Significant Accounting Policies (Policies) |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Accounting Policies [Abstract] | |
| Basis of presentation, Liquidity and Management’s Plans | Basis of presentation, Liquidity and Management’s Plans
The accompanying condensed financial statements of the Company have been prepared in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”). U.S. GAAP contemplates the continuation of the Company as a going concern. For the six months ended June 30, 2026, the Company had net revenues from product sales of $42,897, incurred a net loss of $4,336,355 and had negative cash flows of $2,267,468, and a cumulative net loss since inception totaling $39,003,381.
In management’s opinion, these conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of at least twelve months from the date of this report.
Management’s plans to address the Company’s liquidity needs include raising additional capital through the Company’s existing Standby Equity Purchase Agreement (“SEPA”) and, as necessary, through other equity or debt financing transactions. As of June 30, 2026, approximately $17.2 million of the $20.0 million aggregate commitment under the SEPA remained available; however, the Company’s ability to access this amount is subject to the availability of shares registered for resale, applicable contractual and regulatory limitations, prevailing market conditions and the trading price and trading volume of the Company’s common stock. On July 7, 2026, the SEC declared effective the Company’s registration statement on Form S-1 registering for resale by Yorkville up to an additional shares of common stock that may be issued under the SEPA. The Company’s historically low trading volume may limit the amount and timing of proceeds that can realistically be raised under the SEPA, and therefore the Company cannot presently conclude that the entire remaining commitment will be available when needed. Management intends to utilize available capacity under the SEPA during the third and fourth quarters of 2026, subject to market conditions and applicable limitations, while concurrently evaluating additional financing alternatives to fund the Company’s operations and development activities. There is no assurance that the Company will be able to effect transactions on commercially reasonable terms, if at all.
|
| Business Segment | Business Segment
Business segments are identified as components of an enterprise for which separate discrete financial information is available for evaluation by the Company’s Chief Operating Decision Maker (“CODM”) and relied upon when making decisions regarding resource allocation and assessing performance. When evaluating the Company’s financial performance, the CODM reviews total revenues, total expenses, and expenses by functional classification, using this information to make decisions on a company-wide basis. Effective October 1, 2025, the Company operates through two reportable segments: (i) premium nutritional supplements, and (ii) pharmaceutical operations focused on drug candidates for CNS and rare orphan diseases.
|
| Use of Estimates | Use of Estimates
Preparing 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 the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reported period. Actual results could differ from those estimates, and those estimates may be material.
Significant estimates during the six months ended June 30, 2026 and 2025, respectively, include valuation of stock-based compensation, uncertain tax positions, the valuation of debt instruments, and the valuation allowance on deferred tax assets.
|
| Cash | Cash
The Company considers all highly liquid investments that have maturities of three months or less when acquired to be cash equivalents. The Company maintains its cash balances with high-credit-quality financial institutions. At times, such balances may exceed federally insured limits provided by the Federal Deposit Insurance Corporation (“FDIC”). In 2025, the Company has implemented a deposit insurance program in the Company’s primary account, whereby funds in excess of FDIC insurance limits are insured. The Company did not have any uninsured cash balances that exceeded the FDIC limit of $250,000.
|
| Inventory | Inventory
Inventory is stated at the lower of cost or net realizable value, with cost determined using the first-in, first-out method. The Company evaluates inventory for excess or obsolescence based on forecasted demand and records reserves as necessary. As of June 30, 2026 and December 31, 2025, inventory totaled $135,290 and $159,790, respectively.
|
| Revenue Recognition | Revenue Recognition
The Company recognizes revenue when control of its products is transferred to customers, generally upon shipment or delivery, depending on the terms of the arrangement.
Revenue is recorded net of estimated variable consideration, including product returns, rebates, discounts, and other allowances, based on historical experience and other relevant factors.
The Company evaluates whether it is the principal or agent in its arrangements and records revenue on a gross or net basis accordingly. Shipping and handling activities are considered fulfilment activities, and the related costs are included in cost of goods sold.
|
| Prepaid Contracts | Prepaid Contracts
Prepaid contracts generally represent service agreements which the Company would receive services over a period of time and are expensed as the services are received. The Company’s prepaid contracts are related to service agreements that span over three years; therefore the expense will be recognized over the three year term. See further discussion in Note 6 - Stockholders’ Equity.
|
| Other Assets | Other Assets
As of June 30, 2026, the Company had deposited $600,000 into escrow in connection with the PharmAla transaction, which was recorded as a noncurrent asset. Subsequent to June 30, 2026, the Company entered into a definitive license agreement with PharmAla Biotech Holdings Inc. for perpetual exclusive U.S. rights to ALA-002. See further discussion in Note 1 – Organization and Description of Business.
|
| Research and Development | Research and Development
Research and development costs are expensed as incurred. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as subject enrollment, monitoring visits, clinical site activations, or information provided to us by our vendors with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be.
|
| Income Taxes | Income Taxes
The Company recognizes deferred tax assets and liabilities for temporary differences between the financial reporting basis and the tax basis of our assets and liabilities and the expected benefits of net operating loss carryforwards. The impact of changes in tax rates and laws on deferred taxes, if any, applied during the years in which temporary differences are expected to be settled, is reflected in the financial statements in the period of enactment. The measurement of deferred tax assets is reduced, if necessary, if, based on weight of the evidence, it is more likely than not that some, or all, of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. As of June 30, 2026 and December 31, 2025, the Company concluded that a full valuation allowance is necessary for the net deferred tax assets.
|
| Loss Per Share of Common Stock |
Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible preferred stock, convertible notes payable, stock options, and unvested restricted stock, which would result in the issuance of incremental shares of common stock, as calculated using the treasury method. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation.
As of June 30, 2026, there were restricted stock units and stock options excluded from the computation of diluted loss per share because their effect was anti-dilutive.
As of December 31, 2025, there were restricted stock units and stock options.
|
| Stock-Based Compensation | Stock-Based Compensation
The grant date fair value of stock-based awards issued to employees, non-employees and members of the board of directors, is determined using the Black-Scholes option pricing model and ratably expensed over the requisite service period, which is generally the vesting term of the award. 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, risk-free interest rates and future dividend yields.
|
| Clinical Trial Expenses | Clinical Trial Expenses
When applicable in preparing financial statements, the Company estimates clinical trial-related expenses based on contracts with vendors, clinical sites, and consultants. Because payment timing often differs from service delivery, the Company records expenses according to actual service performance and trial progression, using discussions with internal staff and external providers. Estimates are periodically adjusted as actual results become known. Accurate accruals depend on timely reporting from third-party vendors, and differences between estimated and actual expenses, though not expected to be significant, may occur.
|
| Fair Value of Financial Instruments and Fair Value Measurements | Fair Value of Financial Instruments and Fair Value Measurements
The Company measures its financial assets and liabilities in accordance with US GAAP. For certain financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, the carrying amounts approximate fair value due to their short maturities. Amounts recorded for notes payable, net of discount, and loans payable also approximate fair value because current interest rates available for debt with similar terms and maturities are substantially the same.
The Company follows accounting guidance for financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. This guidance does not apply to measurements related to share-based payments. This guidance discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost).
The guidance utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels:
Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs, other than quoted prices that are observable, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.
Level 3: Unobservable inputs in which little or no market data exists, therefore developed using estimates and assumptions developed by us, which reflect those that a market participant would use.
Also see Note 5 - Standby Equity Purchase Agreement and Convertible Debt.
|
| Convertible Notes with Embedded Derivative Liabilities | Convertible Notes with Embedded Derivative Liabilities
The Company has entered into convertible notes, some of which contain variable conversion options, whereby the outstanding principal and accrued interest may be converted, by the holder, into shares of common stock at a fixed discount to the price of the common stock at or around the time of conversion upon certain trigger events. The Company evaluates all its financial instruments to determine if those contracts or any potential embedded components of those contracts qualify as derivatives. This accounting treatment requires that the carrying amount of any derivatives be recorded at fair value at issuance and marked-to-market at each balance sheet date. In the event that the fair value is recorded as a liability, as is the case with the Company, the change in the fair value during the period is recorded as either other income or expense. Upon conversion, exercise or repayment, the respective derivative liability is marked to fair value at the conversion, repayment, or exercise date and then the related fair value amount is reclassified to other income or expense as part of gain or loss on debt extinguishment.
|
| Leases | Leases
Operating lease right-of-use (“ROU”) assets and related operating lease liabilities are recognized based on the present value of future minimum lease payments over the expected term of the lease after taking into account the likelihood of renewals and extensions at inception. In the event an implicit interest rate is not present in the lease agreement, the Company utilizes its incremental borrowing rate at lease inception in order to determine the present value. Short term leases with an initial term of less than twelve months are expensed as incurred. |