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Background and Basis of Presentation
9 Months Ended
Sep. 30, 2019
Background and Basis of Presentation [Abstract]  
Background and Basis of Presentation

Note 1 — Background and Basis of Presentation

 

TFF Pharmaceuticals, Inc. (the "Company" or "TFF") was incorporated in the State of Delaware on January 24, 2018 by Lung Therapeutics, Inc. ("LTI"), at which time the Company and LTI entered into a Contribution and Subscription Agreement ("Contribution Agreement") pursuant to which LTI agreed to transfer to the Company certain of LTI's non-core intellectual property rights and other assets, including LTI's rights under a patent license agreement with the University of Texas at Austin (see, Note 5), in exchange for 4,000,000 shares of the Company's common stock. The transactions under the Contribution Agreement closed in March 2018. LTI's basis in such assets were minimal. LTI is an early stage biotechnology company focused on the development of certain technologies in the pulmonary field, while the Company intends to initially focus on the development of inhaled dry powder drugs to enhance the treatment of pulmonary diseases and conditions.

 

The Company is in the development stage, having not yet started planned principal operations, and is devoting substantially all of its efforts toward technology research and development.

 

In October 2019, the Company completed an initial public offering ("IPO"), selling 4,400,000 shares of common stock at an offering price of $5.00 per share. The Company received net proceeds of approximately $20,150,000, after deducting underwriting discounts and commissions and offering-related expenses (see Note 10). In addition, the Company granted the underwriter a 45-day option to purchase an additional 660,000 shares of common stock at the initial public offering price, less underwriting discounts and commissions. The option was exercised and the underwriter purchased an additional 479,300 shares of common stock and the Company received additional net proceeds of approximately $2,200,000.

 

The accompanying financial statements of the Company as of and for the period ended January 23, 2018 reflect the historical financial position, results of operations, changes in net investment and cash flows of the operations for the assets acquired by the Company from LTI, the Company's former parent. These financial statements have been derived from the accounting records of LTI and should be read in conjunction with the accompanying notes thereto. The operations surrounding the acquired assets is deemed to be the Company's predecessor prior to January 24, 2018, the deemed date of acquisition. These financial statements do not necessarily reflect what the results of operations, financial position, or cash flows would have been had the Company been a separate entity during the periods prior to January 24, 2018 nor are they indicative of future results of the Company.

 

All of the assets, liabilities and results of operations of the Company as of and for the period ended January 23, 2018 were identified based on the assets acquired by the Company from LTI. Management believes the assumptions underlying the Company's carve-out financial statements are reasonable. Nevertheless, the financial statements may not include all of the actual expenses that would have been incurred had the Company operated as a standalone company during the periods presented, and may not reflect the Company's results of operations, financial position and cash flows had the Company operated as a standalone company during the periods presented. Actual costs that would have been incurred if the Company had operated as a standalone company would depend on multiple factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure.