0001493152-23-028455 | 10-Q | XBRL Viewer

Stock Options (Tables)

6 Months Ended

Jun. 30, 2023

Schedule of Information about Options Outstanding and Exercisable

The following table summarizes information about options outstanding and exercisable at June 30, 2023:

		Options Outstanding					Options Exercisable
Exercise Price		Number of Options at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Options at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price

$	0.48		246,137	2.5 years	$	0.48		246,137	2.6 years	$	0.48
$	0.93		202,040	2.5 years	$	0.93		198,290	2.5 years	$	0.93
$	1.70		812,504	7.8 years	$	1.70		518,227	7.6 years	$	1.70
			1,260,681					962,654

Schedule of Stock Option Activity

Total stock option activity for the six months ended June 30, 2023 is summarized as follows:

Schedule of Stock Option Activity

	Shares			Weighted Average Exercise Price
Outstanding at December 31, 2022		1,290,325		$	1.27
Granted		-			-
Exercised		-			-
Forfeited		(29,644	)		0.93
Outstanding at June 30, 2023		1,260,681		$	1.28

Convertible Debt

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Convertible Debt

7. Convertible Debt

In September 2022, the Company entered into a Convertible Note Purchase Agreement (the Agreement) to issue up to $4,500,000 convertible promissory notes. On the same day, the Company entered into convertible promissory notes (2022 Convertible Notes) with three investors totaling $4,350,000. The 2022 Convertible Notes mature on January 13, 2023 or the occurrence of an Event of Default (as defined) and bear interest at a rate of 8% per annum which shall accrue but is not due and payable until conversion or full repayment of outstanding principal. The principal and interest outstanding under the 2022 Convertible Notes is automatically converted a) upon the closing of a Qualified Financing resulting in gross proceeds to the Company of at least $20 million into securities issued in connection with the Qualified Financing, at a discount of 30% per share; b) upon the closing of a Change of Control event into shares of capital stock of the Company or Series B preferred stock; and c) upon the closing of a Public Company Event, into shares of capital stock being issued to investors equal to two-times (2x) the amount of the outstanding principal and accrued interest then outstanding divided by the public offering price per share. The principal and interest outstanding under the 2022 Convertible Notes is convertible, at the option of the holders, at the maturity date into a new class of Company’s Preferred Stock (Series C Preferred) equal to the quotient of the outstanding principal amount plus interest divided by the Capped Price, which is defined as the price per share equal to the Valuation Cap of $30 million divided by the Company Capitalization, as defined in the Agreement.

In February 2023, the 2022 Convertible Notes were amended to extend the maturity date to March 31, 2023 and to change the conversion price upon a Qualified Financing or Change in Control event to $30 million divided by the number of shares of the Company’s common stock issued and outstanding, on a fully diluted basis, immediately prior to the close of the Qualified Financing or Change in Control event.

During April and June 2023, the 2022 Convertible Notes were further amended to extend the maturity date to June 30, 2023 and allow for the sale of additional notes of $500,000 for a total aggregate principal of $4,850,000.

Effective June 21, 2023, the 2022 Convertible Notes were converted to 1,846,020 shares of the Company’s common stock equal to $9,494,887. Upon conversion, the Company recorded a change in fair value of $2,830,100 for the three and six months ended June 30, 2023 which was recognized as a non-cash change in fair value in Other Income (Expense) on the statement of operations.

The Company accounts for the 2022 Convertible Notes under ASC 815. Under 815-15-25, the election can be at the inception of a financial instrument to account for the instrument under the fair value option under ASC 825. The Company has made such election for the 2022 Convertible Notes. Using the fair value option, the convertible promissory note is to be recorded at its initial fair value on the date of issuance, and each balance sheet date thereafter. The Company evaluates the change based on the conversion price at the current market value. When recognized, changes in the estimated fair value of the notes are recognized as a non-cash gain or loss in Other Income (Expense) on the statements of operations.

Effective January 5, 2021, the Company entered into a Note Purchase Agreement to issue up to $2,000,000 of convertible promissory notes. On the same date, the Company entered into a convertible promissory note (2021 Convertible Note) with one investor for $1,000,000. The 2021 Convertible Note bears interest at a rate of 6% per annum and is due and payable in full on January 5, 2023. The 2021 Convertible Note automatically converts upon a qualified equity financing, as defined in the note agreement to the number of shares equal to all principal and accrued interest divided by the conversion price of $48.00, which is subject to adjustment as defined in the note agreement. The 2021 Convertible Note is also optionally convertible as defined in the note agreement for certain non-qualified financing, a change in control, or upon the maturity date of the 2021 Convertible Note. The Company incurred issuance costs of $15,613 related to the 2021 Convertible Note, which has been recorded as a debt discount and will be amortized over the term of the 2021 Convertible Note.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

In January 2023, the Company elected to convert the 2021 Convertible Note, including interest accrued but not yet paid of $124,759 at a conversion price of $48.00 into 23,432 shares of its Series B Preferred Stock in accordance with the terms outlined in the Note Purchase Agreement.

The Company evaluated the terms and conditions of the Note Purchase Agreement related to the 2021 Convertible Note in order to assess the accounting considerations under ASC 480 – Distinguishing Liabilities from Equity, and ASC 815 – Derivatives and Hedging. The Company determined the Convertible Note does not meet any of the criteria to be accounted pursuant to an ASC 480 liability. The Company also assessed the embedded features pursuant to the guidance in ASC 815 and determined the embedded features do not meet any of the criteria for bifurcation.

Convertible notes payable consisted of the following at:

Schedule of Convertible Notes Payable

	June 30, 2023		December 31, 2022
2021 Convertible Note	$	-	$	1,000,000
2022 Convertible Notes		-		5,600,000
	$	-	$	6,600,000

There was $0 amortized related to the debt issuance costs during the three and six months ended June 30, 2023, respectively. There was $1,968 and $3,936 amortized related to the debt issuance costs during the three and six months ended June 30, 2022, respectively. Interest accrued on the convertible notes was $0 and $223,792 at June 30, 2023 and December 31, 2022, respectively.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

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+ Details

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities:
Net loss	$ (6,886,707)	$ (4,216,170)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	64,806	61,417
Amortization of debt discount		3,936
Amortization of right-of-use assets	139,738	140,921
Accrued interest on convertible notes	165,939	31,512
Stock based compensation	77,588	110,809
Change in fair value of warrant liability	88,711	(35)
Change in fair value of convertible notes	3,630,100
Forgiveness of accounts payable	(56,285)
Loss on disposal of property and equipment		7,923
Changes in operating assets and liabilities:
Accounts Receivable	(262,300)	134,800
Prepaid expenses	111,610	(124,465)
Other assets	(237)	165
Tax credits receivable	27,220	(227,955)
Accounts payable and accrued expenses	(149,781)	134,028
Operating lease liability	(136,624)	(133,491)
Contract liabilities	154,700	(15,000)
Net cash used by operating activities	(3,031,522)	(4,091,605)
Cash flows from investing activities:
Purchases of property and equipment	(17,578)	(31,453)
Proceeds from sale of property and equipment		4,250
Capitalization of deferred patent costs	(119,170)	(117,673)
Capitalization of licenses	(15,263)	(57,372)
Capitalization of patent and trademark costs	(10,127)	(585)
Net cash used in investing activities	(162,138)	(202,833)
Cash flows from financing activities:
Proceeds from initial public offering, net	5,991,359
Proceeds from exercise of stock options		1,510
Net cash provided by financing activities	5,991,359	1,510
Net change in cash and cash equivalents	2,797,699	(4,292,928)
Cash and cash equivalents at beginning of the period	3,492,656	8,044,262
Cash and cash equivalents at end of the period	6,290,355	3,751,334
Non-cash transactions:
Obtaining a right-of-use asset in exchange for lease liability		1,418,502
Conversion of note to common stock	9,495,152
Conversion of note to Series B Convertible Preferred Stock	$ 1,124,759

Schedule of Net Loss Per Share, Basic and Diluted (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Net loss per share, basic	$ (2.36)	$ (2.45)	$ (5.14)	$ (5.31)
Net loss per share, diluted	$ (2.36)	$ (2.45)	$ (5.14)	$ (5.31)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

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+ Details

Schedule of Accrued Expenses (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Employee payroll and bonuses	$ 481,383	$ 371,010
Vacation	60,911	27,082
Research and development projects	164,036	316,389
Interest		223,792
Professional fees	57,133	24,502
Other	4,258	31,186
Total accrued expenses	$ 767,721	$ 993,961

Retirement Plan (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended
Retirement Plan (Details Narrative) - USD ($)	Jan. 01, 2019	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Retirement Benefits [Abstract]
Retirement plan general information	the Company sponsors a 401(k) plan that covers substantially all employees. In order to be eligible to participate, an employee must complete two consecutive months of service and work a minimum of two hundred and fifty hours or work 1,000 hours in their first year of service. Employees may make pre-tax deferrals upon meeting the Plan eligibility requirements. Effective January 1, 2020, the Plan was transitioned to a safe harbor plan in which highly compensated employees are not eligible for matching contributions and non-highly compensated employees earn 100% match on first 3% contributed and 50% on the next 2% contributed.
Employer contribution		$ 2,633	$ 2,632	$ 4,824	$ 14,603

Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Schedule of Fair Value Measurements for Assets and Liabilities

June 30, 2023

Description	Level 1		Level 2		Level 3		Total

Liabilities:
Common stock warrants	$	-	$	-	$	158,698	$	158,698
Total	$	-	$	-	$	158,698	$	158,698

December 31, 2022

Description	Level 1		Level 2		Level 3		Total

Liabilities:
Common stock warrants	$	-	$	-	$	70,283	$	70,283
2022 Convertible Notes		-		-		5,600,000		5,600,000
Total	$	-	$	-	$	5,670,283	$	5,670,283

Schedule of Changes in Level 3 Instruments Measured on a Recurring Basis

The following table presents the changes in Level 3 instruments measured on a recurring basis for the period ended June 30, 2023:


Balance at December 31, 2022	$	5,670,283
Change in fair value of warrants		(5,621	)
Change in fair value of 2022 Convertible Notes		800,000
Balance at March 31, 2023	$	6,464,662
Change in fair value of warrants		94,036
Change in fair value of 2022 Convertible Notes		2,830,100
Conversion of 2022 Convertible Notes		(9,230,100	)
Balance at June 30, 2023	$	158,698

Employee Retention Credit (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		6 Months Ended
Employee Retention Credit (Details Narrative) - USD ($)	Apr. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Defined Benefit Plan Disclosure [Line Items]
Employee retention credit	$ 229,813		$ 229,813		$ 229,813
CARES Employee Retention credit [Member]
Defined Benefit Plan Disclosure [Line Items]
Refundable tax credit		$ 5,000		5,000
Payments to employees wages				$ 10,000
CARES Employee Retention credit [Member] \| Minimum [Member]
Defined Benefit Plan Disclosure [Line Items]
Tax credit percent				50.00%
CARES Employee Retention credit [Member] \| Maximum [Member]
Defined Benefit Plan Disclosure [Line Items]
Tax credit percent				70.00%

Warrants

6 Months Ended

Jun. 30, 2023

Warrants

Warrants

9. Warrants

The Company issued warrants to purchase 6,745 shares of common stock in 2018 in conjunction with convertible debt financing that have a redemption provision providing the holder the right to have the Company redeem all or any portion of the warrant (or shares it has converted into) at a purchase price equal to the fair market value of the shares as determined by the board of directors or an independent appraiser. As a result of this redemption provision, the warrants have been classified as a liability in the financial statements based on ASC 480 – Distinguishing Liabilities from Equity. These warrants have an exercise price of $0.48 per share and a term of 10 years. The warrants are marked to market each reporting period. The fair value is $158,994 and $70,283 at June 30, 2023 and December 31, 2022, respectively. At June 30, 2023, the Company estimated the fair value of the warrants using the Black-Scholes option pricing model with the following assumptions: Underlying common stock value of $3.64; Expected term of 4.8 years; Expected Volatility of 82.5%; Risk Free Interest Rate of 3.01%; and Dividend Yield of 0%. At December 31, 2022, the Company estimated the fair value of the warrants using the Black-Scholes option pricing model with the following assumptions: Underlying common stock value of $12.09; Expected term of 5 years; Expected Volatility of 86.0%; Risk Free Interest Rate of 3.01%; and Dividend Yield of 0%.

The Company also issued warrants in 2016 and 2019 which did not meet the criteria under ASC 480 to be classified as a liability, and instead meet equity classification criteria. The 11,466 warrants issued in 2016 expired upon the initial public offering in June 2023.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

The following table summarizes information about warrants outstanding at June 30, 2023:

			Warrants Outstanding					Warrants Exercisable
Year Granted	Exercise Price		Number of Warrants at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Warrants at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price

2018	$	0.48		47,887	4.8 years	$	0.48		47,887	4.8 years	$	0.48
2019	$	5.28		215,846	2.6 years	$	5.28		215,846	2.6 years	$	5.28
2023	$	6.25		60,000	5.0 years	$	6.25		60,000	5.0 years	$	6.25
				323,733		$	4.75		323,733		$	4.75

Schedule of Future Minimum Payments Under Non-cancelable Operating Leases (Details)	Jun. 30, 2023 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2023	$ 334,661
2024	319,211
2025	246,051
2026	164,469
2027
Total future undiscounted lease payments	1,064,392
Less: interest	(72,736)
Present value of lease liabilities	$ 991,656

Concentration of Credit Risk

6 Months Ended

Jun. 30, 2023

Risks and Uncertainties [Abstract]

Concentration of Credit Risk

15. Concentration of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist principally of cash and accounts receivable.

For the three and six month periods ended June 30, 2023 and 2022, all service revenue was from one customer. For the three and six month period ended June 30, 2023, there was no grant revenue and for the three and six month period ended June 30, 2022, all grant revenue was from one grantor.

The cash balance identified in the balance sheet is held in an account with a financial institution and insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000. At times, cash maintained on deposit may be in excess of FDIC limits.

In early March 2020, there was a global outbreak of COVID-19 that has resulted in significant changes in the global economy. While the Company has not experienced any disruptions to its business operations to date, these changes, including a potential economic downturn, and any potential resulting direct or indirect negative impact to the Company cannot be determined, however they could have a prospective material impact to the Company’s business, cash flows and liquidity.

Property and Equipment

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Property and Equipment

4. Property and Equipment

Property and equipment consisted of the following at June 30, 2023 and December 31, 2022:

Schedule of Property And Equipment

	June 30,2023			December 31, 2022
Lab equipment	$	1,053,710		$	1,034,579
Computer equipment		30,825			30,825
Furniture and fixtures		24,316			24,316
Leasehold improvements		28,855			28,855
Building equipment		14,932			14,932
Property and equipment gross		1,152,638			1,133,507
Less: accumulated depreciation		(349,531	)		(286,549	)
Net property and equipment	$	803,107		$	846,958

Depreciation expense was $30,877 and $61,429 for the three and six months ended June 30, 2023, respectively. Depreciation expense was $30,148 and $59,957 for the three and six months ended June 30, 2022, respectively.

Schedule of Stock Option Activity (Details)	6 Months Ended
Schedule of Stock Option Activity (Details)	Jun. 30, 2023 $ / shares shares
Fair Value Disclosures [Abstract]
Number of Options, Outstanding Beginning \| shares	1,290,325
Weighted Average Exercise Price, Outstanding \| $ / shares	$ 1.27
Number of Options, Granted \| shares
Weighted Average Exercise Price, Granted \| $ / shares
Number of Options, Exercised \| shares
Weighted Average Exercise Price, Exercised \| $ / shares
Number of Options, Forfeited \| shares	(29,644)
Weighted Average Exercise Price, Forfeited \| $ / shares	$ 0.93
Number of Options, Outstanding Ending \| shares	1,260,681
Weighted Average Exercise Price, Outstanding \| $ / shares	$ 1.28

Schedule of Information about Warrants Outstanding (Details)	6 Months Ended
	Jun. 30, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Exercise price of warrants	$ 0.48
Warrant [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants outstanding \| shares	323,733
Weighted Average Exercise Price, Outstanding	$ 4.75
Number of warrants exercisable \| shares	323,733
Weighted Average Exercise Price, Exercisable	$ 4.75
Year 2018 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Exercise price of warrants	$ 0.48
Year 2018 [Member] \| Warrant [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants outstanding \| shares	47,887
Weighted Average Remaining Contractual Life, Outstanding	4 years 9 months 18 days
Weighted Average Exercise Price, Outstanding	$ 0.48
Number of warrants exercisable \| shares	47,887
Weighted Average Remaining Contractual Life, Exercisable	4 years 9 months 18 days
Weighted Average Exercise Price, Exercisable	$ 0.48
Year 2019 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Exercise price of warrants	$ 5.28
Year 2019 [Member] \| Warrant [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants outstanding \| shares	215,846
Weighted Average Remaining Contractual Life, Outstanding	2 years 7 months 6 days
Weighted Average Exercise Price, Outstanding	$ 5.28
Number of warrants exercisable \| shares	215,846
Weighted Average Remaining Contractual Life, Exercisable	2 years 7 months 6 days
Weighted Average Exercise Price, Exercisable	$ 5.28
Year 2023 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Exercise price of warrants	$ 6.25
Year 2023 [Member] \| Warrant [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Number of warrants outstanding \| shares	60,000
Weighted Average Remaining Contractual Life, Outstanding	5 years
Weighted Average Exercise Price, Outstanding	$ 6.25
Number of warrants exercisable \| shares	60,000
Weighted Average Remaining Contractual Life, Exercisable	5 years
Weighted Average Exercise Price, Exercisable	$ 6.25

Employee Retention Credit

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Employee Retention Credit

3. Employee Retention Credit

The CARES Act provides an employee retention credit (“CARES Employee Retention credit”), which is a refundable tax credit against certain employment taxes of up to $5,000 per employee for eligible employers. The tax credit is equal to 50% of qualified wages paid to employees during a quarter, capped at $10,000 of qualified wages per employee through December 31, 2020. Additional relief provisions were passed by the United States government, which extend and slightly expand the qualified wage caps on these credits through September 30, 2021. Based on these additional provisions, the tax credit is now equal to 70% of qualified wages paid to employees during a quarter, and the limit on qualified wages per employee has been increased to $10,000 of qualified wages per quarter. In April 2022, the Company determined it qualified for the tax credit under the CARES Act and recorded a receivable for $229,813 and recognized the amounts as other income on the statement of operations. The Company received full payment for the amount in September 2022.

Stock Options (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended		6 Months Ended
Stock Options (Details Narrative) - USD ($)	Mar. 31, 2023	Dec. 31, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options granted
Stock options plan expense			$ 38,974	$ 53,826	$ 77,588	$ 110,809
Performance Shares [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Performance stock options shares			350,197		350,197
Fair value of stock options					13,120
Fair value of stock options					$ 109,551
2023 Stock Incentive Plan [Member] \| Common Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options granted	2,000,000
2016 Stock Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock options granted		1,490,595
2016 Stock Incentive Plan [Member] \| Equity Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Shares available for future grant			229,914		229,914

Convertible Debt (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

Schedule of Convertible Notes Payable

Convertible notes payable consisted of the following at:

Schedule of Convertible Notes Payable

	June 30, 2023		December 31, 2022
2021 Convertible Note	$	-	$	1,000,000
2022 Convertible Notes		-		5,600,000
	$	-	$	6,600,000

Concentration of Credit Risk (Details Narrative)	Jun. 30, 2023 USD ($)
Risks and Uncertainties [Abstract]
Excess cash maintained in FDIC	$ 250,000

Organization and Nature of Operations

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Organization and Nature of Operations

1. Organization and Nature of Operations

Azitra Inc was founded on January 2, 2014. It is a synthetic biology company focused on screening and genetically engineering microbes of the skin. The mission is to discover and develop novel therapeutics to create a new paradigm for treating skin disease. The Company’s discovery platform is screened for naturally occurring bacterial cells with beneficial effects. These microbes are then genomically sequenced and engineered to make cellular therapies, recombinant therapeutic proteins, peptides and small molecules for precision treatment of dermatology diseases. On May 17, 2023, the Company changed its name to from “Azitra Inc” to “Azitra, Inc.”

The Company maintains a location in Montreal, Canada for certain research activities. This location and operations completed there remained consistent throughout 2022 and into 2023. The Company also opened a manufacturing and laboratory space in Groton, Connecticut during 2021.

Forward Stock Split, Change in Par Value, and Initial Public Offering

In June 2023, the Company completed its initial public offering (IPO) in which it issued and sold 1,500,000 shares of its common stock at a price to the public of $5.00 per share. The shares began trading on the NYSE American on June 16, 2023 under the symbol “AZTR”. The net proceeds received by the Company from the offering were $6.0 million, after deducting underwriting discounts, commissions and other offering expenses.

Immediately prior to the effectiveness of the Company’s registration statement, the Company effected a 7.1-for-1 forward stock split of its issued and outstanding shares of common stock (the Forward Stock Split). On May 17, 2023, the Company changed the par value of its capital stock from $0.01 to $0.0001. Accordingly, all share and per share amounts for all periods presented in the accompanying unaudited consolidated financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect the effect of the Forward Stock Split. Refer to Note 8 for additional details relating to the Forward Stock Split.

Going Concern Matters

The unaudited condensed financial statements have been prepared on the going concern basis, which assumes that the Company will continue in operation for the foreseeable future and which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, management has identified the following conditions and events that created an uncertainty about the ability of the Company to continue as a going concern. As of and for the six months ended June 30, 2023, the Company has an accumulated deficit of $44.2 million, a loss from operations of $3.0 million and used $3.0 million to fund operations. These factors among others raise substantial doubt about the Company’s ability to continue as a going concern.

Management plans to continue to raise funds through equity and debt financing to fund operating and working capital needs; however, the Company will require a significant amount of additional funds to complete the development of its product and to fund additional losses which the Company expects to incur over the next few years. The Company is still in their pre-clinical phase and therefore does not yet have product revenue. There can be no assurance that the Company will be successful in securing additional financing, if needed, to meet its operating needs.

These conditions and events create an uncertainty about the ability of the Company to continue as a going concern for twelve months from the date that the financial statements are available to be issued. The financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

Statements of Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) (Parenthetical)	3 Months Ended
	Jun. 30, 2023 USD ($)
Statement of Stockholders' Equity [Abstract]
Net of issuance costs	$ 1,508,791

Schedule of Changes in Level 3 Instruments Measured on a Recurring Basis (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2023	Jun. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Change in fair value of warrants			$ 88,711	$ (35)
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance at March 31, 2023	$ 6,464,662	$ 5,670,283	5,670,283
Change in fair value of warrants		(5,621)
Change in fair value of 2022 Convertible Notes	2,830,100	800,000
Change in fair value of warrants	94,036
Conversion of 2022 Convertible Notes	(9,230,100)
Balance at June 30, 2023	$ 158,698	$ 6,464,662	$ 158,698

Fair Value Measurements

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

11. Fair Value Measurements

The following tables summarize the fair values and levels within the fair value hierarchy in which the fair value measurements fall for assets and liabilities measured on a recurring basis as of:

June 30, 2023

Description	Level 1		Level 2		Level 3		Total

Liabilities:
Common stock warrants	$	-	$	-	$	158,698	$	158,698
Total	$	-	$	-	$	158,698	$	158,698

December 31, 2022

Description	Level 1		Level 2		Level 3		Total

Liabilities:
Common stock warrants	$	-	$	-	$	70,283	$	70,283
2022 Convertible Notes		-		-		5,600,000		5,600,000
Total	$	-	$	-	$	5,670,283	$	5,670,283

The following table presents the changes in Level 3 instruments measured on a recurring basis for the period ended June 30, 2023:


Balance at December 31, 2022	$	5,670,283
Change in fair value of warrants		(5,621	)
Change in fair value of 2022 Convertible Notes		800,000
Balance at March 31, 2023	$	6,464,662
Change in fair value of warrants		94,036
Change in fair value of 2022 Convertible Notes		2,830,100
Conversion of 2022 Convertible Notes		(9,230,100	)
Balance at June 30, 2023	$	158,698

Fluctuation in the fair value of the Company’s Common stock is the primary driver for the change in the Common Stock Warrant liability valuation during each year. As the fair value of the Common stock increases the value to the holder of the instrument generally increases.

Fluctuations in the various inputs, including the enterprise value, time to liquidity, volatility, and discount rate are the primary drivers for the changes in valuation of the 2022 Convertible Notes each reporting period. As the fair value of the enterprise value, estimated time to liquidity, volatility, and discount rate increase, the value to the holder of the 2022 Convertible Notes generally increases.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Schedule of Numerator for Basic and Diluted Weighted Average Common Stock Outstanding (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Total, basic	2,147,526	1,055,454	1,604,510	1,055,336
Total, diluted	2,147,526	1,055,454	1,604,510	1,055,336
Common Stock [Member]
Total, basic	2,137,207	1,043,988	1,593,617	1,043,870
Total, diluted	2,137,207	1,043,988	1,593,617	1,043,870
Warrant [Member]
Total, basic	10,319	11,466	10,893	11,466
Total, diluted	10,319	11,466	10,893	11,466

Commitments and Contingencies (Details Narrative) - USD ($)	1 Months Ended		3 Months Ended	6 Months Ended		12 Months Ended
	Sep. 30, 2021	May 31, 2021	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2020
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Operating lease rental expense			$ 84,716	$ 169,432
Operating lease term			3 years 4 months 24 days	3 years 4 months 24 days
Operating lease discount rate			4.25%	4.25%
Branford. CT [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lease payments						$ 13,033
Groton. CT [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Lease payments	$ 6,824	$ 4,234
Exclusive License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Capitalized License agreement amount				$ 11,405	$ 15,263

Schedule of Intangible Assets (Details) - USD ($)	6 Months Ended	12 Months Ended
Schedule of Intangible Assets (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 253,097	$ 227,707
Accumulated Amortization	11,517	8,140
Net Amount	$ 241,580	$ 219,567
Trademarks [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	Indefinite	Indefinite
Gross Amount	$ 56,248	$ 53,999
Accumulated Amortization
Net Amount	56,248	53,999
Patents [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	116,076	108,198
Accumulated Amortization	11,517	8,140
Net Amount	$ 104,559	$ 100,058
Estimated Useful Life	17 years	17 years
Licensing Agreements [Member]
Finite-Lived Intangible Assets [Line Items]
Gross Amount	$ 80,773	$ 65,510
Accumulated Amortization
Net Amount	$ 80,773	$ 65,510
Estimated Useful Life	17 years	17 years

Related Parties

6 Months Ended

Jun. 30, 2023

Related Parties

16. Related Parties

Total related party revenue was $172,000 and $285,300 for the three and six months ended June 30, 2023. Total related party revenue was $85,000 and $205,000 for the three and six months ended June 30, 2022. Accounts receivable due from the related party was $440,000 and $175,000 at June 30, 2023 and December 31, 2022, respectively. Contract liabilities from the related party was $310,700 and $156,000 at June 30, 2023 and December 31, 2022, respectively.

In September 2022 the Company entered into a convertible promissory note totaling $4,350,000 of which $4,000,000 was attributable to an entity who was also an investor in the Company’s Series A, A-1, and B Preferred Stock financing (See Note 7). This entity received 1,697,490 shares of common stock up on conversion of the promissory notes for principal and interest of $4,243,726.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-2

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 5
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-5

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480990/946-20-50-6

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 235
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481062/946-235-50-2

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(c))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-07(2)(e))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483575/946-220-S99-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//850/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-6

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Intangible Assets

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

5. Intangible Assets

Intangible assets consisted of the following at:

Schedule of Intangible Assets

June 30, 2023:

	Estimated Useful Life	Gross Amount		Accumulated Amortization		Net Amount
Trademarks	Indefinite	$	56,248	$	-	$	56,248
Patents	17 years		116,076		11,517		104,559
License agreement	17 years		80,773		-		80,773
Intangible Assets		$	253,097	$	11,517	$	241,580

December 31, 2022:

	Estimated Useful Life	Gross Amount		Accumulated Amortization		Net Amount
Trademarks	Indefinite	$	53,999	$	-	$	53,999
Patents	17 years		108,198		8,140		100,058
License agreement	17 years		65,510		-		65,510
Intangible Assets		$	227,707	$	8,140	$	219,567

During the three and six months ended June 30, 2023, amortization expense related to intangible assets was $1,780 and $3,377, respectively. During the three and six months ended June 30, 2022, amortization expense related to intangible assets was $730 and $1,460, respectively.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Service revenue – related party	$ 172,000	$ 85,000	$ 285,300	$ 205,000
Revenue, Related Party, Type [Extensible Enumeration]	Related Party [Member]	Related Party [Member]	Related Party [Member]	Related Party [Member]
Total revenue	$ 172,000	$ 85,000	$ 285,300	$ 205,000
Operating expenses:
General and administrative	844,640	667,940	1,687,651	1,529,248
Research and development	812,836	1,505,447	1,643,017	3,060,815
Total operating expenses	1,657,476	2,173,387	3,330,668	4,590,063
Loss from operations	(1,485,476)	(2,088,387)	(3,045,368)	(4,385,063)
Other income (expense):
Interest income	265	335	550	855
Interest expense	(76,187)	(17,811)	(166,019)	(35,448)
Employee retention credit		229,813		229,813
Other income	1,600		2,746
Forgiveness of accounts payable	56,285		56,285
Change in fair value of convertible note	(2,830,100)		(3,630,100)
Other expense	(95,915)	(14,103)	(104,801)	(26,327)
Total other income (expense)	(2,944,052)	198,234	(3,841,339)	168,893
Net loss before income taxes	(4,429,528)	(1,890,153)	(6,886,707)	(4,216,170)
Income tax benefit (expense)
Net loss	(4,429,528)	(1,890,153)	(6,886,707)	(4,216,170)
Dividends on preferred stock	(643,267)	(692,246)	(1,355,347)	(1,384,492)
Net loss attributable to common shareholders	$ (5,072,795)	$ (2,582,399)	$ (8,242,054)	$ (5,600,662)
Net loss per share, basic	$ (2.36)	$ (2.45)	$ (5.14)	$ (5.31)
Net loss per share, diluted	$ (2.36)	$ (2.45)	$ (5.14)	$ (5.31)
Weighted average common stock outstanding, basic	2,147,526	1,055,454	1,604,510	1,055,336
Weighted average common stock outstanding, diluted	2,147,526	1,055,454	1,604,510	1,055,336

Intangible Assets (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
Intangible Assets (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expenses of intangible assets	$ 1,780	$ 730	$ 3,377	$ 1,460

Subsequent Events

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

17. Subsequent Events

The Company has evaluated events subsequent to the balance sheet date through August 14, 2023, the date these condensed financial statements were available to be issued.

Warrants (Details Narrative)	1 Months Ended	6 Months Ended	12 Months Ended
Warrants (Details Narrative)	Jun. 30, 2023 USD ($) $ / shares shares	Jun. 30, 2023 USD ($) $ / shares shares	Dec. 31, 2022 USD ($) $ / shares
Exercise price of warrants per share \| $ / shares	$ 0.48	$ 0.48
Maturity term	10 years	10 years
IPO [Member]
Number of warrants expired \| shares	11,466
Measurement Input, Share Price [Member]
Expected dividend yield \| $ / shares	3.64	3.64	12.09
Measurement Input, Expected Term [Member]
Expected term		4 years 9 months 18 days	5 years
Measurement Input, Price Volatility [Member]
Expected dividend yield	82.05	82.05	86.00
Measurement Input, Risk Free Interest Rate [Member]
Expected dividend yield	3.01	3.01	3.01
Measurement Input, Expected Dividend Rate [Member]
Expected dividend yield	0	0	0
Common Stock [Member]
Number of warrants issued to purchase common stock \| shares		6,745
Warrant [Member]
Fair value of warrants \| $	$ 158,994	$ 158,994	$ 70,283

Schedule of Property And Equipment (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 1,152,638	$ 1,133,507
Less: accumulated depreciation	(349,531)	(286,549)
Net property and equipment	803,107	846,958
Lab Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	1,053,710	1,034,579
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	30,825	30,825
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	24,316	24,316
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	28,855	28,855
Building Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 14,932	$ 14,932

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
Property and Equipment (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 30,877	$ 30,148	$ 61,429	$ 59,957

Warrants (Tables)

6 Months Ended

Jun. 30, 2023

Warrants

Schedule of Information about Warrants Outstanding

The following table summarizes information about warrants outstanding at June 30, 2023:

			Warrants Outstanding					Warrants Exercisable
Year Granted	Exercise Price		Number of Warrants at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Warrants at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price

2018	$	0.48		47,887	4.8 years	$	0.48		47,887	4.8 years	$	0.48
2019	$	5.28		215,846	2.6 years	$	5.28		215,846	2.6 years	$	5.28
2023	$	6.25		60,000	5.0 years	$	6.25		60,000	5.0 years	$	6.25
				323,733		$	4.75		323,733		$	4.75

Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Intangible assets consisted of the following at:

Schedule of Intangible Assets

June 30, 2023:

	Estimated Useful Life	Gross Amount		Accumulated Amortization		Net Amount
Trademarks	Indefinite	$	56,248	$	-	$	56,248
Patents	17 years		116,076		11,517		104,559
License agreement	17 years		80,773		-		80,773
Intangible Assets		$	253,097	$	11,517	$	241,580

December 31, 2022:

	Estimated Useful Life	Gross Amount		Accumulated Amortization		Net Amount
Trademarks	Indefinite	$	53,999	$	-	$	53,999
Patents	17 years		108,198		8,140		100,058
License agreement	17 years		65,510		-		65,510
Intangible Assets		$	227,707	$	8,140	$	219,567

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Payments Under Non-cancelable Operating Leases

Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow:


2023	$	334,661
2024		319,211
2025		246,051
2026		164,469
2027		-
Total future undiscounted lease payments		1,064,392
Less: interest		(72,736	)
Present value of lease liabilities	$	991,656

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 6,290,355	$ 3,492,656
Accounts receivable	445,120	182,820
Tax credits receivable	42,446	69,666
Income tax receivable	13,722	13,722
Deferred offering costs		216,886
Prepaid expenses	48,523	160,133
Total current assets	6,840,166	4,135,883
Property and equipment, net	803,107	846,958
Other assets
Other assets	47,744	47,507
Operating lease right-of-use asset	976,959	1,116,697
Intangible assets, net	241,580	219,567
Deferred patent costs	920,001	800,831
Total other assets	2,186,284	2,184,602
Total assets	9,829,557	7,167,443
Current liabilities:
Accounts payable	364,183	784,687
Current operating lease liability	298,047	287,384
Accrued expenses	767,721	993,961
Contract liabilities	310,700	156,000
Total current liabilities	1,740,651	2,222,032
Long-term operating lease liability	693,609	840,896
Warrant liability	158,994	70,283
Convertible notes payable, net		6,600,000
Total liabilities	2,593,254	9,733,211
Stockholders’ equity (deficit)
Common stock; $0.0001 par value, 100,000,000 shares authorized at June 30, 2023 and December 31, 2022, 12,097,643 and 1,043,988 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	1,210	104
Additional paid-in capital	51,436,352	1,054,138
Accumulated deficit	(44,201,259)	(37,314,552)
Total stockholders’ equity (deficit)	7,236,303	(36,260,310)
Total liabilities, preferred stock and stockholders’ equity (deficit)	9,829,557	7,167,443
Series A Convertible Preferred Stock [Member]
Preferred stock:
Preferred stock value		3,272,944
Series A-1 Convertible Preferred Stock [Member]
Preferred stock:
Preferred stock value		14,100,533
Series B Convertible Preferred Stock [Member]
Preferred stock:
Preferred stock value		$ 16,321,065

Accrued Expenses

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Accrued Expenses

6. Accrued Expenses

Accrued expenses consisted of the following at:

Schedule of Accrued Expenses

	June 30, 2023		December 31, 2022
Employee payroll and bonuses	$	481,383	$	371,010
Vacation		60,911		27,082
Research and development projects		164,036		316,389
Interest		-		223,792
Professional fees		57,133		24,502
Other		4,258		31,186
Total accrued expenses	$	767,721	$	993,961

The Company accrues expenses related to development activities performed by third parties based on an evaluation of services received and efforts expended pursuant to the terms of the contractual arrangements. Payments under some of these contracts depend on research and non-clinical trial milestones. There may be instances in which payments made to the Company’s vendors will exceed the level of services provided and result in a prepayment of expense. In accruing service fees, the Company estimates the period over which services will be performed and the level of effort to be expended in each period. If the actual timing of the performance of services or the level of effort varies from the estimate, the Company will adjust the accrual or prepaid expense accordingly. The Company has not experienced any material differences between accrued costs and actual costs incurred since its inception.

Schedule of Fair Value Measurements for Assets and Liabilities (Details) - Fair Value, Recurring [Member] - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 158,698	$ 5,670,283
Common Stock Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	158,698	70,283
2022 Convertible Note [Member
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		5,600,000
Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total
Fair Value, Inputs, Level 1 [Member] \| Common Stock Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total
Fair Value, Inputs, Level 1 [Member] \| 2022 Convertible Note [Member
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total
Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total
Fair Value, Inputs, Level 2 [Member] \| Common Stock Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total
Fair Value, Inputs, Level 2 [Member] \| 2022 Convertible Note [Member
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	158,698	5,670,283
Fair Value, Inputs, Level 3 [Member] \| Common Stock Warrants [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total	$ 158,698	70,283
Fair Value, Inputs, Level 3 [Member] \| 2022 Convertible Note [Member
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total		$ 5,600,000

Schedule of Calculation of Diluted Net Loss Per Share (Details) - shares	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Options to purchase shares of common stock	1,260,681	1,290,325
Common stock reserved for future issuance	1,584,414		1,554,061
Warrant [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Warrants outstanding	323,733		263,743
Equity Option [Member]
Debt Securities, Held-to-Maturity, Allowance for Credit Loss [Line Items]
Options to purchase shares of common stock	1,260,681		1,290,318
Warrants outstanding	962,654

Commitments and Contingencies

6 Months Ended

Jun. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

13. Commitments and Contingencies

Legal

The Company is subject to legal proceedings or claims which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity.

License Agreement

Effective January 26, 2022, the Company entered into an Exclusive License Agreement (the Agreement) with an unrelated third party. Under the Agreement, the Company is granted an exclusive license for certain patents and a non-exclusive license for certain know-how. The Agreement continues until the later of the expiration of the last to expire licensed patent or ten years after the first commercial sale of the first licensed therapeutic or non-therapeutic product. The Company may terminate the Agreement at any time by providing at least 30 days written notice to the third party. The Agreement is also terminated upon breach of a material obligation under the agreement or bankruptcy. Upon any termination of the agreement, neither party is relieved of obligations incurred prior to the termination.

During the three and six months ended June 30, 2023 and 2022, the Company capitalized payments made under this license agreement in the amount of $11,405 and $15,263, respectively. These capitalized costs will be amortized over the life of the licensed patents, once issued.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Operating Leases

The Company leases office and lab space in Branford, CT; Groton, CT; and Laval, Quebec. The Company’s leases expire at various dates through May 31, 2027. Most leases are for a fixed term and for a fixed amount. The Company is not a party to any leases that have step rent provisions, escalation clauses, capital improvement funding or payment increases based on any index or rate.

During 2020, the Company entered into a new lease agreement for the Company’s primary office and laboratory space in Branford, CT. The Branford lease requires monthly payments of $13,033 for the first year of the lease, which increases approximately 2% in each of the following years. The Branford lease also requires the Company to pay a pro-rata share of common area maintenance.

During May 2021, the Company entered into a new lease for office and laboratory space in Groton, CT. The Groton lease required monthly payments of $4,234, which was increased to $6,824 in September 2021 upon leasing additional space. The Groton lease is initially for a one-year term, with up to three additional years renewal available.

Future minimum payments under non-cancelable operating leases with initial or remaining terms in excess of one year during each of the next five years follow:


2023	$	334,661
2024		319,211
2025		246,051
2026		164,469
2027		-
Total future undiscounted lease payments		1,064,392
Less: interest		(72,736	)
Present value of lease liabilities	$	991,656

Rent expense for all operating leases was $84,716 and $169,432 for the three and six months ended June 30, 2023. The weighted average lease term for all operating leases is 3.4 years. The weighted average discount rate for all operating leases is 4.25%.

Related Parties (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended
Related Parties (Details Narrative) - USD ($)	Jun. 21, 2023	Sep. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022	Jan. 05, 2021
Related Party Transaction [Line Items]
Revenues from related party			$ 172,000	$ 85,000	$ 285,300	$ 205,000
Stock issued during conversion			$ 9,495,072
Common Stock [Member]
Related Party Transaction [Line Items]
Stock issued during conversion			1,846,020
Stock issued during conversion			$ 185
2022 Convertible Note [Member]
Related Party Transaction [Line Items]
Stock issued during conversion	$ 9,494,887
Convertible Note Purchase Agreement [Member]
Related Party Transaction [Line Items]
Convertible promissory note		$ 4,500,000						$ 2,000,000
Convertible Note Purchase Agreement [Member] \| 2022 Convertible Note [Member]
Related Party Transaction [Line Items]
Convertible promissory note		$ 4,350,000
2022 Convertible Note [Member] \| Common Stock [Member] \| Investor [Member]
Related Party Transaction [Line Items]
Stock issued during conversion		1,697,490
Stock issued during conversion		$ 4,243,726
Related Party [Member]
Related Party Transaction [Line Items]
Revenues from related party			172,000	$ 85,000	285,300	$ 205,000
Contract liabilities due from related party			310,700		310,700		$ 156,000
Related Party [Member] \| Accounts Receivable [Member]
Related Party Transaction [Line Items]
Accounts receivable due from related party			$ 440,000		$ 440,000		$ 175,000
Investor [Member] \| Convertible Note Purchase Agreement [Member] \| 2022 Convertible Note [Member]
Related Party Transaction [Line Items]
Convertible promissory note		$ 4,000,000

Stockholders’ Equity (Details Narrative) - USD ($)			6 Months Ended
Stockholders’ Equity (Details Narrative) - USD ($)	May 17, 2023	Jan. 31, 2023	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Class of Stock [Line Items]
Forward stock split	7.1-for-1 forward stock split		7.1-for-1 forward stock split
Common stock, par value per share			$ 0.0001	$ 0.0001
Common stock shares authorized			100,000,000	100,000,000
Common stock shares issued			12,097,643	1,043,988
Common stock shares outstanding			12,097,643	1,043,988
Common stock voting rights description			Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders and the holders of the Common Stock are entitled to elect one director of the Corporation.
Common stock shares reserved for future issuance			1,584,414		1,554,061
Preferred stock shares authorized			1,437,150	1,437,150
Preferred stock, par value per share			$ 0.0001	$ 0.0001
IPO [Member]
Class of Stock [Line Items]
Gross proceeds from convertible preferred stock		$ 100,000,000
Series B Preferred Stock [Member]
Class of Stock [Line Items]
Original issue price per share of series B preferred stock		$ 43.45
Dividend percentage on series B preferred stock			8.00%
Original issue price per share of series B preferred stock			$ 43.45
Series B Preferred Stock [Member] \| IPO [Member]
Class of Stock [Line Items]
Convertible series B preferred stock shares issued			3,284,553
Series B Preferred Stock [Member] \| 2021 Convertible Note [Member]
Class of Stock [Line Items]
Convertible series B preferred stock shares issued		23,432
Original issue price per share of series B preferred stock		$ 48.00
Series A Preferred Stock [Member]
Class of Stock [Line Items]
Original issue price per share of series B preferred stock		16.25
Dividend percentage on series B preferred stock			8.00%
Original issue price per share of series B preferred stock			$ 16.25
Series A Preferred Stock [Member] \| IPO [Member]
Class of Stock [Line Items]
Convertible series B preferred stock shares issued			1,458,233
Series A-1 convertible preferred stock
Class of Stock [Line Items]
Original issue price per share of series B preferred stock		$ 37.50
Dividend percentage on series B preferred stock			8.00%
Original issue price per share of series B preferred stock			$ 37.50
Series A-1 convertible preferred stock \| IPO [Member]
Class of Stock [Line Items]
Convertible series B preferred stock shares issued			2,964,849
Forward Stock Split [Member]
Class of Stock [Line Items]
Common stock, par value per share	$ 0.01		$ 0.0001
Common stock shares authorized			1,000,000,000

Accrued Expenses (Tables)

6 Months Ended

Jun. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accrued Expenses

Accrued expenses consisted of the following at:

Schedule of Accrued Expenses

	June 30, 2023		December 31, 2022
Employee payroll and bonuses	$	481,383	$	371,010
Vacation		60,911		27,082
Research and development projects		164,036		316,389
Interest		-		223,792
Professional fees		57,133		24,502
Other		4,258		31,186
Total accrued expenses	$	767,721	$	993,961

Schedule of Convertible Notes Payable (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Convertible notes payable, net		$ 6,600,000
2021 Convertible Note [Member]
Debt Instrument [Line Items]
Convertible notes payable, net		1,000,000
2022 Convertible Note [Member]
Debt Instrument [Line Items]
Convertible notes payable, net		$ 5,600,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482900/835-30-50-1

Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(f))
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480678/235-10-S99-1

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
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-Paragraph 3
-Subparagraph (SX 210.12-04(a))
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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-Name Accounting Standards Codification
-Section 55
-Paragraph 69B
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69B

Reference 6: http://www.xbrl.org/2003/role/exampleRef
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-Paragraph 69C
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-URI https://asc.fasb.org//1943274/2147481568/470-20-55-69C

Reference 7: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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Reference 8: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
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-Section 50
-Paragraph 1B
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 11: http://www.xbrl.org/2003/role/exampleRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (e)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stockholders’ Equity

6 Months Ended

Jun. 30, 2023

Equity [Abstract]

Stockholders’ Equity

8. Stockholders’ Equity

On May 17, 2023, the Company effected a 7.1-for-1 forward stock split (the “Forward Stock Split”) of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company’s preferred stock. The par value of the common stock was adjusted as a result of the Forward Stock Split from $0.01 to $0.0001 and the authorized shares were increased to 100,000,0000 shares of common stock in connection with the Forward Stock Split. Fractional shares resulting from the Forward Stock Split were rounded down to the next whole share and in lieu of any fractional shares the Company will pay a cash amount to the holder of such fractional share. The accompanying financial statements and notes to the financial statements give retroactive effect to the Forward Stock Split for all periods presented. Shares of common stock underlying outstanding stock-based awards and other equity instruments were proportionately increased and the respective per share value and exercise prices, if applicable, were proportionately decreased in accordance with the terms of the agreements governing such securities.

Common Stock

At June 30, 2023 and December 31, 2022, per the Company’s amended and restated Certificate of Incorporation, the Company was authorized to issue 100,000,000 shares of $0.0001 par value common stock.

The Company had 12,097,643 and 1,043,988 shares of common stock issued and outstanding as of June 30, 2023 and December 31, 2022, respectively.

Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders and the holders of the Common Stock are entitled to elect one director of the Corporation.

The Company currently has 1,584,414 shares of common stock reserved for future issuance for the potential exercise of stock options and warrants outstanding at June 30, 2023.

Preferred Stock

At June 30, 2023 and December 31, 2022, per the Company’s amended and restated Certificate of Incorporation, the Company has authorized 1,437,150 shares of $0.0001 par value preferred stock.

In January 2023, the Company issued 23,432 shares of its Series B Preferred Stock related to conversion of the 2021 Convertible Note at a conversion price of $48.00 per share (see Note 7).

The Series A, Series A-1, and Series B Preferred Stock have the following rights, preferences and privileges:

Conversion

The preferred stock is convertible, at the option of the holder, into common shares based upon a predefined formula. A holder of preferred stock may convert such shares into common shares at any time. For purpose of conversion, the initial conversion price is $16.25 per share (original issue price) for Series A Preferred Stock, $37.50 per share (original issue price) for Series A-1 Preferred Stock, and $43.45 per share (original issue price) for Series B Preferred Stock, and is subject to adjustment as described in the Certificate of Incorporation. Preferred stock will automatically convert into common shares upon the earlier of (a) an initial public offering with gross proceeds in excess of $100,000,000 or (b) the date and time, or the occurrence of an event, specified by vote or written consent of the required preferred stock shareholders, all outstanding Series A, Series A-1, and Series B Preferred Stock shall automatically convert into common shares, at the then effective conversion rate.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Upon the Company’s IPO in June 2023, all of the outstanding preferred stock converted to common stock, resulting in the issuance of 1,458,233, 2,964,849, and 3,284,553 shares of common stock in exchange for outstanding Series A, Series A-1, and Series B Preferred Stock, respectively. There was no gain or loss upon conversion.

Voting Rights

The holders of the Series A, Series A-1, and Series B Preferred Stock are entitled to vote on any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of preferred stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of preferred stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. The holders of the Series A and Series A-1 Preferred Stock are each entitled to elect one director of the Corporation. The holders of the Series B Stock are entitled to elect two members of the Board. Each class of preferred stock can remove from office such directors and to fill any vacancy caused by the resignation, death or removal of such directors under certain circumstances as described in the Certificate of Incorporation.

Dividends

The holders of Series A Preferred Stock are entitled to receive dividends at a rate of 8% per annum of the Series A original issue price of $16.25 per share on each outstanding share of Series A Preferred Stock (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Preferred Stock). Dividends accumulate from the original date of issuance of the Series A Preferred Stock, are cumulative and are payable upon declaration of the Board of Directors or liquidation of the Company. At June 30, 2023, there were no cumulative dividends on Series A Preferred Stock as there was no longer any Series A Preferred Stock outstanding.

The holders of Series A-1 Stock are entitled to receive dividends at a rate of 8% per annum of the Series A-1 original issue price of $37.50 per share on each outstanding share of Series A-1 (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A-1 Preferred Stock). Dividends are cumulative and are payable upon declaration of the Board of Directors or liquidation of the Company. At June 30, 2023, there were no cumulative dividends on Series A-1 Preferred Stock as there was no longer any Series A-1 Preferred Stock outstanding.

The holders of Series B Stock are entitled to receive dividends at a rate of 8% per annum of the Series B original issue price of $43.45 per share on each outstanding share of Series B (subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B Preferred Stock). Dividends are cumulative and are payable upon declaration of the Board of Directors or liquidation of the Company. At June 30, 2023, there were no cumulative dividends on Series B Preferred Stock as there was no longer any Series B Preferred Stock outstanding.

Liquidation

In the event of any liquidation, dissolution or winding up of the Company, the holders of the preferred stock are entitled to receive, prior to and in preference to the holders of the common shares, an amount equal to the Series A, Series A-1, or Series B Preferred Stock original issue price, plus declared and/or accrued but unpaid dividends. In the event of any such liquidation event, after the payment of all preferential amounts required to be paid to the holders of shares of preferred stock, the remaining assets of the Corporation available for distribution to its stockholders shall be distributed among the holders of the shares of preferred stock and Common Stock, pro rata based on the number of shares held by each such holder, treating for this purpose all such securities as if they had been converted into Common Stock pursuant to the terms of the Certificate of Incorporation immediately prior to such liquidation event.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Name Accounting Standards Codification
-Section 50
-Paragraph 13
-Subparagraph (b)
-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Convertible Debt (Details Narrative) - USD ($)				1 Months Ended				3 Months Ended		6 Months Ended
Convertible Debt (Details Narrative) - USD ($)	Jun. 21, 2023	Sep. 30, 2022	Jan. 05, 2021	Jun. 30, 2023	Apr. 30, 2023	Feb. 28, 2023	Jan. 31, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Debt Instrument [Line Items]
Conversion of convertible notes payable								$ 9,495,072
Change in fair value of convertible note								(2,830,100)		$ (3,630,100)
Amortized debt issuance costs								0	$ 1,968	0	$ 3,936
Interest accrued												$ 223,792
2022 Convertible Note [Member]
Debt Instrument [Line Items]
Maturity date				Jun. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
Conversion price						$ 30,000,000
Sale of additional notes				$ 500,000	$ 500,000
Aggregate principal				$ 4,850,000	$ 4,850,000			4,850,000		4,850,000
Converted shares	1,846,020
Conversion of convertible notes payable	$ 9,494,887
Change in fair value of convertible note								$ 2,830,100		$ 2,830,100
2021 Convertible Note [Member]
Debt Instrument [Line Items]
Conversion price per share			$ 48.00
Debt issuance costs			$ 15,613
2021 Convertible Note [Member] \| Series B Preferred Stock [Member]
Debt Instrument [Line Items]
Conversion price per share							$ 48.00
Interest accrued							$ 124,759
Issuance of conversion shares							23,432
Convertible Note Purchase Agreement [Member]
Debt Instrument [Line Items]
Convertible promissory note		$ 4,500,000	2,000,000
Convertible Note Purchase Agreement [Member] \| 2022 Convertible Note [Member]
Debt Instrument [Line Items]
Convertible promissory note		$ 4,350,000
Maturity date		Jan. 13, 2023
Bearing interest, percentage		8.00%
Gross proceeds		$ 20,000,000
Debt discount, percentage		30.00%
Capitalization amount		$ 30,000,000
Convertible Note Purchase Agreement [Member] \| 2021 Convertible Note [Member]
Debt Instrument [Line Items]
Convertible promissory note			$ 1,000,000
Bearing interest, percentage			6.00%

Summary of Significant Accounting Policies (Details Narrative) - USD ($)		3 Months Ended		6 Months Ended
	Jan. 01, 2022	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Right-of-use asset and lease liability	$ 1,418,502
Operating lease right-of-use asset		$ 976,959		$ 976,959		$ 1,116,697
Current operating lease liability		298,047		298,047		287,384
Long-term operating lease liability		693,609		693,609		840,896
Research and development		812,836	$ 1,505,447	1,643,017	$ 3,060,815
State tax credit receivable		32,459		32,459		32,459
Pending refunds related to research and experimental development		0		0		28,925
Refunds tax amount		9,987		9,987		$ 8,282
Patents [Member]
Property, Plant and Equipment [Line Items]
Impairment of intangible assets		$ 0		$ 0
Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life		3 years		3 years
Lease term		36 months		36 months
Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, plant and equipment, useful life		10 years		10 years
Lease term		52 months		52 months

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Accounting

The financial statements of the Company are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Unaudited Interim Financial Information

The unaudited interim financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, within the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited interim financial statements have been prepared on a basis consistent with the audited financial statements and in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the results for the interim periods presented and of the financial condition as of the date of the interim balance sheet. The financial data and the other information disclosed in these notes to the interim financial statements related to the three and six month periods are unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended December 31, 2022 and notes thereto that are included in the Company’s Registration Statement filed with the SEC on June 5, 2023.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Use of Estimates

The preparation of the financial statement in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the balance sheet. While management believes the estimates and assumptions used in the preparation of the financial statement are appropriate, actual results could differ from those estimates.

Cash and Cash Equivalents

For purposes of the balance sheets and statements of cash flows, the Company considers all cash on hand, demand deposits and all highly liquid investments with original maturities of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives, which range from 3 to 10 years. Expenditures for maintenance and repairs, which do not extend the economic useful life of the related assets, are charged to operations as incurred. Gains or losses on disposal of property and equipment are reflected in the statements of operations in the period of disposal.

Accounts Receivable

The Company carries its accounts receivable at cost less an allowance for doubtful accounts. On a periodic basis, the Company evaluates its accounts receivable and establishes an allowance for doubtful accounts based on a history of past write-offs, collections and current conditions. There was no allowance for doubtful accounts at June 30, 2023 and December 31, 2022. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

Deferred Offering Costs

The Company capitalized deferred offering costs, which primarily consisted of direct, incremental legal, professional, accounting, and other third-party fees relating to the Company’s initial public offering. In June 2023, the Company consummated its IPO and recorded such amounts against the gross proceeds of its IPO within the statements of stockholders’ equity during the three and six months ended June 30, 2023.

Right of Use Assets

In February 2016, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2016-02, Leases (“Topic 842”). ASU 2016-02 requires lessees to present right-of-use (“ROU”) assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. See Note 2 – Recently Adopted Accounting Pronouncements.

In calculating the effect of ASU 2016-02, the Company elected the transition method thereby not restating comparable periods. The Company elected to account for non-lease components as part of the lease component to which they relate. Lease accounting involves significant judgments, including making estimates related to the lease term, lease payments, and discount rate. In accordance with the guidance, the Company recognized ROU assets and lease liabilities for all leases with a term greater than 12 months.

The Company has operating leases for buildings. Currently, the Company has 3 operating leases with a ROU asset and lease liability totaling $1,418,502 as of January 1, 2022. The basis, terms and conditions of the leases are determined by the individual agreements. The Company’s option to extend certain leases ranges from 36 – 52 months. All options to extend have been included in the calculation of the ROU asset and lease liability. The leases do not contain residual value guarantees, restrictions, or covenants that could incur additional financial obligations to the Company. There are no subleases, sale-leaseback, or related party transactions.

At June 30, 2023, the Company had operating right-of-use assets with a net value of $976,959 and current and long-term operating lease liabilities of $298,047 and $693,609, respectively.

Intangible Assets

Intangible assets consist of trademarks and patents. All costs directly related to the filing and prosecution of patent and trademark applications are capitalized. Patents are amortized over their respective remaining useful lives upon formal approval. Trademarks have an indefinite life.

The Company accounts for other indefinite life intangible assets in accordance ASC Topic 350, Goodwill and Other Intangible Assets (ASC 350). ASC 350 requires that intangible assets that have indefinite lives are required to be tested at least annually for impairment or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intangible assets that have finite lives will continue to be amortized over their useful lives. No impairment losses relating to intangible assets were recorded during the three and six months ended June 30, 2023 or 2022.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Deferred Patent Costs

Deferred patent costs represent legal and filing expenses incurred related to the submission of patent applications for patents pending approval. These deferred costs will begin to be amortized over their estimated useful lives upon the formal approval of the patent. If the patent is not approved, the costs associated with the patent will be expensed in the year the patent was rejected. No impairment losses relating to deferred patent costs were recorded in the three and six months ended June 30, 2023 or 2022.

Impairment of Long-Lived Assets

In accordance with ASC Topic 360-10, Accounting for the Impairment or Disposal of Long-Lived Assets (ASC 360-10), the Company’s policy is to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In connection with this review, the Company also reevaluates the periods of depreciation for these assets. The Company recognizes an impairment loss when the sum of the undiscounted expected future cash flows from the use and eventual disposition of the asset is less than its carrying amount. If an asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is determined using the present value of the net future operating cash flows generated by the asset.

Convertible Debt and Warrant Accounting

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable 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 are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of additional paid-in capital at the time of issuance. For issued warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded at their initial fair value on the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of the warrants are recognized as a non-cash gain or loss on the statements of operations under Other Income/loss.

Convertible debt

When the Company issues debt with a conversion feature, it first assesses whether the debt should be accounted for in accordance with ASC 480 – Distinguishing Liabilities from Equity. If the debt does not meet the criteria of an ASC 480 liability, the note’s conversion features require bifurcation in accordance with ASC 815 – Derivatives and Hedging. If the Company determines the embedded conversion feature requires bifurcation in accordance with ASC 815, the Company also considers if it can elect the fair value option. If the fair value option is elected, the Company records the note at its initial fair value with any subsequent changes in fair value recorded in earnings. As noted in Note 7, the Company has elected the fair value option for the 2022 Convertible Notes and will record the notes at their initial fair values with any subsequent changes in fair value recorded in earnings. The Convertible Notes were converted into the Company’s common stock on the Closing Date of the Company’s IPO.

Convertible Preferred Stock

As the Convertible Preferred stockholders have liquidation rights in the event of a deemed liquidation event that, in certain situations, are not solely within the control of the Company and would require the redemption of the then-outstanding Convertible Preferred Stock, the Company classifies the Convertible Preferred Stock in mezzanine equity on the balance sheet. Due to the fact that the occurrence of a deemed liquidation event is not currently probable, the carrying value of the Convertible Preferred Stock is not being accreted to its redemption value. Subsequent adjustments to the carrying value of the Convertible Preferred Stock would be made only when a deemed liquidation event becomes probable.

As noted in Note 8, at the Closing Date of the Company’s IPO, the Convertible Preferred stock converted into shares of the Company’s common stock.

Revenue

The Company follows the five steps to recognize revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers (“ASC 606”), which are:

	●	Step 1: Identify the contract(s) with a customer

	●	Step 2: Identify the performance obligations in the contract

	●	Step 3: Determine the transaction price

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

	●	Step 4: Allocate the transaction price to the performance obligations in the contract

	●	Step 5: Recognize revenue when (or as) a performance obligation is satisfied

The Company generates service revenue through a joint development agreement with a research partner. The Company recognizes revenue related to the research and development aspects of the agreement over time using the input method as work is performed on the contract.

The Company also generates grant revenue, which represents monies received on contracts with various federal agencies and nonprofit research institutions for general research conducted by the Company to further their product development and are therefore considered contributions to the Company. The contracts are generally for periods of one year or more and can be cancelled by either party. The Company concluded that the grant arrangements do not meet the criteria to be treated as a collaborative arrangement under FASB ASC Topic 808 as the Company is the only active participant in the arrangement. The grant arrangements also do not meet the criteria for revenue recognition under Topic 606, as the U.S. Government would not meet the definition of a customer.

Amounts earned under these grant contracts are recorded as a reduction to research and development expense when eligible expenses are incurred and the right to payment is realizable or realized and earned. The Company believes this policy is consistent with Topic 606, to ensure that recognition reflects the transfer of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services, even though there is no exchange as defined in Topic 606. Additionally, the Company has determined that the recognition of amounts received as costs are incurred and amounts become realizable is analogous to the concept of transfer of control of a service over time under Topic 606.

Receipts of grant awards in advance, which are payable back to the funding agency if not used in accordance with conditions in the grants related to allowable costs or receipt of funding from research partners related to service revenue arrangements before work is performed on the contract, are classified as contract liabilities in the accompanying balance sheets.

Research and Development

The Company accounts for research and development costs in accordance with Accounting Standards Codification (ASC) subtopic 730-10, Research and Development. Accordingly, internal research and development costs are expensed as incurred. Research and development costs consist of costs related to labor, materials and supplies. Research and development costs incurred were $812,836 and $1,643,017 during the three and six month period ended June 30, 2023, respectively. Research and development costs incurred were $1,505,447 and $3,060,815 during the three and six month period ended June 30, 2022, respectively.

At June 30, 2023 and December 31, 2022, the Company has a state tax credit receivable of $32,459 for pending refunds related to the selling of research and development tax credits back to the State of Connecticut. At June 30, 2023 and December 31, 2022, the Company has $0 and $28,925, respectively for pending refunds related to Canadian Scientific Research and Experimental Development (SRED) credits. At June 30, 2023 and December 31, 2022, the Company has also recorded $9,987 and $8,282, respectively, related to refunds of Canadian Goods and Services Tax (GST) and Quebec Sales Tax (QST). Receipts of refunds are recorded in other income on the statements of operations.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, Compensation-Stock Compensation (ASC 718). ASC 718 requires employee stock options and rights to purchase shares under stock participation plans to be accounted for at fair value. ASC 718 requires that compensation costs related to share-based payment transactions be recognized as operating expenses in the financial statements. Under this method, compensation costs for all awards granted or modified are measured at estimated fair value at date of grant and are included as compensation expense over the vesting period during which an employee provides service in exchange for the award. For awards with a performance condition that affects vesting, the Company recognizes compensation expense when it is determined probable that the performance condition will be achieved.

The Company uses a Black-Scholes option pricing model to determine fair value of its stock options. The Black-Scholes model includes various assumptions, including the value of the underlying common stock, the expected life of stock options, the expected volatility and the expected risk-free interest rate. These assumptions reflect the Company’s best estimates, but they involve inherent uncertainties based on market conditions generally outside of the control of the Company. As a result, if other assumptions had been used, stock-based compensation cost could have been materially impacted. Furthermore, if the Company uses different assumptions for future grants, stock-based compensation cost could be materially impacted in future periods.

The Company accounts for equity instruments issued to non-employees in accordance with the provisions of ASC 718 as updated by Accounting Standards Update (ASU) No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which expands the scope of ASC 718 to include share-based payment transactions to non-employees.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

The following assumptions are used in valuing options issued using the Black-Scholes option pricing model:

Expected Volatility. The expected volatility of the Company’s shares is estimated based on the Company’s external valuation.

Expected Term. The expected term of options is estimated using the simplified method which is based on the vesting period and contractual term for each grant, or for each vesting-tranche for awards with graded vesting.

Underlying Common Stock Value. The underlying common stock value of the Company’s shares is estimated by a third-party valuation expert.

Risk-free Interest Rate. The Company bases the risk-free interest rate on the implied yield available on a U.S. Treasury note with terms equal to the expected term of the underlying grant.

Dividend Yield. The Black-Scholes valuation model calls for a single expected dividend yield as an input. The Company has not paid dividends on Common stock in the past nor does it expect to pay dividends on Common stock in the near future. As such, the Company uses a dividend yield percentage of zero

Income Taxes

The Company uses the liability method of accounting for income taxes, as set forth in ASC 740, Accounting for Income Taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequence of temporary differences between the carrying amounts and the tax basis of assets and liabilities and net operating loss carry forwards, all calculated using presently enacted tax rates.

Management has evaluated the effect of ASC guidance related to uncertain income tax positions and concluded that the Company has no significant financial statement exposure to uncertain income tax positions at June 30, 2023 and December 31, 2022. The Company’s income tax returns have not been examined by tax authorities through December 31, 2022.

Fair Value Measurements

The Company carries certain liabilities at fair value on a recurring basis. A fair value hierarchy that consists of three levels is used to prioritize the inputs to fair value valuation techniques:

	●	Level 1 – Inputs are based upon observable or quoted prices for identical instruments traded in active markets.

	●	Level 2 – Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

	●	Level 3 – Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

Recent Accounting Pronouncements

In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842). This ASU requires a lessee to recognize a right-of-use asset and a lease liability under most operating leases in its balance sheet. The ASU is effective for annual and interim periods beginning after December 15, 2021. The Company adopted ASU 2016-02 on January 1, 2022. See Note 13 – Operating Leases.

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This standard simplifies the accounting for income taxes through the removal of various exceptions previously provided, as well as providing additional reporting requirements for income taxes. The ASU is effective for the Company on January 1, 2022. The Company has adopted this standard effective January 1, 2022, which did not have a material impact to the financial statements.

In August 2020, the FASB issued ASU No. 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), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. This standard will be effective for the Company on January 1, 2024, with early adoption permitted (but no earlier than fiscal years beginning after December 15, 2020). The Company has adopted this standard effective January 1, 2021, which did not have a material impact to the financial statements.

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Management does not believe that any other recently issued, but not yet effective, accounting standards could have a material effect on the accompanying financial statements. As new accounting pronouncements are issued, the Company will adopt those that are applicable under the circumstances.

Financial Instruments

The Company’s financial instruments are primarily comprised of accounts receivable, accounts payable, accrued liabilities, and long-term debt. For accounts receivable, accounts payable and accrued liabilities, the carrying amount approximates fair value due to the short-term maturities of such instruments. The estimated fair value of the Company’s long-term debt approximates carrying value.

Retirement Plan

6 Months Ended

Jun. 30, 2023

Retirement Benefits [Abstract]

Retirement Plan

14. Retirement Plan

Effective January 1, 2019, the Company sponsors a 401(k) plan that covers substantially all employees. In order to be eligible to participate, an employee must complete two consecutive months of service and work a minimum of two hundred and fifty hours or work 1,000 hours in their first year of service. Employees may make pre-tax deferrals upon meeting the Plan eligibility requirements. Effective January 1, 2020, the Plan was transitioned to a safe harbor plan in which highly compensated employees are not eligible for matching contributions and non-highly compensated employees earn 100% match on first 3% contributed and 50% on the next 2% contributed. Total employer matching contributions were $2,633 and $4,824 for the three and six months ended June 30, 2023, respectively. Total employer matching contributions were $2,632 and $14,603 for the three and six months ended June 30, 2022, respectively.

- Definition

The entire disclosure for retirement benefits.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 70
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480794/715-70-50-1

Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 55
-Paragraph 17
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480482/715-20-55-17

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iv)(03)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(i)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (q)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (l)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//715/tableOfContent

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)(iii)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (o)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (p)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (r)(2)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480506/715-20-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 20
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480126/715-20-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 715
-SubTopic 60
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147480266/715-60-50-3

+ Details

Organization and Nature of Operations (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		6 Months Ended
	May 17, 2023	Jun. 30, 2023	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Proceeds from initial public offering					$ 5,991,359
Forward stock split	7.1-for-1 forward stock split				7.1-for-1 forward stock split
Accumulated deficit		$ 44,201,259	$ 44,201,259		$ 44,201,259		$ 37,314,552
Loss from operations			$ 1,485,476	$ 2,088,387	3,045,368	4,385,063
Net cash used in operating activities					$ 3,031,522	$ 4,091,605
Maximum [Member]
Property, Plant and Equipment [Line Items]
Sale of stock price per share	$ 0.01
Minimum [Member]
Property, Plant and Equipment [Line Items]
Sale of stock price per share	$ 0.0001
IPO [Member]
Property, Plant and Equipment [Line Items]
Shares of common stock		1,500,000
Sale of stock price per share		$ 5.00	$ 5.00		$ 5.00
Proceeds from initial public offering					$ 6.0

Net Loss Per Share

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Net Loss Per Share

12. Net Loss Per Share

Basic and diluted net loss per share were calculated as follows:

The numerator for basic and diluted net loss per share is as follows for the three and six months ended June 30, 2023 and 2022:

	2023			2022			2023			2022
	Three Months Ended						Six Months Ended
	2023			2022			2023			2022
Net loss	$	(4,429,528	)	$	(1,890,153	)	$	(6,886,707	)	$	(4,216,170	)
Dividends on preferred stock		(643,267	)		(692,246	)		(1,355,347	)		(1,384,492	)
Net loss attributable to common shareholders	$	(5,072,795	)	$	(2,582,399	)	$	(8,242,054	)	$	(5,600,662	)

The denominator is as follows for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended				Six Months Ended
	2023		2022		2023		2022
Weighted average common stock outstanding, basic and diluted		2,137,207		1,043,988		1,593,617		1,043,870
$0.01 warrants		10,319		11,466		10,893		11,466
Total		2,147,526		1,055,454		1,604,510		1,055,336

Net loss per share, basic and diluted is as follows for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended						Six Months Ended
	2023			2022			2023			2022
Net loss per share, basic and diluted	$	(2.36	)	$	(2.45	)	$	(5.14	)	$	(5.31	)

The following potential common stock equivalents, presented based on amounts outstanding at each period end, were excluded from the calculation of diluted net loss per share for the periods indicated because including them would have had an anti-dilutive effect:

	2023		2022
	June 30,
	2023		2022
Options to purchase shares of common stock		1,260,681		1,290,318
Warrants outstanding		323,733		263,743
		1,584,414		1,554,061

Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

Schedule of Property And Equipment

Property and equipment consisted of the following at June 30, 2023 and December 31, 2022:

Schedule of Property And Equipment

	June 30,2023			December 31, 2022
Lab equipment	$	1,053,710		$	1,034,579
Computer equipment		30,825			30,825
Furniture and fixtures		24,316			24,316
Leasehold improvements		28,855			28,855
Building equipment		14,932			14,932
Property and equipment gross		1,152,638			1,133,507
Less: accumulated depreciation		(349,531	)		(286,549	)
Net property and equipment	$	803,107		$	846,958

Statements of Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) - USD ($)	Series A Convertible Preferred Stock [Member] Preferred Stock [Member]	Series A-1 Convertible Preferred Stock [Member] Preferred Stock [Member]	Series B Convertible Preferred Stock [Member] Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Beginning balance, value at Dec. 31, 2021	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	$ 868,163	$ (26,634,186)	$ (25,765,919)
Beginning balance, shares at Dec. 31, 2021	205,385	380,657	391,303	1,043,100
Stock-based compensation					56,983		56,983
Exercise of stock options					1,510		1,510
Net loss						(2,326,017)	(2,326,017)
Beginning balance at Mar. 31, 2022	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	926,656	(28,960,203)	(28,033,443)
Ending balance, shares at Mar. 31, 2022	205,385	380,657	391,303	1,043,988
Beginning balance, value at Dec. 31, 2021	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	868,163	(26,634,186)	(25,765,919)
Beginning balance, shares at Dec. 31, 2021	205,385	380,657	391,303	1,043,100
Net loss							(4,216,170)
Beginning balance at Jun. 30, 2022	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	980,482	(30,850,356)	(29,869,770)
Ending balance, shares at Jun. 30, 2022	205,385	380,657	391,303	1,043,988
Beginning balance, value at Mar. 31, 2022	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	926,656	(28,960,203)	(28,033,443)
Beginning balance, shares at Mar. 31, 2022	205,385	380,657	391,303	1,043,988
Stock-based compensation					53,826		53,826
Net loss						(1,890,153)	(1,890,153)
Beginning balance at Jun. 30, 2022	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	980,482	(30,850,356)	(29,869,770)
Ending balance, shares at Jun. 30, 2022	205,385	380,657	391,303	1,043,988
Beginning balance, value at Dec. 31, 2022	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	1,054,138	(37,314,552)	(36,260,310)
Beginning balance, shares at Dec. 31, 2022	205,385	380,657	391,303	1,043,988
Stock-based compensation					38,794		38,794
Exercise of stock options, shares				888
Net loss						(2,457,179)	(2,457,179)
Issuance of Series B Convertible Preferred Stock			$ 1,124,759				1,124,759
Issuance of Series B Convertible Preferred Stock, shares			23,432
Beginning balance at Mar. 31, 2023	$ 3,272,944	$ 14,100,533	$ 17,445,824	$ 104	1,092,932	(39,771,731)	(38,678,695)
Ending balance, shares at Mar. 31, 2023	205,385	380,657	414,735	1,043,988
Beginning balance, value at Dec. 31, 2022	$ 3,272,944	$ 14,100,533	$ 16,321,065	$ 104	1,054,138	(37,314,552)	$ (36,260,310)
Beginning balance, shares at Dec. 31, 2022	205,385	380,657	391,303	1,043,988
Exercise of stock options, shares
Net loss							$ (6,886,707)
Beginning balance at Jun. 30, 2023				$ 1,210	51,436,352	(44,201,259)	7,236,303
Ending balance, shares at Jun. 30, 2023				12,097,643
Beginning balance, value at Mar. 31, 2023	$ 3,272,944	$ 14,100,533	$ 17,445,824	$ 104	1,092,932	(39,771,731)	(38,678,695)
Beginning balance, shares at Mar. 31, 2023	205,385	380,657	414,735	1,043,988
Stock-based compensation					38,794		38,794
Net loss						(4,429,528)	(4,429,528)
Conversion of convertible notes payable				$ 185	9,494,887		9,495,072
Conversion of convertible notes payable, shares				1,846,020
Conversion of preferred stock	$ (3,272,944)	$ (14,100,533)	$ (17,445,824)	$ 771	34,818,530		34,819,301
Conversion of preferred stock, shares	(205,385)	(380,657)	(414,735)	7,707,635
Initial public offering, net of issuance costs of $1,508,791				$ 150	5,991,209		5,991,359
Initial public offering, net of issuance costs of $1,508,791, shares				1,500,000
Beginning balance at Jun. 30, 2023				$ 1,210	$ 51,436,352	$ (44,201,259)	$ 7,236,303
Ending balance, shares at Jun. 30, 2023				12,097,643

Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of Accounting

Basis of Accounting

The financial statements of the Company are prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”).

Unaudited Interim Financial Information

Unaudited Interim Financial Information

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Property and Equipment

Property and Equipment

Accounts Receivable

Accounts Receivable

Deferred Offering Costs

Deferred Offering Costs

Right of Use Assets

Right of Use Assets

At June 30, 2023, the Company had operating right-of-use assets with a net value of $976,959 and current and long-term operating lease liabilities of $298,047 and $693,609, respectively.

Intangible Assets

Intangible Assets

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Deferred Patent Costs

Deferred Patent Costs

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets

Convertible Debt and Warrant Accounting

Convertible Debt and Warrant Accounting

Warrants

Convertible debt

Convertible Preferred Stock

Convertible Preferred Stock

As noted in Note 8, at the Closing Date of the Company’s IPO, the Convertible Preferred stock converted into shares of the Company’s common stock.

Revenue

Revenue

The Company follows the five steps to recognize revenue from contracts with customers under ASC 606, Revenue from Contracts with Customers (“ASC 606”), which are:

	●	Step 1: Identify the contract(s) with a customer

	●	Step 2: Identify the performance obligations in the contract

	●	Step 3: Determine the transaction price

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

	●	Step 4: Allocate the transaction price to the performance obligations in the contract

	●	Step 5: Recognize revenue when (or as) a performance obligation is satisfied

Research and Development

Research and Development

Stock-Based Compensation

Stock-Based Compensation

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

The following assumptions are used in valuing options issued using the Black-Scholes option pricing model:

Expected Volatility. The expected volatility of the Company’s shares is estimated based on the Company’s external valuation.

Underlying Common Stock Value. The underlying common stock value of the Company’s shares is estimated by a third-party valuation expert.

Risk-free Interest Rate. The Company bases the risk-free interest rate on the implied yield available on a U.S. Treasury note with terms equal to the expected term of the underlying grant.

Income Taxes

Income Taxes

Fair Value Measurements

Fair Value Measurements

The Company carries certain liabilities at fair value on a recurring basis. A fair value hierarchy that consists of three levels is used to prioritize the inputs to fair value valuation techniques:

	●	Level 1 – Inputs are based upon observable or quoted prices for identical instruments traded in active markets.

	●	Level 2 – Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

	●	Level 3 – Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Financial Instruments

Financial Instruments

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 14, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-41705
Entity Registrant Name	Azitra, Inc.
Entity Central Index Key	0001701478
Entity Tax Identification Number	46-4478536
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	21 Business Park Drive
Entity Address, City or Town	Branford
Entity Address, State or Province	CT
Entity Address, Postal Zip Code	06405
City Area Code	(203)
Local Phone Number	646-6446
Title of 12(b) Security	Common stock: Par value $0.0001
Trading Symbol	AZTR
Security Exchange Name	NYSEAMER
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		12,097,643

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	12,097,643	1,043,988
Common stock, shares issued	12,097,643	1,043,988
Series A Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	205,385	205,385
Preferred stock, shares issued	0	205,385
Preferred stock, shares outstanding	0	205,385
Preferred stock, liquidation value	$ 0	$ 3,337,506
Series A-1 Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	380,657	380,657
Preferred stock, shares issued	0	380,657
Preferred stock, shares outstanding	0	380,657
Preferred stock, liquidation value	$ 0	$ 14,274,638
Series B Convertible Preferred Stock [Member]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	851,108	851,108
Preferred stock, shares issued	0	391,303
Preferred stock, shares outstanding	0	391,303
Preferred stock, liquidation value	$ 0	$ 17,000,159

Net Loss Per Share (Tables)

6 Months Ended

Jun. 30, 2023

Earnings Per Share [Abstract]

Schedule of Numerator for Basic and Diluted Net Loss Per Share

The numerator for basic and diluted net loss per share is as follows for the three and six months ended June 30, 2023 and 2022:

	2023			2022			2023			2022
	Three Months Ended						Six Months Ended
	2023			2022			2023			2022
Net loss	$	(4,429,528	)	$	(1,890,153	)	$	(6,886,707	)	$	(4,216,170	)
Dividends on preferred stock		(643,267	)		(692,246	)		(1,355,347	)		(1,384,492	)
Net loss attributable to common shareholders	$	(5,072,795	)	$	(2,582,399	)	$	(8,242,054	)	$	(5,600,662	)

Schedule of Numerator for Basic and Diluted Weighted Average Common Stock Outstanding

The denominator is as follows for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended				Six Months Ended
	2023		2022		2023		2022
Weighted average common stock outstanding, basic and diluted		2,137,207		1,043,988		1,593,617		1,043,870
$0.01 warrants		10,319		11,466		10,893		11,466
Total		2,147,526		1,055,454		1,604,510		1,055,336

Schedule of Net Loss Per Share, Basic and Diluted

Net loss per share, basic and diluted is as follows for the three and six months ended June 30, 2023 and 2022:

	Three Months Ended						Six Months Ended
	2023			2022			2023			2022
Net loss per share, basic and diluted	$	(2.36	)	$	(2.45	)	$	(5.14	)	$	(5.31	)

Schedule of Calculation of Diluted Net Loss Per Share

	2023		2022
	June 30,
	2023		2022
Options to purchase shares of common stock		1,260,681		1,290,318
Warrants outstanding		323,733		263,743
		1,584,414		1,554,061

Schedule of Information about Options Outstanding and Exercisable (Details) - $ / shares	6 Months Ended
	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Number of options exercise price	$ 0.48
Number of options outstanding	1,260,681	1,290,325
Stock Option One [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Weighted Average Remaining Contractual Life, Options outstanding	2 years 6 months
Weighted Average Remaining Contractual Life, Options exercisable	2 years 7 months 6 days
Stock Option Two [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Weighted Average Remaining Contractual Life, Options outstanding	2 years 6 months
Weighted Average Remaining Contractual Life, Options exercisable	2 years 6 months
Stock Option Three [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Weighted Average Remaining Contractual Life, Options outstanding	7 years 9 months 18 days
Weighted Average Remaining Contractual Life, Options exercisable	7 years 7 months 6 days
Stock Option One [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Number of options exercise price	$ 0.48
Number of options outstanding	246,137
Weighted Average Exercise Price, Options outstanding	$ 0.48
Number of options exercisable	246,137
Weighted Average Exercise Price, Options exercisable	$ 0.48
Stock Option Two [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Number of options exercise price	$ 0.93
Number of options outstanding	202,040
Weighted Average Exercise Price, Options outstanding	$ 0.93
Number of options exercisable	198,290
Weighted Average Exercise Price, Options exercisable	$ 0.93
Stock Option Three [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Number of options exercise price	$ 1.70
Number of options outstanding	812,504
Weighted Average Exercise Price, Options outstanding	$ 1.70
Number of options exercisable	518,227
Weighted Average Exercise Price, Options exercisable	$ 1.70
Equity Option [Member]
Fair Value, off-Balance-Sheet Risks, Disclosure Information [Line Items]
Number of options outstanding	1,260,681		1,290,318
Number of options exercisable	962,654

Schedule of Numerator for Basic and Diluted Net Loss Per Share (Details) - USD ($)	3 Months Ended				6 Months Ended
	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2022	Mar. 31, 2022	Jun. 30, 2023	Jun. 30, 2022
Earnings Per Share [Abstract]
Net loss	$ (4,429,528)	$ (2,457,179)	$ (1,890,153)	$ (2,326,017)	$ (6,886,707)	$ (4,216,170)
Dividends on preferred stock	(643,267)		(692,246)		(1,355,347)	(1,384,492)
Net loss attributable to common shareholders	$ (5,072,795)		$ (2,582,399)		$ (8,242,054)	$ (5,600,662)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

Stock Options

6 Months Ended

Jun. 30, 2023

Fair Value Disclosures [Abstract]

Stock Options

10. Stock Options

In March 2023, the Company’s Board of Directors and stockholders approved the 2023 Stock Incentive Plan (“2023 Plan”).The 2023 Plan allows the Committee to grant up to 2,000,000 shares of Common Stock in the form of incentive and non-statutory stock options, restricted stock awards, restricted stock units, and other stock-based awards to employees, directors, and non-employees. As of June 30, 2023, there were no awards issued under the 2023 Plan.

During 2016, the Company established the Azitra Inc. 2016 Stock Incentive Plan (the Plan) which provides for the granting of stock options and restricted shares to the Company’s employees, officers, directors, advisors and consultants. There were 1,490,595 shares available for granting under the Plan at December 31, 2022. Options vest over varying time frames.

During the three and months ended June 30, 2023 and 2022, the Company did not grant any stock options to acquire shares of common stock. During the three and six months ended June 30, 2023, the Company recognized stock compensation expense of $38,974 and $77,588, respectively, relating to the issuance of service-based stock options. During the three and six months ended June 30, 2022, the Company recognized stock compensation expense of $53,826 and $110,809, respectively, relating to the issuance of service-based stock options. At June 30, 2023, there was $350,197 of unamortized compensation expense that will be amortized over the remaining vesting period. At June 30, 2023 and 2022, there were 13,120 performance-based options outstanding with a fair value of $109,551. During the three and six months ended June 30, 2023 and 2022, the Company did not recognize any compensation expense for performance-based options. The Company determined the options qualified as plain vanilla under the provisions of SAB 107 and the simplified method was used to estimate the expected option life.

The following table summarizes information about options outstanding and exercisable at June 30, 2023:

		Options Outstanding					Options Exercisable
Exercise Price		Number of Options at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price		Number of Options at 6/30/2023		Weighted Average Remaining Contractual Life	Weighted Average Exercise Price

$	0.48		246,137	2.5 years	$	0.48		246,137	2.6 years	$	0.48
$	0.93		202,040	2.5 years	$	0.93		198,290	2.5 years	$	0.93
$	1.70		812,504	7.8 years	$	1.70		518,227	7.6 years	$	1.70
			1,260,681					962,654

AZITRA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

For The Three and Six Months Ended June 30, 2023 and 2022

Total stock option activity for the six months ended June 30, 2023 is summarized as follows:

Schedule of Stock Option Activity

	Shares			Weighted Average Exercise Price
Outstanding at December 31, 2022		1,290,325		$	1.27
Granted		-			-
Exercised		-			-
Forfeited		(29,644	)		0.93
Outstanding at June 30, 2023		1,260,681		$	1.28

There are 229,914 shares available for future grant under the Plan at June 30, 2023.

- Definition

The entire disclosure for a company's election to apply the fair value option for measurement and reporting of eligible financial assets and liabilities (as defined), as well as certain other eligible items (as defined) included in the statement of financial position, whether such option is elected for a single eligible item or a group of similar eligible items and is in addition to other disclosures concerning fair value which the company may be required to provide. Such disclosure might be expected to include: (1) for items included in the statement of financial position: (a) the reasons for electing a fair value option for each eligible item or group of similar eligible items; (b) if the fair value option is elected for some but not all eligible items within a group of similar eligible items: (i) a description of those similar items and the reasons for partial election and (ii) information of how the group of similar items relates to individual balance sheet line items; (c) for each line item in the statement of financial position that includes an item or items for which the fair value option has been elected: (i) information of how each line item in the statement of financial position relates to major categories of assets and liabilities presented in accordance with other fair value disclosures and (ii) the aggregate carrying amount of ineligible items included in each line item in the balance sheet, if any; (d) the difference between the aggregate fair value and the aggregate unpaid principal balance (assuming contractual principal amounts and fair value option elected) of: (i) loans and long-term receivables (other than securities otherwise reported at fair value) and (ii) long-term debt instruments; (e) for loans held as assets for which the fair value option has been elected: (i) the aggregate fair value of loans that are 90 days or more past due, (ii) if the policy is to recognize interest income separately from other changes in fair value, the aggregate fair value of loans in nonaccrual status, and (iii) the difference between the aggregate fair value and the aggregate unpaid principal balance for loans that are 90 days or more past due, in nonaccrual status, or both; (f) for investments that would have been accounted for under the equity method if the entity had not chosen to apply the fair value option, the information required for such investments, if material either individually or in the aggregate; (2) for items included in the income statement: (a) the amounts of gains and losses from fair value changes included in earnings and in which line in the income statement those gains and losses are reported whether or not combined with gains and losses from items required to be accounted for at fair value; (b) a description of how interest and dividends are measured and where they are reported in the income statement; (c) for loans and other receivables held as assets: (i) the estimated amount of gains or losses included in earnings attributable to changes in instrument-specific credit risk and (ii) how the gains or losses attributable to changes in instrument-specific credit risk were determined; (d) for liabilities with fair values that have been significantly affected during the reporting period by changes in the instrument-specific credit risk: (i) the estimated amount of gains and losses from fair value changes included in earnings that are attributable to changes in the instrument-specific credit risk, (ii) qualitative information about the reasons for those changes, and (iii) how the gains and losses attributable to changes in instrument-specific credit risk were determined; and (3) certain other disclosures as required or determined to be provided.

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