v3.24.4
Summary of Significant Accounting Policies (Tables)
 9 Months Ended 12 Months Ended
Sep. 30, 2024
Dec. 31, 2023
Schedule of the Error Correction

 

   September 30, 2023   Correction   Corrected
September 30, 2023		 
Research and development expense  $3,084,488   $(277,844)  $2,806,644 
General and administrative expense   452,342    277,844    730,186 
Net Loss  $3,536,830   $-   $3,536,830 
  
Schedule of Cash and Cash Equivalents

 

   September 30,   December 31, 
   2024   2023 
Cash  $155,652   $1,550,098 
Money market funds   1,004    1,026,318 
Total cash and cash equivalents  $156,656   $2,576,416 

Cash and cash equivalents include cash in bank accounts and money market funds with maturities of less than three months from inception, which are readily convertible to known amounts of cash and which, in the opinion of management, are subject to an insignificant risk of loss in value. As of December 31, 2023 and 2022, cash and cash equivalents consisted of the following:

 

   December 31,   December 31, 
   2023   2022 
Cash  $1,550,098   $5,411,378 
Money market funds   1,026,318    3,005,825 
Total cash and cash equivalents  $2,576,416   $8,417,203 
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Set out below are the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their fair value hierarchy as of September 30, 2024 and December 31, 2023:

 

September 30, 2024  Level 1   Level 2   Level 3   Carrying Value 
Assets                    
Marketable Securities:                    
United States Treasury Bonds  $-   $-   $-   $- 
Total Assets  $-   $-   $-   $- 
Liabilities                    
Derivative Liability - Warrants  $-   $-   $74,107   $74,107 
Derivative Liability - Accelerated feature   -    -    -    - 
Total Liabilities  $-   $-   $74,107   $74,107 

 

December 31, 2023  Level 1   Level 2   Level 3   Carrying Value 
Assets                    
Marketable Securities:                    
United States Treasury Bonds  $2,887,215   $-   $-   $2,887,215 
Total Assets  $2,887,215   $-   $-   $2,887,215 
Liabilities                    
Derivative Liability - Warrants  $-   $-   $410,660   $410,660 
Derivative Liability - Accelerated feature   -    -    3,852    3,852 
Total Liabilities  $-   $-   $414,512   $414,512 

Set out below are the Company’s financial instruments that are required to be remeasured at fair value on a recurring basis and their fair value hierarchy as of December 31, 2023:

 

December 31, 2023  Level 1   Level 2   Level 3   Carrying Value 
Assets                    
Marketable Securities:                    
United States Treasury Bonds  $2,887,215   $—   $—   $2,887,215 
Total Assets  $2,887,215   $—   $—   $2,887,215 
Liabilities                    
Derivative Liability - Warrants  $—   $—   $410,660   $410,660 
Derivative Liability - Accelerated feature   —    —    3,852    3,852 
Total Liabilities  $—   $—   $414,512   $414,512 
Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share

For the nine months ended September 30, 2024 and 2023, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.

 

   September 30,   September 30, 
   2024   2023 
Convertible notes (Note 5)   -    137,729 
Warrants (Note 6)   184,000    184,000 
Restricted stock units (Note 6)   41,338    21,006 
    225,338    342,735 

For the years ended December 31, 2023 and 2022, the following common stock equivalents were excluded from the computation of diluted net loss per share as the result of the computation was anti-dilutive.

 

   December 31,   December 31, 
   2023   2022 
      

(as restated)

 
Convertible notes (Note 6)   119,939    — 
Warrants (Note 7)   184,000    47,831 
Restricted stock units (Note 7)   24,731    2,966 
    328,670    50,797 
Schedule of Key Inputs of Warrant Liabilities

The key inputs for the Monte Carlo simulation as of September 30, 2024, were as follows:

 

Net cash settlement and down round key valuation inputs – warrants*  September 30, 2024 
Annualized volatility   92.04% - 101.79% 
Risk-free interest rate   3.64% - 4.93% 
Quoted VWAP  $1.31 
Exercise price  $1.93 
Probability assessment   0% - 40% 
Illiquidity discount   (14%)
Time period (years)   0.08 - 2.28 

 

*Based on a Monte Carlo simulation analysis of 250,000 iterations

The range of key inputs for the Monte Carlo simulation for the year ended December 31, 2023, were as follows:

 

Net cash settlement and down round key valuation inputs – Alto Warrants*    
Annualized volatility   77.51% - 92.33%
Risk-free interest rate   4.01% - 5.23%
Quoted VWAP*  $4.72 
Exercise price  $18.80 
Probability assessment   5% - 25%
Illiquidity discount   (17)%
Time period (years)   0.53 - 3.03 
Estimated fair value (issuance)  $

1,189,000

 
Estimated fair value (December 31, 2023) 

$

410,660

 

 

  * Based on a Monte Carlo simulation analysis of 50,000 iterations

 

 

Alto Acceleration Option key valuation inputs*     
Annualized volatility   34.23% - 59.15%
Risk-free interest rate   4.68% - 5.60%
Quoted VWAP*  $4.72 
Illiquidity discount   (17)%
Time period (years)   0 - 1.2 
Estimated fair value (issuance)  $

1,442,000

 
Estimated fair value (December 31, 2023) 

$

3,852

 

 

  * Based on a Monte Carlo simulation analysis of 50,000 iterations
Schedule of Warrant Liabilities  

 

   Warrant Liability – Series A Preferred Stock Obligation 
Balance, December 31, 2021 (as restated)   334,955 
Issued   - 
Exercised (settled)   - 
Loss on change in fair value   421,768 
Reclassifications to stockholders’ equity   (756,723)
Balance, December 31, 2022   — 

 

   Warrant Liability – August 2022 Warrants 
Balance, December 31, 2021 (as restated)   - 
Issued   146,624 
Exercised (settled)   (91,036)
Loss on change in fair value   5,102 
Reclassifications to stockholders’ equity   (60,690)
Balance, December 31, 2022   — 

 

   Warrant Liability – Boustead Placement Agent Warrants 
Balance, December 31, 2021 (as restated)   - 
Issued   92,336 
Exercised (settled)   - 
Gain on change in fair value   (28,196)
Reclassification to stockholders’ equity   

(64,140

)
Balance, December 31, 2022   — 
Schedule of Useful Lives for Property Plant Equipment  

 

Furniture   5 years 
Computers and equipment   5 years 
Research Equipment   10 years 
Warrant [Member]    
Schedule of Key Inputs of Warrant Liabilities  

 

Warrant Liability – Series A Preferred Stock Obligation  December 31, 2021   Reclassification Date 
Estimated fair value of Company’s stock  $40.00   $32.50 
Exercise price (based on estimated IPO or Listing terms at issuance)  $40.00 - $166.56   $32.00 
Number of warrants (based on estimated Series A Preferred Stock conversion shares upon IPO or Listing at issuance)   12,135 - 33,681 shares    42,101 shares 
Annualized volatility   86.3%   82.5%
Risk-free interest rate   1.08%   3.44%
Estimated IPO date   9/30/2022    — 
Estimated Term   3.75 years    3.00 years 
Probability of IPO or Listing Occurring   90%   — 
Probability of IPO as “Qualified IPO”   33%   — 
Probability of IPO as “Listing”   67%   — 
Estimated fair value  $334,955   $756,723 

 

Warrant Liability – August 2022 Warrants  Issuance Dates   Reclassification/Settlement Date 
Estimated fair value of Company’s stock  $32.00   $32.50 
Exercise price  $20.00   $20.00 
Number of warrants   6,250    6,250 
Remaining term   5.0 years    4.9 years 
Volatility   80.0%   82.5%
Risk-free interest rate   2.7%   3.3%
Estimated fair value  $146,624   $151,726 

 

Warrant Liability – Boustead Placement Agent Warrants  Issuance Dates   Reclassification Date 
Estimated fair value of Company’s stock  $32.00   $32.50 
Exercise price (based on estimated Convertible Note conversion terms at issuance)  $16.00   $16.00 
Number of warrants (based on estimated Convertible Note conversion terms at issuance)   3,688    2,581 
Remaining term   5.0 years    4.4 – 4.5 years 
Volatility   86.1%   82.5%
Risk-free interest rate   1.8% - 2.0%    3.4%
Estimated fair value  $92,336   $64,140