Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Jan. 30, 2020 | Jun. 30, 2019 | |
Document and Entity Information [Abstract] | |||
Entity Registrant Name | SPHERIX INC | ||
Entity Central Index Key | 0000012239 | ||
Document Type | 10-K | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity File Number | 000-05576 | ||
Entity Reporting Status Current | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 4,825,549 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Public Float | $ 5,730,248 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 91 | $ 17 |
Marketable securities | 857 | 2,700 |
Prepaid expenses and other assets | 181 | 188 |
Total current assets | 1,129 | 2,905 |
Property and equipment, net | 1 | |
Investments | 10,153 | 10,345 |
Total assets | 11,282 | 13,251 |
Current liabilities | ||
Accounts payable and accrued expenses | 68 | 132 |
Accrued salaries and benefits | 682 | 732 |
Warrant liabilities | 82 | |
Payable to DatChat | 207 | |
Total current liabilities | 750 | 1,153 |
Total liabilities | 750 | 1,153 |
Stockholders' equity | ||
Common stock, $0.0001 par value, 100,000,000 shares authorized; 4,825,552 and 2,010,028 shares issued at December 31, 2019 and 2018, respectively; 4,825,549 and 2,010,025 shares outstanding at December 31, 2019 and 2018, respectively | ||
Additional paid-in-capital | 155,062 | 152,445 |
Treasury stock, at cost, 3 shares at December 31, 2019 and 2018 | (264) | (264) |
Accumulated deficit | (144,266) | (140,083) |
Total stockholders' equity | 10,532 | 12,098 |
Total liabilities and stockholders' equity | 11,282 | 13,251 |
Series D Preferred Stock | ||
Stockholders' equity | ||
Preferred Stock | ||
Series D-1 Preferred Stock | ||
Stockholders' equity | ||
Preferred Stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock, issued | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 100,000,000 | 100,000,000 |
Common stock, issued | 4,825,552 | 2,010,028 |
Common stock, outstanding | 4,825,549 | 2,010,025 |
Treasury stock | 3 | 3 |
Series D Preferred Stock | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, issued | 4,725 | 4,725 |
Preferred stock, outstanding | 4,725 | 4,725 |
liquidation preference | $ 0.0001 | $ 0.0001 |
Series D-1 Preferred Stock | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Preferred stock, issued | 834 | 834 |
Preferred stock, outstanding | 834 | 834 |
liquidation preference | $ 0.0001 | $ 0.0001 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement [Abstract] | ||
Revenues | $ 9 | $ 28 |
Operating costs and expenses | ||
Amortization of patent portfolio | 1,405 | |
Selling, general and administrative | 3,172 | 3,324 |
Research and development | 2,522 | |
Impairment of intangible assets | 2,173 | |
Total operating expenses | 5,694 | 6,902 |
Loss from operations | (5,685) | (6,874) |
Other income (expenses) | ||
Other income (expenses), net | 14 | (333) |
Change in fair value of investment | 1,406 | 8,194 |
Change in fair value of warrant liabilities | 82 | 740 |
Total other income | 1,502 | 8,601 |
Net (loss) income | $ (4,183) | $ 1,727 |
Net income (loss) per share attributable to common stockholders, basic and diluted | ||
Basic | $ (1.67) | $ .91 |
Diluted | $ (1.67) | $ 0.91 |
Weighted average number of shares outstanding, | ||
Basic | 2,511,566 | 1,896,057 |
Diluted | 2,511,566 | 1,896,745 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock | Preferred Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Deficit | Total |
Balance at Dec. 31, 2017 | $ 149,425 | $ (264) | $ (145,055) | $ 4,106 | ||
Balance (in shares) at Dec. 31, 2017 | 1,467,052 | 5,559 | 3 | |||
Issuance common stock in equity raise, net of offering cost | 2,700 | 2,700 | ||||
Issuance common stock in equity raise, net of offering cost (in shares) | 522,876 | |||||
Stock-based compensation | 320 | 320 | ||||
Stock-based compensation (in shares) | 20,097 | |||||
Cumulative effect of the changes related to adoption of ASC 606 | 3,245 | 3,245 | ||||
Net Income (loss) | 1,727 | 1,727 | ||||
Balance at Dec. 31, 2018 | 152,445 | $ (264) | (140,083) | 12,098 | ||
Balance (in shares) at Dec. 31, 2018 | 2,010,025 | 5,559 | 3 | |||
Issuance of common stock and prefunded common stock warrants, net of offering cost | 787 | 787 | ||||
Issuance of common stock and prefunded common stock warrants, net of offering cost (in shares) | 221,000 | |||||
Issuance of common stock, net of offering cost / At-the-market offering | 1,047 | 1,047 | ||||
Issuance of common stock, net of offering cost / At-the-market offering (in shares) | 532,070 | |||||
Exercise of prefunded common stock warrants | ||||||
Exercise of prefunded common stock warrants (in shares) | 201,961 | |||||
Warrant exercise | ||||||
Warrant exercise (in shares) | 33,333 | |||||
Exchange of common shares for prefunded warrants | ||||||
Exchange of common shares for prefunded warrants (in shares) | (115,269) | |||||
Fractional shares adjusted for reverse split | ||||||
Fractional shares adjusted for reverse split (in shares) | 3,371 | |||||
Stock-based compensation | 329 | 329 | ||||
Issuance of common stock for research and development - license acquired | 2,152 | 2,152 | ||||
Issuance of common stock for research and development - license acquired, (in shares) | 1,939,058 | |||||
Distribution of Hoth common stock | (1,698) | (1,698) | ||||
Net Income (loss) | (4,183) | (4,183) | ||||
Balance at Dec. 31, 2019 | $ 155,062 | $ (264) | $ (144,266) | $ 10,532 | ||
Balance (in shares) at Dec. 31, 2019 | 4,825,549 | 5,559 | 3 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities | ||
Net (loss) income | $ (4,183) | $ 1,727 |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization of patent portfolio | 1,405 | |
Change in fair value of investment | (1,406) | (8,194) |
Change in fair value of warrant liabilities | (82) | (740) |
Research and development-acquired license, expensed | 2,512 | |
Stock-based compensation | 329 | 320 |
Depreciation expense | 38 | |
Realized loss on marketable securities | 172 | 400 |
Unrealized loss (gain) on marketable securities | (145) | 117 |
Impairment of intangible assets | 2,173 | |
Changes in assets and liabilities: | ||
Prepaid expenses and other assets | 7 | (38) |
Accounts payable and accrued expenses | (64) | 74 |
Accrued salaries and benefits | (50) | 37 |
Payable to DatChat | (107) | |
Accrued lease liabilities | (48) | |
Net cash used in operating activities | (3,017) | (2,729) |
Cash flows from investing activities | ||
Purchase of marketable securities | (8,461) | (14,280) |
Sale of marketable securities | 10,277 | 15,061 |
Purchase of investments at fair value | (200) | (922) |
Release of deposit | 26 | |
Purchase of research and development licenses | (360) | |
Purchase of property and equipment | (36) | |
Net cash provided by (used in) investing activities | 1,256 | (151) |
Cash flows from financing activities | ||
Proceeds from issuance common stock, net of offering cost | 787 | 2,700 |
Proceeds from issuance common stock/ At-the-market offering | 1,154 | |
Offering costs fro the issuance of common stock / At-the-market offering | (106) | |
Net cash provided by financing activities | 1,835 | 2,700 |
Net increase (decrease) in cash and cash equivalents | 74 | (180) |
Cash and cash equivalents, beginning of period | 17 | 197 |
Cash and cash equivalents, end of period | 91 | 17 |
Non-cash investing and financing activities | ||
Investment in DatChat | 207 | |
Investment in Mellow Scooters | 2 | |
Distribution of Hoth common stock | $ 1,698 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | Note 1. Organization and Description of Business Organization and Description of Business Spherix Incorporated (the “Company”) is technology development company committed to the fostering of innovative ideas. The Company was incorporated in 1967 in the State of Delaware as a scientific research company, and for much of its history pursued drug development including through Phase III clinical studies which were discontinued. The Company was formerly focused on commercializing and monetizing patents by acquiring IP from patent holders in order to maximize the value of the patent holdings by conducting and managing a licensing campaign, or through the settlement and litigation of patents. Since March 2016, the Company has received limited funds from its intellectual property monetization. In addition to its patent monetization efforts, since the fourth quarter of 2017, the Company has been transitioning to focus its efforts as a technology and biotechnology development company. These efforts have focused on biotechnology research and blockchain technology research. The Company’s biotechnology research development includes investments in: (i) Hoth Therapeutics Inc. (“Hoth”), a development stage biopharmaceutical company focused on unique targeted therapeutics for patients suffering from indications such as atopic dermatitis, also known as eczema, (ii) DatChat, Inc. (“DatChat”), a privately held personal privacy platform focused on encrypted communication, internet security and digital rights management, and (iii) the acquisition of assets of CBM BioPharma, Inc. (“CBM”), a pharmaceutical company focusing on the development of cancer treatments. As a result of the Company’s biotechnology research development and associated investments and acquisitions, our business portfolio now focuses on the treatment of three different cancers, including pancreatic cancer, acute myeloid leukemia (AML) and acute lymphoblastic leukemia (ALL). Our AML and ALL compounds, developed at the Wake Forest University, are next generation targeted therapeutics designed to overcome multiple resistance mechanisms observed with the current standard of care. DHA-dFdC, our pancreatic drug developed at the University of Texas at Austin, is a new compound poised to become the next generation of chemotherapy treatment for advanced pancreatic cancer. DHA-dFdC overcomes tumor cell resistance to current chemotherapeutic drugs and is well tolerated in preclinical toxicity tests. Preclinical studies have also indicated that DHA-dFdC inhibits pancreatic cancer cell growth (up to 100,000-fold more potent that gemcitabine, a current standard therapy), has documented efficacy against pancreatic tumors in a clinically relevant transgenic mouse model and has demonstrated activities against other cancers, including leukemia, lung and melanoma. In addition, we are constantly seeking to grow our pipe to treat unmet medical needs in oncology. Reverse Stock Split On May 10, 2019, the Company effected a reverse stock split of its outstanding shares of common stock at a ratio of one-for-4.25 (the “Reverse Stock Split”). The Reverse Stock Split, which was approved by the Company’s Board of Directors under authority granted by the Company’s stockholders at the Company’s 2019 Annual Meeting of Stockholders held on April 15, 2019, was consummated pursuant to a Certificate of Amendment filed with the Secretary of State of Delaware on May 9, 2019 (the “Certificate of Amendment”). The Reverse Stock Split was effective on May 10, 2019 (the “Effective Date”). Unless the context otherwise requires, all references in this report to shares of the Company’s common stock, including prices per share of its common stock, reflect the Reverse Stock Split. Fractional shares were not issued, and the final number of shares were rounded up to the next whole share. CBM Asset Acquisition On October 10, 2018, the Company entered into that certain Agreement and Plan of Merger, dated as of October 10, 2018, by and among the Company, Spherix Delaware Merger Sub Inc., a Delaware corporation, Scott Wilfong, as the CBM stockholder representative, and CBM, a Delaware corporation and a pharmaceutical company focused on the development of cancer treatments, pursuant to which all shares of capital stock of CBM were be converted into the right to receive an aggregate of 15,000,000 shares of the Company’s common stock, with CBM continuing as the surviving corporation in the merger. On May 15, 2019, the Company restructured the terms of the CBM merger and chose to proceed with purchasing substantially all of the assets, properties and rights (the “Acquisition”) of CBM. On December 5, 2019, the Company completed the Acquisition of CBM, pursuant to that certain Asset Purchase Agreement, dated as of May 15, 2019, by and between the Company and CBM, as amended by that certain Amendment No. 1 to Asset Purchase Agreement, dated as of May 30, 2019, and Amendment No. 2 to Asset Purchase Agreement, dated as of December 5, 2019 (collectively, the “CBM Purchase Agreement”). Upon the consummation of the Qualified Financing, the Company shall retain the first $2,000,000 of the gross proceeds from the Qualified Financing and CBM shall receive 100% of the gross proceeds of such Qualified Financing received by the Company in excess of $2,000,000 as well as the gross proceeds of any subsequent equity financings by the Company until the Cash Consideration amount is satisfied in full. Additionally, at closing, 7% or 135,734 shares of common stock of the Stock Consideration was deposited with VStock (the “Escrow Shares”), the Company’s transfer agent, to be held in escrow for six months post-closing to satisfy certain indemnification obligations pursuant to the terms and conditions of the CBM Purchase Agreement, and 93% or 1,803,324 shares of the Stock Consideration was issued and delivered to CBM. On December 5, 2019, the Company recorded the issuance of Stock Consideration at fair value, based upon the closing stock price per share of $1.11 as of December 5, 2019. The issuance of Escrow Shares is considered probable as of December 31, 2019. The Cash Consideration was not considered probable as of December 31, 2019 as such consideration is payable on a Qualified Financing. Because acquisition of CBM’s intellectual property had not received regulatory approval, the $2.5 million purchase price paid for CBM was immediately expensed in the Company’s statement of operations as research and development – intellectual property acquired. |
Going Concern and Financial Con
Going Concern and Financial Condition | 12 Months Ended |
Dec. 31, 2019 | |
Going Concern And Financial Condition | |
Going Concern and Financial Condition | Note 2. Going Concern and Financial Condition The Company continues to incur ongoing administrative and other expenses, including public company expenses, in excess of corresponding (non-financing related) revenue. While the Company continues to implement its business strategy, it intends to finance its activities through: ● managing current cash and cash equivalents on hand from the Company's past debt and equity offerings, ● seeking additional funds raised through the sale of additional securities in the future, ● seeking additional liquidity through credit facilities or other debt arrangements, and ● increasing revenue from its patent portfolios, license fees and new business ventures. The Company's ultimate success is dependent on its ability to obtain additional financing and generate sufficient cash flow to meet its obligations on a timely basis. The Company's business will require significant amounts of capital to sustain operations and make the investments it needs to execute its longer-term business plan to support new technologies and help advance innovation. Absent generation of sufficient revenue from the execution of the Company's long-term business plan, the Company will need to obtain additional debt or equity financing, especially if the Company experiences downturns in its business that are more severe or longer than anticipated, or if the Company experiences significant increases in expense levels resulting from being a publicly-traded company or operations. If the Company attempts to obtain additional debt or equity financing, the Company cannot assume that such financing will be available to the Company on favorable terms, or at all. The Company plans to pursue its plans regarding research and development which will require resources beyond those currently available, including third party capital. During this time, the Company does not expect to generate revenue as there is substantial doubt about the Company's ability to continue as a going concern within one year from the date of this filing. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Nuta Technology Corp. ("Nuta"), Spherix Portfolio Acquisition II, Inc. ("SPAII"), Guidance IP, LLC ("Guidance"), Directional IP, LLC ("Directional"), Spherix Management Services, LLC ("SMS"), Spherix Delaware Merger Sub Inc. ("Merger Sub"), Spherix Merger Subsidiary, Inc ("SMSI") and NNPT, LLC ("NNPT"). All significant intercompany balances and transactions have been eliminated in consolidation. Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"). This requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the period. The Company's significant estimates and assumptions include stock-based compensation, the valuation of derivative liabilities, the valuation of investments and the valuation allowance related to the Company's deferred tax assets. Certain of the Company's estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company's estimates and could cause actual results to differ from those estimates and assumptions. Segments The Company operates in one operating segment and, accordingly, no segment disclosures have been presented herein. Concentration of Cash The Company maintains cash balances at two financial institutions in checking accounts and money market accounts. The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. Marketable Securities Marketable securities are classified as trading and are carried at fair value. The Company's marketable securities consist of corporate bonds and highly liquid mutual funds and exchange-traded & closed-end funds which are valued at quoted market prices. Investments The Company accounts for its investment in Hoth at fair value (based upon the closing price on the Nasdaq Capital Market). In connection with the consummation of the initial public offering of Hoth, the Company entered into a lock-up agreement until February 20, 2022. Therefore, the Company considers its investment in Hoth to be long term. Research and Development – Intellectual Property Acquired The Company concluded that its acquisition of CBM, completed on December 5, 2019, should be accounted for as an asset acquisition rather than a business combination under Accounting Standards Codification (ASC) 805, Business Combinations. The acquisition of CBM was accounted for as an asset acquisition because substantially all the fair value of the assets being acquired are concentrated in a group of similar assets. Furthermore, the acquired assets did not have outputs or employees. The assets acquired by the Company included a license, other associated intellectual property, documentation and records, and related materials. Treasury Stock The Company accounts for the treasury stock using the cost method, which treats it as a reduction in stockholders' equity. Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: ● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct). ● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Noncash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. As of December 31, 2019 and 2018, there were no contract assets or liabilities associated with the Company's settlement and licensing agreements. During the year ended December 31, 2019 and 2018, the Company only generated $9,000 and $28,000 of revenue, respectively. Accounting for Warrants The Company accounts for the issuance of common stock purchase warrants issued in connection with the equity offerings in accordance with the provisions of ASC 815, Derivatives and Hedging The Company assessed the classification of common stock purchase warrants as of the date of each offering and determined that such instruments met the criteria for liability classification. Accordingly, the Company classified the warrants as a liability at their fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized as "change in the fair value of warrant liabilities" in the consolidated statements of operations. The fair value of the warrants has been estimated using a Black-Scholes valuation model. Stock-based Compensation The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company's long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company's stock at the date of grant and expire up to ten years from the date of grant. These options generally vest over a one- to five-year period. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Effective January 1, 2017, the Company elected to account for forfeited awards as they occur, as permitted by Accounting Standards Update ("ASU") 2016-09. Ultimately, the actual expenses recognized over the vesting period will be for those shares that vested. Prior to making this election, the Company estimated a forfeiture rate for awards at 0%, as the Company did not have a significant history of forfeitures. Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740, " Income Taxes Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-13, " Fair Value Measurement In December 2019, the FASB issued ASU No. 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Recently Adopted Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, " Revenue from Contracts with Customers Revenue from Contracts with Customers Revenue from Contracts with Customers Principal versus Agent Considerations Revenue from Contracts with Customers Identifying Performance Obligations and Licensing Revenue from Contracts with Customers Narrow-Scope Improvements and Practical Expedients In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 840) In May 2017, the Financial Accounting Standards Board (the FASB) issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Investments in Marketable Secur
Investments in Marketable Securities | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments in Marketable Securities | Note 4. Investments in Marketable Securities The realized gain or loss, unrealized gain or loss, and dividend income related to marketable securities for the year ended December 31, 2019 and 2018, which are recorded as a component of other (expenses) income on the consolidated statements of operations, are as follows ($ in thousands): For the Years Ended 2019 2018 Realized gain (loss) $ (172 ) $ (400 ) Unrealized gain (loss) 145 (117 ) Dividend income 38 158 Interest income 4 - $ 14 $ (359 ) |
Investment in Hoth Therapeutics
Investment in Hoth Therapeutics, Inc. | 12 Months Ended |
Dec. 31, 2019 | |
Investment in Hoth Therapeutics, Inc. [Abstract] | |
Investment in Hoth Therapeutics, Inc. | Note 5. Investment in Hoth Therapeutics, Inc. Hoth is a development stage biopharmaceutical company focused on unique targeted therapeutics for patients suffering from indications such as atopic dermatitis, also known as eczema. Hoth's primary asset is a sublicense agreement with Chelexa Biosciences, Inc. ("Chelexa") pursuant to which Chelexa has granted Hoth an exclusive sublicense to use its BioLexa products for the treatment of eczema. On February 20, 2019, Hoth closed its initial public offering (the "IPO") at an initial offering price to the public of $5.60 per share. The Company records this investment at fair value and records any change in fair value in the statements of operations (see Note 7). On October 2, 2019, the Board of Directors approved a distribution to the Company's stockholders of 100,000 Hoth Shares held by the Company. Accordingly, each of the Company's stockholders received one (1) share of Hoth common stock for every twenty-nine (29) shares of Company common stock held as of 5 p.m. Eastern Time on October 21, 2019, the dividend record date. The Company did not distribute fractional shares of Hoth common stock, and any fractional shares were rounded down to the nearest whole share. The following summarizes the Company investment in Hoth: Security Name Shares Owned as of December 31, Fair value per Share as of December 31, Fair value as of December 31, HOTH 1,636,230 $ 6.19 $ 10,128 The fair value of Hoth common shares as of December 31, 2019 was based on the closing price of $6.19 reported on The NASDAQ Capital Market as of December 31, 2019. |
Investment in Others
Investment in Others | 12 Months Ended |
Dec. 31, 2019 | |
Investment in Others [Abstract] | |
Investment in Others | Note 6. Investment in Others In May 2019, the Company purchased (a) a senior convertible note issued by DatChat with outstanding principal of $300,000, with an initial conversion rate of $0.20 per share, (b) a warrant to purchase 2,250,000 shares of DatChat common stock at an initial exercise price of $0.20 per share, (c) an option to acquire an additional $300,000 senior convertible note and a warrant to purchase 1,500,000 shares of DatChat common stock, (d) a contingent option to purchase 500,000 shares of DatChat common stock from an existing DatChat stockholder, (e) a contingent option to put 200,000 shares of DatChat common stock and (f) 50,000 shares of common stock of CBM which represents a 20% interest in CBM. The Company allocated all the fair value of this investment to CBM. As a result of the nominal purchase price allocated to DatChat, the Company reviewed its existing holdings in DatChat and reduced its existing carrying amount from $1.0 million to $0. The Company recorded its initial investment in DatChat on adjusted cost method measurement alternative in accordance with ASU 2016-01. The balance of Company's other investments is $25,000 as of December 31, 2019. Such investments were recorded on adjusted cost method measurement alternative in accordance with ASU 2016-01. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Note 7. Fair Value of Financial Assets and Liabilities Financial instruments, including cash and cash equivalents, accounts payable and accrued liabilities are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. The Company measures the fair value of financial assets and liabilities based on the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The Company uses three levels of inputs that may be used to measure fair value: Level 1 - quoted prices in active markets for identical assets or liabilities Level 2 - quoted prices for similar assets and liabilities in active markets or inputs that are observable Level 3 - inputs that are unobservable (for example, cash flow modeling inputs based on assumptions) The following table presents the Company's assets and liabilities that are measured at fair value at December 31, 2019 and 2018 ($ in thousands): Fair value measured at December 31, 2019 Total at December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs 2019 (Level 1) (Level 2) (Level 3) Assets Marketable securities - mutual and exchange traded funds $ 857 $ 857 $ - $ - Investments in Hoth $ 10,128 $ 10,128 $ - $ - Fair value measured at December 31, 2018 Total at December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs 2018 (Level 1) (Level 2) (Level 3) Assets Marketable securities - mutual and exchange traded funds $ 2,700 $ 2,700 $ - $ - Investments in Hoth $ 9,214 $ - $ - $ 9,214 Liabilities Fair value of warrant liabilities $ 82 $ - $ - $ 82 Level 2 Valuation Techniques The fair values of Level 2 marketable securities are determined using one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 Valuation Techniques Level 3 Valuation Techniques – Assets The following table sets forth a summary of the changes in the fair value of the Company's Level 3 financial assets that are measured at fair value on a recurring basis: Fair Value of Level 3 investment December 31, December 31, Beginning balance $ 9,214 $ 1,020 Transfer of Hoth From Level 3 to Level 1 upon IPO (9,214 ) - Change in fair value of Hoth - 8,194 Ending balance $ - $ 9,214 While the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different estimate of fair value at the reporting date. The decision to elect the fair value option, which is irrevocable once elected, is determined on an instrument by instrument basis and applied to an entire instrument. The net gains or losses, if any, on an investment for which the fair value option has been elected, are recognized as change in fair value of investment in the Consolidated Statements of Operations. A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's valuation in Hoth that are categorized within Level 3 of the fair value hierarchy at the date of issuance and as of December 31, 2018 is as follows: Date of valuation December 31, 2018 Risk-free interest rate 2.45 % Expected volatility 75.00 % Contractual life (in years) 0.17 The investment in Hoth as of December 31, 2018 was valued using the PWERM (Probability Weighted Expected Return Method). Under this method, an analysis of future values of a company is performed for several likely scenarios. These scenarios included both a high and low range of values that were provided to Hoth by their investment bankers. The price per share was $6.50 and $5.50, respectively. The value is then discounted to the present using a risk-adjusted discount rate of 15%. The present values of the common stock under each scenario are then weighted based on the probability of each scenario occurring to determine the value of the investment. A 10% probability was placed on the high end and a 90% probability was placed on the low end. Level 3 Valuation Techniques – Liabilities Level 3 financial liabilities consist of the warrant liabilities for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. A significant decrease in the volatility or a significant decrease in the Company's stock price, in isolation, would result in a significantly lower fair value measurement. Changes in the values of the warrant liabilities are recorded in "change in fair value of warrant liabilities" in the Company's consolidated statements of operations. The Series A and Series B warrants have been recorded at their fair value using the Black-Scholes valuation model, and will be recorded at their respective fair value at each subsequent balance sheet date. This model incorporates transaction details such as the Company's stock price, contractual terms, maturity, risk free rates, as well as volatility. The warrants require, at the option of the holder, a net-cash settlement following certain fundamental transactions at the Company or require the issuance of registered shares upon exercise, do not expressly preclude an implied right to cash settlement and are therefore accounted for as derivative liabilities. A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's warrant liabilities that are categorized within Level 3 of the fair value hierarchy at the date of issuance and as of December 31, 2019 and 2018 is as follows: Date of valuation December 31, 2019 December 31, 2018 Contractual life (in years) 0.93-1.06 1.94-2.06 Expected volatility 74% - 100% 72% - 103% Risk-free interest rate 1.59% 2.48% The risk-free interest rate was based on rates established by the Federal Reserve. The general expected volatility is based on standard deviation of the Company's underlying stock price's daily logarithmic returns. The expected life of the warrants was determined by the expiration date of the warrants. The expected dividend yield was based upon the fact that the Company has not historically paid dividends on its common stock and does not expect to pay dividends on its common stock in the future. The following table sets forth a summary of the changes in the fair value of the Company's Level 3 financial liabilities that are measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 ($ in thousands): Fair Value of Level 3 December 31, December 31, Beginning balance $ 82 $ 822 Fair value adjustment of warrant liabilities (82 ) (740 ) Ending balance $ - $ 82 |
Net Earnings (Loss) per Share A
Net Earnings (Loss) per Share Applicable to Common Stockholders | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Earnings (Loss) per Share Applicable to Common Stockholders | Note 8. Net Earnings (Loss) per Share Applicable to Common Stockholders Basic loss per share is computed by dividing the net income or loss applicable to common shares by the weighted average number of common shares outstanding during the period. Net income (loss) attributable to common stockholders includes the effect of the deemed capital contribution on extinguishment of preferred stock and the deemed dividend related to the immediate accretion of beneficial conversion feature of convertible preferred stock. Diluted earnings per share is computed using the weighted average number of common shares and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options (using the treasury stock method) and the conversion of the Company's convertible preferred stock and warrants. Diluted loss per share excludes the shares issuable upon the conversion of preferred stock and the exercise of stock options and warrants from the calculation of net loss per share if their effect would be anti-dilutive. The following table summarizes the earnings (loss) per share calculation (in thousands, except per share amount): For the Years Ended 2019 2018 Basic earnings per share Numerator: Net (loss) income $ (4,183 ) $ 1,727 Net (loss) income available to common stockholders $ (4,183 ) $ 1,727 Denominator: Weighted average number of common shares outstanding, 2,511,566 1,896,057 Earnings per basic share: Net (loss) income (1.67 ) 0.91 Net (loss) income available to common stockholders $ (1.67 ) $ 0.91 Dilutive earnings per share Numerator: Net income (loss) $ (4,183 ) $ 1,727 Net (loss) income available to common stockholders $ (4,183 ) $ 1,727 Denominator: Weighted average basic shares outstanding, 2,511,566 1,896,057 Weighted average effect of dilutive securities Convertible preferred stock - 688 Weighted average diluted shares outstanding 2,511,566 1,896,745 Earnings per diluted share: Net (loss) income $ (1.67 ) $ 0.91 Net (loss) income available to common stockholders $ (1.67 ) $ 0.91 Securities that could potentially dilute loss per share in the future that were not included in the computation of diluted loss per share at December 31, 2019 and 2018 are as follows: As of December 31, 2019 2018 Convertible preferred stock 688 - Warrants to purchase common stock 285,273 294,072 Options to purchase common stock 88,950 124,381 Total 374,911 418,453 |
Stockholders' Equity and Conver
Stockholders' Equity and Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Convertible Preferred Stock | Note 9. Stockholders' Equity and Convertible Preferred Stock Common Stock At The Market Offering Agreement On August 9, 2019, the Company entered into an At The Market Offering Agreement (the "ATM Agreement") with H.C. Wainwright & Co., LLC, as agent ("H.C. Wainwright"), pursuant to which the Company may offer and sell, from time to time through H.C. Wainwright, shares of the Company's common stock having an aggregate offering price of up to $1.2 million (the "Shares"). The Company will pay H.C. Wainwright a commission rate equal to 3.0% of the aggregate gross proceeds from each sale of Shares. During the year ended December 31, 2019, the Company sold a total of 532,070 shares of common stock under the ATM for aggregate total gross proceeds of approximately $1.2 million at an average selling price of $2.17 per share, resulting in net proceeds of approximately $1.1 million after deducting commissions and other transaction costs. Registered Common Stock and Warrant Financing On May 29, 2019, the Company entered into a Securities Purchase Agreement (the "Common Stock Purchase Agreement") for the sale by the Company of 221,000 shares of the Company's common stock, at a purchase price of $2.60 per share, and pre-funded common stock purchase warrants to purchase up to 86,692 shares of common stock at a purchase price of $2.5999 per Warrant, which represents the per share purchase price, less a $0.0001 per share exercise price for each of the warrants ("Penny Warrants"). The Company sold the shares and warrants for net proceeds of approximately $0.8 million which transaction closed on May 31, 2019. Common Stock Warrant Exchange On June 6, 2019, the Company entered into an amendment to the Common Stock Purchase Agreement, pursuant to which the Purchaser surrendered an aggregate of 115,269 shares to the Company and the Company issued 115,269 Penny Warrants to the Purchaser in order to limit the Purchaser's beneficial ownership. The exchange of 115,269 Penny Warrants do not meet the definition of a derivative under ASC 815 because their fair value at issuance is equal to the fair value of the shares underlying the warrant. As such, they have the characteristics of a prepaid forward sale of equity. Since the shares underlying the Penny Warrants are issuable for little or no consideration, they are considered outstanding in the context of earnings per share, as discussed in ASC 260-10-45-13. 2018 activity On March 19, 2018, the Company closed a public offering of common stock for gross proceeds of approximately $3.0 million. The offering was a shelf takedown off of the Company's registration statement on Form S-3 (File No. 333-222488) and was conducted pursuant to a placement agency agreement (the "Agreement") between the Company and Laidlaw & Company (UK) Ltd., the sole placement agent, on a best-efforts basis with respect to the offering (the "Placement Agent"), that was entered into on March 14, 2018. The Company sold 522,876 shares of its common stock in the offering at a purchase price of $5.74 per share. The Company had designated separate series of its capital stock as of December 31, 2019 and December 31, 2018 as summarized below: Number of Shares Issued and Outstanding as of December 31, December 31, Par Value Conversion Ratio Series "A" — — $ 0.0001 N/A Series "C" — — 0.0001 0.05:1 Series "D" 4,725 4,725 0.0001 0.53:1 Series "D-1" 834 834 0.0001 0.53:1 Series "F-1" — — 0.0001 0.05:1 Series "H" — — 0.0001 0.53:1 Series "I" — — 0.0001 1.05:1 Series "J" — — 0.0001 0.05:1 Series "K" — — 0.0001 263.16:1 Series D Convertible Preferred Stock In connection with the acquisition of North South's patent portfolio in September 2013, the Company issued 1,379,685 shares of its Series D Convertible Preferred Stock ("Series D Preferred Stock") to the stockholders of North South. Each share of Series D Preferred Stock has a stated value of $0.0001 per share and is convertible into ten-nineteenths of a share of Common Stock. Upon the liquidation, dissolution or winding up of the Company's business, each holder of Series D Preferred Stock shall be entitled to receive, for each share of Series D Preferred Stock held, a preferential amount in cash equal to the greater of (i) the stated value or (ii) the amount the holder would receive as a holder of Common Stock on an "as converted" basis. Each holder of Series D Preferred Stock shall be entitled to vote on all matters submitted to its stockholders and shall be entitled to such number of votes equal to the number of shares of Common Stock such shares of Series D Preferred Stock are convertible into at such time, taking into account the beneficial ownership limitations set forth in the governing Certificate of Designation and the conversion limitations described below. The conversion ratio of the Series D Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. As of December 31, 2019 and 2018, 4,725 shares of Series D Preferred Stock remained issued and outstanding. Series D-1 Convertible Preferred Stock The Company's Series D-1 Convertible Preferred Stock ("Series D-1 Preferred Stock") was established on November 22, 2013. Each share of Series D-1 Preferred Stock has a stated value of $0.0001 per share and is convertible into ten-nineteenths of a share of Common Stock. Upon the liquidation, dissolution or winding up of the Company's business, each holder of Series D-1 Preferred Stock shall be entitled to receive, for each share of Series D-1 Preferred Stock held, a preferential amount in cash equal to the greater of (i) the stated value or (ii) the amount the holder would receive as a holder of Common Stock on an "as converted" basis. Each holder of Series D-1 Preferred Stock shall be entitled to vote on all matters submitted to the Company's stockholders and shall be entitled to such number of votes equal to the number of shares of Common Stock such shares of Series D-1 Preferred Stock are convertible into at such time, taking into account the beneficial ownership limitations set forth in the governing Certificate of Designation. The conversion ratio of the Series D-1 Preferred Stock is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The Company commenced an exchange with holders of Series D Convertible Preferred Stock pursuant to which the holders of the Company's outstanding shares of Series D Preferred Stock acquired in the Merger could exchange such shares for shares of the Company's Series D-1 Preferred Stock on a one-for-one basis. As of December 31, 2019 and 2018, 834 shares of Series D-1 Preferred Stock remained issued and outstanding. Warrants A summary of warrant activity for year ended December 31, 2019 and 2018 is presented below: Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life Outstanding as of December 31, 2018 294,072 $ 38.15 $ - 1.92 Issued 301,960 - 506,273 - Exercised (235,294 ) - 394,940 - Expired (8,799 ) 476.66 - - Outstanding as of December 31, 2019 351,939 $ 19.96 111,332 0.94 On May 29, 2019, the Company entered into the Master Service Agreement ("MSA") with a consultant, World Wide Holdings, LLC ("Consultant"). In consideration for services provided by Consultant, the Company paid to Consultant three warrants (the "Consultant Warrants"), with each warrant immediately exercisable for 33,333 shares of common stock with a $0.01 strike price. The Company issued each of the three warrants on June 28, July 28 and August 27, 2019, respectively. The Company recorded $0.3 million in stock-based compensation during the year ended December 31, 2019 related to this arrangement. On July 12, 2019, the Company issued 33,333 shares of common stock upon exercise of one Consultant Warrant which resulted in gross proceeds of approximately $333. Stock Options 2012 Plan At December 31, 2019, there were 123 shares available for grant under the 2012 Equity Incentive Plan. 2013 Plan At December 31, 2019, there were 24,840 fully vested options outstanding and 9,835 shares available for grant under the Spherix Incorporated 2013 Equity Incentive Plan. 2014 Plan and Option Grants At December 31, 2019, there were 64,110 options outstanding and 38,058 shares available for grant under the Spherix Incorporated 2014 Equity Incentive Plan. The fair value of options granted in 2019 and 2018 was estimated using the following assumptions: For the Years Ended 2019 2018 Exercise price - $1.04 - $1.50 Term (years) - 9.13 - 9.34 Expected stock price volatility - 131.8% - 132.2% Risk-free rate of interest - 2.65% - 2.80% A summary of option activity under the Company's stock option plan for year ended December 31, 2019 and 2018 is presented below: Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2018 124,381 $ 209.22 $ - 4.8 Employee options expired (35,121 ) 302.29 - - Non-employee options expired (310 ) 571.71 - - Outstanding as of December 31, 2019 88,950 $ 172.39 $ - 5.7 Options vested and exercisable 88,950 $ 172.39 $ - 5.7 Stock-based compensation associated with the amortization of stock option expense was $8,000 and $213,000 for the years ended December 31, 2019 and 2018, respectively. Estimated future stock-based compensation expense relating to unvested stock options is zero. Restricted Stock Awards During 2018 approximately 19,861 shares with a fair value of approximately $106,000 was granted. These restricted stock awards vested immediately. Restricted Stock Units As of December 31, 2019 and 2018, the Company did not have unrecognized stock-based compensation expense related to restricted stock unit awards. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10. Commitments and Contingencies Legal Proceedings In the ordinary course of business, the Company actively pursues legal remedies to enforce its intellectual property rights and to stop unauthorized use of use technology. From time to time, the Company may be involved in various claims and counterclaims and legal actions arising in the ordinary course of business. There were no pending material claims or legal matters as of the date of this report. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes The income tax provision consists of the following ($ in thousands): For the years ended 2019 2018 Federal Current $ - Deferred 3,862 (517 ) Decrease in valuation allowance (3,862 ) 517 State and local Current - Deferred (12,115 ) (92 ) Decrease in valuation allowance 12,115 92 Change in valuation Allowance 8,253 610 Income Tax Provision (Benefit) $ - $ - The following is a reconciliation of the U.S. federal statutory rate to the effective income tax rates for the years ended December 31, 2019 and 2018: For the years ended 2019 2018 U.S. Statutory Federal Rate 21 % 21 % Federal tax rate change -% -% State Taxes, Net of Federal Tax Benefit 13.62 % 3.91 % Other Permanent Differences .01 % 1.76 % State rate change in effect 216.40 % -% Fair Value of Warrants -% 8.99 % Decrease due to true up of State NOL (19.10 )% -% Decrease due to change in Federal NOL and other true ups (34.64 )% (0.36 )% Change in Valuation Allowance (197.29 )% (35.30 )% Income Tax Provision (Benefit) At December 31, 2019 and 2018, the Company's deferred tax assets and liabilities consisted of the effects of temporary differences attributable to the following ($ in thousands): As of December 31, 2019 2018 Deferred tax assets: Net-operating loss carryforward $ 15,443 $ 12,163 Stock based compensation 8,104 5,444 Patent portfolio and other 15,004 11,201 Total Deferred Tax assets 38,551 28,808 Valuation allowance (35,084 ) (26,831 ) Deferred Tax Asset, Net of Allowance $ 3,467 $ 1,977 Deferred tax liability: Fair value adjustment of investment (3,467 ) (1,977 ) - - In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the period in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and taxing strategies in making this assessment. The Company has determined that, based on objective evidence currently available, it is more likely than not, the deferred tax assets will not be realized in future periods. Accordingly, the Company has provided a full allowance for the deferred tax assets at December 31, 2019 and 2018. As of December 31, 2019, the change in valuation allowance is approximately $8.253 million. Under the Act, corporations are no longer subject to the Alternative Minimum Tax (AMT), effective for taxable years beginning after Dec. 31, 2017. However, where a corporation has an AMT credit from a prior taxable year, the corporation will continue to carry the credit forward and may use a portion of it as a refundable credit in any taxable year beginning after 2017 but before 2022. Generally, 50 percent of the corporation's AMT Credit carried forward to one of these years will be claimable and refundable for that year. In tax years beginning in 2021, however, the entire remaining carryforward generally will be refundable. The Company has an AMT credit carryforward of $40,842 as of December, 31, 2019. The Company will request the following refunds for the tax years ended December 31, 2020 through December 31, 2021: Tax Year Ended: AMT Credit Refund December 31, 2020 20,421 December 31, 2021 20,421 $ 40,842 As of December 31, 2019, the Company has approximately $41 million federal and $20 million of city net operating loss carryovers ("NOLs"), which expire from 2022 through 2037, and $14 million of federal and city NOLs with indefinite utilization. The Company has approximately $35 million of state NOLs, which expire from 2022 through 2039. The NOL carryover may be subject to limitation under Internal Revenue Code section 382, should there be a greater than 50% ownership change as determined under the regulations. No study has been performed since the last known ownership change of September 10, 2013. As required by the provisions of ASC 740, the Company recognizes the financial statement benefit of a tax position only after determining that the relevant tax authority would more likely than not sustain the position following an audit. For tax positions meeting the more likely than not threshold, the amount recognized in the consolidated financial statements is the largest benefit that has a greater than 50 percent likelihood of being realized upon ultimate settlement with the relevant tax authority. Differences between tax positions taken or expected to be taken in a tax return and the net benefit recognized and measured pursuant to the interpretation are referred to as "unrecognized benefits." A liability is recognized (or amount of NOL or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise's potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740. If applicable, interest costs and penalties related to unrecognized tax benefits are required to be calculated and would be classified as interest and penalties in general and administrative expense in the statement of operations. As of December 31, 2019 and 2018, no liability for unrecognized tax benefit was required to be reported. No interest or penalties were recorded during the years ended December 31, 2019 and 2018. The Company does not expect any significant changes in its unrecognized tax benefits in the next year. The Company files U.S. federal and state income tax returns. As of December 31, 2019, the Company's U.S. and state tax returns (Delaware, New York, New York City, Pennsylvania, Virginia, and Texas) remain subject to examination by tax authorities beginning with the tax return filed for the year ended December 31, 2016, however, there were no audits pending in any of the above-mentioned jurisdictions during 2019. The Company believes that its income tax positions would be sustained upon an audit and does not anticipate any adjustments that would result in material changes to its consolidated financial position. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 12. Subsequent Events The Company evaluates events that have occurred after the balance sheet date but before the consolidated financial statements are issued. Based upon the evaluation, the Company did not identify any recognized or non-recognized subsequent events that would have required adjustment or disclosure in the consolidated financial statements other than disclosed. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Nuta Technology Corp. ("Nuta"), Spherix Portfolio Acquisition II, Inc. ("SPAII"), Guidance IP, LLC ("Guidance"), Directional IP, LLC ("Directional"), Spherix Management Services, LLC ("SMS"), Spherix Delaware Merger Sub Inc. ("Merger Sub"), Spherix Merger Subsidiary, Inc ("SMSI") and NNPT, LLC ("NNPT"). All significant intercompany balances and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("US GAAP"). This requires management to make estimates and assumptions that affect certain reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the period. The Company's significant estimates and assumptions include stock-based compensation, the valuation of derivative liabilities, the valuation of investments and the valuation allowance related to the Company's deferred tax assets. Certain of the Company's estimates could be affected by external conditions, including those unique to the Company and general economic conditions. It is reasonably possible that these external factors could have an effect on the Company's estimates and could cause actual results to differ from those estimates and assumptions. |
Segments | Segments The Company operates in one operating segment and, accordingly, no segment disclosures have been presented herein. |
Concentration of Cash | Concentration of Cash The Company maintains cash balances at two financial institutions in checking accounts and money market accounts. The Company considers all highly liquid investments with original maturities of three months or less when purchased to be cash equivalents. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk on cash. |
Marketable Securities | Marketable Securities Marketable securities are classified as trading and are carried at fair value. The Company's marketable securities consist of corporate bonds and highly liquid mutual funds and exchange-traded & closed-end funds which are valued at quoted market prices. |
Investments | Investments The Company accounts for its investment in Hoth at fair value (based upon the closing price on the Nasdaq Capital Market). In connection with the consummation of the initial public offering of Hoth, the Company entered into a lock-up agreement until February 20, 2022. Therefore, the Company considers its investment in Hoth to be long term. |
Research and Development - Intellectual Property Acquired | Research and Development – Intellectual Property Acquired The Company concluded that its acquisition of CBM, completed on December 5, 2019, should be accounted for as an asset acquisition rather than a business combination under Accounting Standards Codification (ASC) 805, Business Combinations. The acquisition of CBM was accounted for as an asset acquisition because substantially all the fair value of the assets being acquired are concentrated in a group of similar assets. Furthermore, the acquired assets did not have outputs or employees. The assets acquired by the Company included a license, other associated intellectual property, documentation and records, and related materials. |
Treasury Stock | Treasury Stock The Company accounts for the treasury stock using the cost method, which treats it as a reduction in stockholders' equity. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers ● Step 1: Identify the contract with the customer ● Step 2: Identify the performance obligations in the contract ● Step 3: Determine the transaction price ● Step 4: Allocate the transaction price to the performance obligations in the contract ● Step 5: Recognize revenue when the company satisfies a performance obligation In order to identify the performance obligations in a contract with a customer, a company must assess the promised goods or services in the contract and identify each promised good or service that is distinct. A performance obligation meets ASC 606's definition of a "distinct" good or service (or bundle of goods or services) if both of the following criteria are met: ● The customer can benefit from the good or service either on its own or together with other resources that are readily available to the customer (i.e., the good or service is capable of being distinct). ● The entity's promise to transfer the good or service to the customer is separately identifiable from other promises in the contract (i.e., the promise to transfer the good or service is distinct within the context of the contract). If a good or service is not distinct, the good or service is combined with other promised goods or services until a bundle of goods or services is identified that is distinct. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer. The consideration promised in a contract with a customer may include fixed amounts, variable amounts, or both. When determining the transaction price, an entity must consider the effects of all of the following: ● Variable consideration ● Constraining estimates of variable consideration ● The existence of a significant financing component in the contract ● Noncash consideration ● Consideration payable to a customer Variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The transaction price is allocated to each performance obligation on a relative standalone selling price basis. The transaction price allocated to each performance obligation is recognized when that performance obligation is satisfied, at a point in time or over time as appropriate. As of December 31, 2019 and 2018, there were no contract assets or liabilities associated with the Company's settlement and licensing agreements. During the year ended December 31, 2019 and 2018, the Company only generated $9,000 and $28,000 of revenue, respectively. |
Accounting for Warrants | Accounting for Warrants The Company accounts for the issuance of common stock purchase warrants issued in connection with the equity offerings in accordance with the provisions of ASC 815, Derivatives and Hedging The Company assessed the classification of common stock purchase warrants as of the date of each offering and determined that such instruments met the criteria for liability classification. Accordingly, the Company classified the warrants as a liability at their fair value and adjusts the instruments to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until the warrants are exercised or expired, and any change in fair value is recognized as "change in the fair value of warrant liabilities" in the consolidated statements of operations. The fair value of the warrants has been estimated using a Black-Scholes valuation model. |
Stock-based Compensation | Stock-based Compensation The Company accounts for share-based payment awards exchanged for services at the estimated grant date fair value of the award. Stock options issued under the Company's long-term incentive plans are granted with an exercise price equal to no less than the market price of the Company's stock at the date of grant and expire up to ten years from the date of grant. These options generally vest over a one- to five-year period. The Company estimates the fair value of stock option grants using the Black-Scholes option pricing model and the assumptions used in calculating the fair value of stock-based awards represent management's best estimates and involve inherent uncertainties and the application of management's judgment. Expected Term Expected Volatility Risk-Free Interest Rate Expected Dividend Effective January 1, 2017, the Company elected to account for forfeited awards as they occur, as permitted by Accounting Standards Update ("ASU") 2016-09. Ultimately, the actual expenses recognized over the vesting period will be for those shares that vested. Prior to making this election, the Company estimated a forfeiture rate for awards at 0%, as the Company did not have a significant history of forfeitures. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes in accordance with ASC 740, " Income Taxes |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In August 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-13, " Fair Value Measurement In December 2019, the FASB issued ASU No. 2019-12, " Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In May 2014, the FASB issued ASU No. 2014-09, " Revenue from Contracts with Customers Revenue from Contracts with Customers Revenue from Contracts with Customers Principal versus Agent Considerations Revenue from Contracts with Customers Identifying Performance Obligations and Licensing Revenue from Contracts with Customers Narrow-Scope Improvements and Practical Expedients In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 840) In May 2017, the Financial Accounting Standards Board (the FASB) issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): I. Accounting for Certain Financial Instruments with Down Round Features; II. Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
Investments in Marketable Sec_2
Investments in Marketable Securities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of marketable securities | For the Years Ended 2019 2018 Realized gain (loss) $ (172 ) $ (400 ) Unrealized gain (loss) 145 (117 ) Dividend income 38 158 Interest income 4 - $ 14 $ (359 ) |
Investment in Hoth Therapeuti_2
Investment in Hoth Therapeutics, Inc. (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Investment in Hoth Therapeutics, Inc. [Abstract] | |
Schedule of Company investment in Hoth | The following summarizes the Company investment in Hoth: Security Name Shares Owned as of December 31, Fair value per Share as of December 31, Fair value as of December 31, HOTH 1,636,230 $ 6.19 $ 10,128 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets and liabilities | The following table presents the Company's assets and liabilities that are measured at fair value at December 31, 2019 and 2018 ($ in thousands): Fair value measured at December 31, 2019 Total at December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs 2019 (Level 1) (Level 2) (Level 3) Assets Marketable securities - mutual and exchange traded funds $ 857 $ 857 $ - $ - Investments in Hoth $ 10,128 $ 10,128 $ - $ - Fair value measured at December 31, 2018 Total at December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs 2018 (Level 1) (Level 2) (Level 3) Assets Marketable securities - mutual and exchange traded funds $ 2,700 $ 2,700 $ - $ - Investments in Hoth $ 9,214 $ - $ - $ 9,214 Liabilities Fair value of warrant liabilities $ 82 $ - $ - $ 82 |
Schedule of financial assets measured at fair value on a recurring basis | The following table sets forth a summary of the changes in the fair value of the Company's Level 3 financial assets that are measured at fair value on a recurring basis: Fair Value of Level 3 investment December 31, December 31, Beginning balance $ 9,214 $ 1,020 Transfer of Hoth From Level 3 to Level 1 upon IPO (9,214 ) - Change in fair value of Hoth - 8,194 Ending balance $ - $ 9,214 |
Schedule of fair value assumptions | A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's valuation in Hoth that are categorized within Level 3 of the fair value hierarchy at the date of issuance and as of December 31, 2018 is as follows: Date of valuation December 31, 2018 Risk-free interest rate 2.45 % Expected volatility 75.00 % Contractual life (in years) 0.17 A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's warrant liabilities that are categorized within Level 3 of the fair value hierarchy at the date of issuance and as of December 31, 2019 and 2018 is as follows: Date of valuation December 31, 2019 December 31, 2018 Contractual life (in years) 0.93-1.06 1.94-2.06 Expected volatility 74% - 100% 72% - 103% Risk-free interest rate 1.59% 2.48% |
Schedule of fair value of the company's level 3 financial liabilities | The following table sets forth a summary of the changes in the fair value of the Company's Level 3 financial liabilities that are measured at fair value on a recurring basis for the year ended December 31, 2019 and 2018 ($ in thousands): Fair Value of Level 3 December 31, December 31, Beginning balance $ 82 $ 822 Fair value adjustment of warrant liabilities (82 ) (740 ) Ending balance $ - $ 82 |
Net Earnings (Loss) per Share_2
Net Earnings (Loss) per Share Applicable to Common Stockholders (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of earnings (loss) per share calculation | The following table summarizes the earnings (loss) per share calculation (in thousands, except per share amount): For the Years Ended 2019 2018 Basic earnings per share Numerator: Net (loss) income $ (4,183 ) $ 1,727 Net (loss) income available to common stockholders $ (4,183 ) $ 1,727 Denominator: Weighted average number of common shares outstanding, 2,511,566 1,896,057 Earnings per basic share: Net (loss) income (1.67 ) 0.91 Net (loss) income available to common stockholders $ (1.67 ) $ 0.91 Dilutive earnings per share Numerator: Net income (loss) $ (4,183 ) $ 1,727 Net (loss) income available to common stockholders $ (4,183 ) $ 1,727 Denominator: Weighted average basic shares outstanding, 2,511,566 1,896,057 Weighted average effect of dilutive securities Convertible preferred stock - 688 Weighted average diluted shares outstanding 2,511,566 1,896,745 Earnings per diluted share: Net (loss) income $ (1.67 ) $ 0.91 Net (loss) income available to common stockholders $ (1.67 ) $ 0.91 |
Schedule of potentially dilute loss per share | As of December 31, 2019 2018 Convertible preferred stock 688 - Warrants to purchase common stock 285,273 294,072 Options to purchase common stock 88,950 124,381 Total 374,911 418,453 |
Stockholders' Equity and Conv_2
Stockholders' Equity and Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of designated separate series of capital stock | The Company had designated separate series of its capital stock as of December 31, 2019 and December 31, 2018 as summarized below: Number of Shares Issued and Outstanding as of December 31, December 31, Par Value Conversion Ratio Series "A" — — $ 0.0001 N/A Series "C" — — 0.0001 0.05:1 Series "D" 4,725 4,725 0.0001 0.53:1 Series "D-1" 834 834 0.0001 0.53:1 Series "F-1" — — 0.0001 0.05:1 Series "H" — — 0.0001 0.53:1 Series "I" — — 0.0001 1.05:1 Series "J" — — 0.0001 0.05:1 Series "K" — — 0.0001 263.16:1 |
Schedule of warrant activity | A summary of warrant activity for year ended December 31, 2019 and 2018 is presented below: Warrants Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life Outstanding as of December 31, 2018 294,072 $ 38.15 $ - 1.92 Issued 301,960 - 506,273 - Exercised (235,294 ) - 394,940 - Expired (8,799 ) 476.66 - - Outstanding as of December 31, 2019 351,939 $ 19.96 111,332 0.94 |
Schedule of fair value of options granted | For the Years Ended 2019 2018 Exercise price - $1.04 - $1.50 Term (years) - 9.13 - 9.34 Expected stock price volatility - 131.8% - 132.2% Risk-free rate of interest - 2.65% - 2.80% |
Schedule of option activity | A summary of option activity under the Company's stock option plan for year ended December 31, 2019 and 2018 is presented below: Number of Shares Weighted Average Exercise Price Total Intrinsic Value Weighted Average Remaining Contractual Life (in years) Outstanding as of December 31, 2018 124,381 $ 209.22 $ - 4.8 Employee options expired (35,121 ) 302.29 - - Non-employee options expired (310 ) 571.71 - - Outstanding as of December 31, 2019 88,950 $ 172.39 $ - 5.7 Options vested and exercisable 88,950 $ 172.39 $ - 5.7 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income tax provision | For the years ended 2019 2018 Federal Current $ - Deferred 3,862 (517 ) Decrease in valuation allowance (3,862 ) 517 State and local Current - Deferred (12,115 ) (92 ) Decrease in valuation allowance 12,115 92 Change in valuation Allowance 8,253 610 Income Tax Provision (Benefit) $ - $ - |
Schedule of Reconciliation of the expected tax expense (benefit) | For the years ended 2019 2018 U.S. Statutory Federal Rate 21 % 21 % Federal tax rate change -% -% State Taxes, Net of Federal Tax Benefit 13.62 % 3.91 % Other Permanent Differences .01 % 1.76 % State rate change in effect 216.40 % -% Fair Value of Warrants -% 8.99 % Decrease due to true up of State NOL (19.10 )% -% Decrease due to change in Federal NOL and other true ups (34.64 )% (0.36 )% Change in Valuation Allowance (197.29 )% (35.30 )% Income Tax Provision (Benefit) |
Schedule of deferred tax assets and liabilities | As of December 31, 2019 2018 Deferred tax assets: Net-operating loss carryforward $ 15,443 $ 12,163 Stock based compensation 8,104 5,444 Patent portfolio and other 15,004 11,201 Total Deferred Tax assets 38,551 28,808 Valuation allowance (35,084 ) (26,831 ) Deferred Tax Asset, Net of Allowance $ 3,467 $ 1,977 Deferred tax liability: Fair value adjustment of investment (3,467 ) (1,977 ) - - |
Schedule of refunds for the tax | Tax Year Ended: AMT Credit Refund December 31, 2020 20,421 December 31, 2021 20,421 $ 40,842 |
Organization and Description _2
Organization and Description of Business (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 05, 2019 | May 10, 2019 | Oct. 10, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Organization and Description of Business (Textual) | |||||
Amount of shares issued | $ 1,047 | ||||
Gross proceeds | 787 | $ 2,700 | |||
Share price (in dollars per share) | $ 1.11 | ||||
Description of reverse stock split | one-for-4.25 | ||||
Asset Purchase Agreement [Member] | |||||
Organization and Description of Business (Textual) | |||||
Gross proceeds | $ 2,000 | ||||
Asset Purchase Agreement [Member] | Common Stock [Member] | |||||
Organization and Description of Business (Textual) | |||||
Number of shares issued | 1,803,324 | ||||
Investment interest rate | 93.00% | ||||
CBM BioPharma, Inc. [Member] | |||||
Organization and Description of Business (Textual) | |||||
Aggregate purchase price | $ 2,500 | ||||
Investment interest rate | 100.00% | ||||
Gross proceeds | $ 2,000 | ||||
Share price (in dollars per share) | $ 3.61 | ||||
Aggregate shares consideration | 1,939,058 | ||||
CBM BioPharma, Inc. [Member] | Merger Agreement [Member] | |||||
Organization and Description of Business (Textual) | |||||
Number of shares issued | 15,000,000 | ||||
CBM BioPharma, Inc. [Member] | Common Stock [Member] | |||||
Organization and Description of Business (Textual) | |||||
Number of shares issued | 135,734 | ||||
Investment interest rate | 7.00% | ||||
CBM BioPharma, Inc. [Member] | Asset Purchase Agreement [Member] | |||||
Organization and Description of Business (Textual) | |||||
Consideration paid | $ 1,000 | ||||
Gross proceeds | $ 2,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | Jan. 02, 2018USD ($) | |
Summary of Significant Accounting Policies (Textual) | |||
Number of operating segment | Segment | 1 | ||
Accumulated deficit | $ (144,266) | $ (140,083) | $ 3,200 |
Revenue | $ 9 | 28 | |
Forfeiture rate percentage | 0.00% | ||
Deferred revenue | $ 1,000 |
Investments in Marketable Sec_3
Investments in Marketable Securities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Realized gain (loss) | $ (172) | $ (400) |
Unrealized gain (loss) | 145 | (117) |
Dividend income | 38 | 158 |
Interest income | 4 | |
Total marketable securities | $ 14 | $ (359) |
Investment in Hoth Therapeuti_3
Investment in Hoth Therapeutics, Inc. (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair value | $ (3,467) | $ (1,977) |
Hoth Therapeutics Inc [Member] | ||
Shares Owned | 1,636,230 | |
Fair value per Share | $ 6.19 | |
Fair value | $ 10,128 |
Investment in Hoth Therapeuti_4
Investment in Hoth Therapeutics, Inc. (Details Narrative) - $ / shares | 1 Months Ended | ||
Oct. 02, 2019 | Dec. 31, 2019 | Feb. 20, 2019 | |
Hoth Therapeutics Inc [Member] | |||
Investment in Hoth Therapeutics, Inc. (Textual) | |||
Fair value per Share | $ 6.19 | ||
Board of Directors [Member] | |||
Investment in Hoth Therapeutics, Inc. (Textual) | |||
Sale of stock, number of shares issue | 100,000 | ||
Stockholders, description | The Company’s stockholders received one (1) share of Hoth common stock for every twenty-nine (29) shares of Company common stock held as of 5 p.m. Eastern Time on October 21, 2019, the dividend record date. | ||
IPO [Member] | Common Stock [Member] | |||
Investment in Hoth Therapeutics, Inc. (Textual) | |||
Sale of stock, price per share (in dollars per share) | $ 5.60 |
Investment in Others (Details)
Investment in Others (Details) - USD ($) $ in Thousands | Dec. 05, 2019 | May 31, 2019 | Dec. 31, 2019 |
Investment in Others (Textual) | |||
Carrying amount | $ 0 | ||
Senior Convertible Note [Member] | |||
Investment in Others (Textual) | |||
Carrying amount | $ 1,000 | ||
Other investments | $ 25,000 | ||
Description of senior convertible note issued | The Company wrote-off its investment to research and development expense as the original purchase of 50,000 CBM shares was a component of the transaction contemplated with CBM. | The Company purchased (a) a senior convertible note issued by DatChat with outstanding principal of $300,000, with an initial conversion rate of $0.20 per share, (b) a warrant to purchase 2,250,000 shares of DatChat common stock at an initial exercise price of $0.20 per share, (c) an option to acquire an additional $300,000 senior convertible note and a warrant to purchase 1,500,000 shares of DatChat common stock, (d) a contingent option to purchase 500,000 shares of DatChat common stock from an existing DatChat stockholder, and (e) a contingent option to put 200,000 shares of DatChat common stock and (f) 50,000 shares of common stock of CBM which represents a 20% interest in CBM. |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Assets | ||
Marketable securities - mutual and exchange traded funds | $ 857 | $ 2,700 |
Investments in Hoth | 10,128 | 9,214 |
Liabilities | ||
Fair value of warrant liabilities | 82 | |
Quoted prices in active markets (Level 1) [Member] | ||
Assets | ||
Marketable securities - mutual and exchange traded funds | 857 | 2,700 |
Investments in Hoth | 10,128 | |
Liabilities | ||
Fair value of warrant liabilities | ||
Significant other observable inputs (Level 2) [Member] | ||
Assets | ||
Marketable securities - mutual and exchange traded funds | ||
Investments in Hoth | ||
Liabilities | ||
Fair value of warrant liabilities | ||
Significant unobservable inputs (Level 3) [Member] | ||
Assets | ||
Marketable securities - mutual and exchange traded funds | ||
Investments in Hoth | 9,214 | |
Liabilities | ||
Fair value of warrant liabilities | $ 82 |
Fair Value of Financial Asset_4
Fair Value of Financial Assets and Liabilities (Details 1) - Fair Value of Level 3 Investment [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Beginning balance | $ 9,214 | $ 1,020 |
Transfer of Hoth From Level 3 to Level 1 upon IPO | (9,214) | |
Change in fair value of Hoth | 8,194 | |
Ending balance | $ 9,214 |
Fair Value of Financial Asset_5
Fair Value of Financial Assets and Liabilities (Details 2) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Contractual life (in years) | 2 months 1 day | |
Expected volatility | 75.00% | |
Risk-free interest rate | 2.45% | |
Significant unobservable inputs (Level 3) [Member] | ||
Risk-free interest rate | 1.59% | 2.48% |
Significant unobservable inputs (Level 3) [Member] | Minimum [Member] | ||
Contractual life (in years) | 11 months 4 days | 1 year 11 months 8 days |
Expected volatility | 74.00% | 72.00% |
Significant unobservable inputs (Level 3) [Member] | Maximum [Member] | ||
Contractual life (in years) | 1 year 22 days | 2 years 22 days |
Expected volatility | 100.00% | 103.00% |
Fair Value of Financial Asset_6
Fair Value of Financial Assets and Liabilities (Details 3) - Significant unobservable inputs (Level 3) [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Beginning balance | $ 82 | $ 822 |
Fair value adjustment of warrant liabilities | (82) | (740) |
Ending balance | $ 82 |
Fair Value of Financial Asset_7
Fair Value of Financial Assets and Liabilities (Details Narrative) - Hoth [Member] | 12 Months Ended |
Dec. 31, 2018$ / shares | |
Price per share, low range | $ 5.50 |
Price per share, high range | $ 6.50 |
Percentage of probability, low end | 10.00% |
Percentage of probability, high end | 90.00% |
Risk-adjusted discount rate | 15.00% |
Net Earnings (Loss) per Share_3
Net Earnings (Loss) per Share Applicable to Common Stockholders (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||
Net (loss) income | $ (4,183) | $ 1,727 |
Net (loss) income available to common stockholders | $ (4,183) | $ 1,727 |
Denominator: | ||
Weighted average number of common shares outstanding | 2,511,566 | 1,896,057 |
Earnings per basic share: | ||
Net (loss) income | $ (1.67) | $ .91 |
Net (loss) income available to common stockholders | (1.67) | 0.91 |
Numerator: | ||
Net income (loss) | $ (4,183) | $ 1,727 |
Net (loss) income available to common stockholders | $ (4,183) | $ 1,727 |
Denominator: | ||
Weighted average basic shares outstanding, | 2,511,566 | 1,896,057 |
Weighted average effect of dilutive securities | ||
Convertible preferred stock | 688 | |
Weighted average diluted shares outstanding | 2,511,566 | 1,896,745 |
Earnings per diluted share: | ||
Net (loss) income | $ (1.67) | $ 0.91 |
Net (loss) income available to common stockholders | (1.67) | 0.91 |
Net Earnings (Loss) per Share_4
Net Earnings (Loss) per Share Applicable to Common Stockholders (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Total | 374,911 | 418,453 |
Convertible preferred Stock [Member] | ||
Total | 688 | |
Warrant [Member] | ||
Total | 285,273 | 294,072 |
Options to purchase common stock [Member] | ||
Total | 88,950 | 124,381 |
Stockholders' Equity and Conv_3
Stockholders' Equity and Convertible Preferred Stock (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Preferred stock, issued | ||
Preferred stock, par value | $ 0.0001 | $ 0.0001 |
Series "A" [Member] | ||
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | ||
Series "C" [Member] | ||
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 0.05:1 | |
Series "D" [Member] | ||
Preferred stock, issued | 4,725 | 4,725 |
Preferred stock, outstanding | 4,725 | 4,725 |
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 0.53:1 | |
Series "D-1" [Member] | ||
Preferred stock, issued | 834 | 834 |
Preferred stock, outstanding | 834 | 834 |
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 0.53:1 | |
Series "F-1" [Member] | ||
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 0.05:1 | |
Series "H" [Member] | ||
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 0.53:1 | |
Series "I" [Member] | ||
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 1.05:1 | |
Series "J" [Member] | ||
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 0.05:1 | |
Series "K" [Member] | ||
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Preferred stock, par value | $ 0.0001 | |
Conversion Ratio | 263.16:1 |
Stockholders' Equity and Conv_4
Stockholders' Equity and Convertible Preferred Stock (Details 1) - Warrant [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Number of shares | |
Outstanding at beginnning | shares | 294,072 |
Issued | shares | 301,960 |
Exercised | shares | (235,294) |
Expired | shares | (8,799) |
Outstanding at ending | shares | 351,939 |
Weighted Average Exercise Price | |
Beginnning balance | $ 38.15 |
Issued | |
Exercised | |
Expired | 476.66 |
Ending balance | $ 19.96 |
Total Intrinsic value | |
Outstanding at beginning | $ | |
Issued | $ | 506,273 |
Exercised | $ | $ 394,940 |
Expired | |
Outstanding at ending | $ | $ 111,332 |
Weighted Average Remaining Contractual Life (In years) | |
Outstanding at beginning | 1 year 11 months 1 day |
Outstanding at ending | 11 months 8 days |
Stockholders' Equity and Conv_5
Stockholders' Equity and Convertible Preferred Stock (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Term (years) | 2 months 1 day | |
Risk-free rate of interest | 2.45% | |
Stock Option [Member] | Minimum [Member] | ||
Exercise price | $ 1.04 | |
Term (years) | 9 years 1 month 16 days | |
Expected stock price volatility | 131.80% | |
Risk-free rate of interest | 2.65% | |
Stock Option [Member] | Maximum [Member] | ||
Exercise price | $ 1.5 | |
Term (years) | 9 years 4 months 2 days | |
Expected stock price volatility | 132.20% | |
Risk-free rate of interest | 2.80% |
Stockholders' Equity and Conv_6
Stockholders' Equity and Convertible Preferred Stock (Details 3) | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number of Shares [Roll Forward] | |
Outstanding at beginning | shares | 124,381 |
Employee options expired | shares | (35,121) |
Non-employee options expired | shares | (310) |
Outstanding at ending | shares | 88,950 |
Options vested and exercisable | shares | 88,950 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ / shares | $ 209.22 |
Employee options expired | $ / shares | 302.29 |
Non-employee options expired | $ / shares | 571.71 |
Outstanding at ending | $ / shares | 172.39 |
Options vested and exercisable | $ / shares | $ 172.39 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Total Intrinsic Value [Roll Forward] | |
Outstanding at beginning | $ | |
Employee options expired | $ | |
Non-employee options expired | $ | |
Outstanding at ending | $ | |
Options vested and exercisable | $ | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Remaining Contractual Life [Roll Forward] | |
Outstanding at beginning | 4 years 9 months 18 days |
Outstanding at ending | 5 years 8 months 12 days |
Options vested and exercisable | 5 years 8 months 12 days |
Stockholders' Equity and Conv_7
Stockholders' Equity and Convertible Preferred Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Aug. 09, 2019 | Jul. 12, 2019 | May 31, 2019 | May 29, 2019 | Mar. 19, 2018 | Nov. 22, 2013 | Jun. 06, 2019 | Sep. 30, 2013 | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of common stock issued | 4,825,552 | 2,010,028 | ||||||||
Stock-based compensation | $ 329 | $ 320 | ||||||||
Total gross proceeds | 1,154 | |||||||||
Net proceeds | $ 787 | $ 2,700 | ||||||||
Preferred stock issued | ||||||||||
Options outstanding | 88,950 | 124,381 | ||||||||
Allocated stock based compensation | $ 8 | $ 213 | ||||||||
Restricted Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of non-option shares granted | 19,861 | |||||||||
Non-option grant date fair value | $ 106 | |||||||||
2014 Equity Incentive Plan [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of shares available for grant | 64,110 | |||||||||
Options outstanding | 38,058 | |||||||||
2012 Equity Incentive Plan [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of shares available for grant | 123 | |||||||||
2013 Equity Incentive Plan [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Vested options outstanding | 24,840 | |||||||||
Number of shares available for grant | 9,835 | |||||||||
Series D Preferred Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Preferred stock issued | 4,725 | 4,725 | ||||||||
Preferred stock outstanding | 4,725 | 4,725 | ||||||||
Preferred stock liquidation preference (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Series D-1 Convertible Preferred Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Description of stock conversion terms | Convertible into ten- nineteenths of a share of Common Stock. | |||||||||
Preferred stock issued | 834 | 834 | ||||||||
Preferred stock outstanding | 834 | 834 | ||||||||
Preferred stock liquidation preference (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Description of preferred stock voting rights | Each holder of Series D-1 Preferred Stock shall be entitled to vote on all matters submitted to the Company’s stockholders and shall be entitled to such number of votes equal to the number of shares of Common Stock such shares of Series D-1 Preferred Stock are convertible into at such time, taking into account the beneficial ownership limitations set forth in the governing Certificate of Designation. | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Series D Preferred Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Preferred stock issued | 4,725 | 4,725 | ||||||||
Preferred stock outstanding | 4,725 | 4,725 | ||||||||
Preferred stock liquidation preference (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Series D-1 Preferred Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Preferred stock issued | 834 | 834 | ||||||||
Preferred stock outstanding | 834 | 834 | ||||||||
Preferred stock liquidation preference (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||||||
North South's patent portfolio in September 2013 [Member] | Series D Preferred Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of shares issued | 1,379,685 | |||||||||
Description of stock conversion terms | Convertible into ten-nineteenths of a share of Common Stock. | |||||||||
Description of preferred stock voting rights | Each share of Series D Preferred Stock has a stated value of $0.0001 per share and is convertible into ten-nineteenths of a share of Common Stock. | |||||||||
IPO [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of shares issued | 522,876 | |||||||||
Shares issued price per share (in dollars per share) | $ 5.74 | |||||||||
Net proceeds from issuance of stock | $ 3,000 | |||||||||
Securities Purchase Agreement [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of common stock issued | 221,000 | |||||||||
Purchase price (in dollars per share) | $ 2.60 | |||||||||
Net proceeds from sale of shares and warrants | $ 800 | |||||||||
Common Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Issuance of common stock, net of offering cost / At-the-market offering | 532,070 | |||||||||
Total gross proceeds | $ 1,200 | |||||||||
Average selling price | $ 2.17 | |||||||||
Net proceeds | $ 1,100 | |||||||||
Number of shares issued | 532,070 | |||||||||
Warrant [Member] | Securities Purchase Agreement [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of common stock issued | 86,692 | |||||||||
Purchase price (in dollars per warrant) | $ 2.5999 | |||||||||
Exercise price (in dollars per share) | $ 0.0001 | |||||||||
Warrant [Member] | Securities Common Stock Purchase Agreement [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of share surrendered | 115,269 | |||||||||
Number of penny warrants issued | 115,269 | |||||||||
Consultant [Member] | Master Service Agreement [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Stock-based compensation | $ 300 | |||||||||
Consultant [Member] | Warrant [Member] | Master Service Agreement [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Description of issued of warrants | The Company paid to Consultant three warrants (the “Consultant Warrants”), with each warrant immediately exercisable for 33,333 shares of common stock with a $0.01 strike price. | |||||||||
Consultant [Member] | Warrant [Member] | Common Stock [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Number of common stock issued | 33,333 | |||||||||
Total gross proceeds | $ 333 | |||||||||
H.C. Wainwright & Co., LLC [Member] | Market Offering Agreement [Member] | ||||||||||
Stockholders' Equity and Convertible Preferred Stock (Textual) | ||||||||||
Aggregate offering price of common stock | $ 1,200 | |||||||||
Commission rate | 3.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Federal | ||
Current | ||
Deferred | 3,862 | (517) |
Decrease in valuation allowance | (3,862) | 517 |
State and local | ||
Current | ||
Deferred | (12,115) | (92) |
Decrease in valuation allowance | 12,115 | 92 |
Change in valuation Allowance | 8,253 | 610 |
Income Tax Provision (Benefit) |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
U.S. Statutory Federal Rate | 21.00% | 21.00% |
Federal tax rate change | 0 | 0 |
State Taxes, Net of Federal Tax Benefit | 2.60% | 3.91% |
Other Permanent Differences | 0.00% | 1.76% |
State rate change in effect | 216.40% | 0.00% |
Fair Value of Warrants | 0.00% | 8.99% |
Decrease due to true up of State NOL | 0.1910 | 0 |
Decrease due to change in Federal NOL and other true ups | (34.64%) | (0.36%) |
Change in Valuation Allowance | (197.29%) | (35.30%) |
Income Tax Provision (Benefit) | 0.00% | 0.00% |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net-operating loss carryforward | $ 15,443 | $ 12,163 |
Stock based compensation | 8,104 | 5,444 |
Patent portfolio and other | 15,004 | 11,201 |
Total Deferred Tax assets | 38,551 | 28,808 |
Valuation allowance | (35,084) | (26,831) |
Deferred Tax Asset, Net of Allowance | 3,467 | 1,977 |
Deferred tax liability: | ||
Fair value adjustment of investment | (3,467) | (1,977) |
Total |
Income Taxes (Details 3)
Income Taxes (Details 3) $ in Thousands | Dec. 31, 2019USD ($) |
AMT Credit Refund Request | $ 40,842 |
Alternative Minimum Tax Credit Refund [Member] | December 31, 2020 [Member] | |
AMT Credit Refund Request | 20,421 |
Alternative Minimum Tax Credit Refund [Member] | December 31, 2021 [Member] | |
AMT Credit Refund Request | $ 20,421 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes (Textual) | |||
Change in valuation allowance | $ 8,253 | $ 610 | |
AMT Credit Refund Request | $ 40,842 | ||
Description of operating loss carryforwards expiration | which expire from 2022 through 2039. | ||
Income tax, description | The NOL carryover may be subject to limitation under Internal Revenue Code section 382, should there be a greater than 50% ownership change as determined under the regulations. | Generally, 50 percent of the corporation’s AMT Credit carried forward to one of these years will be claimable and refundable for that year. | |
Federal income tax | $ 41,000 | ||
net operating loss carryovers | 20,000 | ||
Operating loss carryforward, state | 35,000 | ||
Operating loss carryforward, federal | $ 14,000 |