Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 16, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | Cocrystal Pharma, Inc. | ||
Entity Central Index Key | 1,412,486 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Is Entity a Well-known Seasoned Issuer | No | ||
Is Entity a Voluntary Filer | No | ||
Is Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $ 66,000 | ||
Entity Common Stock, Shares Outstanding | 24,400,000 | ||
Trading Symbol | COCP | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 748 | $ 3,605 |
Restricted cash | 29 | 35 |
Accounts receivable | 1 | 21 |
Prepaid and other current assets | 104 | 517 |
Mortgage note receivable | 1,294 | 1,294 |
Total current assets | 2,176 | 5,472 |
Property and equipment, net | 119 | 280 |
Deposits | 31 | 31 |
In process research and development | 53,905 | 53,905 |
Goodwill | 65,195 | 65,195 |
Total assets | 121,426 | 124,883 |
Current liabilities: | ||
Accounts payable and accrued expenses | 837 | 563 |
Derivative liabilities | 569 | 1,476 |
Total current liabilities | 1,406 | 2,039 |
Long-term liabilities | ||
Deferred rent | 31 | 63 |
Convertible notes payable | 1,007 | |
Deferred tax liability | 13,582 | 20,462 |
Total long-term liabilities | 14,620 | 20,525 |
Total liabilities | 16,026 | 22,564 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $.001 par value; 800,000 shares authorized; 24,275 and 23,801 shares issued and outstanding as of December 31, 2017 and December 31, 2016, respectively | 24 | 24 |
Additional paid-in capital | 243,419 | 239,725 |
Accumulated deficit | (138,043) | (137,430) |
Total stockholders’ equity | 105,400 | 102,319 |
Total liabilities and stockholders' equity | $ 121,426 | $ 124,883 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 800,000,000 | 800,000,000 |
Common stock, shares issued | 24,275,000 | 23,801,000 |
Common stock, shares outstanding | 24,275,000 | 23,801,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Grant revenues | $ 78 | ||
Operating expenses | |||
Research and development | 5,822 | 101,679 | 47,261 |
General and administrative | 2,440 | 4,140 | 6,765 |
Total operating expenses | 8,262 | 105,819 | 54,026 |
Loss from operations | (8,262) | (105,819) | (53,948) |
Interest income (expense), net | (7) | 126 | 180 |
Other expense | (131) | (1) | |
Loss on return of escrowed shares | (1,686) | ||
Impairment on mortgage note receivable | (1,177) | ||
Change in fair value of derivative liabilities | 907 | 2,603 | (9,916) |
Total other income (expense), net | 769 | 1,551 | (11,422) |
Loss before income taxes | (7,493) | (104,268) | (65,370) |
Income tax benefit | 6,880 | 29,394 | 15,248 |
Net loss | $ (613) | $ (74,874) | $ (50,122) |
Net loss per common share: | |||
Net loss per share, basic | $ (0.03) | $ (3.18) | $ (2.40) |
Net loss per share, diluted | $ (0.03) | $ (3.30) | $ (2.40) |
Weighted average common shares outstanding, basic | 24,126,000 | 23,518,000 | 21,011,000 |
Weighted average common shares outstanding, diluted | 24,126,000 | 23,533,000 | 21,011,000 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid- in Capital [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2014 | $ 178,218 | $ 1 | $ 4 | $ 18,845 | $ 236 | $ (12,434) | $ 6,651 |
Beginning balance, shares at Dec. 31, 2014 | 33,000 | 33,000 | 4,083,000 | ||||
Conversion of series A convertible stock | $ (178,218) | $ (1) | $ 18 | 178,200 | 178,218 | ||
Conversion of series A convertible stock, Shares | (33,000) | (33,000) | 18,194,000 | ||||
Stock-based compensation | 2,934 | 2,934 | |||||
Exercise of common stock options | 23 | 23 | |||||
Exercise of common stock options, shares | 6,000 | ||||||
Unrealized gain on marketable securities, net of tax | (236) | (236) | |||||
Sale of common stock | $ 1 | 15,861 | 15,862 | ||||
Sale of common stock, shares | 575,000 | ||||||
Exercise of warrants | 14,264 | 14,264 | |||||
Exercise of warrants, Shares | 288,000 | ||||||
Net loss | (50,122) | (50,122) | |||||
Ending Balance at Dec. 31, 2015 | $ 23 | 230,127 | (62,556) | 167,594 | |||
Ending Balance, shares at Dec. 31, 2015 | 23,146,000 | ||||||
Stock-based compensation | 548 | 548 | |||||
Exercise of common stock options | 3 | 3 | |||||
Exercise of common stock options, shares | 1,000 | ||||||
Sale of common stock | $ 1 | 9,012 | 9,013 | ||||
Sale of common stock, shares | 653,000 | ||||||
Exercise of warrants | 35 | 35 | |||||
Exercise of warrants, Shares | 1,000 | ||||||
Net loss | (74,874) | (74,874) | |||||
Ending Balance at Dec. 31, 2016 | $ 24 | 239,725 | (137,430) | 102,319 | |||
Ending Balance, shares at Dec. 31, 2016 | 23,801,000 | ||||||
Stock-based compensation | 614 | 614 | |||||
Exercise of common stock options | 80 | 80 | |||||
Exercise of common stock options, shares | 57,000 | ||||||
Sale of common stock | 3,000 | 3,000 | |||||
Sale of common stock, shares | 417,000 | ||||||
Net loss | (613) | (613) | |||||
Ending Balance at Dec. 31, 2017 | $ 24 | $ 243,419 | $ (138,043) | $ 105,400 | |||
Ending Balance, shares at Dec. 31, 2017 | 24,275,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | |||
Net loss | $ (613) | $ (74,874) | $ (50,122) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 101 | 201 | 192 |
Stock-based compensation | 614 | 548 | 2,934 |
Change in fair value of derivative liabilities | (907) | (2,603) | 9,916 |
Deferred income tax | (6,880) | (29,413) | (15,267) |
Loss on return of escrowed shares | 1,686 | ||
Impairment loss on mortgage note receivable | 1,177 | ||
Impairment on IPR&D | 92,396 | 38,665 | |
Loss on disposal of equipment | 100 | ||
Changes in operating assets and liabilities: | |||
Accounts receivable | 20 | 11 | |
Prepaid expenses and other current assets | 413 | (76) | (212) |
Accounts payable and accrued expenses | 281 | (2,022) | 1,891 |
Deferred rent | (32) | 2 | |
Net cash used in operating activities | (6,903) | (14,655) | (10,317) |
Investing activities | |||
Purchase of property and equipment | (40) | (51) | (339) |
Interest earned on mortgage note receivable | 33 | ||
Principal payments received on mortgage note receivable | 21 | 77 | |
Net cash provided by (used in) investing activities | (40) | 3 | (262) |
Financing activities | |||
Proceeds from exercise of stock options | 80 | 3 | 23 |
Proceeds from issuance of convertible notes payable | 1,000 | ||
Proceeds from issuance of common stock | 3,000 | 9,013 | 15,862 |
Net cash provided by financing activities | 4,080 | 9,016 | 15,885 |
Net (decrease) increase in cash, cash equivalents, and restricted cash | (2,863) | (5,636) | 5,306 |
Cash, cash equivalents, and restricted cash at beginning of period | 3,640 | 9,276 | 3,970 |
Cash, cash equivalents, and restricted cash at end of period | 777 | 3,640 | 9,276 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | |||
Cashless exercise of warrants | $ 35 | $ 14,265 |
Organization and Basis of Prese
Organization and Basis of Presentation | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Cocrystal Pharma, Inc. (the “Company”) is a biopharmaceutical company focused on developing antiviral therapeutics for human diseases. On January 2, 2014, Biozone Pharmaceuticals, Inc. merged with Cocrystal Discovery, Inc. (“Discovery”) with Discovery becoming a wholly-owned subsidiary of the Company. The Company was previously incorporated in Nevada under the name Biozone Pharmaceuticals, Inc. (“Biozone”). On March 18, 2014, the Company reincorporated in Delaware under the name Cocrystal Pharma, Inc. (“we”, the “Company”, or “Cocrystal”). Our primary business is to develop novel medicines for use in the treatment of human viral diseases. Cocrystal has been developing novel technologies and approaches to create antiviral drug candidates since its initial funding in 2008. Our focus is to pursue the development and commercialization of broad-spectrum antiviral drug candidates that will transform the treatment and prophylaxis of viral diseases in humans. By concentrating our research and development efforts on viral replication inhibitors, we plan to leverage our infrastructure and expertise in these areas. The Merger was treated as a reverse merger and recapitalization effected by a share exchange for financial accounting and reporting purposes since substantially all of Biozone’s operations were disposed of immediately prior to the consummation of the Merger. Discovery was treated as the accounting acquirer as its shareholders controlled the Company after the Merger, even though Biozone was the legal acquirer. As a result, the assets and liabilities and the historical operations that are reflected in these financial statements are those of Discovery as if Cocrystal had always been the reporting company and, on the Merger date, changed its name and reorganized its capital stock. Since Biozone had no operations upon the Merger taking place, the transaction was treated as a recapitalization for accounting purposes and no goodwill or other intangible assets were recorded by the Company as a result of the Merger. Historical common stock amounts and additional paid-in capital were retroactively adjusted. Effective November 25, 2014, Cocrystal, Cocrystal Holdings, Inc., a Delaware corporation and wholly-owned subsidiary of Cocrystal, Cocrystal Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Company (the “Cocrystal Merger Sub”), RFS Merger Sub, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (the “RFS Merger Sub”) and RFS Pharma, LLC, a Georgia limited liability company (“RFS Pharma”), entered into and closed an Agreement and Plan of Merger (the “RFS Merger Agreement”). The consideration paid by the Company was approximately $184.8 million, consisting of the issuance of shares of Series A Preferred stock, which subsequently converted to common stock with an estimated fair value of approximately $178.2 million and the issuance of 551,418 options to purchase the Company’s common stock as replacements of awards previously issued to employees of RFS Pharma with an estimated fair value of approximately $6.6 million. On January 18, 2018, the Board of Directors of the Company filed an amendment (the “Amendment”) with the Delaware Secretary of State to effect a one-for-thirty reverse split (the “Reverse Stock Split”) of the Company’s class of Common Stock. The Amendment took effect on January 24, 2018. The Reverse Stock Split did not change the authorized number of shares of Common Stock. Pursuant to the terms of the Company’s outstanding convertible notes, its options and warrants they have been proportionately adjusted to reflect the Reverse Stock Split, and, pursuant to their terms, a proportionate adjustment was made to the per share exercise price and number of shares issuable under of all of the Company’s outstanding stock options, convertible notes and warrants to Common Stock, and the number of shares reserved for issuance pursuant to the Company’s equity compensation plans have been reduced proportionately. All per share amounts and number of shares in the consolidated financial statements and related notes have been retroactively restated to reflect the Basis of Presentation The financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). Principles of Consolidation The consolidated financial statements include the accounts of Cocrystal Pharma, Inc. and its wholly owned subsidiaries: RFS Pharma, LLC, Cocrystal Discovery, Inc., Cocrystal Merger Sub, Inc., Baker Cummins Corp. and Biozone Laboratories, Inc. Intercompany transactions and balances have been eliminated. Liquidity The Company has no pharmaceutical products approved for sale, has not generated any revenues to date from pharmaceutical product sales, and has incurred significant operating losses since inception. The Company has never been profitable and has incurred losses from operations of $8.3 million, $105.8 million, and $53.9 million in the years ended December 31, 2017, 2016 and 2015, respectively. The Company does not believe that its cash and cash equivalents of $0.7 million as of December 31, 2017 are sufficient to fund its operations for the next twelve months. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such financing will be obtainable on acceptable terms. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail its commercial activities. The Company believes these conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management plans to obtain such resources for the Company include obtaining capital from the sale of its equity and convertible note securities during 2018. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Segments The Company operates in only one segment. Management uses cash flow as the primary measure to manage its business and does not segment its business for internal reporting or decision-making. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash. Risks and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, regulatory approvals, competition from current treatments and therapies and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals. Products developed by the Company will require clearances from the U.S. Food and Drug Administration (the “FDA”) and other international regulatory agencies prior to commercial sales in their respective markets. The Company’s products may not receive the necessary clearances and if they are denied clearance, clearance is delayed or the Company is unable to maintain clearance the Company’s business could be materially adversely impacted. Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include cash in a readily available checking account. December 31, 2017 December 31, 2016 Cash and cash equivalents $ 748 $ 3,605 Restricted cash 29 35 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 777 $ 3,640 Restricted cash represents amounts pledged as collateral for financing arrangements with Silicon Valley Bank. These financing arrangements are currently limited to the issuance of business credit cards. The restriction will end upon the conclusion of financing arrangement. Property and Equipment Property and equipment, which consists of lab equipment, computer equipment, and office equipment, are stated at cost and depreciated over the estimated useful lives of the assets (three to five years) using the straight-line method. Goodwill and In-Process Research and Development Goodwill and an intangible asset for in-process research and development were recorded in connection with the acquisition of RFS Pharma in November 2014. In-process research and development represent a series of awarded patents, filed patent applications and an in-process research program acquired in the acquisition of RFS Pharma that are integral to the development of the Company’s planned future products. In-process research and development represent an indefinite-lived intangible asset. As a result, both goodwill and in-process research and development are not amortized but are tested for impairment annually at the reporting unit level on November 30 or more frequently if events and circumstances indicate impairment may have occurred. Factors the Company considers important that could trigger an interim review for impairment include, but are not limited to, the following: ● Significant changes in the manner of its use of acquired assets or the strategy for its overall business; ● Significant negative industry or economic trends; ● Significant decline in the Company’s stock price for a sustained period; ● Significant decline in market capitalization relative to net book value; ● Limited funding that could further delay development efforts; ● Safety or efficacy issues that surface during development efforts; and ● Clinical outcomes for drug candidates do not lead to regulatory approval. Goodwill and in-process research and development are evaluated for impairment first by a qualitative assessment to determine the likelihood of impairment. If it is determined that impairment is more likely than not, the Company will then proceed to the two step impairment test. For goodwill, the first step is to compare the fair value of the reporting unit to the carrying amount of the reporting unit and for in-process research and development to compare the fair value of the in-process research and development asset to its carrying amount (the “First Step”). If the carrying amount exceeds the fair value, a second step must be followed to calculate impairment (the “Second Step”). Otherwise, if the fair value exceeds the carrying amount, the goodwill or indefinite-lived research and development asset is not considered to be impaired as of the measurement date. In its review of the carrying value of the goodwill for its single reporting unit and its in-process research and development, the Company determines fair values of its goodwill using the market approach, and its in-process research and development asset using the income approach. For the years ended December 31, 2017, 2016, and 2015, the Company determined that a quantitative assessment of impairment of goodwill and in-process research and development was necessary and performed its annual impairment tests as of November 30 of each year. In performing the impairment test, the Company considered, among other factors, the Company’s intention for future use of acquired assets, analyses of historical financial performance and estimates of future performance of Cocrystal Pharma’s product candidates. The fair values of intangible assets were calculated primarily using a discounted cash flow analysis of future revenues to be generated from the eventual sale of potential products to be developed under the programs by geographic region, expected development costs and exit values under a number of different scenarios. Company management estimated the probabilities of occurrence of each scenario and prepared forecast balance sheets and income statements for the combined company. The rates utilized to discount net cash flows to their present values were based on a discount rate of 18.6%. Other assumptions used to develop our estimated cash flows include prices charged by competitors for similar products, the expected price of our product candidates if and when they begin generating revenues, the probabilities of our product candidates obtaining regulatory approvals through various phases of development, and the market size of potential candidates for the products we are developing. Upon completion of the impairment evaluation, we have determined that in-process research and development assets related to our Hepatitis C programs were impaired in 2015 and 2016. During the fourth quarter of 2015, we determined the carrying value of our Hepatitis C in-process research and development was impaired by $38.7 million. During the fourth quarter of 2016, we determined the carrying value of our Hepatitis C in-process research and development was impaired by an additional $92.4 million. For 2017, we determined there was no impairment based on our impairment test performed as of November 30, 2017. These impairments recorded in 2016 and 2015 were the result of increased competition within the marketplace that put downward pressure on revenue projections and partially the result of further data defining the scientific and commercial potential of Company HCV compounds during those years. We have included these impairment charges in Research and Development expenses in our Consolidated Statements of Operations. Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objective. Should an impairment exist, the impairment loss would be measured based on the excess of the carrying amount over the asset’s fair value. Mortgage Note Receivable The Company records its mortgage note receivable at the amount advanced to the borrower, which includes the stated principal amount and certain loan origination and commitment fees that are recognized over the term of the mortgage note. Interest income is accrued as earned over the term of the mortgage note. The Company evaluates the collectability of both interest and principal of the note to determine whether it is impaired. The note is considered to be impaired if, based on current information and events, the Company determines that it is probable that it would be unable to collect all amounts due according to the existing contractual terms. Upon determination that the note is impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the note’s effective interest rate or to the fair value of the Company’s interest in the underlying collateral, less the cost to sell. Grant Revenue and Accounts Receivable Research and development grants are recorded as revenue when there is reasonable assurance that the Company has complied with all conditions necessary to achieve the grants, collectability is reasonably assured, and as the expenditures are incurred. Accounts receivable represents amounts due under research and development grants that have not yet been received. Research and Development Expenses All research and development costs are expensed as incurred. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Company recognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the period in which such change occurs. The Company elects to accrue any interest or penalties related to income taxes as part of its income tax expense. Stock-Based Compensation The Company recognizes compensation expense using a fair-value-based method for costs related to stock-based payments, including stock options. The fair value of options awarded to employees is measured on the date of grant using the Black-Scholes option pricing model and is recognized as expense over the requisite service period on a straight-line basis. Use of the Black-Scholes option pricing model requires the input of subjective assumptions including expected volatility, expected term, and a risk-free interest rate. The Company estimates volatility using a blend of its own historical stock price volatility as well as that of market comparable entities since the Company’s common stock has limited trading history and limited observable volatility of its own. The expected term of the options is estimated by using the Securities and Exchange Commission Staff Bulletin No. 107’s Simplified Method for Estimate Expected Term Convertible Notes Payable The Company accounts for convertible notes payable (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options Common Stock Purchase Warrants and Other Derivative Financial Instruments We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40, Contracts in Entity’s Own Equity Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases Leases In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment as of December 31 (in thousands): 2017 2016 Lab equipment $ 1,168 $ 1,241 Computer and office equipment 309 393 Total equipment 1,477 1,634 Less accumulated depreciation (1,358 ) (1,354 ) Property and equipment, net $ 119 $ 280 Depreciation expense was $101,000, $201,000 and $192,000 for the years ended December 31, 2017, 2016 and 2015, respectively. |
Mortgage Note Receivable
Mortgage Note Receivable | 12 Months Ended |
Dec. 31, 2017 | |
Receivables [Abstract] | |
Mortgage Note Receivable | 4. Mortgage Note Receivable In June 2014, the Company acquired a mortgage note from a bank for $2,626,290 which is collateralized by, among other things, the underlying real estate and related improvements. The property subject to the mortgage is owned by Daniel Fisher, one of the founders of Biozone, and is currently under lease to MusclePharm. The mortgage note has a maturity date of August 1, 2032 and bears an interest rate of 7.24%. In 2014, Daniel Fisher and his affiliate, 580 Garcia Properties LLC, brought multiple lawsuits against the Company involving its predecessors and subsidiaries. The lawsuits have been settled and the complaints initiating them dismissed, without the Company making any payments to either Mr. Fisher or 580 Garcia Properties LLC. In addition, the mortgage note discussed above is a promissory note secured by a deed of trust under which 580 Garcia Properties LLC is the primary obligor. As of the time of the acquisition by the Company of the promissory note, 580 Garcia Properties LLC, was delinquent in its obligation to make certain monthly payments thereunder. Consequently, in December 2015, the Company issued notice of default letters to 580 Garcia Properties LLC, Daniel Fisher, and Sharon Fisher for said delinquencies, and proceeded in accordance with rights of a secured real estate creditor under California law, to initiate private foreclosure proceedings respecting the property, to foreclose under the promissory note secured by the deed of trust. A foreclosure sale was set in accordance with California law for January 27, 2017. Prior to the date of this foreclosure sale, Mr. Fisher filed a motion where he sought among other things an order of the court enjoining the foreclosure sale, alleging wrongdoing by the Company and Biozone Pharmaceuticals, Inc. and others that Mr. Fisher claims the Company has direct responsibility over. The court in the Fisher/Biozone Lawsuit heard oral argument on Mr. Fisher’s motion on March 2, 2017. On March 23, 2017, the court ordered further briefing by March 30, 2017 on the issue of whether to enjoin the foreclosure sale. Since the filing of Mr. Fisher’s motion the Company has voluntarily postponed the announced foreclosure sale several times. Because the Company intended to foreclose on the property and foreclosure was deemed to be probable, the Company recognized an impairment on the mortgage note receivable of $1,176,000 in 2016 to adjust the carrying value of the note to its fair value. The fair value of the note was determined by reference to the estimated fair value of the underlying property, which was determined based on analysis of comparable properties and recent market data. Furthermore, as a result of the Company’s plan to divest of this asset within the next twelve months, the asset was reclassified from long-term to current in 2016. In February 2018 a series of transactions concluded, involving the Company, Daniel Fisher, 580 Garcia Properties LLC, and others, by the terms of which, inter alia, the Company resolved all outstanding claims and disputes with Daniel Fisher, his spouse Sharon Fisher, and 580 Garcia Properties, LLC, and by which the Company received a payment of $1.4 million in exchange for the release of the aforementioned note and deed of trust. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Common Stock | 5. Common Stock As of December 31, 2017, the Company had 800,000,000 shares of authorized common stock, $0.001 par value per share, and had 24,274,494 shares issued and outstanding. The holders of common stock are entitled to one vote for each share of common stock held. On March 15, 2016, the Company accepted subscription agreements representing investor commitments totaling $5,004,370 in a private placement offering to investors who participated in the March 2015 private placement on a pro-rata basis to their participation in the March 2015 private placement of 327,083 shares of the Company’s common stock at a purchase price of $15.30 per share. The purchasers included 7 members of the Company’s board of directors including Dr. Raymond F. Schinazi and Dr. Phil Frost. On September 1, 2016, the Company closed on proceeds of $4,008,201 in a private placement offering of 325,870 shares of the Company’s common stock at a purchase price of $12.30 per share. The purchasers included three members of the Company’s board of directors, including Chairman Dr. Raymond F. Schinazi, Interim Chief Executive Officer Dr. Gary Wilcox, and Dr. David Block. In addition, OPKO Health, Inc., of which the Company’s director Dr. Phillip Frost is Chairman and Chief Executive Officer, invested in the Offering. On April 20, 2017, the Company closed on proceeds of $3,000,000 in a private placement offering of 416,667 shares of the Company’s common stock at a purchase price of $7.20 per share to three accredited investors, which included Chairman Dr. Raymond F. Schinazi and OPKO Health, Inc., of which the Company’s director Dr. Phillip Frost is Chairman and Chief Executive Officer. |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Convertible Notes | 6. Convertible Notes On November 24, 2017, the Company entered into a Securities Purchase Agreement with two accredited investors, including the Company’s Chairman of the Board, pursuant to which the Company sold an aggregate principal amount of $1,000,000 of its 8% convertible notes (“Notes”) due November 24, 2019. At the option of the Purchaser, the Note is convertible at $8.10 per share. In the event the Company completes a financing in which the Company receives at least $10,000,000 in gross proceeds and issues common stock or common stock equivalents to the investor (a “Financing”) or there is a change of control of the Company (or sale of substantially all of the Company’s assets), the outstanding principal amount of the Note shall automatically convert. Upon the closing of a Financing, the conversion price of the Note shall be the lesser of (i) $8.10 per share and (ii) the price per share of the securities sold in the Financing. The Company evaluated the embedded conversion features within the above convertible notes under ASC 815-15 and ASC 815-40 to determine if they required bifurcation as a derivative instrument. The Company determined the embedded conversion features do not meet the definition of a derivative liability, and therefore, do not require bifurcation from the host instrument. In addition, the down-round provision under which the conversion price could be affected by future equity offerings, qualified for a scope exception from derivative accounting with the Company’s early adoption of ASU 2017-11, Simplifying Accounting for Certain Financial Instruments with Characteristics of Liabilities and Equity Debt with Conversion and Other Options |
Stock Based Awards
Stock Based Awards | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stock Based Awards | 7. Stock Based Awards Equity Incentive Plans The Company adopted an equity incentive plan (the “2007 Plan”) in 2007 under which 1,786,635 shares of common stock have been reserved for issuance to employees, nonemployee directors and consultants of the Company. Recipients of incentive stock options shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the fair market value of such stock on the date of grant. The maximum term of options granted under the 2007 Plan is ten years. The options generally vest 25% after one year, with the balance vesting monthly over the remaining three years. As of December 31, 2017, 54,615 shares remain available for future grant under this plan. The Company adopted a second equity incentive plan (the “2015 Plan”) in 2015 under which 1,666,667 shares of common stock have been reserved for issuance to employees, directors and consultants of the Company. Recipients of incentive stock options shall be eligible to purchase shares of the Company’s common stock at an exercise price equal to no less than the estimated fair market value of such stock on the date of grant. The maximum term of options granted under the 2015 Plan is ten years. The options generally vest 25% after one year, with the balance vesting monthly over the remaining three years. As of December 31, 2017, 1,601,667 shares of common stock remain available for future grant under the 2015 Plan. The following table summarizes stock option transactions for the 2007 and 2015 Plans for the year ended December 31, 2017 (amounts in thousands, except per share amounts): Number of shares available for grant Total options outstanding Weighted Average Exercise Price Aggregate Intrinsic Value Balance at December 31, 2016 1,612 812 $ 9.00 $ 5,457 Exercised - (57 ) 1.41 - Granted - - - - Cancelled 44 (44 ) 28.87 - Balance at December 31, 2017 1,656 711 $ 8.39 $ 1,640 The Company recognizes compensation expense using a fair-value-based method for costs related to stock-based payments, including stock options. The fair value of options awarded to employees is measured on the date of grant using the Black-Scholes option pricing model and is recognized as expense over the requisite service period on a straight-line basis. The Company did not grant any options during the years ended December 31, 2017 or 2016. The Black-Scholes option pricing model includes the following weighted average assumptions for grants made during the year ended December 31, 2015: 2015 Assumptions: Risk-free interest rate 1.66 - 2.08 % Expected dividend yield 0 % Expected volatility 78 - 108 % Expected terms (in years) 5.00 - 6.50 As of January 1, 2017, the Company adopted the forfeiture rate methodology change in accordance with ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), As of December 31, 2017, there was $546,000 of total unrecognized compensation expense related to non-vested employee stock options that is expected to be recognized over a weighted average period of 1.1 years. For options granted and outstanding, there were 711,000 options outstanding which were fully vested or expected to vest, with an aggregate intrinsic value of $1,640,000 and a weighted average remaining contractual term of 4.1 years at December 31, 2017. For vested and exercisable options, outstanding shares totaled 682,000, with an aggregate intrinsic value of $1,640,000. These options had a weighted-average exercise price of $7.24 per share and a weighted-average remaining contractual term of 3.6 years at December 31, 2017. The aggregate intrinsic value of outstanding and exercisable options at December 31, 2017 was calculated based on the closing price of the Company’s common stock as reported on the Over-the-Counter Bulletin Board and the OTCQx markets on December 31, 2017 of approximately $6.00 per share less the exercise price of the options. The aggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying options. Common Stock Reserved for Future Issuance The following table present information concerning common stock available for future issuance (in thousands): December 31, 2017 2016 Stock options issued and outstanding 711 812 Authorized for future option grants 1,656 1,612 Convertible notes 124 - Warrants outstanding 209 209 Total 2,700 2,633 |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Warrants | |
Warrants | 8. Warrants The following is a summary of activity in the number of warrants outstanding to purchase the Company’s common stock for the years ended December 31, 2017, 2016 and 2015 (in thousands): Warrants accounted for as: Warrants accounted for as: Equity Liabilities January 2012 warrants March 2013 warrants April 2013 warrants February 2012 warrants August 2013 warrants October 2013 warrants October 2013 Series A warrants January 2015 warrants Total Outstanding, January 1, 2015 22 15 62 33 333 7 234 183 889 Warrants exercised - - (12 ) - (333 ) (7 ) (208 ) (50 ) (610 ) Outstanding, December 31, 2015 22 15 50 33 - - 26 133 279 Warrants expired (22 ) (15 ) (30 ) (67 ) Warrants exercised - - - (3 ) - - - - (3 ) Outstanding, December 31, 2016 - - 50 - - - 26 133 209 Warrants expired - - - - - - - - - Warrants exercised - - - - - - - - - Outstanding, December 31, 2017 - - 50 - - - 26 133 209 Expiration date January 11, 2016 March 1, 2016 April 25, 2018 February 28, 2016 August 26, 2023 October 18, 2018 October 24, 2023 January 16, 2024 Warrants consist of warrants with the potential to be settled in cash, which are liability-classified warrants, and equity-classified warrants. Warrants classified as liabilities Liability-classified warrants consist of warrants issued by Biozone in connection with equity financings in February 2012, August 2013, October 2013 and January 2014, which were assumed by the Company in connection with its merger with Biozone in January 2014. As of December 31, 2017, 159,000 warrants are accounted for as liabilities and 50,000 warrants are accounted for as equity. Warrants accounted for as liabilities have the potential to be settled in cash or are not indexed to the Company’s own stock. The estimated fair value of outstanding warrants accounted for as liabilities is determined at each balance sheet date. Any decrease or increase in the estimated fair value of the warrant liability since the most recent balance sheet date is recorded in the consolidated statement of operations as changes in fair value of derivative liabilities. The fair value of the warrants classified as liabilities is estimated using the Black-Scholes option-pricing model with the following inputs as of December 31, 2017: October 2013 warrants January 2015 warrants Strike price $ 15.00 $ 15.00 Expected term (years) 5.8 6.0 Cumulative volatility % 86.7 % 87.7 % Risk-free rate % 2.30 % 2.31 % The fair value of the warrants classified as liabilities is estimated using the Black-Scholes option-pricing model with the following inputs as of December 31, 2016: October 2013 warrants January 2015 warrants Strike price $ 15.00 $ 15.00 Expected term (years) 6.8 7.0 Cumulative volatility % 99.7 % 100 % Risk-free rate % 2.24 % 2.25 % The Company estimates volatility using a blend of its own historical stock price volatility as well as that of market comparable entities since the Company’s common stock has limited trading history and limited observable volatility of its own. The expected life assumption is based on the remaining contractual terms of the warrants. The risk-free rate is based on the zero coupon rates in effect at the balance sheet date. The dividend yield used in the pricing model is zero, because the Company has no present intention to pay cash dividends. |
Licenses and Collaborations
Licenses and Collaborations | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Licenses and Collaborations | 9. Licenses and Collaborations Emory University: Cocrystal Pharma has an exclusive license from Emory University for use of certain inventions and technology related to inhibitors of hepatitis C virus that were jointly developed by Emory and Cocrystal Pharma employees. The License Agreement is dated March 7, 2013 wherein Emory agrees to add to the Licensed Patents and Licensed Technology Emory’s rights to any patent, patent application, invention, or technology application that is based on technology disclosed within three (3) years of March 7, 2013. The agreement includes payments due to Emory ranging from $40,000 to $500,000 based on successful achievement of certain drug development milestones. Additionally, Cocrystal may have royalty payments at 3.5% of net sales due to Emory with a minimum in year one of $25,000 and increase to $400,000 in year five upon product commercialization. One of Cocrystal’s Directors, Dr. Raymond Schinazi, is also a faculty member at Emory University. NIH: Cocrystal Pharma has two Public Health Biological Materials License Agreements with the NIH. The original License Agreements were dated August 31, 2010 and it was amended on November 6, 2013. The materials licensed are being used in Norovirus assays to screen potential antiviral agents in our library. University of Pittsburgh and Emory University: Cocrystal Pharma assigned its patent rights to the patent titled “3’-AZIDO PURINENUCLEOTIDE PRODRUGS FOR TREATMENT OF VIRAL INFECTIONS” to University of Pittsburgh on November 21, 2015. This patent is jointly owned by Cocrystal Pharma, the University of Pittsburgh and Emory University. One of Cocrystal’s Directors, Dr. Raymond Schinazi, is also a faculty member at Emory University. Duke University and Emory University: In February 2016, the Company entered into an agreement with Duke University and Emory University to license various patents and know-how to use CRISPR/Cas9 technologies for developing a possible cure for hepatitis B virus (HBV) and human papilloma virus (HPV). On September 25, 2017 (“Termination Date”), the Company mutually terminated the agreement with Duke University and there are no further rights or obligations under this license agreement after the Termination Date. |
Fair Value Measurement
Fair Value Measurement | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | 10. Fair Value Measurement ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as 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. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: Level 1 — quoted prices in active markets for identical assets or liabilities. Level 2 — other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date. Level 3 — significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date. The Company categorized its cash equivalents as Level 1 fair value measurements. The warrants are valued using the Black-Scholes option-pricing model as discussed in Note 8 above. The following table presents a summary of fair values of assets and liabilities that are remeasured at fair value at each balance sheet date as of December 31, 2017 and 2016, and their placement within the fair value hierarchy as discussed above (in thousands): December 31, Quoted Prices in Active Markets Significant Other Observable Inputs Unobservable Inputs Description 2017 (Level 1) (Level 2) (Level 3) Assets: Cash, cash equivalents, and restricted cash $ 777 $ 777 $ - $ - Liabilities: Warrants potentially settleable in cash $ 569 $ - $ - $ 569 December 31, Quoted Prices in Active Markets Significant Other Observable Inputs Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Assets: Cash, cash equivalents, and restricted cash $ 3,640 $ 3,640 $ - $ - Liabilities: Warrants potentially settleable in cash $ 1,476 $ - $ - $ 1,476 The Company has not transferred any financial instruments into or out of Level 3 classification during the years ended December 31, 2017, 2016, or 2015. A reconciliation of the beginning and ending Level 3 liabilities for the years ended December 31, 2017, 2016 and 2015, is as follows (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) 2017 2016 2015 Balance, January 1, $ 1,476 $ 4,115 $ 8,464 Value of warrants converted in cashless exercise - (36 ) (14,265 ) Change in fair value of warrants for the year ended (907 ) (2,603 ) 9,916 Balance at December 31, $ 569 $ 1,476 $ 4,115 |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 11. Net Loss per Share The Company accounts for and discloses net loss per common share in accordance with FASB ASC Topic 260, Earnings Per Share The following table sets forth the computation of basic and diluted net loss per share (amounts in thousands, except per share amounts): For the year ended: 2017 2016 2015 Numerator: Net loss attributable to common shareholders $ (613 ) $ (74,874 ) $ (50,122 ) Adjustment for change in fair value of derivative liability - (2,603 ) - Net loss attributable to common shareholders, as adjusted $ (613 ) $ (77,477 ) $ (50,122 ) Denominator: Weighted average shares outstanding used to compute net loss per share: Basic 24,126 23,518 21,011 Adjustment for dilutive effects of warrants - 16 - Diluted 24,126 23,534 21,011 Net loss per share Basic $ (0.03 ) $ (3.18 ) $ (2.40 ) Diluted $ (0.03 ) $ (3.30 ) $ (2.40 ) The following table sets forth the number of potential common shares excluded from the calculations of net loss per diluted share because their inclusion would be anti-dilutive (in thousands): For the year ended December 31, 2017 2016 2015 Options to purchase common stock 711 812 1,436 Convertible notes 124 - - Warrants to purchase common stock 209 - 276 Total 1,044 812 1,712 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes In accordance with the authoritative guidance for income taxes under ASC 740, a deferred tax asset or liability is determined based on the difference between the financial statement and the tax basis of assets and liabilities as measured by the enacted tax rates, which will be in effect when these differences reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. The Company recognizes the impact of a tax position in the financial statements only if that position is more likely than not of being sustained upon examination by taxing authorities, based on the technical merits of the position. The Company’s practice is to recognize interest and/or penalties related to income tax matters in income tax expense. The Company is subject to taxation in the U.S. and various state jurisdictions. Currently no years are under examination. All tax years are subject to examination by the U.S. and state tax authorities due to the carry-forward of unutilized net operating losses and research and development credits. A reconciliation of income tax expense (benefit) for the years ended December 31, 2017, 2016, and 2015 is as follows: Year Ended December 31, 2017 2016 2015 Current: Federal $ - $ - $ - State - 19 19 Total current income tax expense - 19 19 Deferred: Federal (6,880 ) (32,421 ) (12,001 ) State - 3,008 (3,266 ) Total deferred income tax benefit (6,880 ) (29,413 ) (15,267 ) Total income tax benefit $ (6,880 ) $ (29,394 ) $ (15,248 ) Significant components of the Company’s deferred income taxes at December 31, 2017 and 2016 are shown below (in thousands): December 31, 2017 2016 Deferred Tax Assets: Net operating loss carryforwards $ 15,003 $ 20,633 Compensation 961 1,323 Research and development tax credits 1,789 1,390 Property and equipment 8 22 Other 373 545 Total gross deferred tax assets 18,134 23,912 Deferred Tax Liabilities Acquired in-process research and development (13,875 ) (20,462 ) Total Deferred Tax Liabilities (13,875 ) (20,462 ) Net deferred tax assets 4,259 3,450 Valuation allowance (17,841 ) (23,912 ) Net Deferred Tax Liability $ (13,582 ) $ (20,462 ) The Company has established a valuation allowance against net deferred tax assets due to the uncertainty that such assets will be realized. The Company periodically evaluates the recoverability of the deferred tax assets. At such time as it is determined that it is more likely than not that deferred tax assets will be realizable, the valuation allowance will be reduced. At December 31, 2017, the Company had federal and California net operating losses, or NOL, carryforwards of approximately $61.7 million and $35.8 million, respectively. The federal NOL carryforwards begin to expire in 2026, and the California NOL carryforwards begin to expire in 2028. At December 31, 2017, the Company also had federal and California research tax credit carryforwards of approximately $1.6 million and $0.3 million, respectively. The federal research tax credit carryforwards begin to expire in 2028, and the California research tax credit carryforwards do not expire and can be carried forward indefinitely until utilized. The above NOL carryforwards and the research tax credit carryforwards may be subject to an annual limitation under Section 382 and 383 of the Internal Revenue Code of 1986, and similar state provisions if the Company experienced one or more ownership changes, which would limit the amount of NOL and tax credit carryforwards that can be utilized to offset future taxable income and tax, respectively. In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. The Company has not completed an IRC Section 382/383 analysis. If a change in ownership were to have occurred, NOL and tax credit carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. The Company adopted ASU 2016-09 in 2017. The Company has excess tax benefits for which a benefit could not previously be recognized of approximately $13,000. The balance of the unrecognized excess tax benefits has been reversed with the impact recorded to retained earnings including any change to the valuation allowance as a result of the adoption. Due to the full valuation allowance on the U.S. deferred tax assets, there is no impact to the financial statements as a result of this adoption. A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2017 2016 2015 Statutory federal income tax rate 34.0 % 34.0 % 34 % Change in fair value of warrant liability 4.1 % 0.9 % (5.2 )% State income taxes, net of federal benefit (7.5 )% 4.8 % 0.1 % Tax credits 3.2 % 0.4 % 0.3 % Change in valuation allowance 81.2 % (7.3 )% (12.5 )% Permanent differences 1.2 % - (0.8 )% State rate adjustment - (5.3 )% 3.3 % Tax Cuts and Jobs Act (22.6 )% - - Equity compensation adjustment (1.8 )% - - Return to provision - 0.9 % (0.1 )% Other - - 4.5 % Effective Rate 91.8 % 28.3 % 23.6 % In December 2017, the Tax Cuts and Jobs Act (the “2017 Act”) was enacted. The 2017 Tax Act includes a number of changes to existing U.S. tax laws that impact the company, most notably a reduction of the U.S. corporate income tax rate from 35 percent to 21 percent for tax years beginning after December 31, 2017. The 2017 Tax Act also provides for the acceleration of depreciation for certain assets placed in service after September 27, 2017 as well as prospective changes beginning in 2018, including additional limitations on executive compensation, limitations on the deductibility of interest and capitalization of research and development expenditures. The Company measures deferred tax assets and liabilities using enacted tax rates that will apply in the years in which the temporary differences are expected to be recovered or paid. Accordingly, the Company’s deferred tax assets and liabilities were remeasured to reflect the reduction in the U.S. corporate income tax rate from the highest graduated tax 35 percent to a 21 percent flat tax. The remeasurement of deferred tax liabilities that are indefinite lived intangibles, generated an income tax benefit of $6.6 million, while the remeasurement of the deferred tax assets and liabilities that are not associated with indefinite lived intangibles generated an income tax expense of $8.3 million. The income tax expense of $8.3 million was entirely offset by the Company’s valuation allowance. The Company files income tax returns in the United States and various state jurisdictions. Due to the Company’s incurred losses, the Company is essentially subject to income tax examination by tax authorities from inception to date. The Company’s policy is to recognize interest expense and penalties related to income tax matters as tax expense. At December 31, 2017, there were no significant accruals for interest related to unrecognized tax benefits or tax penalties. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 13. Commitments and Contingencies Commitments The Company leases office and laboratory space in Bothell, Washington under an operating lease that expires in January 2019, respectively. Future minimum lease payments, by year and in aggregate, are as follows: Year ending December 31 (in thousands) 2018 $ 168 2019 14 Total Minimum Lease Payments $ 182 The minimum lease payments above do not include common area maintenance (CAM) charges, which are contractual obligations under some of the Company’s operating leases, but are not fixed and can fluctuate from year to year. The minimum lease payments above include the amounts that would be paid if the Company maintains its Bothell lease for the five-year term. The Company has the right to terminate this lease after three years, by giving prior notice at least 180 days prior to such early termination date and by paying a termination fee equal to the sum of three months’ rent plus the unamortized balance of the sum of (a) all brokerage commissions paid by the landlord of the property in connection with the lease and (b) the abated free base rent related to the five months of the lease, treating items (a) and (b) as being amortized on a level basis over the five year base term of the lease. The offices and laboratory space in Tucker, Georgia are leased from a limited liability company owned by one of Cocrystal’s Directors, Dr. Raymond Schinazi and are currently on a month to month basis. Rent expense for 2017, 2016, and 2015, totaled $293,000, $345,000 and $375,000 respectively. Contingencies From time to time, the Company is a party to, or otherwise involved in, legal proceedings arising in the normal course of business. As of the date of this report, except as described below, the Company is not aware of any proceedings, threatened or pending, against it which, if determined adversely, would have a material effect on its business, results of operations, cash flows or financial position. |
Quarterly Results (Unaudited)
Quarterly Results (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Results (Unaudited) | 14. Quarterly Results (Unaudited) Selected quarterly financial data for 2017 and 2016 are contained in the Condensed Interim Financial Data table below. ($ in thousands except per share amounts) 4th Q 3rd Q 2nd Q 1st Q 2017 Research and development 1,103 1,393 1,255 2,071 General and administrative 728 717 (55 ) 1,050 Total costs and expenses 1,831 2,110 1,200 3,121 Operating loss (1,831 ) (2,110 ) (1,200 ) (3,121 ) Other income (expense), net (152 ) 150 198 573 Income tax benefit $ 6,880 $ - $ - $ - Net (loss) income 4,897 (1,960 ) (1,002 ) (2,548 ) Basic earnings (loss) per common share $ 0.20 $ (0.08 ) $ (0.04 ) $ (0.11 ) Earnings (loss) per common share assuming dilution $ 0.20 $ (0.08 ) $ (0.04 ) $ (0.11 ) 2016 Research and development 93,876 (1) 2,093 2,368 3,342 General and administrative 510 (199 ) 1,836 1,992 Total costs and expenses 94,386 1,894 4,204 5,334 Operating loss (94,386 ) (1,894 ) (4,204 ) (5,334 ) Other income (expense), net (762 ) 13 977 1,322 Income tax benefit $ 29,394 $ - $ - $ - Net loss (65,754 ) (1,881 ) (3,227 ) (4,012 ) Basic loss per common share $ (3.06 ) $ (0.03 ) $ (0.14 ) $ (0.17 ) Loss per common share assuming dilution $ (3.06 ) $ (0.03 ) $ (0.14 ) $ (0.17 ) (1) Includes impairment charge for the company’s IPR&D asset of $92,369,000 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events On January 18, 2018, the Board of Directors of the Company filed an amendment (the “Amendment”) with the Delaware Secretary of State to effect a one-for-30 reverse split of the Company’s class of Common Stock. The Amendment took effect on January 24, 2018. No fractional shares will be issued or distributed as a result of the Amendment. There was no change in the par value of our common stock. On January 31, 2018, the Company, entered into a Securities Purchase Agreement (the “SPA”) with OPKO Health, Inc. (the “Purchaser”), pursuant to which the Company borrowed $1,000,000 from the Purchaser in exchange for issuing the Purchaser an 8% Convertible Note (the “Note”) due January 31, 2020. At the option of the Purchaser, the Note is convertible at $8.10 per share. In the event the Company completes a financing in which the Company receives at least $10,000,000 in gross proceeds and issues common stock or common stock equivalents to the investor (a “Financing”) or there is a change of control of the Company (or sale of substantially all of the Company’s assets), the outstanding principal amount of the Note shall automatically convert. Upon the closing of a Financing, the conversion price of the Note shall be the lesser of (i) $8.10 per share and (ii) the price per share of the securities sold in the Financing. On or about February 8, 2018 a series of transactions concluded, involving the Company, Daniel Fisher, 580 Garcia Properties LLC, and others, by the terms of which, inter alia |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Segments | Segments The Company operates in only one segment. Management uses cash flow as the primary measure to manage its business and does not segment its business for internal reporting or decision-making. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash. |
Risks and Uncertainties | Risks and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, regulatory approvals, competition from current treatments and therapies and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals. Products developed by the Company will require clearances from the U.S. Food and Drug Administration (the “FDA”) and other international regulatory agencies prior to commercial sales in their respective markets. The Company’s products may not receive the necessary clearances and if they are denied clearance, clearance is delayed or the Company is unable to maintain clearance the Company’s business could be materially adversely impacted. |
Cash and Cash Equivalents, and Restricted cash | Cash, Cash Equivalents, and Restricted Cash The Company considers all highly liquid investments with an original maturity from the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents include cash in a readily available checking account. December 31, 2017 December 31, 2016 Cash and cash equivalents $ 748 $ 3,605 Restricted cash 29 35 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 777 $ 3,640 Restricted cash represents amounts pledged as collateral for financing arrangements with Silicon Valley Bank. These financing arrangements are currently limited to the issuance of business credit cards. The restriction will end upon the conclusion of financing arrangement. |
Property and Equipment | Property and Equipment Property and equipment, which consists of lab equipment, computer equipment, and office equipment, are stated at cost and depreciated over the estimated useful lives of the assets (three to five years) using the straight-line method. |
Goodwill and In-Process Research and Development | Goodwill and In-Process Research and Development Goodwill and an intangible asset for in-process research and development were recorded in connection with the acquisition of RFS Pharma in November 2014. In-process research and development represent a series of awarded patents, filed patent applications and an in-process research program acquired in the acquisition of RFS Pharma that are integral to the development of the Company’s planned future products. In-process research and development represent an indefinite-lived intangible asset. As a result, both goodwill and in-process research and development are not amortized but are tested for impairment annually at the reporting unit level on November 30 or more frequently if events and circumstances indicate impairment may have occurred. Factors the Company considers important that could trigger an interim review for impairment include, but are not limited to, the following: ● Significant changes in the manner of its use of acquired assets or the strategy for its overall business; ● Significant negative industry or economic trends; ● Significant decline in the Company’s stock price for a sustained period; ● Significant decline in market capitalization relative to net book value; ● Limited funding that could further delay development efforts; ● Safety or efficacy issues that surface during development efforts; and ● Clinical outcomes for drug candidates do not lead to regulatory approval. Goodwill and in-process research and development are evaluated for impairment first by a qualitative assessment to determine the likelihood of impairment. If it is determined that impairment is more likely than not, the Company will then proceed to the two step impairment test. For goodwill, the first step is to compare the fair value of the reporting unit to the carrying amount of the reporting unit and for in-process research and development to compare the fair value of the in-process research and development asset to its carrying amount (the “First Step”). If the carrying amount exceeds the fair value, a second step must be followed to calculate impairment (the “Second Step”). Otherwise, if the fair value exceeds the carrying amount, the goodwill or indefinite-lived research and development asset is not considered to be impaired as of the measurement date. In its review of the carrying value of the goodwill for its single reporting unit and its in-process research and development, the Company determines fair values of its goodwill using the market approach, and its in-process research and development asset using the income approach. For the years ended December 31, 2017, 2016, and 2015, the Company determined that a quantitative assessment of impairment of goodwill and in-process research and development was necessary and performed its annual impairment tests as of November 30 of each year. In performing the impairment test, the Company considered, among other factors, the Company’s intention for future use of acquired assets, analyses of historical financial performance and estimates of future performance of Cocrystal Pharma’s product candidates. The fair values of intangible assets were calculated primarily using a discounted cash flow analysis of future revenues to be generated from the eventual sale of potential products to be developed under the programs by geographic region, expected development costs and exit values under a number of different scenarios. Company management estimated the probabilities of occurrence of each scenario and prepared forecast balance sheets and income statements for the combined company. The rates utilized to discount net cash flows to their present values were based on a discount rate of 18.6%. Other assumptions used to develop our estimated cash flows include prices charged by competitors for similar products, the expected price of our product candidates if and when they begin generating revenues, the probabilities of our product candidates obtaining regulatory approvals through various phases of development, and the market size of potential candidates for the products we are developing. Upon completion of the impairment evaluation, we have determined that in-process research and development assets related to our Hepatitis C programs were impaired in 2015 and 2016. During the fourth quarter of 2015, we determined the carrying value of our Hepatitis C in-process research and development was impaired by $38.7 million. During the fourth quarter of 2016, we determined the carrying value of our Hepatitis C in-process research and development was impaired by an additional $92.4 million. For 2017, we determined there was no impairment based on our impairment test performed as of November 30, 2017. These impairments recorded in 2016 and 2015 were the result of increased competition within the marketplace that put downward pressure on revenue projections and partially the result of further data defining the scientific and commercial potential of Company HCV compounds during those years. We have included these impairment charges in Research and Development expenses in our Consolidated Statements of Operations. |
Long-Lived Assets | Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment, to determine whether indicators of impairment may exist which warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objective. Should an impairment exist, the impairment loss would be measured based on the excess of the carrying amount over the asset’s fair value. |
Mortgage Note Receivable | Mortgage Note Receivable The Company records its mortgage note receivable at the amount advanced to the borrower, which includes the stated principal amount and certain loan origination and commitment fees that are recognized over the term of the mortgage note. Interest income is accrued as earned over the term of the mortgage note. The Company evaluates the collectability of both interest and principal of the note to determine whether it is impaired. The note is considered to be impaired if, based on current information and events, the Company determines that it is probable that it would be unable to collect all amounts due according to the existing contractual terms. Upon determination that the note is impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the note’s effective interest rate or to the fair value of the Company’s interest in the underlying collateral, less the cost to sell. |
Grant Revenue and Accounts Receivable | Grant Revenue and Accounts Receivable Research and development grants are recorded as revenue when there is reasonable assurance that the Company has complied with all conditions necessary to achieve the grants, collectability is reasonably assured, and as the expenditures are incurred. Accounts receivable represents amounts due under research and development grants that have not yet been received. |
Research and Development Expenses | Research and Development Expenses All research and development costs are expensed as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Company recognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the period in which such change occurs. The Company elects to accrue any interest or penalties related to income taxes as part of its income tax expense. |
Stock-Based Compensation | Stock-Based Compensation The Company recognizes compensation expense using a fair-value-based method for costs related to stock-based payments, including stock options. The fair value of options awarded to employees is measured on the date of grant using the Black-Scholes option pricing model and is recognized as expense over the requisite service period on a straight-line basis. Use of the Black-Scholes option pricing model requires the input of subjective assumptions including expected volatility, expected term, and a risk-free interest rate. The Company estimates volatility using a blend of its own historical stock price volatility as well as that of market comparable entities since the Company’s common stock has limited trading history and limited observable volatility of its own. The expected term of the options is estimated by using the Securities and Exchange Commission Staff Bulletin No. 107’s Simplified Method for Estimate Expected Term |
Convertible Notes Payable | Convertible Notes Payable The Company accounts for convertible notes payable (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with ASC 470-20, Debt with Conversion and Other Options |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments We classify as equity any contracts that require physical settlement or net-share settlement or provide us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement) provided that such contracts are indexed to our own stock as defined in ASC 815-40, Contracts in Entity’s Own Equity |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases Leases In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) In January 2017, the FASB issued ASU No. 2017-04, Intangibles - Goodwill and Other (Topic 350) |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Cash, Cash Equivalents and Restricted Cash | December 31, 2017 December 31, 2016 Cash and cash equivalents $ 748 $ 3,605 Restricted cash 29 35 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 777 $ 3,640 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment as of December 31 (in thousands): 2017 2016 Lab equipment $ 1,168 $ 1,241 Computer and office equipment 309 393 Total equipment 1,477 1,634 Less accumulated depreciation (1,358 ) (1,354 ) Property and equipment, net $ 119 $ 280 |
Stock Based Awards (Tables)
Stock Based Awards (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Summary of Stock Option Transactions | The following table summarizes stock option transactions for the 2007 and 2015 Plans for the year ended December 31, 2017 (amounts in thousands, except per share amounts): Number of shares available for grant Total options outstanding Weighted Average Exercise Price Aggregate Intrinsic Value Balance at December 31, 2016 1,612 812 $ 9.00 $ 5,457 Exercised - (57 ) 1.41 - Granted - - - - Cancelled 44 (44 ) 28.87 - Balance at December 31, 2017 1,656 711 $ 8.39 $ 1,640 |
Schedule of Weighted Average Assumptions Used for Grants | The Black-Scholes option pricing model includes the following weighted average assumptions for grants made during the year ended December 31, 2015: 2015 Assumptions: Risk-free interest rate 1.66 - 2.08 % Expected dividend yield 0 % Expected volatility 78 - 108 % Expected terms (in years) 5.00 - 6.50 |
Schedule of Common Stock Reserved for Future Issuance | The following table present information concerning common stock available for future issuance (in thousands): December 31, 2017 2016 Stock options issued and outstanding 711 812 Authorized for future option grants 1,656 1,612 Convertible notes 124 - Warrants outstanding 209 209 Total 2,700 2,633 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Warrants | |
Summary of Warrant Activity | The following is a summary of activity in the number of warrants outstanding to purchase the Company’s common stock for the years ended December 31, 2017, 2016 and 2015 (in thousands): Warrants accounted for as: Warrants accounted for as: Equity Liabilities January 2012 warrants March 2013 warrants April 2013 warrants February 2012 warrants August 2013 warrants October 2013 warrants October 2013 Series A warrants January 2015 warrants Total Outstanding, January 1, 2015 22 15 62 33 333 7 234 183 889 Warrants exercised - - (12 ) - (333 ) (7 ) (208 ) (50 ) (610 ) Outstanding, December 31, 2015 22 15 50 33 - - 26 133 279 Warrants expired (22 ) (15 ) (30 ) (67 ) Warrants exercised - - - (3 ) - - - - (3 ) Outstanding, December 31, 2016 - - 50 - - - 26 133 209 Warrants expired - - - - - - - - - Warrants exercised - - - - - - - - - Outstanding, December 31, 2017 - - 50 - - - 26 133 209 Expiration date January 11, 2016 March 1, 2016 April 25, 2018 February 28, 2016 August 26, 2023 October 18, 2018 October 24, 2023 January 16, 2024 |
Schedule of Fair Value of Warrants Classified as Liabilities | The fair value of the warrants classified as liabilities is estimated using the Black-Scholes option-pricing model with the following inputs as of December 31, 2017: October 2013 warrants January 2015 warrants Strike price $ 15.00 $ 15.00 Expected term (years) 5.8 6.0 Cumulative volatility % 86.7 % 87.7 % Risk-free rate % 2.30 % 2.31 % The fair value of the warrants classified as liabilities is estimated using the Black-Scholes option-pricing model with the following inputs as of December 31, 2016: October 2013 warrants January 2015 warrants Strike price $ 15.00 $ 15.00 Expected term (years) 6.8 7.0 Cumulative volatility % 99.7 % 100 % Risk-free rate % 2.24 % 2.25 % |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Summary of Fair Values of Assets and Liabilities Measured at Fair Value On Recurring and Nonrecurring Basis | The following table presents a summary of fair values of assets and liabilities that are remeasured at fair value at each balance sheet date as of December 31, 2017 and 2016, and their placement within the fair value hierarchy as discussed above (in thousands): December 31, Quoted Prices in Active Markets Significant Other Observable Inputs Unobservable Inputs Description 2017 (Level 1) (Level 2) (Level 3) Assets: Cash, cash equivalents, and restricted cash $ 777 $ 777 $ - $ - Liabilities: Warrants potentially settleable in cash $ 569 $ - $ - $ 569 December 31, Quoted Prices in Active Markets Significant Other Observable Inputs Unobservable Inputs Description 2016 (Level 1) (Level 2) (Level 3) Assets: Cash, cash equivalents, and restricted cash $ 3,640 $ 3,640 $ - $ - Liabilities: Warrants potentially settleable in cash $ 1,476 $ - $ - $ 1,476 |
Schedule of Reconciliation of Beginning and Ending Level 3 Liabilities | A reconciliation of the beginning and ending Level 3 liabilities for the years ended December 31, 2017, 2016 and 2015, is as follows (in thousands): Fair Value Measurements Using Significant Unobservable Inputs (Level 3) 2017 2016 2015 Balance, January 1, $ 1,476 $ 4,115 $ 8,464 Value of warrants converted in cashless exercise - (36 ) (14,265 ) Change in fair value of warrants for the year ended (907 ) (2,603 ) 9,916 Balance at December 31, $ 569 $ 1,476 $ 4,115 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss per share (amounts in thousands, except per share amounts): For the year ended: 2017 2016 2015 Numerator: Net loss attributable to common shareholders $ (613 ) $ (74,874 ) $ (50,122 ) Adjustment for change in fair value of derivative liability - (2,603 ) - Net loss attributable to common shareholders, as adjusted $ (613 ) $ (77,477 ) $ (50,122 ) Denominator: Weighted average shares outstanding used to compute net loss per share: Basic 24,126 23,518 21,011 Adjustment for dilutive effects of warrants - 16 - Diluted 24,126 23,534 21,011 Net loss per share Basic $ (0.03 ) $ (3.18 ) $ (2.40 ) Diluted $ (0.03 ) $ (3.30 ) $ (2.40 ) |
Schedule of Antidilutive Securities Excluded from Calculations of Net Loss Per Share | The following table sets forth the number of potential common shares excluded from the calculations of net loss per diluted share because their inclusion would be anti-dilutive (in thousands): For the year ended December 31, 2017 2016 2015 Options to purchase common stock 711 812 1,436 Convertible notes 124 - - Warrants to purchase common stock 209 - 276 Total 1,044 812 1,712 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Income Tax Expense (benefit) | A reconciliation of income tax expense (benefit) for the years ended December 31, 2017, 2016, and 2015 is as follows: Year Ended December 31, 2017 2016 2015 Current: Federal $ - $ - $ - State - 19 19 Total current income tax expense - 19 19 Deferred: Federal (6,880 ) (32,421 ) (12,001 ) State - 3,008 (3,266 ) Total deferred income tax benefit (6,880 ) (29,413 ) (15,267 ) Total income tax benefit $ (6,880 ) $ (29,394 ) $ (15,248 ) |
Schedule of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred income taxes at December 31, 2017 and 2016 are shown below (in thousands): December 31, 2017 2016 Deferred Tax Assets: Net operating loss carryforwards $ 15,003 $ 20,633 Compensation 961 1,323 Research and development tax credits 1,789 1,390 Property and equipment 8 22 Other 373 545 Total gross deferred tax assets 18,134 23,912 Deferred Tax Liabilities Acquired in-process research and development (13,875 ) (20,462 ) Total Deferred Tax Liabilities (13,875 ) (20,462 ) Net deferred tax assets 4,259 3,450 Valuation allowance (17,841 ) (23,912 ) Net Deferred Tax Liability $ (13,582 ) $ (20,462 ) |
Schedule of Reconciliation of Federal Statutory Income Tax Rate | A reconciliation of the federal statutory income tax rate to the Company’s effective income tax rate is as follows: Year Ended December 31, 2017 2016 2015 Statutory federal income tax rate 34.0 % 34.0 % 34 % Change in fair value of warrant liability 4.1 % 0.9 % (5.2 )% State income taxes, net of federal benefit (7.5 )% 4.8 % 0.1 % Tax credits 3.2 % 0.4 % 0.3 % Change in valuation allowance 81.2 % (7.3 )% (12.5 )% Permanent differences 1.2 % - (0.8 )% State rate adjustment - (5.3 )% 3.3 % Tax Cuts and Jobs Act (22.6 )% - - Equity compensation adjustment (1.8 )% - - Return to provision - 0.9 % (0.1 )% Other - - 4.5 % Effective Rate 91.8 % 28.3 % 23.6 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Operating Leases | Future minimum lease payments, by year and in aggregate, are as follows: Year ending December 31 (in thousands) 2018 $ 168 2019 14 Total Minimum Lease Payments $ 182 |
Quarterly Results (Unaudited) (
Quarterly Results (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of Quarterly Financial Data | Selected quarterly financial data for 2017 and 2016 are contained in the Condensed Interim Financial Data table below. ($ in thousands except per share amounts) 4th Q 3rd Q 2nd Q 1st Q 2017 Research and development 1,103 1,393 1,255 2,071 General and administrative 728 717 (55 ) 1,050 Total costs and expenses 1,831 2,110 1,200 3,121 Operating loss (1,831 ) (2,110 ) (1,200 ) (3,121 ) Other income (expense), net (152 ) 150 198 573 Income tax benefit $ 6,880 $ - $ - $ - Net (loss) income 4,897 (1,960 ) (1,002 ) (2,548 ) Basic earnings (loss) per common share $ 0.20 $ (0.08 ) $ (0.04 ) $ (0.11 ) Earnings (loss) per common share assuming dilution $ 0.20 $ (0.08 ) $ (0.04 ) $ (0.11 ) 2016 Research and development 93,876 (1) 2,093 2,368 3,342 General and administrative 510 (199 ) 1,836 1,992 Total costs and expenses 94,386 1,894 4,204 5,334 Operating loss (94,386 ) (1,894 ) (4,204 ) (5,334 ) Other income (expense), net (762 ) 13 977 1,322 Income tax benefit $ 29,394 $ - $ - $ - Net loss (65,754 ) (1,881 ) (3,227 ) (4,012 ) Basic loss per common share $ (3.06 ) $ (0.03 ) $ (0.14 ) $ (0.17 ) Loss per common share assuming dilution $ (3.06 ) $ (0.03 ) $ (0.14 ) $ (0.17 ) (1) Includes impairment charge for the company’s IPR&D asset of $92,369,000 |
Organization and Basis of Pre32
Organization and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | Nov. 25, 2014 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Number of common stock value issued | $ 3,000 | $ 9,013 | $ 15,862 | |||||||||
Losses from operations | $ 1,831 | $ 2,110 | $ 1,200 | $ 3,121 | $ 94,386 | $ 1,894 | $ 4,204 | $ 5,334 | 8,262 | 105,819 | $ 53,948 | |
Cash and cash equivalents | $ 748 | $ 3,605 | $ 748 | $ 3,605 | ||||||||
Cocrystal, Cocrystal Holdings, Inc [Member] | Series A Preferred Stock [Member] | ||||||||||||
Number of common stock value issued | $ 184,800 | |||||||||||
Number of options to purchase of common stock | $ 178,200 | |||||||||||
Number of options to purchase of common stock, shares | 551,418 | |||||||||||
RFS Pharma, LLC [Member] | Series A Preferred Stock [Member] | ||||||||||||
Number of options to purchase of common stock | $ 6,600 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | [1] | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2017USD ($)Segment | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Number of operating segment | Segment | 1 | ||||||||||||
Range of discount rates | 18.60% | ||||||||||||
Research and development | $ | $ 1,103 | $ 1,393 | $ 1,255 | $ 2,071 | $ 93,876 | $ 2,093 | $ 2,368 | $ 3,342 | $ 38,700 | $ 5,822 | $ 101,679 | $ 47,261 | |
Minimum [Member] | |||||||||||||
Property and equipment, estimated useful lives | 3 years | ||||||||||||
Maximum [Member] | |||||||||||||
Property and equipment, estimated useful lives | 5 years | ||||||||||||
[1] | Includes impairment charge for the company's IPR&D asset of $92,369,000 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Summary of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 748 | $ 3,605 | ||
Restricted cash | 29 | 35 | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 777 | $ 3,640 | $ 9,276 | $ 3,970 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 101 | $ 201 | $ 192 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Total equipment | $ 1,477 | $ 1,634 |
Less accumulated depreciation | (1,358) | (1,354) |
Property and equipment, net | 119 | 280 |
Lab Equipment [Member] | ||
Total equipment | 1,168 | 1,241 |
Computer and Office Equipment [Member] | ||
Total equipment | $ 309 | $ 393 |
Mortgage Note Receivable (Detai
Mortgage Note Receivable (Details Narrative) - Mortgage Note [Member] - USD ($) | 1 Months Ended | 12 Months Ended | |
Dec. 31, 2016 | Jun. 30, 2014 | Dec. 31, 2017 | |
Mortgage note receivable | $ 2,626,290 | ||
Debt instrument maturity date | Aug. 1, 2032 | ||
Debt instrument interest rate | 7.24% | ||
Impairment of mortgage note receivable | $ 1,176,000 | ||
February 27, 2018 [Member] | |||
Proceeds from related party | $ 1,400,000 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) | Apr. 20, 2017 | Sep. 01, 2016 | Mar. 15, 2016 | Mar. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock authorized | 800,000,000 | 800,000,000 | |||||
Common stock par value | $ 0.001 | $ 0.001 | |||||
Common stock issued | 24,275,000 | 23,801,000 | |||||
Common stock outstanding | 24,275,000 | 23,801,000 | |||||
Common stock, voting rights | The holders of common stock are entitled to one vote for each share of common stock held. | ||||||
Number of common stock issued | $ 3,000,000 | $ 9,013,000 | $ 15,862,000 | ||||
Private Placement [Member] | |||||||
Number of common stock issued | $ 4,008,201 | ||||||
Number of common stock issued, shares | 325,870 | 327,083 | |||||
Common stock purchase price, per share | $ 12.30 | $ 15.30 | |||||
Private Placement [Member] | Three Accredited Investor [Member] | |||||||
Number of common stock issued | $ 3,000,000 | ||||||
Number of common stock issued, shares | 416,667 | ||||||
Common stock purchase price, per share | $ 7.20 | ||||||
Investor [Member] | |||||||
Number of common stock issued | $ 5,004,370 |
Convertible Notes (Details Narr
Convertible Notes (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Nov. 24, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Gross proceeds from convertible debt | $ 3,000 | $ 9,013 | $ 15,862 | |
Securities Purchase Agreement [Member] | Two Accredited Investors [Member] | Convertible Notes [Member] | ||||
Debt instrument, principal amount | $ 1,000 | |||
Convertible note interest rate, percentage | 8.00% | |||
Debt maturity date | Nov. 24, 2019 | |||
Debt conversion price per share | $ 8.10 | |||
Gross proceeds from convertible debt | $ 10,000 |
Stock Based Awards (Details Nar
Stock Based Awards (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Shares reserved for issuance | 2,700,000 | 2,633,000 | |
Common stock remain available for future grant | 1,656,000 | 1,612,000 | |
Stock option granted | |||
Stock option award forfeiture | 0 | ||
Stock based compensation | $ 614 | $ 548 | $ 2,934 |
Unrecognized compensation expense | $ 546 | ||
Weighted average period | 1 year 1 month 6 days | ||
Stock option outstanding vested or expected to vest | 711,000 | ||
Aggregate intrinsic value of stock option | $ 1,640 | ||
Weighted average remaining contractual term | 4 years 1 month 6 days | ||
Stock option vested exercisable | 682,000 | ||
Aggregate intrinsic value exercisable | $ 1,640 | ||
Weighted average exercise price | $ 7.24 | ||
Weighted average exercisable contractual term | 3 years 7 months 6 days | ||
Over-the-Counter Bulletin Board [Member] | |||
Weighted average exercise price | $ 6 | ||
2007 Plan [Member] | |||
Stock option term description | The maximum term of options granted under the 2007 Plan is ten years | ||
Shares vesting percentage | 25.00% | ||
Shares vesting period | 3 years | ||
Common stock remain available for future grant | 54,615 | ||
2015 plan [Member] | |||
Stock option term description | The maximum term of options granted under the 2015 Plan is ten years | ||
Shares vesting percentage | 25.00% | ||
Shares vesting period | 3 years | ||
Common stock remain available for future grant | 1,601,667 | ||
Employees Nonemployee Directors And Consultants [Member] | 2007 Plan [Member] | |||
Shares reserved for issuance | 1,786,635 | ||
Employees Nonemployee Directors And Consultants [Member] | 2015 plan [Member] | |||
Shares reserved for issuance | 1,666,667 |
Stock Based Awards - Summary of
Stock Based Awards - Summary of Stock Option Transactions (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Number of shares available for grant, beginning | 1,612,000 | |
Number of shares available for grant, ending | 1,656,000 | 1,612,000 |
Total options outstanding, Granted | ||
Weighted Average Exercise Price, ending | $ 7.24 | |
Aggregate Intrinsic Value, ending | $ 1,640 | |
2007 And 2015 plan [Member] | ||
Number of shares available for grant, beginning | 1,612,000 | |
Number of shares available for grant, Exercised | ||
Number of shares available for grant, Granted | ||
Number of shares available for grant, Cancelled | 44,000 | |
Number of shares available for grant, ending | 1,656,000 | 1,612,000 |
Total options outstanding, beginning | 812,000 | |
Total options outstanding, Exercised | (57,000) | |
Total options outstanding, Granted | ||
Total options outstanding, Cancelled | (44,000) | |
Total options outstanding, ending | 711,000 | 812,000 |
Weighted Average Exercise Price, outstanding | $ 9 | |
Weighted Average Exercise Price, Exercised | 1.41 | |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Cancelled | 28.87 | |
Weighted Average Exercise Price, ending | $ 8.39 | $ 9 |
Aggregate Intrinsic Value, outstanding | $ 5,457 | |
Aggregate Intrinsic Value, ending | $ 1,640 | $ 5,457 |
Stock Based Awards - Schedule o
Stock Based Awards - Schedule of Weighted Average Assumptions Used for Grants (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2015 | |
Expected dividend yield | 0.00% | |
Expected terms (in years) | 1 year 1 month 6 days | |
Minimum [Member] | ||
Risk-free interest rate | 1.66% | |
Expected volatility | 78.00% | |
Expected terms (in years) | 5 years | |
Maximum [Member] | ||
Risk-free interest rate | 2.08% | |
Expected volatility | 108.00% | |
Expected terms (in years) | 6 years 6 months |
Stock Based Awards - Schedule43
Stock Based Awards - Schedule of Common Stock Reserved for Future Issuance (Details) - shares | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Stock options issued and outstanding | 711,000 | 812,000 |
Authorized for future option grants | 1,656,000 | 1,612,000 |
Convertible notes | 124,000 | |
Warrants outstanding | 209,000 | 209,000 |
Total | 2,700,000 | 2,633,000 |
Warrants (Details Narrative)
Warrants (Details Narrative) - shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Warrants | 209,000 | 209,000 |
Risk free interest | 0.00% | |
Dividend Yield | 0.00% | |
Liabilities [Member] | ||
Warrants | 159,000 | |
Equity [Member] | ||
Warrants | 50,000 |
Warrants - Summary of Warrant A
Warrants - Summary of Warrant Activity (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Warrants to Purchase Common Stock [Member] | |||
Number of warrants outstanding, beginning | 209,000 | 279,000 | 889,000 |
Number of warrants expired | (67,000) | ||
Number of warrants exercised | (3,000) | (610,000) | |
Number of warrants outstanding, ending | 209,000 | 209,000 | 279,000 |
January 2012 Warrants [Member] | Equity [Member] | |||
Number of warrants outstanding, beginning | 22,000 | 22,000 | |
Number of warrants expired | (22,000) | ||
Number of warrants exercised | |||
Number of warrants outstanding, ending | 22,000 | ||
Warrant expiration date | Jan. 11, 2016 | ||
March 2013 Warrants [Member] | Equity [Member] | |||
Number of warrants outstanding, beginning | 15,000 | 15,000 | |
Number of warrants expired | (15,000) | ||
Number of warrants exercised | |||
Number of warrants outstanding, ending | 15,000 | ||
Warrant expiration date | Mar. 1, 2016 | ||
April 2013 Warrants [Member] | Equity [Member] | |||
Number of warrants outstanding, beginning | 50,000 | 50,000 | 62,000 |
Number of warrants expired | |||
Number of warrants exercised | (12,000) | ||
Number of warrants outstanding, ending | 50,000 | 50,000 | 50,000 |
Warrant expiration date | Apr. 25, 2018 | ||
February 2012 Warrants [Member] | Liabilities [Member] | |||
Number of warrants outstanding, beginning | 33,000 | 33,000 | |
Number of warrants expired | (30,000) | ||
Number of warrants exercised | (3,000) | ||
Number of warrants outstanding, ending | 33,000 | ||
Warrant expiration date | Feb. 28, 2016 | ||
August 2013 Warrants [Member] | Liabilities [Member] | |||
Number of warrants outstanding, beginning | 333,000 | ||
Number of warrants expired | |||
Number of warrants exercised | (333,000) | ||
Number of warrants outstanding, ending | |||
Warrant expiration date | Aug. 26, 2023 | ||
October 2013 Warrants [Member] | Liabilities [Member] | |||
Number of warrants outstanding, beginning | 7,000 | ||
Number of warrants expired | |||
Number of warrants exercised | (7,000) | ||
Number of warrants outstanding, ending | |||
Warrant expiration date | Oct. 18, 2018 | ||
October 2013 Warrants Series A [Member] | Liabilities [Member] | |||
Number of warrants outstanding, beginning | 26,000 | 26,000 | 234,000 |
Number of warrants expired | |||
Number of warrants exercised | (208,000) | ||
Number of warrants outstanding, ending | 26,000 | 26,000 | 26,000 |
Warrant expiration date | Oct. 24, 2023 | ||
January 2015 Warrants [Member] | Liabilities [Member] | |||
Number of warrants outstanding, beginning | 133,000 | 133,000 | 183,000 |
Number of warrants expired | |||
Number of warrants exercised | (50,000) | ||
Number of warrants outstanding, ending | 133,000 | 133,000 | 133,000 |
Warrant expiration date | Jan. 16, 2024 |
Warrants - Schedule of Fair Val
Warrants - Schedule of Fair Value of Warrants Classified as Liabilities (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Risk-free rate % | 0.00% | |
October 2013 Warrants [Member] | ||
Strike price | $ 15 | $ 15 |
Expected term (years) | 5 years 9 months 18 days | 6 years 9 months 18 days |
Cumulative volatility % | 86.70% | 99.70% |
Risk-free rate % | 2.30% | 2.24% |
January 2015 Warrants [Member] | ||
Strike price | $ 15 | $ 15 |
Expected term (years) | 6 years | 7 years |
Cumulative volatility % | 87.70% | 100.00% |
Risk-free rate % | 2.31% | 2.25% |
Licenses and Collaborations (De
Licenses and Collaborations (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
License agreement, description | The minimum lease payments above include the amounts that would be paid if the Company maintains its Bothell lease for the five-year term. The Company has the right to terminate this lease after three years, by giving prior notice at least 180 days prior to such early termination date and by paying a termination fee equal to the sum of three months rent plus the unamortized balance of the sum of (a) all brokerage commissions paid by the landlord of the property in connection with the lease and (b) the abated free base rent related to the five months of the lease, treating items (a) and (b) as being amortized on a level basis over the five year base term of the lease. |
Emory University [Member] | |
License agreement, description | The License Agreement is dated March 7, 2013 wherein Emory agrees to add to the Licensed Patents and Licensed Technology Emorys rights to any patent, patent application, invention, or technology application that is based on technology disclosed within three (3) years of March 7, 2013. |
Emory University [Member] | Sales Revenue, Net [Member] | |
Royalty, percentage | 3.50% |
Emory University [Member] | Minimum [Member] | |
Payments due to achievement of certain drug development milestones | $ 40 |
Emory University [Member] | Maximum [Member] | |
Payments due to achievement of certain drug development milestones | 500 |
Emory University [Member] | Minimum In One Year [Member] | |
Royalty payment | 25 |
Emory University [Member] | Maximum In Five Year [Member] | |
Royalty payment | $ 400 |
Fair Value Measurement - Summar
Fair Value Measurement - Summary of Fair Values of Assets and Liabilities Measured at Fair Value On Recurring and NonRecurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Cash, cash equivalents, and restricted cash | $ 777 | $ 3,640 | $ 9,276 | $ 3,970 |
Warrants potentially settleable in cash | 569 | 1,476 | ||
Quoted Prices in Active Markets Level 1 [Member] | ||||
Cash, cash equivalents, and restricted cash | 777 | 3,640 | ||
Warrants potentially settleable in cash | ||||
Significant Other Observable Inputs Level 2 [Member] | ||||
Cash, cash equivalents, and restricted cash | ||||
Warrants potentially settleable in cash | ||||
Unobservable Inputs Level 3 [Member] | ||||
Cash, cash equivalents, and restricted cash | ||||
Warrants potentially settleable in cash | $ 569 | $ 1,476 |
Fair Value Measurement - Schedu
Fair Value Measurement - Schedule of Reconciliation of Beginning and Ending Level 3 Liabilities (Details) - Unobservable Inputs Level 3 [Member] - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Balance - January 1 | $ 1,476 | $ 4,115 | $ 8,464 |
Value of warrants converted in cashless exercise | (36) | (14,265) | |
Change in fair value of warrants | (907) | (2,603) | 9,916 |
Balance at December 31 | $ 569 | $ 1,476 | $ 4,115 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net loss attributable to common shareholders | $ 4,897 | $ (1,960) | $ (1,002) | $ (2,548) | $ (65,754) | $ (1,881) | $ (3,227) | $ (4,012) | $ (613) | $ (74,874) | $ (50,122) |
Adjustment for change in fair value of derivative liability | (2,603) | ||||||||||
Net loss attributable to common shareholders, as adjusted | $ (613) | $ (77,477) | $ (50,122) | ||||||||
Weighted average shares outstanding used to compute net loss per share: Basic | 24,126,000 | 23,518,000 | 21,011,000 | ||||||||
Adjustment for dilutive effect of warrants | 16,000 | ||||||||||
Diluted | 24,126,000 | 23,533,000 | 21,011,000 | ||||||||
Net loss per share, Basic | $ 0.20 | $ (0.08) | $ (0.04) | $ (0.11) | $ (3.06) | $ (0.03) | $ (0.14) | $ (0.17) | $ (0.03) | $ (3.18) | $ (2.40) |
Net loss per share, Diluted | $ 0.20 | $ (0.08) | $ (0.04) | $ (0.11) | $ (3.06) | $ (0.03) | $ (0.14) | $ (0.17) | $ (0.03) | $ (3.30) | $ (2.40) |
Net Loss Per Share - Schedule51
Net Loss Per Share - Schedule of Antidilutive Securities Excluded from Calculations of Net Loss Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Anti-dilutive securities | 1,044,000 | 812,000 | 1,712,000 |
Options to Purchase Common Stock [Member] | |||
Anti-dilutive securities | 711,000 | 812,000 | 1,436,000 |
Convertible Notes [Member] | |||
Anti-dilutive securities | 124,000 | ||
Warrants to Purchase Common Stock [Member] | |||
Anti-dilutive securities | 209,000 | 276,000 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred tax assets net operating loss carry forward | $ 15,003 | $ 20,633 | $ 15,003 | $ 20,633 | |||||||
Ownership change, description | In general, an ownership change, as defined by Section 382 and 383, results from transactions increasing ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percentage points over a three-year period. | ||||||||||
Unrecognized income tax benefits | 13 | $ 13 | |||||||||
U.S. corporate income tax rate | 35.00% | ||||||||||
Reduction of U.S. corporate income tax rate | 21.00% | ||||||||||
Income tax expense benefit | 6,880 | $ 29,394 | $ (6,880) | $ (29,394) | $ (15,248) | ||||||
Offset Income tax expense | 8,300 | ||||||||||
Interest related to Unrecognized tax benefits or penalties | |||||||||||
Indefinite-lived Intangible Assets [Member] | |||||||||||
Income tax expense benefit | 6,600 | ||||||||||
Unclassified Indefinite-lived Intangible Assets [Member] | |||||||||||
Income tax expense benefit | 8,300 | ||||||||||
Federal [Member] | |||||||||||
Deferred tax assets net operating loss carry forward | 61,700 | $ 61,700 | |||||||||
Net operating loss carry forward, expiration | 2,026 | ||||||||||
Deferred research tax credit carryforwards | 1,600 | $ 1,600 | |||||||||
California [Member] | |||||||||||
Deferred tax assets net operating loss carry forward | 35,800 | $ 35,800 | |||||||||
Net operating loss carry forward, expiration | 2,028 | ||||||||||
Deferred research tax credit carryforwards | $ 300 | $ 300 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Income Tax Expense (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal | |||
State | 19 | 19 | |
Total current income tax expense | 19 | 19 | |
Deferred Federal | (6,880) | (32,421) | (12,001) |
Deferred State | 3,008 | (3,266) | |
Total deferred income tax benefit | (6,880) | (29,413) | (15,267) |
Total income tax benefit | $ (6,880) | $ (29,394) | $ (15,248) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 15,003 | $ 20,633 |
Compensation | 961 | 1,323 |
Research and development tax credits | 1,789 | 1,390 |
Property and equipment | 8 | 22 |
Other | 373 | 545 |
Total gross deferred tax assets | 18,134 | 23,912 |
Acquired in-process research and development | (13,875) | (20,462) |
Total Deferred Tax Liabilities | (13,875) | (20,462) |
Net deferred tax assets | 4,259 | 3,450 |
Valuation allowance | (17,841) | (23,912) |
Net Deferred Tax Liability | $ (13,582) | $ (20,462) |
Income Taxes - Schedule of Re55
Income Taxes - Schedule of Reconciliation of Federal Statutory Income Tax Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate | 34.00% | 34.00% | 34.00% |
Change in fair value of warrant liability | 4.10% | 0.90% | (5.20%) |
State income taxes, net of federal benefit | (7.50%) | 4.80% | 0.10% |
Tax credits | 3.20% | 0.40% | 0.30% |
Change in valuation allowance | 81.20% | (7.30%) | (12.50%) |
Permanent differences | 1.20% | (0.80%) | |
State rate adjustment | (5.30%) | 3.30% | |
Tax Cuts and Jobs Act | (22.60%) | ||
Equity compensation adjustment | (1.80%) | ||
Return to provision | 0.90% | (0.10%) | |
Other | 4.50% | ||
Effective Rate | 91.80% | 28.30% | 23.60% |
Commitments and Contingencies56
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Commitments description | The minimum lease payments above include the amounts that would be paid if the Company maintains its Bothell lease for the five-year term. The Company has the right to terminate this lease after three years, by giving prior notice at least 180 days prior to such early termination date and by paying a termination fee equal to the sum of three months rent plus the unamortized balance of the sum of (a) all brokerage commissions paid by the landlord of the property in connection with the lease and (b) the abated free base rent related to the five months of the lease, treating items (a) and (b) as being amortized on a level basis over the five year base term of the lease. | ||
Rent expense | $ 293 | $ 345 | $ 375 |
Bothell [Member] | |||
Operating lease term | Jan. 31, 2019 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Future Minimum Lease Payments Under Operating Leases (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 168 |
2,019 | 14 |
Total Minimum Lease Payments | $ 182 |
Quarterly Results (Unaudited) -
Quarterly Results (Unaudited) - Schedule of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | ||
Quarterly Financial Information Disclosure [Abstract] | |||||||||||||
Research and development | $ 1,103 | $ 1,393 | $ 1,255 | $ 2,071 | $ 93,876 | [1] | $ 2,093 | $ 2,368 | $ 3,342 | $ 38,700 | $ 5,822 | $ 101,679 | $ 47,261 |
General and administrative | 728 | 717 | (55) | 1,050 | 510 | (199) | 1,836 | 1,992 | 2,440 | 4,140 | 6,765 | ||
Total costs and expenses | 1,831 | 2,110 | 1,200 | 3,121 | 94,386 | 1,894 | 4,204 | 5,334 | 8,262 | 105,819 | 54,026 | ||
Operating loss | (1,831) | (2,110) | (1,200) | (3,121) | (94,386) | (1,894) | (4,204) | (5,334) | (8,262) | (105,819) | (53,948) | ||
Other income (expense), net | (152) | 150 | 198 | 573 | (762) | 13 | 977 | 1,322 | |||||
Income tax benefit | 6,880 | 29,394 | (6,880) | (29,394) | (15,248) | ||||||||
Net (loss) income | $ 4,897 | $ (1,960) | $ (1,002) | $ (2,548) | $ (65,754) | $ (1,881) | $ (3,227) | $ (4,012) | $ (613) | $ (74,874) | $ (50,122) | ||
Basic earnings (loss) per common share | $ 0.20 | $ (0.08) | $ (0.04) | $ (0.11) | $ (3.06) | $ (0.03) | $ (0.14) | $ (0.17) | $ (0.03) | $ (3.18) | $ (2.40) | ||
Earnings (loss) per common share assuming dilution | $ 0.20 | $ (0.08) | $ (0.04) | $ (0.11) | $ (3.06) | $ (0.03) | $ (0.14) | $ (0.17) | $ (0.03) | $ (3.30) | $ (2.40) | ||
[1] | Includes impairment charge for the company's IPR&D asset of $92,369,000 |
Quarterly Results - Schedule of
Quarterly Results - Schedule of Quarterly Financial Data (Details) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | ||||
Impairment charge | $ 92,369 | $ 92,396 | $ 38,665 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Feb. 09, 2018 | Jan. 31, 2018 | Jan. 18, 2018 | Jun. 30, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Gross proceeds from convertible debt | $ 1,000,000 | ||||||
Mortgage note | 1,294,000 | $ 1,294,000 | |||||
Mortgage Note [Member] | |||||||
Debt instrument, principal amount | $ 2,626,290 | ||||||
Debt maturity date | Aug. 1, 2032 | ||||||
Subsequent Event [Member] | |||||||
Reserve split of common stock | one-for-30 reverse split of the Companys class of Common Stock | ||||||
Subsequent Event [Member] | Mortgage Note [Member] | |||||||
Mortgage note | $ 1,294,000 | ||||||
Subsequent Event [Member] | Mortgage Note [Member] | March 31, 2018 [Member] | |||||||
Gain on repayment of debt | $ 106,000 | ||||||
Subsequent Event [Member] | Mortgage Note [Member] | Third Party [Member] | |||||||
Proceeds from third party | $ 1,400,000 | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | OPKO Health, Inc. [Member] | Convertible Note [Member] | |||||||
Debt instrument, principal amount | $ 1,000,000 | ||||||
Convertible note interest rate, percentage | 8.00% | ||||||
Debt maturity date | Jan. 31, 2020 | ||||||
Debt conversion price per share | $ 8.10 | ||||||
Gross proceeds from convertible debt | $ 10,000,000 |