Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expense during the reporting period. Actual results could differ from those estimates. Significant estimates underlying the financial statements include the fair value of stock options and warrants.

Concentrations of Credit Risk

Concentrations of Credit Risk

The Company maintains its cash accounts at financial institutions which are insured by the Federal Deposit Insurance Corporation. At times, the Company may have deposits in excess of federally insured limits.

Fixed asset

Fixed Assets

Fixed assets are stated at cost less accumulated depreciation. Cost includes expenditures for furniture, office equipment, laboratory equipment, and other assets. Maintenance and repairs are charged to expense as incurred. When assets are sold, retired, or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts and any resulting gain or loss is reflected in operations. The cost of fixed assets are depreciated using the straight-line method over the estimated useful lives of the related assets. Depreciation expense was $2,796 for the three and nine months ended September 30, 2020 and zero for the three and nine months ended for September 30, 2019.

Leases

Leases

Under Topic 842, operating lease expense is generally recognized evenly over the term of the lease. The Company has operating leases consisting of office and laboratory space with remaining lease terms of 46 months. Rent and Lease costs were $46,698 and $23,731 for the nine months ended September 30, 2020 and 2019. There was no sublease rental income for the nine months ended September 30, 2020 and 2019. Rent and Lease costs were $43,573 and $9,467 for the three months ended September 30, 2020 and 2019. There was no sublease rental income for the three months ended September 30, 2020 and 2019.

Leases with an initial term of twelve months or less are not recorded on the balance sheet. For lease agreements entered into or reassessed after the adoption of Topic 842, we combine the lease and non-lease components in determining the lease liabilities and right of use (“ROU”) assets.

Our lease agreements generally do not provide an implicit borrowing rate, therefore an internal incremental borrowing rate is determined based on information available at lease commencement date for purposes of determining the present value of lease payments. We used the incremental borrowing rate on September 30, 2020 and December 31, 2019 for all leases that commenced prior to that date. In determining this rate, which is used to determine the present value of future lease payments, we estimate the rate of interest we would pay on a collateralized basis, with similar payment terms as the lease and in a similar economic environment.

Lease Costs

	Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
Components of total lease costs:
Operating lease expense	$	46,698	$	-
Total lease costs	$	46,698	$	-

Lease Positions as of September 30, 2020

ROU lease assets and lease liabilities for our operating leases were recorded in the balance sheet as follows:

	September 30, 2020		December 31, 2019
Assets
Right of use asset – short term	$	324,289	$	-
Right of use asset – long term		870,311		-
Total assets	$	1,194,600	$	-

Liabilities
Operating lease liabilities – short term	$	326,904	$	-
Operating lease liabilities – long term		865,081		-
Total lease liability	$	1,191,985	$	-

Lease Terms and Discount Rate

Weighted average remaining lease term (in years) – operating lease			3.83
Weighted average discount rate – operating lease			8.00	%

The future minimum lease payments under the leases are as follows:

2020 (remainder)	$	84,536
2021		342,500
2022		352,958
2023		363,416
2024		215,551
Total future minimum lease payments		1,358,961
Less: Lease imputed interest		166,976
Total	$	1,191,985

Patents

Patents

The Company incurs fees from patent licenses. During the nine months ended September 30, 2020 and 2019, the Company had a licensing fee for the patents of $258,635 and $18,071, respectively.

Basic and Diluted Net Loss per Common Share

Basic and Diluted Net Loss per Common Share

Basic loss per common share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding for each period. Diluted loss per share is computed by dividing the net loss by the weighted average number of shares of common stock outstanding plus the dilutive effect of shares issuable through the common stock equivalents. The weighted-average number of common shares outstanding excludes common stock equivalents because their inclusion would be anti-dilutive. As of September 30, 2020, 1,110,000 stock options and 6,237,296 warrants were excluded from dilutive earnings per share as their effects were anti-dilutive. As of September 30, 2019, 2,205,000 stock options and 2,632,456 warrants were excluded from dilutive earnings per share as their effects were anti-dilutive.