10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended: March 31, 2023

or

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from ____ to ____

Commission file number: 0-25466

CYCLO THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Nevada	59-3029743
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)

6714 NW 16th Street, Suite B, Gainesville, Florida	32653
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: 386-418-8060

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

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.0001 per share	CYTH	The Nasdaq Stock Market LLC
Warrants to purchase Common Stock	CYTHW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 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

As of May 11, 2023 the Company had outstanding 15,168,397 shares of its common stock.

CYCLO THERAPEUTICS, INC.

FORM 10-Q 

TABLE OF CONTENTS

	Description	Page
PART I	FINANCIAL INFORMATION	1
Item 1.	Financial Statements.	1
	Condensed Consolidated Balance Sheets as of March 31, 2023 (Unaudited) and December 31, 2022.	1
	Condensed Consolidated Statements of Operations (Unaudited) for the Three Months Ended March 31, 2023 and 2022.	2
	Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, 2023.	3
	Condensed Consolidated Statement of Stockholders’ Equity (Unaudited) for the Three Months Ended March 31, 2022.	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three Months Ended March 31, 2023 and 2022.	5
	Notes to Condensed Consolidated Financial Statements.	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	19
Item 4.	Controls and Procedures.	19
PART II	OTHER INFORMATION	20
Item 1A.	Risk Factors.	20
Item 6.	Exhibits.	20
SIGNATURES		21

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2023			December 31, 2022
	(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents	$	915,176		$	1,543,418
Accounts receivable, net		131,224			54,991
Inventory, net		244,497			254,491
Prepaid insurance and services		188,638			101,135
Prepaid clinical expenses		2,513,923			2,204,520
Total current assets		3,993,458			4,158,555
FURNITURE AND EQUIPMENT, NET		50,369			55,188
RIGHT-TO-USE LEASE ASSET, NET		53,393			1,470
TOTAL ASSETS	$	4,097,220		$	4,215,213
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Current portion of lease liability	$	16,969		$	-
Accounts payable and accrued expenses		4,482,600			3,480,669
Total current liabilities		4,499,569			3,480,669
LONG-TERM LIABILITIES
Lease liability, net of current portion		36,527			-
Total long-term liabilities		36,527			-
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.0001 per share, 50,000,000 and 20,000,000 shares authorized, 10,053,544 and 8,481,848 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively		1,056			849
Preferred stock, par value $.0001 per share, 5,000,000 shares authorized, 0 outstanding		-			-
Additional paid-in capital		68,366,532			64,533,074
Accumulated deficit		(68,806,464	)		(63,799,379	)
Total stockholders' equity (deficit)		(438,876	)		734,544
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$	4,097,220		$	4,215,213

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three Months Ended March 31,
	2023			2022
REVENUES
Product sales	$	152,411		$	194,904
EXPENSES
Personnel		906,955			1,216,905
Cost of products sold (exclusive of direct and indirect overhead and handling costs)		10,196			16,464
Research and development		3,398,167			1,084,052
Repairs and maintenance		1,252			4,323
Professional fees		482,835			412,055
Office and other		282,375			294,176
Board of Directors fees and costs		72,125			92,125
Depreciation		4,819			4,741
Freight and shipping		819			4,520
Total operating expenses		5,159,543			3,129,361
LOSS FROM OPERATIONS		(5,007,132	)		(2,934,457	)
OTHER INCOME
Investment and other income		47			4,342
Gain on forgiveness of PPP loan		-			158,524
Total other income		47			162,866
LOSS BEFORE INCOME TAXES		(5,007,085	)		(2,771,591	)
PROVISION FOR INCOME TAXES		-			-
NET LOSS	$	(5,007,085	)	$	(2,771,591	)
BASIC AND DILUTED NET LOSS PER COMMON SHARE	$	(0.46	)	$	(0.33	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING		11,003,588			8,411,798

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)

THREE MONTHS ENDED MARCH 31, 2023

(Unaudited)

	Common Stock				Additional					Total
	Shares		Par Value		Paid-In Capital		Accumulated Deficit			Stockholders’ Equity (Deficit)
Balance, December 31, 2022		8,481,848	$	849	$	64,533,074	$	(63,799,379	)	$	734,544
Sale of common stock and accompanying pre-funded warrants, net		930,000		93		3,741,790		-			3,741,883
Exercise of warrants		1,141,696		114		-		-			114
Stock-based compensation		-		-		91,668		-			91,668
Net loss		-		-		-		(5,007,085	)		(5,007,085	)
Balance, March 31, 2023		10,553,544	$	1,056	$	68,366,532	$	(68,806,464	)	$	(438,876	)

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Unaudited)

	Common Stock				Additional					Total
	Shares		Par Value		Paid-In Capital		Accumulated Deficit			Stockholders’ Equity
Balance, December 31, 2021		8,403,869	$	841	$	64,019,513	$	(48,348,491	)	$	15,671,863
Stock issued to nonemployees		11,327		1		41,003		-			41,004
Stock-based compensation		-		-		106,738		-			106,738
Net loss		-		-		-		(2,771,591	)		(2,771,591	)
Balance, March 31, 2022		8,415,196	$	842	$	64,167,254	$	(51,120,082	)	$	13,048,014

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended March 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(5,007,085	)	$	(2,771,591	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		4,819			4,741
Gain on forgiveness of PPP loan		-			(158,524	)
Stock-based compensation		91,668			106,738
Stock compensation to nonemployees		-			41,004
Increase or decrease in:
Accounts receivable, net		(76,233	)		374,738
Inventory, net		9,994			6,381
Prepaid clinical expenses		(309,403	)		(1,426,434	)
Prepaid insurance and services		(87,503	)		(189,368	)
Other		1,573			(1,537	)
Accounts payable and accrued expenses		1,001,931			(816,397	)
Total adjustments		636,846			(2,058,658	)
NET CASH USED IN OPERATING ACTIVITIES		(4,370,239	)		(4,830,249	)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment		-			(4,600	)
Collections from mortgage note receivable		-			13,916
NET CASH PROVIDED BY INVESTING ACTIVITIES		-			9,316
CASH FLOWS FROM FINANCING ACTIVITIES
Net from the sale of warrants		2,407,849			-
Net proceeds from sale of stock		1,334,034
Exercise of warrants		114
Payments on PPP loan		-			(8,159	)
Refund of PPP loan payments		-			14,937
NET CASH PROVIDED BY FINANCING ACTIVITIES		3,741,997			6,778
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		(628,242	)		(4,814,155	)
CASH AND CASH EQUIVALENTS, beginning of period		1,543,418			16,612,711
CASH AND CASH EQUIVALENTS, end of period	$	915,176		$	11,798,556
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	1,730		$	-

See accompanying Notes to Condensed Consolidated Financial Statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The information presented herein as of March 31, 2023 and for the three months ended March 31, 2023 and 2022 is unaudited.

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The following is a summary of the more significant accounting policies of Cyclo Therapeutics, Inc. (the “Company,” “we,” “our” or “us”) that affect the accompanying condensed consolidated financial statements:

(a) ORGANIZATION AND OPERATIONS–– The Company was incorporated in August 1990 as a Florida corporation, under the name Cyclodextrin Technologies Development, Inc. with operations beginning in July 1992. In conjunction with a restructuring in 2000, we changed our name to CTD Holdings, Inc. We changed our name to Cyclo Therapeutics, Inc. in September 2019 to better reflect our current business and on November 6, 2020, we reincorporated from the State of Florida to the State of Nevada.

We are a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. We filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for our lead drug candidate, Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease (“NPC”). NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, we launched an International Clinical Program for Trappsol® Cyclo™ as a treatment for NPC. In 2016, we filed an Investigational New Drug application (“IND”) with the FDA, which described our Phase I clinical plans for a randomized, double blind, parallel group study at a single clinical site in the U.S. The Phase I study evaluated the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older. The IND was approved by the FDA in September 2016, and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 we announced Top Line data showing a favorable safety and tolerability profile for Trappsol® Cyclo™ in this study.

We have also completed a Phase I/II clinical study approved by European regulatory bodies with clinical trial centers in the United Kingdom, Sweden, and in Israel. The Phase I/II study evaluated the safety, tolerability and efficacy of Trappsol® Cyclo™ through a range of clinical outcomes, including neurologic, respiratory, and measurements of cholesterol metabolism and markers of NPC. Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol® Cyclo™ intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses). In March of 2021 we announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale.

Additionally, in February 2020 we had a face-to-face “Type C” meeting with the FDA with respect to the initiation of our pivotal Phase III clinical trial of Trappsol® Cyclo™ based on the clinical data obtained to date. At that meeting, we also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol® Cyclo™. A similar request was submitted to the European Medicines Agency (“EMA”) in February 2020, seeking scientific advice and protocol assistance from the EMA for proceeding with a Phase III clinical trial in Europe. In October 2020 we received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021 we commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol® Cyclo™ for the treatment of NPC.

We are also exploring the use of cyclodextrins in the treatment of Alzheimer’s disease. In January 2018, the FDA authorized a single patient IND expanded access program using Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. After 18 months of treatment in this geriatric patient with late-onset disease, the disease was stabilized and the drug was well tolerated. The patient also exhibited signs of improvement with less volatility and shorter latency in word-finding. We prepared a synopsis for an early stage protocol using Trappsol® Cyclo™ intravenously to treat Alzheimer’s disease that was presented to the FDA in January of 2021. We received feedback from the FDA on this synopsis in April 2021 and incorporated the feedback into an IND for a Phase II study for the treatment of Alzheimer’s disease with of Trappsol® Cyclo™ that we submitted to the FDA in November 2021. In December of 2021, we received IND clearance from the FDA, allowing us to proceed with our Phase II study of Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. U.S. sites for the study were activated during the second half of 2022, and patient dosing began in the first quarter of 2023.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  (CONTINUED)

We also continue to operate our legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin- based biopharmaceuticals for the treatment of disease from a business that had been primarily reselling basic cyclodextrin products.

(b) BASIS OF PRESENTATION––The condensed consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The interim condensed consolidated financial statements of the Company included in this Quarterly Report on Form 10-Q, including these notes, are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments are of a normal, recurring nature. The condensed consolidated financial statements, and these notes, have been prepared in accordance with Generally Accepted Accounting Principles and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The condensed consolidated financial statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

(c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original purchased maturity of three months or less.

(d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Customer account balances with invoices dated over 90 days old are considered past due. The Company does not accrue interest on past due accounts. Customer payments are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, applied to the oldest unpaid invoices.

The carrying amount of accounts receivable is reduced by an allowance for credit losses that reflects management’s best estimate of expected credit losses. The Company reviews each customer balance where all or a portion of the balance exceeds 90 days from the invoice date. Based on the Company’s assessment of the customer's current and forecasted creditworthiness, the Company estimates the portion, if any, of the balance that will not be collected, and writes off receivables as a charge to the allowance for credit losses when, in management’s estimation, it is probable that the receivable is worthless. The Company has estimated an allowance for doubtful accounts of $10,300 at March 31, 2023 and December 31, 2022.

(e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. The Company records a specific reserve for inventory items that are determined to be obsolete. The reserve for obsolete inventory was approximately $52,900 at March 31, 2023 and December 31, 2022.

The Company’s reserve for obsolete inventory is based on the Company’s best estimates of product sales and customer demands. It is reasonably possible that the estimates used by the Company to determine its provisions for inventory write-downs will be materially different from actual write-downs. These differences could result in materially higher than expected inventory provisions and related costs, which could have a materially adverse effect on the Company’s results of operations and financial condition in the near term.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  (CONTINUED)

(f) PREPAID CLINICAL EXPENSES––Prepaid clinical expenses consist of our pharmaceutical drug Trappsol® Cyclo™ expected to be used in our clinical trial program recorded at cost. In addition, advance payments for goods or services for future research and development activities are included as prepaid clinical expenses. Prepaid clinical expenses are expensed as research and development costs as the goods are delivered or the related services are performed.

(g) FURNITURE AND EQUIPMENT––Furniture and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers and vehicles and seven to ten years for machinery, equipment and office furniture). We periodically review our long-lived assets to determine if the carrying value of assets may not be recoverable. If an impairment is identified, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset. 

(h) LEASES––The Company leases office and warehouse space.  The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities on the Company’s condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. 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 for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In evaluating contracts to determine if they qualify as a lease, the Company considers factors such as if the Company has obtained substantially all of the rights to the underlying asset through exclusivity, if it can direct the use of the asset by making decisions about how and for what purpose the asset will be used and if the lessor has substantive substitution rights. This evaluation may require significant judgment.

(i) REVENUE RECOGNITION––Revenues are recognized when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under Accounting Standard Codification (“ASC”) Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Product revenues

In the U.S., we sell our products to the end user or wholesale distributors. In other countries, we sell our products primarily to wholesale distributors and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients.

Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial.  We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers.  The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  (CONTINUED)

Reserves for Discounts and Allowances

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

For additional information on our revenues, please read Note 2, Revenues, to these condensed consolidated financial statements.

(j) SHIPPING AND HANDLING FEES––Shipping and handling fees, if billed to customers, are included in product sales. Shipping and handling costs associated with inbound and outbound freight are expensed as incurred and included in freight and shipping expense.

(k) ADVERTISING––Advertising costs are charged to operations when incurred. We incur minimal advertising expenses.

(l) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred. Research and development expenses primarily consist of product development, third-party contractors, salaries and materials.

(m) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.  As of March 31, 2023, and December 31, 2022, the Company has recorded a full valuation allowance against its deferred tax assets.

(n) NET LOSS PER COMMON SHARE–– Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented, as outstanding warrants to purchase 7,419,760 and 2,048,186 common shares were antidilutive for the three months ended March 31, 2023 and March 31, 2022, respectively. Additionally, outstanding options to purchase 771,527 and 412,263 shares of common stock were antidilutive for the three months ended March 31, 2023 and March 31, 2022, respectively.

(o) STOCK-BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. In the case of employees and consultants, an expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date. With respect to directors, the Company accrues stock compensation expense on a quarterly basis based on the Company’s historical director compensation policies, and each quarter recognizes such expense based on the trading price of the common stock during such quarter. This expense is then trued up at the time the shares are issued to directors based on the trading price at the time of issuance.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  (CONTINUED)

The Company periodically issues stock options under its 2021 Equity Incentive Plan. The Company uses the Black-Scholes valuation method to estimate the fair value of stock options at grant date. Compensation expense is recognized on the straight-line basis over the requisite service period, which is generally the vesting period.

(p) FAIR VALUE MEASUREMENTS AND DISCLOSURES––The Fair Value Measurements and Disclosures topic of the Accounting Standards Codification (“ASC”) requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. The Fair Value Measurements and Disclosures topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

● Level 1: Quoted market prices in active markets for identical assets or liabilities.

● Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

● Level 3: Unobservable inputs that are not corroborated by market data.

We have no assets or liabilities required to have their fair value measured on a recurring basis at March 31, 2023 and December 31, 2022. Long-lived assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments when there is evidence of impairment.

For short-term classes of our financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, and which are not reported at fair value, the carrying amounts approximate fair value due to their short-term nature. 

(q) USE OF ESTIMATES––The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions, including regarding contingencies, that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company’s most significant estimates relate to inventory obsolescence, stock-based compensation and warrant liability valuation. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

(r) RECENT ACCOUNTING PRONOUNCEMENTS––In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses” (Topic 326), which provides guidance on how an entity should measure credit losses on financial instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The ASU is effective for smaller reporting company’s in the first quarter of 2023. The Company adopted the new guidance as of January 1, 2023, and it did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has adopted this standard as of January 1, 2023, and determined no material impact on its condensed consolidated financial statements.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:  (CONTINUED)

(s) WARRANTS––The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants considering the authoritative guidance in  ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and satisfy additional conditions for equity classification. Warrants that are liability-classified are measured at fair value at each reporting date in accordance with the guidance in ASC 820, “Fair Value Measurement,” with any subsequent changes in fair value recognized in the statement of operations in the period of change. The fair value of liability classified warrants was not material at March 31, 2023, and December 31, 2022.

(t) LIQUIDITY AND GOING CONCERN––For the three months ended March 31, 2023, the Company incurred a net loss of approximately $5,007,085. The Company has an accumulated deficit of approximately $68,806,464 at March 31, 2023. Our recent losses have predominantly resulted from research and development expenses for our Trappsol® Cyclo™ product and other general operating expenses, including personnel expenses and board advisory fees. We believe our expenses will continue to increase as we continue to conduct clinical trials and seek regulatory approval for the use of Trappsol® Cyclo™ in the treatment of NPC and Alzheimer’s disease.

For three months ended March 31, 2023, the Company’s operations used $4,370,239 in cash, and at March 31, 2023, the Company had a cash balance of $915,176 and negative working capital of approximately $506,100.  We will need to raise additional capital for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. As further discussed in Note 11, subsequent to quarter-end, the Company generated gross proceeds of approximately $3,405,000 from the sale of securities in private placements of the Company’s securities.

We intend to continue to raise such capital through the sale of equity securities from time to time, the issuance of debt securities, the sale or licensing of existing assets or assets in development, or from other non-dilutive funding mechanisms. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. If we cannot raise the additional funds required for our anticipated operations, we may be required to reduce the scope of or eliminate our research and development programs, delay our clinical trials and the ability to seek regulatory approvals, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency. If we raise additional funds through future offerings of shares of our Common Stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our Common Stock.

Our condensed consolidated financial statements for the three months ended March 31, 2023 were prepared on the basis of a going concern, which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

(2) REVENUES:

The Company operates in one business segment, which primarily focuses on the development and commercialization of innovative cyclodextrin-based products for the treatment of people with serious and life-threatening rare diseases and medical conditions. However, substantially all of the Company’s revenues are derived from the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs.  Currently, a small portion of the Company’s revenues is generated by sales of Trappsol® Cyclo™ to South America (Brazil) for the treatment of NPC patients.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

 

(2) REVENUES: (CONTINUED)

The Company considers there to be revenue concentration risks for regions where net product revenues exceed 10% of condensed consolidated net product revenues. The concentration of the Company’s net product revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties.

Revenues by product are summarized as follows:

	Three Months Ended
	March 31,
	2023		2022
Trappsol® Cyclo™	$	53,384	$	-
Trappsol® HPB		85,984		64,573
Trappsol® Fine Chemical		3,239		129,703
Aquaplex®		9,804		628
Total revenues	$	152,411	$	194,904

Substantially all of our sales of Trappsol® Cyclo™ for the three months ended March 31, 2023 were to a single customer who exports the drug to South America. Substantially all of our Aquaplex® sales for the three months ended March 31, 2023 and March 31, 2022 were to one customer.

(3) MAJOR CUSTOMERS AND SUPPLIERS:

Our revenues are derived primarily from chemical supply and pharmaceutical companies located primarily in the United States. For the three months ended March 31, 2023 three major customers accounted for 76% of total revenues. For the three months ended March 31, 2022, four major customers accounted for 75% of total revenues.

There were no inventory purchases during the three months ended March 31, 2023. Substantially all inventory purchases were from three vendors in 2022 and 2021. These vendors are located primarily outside the United States.

We have three sources for our Aquaplex® products. There are multiple sources for our Trappsol® products.

For the three months ended March 31, 2023, the product mix of our revenues consisted of 94% basic natural and chemically modified cyclodextrins and 6% cyclodextrin complexes. For the three months ended March 31, 2022 the product mix of our revenues consisted of 99.7% basic natural and chemically modified cyclodextrins and .3% cyclodextrin complexes.

(4) NOTE PAYABLE:

On May 4, 2020, the Company’s wholly owned subsidiary, Cyclodextrin Technologies Development, Inc., borrowed $158,524 from BBVA USA under the Paycheck Protection Program (PPP) which was established under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The loan matured on May 4, 2022 and bore interest at a rate of 1% per annum, payable monthly commencing on September 5, 2021.

Under the Paycheck Protection Program, because the loan was used to fund certain qualifying expenses as described in the CARES Act, the full amount of the loan, including accrued interest was forgiven in March 2022. As a result, the balance forgiven is presented separately as gain on the forgiveness of PPP loan in the accompanying condensed consolidated statement of operations.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(5) LEASES

The Company entered in an operating lease in January 2023 for office and warehouse space, which has a lease term expiring in January 2026, with an option to extend for an additional three years. As it is not reasonably certain the Company will exercise the option to extend, the additional three years have not been included in the lease term.  This lease replaced an existing operating lease which expired in January 2023. Right-of-use assets are recorded net of accumulated amortization, which was $4,256 as of March 31, 2023.  Lease expense for lease payments are recognized on a straight-line basis over the lease term.  Lease expense for the three months ended March 31, 2023 and 2022 was $9,535 and 7,397, respectively. 

(6) EQUITY TRANSACTIONS:

On March 3, 2023, following the approval of the Company’s stockholders at a special meeting, the Company’s Articles of Incorporation were amended to increase the number of authorized shares of common stock from 20,000,000 to 50,000,000.

The Company accrues stock compensation expense over the period earned for employees and board members. Stock compensation expense for board members is included in “Board of Directors fees and costs” on our condensed consolidated statement of operations, and stock compensation expense for officers and employees that are not board members is included in “Personnel” on our condensed consolidated statement of operations. In the three ended March 31, 2023, the Company recognized compensation expense of $30,750 to board members. As of March 31, 2023, accrued compensation to board members totaled $61,500. In the three months ended March 31, 2022, the Company issued 11,327 shares to board members with a value of $41,004, at the time of issuance, with respect to which compensation expense in that period had been accrued as of December 31, 2021. The Company did not issue shares to employees in the three month periods ended March 31, 2023 and 2022.

On January 3, 2023, the Company sold to an institutional investor in a registered direct offering 930,000 shares of common stock at a purchase price per share of $1.61, and prefunded warrants to purchase up to an aggregate of 1,678,696 shares of common stock at a purchase price of $1.61 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.0001 per share and remain exercisable until exercised in full. In a concurrent private placement, the Company also issued to the investor Series A-1 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of five years from the date of issuance, and Series A-2 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of three years from the date of issuance. The net proceeds from the registered direct offering were approximately $3.7 million after deducting fees due to the placement agent in the offering. A holder of pre-funded warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. A holder of pre-funded warrants may increase or decrease this percentage, but not in excess of 9.99%, by providing at least 61 days’ prior notice to the Company. A holder of the Series A-1 and Series A-2 warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise, and may increase or decrease this percentage, but not in excess of 9.99%, by providing at least 61 days’ prior notice to the Company.

The Company classified the fair value of the warrants as equity because they are indexed to its own stock and meet the conditions necessary for equity classification in accordance with the guidance in ASC Subtopic 815-40 on derivatives and hedging.

H.C. Wainwright & Co., LLC acted as placement agent to the Company in connection with the registered direct offering and concurrent private placement and was paid a cash fee equal to 7.5% of the gross proceeds of the offering, a management fee equal to 1.0% of the gross proceeds of the offering, and was reimbursed by the Company for its non-accountable expenses in the amount of $35,000, for fees and expenses of its legal counsel, for other out-of-pocket expenses in the amount of $50,000, and for its clearing expenses in the amount of $15,950. The Company also issued to designees of the placement agent five-year warrants to purchase an aggregate of 156,522 shares of common stock at an exercise price of $2.0125 per share.

On January 25, 2023, the investor exercised a portion of its pre-funded warrants and acquired 400,696 shares of common stock for an aggregate exercise price of $40, and on February 27, 2023, the investor exercised an additional portion of its pre-funded warrants and acquired 741,000 shares of common stock for an aggregate exercise price of $74.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(6) EQUITY TRANSACTIONS: (CONTINUED)

As of March 31, 2023, the Company had warrants outstanding, excluding prefunded warrants, to purchase 7,419,760 shares of common stock at exercise prices ranging from $1.36 to $65.00 per share that expire at various dates through 2027. In addition, there are currently outstanding seven-year warrants to purchase (i) 4,800 Units sold in our May 2016 private placement at an exercise price of $25.00 per Unit, (ii) 1,641 Units sold in our February 2017 private placement at an exercise price of $35.00 per Unit, and (iii) 2,400 Units sold in our October 2017 private placement at an exercise price of $25.00 per Unit.  The exercise in full of these warrants to purchase units (including exercise of the warrants underlying these warrants) would result in the issuance of 17,681 additional shares of our common stock at an aggregate exercise price of $474,852.

(7) INCOME TAXES:

The Company reported a net loss for the three months ended March 31, 2023 and 2022, respectively. The Company increased its deferred tax asset valuation allowance rather than recognize an income tax benefit.

(8) EQUITY INCENTIVE PLAN:

On August 29, 2019, the Company’s stockholders approved the Company’s 2019 Omnibus Equity Incentive Plan at a special meeting of stockholders (the “Incentive Plan”). The Incentive Plan provides for the issuance of up to 68,437 shares of common stock pursuant to the grant of shares of common stock, stock options or other awards, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. Options granted under the Incentive Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. As of March 31, 2023, we had awarded 68,437 shares of common stock as awards under the Incentive Plan, with no shares of common stock remaining available for future awards under the Incentive Plan.

On June 24, 2021, the Company’s stockholders approved the Company’s 2021 Equity Incentive Plan at its annual meeting of stockholders (the “2021 Plan”). The 2021 Plan provides for the issuance of up to 3,000,000 shares of common stock pursuant to the grant of shares of common stock, stock options or other awards, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. Options granted under the 2021 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. As of March 31, 2023, we had awarded 95,032 shares of common stock and granted options to purchase 771,527 shares of common stock under the 2021 Plan, with 2,133,441 shares of common stock remaining available for future awards.

During the three months ended March 31, 2023, the Company granted options to purchase (i) and aggregate of 321,631 shares of common stock at exercise prices of $1.28 per share to its officers and employees, vesting over a four-year period in equal monthly installments, (ii) 2,500 shares of common stock to three employees, with an exercise price of $1.28, vesting immediately, and (iii) 3,350 shares of common stock to each of its five non-employee directors, with an exercise price of $1.28, vesting over a one-year period in equal quarterly installments. The options granted during the three months ended March 31, 2023 were valued using the Black Scholes option pricing model using the following assumptions: (i) expected term of 5.00 to 6.25 years; (ii) risk free interest rate of 4.1%%; (iii) expected volatility of 100.3% to 103.6%; and (iv) dividend yield of 0.0%. The weighted-average grant date fair value of the options issued by the Company during the three months ended March 31, 2023 ranged from $0.99 to $1.04 per share.

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CYCLO THERAPEUTICS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(9) NET LOSS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per common share.

	Three Months Ended
	March 31,
	2023			2022
Numerator
Net loss	$	(5,007,085	)	$	(2,771,591	)
Denominator		11,003,588			8,411,798
Weighted-average common shares outstanding, basic and diluted	$	(0.46	)	$	(0.33	)

The Company reported a net loss for the three months ended March 31, 2023, and 2022, therefore, the basic and diluted net loss per share are the same in the respective periods because of the inclusion of potential common shares would have an anti-dilutive effect. Potential shares of common stock that are excluded from the computation of diluted weighted-average shares outstanding are as follows:

	Three Months Ended
	March 31,
	2023		2022
Stock options		771,527		412,263
Warrants		7,419,760		2,048,186

(10) PURCHASE COMMITMENTS:

In connection with an agreement executed in January 2022 with Ashland, Inc., the Company committed to purchase minimum amounts of goods used in its normal operations based on completion of certain milestones. The first milestone was met during the first quarter of 2023, and $980,000 of goods were purchased and received. Future annual minimum purchases remaining under the agreement are $1,960,000.

(11) SUBSEQUENT EVENTS:

On April 20, 2023, the Company, completed a private placement of its securities priced at-the-market under the rules of The Nasdaq Stock Market, Inc., to a group of accredited investors that included several directors of the Company and members of management and their affiliates. Investors in the private placement purchased 1,562,883 shares of common and were issued warrants to purchase 1,562,883 shares of common. The purchase price for one share of common stock and a Warrant to purchase one share of common stock was $0.835. The Warrants have an exercise price of $0.71 and have a term of seven years. The gross proceeds of the private placement were $1,305,000.

On May 2, 2023, the Company completed the private placement of its securities to Rafael Holdings, Inc., a Delaware corporation, in which Rafael Holdings purchased 2,514,970 shares of common stock, and a warrant to purchase an additional 2,514,970 shares of common (the “Warrant”), for an aggregate purchase price of $2,100,000. The Warrant has an exercise price of $0.71 per share, and will not be exercisable until the Company has obtained the approval of its shareholders to the exercise of the Warrant in accordance with Listing Rules 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc. Following the date of such approval, the Warrant will be exercisable for a period of seven years. Pursuant to the Purchase Agreement, the Company (i) entered into a Registration Rights Agreement with Rafael Holdings requiring the Company to file a registration statement with the Securities and Exchange Commission to register the resale of the shares and shares of common stock underlying the Warrants, upon the request of Rafael Holdings, and (ii) appointed William Conkling, the CEO of Rafael Holdings, to the Company’s Board of Directors.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis provides information to explain our results of operations and financial condition.  You should also read our unaudited condensed consolidated interim financial statements and their notes included in this Form 10-Q, and our audited condensed consolidated financial statements and their notes and other information included in our Annual Report on Form 10-K for the year ended December 31, 2022.  This report may contain forward-looking statements. Forward-looking statements within this Form 10-Q are identified by words such as “believes,” “anticipates,” “expects,” “intends,” “may,” “will” “plans” and other similar expressions; however, these words are not the exclusive means of identifying such statements. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.  These forward-looking statements are subject to significant risks, uncertainties and other factors, which may cause actual results to differ materially from those expressed in, or implied by, these forward-looking statements.  Except as expressly required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements to reflect events, circumstances or developments occurring subsequent to the filing of this Form 10-Q with the U.S. Securities and Exchange Commission (the “SEC”) or for any other reason and you should not place undue reliance on these forward-looking statements.  You should carefully review and consider the various disclosures the Company makes in this report and our other reports filed with the SEC that attempt to advise interested parties of the risks, uncertainties and other factors that may affect our business.  All amounts presented herein are rounded to nearest $1,000.

Overview

We are a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. We filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for our lead drug candidate, Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease (“NPC”). NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, we launched an International Clinical Program for Trappsol® Cyclo™ as a treatment for NPC. In 2016, we filed an Investigational New Drug application (“IND”) with the FDA, which described our Phase I clinical plans for a randomized, double blind, parallel group study at a single clinical site in the U.S. The Phase I study evaluated the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older. The IND was approved by the FDA in September 2016, and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 we announced Top Line data showing a favorable safety and tolerability profile for Trappsol® Cyclo™ in this study.

We have also completed a Phase I/II clinical study approved by European regulatory bodies with clinical trial centers in the United Kingdom, Sweden, and in Israel. The Phase I/II study evaluated the safety, tolerability and efficacy of Trappsol® Cyclo™ through a range of clinical outcomes, including neurologic, respiratory, and measurements of cholesterol metabolism and markers of NPC. Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol® Cyclo™ intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses). In March of 2021 we announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale.

Additionally, in February 2020 we had a face-to-face “Type C” meeting with the FDA with respect to the initiation of our pivotal Phase III clinical trial of Trappsol® Cyclo™ based on the clinical data obtained to date. At that meeting, we also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol® Cyclo™. A similar request was submitted to the European Medicines Agency (“EMA”) in February 2020, seeking scientific advice and protocol assistance from the EMA for proceeding with a Phase III clinical trial in Europe. In October 2020 we received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021 we commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol® Cyclo™ for the treatment of NPC.

Preliminary data from our completed clinical studies suggest that Trappsol® Cyclo™ clears toxic deposits of cholesterol and other lipids from cells, has a consistent pharmacokinetic profile peripherally, and crosses the blood-brain-barrier in individuals suffering from NPC, and results in neurological and neurocognitive benefits and other clinical improvements in NPC patients. The full significance of these findings will be determined as part of the final analysis of data derived from our clinical trials (both completed and ongoing).

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On May 17, 2010, the FDA designated Trappsol® Cyclo™ as an orphan drug for the treatment of NPC, which would provide us with the exclusive right to sell Trappsol® Cyclo™ for the treatment of NPC for seven years following FDA drug approval. In April 2015, we also obtained Orphan Drug Designation for Trappsol® Cyclo™ in Europe, which will provide us with 10 years of market exclusivity following regulatory approval, which period will be extended to 12 years upon acceptance by the EMA’s Pediatric Committee of our pediatric investigation plan (PIP) demonstrating that Trappsol® Cyclo™ addresses the pediatric population. On January 12, 2017, we received Fast Track Designation from the FDA, and on December 1, 2017, the FDA designated NPC a Rare Pediatric Disease.

We are also exploring the use of cyclodextrins in the treatment of Alzheimer’s disease.  In January 2018, the FDA authorized a single patient IND expanded access program using Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. After 18 months of treatment in this geriatric patient with late-onset disease, the disease was stabilized, and the drug was well tolerated. The patient also exhibited signs of improvement with less volatility and shorter latency in word-finding. We prepared a synopsis for an early-stage protocol using Trappsol® Cyclo™ intravenously to treat Alzheimer’s disease that was presented to the FDA in January of 2021. We received feedback from the FDA on this synopsis in April 2021 and incorporated the feedback into an IND for a Phase II study for the treatment of Alzheimer’s disease with of Trappsol® Cyclo™ that we submitted to the FDA in November 2021. In December of 2021, we received IND clearance from the FDA, allowing us to proceed with our Phase II study of Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. U.S. sites for the study were activated during the second half of 2022, with patient dosing beginning in the first quarter of 2023.

We filed an international patent application in October 2019 under the Patent Cooperation Treaty directed to the treatment of Alzheimer’s disease with cyclodextrins, and we are pursuing national and regional stage applications based on this international application. The terms of any patents resulting from these national or regional stage applications would be expected to expire in 2039 if all the requisite maintenance fees are paid.

We also continue to operate our legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin- based biopharmaceuticals for the treatment of disease from a business that had been primarily reselling basic cyclodextrin products.

Results of Operations - Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

We reported a net loss of approximately $5,007,085 for the three months ended March 31, 2023, compared to a net loss of approximately $2,772,000 for the three months ended March 31, 2022.

Total revenues for the three month period ended March 31, 2023 decreased 23% to approximately $150,000 compared to approximately $195,000 for the same period in 2022. Our change in the mix of our product sales for the three months ended March 31, 2023 and 2022 is as follows:

Trappsol® Cyclo HPBCDs

First and second-generation formulations of Trappsol® Cyclo™ HPBCD (in liquid and powder form) have been sold to a single customer who exports to Brazil for compassionate use in NPC patients. We sold approximately $53,000 of Trappsol® Cyclo™ for the three month period ended March 31, 2023. We did not sell any of this product for the three month period ended March 31, 2022. This product is designated as an orphan drug; the population of patients who use the product on a compassionate basis is small.  

Trappsol® HPB

Our sales of Trappsol® HPB increased by 32% for the three month period ended March 31, 2023, to approximately $86,000 from approximately $65,000 for the three months ended March 31, 2022.

Trappsol® other products

Our sales of other Trappsol® other products decreased by 98% for the three month period ended March 31, 2023, to approximately $3,000 from approximately $130,000 for the three months ended March 31, 2022.

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Aquaplex®

Our sales of Aquaplex® for the three month period ended March 31, 2023 were approximately $10,000, as compared to sales of Aquaplex® for the three months ended March 31, 2022 of approximately $1,000.

The largest customers for our legacy fine chemical business continue to follow historical product ordering trends by placing periodic large orders that represent a significant share of our annual sales volume. During the three months ended March 31, 2023, our three largest customers accounted for 76% of our sales; the largest accounted for 32% of sales. During the three months ended March 31, 2022, our four largest customers accounted for 75% of our sales; the largest accounted for 25% of sales. Historically, our usual smaller sales of HPB occur more frequently throughout the year compared to our large sales that we receive periodically. The timing of when we receive and are able to complete these two kinds of sales has a significant effect on our quarterly revenues and operating results and makes period to period comparisons difficult.

Our cost of products sold (excluding any allocation of direct and indirect overhead and handling costs) for the three month period ended March 31, 2023 decreased 38% to approximately $10,000 from approximately $16,000 for the same period in 2022. Our cost of products sold (excluding any allocation of direct and indirect overhead and handling costs) as a percentage of sales was 7% for the three months ended March 31, 2023 and 8% for the three months ended March 31, 2022. Historically, the timing and product mix of sales to our large customers has had a significant effect on our sales, cost of products sold (excluding any allocation of direct and indirect overhead and handling costs) and the related margin. We did not experience any significant increases in material costs during 2022, or the first three months of 2023.

Our gross margins may not be comparable to those of other entities, since some entities include all the costs related to their distribution network in cost of goods sold. Our cost of goods sold includes only the cost of products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation expense. Our employees provide receiving, inspection, warehousing and shipping operations for us. The cost of our employees is included in personnel expense. Our other costs of warehousing and shipping functions are included in office and other expense.

As we buy inventory from foreign suppliers, the change in the value of the U.S. dollar in relation to the Euro, Yen and Yuan has an effect on our cost of inventory. Our main supplier of specialty cyclodextrins and complexes, Cyclodextrin Research & Development Laboratory, is located in Hungary and its prices are set in Euros. The cost of our bulk inventory often changes due to fluctuations in the U.S. dollar. The cost of shipping from outside the U.S. also has a significant effect on our inventory acquisition costs. When we experience short-term increases in currency fluctuation or supplier price increases, we are often not able to raise our prices sufficiently to maintain our historical margins.  Therefore, our margins on these sales may decline. 

Personnel expenses decreased by 25%, to approximately $907,000 for the three months ended March 31, 2023 from approximately $1,217,000 for the three months ended March 31, 2022. The decrease in personnel is due to the reallocation of personnel time from salaries to R&D expenses. We expect to maintain our level of employees and related costs in the near term.

Research and development expenses increased 213% to approximately $3,398,000 for the three months ended March 31, 2023, from approximately $1,084,000 for the three months ended March 31, 2022. Research and development expenses as a percentage of our total operating expenses increased to 66% for the three months ended March 31, 2023 from 35% for the three months ended March 31, 2022. The increase in research and development expense resulted from the increased activity in our Phase III study of Trappsol® Cyclo™ for the treatment of NPC in the more recent period.

Professional fees increased 17% to approximately $483,000 for the three months ended March 31, 2023, compared to approximately $412,000 for the three months ended March 31, 2022. Professional fees may continue to increase in the future due to new initiatives in raising capital and the continuation of product development.

Office and other expenses decreased 4% to approximately $282,000 for the three months ended March 31, 2023, compared to approximately $294,000 for the three months ended March 31, 2022 due primarily to a decrease in investor relations costs.

We increased our valuation allowance to offset the increase in our deferred tax asset from our net operating loss and did not recognize an income benefit or provision for the three months ended March 31, 2023, and 2022, respectively.

- 18 -

Liquidity and Capital Resources

Our cash decreased to approximately $915,176 as of March 31, 2023, compared to approximately $1,543,000 as of  December 31, 2022. We had negative working capital of approximately $506,000 as of March 31, 2023, compared to positive working capital of approximately $678,000 at December 31, 2022. Cash used in operations was $4,370,239 for the three months ended March 31, 2023, compared to approximately $4,830,000 for the same period in 2022.

The Company has continued to realize losses from operations. However, as a result of our recent public offerings, we believe we will have sufficient cash to meet our anticipated operating costs and capital expenditure requirements for at least the next 12 months. We will need to raise additional capital in the future to support our ongoing operations and continue our clinical trials. We expect to continue to raise additional capital through the sale of our securities from time to time for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. There can be no guarantee that the Company will be successful in its ability to raise capital to fund future operational and development initiatives.

Our condensed consolidated financial statements for the three months ended March 31, 2023 and the year ended December 31, 2022 were prepared on the basis of a going concern, which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above.

At December 31, 2022, we had approximately $42,395,000 in net state and federal operating loss carryforwards expiring from 2024 through 2037, including $33,997,000 that will not expire, that can be used to offset our current and future taxable net income and reduce our income tax liabilities. We have provided a 100% valuation allowance on our deferred tax asset based on our expected future expenses related to our clinical trials and other development initiatives. 

We had no off-balance sheet arrangements as of March 31, 2023.

Critical Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the U.S. The preparation of these financial statements requires us to make judgments, 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 as well as the reported revenue and expenses during the reporting periods. We continually evaluate our judgments, estimates and assumptions. We base our estimates on the terms of underlying agreements, our expected course of development, historical experience and other factors we believe are reasonable based on the circumstances, the results of which form our management’s basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

There were no significant changes to our critical accounting policies during the quarter ended March 31, 2023. For information about critical accounting policies, see the discussion of critical accounting policies in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 4. Controls and Procedures.

a.  Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our principal executive and principal financial officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) as of the end of the period covered by this report (the "Evaluation Date"). Due to the material weaknesses in internal control over financial reporting as described below, our management, with the participation of our principal executive financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were not effective as of March 31, 2023. 

b. Material Weakness over Complex Equity Instruments

During the preparation of our interim condensed consolidated financial statements for the period ended March 31, 2023, we identified a material weakness in our internal controls relating to the accounting of complex equity instruments. Specifically, the controls related to the evaluation of the appropriate accounting classification of warrants as equity classified.

c. Changes in Internal Control.

We made no changes in our internal control over financial reporting (as defined in Rules 13a-15(f)) and 15d-15(f) under the Exchange Act) identified in connection with the evaluation of our internal controls that occurred during our last fiscal quarter that has materially affected, or which is reasonably likely to materially affect, our internal controls over financial reporting.

- 19 -

PART II. OTHER INFORMATION

Item 1A. Risk Factors.

We have identified no additional risk factors other than those included in our Annual Report on Form 10-K for our year ended December 31, 2022 that we filed with the Securities and Exchange Commission on March 17, 2023.  Readers are urged to carefully review our risk factors because they may cause our results to differ from the "forward-looking" statements made in this report. Additional risks not presently known to us or other factors not perceived by us to present significant risks to our business at this time also may impair our business, financial condition and results of operations.  We do not undertake to update any of the "forward-looking" statements or to announce the results of any revisions to these "forward-looking" statements except as required by law.

Item 6. Exhibits.

EXHIBIT NO.	DESCRIPTION
3.1	Articles of Incorporation of Cyclo Therapeutics, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 10, 2020).
3.2	Certificate of Amendment to Articles of Incorporation of Cyclo Therapeutics, Inc., filed June 24, 2021 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on June 24, 2021).
3.3	Certificate of Amendment to Articles of Incorporation of Cyclo Therapeutics, Inc. filed March 7, 2023 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on March 8, 2023).
3.4	Bylaws of Cyclo Therapeutics, Inc., a Nevada corporation (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on November 10, 2020).
31.1	Rule 13a-14(a)/15d-14a(a) Certification of Chief Executive Officer
31.2	Rule 13a-14(a)/15d-14a(a) Certification of Chief Financial Officer
32.1	Section 1350 Certification of Chief Executive Officer
32.2	Section 1350 Certification of Chief Financial Officer

101.INS	Inline XBRL Instance 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 and contained in Exhibit 101)

- 20 -

SIGNATURES

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

	CYCLO THERAPEUTICS, INC.
Date:  May 12, 2023	By:	/s/ N. Scott Fine
		N. Scott Fine
		Chief Executive Officer
		(principal executive officer)

Date:  May 12, 2023	By:	/s/ Joshua M. Fine
		Joshua M. Fine
		Chief Financial Officer
		(principal financial and accounting officer)

- 21 -

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, N. Scott Fine, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cyclo Therapeutics, Inc.;

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 condensed 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:  May 12, 2023	By:	/s/ N. Scott Fine
		N. Scott Fine
		Chief Executive Officer
		(principal executive officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Joshua M. Fine, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Cyclo Therapeutics, Inc.;

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 condensed 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:  May 12, 2023	By:	/s/ Joshua M. Fine
		Joshua M. Fine
		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 this Quarterly Report on Form 10-Q of Cyclo Therapeutics, Inc. (the “Company”) for the fiscal quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, N. Scott Fine, certify, pursuant to 18 U.S.C. §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:  May 12, 2023	/s/ N. Scott Fine
	N. Scott Fine
	Chief Executive Officer
	(principal executive, financial and accounting officer)

EX-32.2

EXHIBIT 32.2

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 this Quarterly Report on Form 10-Q of Cyclo Therapeutics, Inc. (the “Company”) for the fiscal quarter ended March 31, 2023, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Joshua M. Fine, certify, pursuant to 18 U.S.C. §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:  May 12, 2023	/s/ Joshua M. Fine
	Joshua M. Fine
	Chief Financial Officer
	(principal financial and accounting officer)

XML

Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2023	May 11, 2023
Document Information [Line Items]
Entity Central Index Key	0000922247
Entity Registrant Name	Cyclo Therapeutics, Inc.
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2023
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	0-25466
Entity Incorporation, State or Country Code	NV
Entity Tax Identification Number	59-3029743
Entity Address, Address Line One	6714 NW 16th Street, Suite B
Entity Address, City or Town	Gainesville
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	32653
City Area Code	386
Local Phone Number	418-8060
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		15,168,397
Warrants To Purchase Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Warrants to purchase Common Stock
Trading Symbol	CYTHW
Security Exchange Name	NASDAQ
Common Stock [Member]
Document Information [Line Items]
Title of 12(b) Security	Common Stock, par value $.0001 per share
Trading Symbol	CYTH
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Mar. 31, 2023	Dec. 31, 2022
CURRENT ASSETS
Cash and cash equivalents	$ 915,176	$ 1,543,418
Accounts receivable, net	131,224	54,991
Inventory, net	244,497	254,491
Prepaid insurance and services	188,638	101,135
Prepaid clinical expenses	2,513,923	2,204,520
Total current assets	3,993,458	4,158,555
FURNITURE AND EQUIPMENT, NET	50,369	55,188
RIGHT-TO-USE LEASE ASSET, NET	53,393	1,470
TOTAL ASSETS	4,097,220	4,215,213
CURRENT LIABILITIES
Current portion of lease liability	16,969	0
Accounts payable and accrued expenses	4,482,600	3,480,669
Total current liabilities	4,499,569	3,480,669
LONG-TERM LIABILITIES
Lease liability, net of current portion	36,527	0
Total long-term liabilities	36,527	0
STOCKHOLDERS' EQUITY (DEFICIT)
Common stock, par value $.0001 per share, 50,000,000 and 20,000,000 shares authorized, 10,053,544 and 8,481,848 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	1,056	849
Preferred stock, par value $.0001 per share, 5,000,000 shares authorized, 0 outstanding	0	0
Additional paid-in capital	68,366,532	64,533,074
Accumulated deficit	(68,806,464)	(63,799,379)
Total stockholders' equity (deficit)	(438,876)	734,544
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)	$ 4,097,220	$ 4,215,213

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - $ / shares	Mar. 31, 2023	Dec. 31, 2022
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	50,000,000	20,000,000
Common stock, shares issued (in shares)	10,053,544	8,481,848
Common stock, shares outstanding (in shares)	10,053,544	8,481,848
Preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred Stock, Shares Outstanding (in shares)	0	0

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
REVENUES
Product sales	$ 152,411	$ 194,904
EXPENSES
Personnel	906,955	1,216,905
Cost of products sold (exclusive of direct and indirect overhead and handling costs)	10,196	16,464
Research and development	3,398,167	1,084,052
Repairs and maintenance	1,252	4,323
Professional fees	482,835	412,055
Office and other	282,375	294,176
Board of Directors fees and costs	72,125	92,125
Depreciation	4,819	4,741
Freight and shipping	819	4,520
Total operating expenses	5,159,543	3,129,361
LOSS FROM OPERATIONS	(5,007,132)	(2,934,457)
OTHER INCOME
Investment and other income	47	4,342
Gain on forgiveness of PPP loan	(0)	158,524
Total other income	47	162,866
LOSS BEFORE INCOME TAXES	(5,007,085)	(2,771,591)
PROVISION FOR INCOME TAXES	0	0
NET LOSS	$ (5,007,085)	$ (2,771,591)
BASIC AND DILUTED NET LOSS PER COMMON SHARE (in dollars per share)	$ (0.46)	$ (0.33)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (in shares)	11,003,588	8,411,798
Paycheck Protection Program CARES Act [Member]
OTHER INCOME
Gain on forgiveness of PPP loan	$ 0	$ 158,524

XML

Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($)	Share-Based Payment Arrangement, Nonemployee [Member] Common Stock [Member]	Share-Based Payment Arrangement, Nonemployee [Member] Additional Paid-in Capital [Member]	Share-Based Payment Arrangement, Nonemployee [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2021				8,403,869
Balance at Dec. 31, 2021				$ 841	$ 64,019,513	$ (48,348,491)	$ 15,671,863
Stock-based compensation				$ 0	106,738	0	106,738
Net loss						(2,771,591)	(2,771,591)
Stock issued to nonemployees (in shares)	11,327
Stock issued to nonemployees	$ 1	$ 41,003	$ 41,004
Balance (in shares) at Mar. 31, 2022				8,415,196
Balance at Mar. 31, 2022				$ 842	64,167,254	(51,120,082)	13,048,014
Balance (in shares) at Dec. 31, 2022				8,481,848
Balance at Dec. 31, 2022				$ 849	64,533,074	(63,799,379)	734,544
Sale of common stock and accompanying pre-funded warrants, net (in shares)				930,000
Sale of common stock and accompanying pre-funded warrants, net				$ 93	3,741,790	0	3,741,883
Exercise of warrants (in shares)				1,141,696
Exercise of warrants				$ 114	0	0	114
Stock-based compensation				$ 0	91,668	0	91,668
Net loss						(5,007,085)	(5,007,085)
Balance (in shares) at Mar. 31, 2023				10,553,544
Balance at Mar. 31, 2023				$ 1,056	$ 68,366,532	$ (68,806,464)	$ (438,876)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Net Income (Loss) Attributable to Parent	$ (5,007,085)	$ (2,771,591)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	4,819	4,741
Gain on forgiveness of PPP loan	0	(158,524)
Stock-based compensation	91,668	106,738
Stock compensation to nonemployees	0	41,004
Increase or decrease in:
Accounts receivable, net	(76,233)	374,738
Inventory, net	9,994	6,381
Prepaid clinical expenses	(309,403)	(1,426,434)
Prepaid insurance and services	(87,503)	(189,368)
Other	1,573	(1,537)
Accounts payable and accrued expenses	1,001,931	(816,397)
Total adjustments	636,846	(2,058,658)
NET CASH USED IN OPERATING ACTIVITIES	(4,370,239)	(4,830,249)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of equipment	0	(4,600)
Collections from mortgage note receivable	0	13,916
NET CASH PROVIDED BY INVESTING ACTIVITIES	0	9,316
CASH FLOWS FROM FINANCING ACTIVITIES
Net from the sale of warrants	2,407,849	0
Net proceeds from sale of stock	1,334,034
Exercise of warrants	114
Payments on PPP loan	0	(8,159)
NET CASH PROVIDED BY FINANCING ACTIVITIES	3,741,997	6,778
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(628,242)	(4,814,155)
CASH AND CASH EQUIVALENTS, beginning of period	1,543,418	16,612,711
CASH AND CASH EQUIVALENTS, end of period	915,176	11,798,556
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	1,730	0
Paycheck Protection Program CARES Act [Member]
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on forgiveness of PPP loan	0	(158,524)
CASH FLOWS FROM FINANCING ACTIVITIES
Refund of PPP loan payments	$ 0	$ 14,937

XML

Note 1 - Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Significant Accounting Policies [Text Block]

(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The following is a summary of the more significant accounting policies of Cyclo Therapeutics, Inc. (the “Company,” “we,” “our” or “us”) that affect the accompanying condensed consolidated financial statements:

(a) ORGANIZATION AND OPERATIONS–– The Company was incorporated in August 1990 as a Florida corporation, under the name Cyclodextrin Technologies Development, Inc. with operations beginning in July 1992. In conjunction with a restructuring in 2000, we changed our name to CTD Holdings, Inc. We changed our name to Cyclo Therapeutics, Inc. in September 2019 to better reflect our current business and on November 6, 2020, we reincorporated from the State of Florida to the State of Nevada.

We are a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. We filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for our lead drug candidate, Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease (“NPC”). NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, we launched an International Clinical Program for Trappsol® Cyclo™ as a treatment for NPC. In 2016, we filed an Investigational New Drug application (“IND”) with the FDA, which described our Phase I clinical plans for a randomized, double blind, parallel group study at a single clinical site in the U.S. The Phase I study evaluated the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older. The IND was approved by the FDA in September 2016, and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 we announced Top Line data showing a favorable safety and tolerability profile for Trappsol® Cyclo™ in this study.

We have also completed a Phase I/II clinical study approved by European regulatory bodies with clinical trial centers in the United Kingdom, Sweden, and in Israel. The Phase I/II study evaluated the safety, tolerability and efficacy of Trappsol® Cyclo™ through a range of clinical outcomes, including neurologic, respiratory, and measurements of cholesterol metabolism and markers of NPC. Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol® Cyclo™ intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses). In March of 2021 we announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale.

Additionally, in February 2020 we had a face-to-face “Type C” meeting with the FDA with respect to the initiation of our pivotal Phase III clinical trial of Trappsol® Cyclo™ based on the clinical data obtained to date. At that meeting, we also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol® Cyclo™. A similar request was submitted to the European Medicines Agency (“EMA”) in February 2020, seeking scientific advice and protocol assistance from the EMA for proceeding with a Phase III clinical trial in Europe. In October 2020 we received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021 we commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol® Cyclo™ for the treatment of NPC.

We are also exploring the use of cyclodextrins in the treatment of Alzheimer’s disease. In January 2018, the FDA authorized a single patient IND expanded access program using Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. After 18 months of treatment in this geriatric patient with late-onset disease, the disease was stabilized and the drug was well tolerated. The patient also exhibited signs of improvement with less volatility and shorter latency in word-finding. We prepared a synopsis for an early stage protocol using Trappsol® Cyclo™ intravenously to treat Alzheimer’s disease that was presented to the FDA in January of 2021. We received feedback from the FDA on this synopsis in April 2021 and incorporated the feedback into an IND for a Phase II study for the treatment of Alzheimer’s disease with of Trappsol® Cyclo™ that we submitted to the FDA in November 2021. In December of 2021, we received IND clearance from the FDA, allowing us to proceed with our Phase II study of Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. U.S. sites for the study were activated during the second half of 2022, and patient dosing began in the first quarter of 2023.

We also continue to operate our legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin- based biopharmaceuticals for the treatment of disease from a business that had been primarily reselling basic cyclodextrin products.

(b) BASIS OF PRESENTATION––The condensed consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The interim condensed consolidated financial statements of the Company included in this Quarterly Report on Form 10-Q, including these notes, are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments are of a normal, recurring nature. The condensed consolidated financial statements, and these notes, have been prepared in accordance with Generally Accepted Accounting Principles and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The condensed consolidated financial statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

(c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original purchased maturity of three months or less.

(d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Customer account balances with invoices dated over 90 days old are considered past due. The Company does not accrue interest on past due accounts. Customer payments are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, applied to the oldest unpaid invoices.

The carrying amount of accounts receivable is reduced by an allowance for credit losses that reflects management’s best estimate of expected credit losses. The Company reviews each customer balance where all or a portion of the balance exceeds 90 days from the invoice date. Based on the Company’s assessment of the customer's current and forecasted creditworthiness, the Company estimates the portion, if any, of the balance that will not be collected, and writes off receivables as a charge to the allowance for credit losses when, in management’s estimation, it is probable that the receivable is worthless. The Company has estimated an allowance for doubtful accounts of $10,300 at March 31, 2023 and December 31, 2022.

(e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. The Company records a specific reserve for inventory items that are determined to be obsolete. The reserve for obsolete inventory was approximately $52,900 at March 31, 2023 and December 31, 2022.

The Company’s reserve for obsolete inventory is based on the Company’s best estimates of product sales and customer demands. It is reasonably possible that the estimates used by the Company to determine its provisions for inventory write-downs will be materially different from actual write-downs. These differences could result in materially higher than expected inventory provisions and related costs, which could have a materially adverse effect on the Company’s results of operations and financial condition in the near term.

(f) PREPAID CLINICAL EXPENSES––Prepaid clinical expenses consist of our pharmaceutical drug Trappsol® Cyclo™ expected to be used in our clinical trial program recorded at cost. In addition, advance payments for goods or services for future research and development activities are included as prepaid clinical expenses. Prepaid clinical expenses are expensed as research and development costs as the goods are delivered or the related services are performed.

(g) FURNITURE AND EQUIPMENT––Furniture and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers and vehicles and seven to ten years for machinery, equipment and office furniture). We periodically review our long-lived assets to determine if the carrying value of assets may not be recoverable. If an impairment is identified, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset. 

(h) LEASES––The Company leases office and warehouse space.  The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities on the Company’s condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. 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 for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In evaluating contracts to determine if they qualify as a lease, the Company considers factors such as if the Company has obtained substantially all of the rights to the underlying asset through exclusivity, if it can direct the use of the asset by making decisions about how and for what purpose the asset will be used and if the lessor has substantive substitution rights. This evaluation may require significant judgment.

(i) REVENUE RECOGNITION––Revenues are recognized when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under Accounting Standard Codification (“ASC”) Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Product revenues

In the U.S., we sell our products to the end user or wholesale distributors. In other countries, we sell our products primarily to wholesale distributors and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients.

Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial.  We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers.  The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation.

Reserves for Discounts and Allowances

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

For additional information on our revenues, please read Note 2, Revenues, to these condensed consolidated financial statements.

(j) SHIPPING AND HANDLING FEES––Shipping and handling fees, if billed to customers, are included in product sales. Shipping and handling costs associated with inbound and outbound freight are expensed as incurred and included in freight and shipping expense.

(k) ADVERTISING––Advertising costs are charged to operations when incurred. We incur minimal advertising expenses.

(l) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred. Research and development expenses primarily consist of product development, third-party contractors, salaries and materials.

(m) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.  As of March 31, 2023, and December 31, 2022, the Company has recorded a full valuation allowance against its deferred tax assets.

(n) NET LOSS PER COMMON SHARE–– Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented, as outstanding warrants to purchase 7,419,760 and 2,048,186 common shares were antidilutive for the three months ended March 31, 2023 and March 31, 2022, respectively. Additionally, outstanding options to purchase 771,527 and 412,263 shares of common stock were antidilutive for the three months ended March 31, 2023 and March 31, 2022, respectively.

(o) STOCK-BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. In the case of employees and consultants, an expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date. With respect to directors, the Company accrues stock compensation expense on a quarterly basis based on the Company’s historical director compensation policies, and each quarter recognizes such expense based on the trading price of the common stock during such quarter. This expense is then trued up at the time the shares are issued to directors based on the trading price at the time of issuance.

The Company periodically issues stock options under its 2021 Equity Incentive Plan. The Company uses the Black-Scholes valuation method to estimate the fair value of stock options at grant date. Compensation expense is recognized on the straight-line basis over the requisite service period, which is generally the vesting period.

(p) FAIR VALUE MEASUREMENTS AND DISCLOSURES––The Fair Value Measurements and Disclosures topic of the Accounting Standards Codification (“ASC”) requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. The Fair Value Measurements and Disclosures topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

● Level 1: Quoted market prices in active markets for identical assets or liabilities.

● Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

● Level 3: Unobservable inputs that are not corroborated by market data.

We have no assets or liabilities required to have their fair value measured on a recurring basis at March 31, 2023 and December 31, 2022. Long-lived assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments when there is evidence of impairment.

For short-term classes of our financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, and which are not reported at fair value, the carrying amounts approximate fair value due to their short-term nature. 

(q) USE OF ESTIMATES––The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions, including regarding contingencies, that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company’s most significant estimates relate to inventory obsolescence, stock-based compensation and warrant liability valuation. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

(r) RECENT ACCOUNTING PRONOUNCEMENTS––In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses” (Topic 326), which provides guidance on how an entity should measure credit losses on financial instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The ASU is effective for smaller reporting company’s in the first quarter of 2023. The Company adopted the new guidance as of January 1, 2023, and it did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has adopted this standard as of January 1, 2023, and determined no material impact on its condensed consolidated financial statements.

(s) WARRANTS––The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants considering the authoritative guidance in  ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and satisfy additional conditions for equity classification. Warrants that are liability-classified are measured at fair value at each reporting date in accordance with the guidance in ASC 820, “Fair Value Measurement,” with any subsequent changes in fair value recognized in the statement of operations in the period of change. The fair value of liability classified warrants was not material at March 31, 2023, and December 31, 2022.

(t) LIQUIDITY AND GOING CONCERN––For the three months ended March 31, 2023, the Company incurred a net loss of approximately $5,007,085. The Company has an accumulated deficit of approximately $68,806,464 at March 31, 2023. Our recent losses have predominantly resulted from research and development expenses for our Trappsol® Cyclo™ product and other general operating expenses, including personnel expenses and board advisory fees. We believe our expenses will continue to increase as we continue to conduct clinical trials and seek regulatory approval for the use of Trappsol® Cyclo™ in the treatment of NPC and Alzheimer’s disease.

For three months ended March 31, 2023, the Company’s operations used $4,370,239 in cash, and at March 31, 2023, the Company had a cash balance of $915,176 and negative working capital of approximately $506,100.  We will need to raise additional capital for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. As further discussed in Note 11, subsequent to quarter-end, the Company generated gross proceeds of approximately $3,405,000 from the sale of securities in private placements of the Company’s securities.

We intend to continue to raise such capital through the sale of equity securities from time to time, the issuance of debt securities, the sale or licensing of existing assets or assets in development, or from other non-dilutive funding mechanisms. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. If we cannot raise the additional funds required for our anticipated operations, we may be required to reduce the scope of or eliminate our research and development programs, delay our clinical trials and the ability to seek regulatory approvals, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency. If we raise additional funds through future offerings of shares of our Common Stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our Common Stock.

Our condensed consolidated financial statements for the three months ended March 31, 2023 were prepared on the basis of a going concern, which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

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Note 2 - Revenues

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

(2) REVENUES:

The Company operates in one business segment, which primarily focuses on the development and commercialization of innovative cyclodextrin-based products for the treatment of people with serious and life-threatening rare diseases and medical conditions. However, substantially all of the Company’s revenues are derived from the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs.  Currently, a small portion of the Company’s revenues is generated by sales of Trappsol® Cyclo™ to South America (Brazil) for the treatment of NPC patients.

(2) REVENUES: (CONTINUED)

The Company considers there to be revenue concentration risks for regions where net product revenues exceed 10% of condensed consolidated net product revenues. The concentration of the Company’s net product revenues within the regions below may have a material adverse effect on the Company’s revenues and results of operations if sales in the respective regions experience difficulties.

Revenues by product are summarized as follows:

	Three Months Ended
	March 31,
	2023		2022
Trappsol® Cyclo™	$	53,384	$	-
Trappsol® HPB		85,984		64,573
Trappsol® Fine Chemical		3,239		129,703
Aquaplex®		9,804		628
Total revenues	$	152,411	$	194,904

Substantially all of our sales of Trappsol® Cyclo™ for the three months ended March 31, 2023 were to a single customer who exports the drug to South America. Substantially all of our Aquaplex® sales for the three months ended March 31, 2023 and March 31, 2022 were to one customer.

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Note 3 - Major Customers and Suppliers

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Major Customers and Suppliers Disclosure [Text Block]

(3) MAJOR CUSTOMERS AND SUPPLIERS:

Our revenues are derived primarily from chemical supply and pharmaceutical companies located primarily in the United States. For the three months ended March 31, 2023 three major customers accounted for 76% of total revenues. For the three months ended March 31, 2022, four major customers accounted for 75% of total revenues.

There were no inventory purchases during the three months ended March 31, 2023. Substantially all inventory purchases were from three vendors in 2022 and 2021. These vendors are located primarily outside the United States.

We have three sources for our Aquaplex® products. There are multiple sources for our Trappsol® products.

For the three months ended March 31, 2023, the product mix of our revenues consisted of 94% basic natural and chemically modified cyclodextrins and 6% cyclodextrin complexes. For the three months ended March 31, 2022 the product mix of our revenues consisted of 99.7% basic natural and chemically modified cyclodextrins and .3% cyclodextrin complexes.

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Note 4 - Note Payable

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Debt Disclosure [Text Block]

(4) NOTE PAYABLE:

On May 4, 2020, the Company’s wholly owned subsidiary, Cyclodextrin Technologies Development, Inc., borrowed $158,524 from BBVA USA under the Paycheck Protection Program (PPP) which was established under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”). The loan matured on May 4, 2022 and bore interest at a rate of 1% per annum, payable monthly commencing on September 5, 2021.

Under the Paycheck Protection Program, because the loan was used to fund certain qualifying expenses as described in the CARES Act, the full amount of the loan, including accrued interest was forgiven in March 2022. As a result, the balance forgiven is presented separately as gain on the forgiveness of PPP loan in the accompanying condensed consolidated statement of operations.

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Note 5 - Leases

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

(5) LEASES

The Company entered in an operating lease in January 2023 for office and warehouse space, which has a lease term expiring in January 2026, with an option to extend for an additional three years. As it is not reasonably certain the Company will exercise the option to extend, the additional three years have not been included in the lease term.  This lease replaced an existing operating lease which expired in January 2023. Right-of-use assets are recorded net of accumulated amortization, which was $4,256 as of March 31, 2023.  Lease expense for lease payments are recognized on a straight-line basis over the lease term.  Lease expense for the three months ended March 31, 2023 and 2022 was $9,535 and 7,397, respectively. 

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Note 6 - Equity Transactions

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Equity [Text Block]

(6) EQUITY TRANSACTIONS:

On March 3, 2023, following the approval of the Company’s stockholders at a special meeting, the Company’s Articles of Incorporation were amended to increase the number of authorized shares of common stock from 20,000,000 to 50,000,000.

The Company accrues stock compensation expense over the period earned for employees and board members. Stock compensation expense for board members is included in “Board of Directors fees and costs” on our condensed consolidated statement of operations, and stock compensation expense for officers and employees that are not board members is included in “Personnel” on our condensed consolidated statement of operations. In the three ended March 31, 2023, the Company recognized compensation expense of $30,750 to board members. As of March 31, 2023, accrued compensation to board members totaled $61,500. In the three months ended March 31, 2022, the Company issued 11,327 shares to board members with a value of $41,004, at the time of issuance, with respect to which compensation expense in that period had been accrued as of December 31, 2021. The Company did not issue shares to employees in the three month periods ended March 31, 2023 and 2022.

On January 3, 2023, the Company sold to an institutional investor in a registered direct offering 930,000 shares of common stock at a purchase price per share of $1.61, and prefunded warrants to purchase up to an aggregate of 1,678,696 shares of common stock at a purchase price of $1.61 per pre-funded warrant. The pre-funded warrants have an exercise price of $0.0001 per share and remain exercisable until exercised in full. In a concurrent private placement, the Company also issued to the investor Series A-1 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of five years from the date of issuance, and Series A-2 warrants to purchase up to 2,608,696 shares of common stock at an exercise price of $1.36 per share, exercisable for a period of three years from the date of issuance. The net proceeds from the registered direct offering were approximately $3.7 million after deducting fees due to the placement agent in the offering. A holder of pre-funded warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 9.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise. A holder of pre-funded warrants may increase or decrease this percentage, but not in excess of 9.99%, by providing at least 61 days’ prior notice to the Company. A holder of the Series A-1 and Series A-2 warrants may not exercise the warrant if the holder, together with its affiliates, would beneficially own more than 4.99% of the number of shares of common stock outstanding immediately after giving effect to such exercise, and may increase or decrease this percentage, but not in excess of 9.99%, by providing at least 61 days’ prior notice to the Company.

The Company classified the fair value of the warrants as equity because they are indexed to its own stock and meet the conditions necessary for equity classification in accordance with the guidance in ASC Subtopic 815-40 on derivatives and hedging.

H.C. Wainwright & Co., LLC acted as placement agent to the Company in connection with the registered direct offering and concurrent private placement and was paid a cash fee equal to 7.5% of the gross proceeds of the offering, a management fee equal to 1.0% of the gross proceeds of the offering, and was reimbursed by the Company for its non-accountable expenses in the amount of $35,000, for fees and expenses of its legal counsel, for other out-of-pocket expenses in the amount of $50,000, and for its clearing expenses in the amount of $15,950. The Company also issued to designees of the placement agent five-year warrants to purchase an aggregate of 156,522 shares of common stock at an exercise price of $2.0125 per share.

On January 25, 2023, the investor exercised a portion of its pre-funded warrants and acquired 400,696 shares of common stock for an aggregate exercise price of $40, and on February 27, 2023, the investor exercised an additional portion of its pre-funded warrants and acquired 741,000 shares of common stock for an aggregate exercise price of $74.

As of March 31, 2023, the Company had warrants outstanding, excluding prefunded warrants, to purchase 7,419,760 shares of common stock at exercise prices ranging from $1.36 to $65.00 per share that expire at various dates through 2027. In addition, there are currently outstanding seven-year warrants to purchase (i) 4,800 Units sold in our May 2016 private placement at an exercise price of $25.00 per Unit, (ii) 1,641 Units sold in our February 2017 private placement at an exercise price of $35.00 per Unit, and (iii) 2,400 Units sold in our October 2017 private placement at an exercise price of $25.00 per Unit.  The exercise in full of these warrants to purchase units (including exercise of the warrants underlying these warrants) would result in the issuance of 17,681 additional shares of our common stock at an aggregate exercise price of $474,852.

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Note 7 - Income Taxes

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Income Tax Disclosure [Text Block]

(7) INCOME TAXES:

The Company reported a net loss for the three months ended March 31, 2023 and 2022, respectively. The Company increased its deferred tax asset valuation allowance rather than recognize an income tax benefit.

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Note 8 - Equity Incentive Plan

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

(8) EQUITY INCENTIVE PLAN:

On August 29, 2019, the Company’s stockholders approved the Company’s 2019 Omnibus Equity Incentive Plan at a special meeting of stockholders (the “Incentive Plan”). The Incentive Plan provides for the issuance of up to 68,437 shares of common stock pursuant to the grant of shares of common stock, stock options or other awards, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. Options granted under the Incentive Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. As of March 31, 2023, we had awarded 68,437 shares of common stock as awards under the Incentive Plan, with no shares of common stock remaining available for future awards under the Incentive Plan.

On June 24, 2021, the Company’s stockholders approved the Company’s 2021 Equity Incentive Plan at its annual meeting of stockholders (the “2021 Plan”). The 2021 Plan provides for the issuance of up to 3,000,000 shares of common stock pursuant to the grant of shares of common stock, stock options or other awards, to employees, officers or directors of, and consultants to, the Company and its subsidiaries. Options granted under the 2021 Plan may either be intended to qualify as incentive stock options under the Internal Revenue Code of 1986, or may be non-qualified options, and are exercisable over periods not exceeding ten years from date of grant. As of March 31, 2023, we had awarded 95,032 shares of common stock and granted options to purchase 771,527 shares of common stock under the 2021 Plan, with 2,133,441 shares of common stock remaining available for future awards.

During the three months ended March 31, 2023, the Company granted options to purchase (i) and aggregate of 321,631 shares of common stock at exercise prices of $1.28 per share to its officers and employees, vesting over a four-year period in equal monthly installments, (ii) 2,500 shares of common stock to three employees, with an exercise price of $1.28, vesting immediately, and (iii) 3,350 shares of common stock to each of its five non-employee directors, with an exercise price of $1.28, vesting over a one-year period in equal quarterly installments. The options granted during the three months ended March 31, 2023 were valued using the Black Scholes option pricing model using the following assumptions: (i) expected term of 5.00 to 6.25 years; (ii) risk free interest rate of 4.1%%; (iii) expected volatility of 100.3% to 103.6%; and (iv) dividend yield of 0.0%. The weighted-average grant date fair value of the options issued by the Company during the three months ended March 31, 2023 ranged from $0.99 to $1.04 per share.

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Note 9 - Net Loss Per Share

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Earnings Per Share [Text Block]

(9) NET LOSS PER SHARE:

The following table sets forth the computation of basic and diluted earnings per common share.

	Three Months Ended
	March 31,
	2023			2022
Numerator
Net loss	$	(5,007,085	)	$	(2,771,591	)
Denominator		11,003,588			8,411,798
Weighted-average common shares outstanding, basic and diluted	$	(0.46	)	$	(0.33	)

The Company reported a net loss for the three months ended March 31, 2023, and 2022, therefore, the basic and diluted net loss per share are the same in the respective periods because of the inclusion of potential common shares would have an anti-dilutive effect. Potential shares of common stock that are excluded from the computation of diluted weighted-average shares outstanding are as follows:

	Three Months Ended
	March 31,
	2023		2022
Stock options		771,527		412,263
Warrants		7,419,760		2,048,186

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Note 10 - Purchase Commitments

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

(10) PURCHASE COMMITMENTS:

In connection with an agreement executed in January 2022 with Ashland, Inc., the Company committed to purchase minimum amounts of goods used in its normal operations based on completion of certain milestones. The first milestone was met during the first quarter of 2023, and $980,000 of goods were purchased and received. Future annual minimum purchases remaining under the agreement are $1,960,000.

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Note 11 - Subsequent Events

3 Months Ended

Mar. 31, 2023

Notes to Financial Statements

Subsequent Events [Text Block]

(11) SUBSEQUENT EVENTS:

On April 20, 2023, the Company, completed a private placement of its securities priced at-the-market under the rules of The Nasdaq Stock Market, Inc., to a group of accredited investors that included several directors of the Company and members of management and their affiliates. Investors in the private placement purchased 1,562,883 shares of common and were issued warrants to purchase 1,562,883 shares of common. The purchase price for one share of common stock and a Warrant to purchase one share of common stock was $0.835. The Warrants have an exercise price of $0.71 and have a term of seven years. The gross proceeds of the private placement were $1,305,000.

On May 2, 2023, the Company completed the private placement of its securities to Rafael Holdings, Inc., a Delaware corporation, in which Rafael Holdings purchased 2,514,970 shares of common stock, and a warrant to purchase an additional 2,514,970 shares of common (the “Warrant”), for an aggregate purchase price of $2,100,000. The Warrant has an exercise price of $0.71 per share, and will not be exercisable until the Company has obtained the approval of its shareholders to the exercise of the Warrant in accordance with Listing Rules 5635(b) and 5635(d) of The Nasdaq Stock Market, Inc. Following the date of such approval, the Warrant will be exercisable for a period of seven years. Pursuant to the Purchase Agreement, the Company (i) entered into a Registration Rights Agreement with Rafael Holdings requiring the Company to file a registration statement with the Securities and Exchange Commission to register the resale of the shares and shares of common stock underlying the Warrants, upon the request of Rafael Holdings, and (ii) appointed William Conkling, the CEO of Rafael Holdings, to the Company’s Board of Directors.

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Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2023

Accounting Policies [Abstract]

Organization and Operations [Policy Text Block]

(a) ORGANIZATION AND OPERATIONS–– The Company was incorporated in August 1990 as a Florida corporation, under the name Cyclodextrin Technologies Development, Inc. with operations beginning in July 1992. In conjunction with a restructuring in 2000, we changed our name to CTD Holdings, Inc. We changed our name to Cyclo Therapeutics, Inc. in September 2019 to better reflect our current business and on November 6, 2020, we reincorporated from the State of Florida to the State of Nevada.

We are a clinical stage biotechnology company that develops cyclodextrin-based products for the treatment of neurodegenerative diseases. We filed a Type II Drug Master File with the U.S. Food and Drug Administration (“FDA”) in 2014 for our lead drug candidate, Trappsol® Cyclo™ (hydroxypropyl beta cyclodextrin) as a treatment for Niemann-Pick Type C disease (“NPC”). NPC is a rare and fatal autosomal recessive genetic disease resulting in disrupted cholesterol metabolism that impacts the brain, lungs, liver, spleen, and other organs. In 2015, we launched an International Clinical Program for Trappsol® Cyclo™ as a treatment for NPC. In 2016, we filed an Investigational New Drug application (“IND”) with the FDA, which described our Phase I clinical plans for a randomized, double blind, parallel group study at a single clinical site in the U.S. The Phase I study evaluated the safety and pharmacokinetics of Trappsol® Cyclo™ along with markers of cholesterol metabolism and markers of NPC during a 12-week treatment period of intravenous administration of Trappsol® Cyclo™ every two weeks to participants 18 years of age and older. The IND was approved by the FDA in September 2016, and in January 2017 the FDA granted Fast Track designation to Trappsol® Cyclo™ for the treatment of NPC. Initial patient enrollment in the U.S. Phase I study commenced in September 2017, and in May 2020 we announced Top Line data showing a favorable safety and tolerability profile for Trappsol® Cyclo™ in this study.

We have also completed a Phase I/II clinical study approved by European regulatory bodies with clinical trial centers in the United Kingdom, Sweden, and in Israel. The Phase I/II study evaluated the safety, tolerability and efficacy of Trappsol® Cyclo™ through a range of clinical outcomes, including neurologic, respiratory, and measurements of cholesterol metabolism and markers of NPC. Consistent with the 12-week phase 1 study (single US site), the European/Israel study administered Trappsol® Cyclo™ intravenously to NPC patients every two weeks in a double-blind, randomized trial, but differs in that the study period was for 48 weeks (24 doses). In March of 2021 we announced that 100% of patients who completed the trial (9 out of 12) improved or remained stable, and 89% met the efficacy outcome measure of improvement in at least two domains of the 17-domain NPC severity scale.

Additionally, in February 2020 we had a face-to-face “Type C” meeting with the FDA with respect to the initiation of our pivotal Phase III clinical trial of Trappsol® Cyclo™ based on the clinical data obtained to date. At that meeting, we also discussed with the FDA submitting a New Drug Application (NDA) under Section 505(b)(1) of the Federal Food, Drug, and Cosmetic Act for the treatment of NPC in pediatric and adult patients with Trappsol® Cyclo™. A similar request was submitted to the European Medicines Agency (“EMA”) in February 2020, seeking scientific advice and protocol assistance from the EMA for proceeding with a Phase III clinical trial in Europe. In October 2020 we received a “Study May Proceed” notification from the FDA with respect to the proposed Phase III clinical trial, and in June of 2021 we commenced enrollment in TransportNPC, a pivotal Phase III study of Trappsol® Cyclo™ for the treatment of NPC.

We are also exploring the use of cyclodextrins in the treatment of Alzheimer’s disease. In January 2018, the FDA authorized a single patient IND expanded access program using Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. After 18 months of treatment in this geriatric patient with late-onset disease, the disease was stabilized and the drug was well tolerated. The patient also exhibited signs of improvement with less volatility and shorter latency in word-finding. We prepared a synopsis for an early stage protocol using Trappsol® Cyclo™ intravenously to treat Alzheimer’s disease that was presented to the FDA in January of 2021. We received feedback from the FDA on this synopsis in April 2021 and incorporated the feedback into an IND for a Phase II study for the treatment of Alzheimer’s disease with of Trappsol® Cyclo™ that we submitted to the FDA in November 2021. In December of 2021, we received IND clearance from the FDA, allowing us to proceed with our Phase II study of Trappsol® Cyclo™ for the treatment of Alzheimer’s disease. U.S. sites for the study were activated during the second half of 2022, and patient dosing began in the first quarter of 2023.

We also continue to operate our legacy fine chemical business, consisting of the sale of cyclodextrins and related products to the pharmaceutical, nutritional, and other industries, primarily for use in diagnostics and specialty drugs. However, our core business has transitioned to a biotechnology company primarily focused on the development of cyclodextrin- based biopharmaceuticals for the treatment of disease from a business that had been primarily reselling basic cyclodextrin products.

Basis of Accounting, Policy [Policy Text Block]

(b) BASIS OF PRESENTATION––The condensed consolidated financial statements include the Company and its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. The interim condensed consolidated financial statements of the Company included in this Quarterly Report on Form 10-Q, including these notes, are unaudited. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included. Such adjustments are of a normal, recurring nature. The condensed consolidated financial statements, and these notes, have been prepared in accordance with Generally Accepted Accounting Principles and do not contain certain information included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022. The condensed consolidated financial statements should be read in conjunction with that Annual Report on Form 10-K. Results for the interim periods presented are not necessarily indicative of the results that might be expected for the entire fiscal year.

Cash and Cash Equivalents, Policy [Policy Text Block]

(c) CASH AND CASH EQUIVALENTS––Cash and cash equivalents consist of cash and any highly liquid investments with an original purchased maturity of three months or less.

Receivable [Policy Text Block]

(d) ACCOUNTS RECEIVABLE––Accounts receivable are unsecured and non-interest bearing and stated at the amount we expect to collect from outstanding balances. Customer account balances with invoices dated over 90 days old are considered past due. The Company does not accrue interest on past due accounts. Customer payments are allocated to the specific invoices identified on the customer’s remittance advice or, if unspecified, applied to the oldest unpaid invoices.

The carrying amount of accounts receivable is reduced by an allowance for credit losses that reflects management’s best estimate of expected credit losses. The Company reviews each customer balance where all or a portion of the balance exceeds 90 days from the invoice date. Based on the Company’s assessment of the customer's current and forecasted creditworthiness, the Company estimates the portion, if any, of the balance that will not be collected, and writes off receivables as a charge to the allowance for credit losses when, in management’s estimation, it is probable that the receivable is worthless. The Company has estimated an allowance for doubtful accounts of $10,300 at March 31, 2023 and December 31, 2022.

Inventory, Policy [Policy Text Block]

(e) INVENTORY AND COST OF PRODUCTS SOLD––Inventory consists of our pharmaceutical drug Trappsol® Cyclo™, cyclodextrin products and chemical complexes purchased for resale recorded at the lower of cost (first-in, first-out) or net realizable value. Cost of products sold includes the acquisition cost of the products sold and does not include any allocation of inbound or outbound freight charges, indirect overhead expenses, warehouse and distribution expenses, or depreciation and amortization expense. The Company records a specific reserve for inventory items that are determined to be obsolete. The reserve for obsolete inventory was approximately $52,900 at March 31, 2023 and December 31, 2022.

The Company’s reserve for obsolete inventory is based on the Company’s best estimates of product sales and customer demands. It is reasonably possible that the estimates used by the Company to determine its provisions for inventory write-downs will be materially different from actual write-downs. These differences could result in materially higher than expected inventory provisions and related costs, which could have a materially adverse effect on the Company’s results of operations and financial condition in the near term.

Prepaid Expenses [Policy Text Block]

(f) PREPAID CLINICAL EXPENSES––Prepaid clinical expenses consist of our pharmaceutical drug Trappsol® Cyclo™ expected to be used in our clinical trial program recorded at cost. In addition, advance payments for goods or services for future research and development activities are included as prepaid clinical expenses. Prepaid clinical expenses are expensed as research and development costs as the goods are delivered or the related services are performed.

Property, Plant and Equipment, Policy [Policy Text Block]

(g) FURNITURE AND EQUIPMENT––Furniture and equipment are recorded at cost, less accumulated depreciation. Depreciation is computed using primarily the straight-line method over the estimated useful lives of the assets (generally three to five years for computers and vehicles and seven to ten years for machinery, equipment and office furniture). We periodically review our long-lived assets to determine if the carrying value of assets may not be recoverable. If an impairment is identified, we recognize a loss for the difference between the carrying amount and the estimated fair value of the asset. 

Lessee, Leases [Policy Text Block]

(h) LEASES––The Company leases office and warehouse space.  The Company determines if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets and operating lease liabilities on the Company’s condensed consolidated balance sheets.

ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. 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 for lease payments is recognized on a straight-line basis over the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

In evaluating contracts to determine if they qualify as a lease, the Company considers factors such as if the Company has obtained substantially all of the rights to the underlying asset through exclusivity, if it can direct the use of the asset by making decisions about how and for what purpose the asset will be used and if the lessor has substantive substitution rights. This evaluation may require significant judgment.

Revenue [Policy Text Block]

(i) REVENUE RECOGNITION––Revenues are recognized when our customer obtains control of promised goods or services in an amount that reflects the consideration which we expect to receive in exchange for those goods or services. We recognize revenues following the five step model prescribed under Accounting Standard Codification (“ASC”) Topic 606: (i) identify contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenues when (or as) we satisfy the performance obligation.

Product revenues

In the U.S., we sell our products to the end user or wholesale distributors. In other countries, we sell our products primarily to wholesale distributors and other third-party distribution partners. These customers subsequently resell our products to health care providers and patients.

Revenues from product sales are recognized when the customer obtains control of our product, which occurs at a point in time, typically upon delivery to the customer. We expense incremental costs of obtaining a contract as and when incurred if the expected amortization period of the asset that we would have recognized is one year or less or the amount is immaterial.  We treat shipping and handling costs performed after a customer obtains control of the product as a fulfillment cost. We have identified one performance obligation in our contracts with customers which is the delivery of product to our customers.  The transaction price is recognized in full when we deliver the product to our customer, which is the point at which we have satisfied our performance obligation.

Reserves for Discounts and Allowances

Revenues from product sales are recorded net of reserves established for applicable discounts and allowances that are offered within contracts with our customers, health care providers or payors, including those associated with the implementation of pricing actions in certain of the international markets in which we operate. Our process for estimating reserves established for these variable consideration components do not differ materially from our historical practices.

Product revenue reserves, which are classified as a reduction in product revenues, are generally characterized in the following categories: discounts, contractual adjustments and returns. These reserves are based on estimates of the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to our customer) or a liability (if the amount is payable to a party other than our customer). Our estimates of reserves established for variable consideration typically utilize the most likely method and reflect our historical experience, current contractual and statutory requirements, specific known market events and trends, industry data and forecasted customer buying and payment patterns. The transaction price, which includes variable consideration reflecting the impact of discounts and allowances, may be subject to constraint and is included in the net sales price only to the extent that it is probable that a significant reversal of the amount of the cumulative revenues recognized will not occur in a future period. Actual amounts may ultimately differ from our estimates. If actual results vary, we adjust these estimates, which could have an effect on earnings in the period of adjustment.

For additional information on our revenues, please read Note 2, Revenues, to these condensed consolidated financial statements.

Revenue from Contract with Customer, Shipping and Handling Fees, Policy [Policy Text Block]

(j) SHIPPING AND HANDLING FEES––Shipping and handling fees, if billed to customers, are included in product sales. Shipping and handling costs associated with inbound and outbound freight are expensed as incurred and included in freight and shipping expense.

Advertising Cost [Policy Text Block]

(k) ADVERTISING––Advertising costs are charged to operations when incurred. We incur minimal advertising expenses.

Research and Development Expense, Policy [Policy Text Block]

(l) RESEARCH AND DEVELOPMENT COSTS––Research and development costs are expensed as incurred. Research and development expenses primarily consist of product development, third-party contractors, salaries and materials.

Income Tax, Policy [Policy Text Block]

(m) INCOME TAXES––Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases. Deferred tax assets and liabilities are measured using enacted rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. In addition, tax benefits related to positions considered uncertain are recognized only when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions shall initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.  As of March 31, 2023, and December 31, 2022, the Company has recorded a full valuation allowance against its deferred tax assets.

Earnings Per Share, Policy [Policy Text Block]

(n) NET LOSS PER COMMON SHARE–– Basic and fully diluted net loss per common share is computed using a simple weighted average of common shares outstanding during the periods presented, as outstanding warrants to purchase 7,419,760 and 2,048,186 common shares were antidilutive for the three months ended March 31, 2023 and March 31, 2022, respectively. Additionally, outstanding options to purchase 771,527 and 412,263 shares of common stock were antidilutive for the three months ended March 31, 2023 and March 31, 2022, respectively.

Share-Based Payment Arrangement [Policy Text Block]

(o) STOCK-BASED COMPENSATION––The Company periodically awards stock to employees, directors, and consultants. In the case of employees and consultants, an expense is recognized equal to the fair value of the stock determined using the closing trading price of the stock on the award date. With respect to directors, the Company accrues stock compensation expense on a quarterly basis based on the Company’s historical director compensation policies, and each quarter recognizes such expense based on the trading price of the common stock during such quarter. This expense is then trued up at the time the shares are issued to directors based on the trading price at the time of issuance.

The Company periodically issues stock options under its 2021 Equity Incentive Plan. The Company uses the Black-Scholes valuation method to estimate the fair value of stock options at grant date. Compensation expense is recognized on the straight-line basis over the requisite service period, which is generally the vesting period.

Fair Value Measurement, Policy [Policy Text Block]

(p) FAIR VALUE MEASUREMENTS AND DISCLOSURES––The Fair Value Measurements and Disclosures topic of the Accounting Standards Codification (“ASC”) requires companies to determine fair value based on the price that would be received to sell the asset or paid to transfer the liability to a market participant. The Fair Value Measurements and Disclosures topic emphasizes that fair value is a market-based measurement, not an entity-specific measurement.

The guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following categories:

● Level 1: Quoted market prices in active markets for identical assets or liabilities.

● Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

● Level 3: Unobservable inputs that are not corroborated by market data.

We have no assets or liabilities required to have their fair value measured on a recurring basis at March 31, 2023 and December 31, 2022. Long-lived assets are measured at fair value on a non-recurring basis and are subject to fair value adjustments when there is evidence of impairment.

For short-term classes of our financial instruments, which include cash and cash equivalents, accounts receivable and accounts payable, and which are not reported at fair value, the carrying amounts approximate fair value due to their short-term nature. 

Use of Estimates, Policy [Policy Text Block]

(q) USE OF ESTIMATES––The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions, including regarding contingencies, that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. The Company’s most significant estimates relate to inventory obsolescence, stock-based compensation and warrant liability valuation. Although management bases its estimates on historical experience and assumptions that are believed to be reasonable under the circumstances, actual results could significantly differ from these estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

(r) RECENT ACCOUNTING PRONOUNCEMENTS––In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses” (Topic 326), which provides guidance on how an entity should measure credit losses on financial instruments. The standard amends the impairment model by requiring entities to use a forward-looking approach based on expected losses to estimate credit losses for most financial assets and certain other instruments that aren’t measured at fair value through net income. The ASU is effective for smaller reporting company’s in the first quarter of 2023. The Company adopted the new guidance as of January 1, 2023, and it did not have a material impact on its condensed consolidated financial statements.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815 – 40), (“ASU 2020-06”). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. The ASU 2020-06 amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. The Company has adopted this standard as of January 1, 2023, and determined no material impact on its condensed consolidated financial statements.

Warrants [Policy Text Block]

(s) WARRANTS––The Company accounts for its warrants as either equity-classified or liability-classified instruments based on an assessment of the specific terms of the warrants considering the authoritative guidance in  ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants meet the definition of a liability pursuant to ASC 480, and meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and satisfy additional conditions for equity classification. Warrants that are liability-classified are measured at fair value at each reporting date in accordance with the guidance in ASC 820, “Fair Value Measurement,” with any subsequent changes in fair value recognized in the statement of operations in the period of change. The fair value of liability classified warrants was not material at March 31, 2023, and December 31, 2022.

Liquidity [Policy Text Block]

(t) LIQUIDITY AND GOING CONCERN––For the three months ended March 31, 2023, the Company incurred a net loss of approximately $5,007,085. The Company has an accumulated deficit of approximately $68,806,464 at March 31, 2023. Our recent losses have predominantly resulted from research and development expenses for our Trappsol® Cyclo™ product and other general operating expenses, including personnel expenses and board advisory fees. We believe our expenses will continue to increase as we continue to conduct clinical trials and seek regulatory approval for the use of Trappsol® Cyclo™ in the treatment of NPC and Alzheimer’s disease.

For three months ended March 31, 2023, the Company’s operations used $4,370,239 in cash, and at March 31, 2023, the Company had a cash balance of $915,176 and negative working capital of approximately $506,100.  We will need to raise additional capital for the foreseeable future to fund the development of our drug product candidates through clinical development, manufacturing and commercialization. As further discussed in Note 11, subsequent to quarter-end, the Company generated gross proceeds of approximately $3,405,000 from the sale of securities in private placements of the Company’s securities.

We intend to continue to raise such capital through the sale of equity securities from time to time, the issuance of debt securities, the sale or licensing of existing assets or assets in development, or from other non-dilutive funding mechanisms. Our ability to obtain such additional capital will likely be subject to various factors, including our overall business performance and market conditions. If we cannot raise the additional funds required for our anticipated operations, we may be required to reduce the scope of or eliminate our research and development programs, delay our clinical trials and the ability to seek regulatory approvals, downsize our general and administrative infrastructure, or seek alternative measures to avoid insolvency. If we raise additional funds through future offerings of shares of our Common Stock or other securities, such offerings would cause dilution of current stockholders’ percentage ownership in the Company, which could be substantial. Future offerings also could have a material and adverse effect on the price of our Common Stock.

Our condensed consolidated financial statements for the three months ended March 31, 2023 were prepared on the basis of a going concern, which contemplates that we will be able to realize assets and discharge liabilities in the normal course of business. Our ability to continue as a going concern is dependent upon the availability of equity financing as noted above. These factors raise substantial doubt about our ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

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Note 2 - Revenues (Tables)

3 Months Ended

Mar. 31, 2023

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended
	March 31,
	2023		2022
Trappsol® Cyclo™	$	53,384	$	-
Trappsol® HPB		85,984		64,573
Trappsol® Fine Chemical		3,239		129,703
Aquaplex®		9,804		628
Total revenues	$	152,411	$	194,904

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Note 9 - Net Loss Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended
	March 31,
	2023			2022
Numerator
Net loss	$	(5,007,085	)	$	(2,771,591	)
Denominator		11,003,588			8,411,798
Weighted-average common shares outstanding, basic and diluted	$	(0.46	)	$	(0.33	)

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]

	Three Months Ended
	March 31,
	2023		2022
Stock options		771,527		412,263
Warrants		7,419,760		2,048,186

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Note 1 - Summary of Significant Accounting Policies (Details Textual) - USD ($)		3 Months Ended
	Jan. 03, 2023	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Inventory Valuation Reserves		$ 10,300		$ 52,900
Net Income (Loss) Attributable to Parent		(5,007,085)	$ (2,771,591)
Retained Earnings (Accumulated Deficit)		(68,806,464)		(63,799,379)
Net Cash Provided by (Used in) Operating Activities		(4,370,239)	$ (4,830,249)
Cash and Cash Equivalents, at Carrying Value		915,176		$ 1,543,418
Working Capital Deficit		$ 506,100
Registered Direct Offering [Member]
Proceeds from Issuance or Sale of Equity	$ 3,405,000
Warrants To Purchase Common Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)		7,419,760	2,048,186
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)		771,527	412,263
Computers and Vehicles [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)		3 years
Computers and Vehicles [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)		5 years
Machinery and Furniture [Member] | Minimum [Member]
Property, Plant and Equipment, Useful Life (Year)		7 years
Machinery and Furniture [Member] | Maximum [Member]
Property, Plant and Equipment, Useful Life (Year)		10 years

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Note 2 - Revenues (Details Textual)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Number of Operating Segments	1
Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Number of Major Customers	3	4
Aquaplex [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Number of Major Customers	1	1
Trappsol Cyclo [Member] | Customer Concentration Risk [Member] | Revenue Benchmark [Member]
Number of Major Customers	1

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Note 2 - Revenues - Revenues by Product (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Revenues	$ 152,411	$ 194,904
Trappsol Cyclo [Member]
Revenues	53,384	0
Trappsol HPB [Member]
Revenues	85,984	64,573
Trappsol Fine Chemical [Member]
Revenues	3,239	129,703
Aquaplex [Member]
Revenues	$ 9,804	$ 628

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Note 3 - Major Customers and Suppliers (Details Textual) - Revenue Benchmark [Member]	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Customer Concentration Risk [Member]
Number of Major Customers	3	4
Customer Concentration Risk [Member] | Three Major Customers [Member]
Concentration Risk, Percentage	76.00%
Customer Concentration Risk [Member] | Four Major Customers [Member]
Concentration Risk, Percentage		75.00%
Product Concentration Risk [Member] | Basic Natural and Chemically Modified Cyclodexterins [Member]
Concentration Risk, Percentage	94.00%	99.70%
Product Concentration Risk [Member] | Cyclodexterin Complexes [Member]
Concentration Risk, Percentage	6.00%	3.00%

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Note 4 - Note Payable (Details Textual)	May 04, 2020 USD ($)
Paycheck Protection Program CARES Act [Member]
Proceeds from Issuance of Long-term Debt, Total	$ 158,524

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Note 5 - Leases (Details Textual) - USD ($)	1 Months Ended	3 Months Ended
	Jan. 31, 2023	Mar. 31, 2023	Mar. 31, 2022
Operating Lease, Right-of-Use Asset, Amortization		$ 4,256
Operating Lease, Expense		$ 9,535	$ 7,397
Office Lease [Member]
Lessee, Operating Lease, Extension Option, Renewal Term (Year)	3 years

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Note 6 - Equity Transactions (Details Textual) - USD ($)				3 Months Ended
	Feb. 27, 2023	Jan. 25, 2023	Jan. 03, 2023	Mar. 31, 2023	Mar. 03, 2023	Dec. 31, 2022	Jun. 24, 2021
Common Stock, Shares Authorized (in shares)				50,000,000	50,000,000	20,000,000	20,000,000
Pre-funded Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			1,678,696
Class of Warrant or Right, Purchase Price of Warrants or Rights (in dollars per share)			$ 1.61
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)			$ 0.0001
Class of Warrant or Right, Maximum Beneficial Ownership Percent.			9.99%
Stock Issued During Period, Shares, Warrants Exercised (in shares)	741,000	400,696
Stock Issued During Period, Value, Warrants Exercised	$ 74	$ 40
Series A-1 Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			2,608,696
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)			$ 1.36
Warrants and Rights Outstanding, Term (Year)			5 years
Class of Warrant or Right, Maximum Beneficial Ownership Percent.			4.99%
Series A-2 Warrants [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			2,608,696
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)			$ 1.36
Warrants and Rights Outstanding, Term (Year)			3 years
Class of Warrant or Right, Maximum Beneficial Ownership Percent.			4.99%
Warrants Issued to Placement Agent [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)			156,522
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)			$ 2.0125
Warrants and Rights Outstanding, Term (Year)			5 years
Warrants To Purchase Common Stock [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				7,419,760
Warrants To Purchase Common Stock [Member] | Minimum [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 1.36
Warrants To Purchase Common Stock [Member] | Maximum [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 65.00
Warrants to Purchase Units Sold in May 2016 Private Placement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				4,800
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 25.00
Warrants and Rights Outstanding, Term (Year)				7 years
Warrants to Purchase Units Sold in February 2017 Private Placement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				1,641
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 35.00
Warrants to Purchase Units Sold in October 2017 Private Placement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				2,400
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)				$ 25.00
Warrants to Purchase Units Sold in May 2016, February 2017 and October 2017 Private Placement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)				17,681
Warrants and Rights Outstanding				$ 474,852
Registered Direct Offering [Member]
Stock Issued During Period, Shares, New Issues (in shares)			930,000
Shares Issued, Price Per Share (in dollars per share)			$ 1.61
Proceeds from Issuance or Sale of Equity, Net of Issuance Costs			$ 3,700,000
Stock Issued, Offering Fee, Percentage of Proceeds			7.50%
Stock Issued, Management Fee, Percentage of Proceeds			1.00%
Non-accountable Expense			$ 35,000
Legal Counsel Expense and Other Out-of-pocket Expense			50,000
Clearing Expense			$ 15,950
Board Members [Member]
Share-Based Payment Arrangement, Expense				30,750
Deferred Compensation Liability, Current and Noncurrent				$ 61,500
Shares Issued, Shares, Share-Based Payment Arrangement, before Forfeiture (in shares)				11,327
Shares Issued, Value, Share-Based Payment Arrangement, before Forfeiture				$ 41,004
Employees [Member]
Shares Issued, Shares, Share-Based Payment Arrangement, before Forfeiture (in shares)				0

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Note 8 - Equity Incentive Plan (Details Textual) - $ / shares			3 Months Ended
	Mar. 07, 2023	Jun. 24, 2021	Mar. 31, 2023	Aug. 29, 2019
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)			321,631
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Risk Free Interest Rate			4.10%
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Dividend Rate			0.00%
Minimum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term (Year)			5 years
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate			100.30%
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)			$ 0.99
Maximum [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Term (Year)			6 years 3 months
Share-Based Compensation Arrangement by Share-Based Payment Award, Fair Value Assumptions, Expected Volatility Rate			103.60%
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value (in dollars per share)			$ 1.04
Officers and Employees [Member]
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)	$ 1.28
Three Major Customers [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)			2,500
Share-Based Payment Arrangement, Option, Exercise Price Range, Outstanding, Weighted Average Exercise Price (in dollars per share)			$ 1.28
Each of Five Non-employee Directors [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)	3,350
Share-Based Compensation Arrangements by Share-Based Payment Award, Options, Grants in Period, Weighted Average Exercise Price (in dollars per share)	$ 1.28
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	1 year
Share-Based Payment Arrangement, Option [Member] | Officers and Employees [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)	4 years
The 2019 Omnibus Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)				68,437
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)			68,437
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)			0
The 2019 Omnibus Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)			10 years
The 2021 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized (in shares)		3,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)			771,527
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant (in shares)			2,133,441
The 2021 Equity Incentive Plan [Member] | Share-Based Payment Arrangement, Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period (Year)		10 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross (in shares)			95,032

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Note 9 - Net Loss Per Share - Earnings Per Share (Details) - USD ($)	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Net loss	$ (5,007,085)	$ (2,771,591)
Weighted-average common shares outstanding, basic and diluted (in shares)	11,003,588	8,411,798
BASIC AND DILUTED NET LOSS PER COMMON SHARE (in dollars per share)	$ (0.46)	$ (0.33)

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Note 9 - Net Loss Per Share - Antidilutive Securities Weighted Average Shares Outstanding (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities (in shares)	771,527	412,263
Warrant [Member]
Antidilutive Securities (in shares)	7,419,760	2,048,186

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Note 10 - Purchase Commitments (Details Textual) - Purchase Commitment [Member] - Ashland, Inc. [Member]	3 Months Ended
	Mar. 31, 2023 USD ($)
Purchase Commitment, Goods Purchased During Period.	$ 980,000
Purchase Commitment, Remaining Minimum Amount Committed	$ 1,960,000

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Note 11 - Subsequent Events (Details Textual) - Subsequent Event [Member] - USD ($)	May 02, 2023	Apr. 20, 2023
Warrants Issued in April 20, 2023 Private Placement [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)		1,562,883
Class of Warrant or Right, Purchase Price of Warrants or Rights (in dollars per share)		$ 0.835
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)		$ 0.71
Class of Warrant or Right, Term (Year)		7 years
Warrants Issued to Rafael Holdings [Member] | Rafael Holdings, Inc. [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights (in shares)	2,514,970
Class of Warrant or Right, Exercise Price of Warrants or Rights (in dollars per share)	$ 0.71
Class of Warrant or Right, Term (Year)	7 years
Private Placement [Member]
Stock Issued During Period, Shares, New Issues (in shares)		1,562,883
Proceeds from Issuance or Sale of Equity		$ 1,305,000
Private Placement [Member] | Rafael Holdings, Inc. [Member]
Stock Issued During Period, Shares, New Issues (in shares)	2,514,970
Proceeds from Issuance or Sale of Equity	$ 2,100,000