Computer equipment and software	$	11,540	$	11,540
Office equipment		48,278		48,278
Leasehold improvements		28,000		28,000
Total property, plant, and equipment		87,818		87,818
Less accumulated depreciation		(58,616)		(43,979)
Property, plant and equipment, net	$	29,202	$	43,839

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill

Schedule of goodwill

	Goodwill
Balance on January 1, 2022	$	1,911,705
Foreign currency translation		(227,523)
Balance on December 31, 2022		1,684,182
Foreign currency translation		—
Balance on June 30, 2023 (unaudited)	$	1,684,182

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Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2023

Accrued Expenses

Schedule of accrued expenses

	June 30,
	2023		December 31,
	(unaudited)		2022
Clinical trials	$	301,226	$	5,340
Professional fees		178,636		309,867
Consulting fees		—		4,969
Total accrued expenses	$	479,862	$	320,176

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Warrants (Tables)

6 Months Ended

Jun. 30, 2023

Warrants

Schedule of warrant activity

		Weighted		Weighted
		Average		Average
	Number of	Exercise Price		Remaining
	Warrants	Per Share		Term in Years
Outstanding and exercisable on January 1, 2023	2,179,798	$	19.16	5.50
Issued	6,389,718		1.79	4.85
Expired	(116)		773.79	—
Exercised	(3,048,825)		0.65	4.94
Warrants outstanding and exercisable on June 30, 2023	5,520,575		7.85	4.86
Warrants outstanding and exercisable on January 1, 2022	26,089	$	1,992.90	3.95
Issued	56,795		161.70	4.67
Expired	(564)		7,755.30	—
Exercised	(23,087)		2.10	4.67
Warrants outstanding and exercisable on June 30, 2022	59,233	$	732.90	4.18

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Equity Incentive Plan (Tables)

6 Months Ended

Jun. 30, 2023

Equity Incentive Plan

Schedule of stock option activity

		Average		Remaining
	Number	Exercise		Contract	Intrinsic
	of Shares	Price		Life (Years)	Value
Outstanding at January 1, 2023	4,076	$	958.14	8.22	$	—
Granted	5,000		3.73	9.91		—
Forfeited	(11)		573.68	—		—
Expired	(109)		4,363.67	—		—
Outstanding at June 30, 2023	8,956	$	397.33	8.93	$	—
Exercisable at June 30, 2023	5,271	$	574.49	8.69	$	—
Outstanding at January 1, 2022	1,941	$	2,470.99	7.28	$	—
Granted	3,219		291.90	8.08		—
Cancelled	(202)		278.14	—		—
Forfeited	(475)		852.60	—		—
Outstanding at June 30, 2022	4,483	$	1,096.20	8.52	$	—
Exercisable at June 30, 2022	2,093	$	2,226.00	7.59	$	—

Schedule of option pricing model with the following weighted-average assumptions

	2023		2022
Contractual term (in years)	6.50		6.50
Expected Volatility	98.80	%	90.92	%
Risk-free interest rate	4.08	%	1.11	%
Expected Dividend yield	0	%	0	%

Schedule of RSU activity under the 2020 Plan

		Weighted-Average		Weighted-Average
	Number	Grant Date		Remaining Recognition
	of Shares	Fair Value		Period (Years)
Non-vested Outstanding at January 1, 2023	—	$	—	—
Awarded	160,239		6.20
Vested	(77,095)		6.20
Cancelled	(9,079)		6.20
Non-vested Outstanding at June 30, 2023	74,065	$	6.20	0.50

Schedule of stock-based compensation expense

	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	38,165	$	24,839	$	76,245	$	71,246
General and administrative		254,539		350,068		574,775		521,891
Total stock-based compensation expense	$	292,704	$	374,907	$	651,020	$	593,136

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Leases (Tables)

6 Months Ended

Jun. 30, 2023

Leases

Schedule of weighted-average remaining lease term and weighted-average discount rate under operating leases

	June 30,
	2023
Lease term and discount rate
Weighted-average remaining lease term (years)	3.2
Weighted-average discount rate	7.00	%

Schedule of maturities of operating lease liabilities

Maturities of operating lease liabilities as of June 30, 2023, were as follows:

2023 (remainder of year)	$	42,360
2024		86,202
2025		88,788
2026		60,593
Total lease payments		277,943
Less imputed interest		(29,717)
Present value of lease liabilities	$	248,226

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Net Loss per Common Share (Tables)

6 Months Ended

Jun. 30, 2023

Net Loss per Common Share

Schedule of Common Stock that may potentially be issued in the future

	June 30, 2023	June 30, 2022
	(unaudited)	(unaudited)
Common stock warrants	5,520,575	59,233
Stock options	8,956	4,483
RSUs not yet issued	160,239	—
Convertible preferred stock (1)	3,157	3,416
Restricted stock not yet issued	162	162
Total shares of Common Stock issuable	5,693,089	67,294

(1) Convertible preferred stock is assumed to be converted at the rate of $1,617.70 per common share, which is the conversion price as of June 30, 2023.

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The Company and Basis of Presentation (Details) - USD ($)			1 Months Ended
	Aug. 14, 2023	Jun. 30, 2023	Jul. 31, 2023	Dec. 31, 2022
The Company and Basis of Presentation
Cash and cash equivalents		$ 1,236,054		$ 1,362,910
Accumulated deficit		(176,793,574)		$ (168,533,689)
Working capital deficiency		900,000
July 2023 Purchase Agreement
The Company and Basis of Presentation
Proceeds from issuance of shares	$ 2,100,000	$ 2,100,000	$ 2,100,000

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Significant Accounting Policies and Recent Accounting Pronouncements (Details) - USD ($)			6 Months Ended
	Jan. 18, 2023	Aug. 26, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Significant Accounting Policies and Recent Accounting Pronouncements
Number of shares reduced due to reverse stock split	7	30		1
Restricted cash			$ 20,000.00		$ 20,000.00
Cash in US banks in excess of FDIC insurance limits			1,200,000
Asset impairment charges			$ 0

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Fair Value Disclosures (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Fair Value Disclosures
Money market funds	$ 1,236,054	$ 1,362,910
Note payable	153,478	603,494
Carrying Amount
Fair Value Disclosures
Note payable	153,478	603,494
Fair Value, Inputs, Level 2
Fair Value Disclosures
Note payable	153,478	603,494
Money Market Funds
Fair Value Disclosures
Money market funds	11,925	509,890
Money Market Funds | Carrying Amount
Fair Value Disclosures
Money market funds	11,925	509,890
Money Market Funds | Fair Value, Inputs, Level 1
Fair Value Disclosures
Money market funds	$ 11,925	$ 509,890

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Asset Acquisition (Details) - USD ($) $ in Millions					1 Months Ended	6 Months Ended
	Nov. 30, 2022	Sep. 29, 2022	Jul. 29, 2022	May 19, 2022	Jul. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Asset Acquisition
Stock cancelled during period, shares, acquisitions (in shares)						2,967
First Wave Bio Inc
Asset Acquisition
Asset acquisition consideration transferred	$ 2.0	$ 1.0	$ 1.5				$ 2.4
Asset acquisition, consideration transferred, contingent consideration				$ 4.0
Cash consideration					$ 1.5
Asset acquisition, potential milestone payments						$ 10.1
Milestone payment					$ 2.0

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Property, Equipment and Leasehold Improvements - Property (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	$ 87,818		$ 87,818		$ 87,818
Less accumulated depreciation	(58,616)		(58,616)		(43,979)
Property, plant and equipment, net	29,202		29,202		43,839
Depreciation expense	7,300	$ 7,300	14,600	$ 14,600
Computer equipment and software
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	11,540		11,540		11,540
Office equipment
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	48,278		48,278		48,278
Leasehold improvements
Property, Equipment and Leasehold Improvements
Total property, plant, and equipment	$ 28,000		$ 28,000		$ 28,000

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Goodwill (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Goodwill
Beginning balance	$ 1,684,182	$ 1,911,705
Foreign currency translation	0	(227,523)
Ending balance	$ 1,684,182	$ 1,684,182

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Accrued Expenses (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Accrued Expenses
Clinical trials	$ 301,226	$ 5,340
Professional fees	178,636	309,867
Consulting fees		4,969
Total accrued expenses	$ 479,862	$ 320,176

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Note Payable (Details) - USD ($)	Nov. 30, 2022	Jun. 30, 2023	Dec. 31, 2022
Note Payable
Notes payable balance		$ 153,000	$ 603,000
Financing Agreement for Directors and Officer's and Other Liability Insurances
Note Payable
Debt instrument, term	9 months
Debt instrument, face amount	$ 677,000
Debt instrument, interest Rate	6.79%
Debt instrument, periodic payment	$ 77,000

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Capital Stock (Details)								3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 13, 2023 USD ($) $ / shares shares	Mar. 15, 2023 USD ($) $ / shares shares	Jan. 18, 2023 shares	Aug. 26, 2022 shares	May 12, 2022 $ / shares shares	Mar. 02, 2022 USD ($) $ / shares shares	May 26, 2021 shares	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($) $ / shares shares	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2022 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares shares	Mar. 31, 2022 $ / shares	Dec. 31, 2021 shares
Common stock, shares authorized (in shares)								50,000,000		50,000,000		50,000,000
Common stock, par or stated value per share (in dollars per share) | $ / shares								$ 0.0001		$ 0.0001		$ 0.0001
Preferred stock, shares designated (in shares)								10,000,000		10,000,000
Preferred stock, par or stated value per share (in dollars per share) | $ / shares								$ 0.0001		$ 0.0001
Common stock, shares, issued, total (in shares)								4,208,995	995,003	4,208,995	995,003	995,003
Warrant exercise price | $ / shares						$ 264.60
Warrants to purchase of stock						1
Purchase of aggregate common stock								5,520,575	59,233	5,520,575	59,233	2,179,798		26,089
Deemed dividend on warrant modifications | $									$ 47,300		$ 47,300	$ (47,000.000)
Number of shares reduced due to reverse stock split			7	30							1
Common stock, shares, outstanding, ending balance (in shares)								4,208,995		4,208,995		995,003
Proceeds from Issuance of Common Stock | $						$ 8,000,000.0
Stock issued during period, value, new issues | $									$ 317,231		$ 317,231
Issuance of common stock, pre-funded warrants and warrants in registered direct offering, net of issuance costs (in shares)						7,857
Shares issued, price per share (in dollars per share) | $ / shares						$ 288.75
Warrants and rights outstanding, term (year)						5 years
Reverse stock split ratio										1
Stock Cancelled During Period, Shares, Acquisitions (in shares)										2,967
Common Stock issued to consultants | $											$ 118,999
March 2022 Warrants
Warrants to purchase of stock						30,943
Pre-Funded Warrant
Warrant exercise price | $ / shares						$ 363.30
Warrants to purchase of stock						23,086
Shares issued, price per share (in dollars per share) | $ / shares						$ 290.85
Warrants and rights outstanding, term (year)						5 years
Number of common stock shares called by each warrant (in shares)						1
March 2022 Pre-Funded warrants
Warrants to purchase of stock						1
Waiver
Purchase of aggregate common stock					1,196
Waiver | Common stock warrants
Warrant exercise price | $ / shares					$ 52.50
Series B Preferred Stock Converted into Common Stock
Warrant exercise price | $ / shares									$ 264.60		$ 264.60
Conversion of Stock, Shares Converted (in shares)									13.87		30.92
Warrants and rights outstanding, term (year)									5 years		5 years
Common stock issued upon conversion of preferred stock | $									$ 107,000		$ 238,000
Conversion of Stock, Amount Converted, Accrued Dividends | $									$ 13,000		$ 27,000
Officers and Directors | Waiver
Warrant exercise price | $ / shares					$ 69.174
Consultants
Stock Issued During Period, Shares, Settlement (in shares)											429
Stock Issued During Period, Value, Settlement | $											$ 119,000
Restricted Stock Units
Conversion of stock, shares issued (in shares)								40,064		40,064
Market Agreement | H C Wainwright Co L L C
Stock issued during period, shares, new issues (in shares)											217,036	217,036
Proceeds from Issuance of Common Stock | $												$ 8,000,000.0
Stock issuance costs | $												$ 309,000
At The Market Offering Agreement
Stock issued during period, shares, new issues (in shares)									5,070		5,070
Stock issued during period, value, new issues | $											$ 317,000
Gross proceeds | $									$ 317,000
At The Market Offering Agreement | Wainwright
Stock Sales Agreement, Commission on Shares Sold, Percentage							3.00%
Stock Sales Agreement, Number of Shares Authorized (in shares)							8,000,000.0
July 2022 Private Placement
Gross proceeds | $		$ 4,000,000.0
Other offering expenses | $		$ 300,000
March 2022 offering
Warrant exercise price | $ / shares													$ 5.901
Stock issued during period, shares, new issues (in shares)											7,857
Shares issued, price per share (in dollars per share) | $ / shares													$ 264.60
Gross proceeds | $											$ 8,000,000.0
March 2023 offering
Stock issued during period, shares, new issues (in shares)										128,000
Proceeds from Issuance of Common Stock | $										$ 3,700,000
March 2022 Registered Direct Offering
Gross proceeds | $						$ 9,000,000.0
Other offering expenses | $						$ 1,000,000.0
Direct offering | Pre-Funded Warrant
Warrants to purchase of stock						1,856
Class of Warrant or Right, Issued, Percentage of Common Stock Issued in Offering						6.00%
June 2023 Inducement Offering
Warrant exercise price | $ / shares	$ 1.15
Warrants to purchase of stock	1,724,332							3,448,664		3,448,664
Payment For Service Fee | $	$ 150,000
June 2023 Inducement Offering | Existing warrants
Warrant exercise price | $ / shares	$ 0.125
Proceeds from issuance of shares | $	$ 2,400,000
Proceeds from Issuance or Sale of Equity, Total | $	$ 2,400,000
Warrant | June 2023 Inducement Offering
Proceeds from Issuance of Common Stock | $								$ 2,200,000		$ 2,200,000
Class of warrant or right, exercised during period (in shares)								1,724,332		1,724,332
Pre-Funded Warrants
Conversion of stock, shares issued (in shares)								895,018		1,324,493
Stock Issued During Period, Shares, Exercise of Warrants (in shares)											23,086
Par value per warrant | $ / shares								$ 0.0001		$ 0.0001	$ 0.01
Series B Preferred Stock
Preferred stock, shares designated (in shares)								5,194.81		5,194.81		5,194.81
Preferred stock, par or stated value per share (in dollars per share) | $ / shares								$ 0.0001		$ 0.0001		$ 0.0001
Preferred stock, shares issued, total (in shares)								545.94		545.94		550.17
Exchange Amount | $								$ 7,700.00		$ 7,700.00
Warrants to purchase of stock									499		499
Preferred stock, shares outstanding (in shares)								545.94		545.94		550.17
Series B Preferred Stock | Waiver
Value of preferred stock agreed to be waived with holders of preferred stock | $									$ 2,880,000		$ 2,880,000
Value of preferred stock agreed to be waived with insiders | $									47,000.000		47,000.000
Waiver fee paid | $											233,000
Percentage of outstanding shares					81.30%
Series B Preferred Stock | Series B Preferred Stock Converted into Common Stock
Conversion of Stock, Shares Converted (in shares)										4.23
Common stock issued upon conversion of preferred stock | $										$ 32,600
Conversion of Stock, Amount Converted, Accrued Dividends | $										6,200
Series B Preferred Stock convertible into Series C Preferred Stock
Exchange Amount | $								$ 14,400,000	$ 265,000	$ 14,400,000	$ 265,000
Conversion of Series B preferred shares into common stock (in shares)										9,058
Conversion of Stock, Shares Converted (in shares)										1,839.76
Series B Preferred Stock convertible into Series C Preferred Stock | Investor warrants
Conversion of Series B preferred shares into common stock (in shares)										9,058
Series B Preferred Stock convertible into common stock with no warrants
Exchange Amount | $								$ 880,000		$ 880,000
Conversion of Series B preferred shares into common stock (in shares)										1,552
Conversion of Stock, Shares Converted (in shares)										99.200
Series B Preferred Stock Convertible Into Common Stock With Series C Warrants
Conversion of Series B preferred shares into common stock (in shares)										909
Conversion of Stock, Shares Converted (in shares)										30.91
Series B Preferred Stock Convertible Into Common Stock With Series C Warrants | March 2022 Warrants
Warrants to purchase of stock								909		909
Series C Preferred Stock
Preferred stock, shares designated (in shares)								75,000		75,000		75,000
Preferred stock, par or stated value per share (in dollars per share) | $ / shares								$ 0.0001		$ 0.0001		$ 0.0001
Preferred stock, shares issued, total (in shares)								0		0		0
Preferred stock, shares outstanding (in shares)								0		0		0
Series C Preferred Stock | July 2022 Private Placement
Number of common shares issuable upon conversion		895,018
Series D Preferred Stock
Preferred stock, shares designated (in shares)								150		150		150
Preferred stock, par or stated value per share (in dollars per share) | $ / shares								$ 0.0001		$ 0.0001		$ 0.0001
Preferred stock, shares issued, total (in shares)								0		0		0
Preferred stock, shares outstanding (in shares)								0		0		0
Series D Preferred Stock | July 2022 Private Placement
Convertible preferred stock, shares issued upon conversion (in shares)		3.91
Stock issued during period, shares, new issues (in shares)		128,000
Preferred stock, convertible, conversion price (in dollars per share) | $ / shares		$ 0.0001
Series E Preferred Stock
Preferred stock, shares designated (in shares)								150		150		150
Preferred stock, par or stated value per share (in dollars per share) | $ / shares								$ 0.0001		$ 0.0001		$ 0.0001
Preferred stock, shares issued, total (in shares)								0		0		0
Preferred stock, shares outstanding (in shares)								0		0		0
Series E Preferred Stock | July 2022 Private Placement
Preferred stock, par or stated value per share (in dollars per share) | $ / shares		$ 2,046,036
Number of shares reduced due to reverse stock split		3.66
Series F Preferred Stock
Preferred stock, shares designated (in shares)								7,000		7,000		7,000
Preferred stock, par or stated value per share (in dollars per share) | $ / shares								$ 0.0001		$ 0.0001		$ 0.0001
Preferred stock, shares issued, total (in shares)								0		0		0
Preferred stock, shares outstanding (in shares)								0		0		0
Common Stock
Conversion of stock, shares issued (in shares)									411	70	910
Common Stock | Pre-Funded Warrant
Warrant exercise price | $ / shares						$ 2.10
Common Stock | June 2023 Inducement Offering
Warrants to purchase of stock								1,724,332		1,724,332
Stock Issued During Period, Shares, Exercise of Warrants (in shares)								1,724,332		1,724,332
Maximum | June 2023 Inducement Offering
Warrants to purchase of stock	3,448,664

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Warrants (Details) - USD ($) $ / shares in Units, $ in Millions	6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021	Jun. 13, 2023	Mar. 31, 2022	Mar. 02, 2022	Mar. 31, 2021	Jan. 31, 2021
Number of Warrants
Outstanding and exercisable, beginning (in shares)	2,179,798	26,089	26,089
Issued (in shares)	6,389,718	56,795
Expired (in shares)	(116)	(564)
Exercised (in shares)	(3,048,825)	(23,087)
Warrants outstanding and exercisable, ending (in shares)	5,520,575	59,233	2,179,798	26,089
Weighted Average Exercise Price Per Share
Outstanding and exercisable, beginning (in dollars per share)	$ 19.16	$ 1,992.90	$ 1,992.90
Issued (in dollars per share)	1.79	161.70
Expired (in dollars per share)	773.79	7,755.30
Exercised (in dollars per share)	0.65	2.10
Warrants outstanding and exercisable, ending (in dollars per share)	$ 7.85	$ 732.90	$ 19.16	$ 1,992.90
Weighted Average Remaining Term in Years
Outstanding and exercisable (in years)	4 years 10 months 9 days	4 years 2 months 4 days	5 years 6 months	3 years 11 months 12 days
Issued (in years)	4 years 10 months 6 days	4 years 8 months 1 day
Exercised (in years)	4 years 11 months 8 days	4 years 8 months 1 day
Warrants to purchase of stock							1
Class of warrant or right, exercise price of warrants or rights (in dollars per share)							$ 264.60
Shares issued, price per share (in dollars per share)							$ 288.75
Series B Preferred Stock
Weighted Average Remaining Term in Years
Warrants to purchase of stock		499
March 2022 offering
Weighted Average Remaining Term in Years
Class of warrant or right, exercise price of warrants or rights (in dollars per share)						$ 5.901
Consideration for purchase of securities						$ 9.0
Shares issued, price per share (in dollars per share)						$ 264.60
Warrant amendment agreement
Weighted Average Remaining Term in Years
Class of warrant or right, exercise price of warrants or rights (in dollars per share)								$ 2,541.00	$ 1,680.00
June 2023 Inducement Offering
Weighted Average Remaining Term in Years
Warrants to purchase of stock	3,448,664				1,724,332
Class of warrant or right, exercise price of warrants or rights (in dollars per share)					$ 1.15
June 2023 Inducement Offering | Common Stock
Weighted Average Remaining Term in Years
Warrants to purchase of stock	1,724,332
Maximum | Warrant amendment agreement
Weighted Average Remaining Term in Years
Warrants to purchase of stock								1,872	5,080
Maximum | June 2023 Inducement Offering
Weighted Average Remaining Term in Years
Warrants to purchase of stock					3,448,664
Warrants, pre-funded warrants, and placement agent warrants
Weighted Average Remaining Term in Years
Warrants to purchase of stock	23,087
Warrants, pre-funded warrants, and placement agent warrants | March 2022 offering
Weighted Average Remaining Term in Years
Warrants to purchase of stock		55,883
Warrants, pre-funded warrants, and placement agent warrants | March 2023 offering
Weighted Average Remaining Term in Years
Warrants to purchase of stock	2,941,054
Warrants, pre-funded warrants, and placement agent warrants | June 2023 Inducement Offering | Common Stock
Weighted Average Remaining Term in Years
Warrants to purchase of stock	1,324,493
Existing warrants | June 2023 Inducement Offering
Weighted Average Remaining Term in Years
Class of warrant or right, exercise price of warrants or rights (in dollars per share)					$ 0.125

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Equity Incentive Plan (Details) - USD ($)			6 Months Ended
	Jun. 22, 2023	Sep. 11, 2020	Jun. 30, 2023	Jun. 30, 2022	Apr. 20, 2023	Jan. 01, 2023	Dec. 31, 2022
Equity Incentive Plan
Granted (in shares)			5,000	3,219
Unrecognized stock-based compensation expense			$ 800,000	$ 1,100,000
Remaining Term
Equity Incentive Plan
Unrecognized stock-based compensation expense			$ 600,000	$ 600,000
Average remaining vesting term of the stock options (in years)			9 months 10 days	9 years 4 months 24 days
Clinical, corporate milestones
Equity Incentive Plan
Unrecognized stock-based compensation expense			$ 200,000	$ 500,000
Incentive Stock Options
Equity Incentive Plan
Granted (in shares)			7,142
Stock Option
Equity Incentive Plan
Weighted average fair value of warrants granted (in dollars per share)			$ 3.05	$ 258.30
2020 Equity Incentive Plan
Equity Incentive Plan
Shares available under equity incentive plan (in shares)		4,761	1,008,096		5,000,000	317,480
Shares available under equity incentive plan increased (in shares)	1,167,480
Percentage of common stock reserved for issuance equity incentive plan		10.00%
Options to purchase shares of common stock (in shares)			159,384
Number of shares authorized under the plan			1,167,480
Options forfeited			11	475
Options cancelled			109
Vesting period			36 months
2020 Equity Incentive Plan | Maximum
Equity Incentive Plan
Shares available under equity incentive plan (in shares)					1,167,480
2020 Equity Incentive Plan | Minimum
Equity Incentive Plan
Shares available under equity incentive plan (in shares)					317,480
2020 Equity Incentive Plan | Restricted Stock Units
Equity Incentive Plan
Number of awards outstanding			74,065				0
Awards issued (in shares)			160,239
Vesting period			1 year
Equity Incentive Plan 2014
Equity Incentive Plan
Shares available under equity incentive plan (in shares)			1,024
Options to purchase shares of common stock (in shares)			732
Equity Incentive Plan 2014 | Restricted Stock
Equity Incentive Plan
Aggregate unrecognized restricted Common Stock expense			$ 388,000
Number of awards outstanding			130
Omnibus Equity Incentive Plan | Restricted Stock
Equity Incentive Plan
Shares reserved subject to issuance (in shares)			292

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Equity Incentive Plan - Stock option activity (Details) - $ / shares	6 Months Ended		12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Dec. 31, 2021
Numbers of Shares
Granted (in shares)	5,000	3,219
Expired (in shares)	(109)
Average Exercise Price
Expired (in dollars per share)	$ 4,363.67
Stock option
Numbers of Shares
Granted (in shares)	7,142
Equity Incentive Plan | Stock option
Numbers of Shares
Outstanding at beginning (in shares)	4,076	1,941	1,941
Granted (in shares)	5,000	3,219
Canceled (in shares)		(202)
Forfeited (in shares)	(11)	(475)
Outstanding at ending (in shares)	8,956	4,483	4,076	1,941
Exercisable (in shares)	5,271	2,093
Average Exercise Price
Outstanding at beginning (in dollars per share)	$ 958.14	$ 2,470.99	$ 2,470.99
Granted (in dollars per share)	3.73	291.90
Canceled (in dollars per share)		278.14
Forfeited (in dollars per share)	573.68	852.60
Outstanding at ending (in dollars per share)	397.33	1,096.20	$ 958.14	$ 2,470.99
Exercisable (in dollars per share)	$ 574.49	$ 2,226.00
Remaining Contract Life (Years)
Stock option outstanding, remaining contractual life (Years)	8 years 11 months 4 days	8 years 6 months 7 days	8 years 2 months 19 days	7 years 3 months 10 days
Granted (in years)	9 years 10 months 28 days	8 years 29 days
Forfeited (in years)	0 years
Exercisable (in years)	8 years 8 months 8 days	7 years 7 months 2 days

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Equity Incentive Plan - Weighted-average assumptions (Details) - Stock Option	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Equity Incentive Plan
Contractual term (in years)	6 years 6 months	6 years 6 months
Expected Volatility	98.80%	90.92%
Risk-free interest rate	4.08%	1.11%
Expected Dividend yield	0.00%	0.00%

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Equity Incentive Plan - RSU activity under the 2020 Plan (Details) - 2020 Equity Incentive Plan - Restricted Stock Units	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Number of Shares
Outstanding at beginning (in shares) | shares	0
Awards issued (in shares) | shares	160,239
Vested (in shares) | shares	(77,095)
Cancelled (in shares) | shares	9,079
Outstanding at ending (in shares) | shares	74,065
Weighted-Average Grant Date Fair Value
Outstanding at beginning (in dollars per share) | $ / shares	$ 0
Awarded (in dollars per share) | $ / shares	6.20
Vested (in dollars per share) | $ / shares	6.20
Cancelled (in dollars per share) | $ / shares	6.20
Outstanding at ending (in dollars per share) | $ / shares	$ 6.20
Weighted-Average Remaining Recognition Period (Years)	6 months

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Equity Incentive Plan - Total stock-based compensation expense (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Equity Incentive Plan
Total stock-based compensation expense	$ 292,704	$ 374,907	$ 651,020	$ 593,136
Research and development
Equity Incentive Plan
Total stock-based compensation expense	38,165	24,839	76,245	71,246
General and administrative
Equity Incentive Plan
Total stock-based compensation expense	$ 254,539	$ 350,068	$ 574,775	$ 521,891

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Leases (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2023 USD ($) ft² property	Jun. 30, 2022 USD ($)	Jun. 30, 2023 USD ($) ft² property	Jun. 30, 2022 USD ($)
Leases
Operating lease, expense | $	$ 35,000	$ 50,000	$ 72,000	$ 78,000
Number of real property operating leases | property	1		1
Boca Raton, Florida
Leases
Area of real estate property (Square Foot) | ft²	3,472		3,472

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Leases - Weighted-average remaining lease term and discount rate (Details)	Jun. 30, 2023
Leases
Weighted-average remaining lease term (years)	3 years 2 months 12 days
Weighted-average discount rate	7.00%

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Leases - Maturities of operating lease liabilities (Details)	Jun. 30, 2023 USD ($)
Leases
2023 (remainder of year)	$ 42,360
2024	86,202
2025	88,788
2026	60,593
Total lease payments	277,943
Less imputed interest	(29,717)
Present value of lease liabilities	$ 248,226

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Net Loss per Common Share - Common Stock that may potentially be issued (Details) - $ / shares	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Net Loss per Common Share
Total shares of Common Stock issuable	5,693,089	67,294
Common stock warrants
Net Loss per Common Share
Total shares of Common Stock issuable	5,520,575	59,233
Stock options
Net Loss per Common Share
Total shares of Common Stock issuable	8,956	4,483
RSUs not yet issued
Net Loss per Common Share
Total shares of Common Stock issuable	160,239
Convertible preferred stock
Net Loss per Common Share
Total shares of Common Stock issuable	3,157	3,416
Preferred stock, convertible, conversion price (in dollars per share)	$ 1,617.70
Restricted stock not yet issued
Net Loss per Common Share
Total shares of Common Stock issuable	162	162

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Employee Benefit Plans (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Employee Benefit Plans
Defined benefit plan, plan assets, contributions by employer	$ 21,000	$ 29,000	$ 47,000	$ 76,000
Defined contribution plan, employers matching contribution, annual vesting percentage			6.00%
Minimum
Employee Benefit Plans
Defined contribution plan, maximum annual contributions per employee, percent			1.00%
Maximum
Employee Benefit Plans
Defined contribution plan, maximum annual contributions per employee, percent			100.00%

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Subsequent Events (Details) - USD ($)	Jul. 21, 2023	Mar. 02, 2022
Subsequent Events
Warrant exercise price		$ 264.60
Warrants term		5 years
Subsequent events | Public Offering
Subsequent Events
Gross proceeds	$ 2,100,000
Other offering expenses	$ 350,000
Subsequent events | July 2023 Offering
Subsequent Events
Stock issued during period, shares, new issues (in shares)	610,000
Shares of common stock	$ 0.64
Warrant exercised to purchase shares of common stock	1
Subsequent events | July 2023 Pre-Funded Warrants
Subsequent Events
Stock issued during period, shares, new issues (in shares)	2,675,000
Warrant exercise price	$ 0.0001
Warrant exercised to purchase shares of common stock	2,246,000
Subsequent events | July 2023 Warrants
Subsequent Events
Stock issued during period, shares, new issues (in shares)	6,570,000
Warrant exercise price	$ 0.64
Warrants term	5 years