Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Cocrystal Pharma, Inc. | |
Entity Central Index Key | 0001412486 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 68,563,512 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2020 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 31,781 | $ 7,418 |
Restricted cash | 50 | 50 |
Accounts receivable | 581 | 644 |
Prepaid expenses and other current assets | 487 | 169 |
Total current assets | 32,899 | 8,281 |
Property and equipment, net | 635 | 431 |
Deposits | 46 | 50 |
Operating lease right-of-use assets, net (including $51 to related party) | 544 | 677 |
Goodwill | 19,092 | 19,092 |
Total assets | 53,216 | 28,531 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,350 | 1,999 |
Current maturities of finance lease liabilities | 40 | 103 |
Current maturities of operating lease liabilities (including $53 to related party) | 188 | 177 |
Derivative liabilities | 36 | 7 |
Total current liabilities | 2,614 | 2,286 |
Long-term liabilities: | ||
Finance lease liabilities | 44 | 14 |
Operating lease liabilities (including $0 to related party) | 381 | 523 |
Total long-term liabilities | 425 | 537 |
Total liabilities | 3,039 | 2,823 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 100,000 shares authorized as of September 30, 2020 and December 31, 2019; 68,564 and 35,150 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively | 69 | 36 |
Additional paid-in capital | 293,523 | 260,932 |
Accumulated deficit | (243,415) | (235,260) |
Total stockholders' equity | 50,177 | 25,708 |
Total liabilities and stockholders' equity | $ 53,216 | $ 28,531 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Related party operating lease right of use assets | $ 51 | $ 51 |
Related party operating lease liabilities current | 53 | 53 |
Related party operating lease liabilities non-current | $ 0 | $ 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 68,564,000 | 35,150,000 |
Common stock, shares outstanding | 68,564,000 | 35,150,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues: | ||||
Total revenue | $ 489 | $ 492 | $ 1,504 | $ 6,162 |
Operating expenses: | ||||
Research and development | 2,077 | 1,077 | 5,336 | 3,046 |
General and administrative | 1,121 | 1,223 | 4,288 | 3,597 |
Total operating expenses | 3,198 | 2,300 | 9,624 | 6,643 |
Loss from operations | (2,709) | (1,808) | (8,120) | (481) |
Other income (expense): | ||||
Interest expense, net | (2) | (5) | (6) | (16) |
Change in fair value of derivative liabilities | 41 | 33 | (29) | 173 |
Total other income (expense), net | 39 | 28 | (35) | 157 |
Net loss | $ (2,670) | $ (1,780) | $ (8,155) | $ (324) |
Net loss per common share: | ||||
Loss per share, basic and diluted | $ (0.05) | $ (0.06) | $ (0.16) | $ (0.01) |
Weighted average number of common shares outstanding, basic and diluted | 57,555 | 31,621 | 50,491 | 31,201 |
Collaboration Revenue [Member] | ||||
Revenues: | ||||
Total revenue | $ 489 | $ 492 | $ 1,504 | $ 6,162 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 30 | $ 253,949 | $ (187,091) | $ 66,888 |
Balance, shares at Dec. 31, 2018 | 29,938 | |||
Stock-based compensation | 33 | 33 | ||
Sale of common stock, net of transaction costs | $ 2 | 3,926 | 3,928 | |
Sale of common stock, net of transaction costs, shares | 1,683 | |||
Net income (loss) | 2,971 | 2,971 | ||
Balance at Mar. 31, 2019 | $ 32 | 257,908 | (184,120) | 73,820 |
Balance, shares at Mar. 31, 2019 | 31,621 | |||
Balance at Dec. 31, 2018 | $ 30 | 253,949 | (187,091) | 66,888 |
Balance, shares at Dec. 31, 2018 | 29,938 | |||
Net income (loss) | (324) | |||
Balance at Sep. 30, 2019 | $ 32 | 258,128 | (187,415) | 70,745 |
Balance, shares at Sep. 30, 2019 | 31,621 | |||
Balance at Mar. 31, 2019 | $ 32 | 257,908 | (184,120) | 73,820 |
Balance, shares at Mar. 31, 2019 | 31,621 | |||
Stock-based compensation | 113 | 113 | ||
Net income (loss) | (1,515) | (1,515) | ||
Balance at Jun. 30, 2019 | $ 32 | 258,021 | (185,635) | 72,418 |
Balance, shares at Jun. 30, 2019 | 31,621 | |||
Stock-based compensation | 107 | 107 | ||
Net income (loss) | (1,780) | (1,780) | ||
Balance at Sep. 30, 2019 | $ 32 | 258,128 | (187,415) | 70,745 |
Balance, shares at Sep. 30, 2019 | 31,621 | |||
Balance at Dec. 31, 2019 | $ 36 | 260,932 | (235,260) | 25,708 |
Balance, shares at Dec. 31, 2019 | 35,150 | |||
Stock-based compensation | 107 | 107 | ||
Sale of common stock, net of transaction costs | $ 17 | 16,589 | 16,606 | |
Sale of common stock, net of transaction costs, shares | 16,991 | |||
Net income (loss) | (1,990) | (1,990) | ||
Balance at Mar. 31, 2020 | $ 53 | 277,628 | (237,250) | 40,431 |
Balance, shares at Mar. 31, 2020 | 52,141 | |||
Balance at Dec. 31, 2019 | $ 36 | 260,932 | (235,260) | 25,708 |
Balance, shares at Dec. 31, 2019 | 35,150 | |||
Net income (loss) | (8,155) | |||
Balance at Sep. 30, 2020 | $ 69 | 293,523 | (243,415) | 50,177 |
Balance, shares at Sep. 30, 2020 | 68,564 | |||
Balance at Mar. 31, 2020 | $ 53 | 277,628 | (237,250) | 40,431 |
Balance, shares at Mar. 31, 2020 | 52,141 | |||
Stock-based compensation | 119 | 119 | ||
Net income (loss) | (3,495) | (3,495) | ||
Balance at Jun. 30, 2020 | $ 53 | 277,747 | (240,745) | 37,055 |
Balance, shares at Jun. 30, 2020 | 52,141 | |||
Stock-based compensation | 237 | 237 | ||
Sale of common stock, net of transaction costs | $ 16 | 15,539 | 15,555 | |
Sale of common stock, net of transaction costs, shares | 16,423 | |||
Net income (loss) | (2,670) | (2,670) | ||
Balance at Sep. 30, 2020 | $ 69 | $ 293,523 | $ (243,415) | $ 50,177 |
Balance, shares at Sep. 30, 2020 | 68,564 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities: | ||
Net loss | $ (8,155) | $ (324) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 112 | 69 |
Amortization of right of use assets | 133 | 114 |
Stock-based compensation | 463 | 253 |
Payments on operating lease liabilities | (131) | (94) |
Change in fair value of derivative liabilities | 29 | (173) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 63 | (768) |
Prepaid expenses and other current assets | (318) | (10) |
Deposits | 4 | (10) |
Accounts payable and accrued expenses | 351 | 613 |
Deferred rent | (3) | |
Net cash used in operating activities | (7,449) | (333) |
Investing activities: | ||
Purchases of property and equipment | (239) | (144) |
Net cash used in investing activities | (239) | (144) |
Financing activities: | ||
Proceeds from issuance of common stock | 32,161 | 3,928 |
Payments on finance lease liabilities | (110) | (159) |
Net cash provided by financing activities | 32,051 | 3,769 |
Net increase in cash and restricted cash | 24,363 | 3,292 |
Cash and restricted cash at beginning of period | 7,468 | 2,752 |
Cash and restricted cash at end of period | 31,831 | 6,044 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES: | ||
Recognition of finance lease right-of-use asset and liability | 77 | |
Recognition of operating lease right-of-use assets and operating lease liabilities upon adoption of ASC Topic 842, Leases | $ 833 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Business | 1. Organization and Business Cocrystal Pharma, Inc. (“we”, the “Company” or “Cocrystal”), a biopharmaceutical company incorporated in Delaware, has been developing novel technologies and approaches to create first-in-class or best-in-class 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 inhibiting viral replication, we plan to leverage our infrastructure and expertise in these areas. The Company’s activities since inception have principally consisted of acquiring product and technology rights, raising capital, performing research and development and conducting clinical trials. Successful completion of the Company’s development programs, obtaining regulatory approvals of its products and, ultimately, the attainment of profitable operations is dependent on future events, including, among other things, its ability to access potential markets, secure financing, develop a customer base, attract, retain and motivate qualified personnel, and develop strategic alliances. Through September 30, 2020, the Company has primarily funded its operations through equity offerings and strategic partnerships, including collaboration with Merck Sharp & Dohme Corp. (“Merck”). |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X set forth by the Securities and Exchange Commission (“SEC”). They do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the interim periods presented are not necessarily indicative of the results of operations for the entire fiscal year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019 filed on March 27, 2020 (“Annual Report”). Principles of Consolidation The consolidated financial statements include the accounts of Cocrystal Pharma, Inc. and its wholly owned subsidiaries: Cocrystal Discovery, Inc., Cocrystal Merger Sub, Inc., Baker Cummins Corp. and Biozone Laboratories, Inc. Intercompany transactions and balances have been eliminated. Segments The Company operates in only one segment. Management uses cash flows as the primary measure to manage its business and does not segment its business for internal reporting or decision-making. Use of Estimates Preparation of the Company’s consolidated financial statements in conformance with U.S. GAAP requires the Company’s management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The significant estimates in the Company’s consolidated financial statements relate to the valuation of equity awards and derivative liabilities, recoverability of deferred tax assets, estimated useful lives of fixed assets, and forecast assumptions used in the valuation of intangible assets and goodwill. The Company bases estimates and assumptions on historical experience, when available, and on various factors that it believes to be reasonable under the circumstances. However, if future results are not consistent with our estimates and assumptions, including as a result of the COVID-19 global pandemic, then we may be exposed to an impairment charge, which could be material. The Company evaluates its estimates and assumptions on an ongoing basis, and its actual results may differ from estimates made under different assumptions or conditions. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash deposited in accounts held at two U.S. financial institutions, which may, at times, exceed federally insured limits of $250,000 for each institution accounts are held. At September 30, 2020 and December 31, 2019, our primary operating account held approximately $31,781,000 and $7,418,000, respectively, and our collateral account balance was $50,000 at a different institution. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risks thereof. As of September 30, 2020, 100% of our revenue and receivables are from one customer, Merck Sharp & Dohme Corp. Fair Value Measurements FASB Accounting Standards Codification (“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 categorizes its cash and restricted cash as Level 1 fair value measurements. The Company categorizes its warrants potentially settleable in cash as Level 2 fair value measurements. The warrants potentially settleable in cash are measured at fair value on a recurring basis and are being marked to fair value at each reporting date until they are completely settled or meet the requirements to be accounted for as component of stockholders’ equity. The warrants are valued using the Black-Scholes option pricing model as discussed in Note 7 – Warrants. At September 30, 2020 and December 31, 2019, the carrying amounts of financial assets and liabilities, such as cash, accounts receivable, other assets, and accounts payable and accrued expenses approximate their fair values due to their short-term nature. The carrying values of notes payable and lease liabilities approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company’s derivative liabilities are considered Level 2 measurements. Goodwill In November 2014, goodwill was recorded in connection with the acquisition of RFS Pharma. We evaluate indefinite-lived intangible assets and goodwill for impairment annually, as of November 30, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value. Fair value is typically estimated using an income approach based on the present value of future discounted cash flows. The significant estimates in the discounted cash flow model primarily include the discount rate, and rates of future revenue and expense growth and/or profitability of the acquired assets. 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’s product candidates. At September 30, 2020, the Company had goodwill of $19,092,000. The Company previously completed its annual impairment test in November 2019, and at that time determined the fair value of its reporting unit, under both the Company’s Nasdaq market capitalization and an income approach analysis; both methods were less than the carrying value as of December 31, 2019; therefore, management considered goodwill to be impaired. This resulted in a $46,103,000 impairment in 2019. The Company plans to conduct its next annual impairment test in November 2020. Based on management’s assessment on September 30, 2020, no further impairment of Goodwill is required. Long-Lived Assets The Company regularly reviews the carrying value and estimated lives 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. Research and Development Expenses All research and development costs are expensed as incurred. Revenue Recognition The Company recognizes revenue from research and development arrangements. In accordance with Accounting Standards Codification (“ASC”) Topic 606– Revenue from Contracts with Customers In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 On January 2, 2019, the Company entered into an Exclusive License and Research Collaboration Agreement (the “Collaboration Agreement”) with Merck to discover and develop certain proprietary influenza A/B antiviral agents. Under the terms of the Collaboration Agreement, Merck will fund research and development for the program, including clinical development, and will be responsible for worldwide commercialization of any products derived from the collaboration. Revenue recorded for the three and nine months ended September 30, 2020 was $489,000 and $1,504,000 respectively, compared with $492,000 and $6,162,000 for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, accounts receivable of $581,000 was due from Merck. 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. As of September 30, 2020, the Company assessed its income tax expense based on its projected future taxable income for the year ended December 31, 2020 and therefore recorded no amount for income tax expense for the nine months ended September 30, 2020. In addition, the Company has significant deferred tax assets available to offset income tax expense due to net operating loss carry forwards which are currently subject to a full valuation allowance based on the Company’s assessment of future taxable income. Refer to our Annual Report on Form 10-K for the year ended December 31, 2019 for more information. Franchise Taxes As of June 30, 2020, the Company amended its franchise tax filed for 2018 period, which the result is a credit balance of $126,000. The Company recognized $51,000 as expense for the period from January 1, 2020 through September 30, 2020; the balance of $75,000 is recorded as prepaid expense to be amortized until September 30, 2021. Franchise taxes are included in the general and administrative expenses. 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 Estimating Expected Term Share Issuance Costs The Company accounts for direct and incremental costs related to the issuance of its capital stock as a reduction in the proceeds from such issuances. In the case, the Company incurs certain expenses related to the offering of equity security, the Company complies with the requirements of FASB 340-10-S99-1with regards to offering costs. 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 Net Income (Loss) per Share The Company accounts for and discloses net income (loss) per common share in accordance with FASB ASC Topic 260, Earnings 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): September 30, 2020 2019 Outstanding options to purchase common stock 1,801 931 Warrants to purchase common stock 243 243 Total 2,044 1,174 Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2019. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows. Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not, or are not expected to, have a material impact on the Company’s consolidated financial statements and related disclosures. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment are recorded at cost and depreciated over the estimated useful lives of the underlying assets (three to five years) using the straight-line method. As of September 30, 2020, and December 31, 2019, property and equipment consists of (in thousands): September 30, 2020 December 31, 2019 Lab equipment $ 1,498 $ 1,073 Finance lease right-of-use lab equipment obtained in exchange for finance lease liabilities 119 347 Computer and office equipment 120 92 Total property and equipment 1,737 1,512 Less: accumulated depreciation and amortization (1,102 ) (1,081 ) Property and equipment, net $ 635 $ 431 Total depreciation and amortization expense was $44,000 and $112,000 for the three and nine months ended September 30, 2020, which includes amortization expense of $6,000 and $38,000 related to finance lease right-of-use lab equipment, respectively. For additional finance leases information, refer to Note 9 – Commitments and Contingencies. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 4. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consisted of the following (in thousands) as of: September 30, 2020 December 31, 2019 Accounts payable $ 1,485 $ 1,511 Accrued compensation 183 83 Accrued other expenses 682 405 Total accounts payable and accrued expenses $ 2,350 $ 1,999 Accounts payable and accrued other expenses contain unpaid general and administrative expenses and costs related to research and development that have been billed and estimated unbilled, respectively, as of period-end. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Common Stock | 5. Common Stock As of September 30, 2020, the Company has authorized 100,000,000 shares of common stock, $0.001 par value per share. The Company had 68,563,512 and 35,150,000 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively. The holders of common stock are entitled to one vote for each share of common stock held. On January 29, 2020, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 3,492,063 shares of common stock at a purchase price per share of $0.63 for aggregate net proceeds to the Company of approximately $1.5 million, after deducting fees payable to the placement agent and other estimated offering expenses payable by the Company. The Company closed the offering on January 31, 2020. On February 27, 2020, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 8,461,540 shares of common stock at a purchase price per share of $1.30 for aggregate net proceeds to the Company of approximately $10.1 million, after deducting fees payable to the placement agent and other estimated offering expenses payable by the Company. The Company closed the offering on February 28, 2020. On March 9, 2020, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to sell and issue, in a registered direct offering, 5,037,038 shares of common stock at a purchase price per share of $1.35 for aggregate net proceeds to the Company of approximately $5.0 million, after deducting fees payable to the placement agent, lock-up settlement fee and other estimated offering expenses payable by the Company. The Company closed the offering on March 10, 2020. On June 2, 2020, the Company provided written notice to A.G.P./Alliance Global Partners (“AGP”) of its election to terminate the Amended and Restated Equity Distribution Agreement, dated October 30, 2019, by and between the Company and AGP, as amended on January 29, 2020 (the “AGP Agreement”). The termination of the AGP Agreement was effective June 3, 2020. On July 1, 2020, the Company entered into an At-The-Market Offering Agreement with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which the Company may issue and sell over time and from time to time, to or through Wainwright, up to $10,000,000 of shares of the Company’s common stock. The Company has not sold any shares pursuant to this ATM during the nine months ended September 30, 2020. On August 31, 2020, the Company closed an underwritten public offering of its common stock totaling 16,422,813 shares at public offering price of $1.05 per share sold to Wainwright for net proceeds of approximately $15.6 million, after deducting fees payable to the placement agent and other offering expenses payable by the Company. The 16,422,813 shares of common stock sold in the offering includes 2,137,098 shares pursuant to Wainwright’s partial exercise of its over-allotment option to purchase additional shares of common stock, pursuant to the Amended and Restated Underwriting Agreement, dated as of August 26, 2020, between the Company and Wainwright. |
Stock Based Awards
Stock Based Awards | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Awards | 6. Stock Based Awards Equity Incentive Plans The Company adopted an equity incentive plan in 2007 (the “2007 Plan”) under which 1,786,635 shares of common stock had been reserved for issuance to employees and nonemployee directors and consultants of the Company. The Company no longer issues any awards under the 2007 Plan. Holders of outstanding incentive stock options granted under the 2007 Plan are 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 was ten years. The Company adopted a second equity incentive plan in 2015 (the “2015 Plan”) under which 2,705,237 (including 1,038,570 initially transferred from the 2007 Plan) shares of common stock have been reserved for issuance to employees, and nonemployee directors and consultants of the Company. Recipients of incentive stock options granted under the 2015 Plan 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. As of September 30, 2020, 2,718,020 options remain available for future grants under the 2015 Plan. The following table summarizes stock option transactions for the 2007 Plan and 2015 Plan, collectively, for the nine months ended September 30, 2020 (in thousands, except per share amounts): Number of Total Weighted Aggregate Balance at December 31, 2019 3,588 931 $ 4.14 $ - Exercised - - - - Granted (878 ) 878 1.33 _ Cancelled 8 (8 ) 2.94 - Balance at September 30, 2020 2,718 1,801 2.78 _ The Company accounts for share-based awards to employees and nonemployee directors and consultants in accordance with the provisions of ASC 718, Compensation—Stock Compensation. Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting During the nine months ended September 30, 2020 the Company granted stock options to officers, directors, employees and consultants to purchase a total of 878,000 shares of common stock. The options have an exercise price of $1.33 per share, expire in ten years, and vest as follows: one half vests on the one year anniversary of the grant date and the remainder will vest in eight equal quarterly increments with the first such quarterly increment vesting on September 30, 2021. The total fair value of these options at the grant date was approximately $944,000 using the Black-Scholes Option pricing model. The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: Nine Months Ended September 30, 2020 2019 Risk-free interest rate 0.43 % 2.99 % Average expected term (years) 5.9 6.1 Expected volatility 107.45 % 90.00 % Expected dividend yield 0.00 0.00 The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award; the expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; and the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future. As of September 30, 2020, there was approximately $1,661,000 of total unrecognized compensation expense related to non-vested stock options that is expected to be recognized over a weighted average period of 8.5 years. For options granted and outstanding, there were 515,564 options outstanding which were fully vested or expected to vest, with an aggregate intrinsic value of $0, a weighted average exercise price of $2.77, and weighted average remaining contractual term of 6.8 years at September 30, 2020. For vested and exercisable options, outstanding shares totaled 515,564, with an aggregate intrinsic value of $0. These options had a weighted average exercise price of $5.24 per share and a weighted-average remaining contractual term of 6.8 years at September 30, 2020. The aggregate intrinsic value of outstanding and exercisable options at September 30, 2020 was calculated based on the closing price of the Company’s common stock as reported on The Nasdaq Capital Market on September 30, 2020 of $0.93 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 presents information concerning common stock available for future issuance (in thousands) as of: September 30, 2020 September 30, 2019 Stock options issued and outstanding 1,801 931 Shares authorized for future option grants 2,718 3,588 Warrants outstanding 243 243 Total 4,762 4,762 |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 7. Warrants The following is a summary of activity in the number of warrants outstanding to purchase the Company’s common stock for the nine months ended September 30, 2020 (in thousands): Warrants Accounted for as: Equity Warrants Accounted for as: Liabilities May 2018 October 2013 January 2014 Total Outstanding, December 31, 2019 84 26 133 243 Exercised - - - - Granted - - - - Expired - - - - Outstanding, September 30, 2020 84 26 133 243 Expiration date: October 27, 2022 October 24, 2023 January 16, 2024 The following is a summary of activity in the number of warrants outstanding to purchase the Company’s common stock for the nine months ended September 30, 2019 (in thousands): Warrants Accounted for as: Equity Warrants Accounted for as: Liabilities May 2018 October 2013 January 2014 Total Outstanding, December 31, 2018 84 26 133 243 Exercised - - - - Granted - - - - Expired - - - - Outstanding, September 30, 2019 84 26 133 243 Expiration date: October 27, 2022 October 24, 2023 January 16, 2024 Warrants Classified as Liabilities Liability-classified warrants consist of warrants issued by Biozone in connection with equity financings in October 2013 and January 2014, which were assumed by the Company in connection with its merger with Biozone in January 2014. 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 condensed 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 September 30, 2020: October 2013 January 2014 Strike price $ 15.00 $ 15.00 Expected dividend yield 0.00 % 0.00 % Contractual term (years) 3.1 3.3 Cumulative volatility 116.46 % 114.97 % Risk-free rate 0.15 % 0.17 % Value $ 0.21 $ 0.23 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, 2019: October 2013 January 2014 Strike price $ 15.00 $ 15.00 Expected dividend yield 0.00 % 0.00 % Contractual term (years) 3.8 4.0 Cumulative volatility 89.59 % 90.58 % Risk-free rate 1.67 % 1.68 % Value $ 0.04 $ 0.05 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 | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Licenses and Collaborations | 8. Licenses and Collaborations Merck On January 2, 2019, the Company entered into an Exclusive License and Research Collaboration Agreement (the “Collaboration Agreement”) with Merck to discover and develop certain proprietary influenza A/B antiviral agents. Under the terms of the Collaboration Agreement, Merck funds research and development for the program, including clinical development, and will be responsible for worldwide commercialization of any products derived from the collaboration. Cocrystal received an upfront payment of $4,000,000 in 2019 and is eligible to receive payments related to designated development, regulatory and sales milestones with the potential to earn up to $156,000,000, as well as royalties on product sales. Merck can terminate the Collaboration Agreement at any time prior to the first commercial sale of the first product developed under the Collaboration Agreement, in its sole discretion, without cause. The Company recognized $1,504,000 in revenues on the condensed consolidated statement of operations for the nine months ended September 30, 2020 related to influenza A/B program research and development expenses for the first nine months of 2020. Kansas State University Research Foundation Cocrystal entered into a License Agreement with Kansas State University Research Foundation (“KSURF”) on February 18, 2020 to further develop certain proprietary broad-spectrum antiviral compounds for the treatment of Norovirus and Coronavirus infections. Pursuant to the terms of the License Agreement, KSURF granted the Company an exclusive royalty bearing license to practice under certain patent rights, under patent applications covering antivirals against coronaviruses, caliciviruses, and picornaviruses, and related know-how, including to make and sell therapeutic, diagnostic and prophylactic products. The Company agreed to pay KSURF a one-time non-refundable license initiation fee of $80,000 under the License Agreement, and annual license maintenance fees. The Company also agreed to make certain future milestone payments, dependent upon the progress of clinical trials, regulatory approvals, and initiation of commercial sales in the United States and certain countries outside the United States. On April 19, 2020, the Company entered into a second License Agreement with KSURF in addition to the License Agreement entered into in February 2020. Pursuant to the terms of the second License Agreement, KSURF granted the Company an exclusive royalty bearing license to practice under certain patent rights under patent applications covering antivirals against coronaviruses, caliciviruses, and picornaviruses, and related know-how, including to make and sell therapeutic, diagnostic and prophylactic products. The Company agreed to pay KSURF a one-time non-refundable license initiation fee and annual license maintenance fees. The Company also agreed to make certain future milestone payments, dependent upon the progress of clinical trials, regulatory approvals, and initiation of commercial sales in the United States and certain countries outside the United States. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. Commitments and Contingencies Commitments In the ordinary course of business, the Company enters into non-cancelable leases to purchase equipment and for its facilities, including related party leases (see Note 10 – Transactions with Related Parties). Leases are accounted for as operating leases or finance leases, in accordance with ASC 842, Leases Operating Leases The Company leases office space in Miami, Florida and laboratory space in Bothell, Washington under operating leases that expire on August 31, 2021 and January 31, 2024, respectively. The Company recently signed an amendment to the Bothell, Washington lease agreement by extending the lease term for a period of sixty months from February 2019 through January 2024. For operating leases, the weighted average discount rate is 8.0% and the weighted average remaining lease term is 3.1 years. The following table summarizes the Company’s maturities of operating lease liabilities, by year and in aggregate, as of September 30, 2020 (in thousands): 2020 (excluding the nine months ended September 30, 2020) $ 57 2021 213 2022 178 2023 183 Thereafter 15 Total operating lease payments 646 Less: present value discount (77 ) Total operating lease liabilities $ 569 The operating lease liabilities summarized above do not include variable common area maintenance (CAM) charges, which are contractual liabilities under the Company’s Bothell, Washington lease. CAM charges for the Bothell, Washington facility are calculated annually based on actual common expenses for the building incurred by the lessor and proportionately billed to tenants based on leased square footage. For the nine months ended September 30, 2020 and 2019, approximately $54,000 and $60,000 of variable lease expense (CAM) was included in general and administrative operating expenses on the condensed consolidated statements of operations. The minimum lease payments above include the amounts that would be paid if the Company maintains its Bothell lease for the five-year term, starting February 2019. The Company has the right to terminate this lease after three years on January 31, 2022, by giving prior notice at least nine months before the early termination date and by paying a termination fee equal to the sum of unamortized leasing commissions and reimbursement for tenant improvements provided by the landlord amortized at 8.0% over the extended term. On September 1, 2018, the Company entered into a lease agreement with a limited liability company controlled by Dr. Phillip Frost, a director and a principal shareholder of the Company (see Note 10 – Transactions with Related Parties). The lease term is three years with an optional three-year extension. On an annualized basis, straight-line rent expense is approximately $58,000, including fixed and estimable fees and taxes. As of September 30, 2020, operating lease rights include $51,000 and operating lease liabilities include $53,000 relating to this lease. For the nine months ended September 30, 2020 and 2019, operating lease expense, excluding short-term leases, finance leases and CAM charges, totaled approximately $171,000 and $169,000, respectively, of which $44,000 and $43,000 in each period was to a related party. Finance Leases In November 2018, the Company entered into two lease agreements to acquire lab equipment with 18 monthly payments of $18,000 payable through May 27, 2020 and 36 monthly payments of $1,000 payable through November 21, 2021, respectively; in September 2020 the Company entered into a new lease agreement to acquire lab equipment with 36 payments of $2,000 monthly payable through April 16, 2023. For finance leases, the weighted average discount rate is 8.0% and the weighted average remaining lease term is 3.4 years. The following table summarizes the Company’s maturities of finance lease liabilities, by year and in aggregate, as of September 30, 2020 (in thousands): 2020 (excluding the nine months ended September 30, 2020) $ 11 2021 44 2022 29 2023 7 Total finance lease payments 91 Less: present value discount (7 ) Total finance lease liabilities $ 84 The leased lab equipment is depreciable over five years and is presented net of accumulated depreciation on the condensed consolidated balance sheets under property and equipment. As of September 30, 2020, total right-of-use lab equipment and accumulated depreciation recognized under finance leases is $119,000 and $21,000, respectively, and depreciation expense for the nine months ended September 30, 2020 was $38,000. As of December 31, 2019, total right-of-use assets lab equipment exchanged for finance lease liabilities was $347,000 and accumulated depreciation for lab equipment under finance leases was $75,000. At September 30, 2020, the aggregate outstanding balance of finance lease liabilities, current and long-term, is $84,000 and the Company expects to pay future interest charges of $7,000 over the remaining finance lease terms. At December 31, 2019, the aggregate outstanding balance of finance lease liabilities, current and long-term, was $117,000 and the Company expects to pay future interest charges of $4,000 over the remaining finance lease terms. For the nine months ended September 30, 2020, the Company paid $107,000 and $6,000 in principal and interest, respectively, totaling financing cash out flows of $113,000, net of interest expense, for amount included in the measurement of lease liabilities for finance leases. For the nine months ended September 30, 2019, the Company paid $159,000 and $16,000 in principal and interest, respectively, totaling financing cash out flows of $ 175,000 for amounts included in the measurement of lease liabilities for finance leases and added back to net income the $16,000 of interest expense under cash flows from operating activities. 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. On September 20, 2018, Anthony Pepe, individually and on behalf of a class, filed with the United States District Court for the District of New Jersey a complaint against the Company, certain current and former executive officers and directors of the Company and the other defendants named therein for violation of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder. The class consists of the persons and entities who purchased the Company’s common stock during the period from September 23, 2013 through September 7, 2018. Pepe also alleges violation of other sections of the Exchange Act by the defendants named in the complaint other than the Company. Pepe seeks damages, pre-judgment and post-judgment interest, reasonable attorneys’ fees, expert fees and other costs. On January 16, 2019, Ms. Susan Church, a stockholder of the Company, filed with the United States District Court for the Western District of Washington a derivative suit against certain current and former executive officers and directors of the Company alleging breach of fiduciary duties, unjust enrichment, waste of corporate assets, and violations of the rules governing proxy solicitation. Church seeks, among other things, money damages, disgorgement of profits from alleged wrongful conduct, including cash bonuses, pre-judgment and post-judgment interest, reasonable attorneys’ fees, expert fees and other costs. On July 2, 2020, the Company negotiated and executed term sheets with respect to the proposed settlement of the class action, the derivative lawsuit discussed above, and two related derivative actions. The term sheets are subject to approval by the court. As of September 30, 2020, the Company agreed to pay $450,000 for its share of the total proposed class action settlement. The final settlement hearing for the class action and derivative lawsuits is scheduled for December 16, 2020. As for the settlement of the derivative lawsuits, the Company agreed to make certain corporate governance changes. On September 22, 2020, United States District Court for the District of New Jersey, where one of the derivative actions was pending, entered an order preliminarily approving the Stipulation and Agreement of Settlement, dated August 20, 2020 (the “Stipulation”) by and among the plaintiffs in the derivative actions, the Company as the nominal defendant, and defendants, including certain of the Company’s current and former directors and officers. The settlement as documented in the Stipulation covers all three derivative actions and is subject to the approval of the Court. The proposed settlement requires that certain defendants named in the Stipulation, other than the Company, pay the plaintiffs’ attorneys’ fees and expenses in the amount of $275,000, and that the Company adopt within 60 days of the final approval of the settlement by the Court certain corporate governance enhancements. Liberty Insurance Underwriters Inc. filed suit against us in federal court in Delaware seeking a declaratory judgment that it is not liable to defend us in the class and derivative litigation. The insurance company also is claiming it is entitled to recover $1 million it advanced to us in connection with a prior SEC investigation, of which the Company disagrees with the insurance company position. We have retained counsel to defend us which has filed an answer to the complaint. In November 2017, Lee Pederson, a former Biozone lawyer, filed a lawsuit in the U.S. District Court in Minnesota against co-defendants the Company, Dr. Phillip Frost, OPKO Health, Inc. and Brian Keller alleging that defendants engaged in wrongful conduct related to Biozone, including causing Biozone to enter into an allegedly improper licensing agreement and engaged in alleged market manipulation. On September 13, 2018, the United States District Court granted the Company and its co-defendants’ motion to dismiss Pederson’s amended complaint for lack of personal jurisdiction in Minnesota. On October 11, 2018, Pederson filed a notice of appeal with the United States Court of Appeals for the Eighth Circuit. The plaintiff’s appeal was denied and the dismissal affirmed. In July 2019, Lee Pederson filed another lawsuit in the U.S. District Court in Minnesota against co-defendants the Company, Dr. Frost, and Daniel Fisher. In his complaint, Pederson alleges tortious interference by the Company and Dr. Frost with an alleged collaboration agreement between Mr. Pederson and Mr. Fisher. Mr. Pederson seeks damages in the amount of $800,000 or such other amount as may be determined at trial. This lawsuit had previously been stayed by the court, pending disposition of Pederson’s first lawsuit. With that first lawsuit having been dismissed and appeal denied, the stay was lifted, and the Company was served in July 2020 with the complaint initiating that second lawsuit. The Company is reviewing the complaint with counsel. On October 14, 2020, the Company and co-defendants’ motions for, among other things, dismissal for lack of personal jurisdiction in that second lawsuit were heard by the court, and the Company and co-defendants are awaiting a ruling from the trial court. On May 19, 2020, A.G.P./Alliance Global Partners (“AGP”), which had previously acted as the Company’s underwriter, placement agent and sales agent in connection with the Company’s registered and exempt equity offerings, filed a lawsuit against the Company in the United States District Court for the Southern District of New York alleging violation of a lock-up provision under the Placement Agent Agreement, dated January 28, 2020 (the “Placement Agent Agreement”), by and between the Company and AGP. AGP seeks (i) damages estimated in the complaint to be in excess of $1 million and attorneys’ fees, and (ii) declaratory relief. The Company has filed a motion to dismiss the complaint. While the Company intends to defend itself vigorously from the claims in the aforementioned disputes, it is unable to predict the outcome of these legal proceedings. Any potential loss as a result of these legal proceedings cannot be reasonably estimated. As a result, the Company has not recorded a loss contingency for any of the aforementioned claims. COVID-19 Our administrative and finance activities are fully functional out of our Miami, Florida location and our research laboratory in Bothell, Washington remains open for essential operations while meeting COVID-19 quarantine challenges. Our scientists are also able to continue working on site and remotely and we remain committed to meeting our corporate and development milestones throughout the year. We have experienced delays in our supply chain and with service partners as a result of the COVID-19 pandemic. Also because of the unknown impact from the COVID-19 pandemic, it may have unanticipated material adverse effects on us in a number of ways including: ● If our scientists and other personnel (or their family members) are infected with the virus, it may hamper our ability to engage in ongoing research activities; ● Similarly, we rely on third parties who can be similarly impacted; ● If these third parties are affected by COVID-19, they may focus on other activities which they may devote their limited time to other priorities rather than to our joint research; ● We may experience a shortage of laboratory materials which would impact our research activities; ● As a result of the continuing impact of the virus, we may fail to get access to third party laboratories which would impact our research activities; and ● We may sustain problems due to the serious short-term and possible longer term serious economic disruptions as our economy faces unprecedented uncertainty. |
Transactions with Related Parti
Transactions with Related Parties | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | 10. Transactions with Related Parties In September 2018, the Company leased administrative offices from a limited liability company owned by one of the Company’s directors and principal shareholder, Dr. Phillip Frost. The operating lease term is three years with an optional three-year extension. On an annualized basis, straight-line lease expense, including taxes and fees, for this location is approximately $58,000. In September 2018, the Company paid a lease deposit of $4,000 and total amounts paid in connection with this operating lease were $44,000 and $42,000 for the nine months ended September 30, 2020 and 2019, respectively. |
Basis of Presentation and Sig_2
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) for interim financial information, the instructions to Form 10-Q and Article 10 of Regulation S-X set forth by the Securities and Exchange Commission (“SEC”). They do not include all of the information and notes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The results of operations for the interim periods presented are not necessarily indicative of the results of operations for the entire fiscal year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended December 31, 2019 filed on March 27, 2020 (“Annual Report”). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of Cocrystal Pharma, Inc. and its wholly owned subsidiaries: Cocrystal Discovery, Inc., Cocrystal Merger Sub, Inc., Baker Cummins Corp. and Biozone Laboratories, Inc. Intercompany transactions and balances have been eliminated. |
Segments | Segments The Company operates in only one segment. Management uses cash flows 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 Preparation of the Company’s consolidated financial statements in conformance with U.S. GAAP requires the Company’s management to make estimates and assumptions that impact the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities in the Company’s consolidated financial statements and accompanying notes. The significant estimates in the Company’s consolidated financial statements relate to the valuation of equity awards and derivative liabilities, recoverability of deferred tax assets, estimated useful lives of fixed assets, and forecast assumptions used in the valuation of intangible assets and goodwill. The Company bases estimates and assumptions on historical experience, when available, and on various factors that it believes to be reasonable under the circumstances. However, if future results are not consistent with our estimates and assumptions, including as a result of the COVID-19 global pandemic, then we may be exposed to an impairment charge, which could be material. The Company evaluates its estimates and assumptions on an ongoing basis, and its actual results may differ from estimates made under different assumptions or conditions. |
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 deposited in accounts held at two U.S. financial institutions, which may, at times, exceed federally insured limits of $250,000 for each institution accounts are held. At September 30, 2020 and December 31, 2019, our primary operating account held approximately $31,781,000 and $7,418,000, respectively, and our collateral account balance was $50,000 at a different institution. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risks thereof. As of September 30, 2020, 100% of our revenue and receivables are from one customer, Merck Sharp & Dohme Corp. |
Fair Value Measurements | Fair Value Measurements FASB Accounting Standards Codification (“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 categorizes its cash and restricted cash as Level 1 fair value measurements. The Company categorizes its warrants potentially settleable in cash as Level 2 fair value measurements. The warrants potentially settleable in cash are measured at fair value on a recurring basis and are being marked to fair value at each reporting date until they are completely settled or meet the requirements to be accounted for as component of stockholders’ equity. The warrants are valued using the Black-Scholes option pricing model as discussed in Note 7 – Warrants. At September 30, 2020 and December 31, 2019, the carrying amounts of financial assets and liabilities, such as cash, accounts receivable, other assets, and accounts payable and accrued expenses approximate their fair values due to their short-term nature. The carrying values of notes payable and lease liabilities approximate their fair values due to the fact that the interest rates on these obligations are based on prevailing market interest rates. The Company’s derivative liabilities are considered Level 2 measurements. |
Goodwill | Goodwill In November 2014, goodwill was recorded in connection with the acquisition of RFS Pharma. We evaluate indefinite-lived intangible assets and goodwill for impairment annually, as of November 30, or more frequently when events or circumstances indicate that impairment may have occurred. As part of the impairment evaluation, we may elect to perform an assessment of qualitative factors. If this qualitative assessment indicates that it is more likely than not that the fair value of the indefinite-lived intangible asset or the reporting unit (for goodwill) is less than its carrying value, we then would proceed with the quantitative impairment test to compare the fair value to the carrying value and record an impairment charge if the carrying value exceeds the fair value. Fair value is typically estimated using an income approach based on the present value of future discounted cash flows. The significant estimates in the discounted cash flow model primarily include the discount rate, and rates of future revenue and expense growth and/or profitability of the acquired assets. 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’s product candidates. At September 30, 2020, the Company had goodwill of $19,092,000. The Company previously completed its annual impairment test in November 2019, and at that time determined the fair value of its reporting unit, under both the Company’s Nasdaq market capitalization and an income approach analysis; both methods were less than the carrying value as of December 31, 2019; therefore, management considered goodwill to be impaired. This resulted in a $46,103,000 impairment in 2019. The Company plans to conduct its next annual impairment test in November 2020. Based on management’s assessment on September 30, 2020, no further impairment of Goodwill is required. |
Long-Lived Assets | Long-Lived Assets The Company regularly reviews the carrying value and estimated lives 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. |
Research and Development Expenses | Research and Development Expenses All research and development costs are expensed as incurred. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from research and development arrangements. In accordance with Accounting Standards Codification (“ASC”) Topic 606– Revenue from Contracts with Customers In November 2018, the FASB issued ASU 2018-18, Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 On January 2, 2019, the Company entered into an Exclusive License and Research Collaboration Agreement (the “Collaboration Agreement”) with Merck to discover and develop certain proprietary influenza A/B antiviral agents. Under the terms of the Collaboration Agreement, Merck will fund research and development for the program, including clinical development, and will be responsible for worldwide commercialization of any products derived from the collaboration. Revenue recorded for the three and nine months ended September 30, 2020 was $489,000 and $1,504,000 respectively, compared with $492,000 and $6,162,000 for the three and nine months ended September 30, 2019, respectively. As of September 30, 2020, accounts receivable of $581,000 was due from Merck. |
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. As of September 30, 2020, the Company assessed its income tax expense based on its projected future taxable income for the year ended December 31, 2020 and therefore recorded no amount for income tax expense for the nine months ended September 30, 2020. In addition, the Company has significant deferred tax assets available to offset income tax expense due to net operating loss carry forwards which are currently subject to a full valuation allowance based on the Company’s assessment of future taxable income. Refer to our Annual Report on Form 10-K for the year ended December 31, 2019 for more information. |
Franchise Taxes | Franchise Taxes As of June 30, 2020, the Company amended its franchise tax filed for 2018 period, which the result is a credit balance of $126,000. The Company recognized $51,000 as expense for the period from January 1, 2020 through September 30, 2020; the balance of $75,000 is recorded as prepaid expense to be amortized until September 30, 2021. Franchise taxes are included in the general and administrative expenses. |
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 Estimating Expected Term |
Share Issuance Costs | Share Issuance Costs The Company accounts for direct and incremental costs related to the issuance of its capital stock as a reduction in the proceeds from such issuances. In the case, the Company incurs certain expenses related to the offering of equity security, the Company complies with the requirements of FASB 340-10-S99-1with regards to offering costs. |
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 |
Net Income (Loss) Per Share | Net Income (Loss) per Share The Company accounts for and discloses net income (loss) per common share in accordance with FASB ASC Topic 260, Earnings 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): September 30, 2020 2019 Outstanding options to purchase common stock 1,801 931 Warrants to purchase common stock 243 243 Total 2,044 1,174 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06 (“ASU 2020-06”) “Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” In June 2016, the FASB issued ASU No. 2016-13, Credit Losses - Measurement of Credit Losses on Financial Instruments (“ASC 326”). The standard significantly changes how entities will measure credit losses for most financial assets, including accounts and notes receivables. The standard will replace today’s “incurred loss” approach with an “expected loss” model, under which companies will recognize allowances based on expected rather than incurred losses. Entities will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The standard is effective for interim and annual reporting periods beginning after December 15, 2019. The adoption of ASU 2016-13 is not expected to have a material impact on the Company’s financial position, results of operations, and cash flows. Other recent authoritative guidance issued by the FASB (including technical corrections to the ASC), the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (“SEC”) did not, or are not expected to, have a material impact on the Company’s consolidated financial statements and related disclosures. |
Basis of Presentation and Sig_3
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
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): September 30, 2020 2019 Outstanding options to purchase common stock 1,801 931 Warrants to purchase common stock 243 243 Total 2,044 1,174 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | As of September 30, 2020, and December 31, 2019, property and equipment consists of (in thousands): September 30, 2020 December 31, 2019 Lab equipment $ 1,498 $ 1,073 Finance lease right-of-use lab equipment obtained in exchange for finance lease liabilities 119 347 Computer and office equipment 120 92 Total property and equipment 1,737 1,512 Less: accumulated depreciation and amortization (1,102 ) (1,081 ) Property and equipment, net $ 635 $ 431 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following (in thousands) as of: September 30, 2020 December 31, 2019 Accounts payable $ 1,485 $ 1,511 Accrued compensation 183 83 Accrued other expenses 682 405 Total accounts payable and accrued expenses $ 2,350 $ 1,999 |
Stock Based Awards (Tables)
Stock Based Awards (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Share-based Compensation, Stock Options, Activity | The following table summarizes stock option transactions for the 2007 Plan and 2015 Plan, collectively, for the nine months ended September 30, 2020 (in thousands, except per share amounts): Number of Total Weighted Aggregate Balance at December 31, 2019 3,588 931 $ 4.14 $ - Exercised - - - - Granted (878 ) 878 1.33 _ Cancelled 8 (8 ) 2.94 - Balance at September 30, 2020 2,718 1,801 2.78 _ |
Schedule of Weighted Average Assumptions Used | The fair value of share option award is estimated using the Black-Scholes option pricing method based on the following weighted-average assumptions: Nine Months Ended September 30, 2020 2019 Risk-free interest rate 0.43 % 2.99 % Average expected term (years) 5.9 6.1 Expected volatility 107.45 % 90.00 % Expected dividend yield 0.00 0.00 |
Schedule of Common Stock Reserved Future Issuance | The following table presents information concerning common stock available for future issuance (in thousands) as of: September 30, 2020 September 30, 2019 Stock options issued and outstanding 1,801 931 Shares authorized for future option grants 2,718 3,588 Warrants outstanding 243 243 Total 4,762 4,762 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Warrants and Rights Note Disclosure [Abstract] | |
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 nine months ended September 30, 2020 (in thousands): Warrants Accounted for as: Equity Warrants Accounted for as: Liabilities May 2018 October 2013 January 2014 Total Outstanding, December 31, 2019 84 26 133 243 Exercised - - - - Granted - - - - Expired - - - - Outstanding, September 30, 2020 84 26 133 243 Expiration date: October 27, 2022 October 24, 2023 January 16, 2024 The following is a summary of activity in the number of warrants outstanding to purchase the Company’s common stock for the nine months ended September 30, 2019 (in thousands): Warrants Accounted for as: Equity Warrants Accounted for as: Liabilities May 2018 October 2013 January 2014 Total Outstanding, December 31, 2018 84 26 133 243 Exercised - - - - Granted - - - - Expired - - - - Outstanding, September 30, 2019 84 26 133 243 Expiration date: October 27, 2022 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 September 30, 2020: October 2013 January 2014 Strike price $ 15.00 $ 15.00 Expected dividend yield 0.00 % 0.00 % Contractual term (years) 3.1 3.3 Cumulative volatility 116.46 % 114.97 % Risk-free rate 0.15 % 0.17 % Value $ 0.21 $ 0.23 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, 2019: October 2013 January 2014 Strike price $ 15.00 $ 15.00 Expected dividend yield 0.00 % 0.00 % Contractual term (years) 3.8 4.0 Cumulative volatility 89.59 % 90.58 % Risk-free rate 1.67 % 1.68 % Value $ 0.04 $ 0.05 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Maturities of Operating Lease Liabilities | The following table summarizes the Company’s maturities of operating lease liabilities, by year and in aggregate, as of September 30, 2020 (in thousands): 2020 (excluding the nine months ended September 30, 2020) $ 57 2021 213 2022 178 2023 183 Thereafter 15 Total operating lease payments 646 Less: present value discount (77 ) Total operating lease liabilities $ 569 |
Schedule of Maturities of Finance Lease Liabilities | The following table summarizes the Company’s maturities of finance lease liabilities, by year and in aggregate, as of September 30, 2020 (in thousands): 2020 (excluding the nine months ended September 30, 2020) $ 11 2021 44 2022 29 2023 7 Total finance lease payments 91 Less: present value discount (7 ) Total finance lease liabilities $ 84 |
Basis of Presentation and Sig_4
Basis of Presentation and Significant Accounting Policies (Details Narrative) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Jun. 30, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)Segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Number of operating segment | Segment | 1 | |||||
Primary operating account balance | $ 31,781 | $ 31,781 | $ 7,418 | |||
Cash uninsured amount | 50 | 50 | ||||
Goodwill | 19,092 | 19,092 | $ 19,092 | |||
Impairment in goodwill | $ 46,103 | |||||
Collaboration revenue | 489 | $ 492 | 1,504 | $ 6,162 | ||
Franchise Taxes [Member] | ||||||
Deferred tax credits | $ 126 | |||||
Income tax expense | $ 51 | |||||
Amortized until prepaid expense | $ 75 | |||||
Amortized until prepaid expense maturity date | Sep. 30, 2021 | |||||
Merck Sharp & Dohme Corp [Member] | ||||||
Accounts receivable related party | 581 | $ 581 | ||||
Merck Sharp & Dohme Corp [Member] | Customer One [Member] | Customer Concentration Risk [Member] | Revenue and Receivables [Member] | ||||||
Revenue and receivable percentage | 100.00% | |||||
U.S. Financial Institutions One [Member] | ||||||
Cash FDIC insured limits | 250 | $ 250 | ||||
U.S. Financial Institutions Two [Member] | ||||||
Cash FDIC insured limits | $ 250 | $ 250 |
Basis of Presentation and Sig_5
Basis of Presentation and Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Calculations of Net Loss Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Anti-dilutive securities | 2,044,000 | 1,174,000 |
Outstanding Options to Purchase Common Stock [Member] | ||
Anti-dilutive securities | 1,801,000 | 931,000 |
Warrants to Purchase Common Stock [Member] | ||
Anti-dilutive securities | 243,000 | 243,000 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Depreciation and amortization expense | $ 44 | $ 112 |
Amortization expense | $ 6 | $ 38 |
Minimum [Member] | ||
Estimated useful lives | 3 years | |
Maximum [Member] | ||
Estimated useful lives | 5 years |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Total property and equipment | $ 1,737 | $ 1,512 |
Less: accumulated depreciation and amortization | (1,102) | (1,081) |
Property and equipment, net | 635 | 431 |
Lab Equipment [Member] | ||
Total property and equipment | 1,498 | 1,073 |
Finance Lease Right-of-Use Lab Equipment Obtained in Exchange For Finance Lease Liabilities [Member] | ||
Total property and equipment | 119 | 347 |
Computer and Office Equipment [Member] | ||
Total property and equipment | $ 120 | $ 92 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 1,485 | $ 1,511 |
Accrued compensation | 183 | 83 |
Accrued other expenses | 682 | 405 |
Total accounts payable and accrued expenses | $ 2,350 | $ 1,999 |
Common Stock (Details Narrative
Common Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jul. 02, 2020 | Mar. 09, 2020 | Feb. 27, 2020 | Jan. 29, 2020 | Aug. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Common stock authorized | 100,000,000 | 100,000,000 | ||||||
Common stock par value | $ 0.001 | $ 0.001 | ||||||
Common stock issued | 68,564,000 | 35,150,000 | ||||||
Common stock outstanding | 68,564,000 | 35,150,000 | ||||||
Common stock, voting rights | The holders of common stock are entitled to one vote for each share of common stock held. | |||||||
Purchase price share | $ 0.93 | |||||||
Proceeds from common stock | $ 32,161 | $ 3,928 | ||||||
H.C. Wainwright & Co., LLC [Member] | Underwritten Public Offering [Member] | ||||||||
Number of shares issued | 16,422,813 | |||||||
Purchase price share | $ 1.05 | |||||||
Proceeds from common stock | $ 15,600 | |||||||
H.C. Wainwright & Co., LLC [Member] | Offering [Member] | ||||||||
Sale of stock offering shares | 16,422,813 | |||||||
H.C. Wainwright & Co., LLC [Member] | Over-Allotment Option [Member] | ||||||||
Sale of stock offering shares | 2,137,098 | |||||||
Securities Purchase Agreement [Member] | Institutional Investors [Member] | ||||||||
Number of shares issued | 5,037,038 | 8,461,540 | 3,492,063 | |||||
Purchase price share | $ 1.35 | $ 1.30 | $ 0.63 | |||||
Proceeds from common stock | $ 5,000 | $ 10,100 | $ 1,500 | |||||
At-The-Market Offering Agreement [Member] | H.C. Wainwright & Co., LLC [Member] | ||||||||
Number of shares issued | 10,000,000 |
Stock Based Awards (Details Nar
Stock Based Awards (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | |
Shares reserved for issuance | 4,762,000 | 4,762,000 | 4,762,000 | ||
Stock based compensation expense | $ 237 | $ 108 | $ 463 | $ 253 | |
Unrecognized compensation expense | $ 1,661 | $ 1,661 | |||
Stock-based compensation weighted average period | 8 years 6 months | ||||
Number of options vested and expected to vest | 515,564 | 515,564 | |||
Aggregate intrinsic value of vested and expected to vest | $ 0 | $ 0 | |||
Weighted-average exercise price | $ 2.77 | $ 2.77 | |||
Weighted-average remaining contractual term | 6 years 9 months 18 days | ||||
Number of options vested and exercisable | $ 515,564 | ||||
Aggregate intrinsic value of options vested and exercisable | $ 0 | ||||
Weighted-average exercise price of options vested and exercisable | $ 5.24 | ||||
Weighted-average remaining contractual term of options vested and exercisable | 6 years 9 months 18 days | ||||
Shares issued price per share | 0.93 | $ 0.93 | |||
Officers, Directors, Employees and Consultants [Member] | |||||
Weighted-average exercise price | $ 1.33 | $ 1.33 | |||
Number of shares issued | 878,000 | ||||
Vesting description | The options have an exercise price of $1.33 per share, expire in ten years, and vest as follows: one half vests on the one year anniversary of the grant date and the remainder will vest in eight equal quarterly increments with the first such quarterly increment vesting on September 30, 2021. | ||||
Fair value of option grant | $ 944 | ||||
2007 Equity Incentive Plans [Member] | |||||
Shares reserved for issuance | 1,786,635 | 1,786,635 | |||
Shares vesting period | 10 years | ||||
2015 Equity Incentive Plans [Member] | |||||
Shares reserved for issuance | 2,705,237 | 2,705,237 | |||
Shares vesting period | 10 years | ||||
Shares available for grant | 2,718,020 | 2,718,020 | |||
Transferred from 2007 Plans [Member] | |||||
Shares reserved for issuance | 1,038,570 | 1,038,570 |
Stock Based Awards - Schedule o
Stock Based Awards - Schedule of Share-based Compensation, Stock Options, Activity (Details) - Stock Option [Member] | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Number of Shares Available for Grant, Beginning | 3,588,000 |
Number of Shares Available for Grant, Exercised | |
Number of Shares Available for Grant, Granted | (878,000) |
Number of Shares Available for Grant, Cancelled | 8,000 |
Number of Shares Available for Grant, Ending | 2,718,000 |
Total Options Outstanding, Beginning | 931,000 |
Total Options Outstanding, Exercised | |
Total Options Outstanding, Granted | (878,000) |
Total Options Outstanding, Cancelled | (8,000) |
Total Options Outstanding, Ending | 1,801,000 |
Weighted Average Exercise Price, Outstanding | $ / shares | $ 4.14 |
Weighted Average Exercise Price, Exercised | $ / shares | |
Weighted Average Exercise Price, Granted | $ / shares | 1.33 |
Weighted Average Exercise Price, Cancelled | $ / shares | 2.94 |
Weighted Average Exercise Price, Ending | $ / shares | $ 2.78 |
Aggregate Intrinsic Value, Beginning | $ | |
Aggregate Intrinsic Value, Granted | $ | |
Aggregate Intrinsic Value, Ending | $ |
Stock Based Awards - Schedule_2
Stock Based Awards - Schedule of Weighted Average Assumptions Used (Details) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Risk-free interest rate | 0.43% | 2.99% |
Average expected term (years) | 5 years 10 months 25 days | 6 years 1 month 6 days |
Expected volatility | 107.45% | 90.00% |
Expected dividend yield | 0.00% | 0.00% |
Stock Based Awards - Schedule_3
Stock Based Awards - Schedule of Common Stock Reserved Future Issuance (Details) - shares | Sep. 30, 2020 | Jun. 30, 2019 |
Share-based Payment Arrangement [Abstract] | ||
Stock options issued and outstanding | 1,801,000 | 931,000 |
Shares authorized for future option grants | 2,718,000 | 3,588,000 |
Warrants outstanding | 243,000 | 243,000 |
Total | 4,762,000 | 4,762,000 |
Warrants - Summary of Warrant A
Warrants - Summary of Warrant Activity (Details) - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Number of warrants outstanding, ending | 2,718,000 | |
Warrants [Member] | ||
Number of warrants outstanding, beginning | 243,000 | 243,000 |
Number of warrants exercised | ||
Number of warrants granted | ||
Number of warrants expired | ||
Number of warrants outstanding, ending | 243,000 | 243,000 |
May 2018 Warrants [Member] | Equity [Member] | ||
Number of warrants outstanding, beginning | 84,000 | 84,000 |
Number of warrants exercised | ||
Number of warrants granted | ||
Number of warrants expired | ||
Number of warrants outstanding, ending | 84,000 | 84,000 |
Warrant expiration date | Oct. 27, 2022 | Oct. 27, 2022 |
October 2013 Warrants [Member] | Liabilities [Member] | ||
Number of warrants outstanding, beginning | 26,000 | 26,000 |
Number of warrants exercised | ||
Number of warrants granted | ||
Number of warrants expired | ||
Number of warrants outstanding, ending | 26,000 | 26,000 |
Warrant expiration date | Oct. 24, 2023 | Oct. 24, 2023 |
January 2014 Warrants [Member] | Liabilities [Member] | ||
Number of warrants outstanding, beginning | 133,000 | 133,000 |
Number of warrants exercised | ||
Number of warrants granted | ||
Number of warrants expired | ||
Number of warrants outstanding, ending | 133,000 | 133,000 |
Warrant expiration date | Jan. 16, 2024 | Jan. 16, 2024 |
Warrants - Schedule of Fair Val
Warrants - Schedule of Fair Value of Warrants Classified as Liabilities (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020$ / shares | Dec. 31, 2019$ / shares | |
October 2013 Warrants [Member] | ||
Strike price | $ 15 | $ 15 |
Value | $ 0.21 | $ 0.04 |
October 2013 Warrants [Member] | Expected Dividend Yield [Member] | ||
Fair value assumptions, percentage | 0 | 0 |
January 2014 Warrants [Member] | ||
Strike price | $ 15 | $ 15 |
Value | $ 0.23 | $ 0.05 |
January 2014 Warrants [Member] | Expected Dividend Yield [Member] | ||
Fair value assumptions, percentage | 0 | 0 |
January 2014 Warrants [Member] | Contractual Term (Years) [Member] | ||
Warrant Expected term (years) | 3 years 3 months 19 days | 4 years |
January 2014 Warrants [Member] | Cumulative Volatility [Member] | ||
Fair value assumptions, percentage | 114.97 | 90.58 |
January 2014 Warrants [Member] | Risk-Free Rate [Member] | ||
Fair value assumptions, percentage | 0.17 | 1.68 |
October 2013 Warrants [Member] | Contractual Term (Years) [Member] | ||
Warrant Expected term (years) | 3 years 1 month 6 days | 3 years 9 months 18 days |
October 2013 Warrants [Member] | Cumulative Volatility [Member] | ||
Fair value assumptions, percentage | 116.46 | 89.59 |
October 2013 Warrants [Member] | Risk-Free Rate [Member] | ||
Fair value assumptions, percentage | 0.15 | 1.67 |
Licenses and Collaborations (De
Licenses and Collaborations (Details Narrative) - USD ($) $ in Thousands | Feb. 18, 2020 | Jan. 02, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Collaboration revenue | $ 489 | $ 492 | $ 1,504 | $ 6,162 | ||
Collaboration Agreement [Member] | ||||||
Proceeds from collaborators | $ 4,000 | |||||
Collaboration Agreement [Member] | Maximum [Member] | ||||||
Royalty received on sales | $ 156,000 | |||||
License Agreement [Member] | ||||||
Non refundable license initiation fee | $ 80 | |||||
Annual license maintenance fee | $ 80 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Sep. 22, 2020 | Jan. 28, 2020 | Oct. 11, 2018 | Sep. 01, 2018 | Sep. 30, 2020 | Nov. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jun. 20, 2020 |
Rent expense | $ 0 | ||||||||||||
Operating lease rights | $ 544 | $ 544 | 544 | $ 677 | |||||||||
Operating lease liabilities | 569 | 569 | 569 | ||||||||||
Finance lease liabilities current and long-term | $ 84 | 84 | 84 | 117 | |||||||||
Finance lease interest expense | 7 | ||||||||||||
Pay future interest charges | 4 | ||||||||||||
Payments on finance lease liabilities | 107 | $ 159 | |||||||||||
Interest expense, net | $ 2 | $ 5 | 6 | 16 | |||||||||
Financing cash out flows | 113 | 175 | |||||||||||
Finance lease of interest expense | 16 | ||||||||||||
Payment of legal settlement | 450 | ||||||||||||
Litigation expense | $ 1,000 | ||||||||||||
Placement Agent Agreement [Member] | Alliance Global Partners [Member] | |||||||||||||
Damage expenses | $ 1,000 | ||||||||||||
Dr. Phillip Frost [Member] | |||||||||||||
Lease term | 3 years | 3 years | |||||||||||
Lease termination, description | The lease term is three years with an optional three-year extension. | ||||||||||||
Rent expense | $ 58 | $ 58 | |||||||||||
Operating lease rights | $ 51 | ||||||||||||
Operating lease liabilities | $ 53 | ||||||||||||
Plaintiffs Attorneys [Member] | Stipulation Settlement [Member] | |||||||||||||
Company fees and expenses | $ 275 | ||||||||||||
Mr Pederson And Mr Fisher [Member] | United States Court Appeals Eighth Circuit [Member] | |||||||||||||
Damage expenses | $ 800 | ||||||||||||
Operating Leases [Member] | |||||||||||||
Operating leases weighted average discount rate | 8.00% | 8.00% | 8.00% | ||||||||||
Weighted average remaining operating lease term | 3 years 1 month 6 days | 3 years 1 month 6 days | 3 years 1 month 6 days | ||||||||||
Common Area Maintenance [Member] | |||||||||||||
Operating variable lease expense | $ 54 | 60 | |||||||||||
Operating lease expense | 171 | 169 | |||||||||||
Related party | $ 44 | $ 43 | |||||||||||
Finance Leases [Member] | |||||||||||||
Weighted average finance lease discount rate | 8.00% | 8.00% | 8.00% | ||||||||||
Weighted average remaining finance lease term | 3 years 4 months 24 days | 3 years 4 months 24 days | 3 years 4 months 24 days | ||||||||||
Right-of-use lab equipment | $ 119 | $ 119 | $ 119 | 347 | |||||||||
Accumulated depreciation | $ 21 | 21 | 21 | $ 75 | |||||||||
Depreciation expense | $ 38 | ||||||||||||
February 2019 through January 2024 [Member] | |||||||||||||
Lease term | 60 months | ||||||||||||
February 2019 [Member] | |||||||||||||
Lease term | 5 years | ||||||||||||
Lease termination, 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, starting February 2019. The Company has the right to terminate this lease after three years on January 31, 2022, by giving prior notice at least nine months before the early termination date and by paying a termination fee equal to the sum of unamortized leasing commissions and reimbursement for tenant improvements provided by the landlord amortized at 8.0% over the extended term. | ||||||||||||
Unamortized leasing percentage | 8.00% | ||||||||||||
May 27, 2020 [Member] | Lease Agreement One [Member] | |||||||||||||
Lease term | 18 months | ||||||||||||
Capital lease payment | $ 18 | ||||||||||||
November 21, 2021 [Member] | Lease Agreement Two [Member] | |||||||||||||
Lease term | 36 months | ||||||||||||
Capital lease payment | $ 1 | ||||||||||||
April 16, 2023 [Member] | Lease Agreement Two [Member] | |||||||||||||
Lease term | 36 months | ||||||||||||
Capital lease payment | $ 2 | $ 2 | $ 2 | ||||||||||
Miami, Florida [Member] | |||||||||||||
Lease expire | Aug. 31, 2021 | ||||||||||||
Bothell, Washington [Member] | |||||||||||||
Lease expire | Jan. 31, 2024 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 (excluding the nine months ended September 30, 2020) | $ 57 |
2021 | 213 |
2022 | 178 |
2023 | 183 |
Thereafter | 15 |
Total operating lease payments | 646 |
Less: present value discount | (77) |
Total operating lease liabilities | $ 569 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Maturities of Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Commitments and Contingencies Disclosure [Abstract] | ||
2020 (excluding the nine months ended September 30, 2020) | $ 11 | |
2021 | 44 | |
2022 | 29 | |
2023 | 7 | |
Total finance lease payments | 91 | |
Less: present value discount | (7) | |
Total finance lease liabilities | $ 84 | $ 117 |
Transactions with Related Par_2
Transactions with Related Parties (Details Narrative) - USD ($) $ in Thousands | Sep. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2020 | Sep. 30, 2019 |
Rent expenses | $ 0 | |||
Lease deposit | $ 44 | $ 42 | ||
Dr. Phillip Frost [Member] | ||||
Lease term | 3 years | 3 years | ||
Rent expenses | $ 58 | $ 58 | ||
Lease deposit | $ 4 |