Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2019 | |
Document And Entity Information | |
Entity Registrant Name | RITTER PHARMACEUTICALS INC |
Entity Central Index Key | 0001460702 |
Document Type | S-4 |
Amendment Flag | false |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business Flag | true |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | |||
Cash and cash equivalents | $ 1,957,395 | $ 7,812,259 | $ 22,631,971 |
Accrued interest receivable | 1,469 | 54,456 | |
Investments in marketable securities | 6,988,780 | ||
Prepaid expenses | 771,199 | 421,522 | 167,400 |
Total current assets | 2,730,063 | 15,277,017 | 22,799,371 |
Other assets | |||
Right-of-use assets | 119,978 | ||
Other assets | 32,725 | 22,725 | 10,326 |
Total other assets | 152,703 | 22,725 | |
Property and equipment, net | 17,199 | 20,160 | 23,873 |
Total Assets | 2,899,965 | 15,319,902 | 22,833,570 |
Current liabilities | |||
Accounts payable | 2,566,485 | 4,512,316 | 2,237,579 |
Accrued expenses | 141,222 | 1,407,843 | 454,252 |
Lease liabilities | 119,074 | ||
Other liabilities | 13,359 | 15,757 | |
Total current liabilities | 2,826,781 | 5,933,518 | 2,707,588 |
Lease liabilities, non-current | 10,274 | ||
Total Liabilities | 2,837,055 | 5,933,518 | |
Stockholders' equity | |||
Common stock, $0.001 par value; 225,000,000 shares authorized, 9,926,956, 6,036,562 and 4,940,652 shares issued and outstanding as of September 30, 2019, December 31, 2018 and 2017, respectively | 9,927 | 6,037 | 4,940 |
Additional paid-in capital | 76,122,975 | 71,505,160 | 68,323,940 |
Accumulated other comprehensive loss | (923) | ||
Accumulated deficit | (79,888,272) | (70,200,145) | (53,331,434) |
Total stockholders' equity | 62,910 | 9,386,384 | 20,125,982 |
Total Liabilities and Stockholders' Equity | 2,899,965 | 15,319,902 | 22,833,570 |
Series A Preferred Stock [Member] | |||
Stockholders' equity | |||
Preferred stock, value | 2,289,324 | 2,289,324 | 5,128,536 |
Series B Preferred Stock [Member] | |||
Stockholders' equity | |||
Preferred stock, value | 1,288,956 | 3,906,931 | |
Series C Preferred Stock [Member] | |||
Stockholders' equity | |||
Preferred stock, value | $ 240,000 | $ 1,880,000 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Preferred stock, par value | $ 0.001 | $ 0.001 | ||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | ||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 225,000,000 | 225,000,000 | 25,000,000 | 225,000,000 |
Common stock, shares issued | 9,926,956 | 6,036,562 | 4,940,652 | |
Common stock, shares outstanding | 9,926,956 | 6,036,562 | 4,940,652 | |
Series A Preferred Stock [Member] | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 9,500 | 9,500 | 15,000,000 | |
Preferred stock, shares issued | 4,080 | 4,080 | 9,140 | |
Preferred stock, shares outstanding | 4,080 | 4,080 | 9,140 | |
Series B Preferred Stock [Member] | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 6,000 | 6,000 | 6,000 | |
Preferred stock, shares issued | 1,850 | 5,608 | 0 | |
Preferred stock, shares outstanding | 1,850 | 5,608 | 0 | |
Series C Preferred Stock [Member] | ||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Preferred stock, shares authorized | 1,880 | 1,880 | 1,880 | |
Preferred stock, shares issued | 240 | 1,880 | 0 | |
Preferred stock, shares outstanding | 240 | 1,880 | 0 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Operating costs and expenses: | ||||||
Research and development | $ 1,036,689 | $ 3,459,681 | $ 6,044,580 | $ 6,180,607 | $ 11,366,117 | $ 2,874,184 |
Patent costs | 20,867 | 59,068 | 139,436 | 170,418 | 204,396 | 250,372 |
General and administrative | 1,122,825 | 1,144,750 | 3,621,888 | 3,957,545 | 5,425,033 | 4,777,902 |
Total operating costs and expenses | 2,180,381 | 4,663,499 | 9,805,904 | 10,308,570 | 16,995,546 | 7,902,458 |
Operating loss | (2,180,381) | (4,663,499) | (9,805,904) | (10,308,570) | (16,995,546) | (7,902,458) |
Other income (expense): | ||||||
Interest income | 13,172 | 17,237 | 117,777 | 64,965 | 126,835 | 40,227 |
Other expense | (1,627) | |||||
Total other income | 13,172 | 17,237 | 117,777 | 64,965 | 126,835 | 38,600 |
Net loss | (2,167,209) | (4,646,262) | (9,688,127) | (10,243,605) | (16,868,711) | (7,863,858) |
Other comprehensive income: | ||||||
Unrealized gain (loss) on debt securities | 923 | (923) | ||||
Comprehensive loss | (2,167,209) | (4,646,262) | (9,687,204) | (10,243,605) | (16,869,634) | (7,863,858) |
Net loss | $ (2,167,209) | $ (4,646,262) | $ (9,688,127) | $ (10,243,605) | (16,868,711) | (7,863,858) |
Deemed dividend of preferred stock | (2,537,844) | (3,111,020) | ||||
Net loss applicable to common stockholders | $ (19,406,555) | $ (10,974,878) | ||||
Net loss per common share - basic and diluted | $ (0.23) | $ (0.86) | $ (1.09) | $ (2) | $ (3.66) | $ (4.95) |
Weighted average common shares outstanding - basic and diluted | 9,507,636 | 5,373,769 | 8,873,947 | 5,129,351 | 5,304,667 | 2,214,951 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Equity - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock [Member] | Paid-in Capital [Member] | Accumulated Deficit [Member] | Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2016 | $ 1,162 | $ 49,603,487 | $ (45,467,576) | $ 4,137,073 | ||||
Balance, shares at Dec. 31, 2016 | 1,161,920 | |||||||
Issuance of shares upon follow-on offering | $ 5,150,980 | $ 3,454 | 17,844,220 | 22,998,654 | ||||
Issuance of shares upon follow-on offering, shares | 9,180 | 3,453,987 | ||||||
Commissions and offering costs of follow-on offering | (2,038,471) | (2,038,471) | ||||||
Issuance of shares under common stock purchase agreement | $ 314 | 1,996,862 | 1,997,176 | |||||
Issuance of shares under common stock purchase agreement, shares | 313,732 | |||||||
Stock-based compensation | 895,498 | 895,498 | ||||||
Conversion of series A preferred shares | $ (22,444) | $ 10 | 22,344 | (90) | ||||
Conversion of series A preferred shares, shares | (40) | 10,000 | ||||||
Net loss | (7,863,858) | (7,863,858) | ||||||
Balance at Dec. 31, 2017 | $ 5,128,536 | $ 4,941 | 68,323,939 | (53,331,434) | 20,125,982 | |||
Balance, shares at Dec. 31, 2017 | 9,140 | 4,940,652 | ||||||
Conversion of preferred shares into common stock | $ (179,555) | $ 80 | 179,475 | |||||
Conversion of preferred shares into common stock, shares | (320) | 80,000 | ||||||
Stock-based compensation | 212,608 | 212,608 | ||||||
Net loss | (2,012,690) | (2,012,690) | ||||||
Balance at Mar. 31, 2018 | $ 4,948,981 | $ 5,021 | 68,716,022 | (55,344,124) | 18,325,900 | |||
Balance, shares at Mar. 31, 2018 | 8,820 | 5,020,652 | ||||||
Balance at Dec. 31, 2017 | $ 5,128,536 | $ 4,941 | 68,323,939 | (53,331,434) | 20,125,982 | |||
Balance, shares at Dec. 31, 2017 | 9,140 | 4,940,652 | ||||||
Net loss | (10,243,605) | |||||||
Balance at Sep. 30, 2018 | $ 3,344,209 | $ 5,735 | 70,665,970 | (63,575,039) | 10,440,875 | |||
Balance, shares at Sep. 30, 2018 | 5,960 | 5,734,639 | ||||||
Balance at Dec. 31, 2017 | $ 5,128,536 | $ 4,941 | 68,323,939 | (53,331,434) | 20,125,982 | |||
Balance, shares at Dec. 31, 2017 | 9,140 | 4,940,652 | ||||||
Stock-based compensation | 645,823 | 645,823 | ||||||
Issuance of Series B preferred shares upon closing of private placement | $ 4,570,848 | 792,037 | 5,362,885 | |||||
Issuance of Series B preferred shares upon closing of private placement, shares | 6,000 | |||||||
Commissions and offering costs of private placement | $ (390,449) | (122,081) | (512,530) | |||||
Commissions and offering costs of private placement, shares | ||||||||
Deemed dividend of preferred stock | $ (1,054,886) | $ 1,880,000 | (188,000) | 637,114 | ||||
Deemed dividend of preferred stock, shares | (1,880) | 1,880 | ||||||
Conversion of Series A preferred shares into common stock | $ (1,784,326) | $ 795 | 1,783,531 | |||||
Conversion of Series A preferred shares into common stock, shares | (3,180) | 795,000 | ||||||
Conversion of Series B preferred shares into common stock | $ (273,468) | $ 302 | 273,166 | |||||
Conversion of Series B preferred shares into common stock, shares | (392) | 301,923 | ||||||
Unrealized gain on investment in marketable securities | (923) | (923) | ||||||
Payout to stockholders for fractional shares | (3,256) | (3,256) | ||||||
Net loss | (16,868,711) | (16,868,711) | ||||||
Balance at Dec. 31, 2018 | $ 2,289,324 | $ 3,906,931 | $ 1,880,000 | $ 6,037 | 71,505,160 | (70,200,145) | (923) | 9,386,384 |
Balance, shares at Dec. 31, 2018 | 4,080 | 5,608 | 1,880 | 6,036,562 | ||||
Balance at Mar. 31, 2018 | $ 4,948,981 | $ 5,021 | 68,716,022 | (55,344,124) | 18,325,900 | |||
Balance, shares at Mar. 31, 2018 | 8,820 | 5,020,652 | ||||||
Conversion of preferred shares into common stock | $ (706,998) | $ 314 | 706,683 | |||||
Conversion of preferred shares into common stock, shares | (1,260) | 315,000 | ||||||
Stock-based compensation | 178,074 | 178,074 | ||||||
Payout to stockholders for fractional shares | (3,256) | (3,256) | ||||||
Net loss | (3,584,652) | (3,584,652) | ||||||
Balance at Jun. 30, 2018 | $ 4,241,983 | $ 5,335 | 69,597,523 | (58,928,776) | 14,916,065 | |||
Balance, shares at Jun. 30, 2018 | 7,560 | 5,334,639 | ||||||
Conversion of preferred shares into common stock | $ (897,774) | $ 400 | 897,374 | |||||
Conversion of preferred shares into common stock, shares | (1,600) | 400,000 | ||||||
Stock-based compensation | 171,073 | 171,073 | ||||||
Net loss | (4,646,263) | (4,646,262) | ||||||
Balance at Sep. 30, 2018 | $ 3,344,209 | $ 5,735 | 70,665,970 | (63,575,039) | 10,440,875 | |||
Balance, shares at Sep. 30, 2018 | 5,960 | 5,734,639 | ||||||
Balance at Dec. 31, 2018 | $ 2,289,324 | $ 3,906,931 | $ 1,880,000 | $ 6,037 | 71,505,160 | (70,200,145) | (923) | 9,386,384 |
Balance, shares at Dec. 31, 2018 | 4,080 | 5,608 | 1,880 | 6,036,562 | ||||
Stock-based compensation | 146,491 | 146,491 | ||||||
Conversion of Series B preferred shares into common stock | $ (1,816,732) | $ 2,005 | 1,814,727 | |||||
Conversion of Series B preferred shares into common stock, shares | (2,608) | 2,005,770 | ||||||
Conversion of Series C preferred shares into common stock | $ (1,640,000) | $ 1,000 | 1,639,000 | |||||
Conversion of Series C preferred shares into common stock, shares | (1,640) | 1,000,000 | ||||||
Unrealized gain on investment in marketable securities | (923) | 2,434 | 1,511 | |||||
Net loss | (4,705,766) | (4,705,766) | ||||||
Balance at Mar. 31, 2019 | $ 2,289,324 | $ 2,090,199 | $ 240,000 | $ 9,042 | 75,105,378 | (74,906,834) | 1,511 | 4,828,620 |
Balance, shares at Mar. 31, 2019 | 4,080 | 3,000 | 240 | 9,042,332 | ||||
Balance at Dec. 31, 2018 | $ 2,289,324 | $ 3,906,931 | $ 1,880,000 | $ 6,037 | 71,505,160 | (70,200,145) | (923) | 9,386,384 |
Balance, shares at Dec. 31, 2018 | 4,080 | 5,608 | 1,880 | 6,036,562 | ||||
Net loss | (9,688,127) | |||||||
Balance at Sep. 30, 2019 | $ 2,289,324 | $ 1,288,956 | $ 240,000 | $ 9,927 | 76,122,975 | (79,888,272) | 62,910 | |
Balance, shares at Sep. 30, 2019 | 4,080 | 1,850 | 240 | 9,926,956 | ||||
Balance at Mar. 31, 2019 | $ 2,289,324 | $ 2,090,199 | $ 240,000 | $ 9,042 | 75,105,378 | (74,906,834) | 1,511 | 4,828,620 |
Balance, shares at Mar. 31, 2019 | 4,080 | 3,000 | 240 | 9,042,332 | ||||
Stock-based compensation | 122,703 | 122,703 | ||||||
Unrealized gain on investment in marketable securities | $ 923 | $ (1,511) | $ (588) | |||||
Fractional shares adjustment | (2) | |||||||
Net loss | $ (2,815,152) | $ (2,815,152) | ||||||
Balance at Jun. 30, 2019 | $ 2,289,324 | $ 2,090,199 | $ 240,000 | $ 9,042 | 75,228,081 | (77,721,063) | 2,135,583 | |
Balance, shares at Jun. 30, 2019 | 4,080 | 3,000 | 240 | 9,042,330 | ||||
Stock-based compensation | 94,536 | 94,536 | ||||||
Conversion of Series B preferred shares into common stock | $ (801,243) | $ 885 | 800,358 | |||||
Conversion of Series B preferred shares into common stock, shares | (1,150) | 884,626 | ||||||
Net loss | (2,167,209) | (2,167,209) | ||||||
Balance at Sep. 30, 2019 | $ 2,289,324 | $ 1,288,956 | $ 240,000 | $ 9,927 | $ 76,122,975 | $ (79,888,272) | $ 62,910 | |
Balance, shares at Sep. 30, 2019 | 4,080 | 1,850 | 240 | 9,926,956 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||||
Net loss | $ (9,688,127) | $ (10,243,605) | $ (16,868,711) | $ (7,863,858) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 4,550 | 4,257 | 5,721 | 5,720 |
Amortization of right-of-use assets | 78,341 | |||
Stock-based compensation | 363,730 | 561,755 | 645,823 | 895,498 |
Settlement of Covance accounts payable | (893,823) | (893,823) | ||
Loss on disposal of equipment | 1,627 | |||
Amortization of discount on available-for-sale debt securities | (9,769) | (19,789) | ||
Unrealized gain on available-for-sale securities | 923 | (923) | ||
Changes in operating assets and liabilities: | ||||
Accrued interest receivable | 52,987 | (54,456) | ||
Prepaid expenses | (349,677) | (298,384) | ||
Prepaid expenses and other assets | (254,122) | (10,648) | ||
Other assets | (10,000) | (12,399) | ||
Accounts payable | (1,945,831) | 786,723 | 3,168,559 | 341,211 |
Accrued expenses | (1,266,621) | (45,692) | 953,591 | (768,483) |
Lease liabilities | (68,971) | |||
Other liabilities | (13,359) | (1,362) | (2,398) | 1,021 |
Net cash used in operating activities | (12,851,824) | (10,130,131) | (13,332,927) | (7,397,912) |
Cash flows from (used in) investing activities | ||||
Purchase of property and equipment | (1,589) | (2,008) | (2,008) | (7,678) |
Sale of investments in marketable debt securities | 6,998,549 | |||
Purchase of investment in marketable securities | (6,968,991) | |||
Net cash flows from investing activities | 6,996,960 | (2,008) | (6,970,999) | (7,678) |
Cash flows used in financing activities | ||||
Proceeds from the issuance of preferred shares upon closing of private placement | 6,000,000 | |||
Commission and issuance costs of private placement | (512,530) | |||
Proceeds from the issuance of shares upon closing of follow-on offering | 23,029,750 | |||
Commission and issuance costs of follow-on offering | (2,038,471) | |||
Proceeds from the issuance of shares from common stock purchase agreement | 2,000,000 | |||
Payout to stockholders for fractional shares | (3,256) | (3,256) | ||
Net cash used in financing activities | (3,256) | 5,484,214 | 22,991,279 | |
Net (decrease) increase in cash and cash equivalents | (5,854,864) | (10,135,395) | (14,819,712) | 15,585,689 |
Cash and cash equivalents at beginning of period | 7,812,259 | 22,631,971 | 22,631,971 | 7,046,282 |
Cash and cash equivalents at end of period | 1,957,395 | 12,496,576 | 7,812,259 | 22,631,971 |
Supplemental disclosure of cash flow activities: | ||||
Cash paid for taxes | 187,079 | 2,233 | 800 | |
Supplemental disclosure of non-cash financing activities: | ||||
Conversion of preferred stock to common stock | 4,257,975 | 1,784,327 | ||
Right-of-use assets obtained in exchange for lease liabilities | (198,319) | |||
Lease liabilities arising from obtaining right-of-use assets | $ 184,644 | |||
Deemed dividend on preferred stock | 2,537,844 | 3,111,020 | ||
Conversion of Series A and Series B preferred stock to common stock | 2,057,794 | |||
Conversion of Series A preferred stock to Series C preferred stock | $ 1,880,000 |
Organization and Principal Acti
Organization and Principal Activities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Organization and Principal Activities | NOTE 1 - ORGANIZATION AND PRINCIPAL ACTIVITIES Ritter Pharmaceuticals, Inc. (“Ritter” or the “Company”) is a Delaware corporation headquartered in Los Angeles, California. The Company was formed as a Nevada limited liability company in March 2004, under the name Ritter Natural Sciences, LLC, and converted into a Delaware corporation in September 2008. Since its inception, Ritter Pharmaceuticals, Inc. has been focused on the development of innovative therapeutic products that modulate the gut microbiome to treat gastrointestinal diseases. The Company’s only product candidate, RP-G28, is an orally administered, high purity galacto-oligosaccharide for the treatment of lactose intolerance (“LI”), a condition that affects millions of people worldwide. RP-G28 is designed to selectively stimulate the growth of lactose-metabolizing bacteria in the colon, thereby effectively adapting the gut microbiome to assist in digesting lactose (the sugar found in milk) that reaches the large intestine. The Company completed enrollment in its Phase 3 clinical trial of RP-G28 known as “Liberatus” in March 2019 and last patient visit in July 2019. In September 2019, the Company announced that its Phase 3 clinical trial of RP-G28 for LI failed to demonstrate statistical significance in its pre-specified primary and secondary endpoints. While the Company is continuing to analyze the results of the trial to better understand the data and clinical outcomes to assess a path forward for RP-G28, no further development efforts of RP-G28 are currently ongoing. In October 2019, the Company announced that it has engaged A.G.P./Alliance Global Partners (“A.G.P.”) as financial advisor to explore and evaluate potential strategic alternatives to enhance shareholder value, which may include an acquisition, merger, reverse merger, other business combination, sale of assets, licensing or other strategic transaction. The Company operates in one business segment focused on the development and commercialization of therapeutic products that modulate the gut microbiome to treat gastrointestinal diseases. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer. The Company does not currently operate any separate lines of business or separate business entities. | NOTE 1 — ORGANIZATION AND PRINCIPAL ACTIVITIES Ritter Pharmaceuticals, Inc. (“Ritter” or the “Company”) is a Delaware corporation headquartered in Los Angeles, California. The Company was formed as a Nevada limited liability company in March 2004, under the name Ritter Natural Sciences, LLC, and converted into a Delaware corporation in September 2008. Ritter Pharmaceuticals, Inc. develops novel therapeutic products that modulate the gut microbiome to treat digestive disorders and gastrointestinal diseases. The Company’s lead product candidate, RP-G28, is an orally administered, high purity galacto-oligosaccharide, currently in Phase 3 clinical development for the treatment of lactose intolerance (“LI”), a condition that affects millions of people worldwide. RP-G28 is designed to selectively stimulate the growth of lactose-metabolizing bacteria in the colon, thereby effectively adapting the gut microbiome to assist in digesting lactose (the sugar found in milk) that reaches the large intestine. RP-G28 has the potential to become the first drug approved by the Food and Drug Administration (“FDA”) for the treatment of LI. The Company is further exploring the functionality and discovering the therapeutic potential that gut microbiome changes may have on treating/preventing a variety of conditions including gastrointestinal diseases, cancer, metabolic, and liver diseases. The Company intends to expand its product pipeline and create added value in the future by evaluating RP-G28 in other indications, developing additional products based on its underlying, microbiome-modulating technology or in-licensing complementary products to treat these, or other, conditions. The Company currently operates in one business segment focusing on the development and commercialization of RP-G28. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer. The Company does not currently operate any separate lines of business or separate business entities. |
Basis of Presentation
Basis of Presentation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Basis of Presentation | NOTE 2 - BASIS OF PRESENTATION The accompanying interim period unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, all adjustments consisting of normal recurring adjustments considered necessary for a fair presentation of the financial position and results of operations have been included and management believes the disclosures that are made are adequate to make the information presented not misleading. The condensed balance sheets at December 31, 2018 have been derived from the audited financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2018 filed with the SEC on April 1, 2019 (the “2018 Annual Report”), but does not include all of the information and footnotes required by GAAP for complete financial statements. The results for the three and nine months ended September 30, 2019 are not necessarily indicative of the results expected for the full fiscal year or any other period. The accompanying interim period unaudited condensed financial statements and related financial information included in this Quarterly Report on Form 10-Q (“Quarterly Report”) should be read in conjunction with the audited financial statements and notes thereto included in the Company’s 2018 Annual Report. All common share amounts and per share amounts have been adjusted to reflect a 1-for-10 reverse stock split of the Company’s common stock effected on March 23, 2018. Going Concern and Liquidity The accompanying interim period unaudited condensed financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any product revenue and has not achieved profitable operations to date. For the nine months ended September 30, 2019, the Company had a net loss of approximately $9.7 million and had net cash used in operating activities of approximately $12.9 million. At September 30, 2019, the Company had net working capital of approximately $0.1 million, an accumulated deficit of approximately $79.9 million, and cash and cash equivalents of approximately $2.0 million. In September 2019, the Company announced that its Phase 3 clinical trial of RP-G28 for LI failed to demonstrate statistical significance in its pre-specified primary and secondary endpoints. While the Company is continuing to analyze the results of the trial to better understand the data and clinical outcomes to assess a path forward for RP-G28, no further development efforts of RP-G28 are currently ongoing. The Company is currently exploring and evaluating potential strategic alternatives to enhance shareholder value, which may include an acquisition, merger, reverse merger, other business combination, sale of assets, licensing or other strategic transaction. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. The Company’s operating expenses have decreased significantly since the completion of its Phase 3 clinical trial of RP-G28 and the Company has made additional operating expense reductions following the announcement of the trial results, including reductions to executive and board compensation. The Company will continue to make further reductions as necessary. However, any future development activities, clinical and pre-clinical testing, and commercialization of the Company’s products will require significant financing. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Since inception, the operations of the Company have been funded through the sale of common shares, preferred shares, warrants and convertible debt. Our announcement related to the results of our Phase 3 clinical trial of RP-G28 has significantly depressed our stock price and may severely impair our ability to raise additional funds. Management cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company is able to raise additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that could impact the Company’s ability to conduct business. If the Company is not able to raise additional capital on acceptable terms, the Company may have to (i) discontinue the development and/or commercialization of RP-G28; (ii) seek collaborators for the development of RP-G28 on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to RP-G28. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. | NOTE 2 — BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. Going Concern and Liquidity The accompanying financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has not generated any product revenue and has not achieved profitable operations. The Company had net losses of approximately $16.9 million and $7.9 million for the years ended December 31, 2018 and 2017, respectively, and had net cash used in operating activities of approximately $13.3 million and $7.4 million, for the years ended December 31, 2018 and 2017, respectively. At December 31, 2018, the Company had working capital of approximately $9.3 million, an accumulated deficit of approximately $70.2 million, cash and cash equivalents of approximately $7.8 million and investment in short-term marketable debt securities of $7.0 million. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and pre-clinical testing, and commercialization of the Company’s products will require significant financing. These matters, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Since inception, the operations of the Company have been funded through the sale of common shares, preferred shares, warrants and convertible debt. Management cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company raises additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that could impact the Company’s ability to conduct business. If the Company is not able to raise additional capital when required or on acceptable terms, the Company may have to (i) significantly delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that the Company would otherwise seek to develop or commercialize. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES There have been no material changes in the Company’s significant accounting policies as of and for the nine months ended September 30, 2019, as compared to the significant accounting policies described in the Company’s 2018 Annual Report, except for the recent adoption of the new lease accounting pronouncement as described below. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents Cash consists of amounts held in financial institutions that are immediately available to the Company. The funds are maintained at stable financial institutions, generally at amounts in excess of federally insured limits. Cash equivalents include money market funds and held-to-maturity securities with a maturity date of 90 days or less. As of September 30, 2019, cash and cash equivalents consisted of bank deposits, cash and investments in money market funds. The Company has not realized any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions at which those deposits are held. Investments in Marketable Securities Investments in marketable securities are held in a custodial account at a financial institution and managed by the Company’s capital advisors based on the Company’s investment guidelines. All of the Company’s investments in marketable securities are classified as available-for-sale debt securities and are carried at fair value. Interest on these securities, as well as the amortization of discounts and premiums, is included in interest income in the statements of operations. The unrealized gains and losses on these securities are excluded from earnings and reported in other comprehensive income until realized, except when the declines in value are considered to be other than temporary. Other than temporary impairment losses related to credit losses are considered to be realized losses. When available-for-sale debt securities are sold, the cost of the securities is specifically identified and is used to determine the realized gain or loss. Securities classified as current assets have maturity dates of less than or equal to one year from the balance sheet date. Operating Leases The Company determines if a contract contains a lease at inception. The Company’s material operating lease relates to a single office space. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. As the Company has no outstanding debt or committed credit facilities, secured or otherwise, the Company estimates this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. The Company’s leases typically contain rent escalations over the lease term. The Company recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use (“ROU”) asset related to the lease. These are amortized through the ROU asset as reductions of expense over the lease term. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The Company has no lease agreements with lease and non-lease components. Related to the adoption of Topic 842, the Company’s policy elections were as follows: Separation of lease and non-lease components While the Company does not currently have any lease agreement with lease and non-lease components, the Company elected this expedient to account for lease and non-lease components as separate components. Short-term policy The Company has elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, are not recorded on the balance sheet. Other information related to the Company’s leases is provided below. Nine Months Ended Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease 86,234 Operating lease asset obtained in exchange for lease obligation: Operating lease $ 198,319 Remaining lease term Operating lease 1.1 years Discount rate Operating lease 6.00 % Future payments under non-cancelable extended operating leases having initial or remaining terms of one year or more are as follows for the remaining fiscal year and thereafter: Future minimum lease payments year ending December 31, 2019 (remaining) $ 30,675 2020 103,254 Total future minimum lease payments, undiscounted 133,929 Less imputed interest (4,581 ) Present value of lease liabilities $ 129,348 Operating lease liabilities reported as of September 30, 2019: Operating lease liabilities-current $ 119,074 Operating lease liabilities-non-current 10,274 Total $ 129,348 Equity-linked Financial Instruments The Company classifies outstanding common stock warrants with down-round features as equity, if the instrument would otherwise be classified in equity absent the down-round feature. The Company will recognize the value of a down-round feature when it is triggered and the warrant’s strike price has been adjusted downward, as a deemed dividend and reduction of income available to common stockholders in computing basic earnings per share. Net Loss Per Share The Company determines basic loss per share and diluted loss per share in accordance with the provisions of Accounting Standards Codification (“ASC”) 260, “Earnings per Share.” Basic net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period. Diluted net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. The potentially dilutive stock options issued under the 2015 Plan (described in Note 8), Series A, B and C Convertible Preferred Stock (described in Note 6) and warrants to purchase the Company’s common stock (described in Notes 6 and 7) were not considered in the computation of diluted net loss per share because they would be anti-dilutive. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company is required to record all components of comprehensive income (loss) in the financial statements in the period in which they are recognized. Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on investments are reported, net of their related tax effect, to arrive at comprehensive income (loss). For the nine months ended September 30, 2019, comprehensive income consisted of unrealized gains on investments in available-for-sale debt securities. There were no unrealized gains (losses) on investments in available-for-sale debt securities and held-to-maturity debt securities for the nine months ended September 30, 2018. Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement” In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Other accounting standard updates effective after September 30, 2019 are not expected to have a material impact on the Company’s financial statements. Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 842) Targeted Improvements The Company elected the available package of practical expedients, but not the hindsight practical expedient, and implemented internal controls to enable the preparation of financial information on adoption as of January 1, 2019. The standard had a material impact on the Company’s condensed balance sheets, but did not have an impact on its statements of operations and comprehensive loss. The most significant impact was the recognition of a ROU asset and lease liability for the Company’s sole operating lease—the Company had no finance leases. Adoption of the standard did not require the Company to restate previously reported results as it elected to apply a modified retrospective approach at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation Equity—Equity-Based Payments to Non-Employees In August 2018, the SEC adopted final rules under SEC Release No. 33-10532, Disclosure Update and Simplification | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others; the valuation allowance of deferred tax assets resulting from net operating losses and the valuation of options on the Company’s common stock. Cash and Cash Equivalents Cash consists of amounts held in financial institutions and consists of immediately available fund balances. The funds are maintained at stable financial institutions, generally at amounts in excess of federally insured limits. Cash equivalents include money market funds and held-to-maturity securities with a maturity date of 90 days or less. As of December 31, 2018, cash and cash equivalents consisted of bank deposits, cash and investments in money market funds and held-to-maturity securities. The Company has not realized any losses. Investment in Marketable Securities Investment in Marketable Securities is held in a custodial account at a financial institution and managed by the Company’s capital advisors based on the Company’s investment guidelines. All of the Company’s investments in marketable securities are classified as available-for-sale debt securities and are carried at fair value. Interest on these securities, as well as the amortization of discounts and premiums, is included in interest income in the Statements of Operations. The unrealized gains and losses on these securities are excluded from earnings and reported in other comprehensive income until realized, except when it considers declines in value to be other than temporary. Other than temporary impairment losses related to credit losses are considered to be realized losses. When available-for-sale debt securities are sold, the cost of the securities is specifically identified and is used to determine the realized gain or loss. Securities classified as current assets have maturity dates of less than or equal to one year from the balance sheet date. Property and Equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method (see Note 4). Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income. Maintenance and repairs are charged to expense as incurred while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Impairment of Long-Lived Assets The Company periodically assesses the impairment of long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360, Property Plant and Equipment. Clinical Trial and Pre-Clinical Study Accruals The Company makes estimates of accrued expenses as of each balance sheet date in its financial statements based on the facts and circumstances known to it at that time. Accrued expenses for pre-clinical studies and clinical trials are based on estimates of costs incurred and fees that may be associated with services provided by contract research organizations, clinical trial investigational sites, and other related vendors. Payments under certain contracts with such parties depend on factors such as successful enrollment of patients, site initiation and the completion of milestones. In accruing service fees, management estimates the time period over which services will be performed and the level of effort to be expended in each period. If possible, the Company obtains information regarding unbilled services directly from these service providers. However, the Company may be required to estimate these services based on other information available to it. If the Company underestimates or overestimates the activity or fees associated with a study or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. Historically, estimated accrued liabilities have approximated actual expense incurred. Subsequent changes in estimates may result in a material change in the Company’s accruals. Research and Development The Company expenses the cost of research and development as incurred. Research and development expenses comprise costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services, license fees, and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC Topic 730, Research and Development Patent Costs The Company has no historical data to support a probable future economic benefit for the arising patent applications, filing and prosecution costs. Therefore, patent costs are expensed as incurred. Should the Company experience a legal cost to defend a patent in the future, that cost would be capitalized only when it is part of the cost of retaining and obtaining the future economic benefit of the patent. Costs related to an unsuccessful outcome would be expensed. Stock-based Compensation Stock-based compensation cost for stock awards issued to employees, members of the Company’s board of directors and non-employees, is measured at the grant date based on the fair value of the award and is recognized as expense over the required service period, which is generally equal to the vesting period. Stock-based compensation is recognized only for those awards that are ultimately expected to vest. Common stock, stock options or warrants issued to non-employees, including consultants and members of the Company’s Scientific Advisory Board as consideration for goods or services received by the Company, are accounted for based on the fair value of the equity instruments issued unless the fair value consideration received can be more reliably measured. The fair value of stock options is determined using the Black-Scholes option-pricing model. The fair value of any options issued to non-employees is recorded as expense over the vesting period. See Note 8 for further information. Fair Value Measurements The fair value of the Company’s financial instruments reflects the amounts that it estimates it would receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date; Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active; Level 3 - Inputs that are unobservable. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the year ended December 31, 2018. A summary of the assets and liabilities carried at fair value in accordance with the hierarchy defined above is as follows: Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2018 Assets: Cash and money market fund $ 2,353,825 $ ― $ ― $ 2,353,825 Corporate debt securities ― 6,908,710 ― 6,908,710 Commercial paper ― 2,979,213 ― 2,979,213 Total assets $ 2,353,825 $ 9,887,923 $ ― $ 12,241,748 The Company uses a market approach for determining the fair value of all its Level 1 and Level 2 money market funds and marketable securities. To value its money market funds, the Company values the funds at $1 stable net asset value, which is the market pricing convention for identical assets that the Company has the ability to access. The investments are classified as available-for-sale debt securities. At December 31, 2018, the balance in the Company’s accumulated other comprehensive loss was comprised primarily of activity related to the Company’s available-for-sale debt securities and some activity related to held-to-maturity debt securities. There were no realized gains or losses recognized on the sale or maturity of available-for-sale debt securities for the years ended December 31, 2018 and as a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss for the year. The Company has a limited number of available-for-sale debt securities in insignificant loss positions as of December 31, 2018, which the Company does not intend to sell and has concluded it will not be required to sell before recovery of the amortized cost for the investment at maturity. The following table summarizes the available-for-sale debt securities at December 31, 2018: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities $ 4,010,003 $ 27 $ (463 ) $ 4,009,567 Commercial paper 2,979,583 72 (442 ) 2,979,213 Total available-for-sale debt securities $ 6,989,586 $ 99 $ (905 ) $ 6,988,780 Convertible Preferred Stock The Company follows authoritative accounting guidance to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of the Company’s financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company generally uses either the Black-Scholes option-pricing model or a Monte Carlo simulation, as applicable, to value the derivative instruments at inception and subsequent valuation dates when needed. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Accounting for Income Taxes Deferred tax assets and liabilities are recognized for the expected future consequences of events that have been reflected in the financial statements. Deferred tax assets and liabilities are determined based on the differences between the book and tax basis of assets and liabilities and operating loss carryforwards, using tax rates expected to be in effect for the years in which the differences are expected to reverse. Such differences arise primarily from stock-based compensation and net operating loss carryforwards. The Company records a valuation allowance to reduce deferred income tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. Prior to September 15, 2008, the Company was a limited liability company and the Company’s tax losses and credits generally flowed directly to the members. Net Loss Per Share The Company determines basic net loss per share and diluted net loss per share in accordance with the provisions of ASC 260, “Earnings per Share.” Basic net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period. Diluted net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. The potentially dilutive stock options issued under the 2015 Stock Plan (described in Note 8), Series A, Series B and Series C Convertible Preferred Stock (described in Note 6) and warrants on the Company’s common stock (described in Notes 6 and 7) were not considered in the computation of diluted net loss per share because they would be anti-dilutive. Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company is required to record all components of comprehensive loss in the financial statements in the period in which they are recognized. Net income (loss) and other comprehensive loss, including foreign currency translation adjustments and unrealized gains and losses on investments are reported, net of their related tax effect, to arrive at a comprehensive loss. For the years ended December 31, 2018 and 2017, comprehensive loss comprised of unrealized losses on investments in available-for-sale debt securities and held-to-maturity debt securities. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) Leases (Topic 842) Targeted Improvements The Company will elect the available package of practical expedients, but not the hindsight practical expedient, and implemented internal controls to enable the preparation of financial information on adoption as of January 1, 2019. The standard will have a material impact on the Company’s balance sheets but will not have an impact on its statements of operations. The most significant impact will be the recognition of a ROU asset and lease liability for the Company’s sole operating lease—the Company has no finance leases. Adoption of the standard will not require the Company to restate previously reported results as it will elect to apply a modified retrospective approach at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), an amendment which modifies the measurement recognition of credit losses for most financial assets and certain other instruments. The amendment updates the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The amendment also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted for annual periods after December 15, 2018. The Company does not expect the adoption of this guidance will have a material impact on its financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the passing of H.R. 1/Public Law No. 115-97, commonly known as the Tax Cuts and Jobs Act (the “Act”) and requires certain disclosures about stranded tax effects. The amendments in ASU No. 2018-02 are effective beginning in 2019, with early adoption permitted, and may be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. Federal corporate tax rate in the Act is recognized. The Company does not expect the adoption of this guidance will have an impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation Equity—Equity-Based Payments to Non-Employees Revenue from Contracts with Customers In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”, an amendment to the accounting guidance on fair value measurements. The guidance modifies the disclosure requirements on fair value measurements, including the removal of disclosures of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The guidance also adds certain disclosure requirements related to Level 3 fair value measurements. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company does not expect the adoption of this guidance will have a material impact on its financial statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheets must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. However, as provided for by the SEC in Q&A 105.09, the Company will defer presenting its analysis of stockholders’ equity in its quarterly report in Form 10-Q until its quarter ended March 31, 2019. The Company does not expect the adoption of SEC Release No. 33-10532 to have a material impact on its financial position, results of operations or cash flows. Recently Adopted Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in ASU 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company adopted ASU 2016-01 in the first quarter of 2018. The adoption of this new standard did not have a material impact on the Company’s financial statements. On August 26, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In January 2017, the FASB issued ASU No. 2017-04 “ Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, “ Stock Compensation – Scope of Modification Accounting” In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 Note 7. Income Taxes |
Property and Equipment
Property and Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Property and Equipment | NOTE 4 - PROPERTY AND EQUIPMENT Property and equipment consists of the following: Estimated Life September 30, 2019 December 31, 2018 Computers and equipment 5 years $ 17,178 $ 15,589 Furniture and fixtures 7 years 19,158 19,158 Total property and equipment 36,336 34,747 Accumulated depreciation (19,137 ) (14,587 ) Total property and equipment, net $ 17,199 $ 20,160 Depreciation expense of approximately $1,600 was recognized for the three months ended September 30, 2019 and approximately $1,500 was recognized for the three months ended September 30, 2018. Depreciation expense of approximately $4,600 was recognized for the nine months ended September 30, 2019 and approximately $4,300 was recognized for 2018. Depreciation expense is classified in general and administrative expense in the accompanying unaudited condensed statements of operations. | NOTE 4 — PROPERTY AND EQUIPMENT Property and equipment consists of the following: Estimated Life December 31, 2018 December 31, 2017 Computer equipment 5 years $ 15,589 $ 13,582 Furniture and fixtures 7 years 19,158 19,158 Total property and equipment 34,747 32,740 Accumulated depreciation (14,587 ) (8,867 ) Property and equipment, net $ 20,160 $ 23,873 Depreciation expense of approximately $5,700 was recognized for each of the years ended December 31, 2018 and 2017, and is classified in general and administrative expense in the accompanying Statements of Operations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | NOTE 5 - COMMITMENTS AND CONTINGENCIES Master Services Agreement In May 2018, the Company entered into an Amended and Restated Master Services Agreement (“Service Agreement”) with a clinical research organization (“CRO”), pursuant to which the CRO will perform certain services related to the management and execution of certain clinical trials involving RP-G28. The Services Agreement supersedes the Master Service Agreement, dated August 30, 2016, by and between the Company and the CRO. The precise services to be performed by the CRO under the Services Agreement will be mutually agreed upon by the parties in writing and set forth in one or more task orders. The Company is not obligated to purchase any minimum or specific volume or dollar amount of services under the Services Agreement. The term of the Services Agreement is four years from the effective date of the Service Agreement unless earlier terminated. The Company may terminate the Services Agreement or any task without cause immediately upon giving the CRO notice of such termination. The CRO may terminate a task order if the Company has materially defaulted on its obligations under the Services Agreement or any task order and has not cured such material default with advance notice to the Company, as described in the Services Agreement. Lease Agreement On July 9, 2015, the Company entered into a lease with a California limited partnership, pursuant to which the Company leased approximately 2,780 square feet of office space in Los Angeles, California for its headquarters. The lease provides for a term of sixty-one (61) months, commencing on October 1, 2015. The Company paid no rent for the first month of the term and paid base rent of $9,174 per month for months 2 through 13 of the term, with increasing base rent for each twelve-month period thereafter under the term of the lease to a maximum of $10,325 per month for months 50 through 61. The base rent payments do not include the Company’s proportionate share of any operating expenses, including real estate taxes. The Company has the option to extend the term of the lease for one five-year term, provided that the rent would be subject to market adjustment at the beginning of the renewal term. Rent expense, which is recognized on a straight-line basis over the lease term, was approximately $29,000 for each of the three months ended September 30, 2019 and 2018, and approximately $88,000 for each of the nine months ended September 30, 2019 and 2018 and is recorded in general and administrative expenses in the accompanying unaudited condensed statements of operations. Legal From time to time, the Company may be party to legal claims and proceedings that arise in the ordinary course of business, which may relate to our operations or assets. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters. Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. We do not believe that any individual legal claim or proceeding that is currently pending is material to the Company or that these claims and proceedings in the aggregate are material to the Company. | NOTE 5 — COMMITMENTS AND CONTINGENCIES Master Services Agreement In May 2018, the Company entered into an Amended and Restated Master Services Agreement (“Service Agreement”) with a clinical research organization (“CRO”), pursuant to which the CRO will perform certain services related to the management and execution of certain clinical trials involving the Company’s lead product candidate, RP-G28. The Services Agreement supersedes the Master Service Agreement, dated August 30, 2016, by and between the Company and the CRO. The precise services to be performed by the CRO under the Services Agreement will be mutually agreed upon by the parties in writing and set forth in one or more task orders. The Company is not obligated to purchase any minimum or specific volume or dollar amount of services under the Services Agreement. The term of the Services Agreement is four years from the effective date of the Service Agreement unless earlier terminated. The Company may terminate the Services Agreement or any task without cause immediately upon giving the CRO notice of such termination. The CRO may terminate a task order if the Company has materially defaulted on its obligations under the Services Agreement or any task order and has not cured such material default with advance notice to the Company, as described in the Services Agreement. Lease Agreement In July 2015, the Company entered into a lease with Century Park, a California limited partnership, pursuant to which we are leasing approximately 2,780 square feet of office space in Los Angeles, California for our headquarters. The lease provides for a term of sixty-one (61) months, commencing on October 1, 2015. We paid no rent for the first month of the term and will pay base rent of $9,174 per month for months 2 through 13 of the term, with increasing base rent for each twelve-month period thereafter under the term of the lease to a maximum of $10,325 per month for months 50 through 61. The base rent payments do not include our proportionate share of any operating expenses, including real estate taxes. We have the option to extend the term of the lease for one five-year term, provided that the rent would be subject to market adjustment at the beginning of the renewal term. We will recognize rent expense on a straight-line basis over the lease term. Rent expense, recognized on a straight-line basis, was approximately $118,000 and $115,000 for the years ended December 31, 2018 and 2017, respectively, and is recorded in general and administrative expenses in the accompanying statements of operations. The following table summarizes our lease obligations at December 31, 2018: LEASE COMMITMENTS Years ended December 31, Operating Lease 2019 $ 120,898 2020 103,254 Total minimum lease payments $ 224,152 Legal From time to time, we are party to legal claims and proceedings that arise in the ordinary course of business, which may relate to our operations or assets. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters. Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. We do not believe that any individual legal claim or proceeding that is currently pending is material to the Company or that these claims and proceedings in the aggregate are material to the Company. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Stockholders' Equity | NOTE 6 - STOCKHOLDERS’ EQUITY Authorized Shares The Company’s Amended and Restated Certificate of Incorporation authorizes the issuance of up to 225,000,000 shares of common stock, $0.001 par value per share, and 15,000,000 shares of preferred stock, $0.001 par value per share, of which 9,500, 6,000 and 1,880 shares are designated for Series A, B and C, respectively. All common share amounts and per share amounts were retroactively restated to reflect a 1-for-10 reverse stock split that was effective March 23, 2018. As of September 30, 2019, the Company had 9,926,956 shares of common stock, 4,080 shares of Series A convertible preferred stock, 1,850 shares of Series B convertible preferred stock and 240 shares of Series C convertible preferred stock issued and outstanding. Each share of the Company’s common stock is entitled to one vote, and all shares rank equally as to voting and other matters. Each share of Series A preferred stock is convertible by the holder at $4.00 per share, subject to adjustment for stock splits, stock dividends, subsequent rights offerings, pro rata distributions, and fundamental transactions. Each share of Series B preferred stock is convertible by the holder at $1.30 per share, subject to customary adjustment in the event of future stock dividends and stock splits. Each share of Series C preferred stock is convertible by the holder at $1.64 per share, subject to customary adjustment in the event of future stock dividends and stock splits. Holders are entitled to receive, and the Company shall pay, dividends on outstanding shares of Series A, Series B and Series C preferred stock, on an as-if-converted-to-common-stock basis, equal to and in the same form as dividends actually paid on outstanding common shares when, as and if such dividends are paid on outstanding common shares. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Series A, Series B and Series C preferred stock shall be entitled to receive out of the assets of the Company, whether capital or surplus, the same amount that a holder of common stock would receive if the Series A, Series B and Series C preferred stock were fully converted to common stock, which amounts shall be paid pari passu with all common stockholders. Holders of Series A, Series B and Series C preferred stock have no voting rights. However, as long as any shares of Series A, Series B and Series C preferred stock are outstanding, the Company may not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series A, Series B and Series C preferred stock, (a) alter or change adversely the powers, preferences or rights given to the Series A, Series B and Series C preferred stock or alter or amend the applicable Certificate of Designation, (b) amend the Company’s certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A, Series B and Series C preferred stock, (c) increase the number of authorized shares of Series A, Series B and Series C preferred stock, or (d) enter into any agreement with respect to any of the foregoing. Aspire Capital Common Stock Purchase Agreement On May 4, 2017, the Company entered into a common stock purchase agreement with Aspire Capital Fund, LLC (“Aspire Capital”), which the Company and Aspire amended and restated on March 29, 2019 and July 23, 2019 (as amended and restated, the “Aspire Purchase Agreement”). The Aspire Purchase Agreement was amended and restated to adjust certain provisions of the agreement to improve the Company’s access to funding under the agreement. The Aspire Purchase Agreement provides access to the Company of up to an aggregate of $6.5 million in proceeds through the sale of shares of its common stock through March 31, 2021. Under the Aspire Purchase Agreement, as amended, on any trading day the Company selects, it has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 100,000 shares of its common stock per trading day for up to an aggregate of $6,500,000 of its common stock, at a per share price (the “Purchase Price”) equal to the lesser of: (i) the lowest sale price of the Company’s common stock on the sale date, or (ii) the arithmetic average of the three lowest closing sale prices for the Company’s common stock during the ten (10) consecutive trading days ending on the trading day immediately preceding the sale date. The aggregate purchase price payable by Aspire Capital on any one purchase date cannot exceed $500,000. In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount of at least 100,000 shares and its stock price is not less than $0.25 per share, the Company can also, in its sole discretion, present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of its common stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), as determined by the Company. Under the terms of the Aspire Purchase Agreement, the number of shares that can be sold pursuant to Aspire Capital is limited to 1,807,562 (the “Exchange Cap”), which represented 19.99% of the Company’s outstanding shares of common stock as of March 29, 2019, the date the agreement was first amended and restated, unless stockholder approval or an exception pursuant to the rules of the Nasdaq Capital Market was obtained to issue more than 19.99%. This limitation would not apply if, at any time the Exchange Cap was reached and at all times thereafter, the average price paid for all shares issued under the Aspire Purchase Agreement was equal to or greater than $0.86 (the “Minimum Price”), which was the closing price of the Company’s common stock immediately preceding the signing of the agreement. As of September 30, 2019, no shares of common stock have been sold or issued to Aspire Capital under the Aspire Purchase Agreement. | NOTE 6— STOCKHOLDERS’ EQUITY Authorized Shares In September 2017, the Company amended its Amended and Restated Certificate of Incorporation to authorize the issuance of up to 225,000,000 shares of common stock, $0.001 par value per share, and 15,000,000 shares of preferred stock, $0.001 par value per share. All common share amounts and per share amounts were retroactively restated to reflect a 1-for-10 reverse stock split that was effective March 23, 2018. As of December 31, 2018, the Company had 6,036,562 shares of common stock, 4,080 shares of Series A convertible preferred stock, 5,608 shares of Series B convertible preferred stock and 1,880 shares of Series C convertible preferred stock issued and outstanding. Each share of the Company’s common stock is entitled to one vote, and all shares rank equally as to voting and other matters. Each share of Series A preferred stock is convertible by the holder at $4.00 per share; subject to adjustment for stock splits, stock dividends, subsequent rights offerings, pro rata distributions, and fundamental transactions. Each share of Series B preferred stock is convertible by the holder at $1.30 per share; subject to customary adjustment in the event of future stock dividends and stock splits. Each share of Series C preferred stock is convertible by the holder at $1.64 per share; subject to customary adjustment in the event of future stock dividends and stock splits. Holders are entitled to receive, and the Company shall pay, dividends on outstanding shares of Series A preferred stock, on an as-if-converted-to-common-stock basis, equal to and in the same form as dividends actually paid on outstanding common shares when, as and if such dividends are paid on outstanding common shares. Upon any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the holders of Series A, Series B and Series C preferred stock shall be entitled to receive out of the assets, whether capital or surplus, of the Company the same amount that a holder of common stock would receive if the Series A, Series B and Series C preferred stock were fully converted to common stock, which amounts shall be paid pari passu with all common stockholders. Holders of Series A, Series B and Series C preferred stock have no voting rights. However, as long as any shares of Series A, Series B and Series C preferred stock are outstanding, the Company shall not, without the affirmative vote of the holders of a majority of the then outstanding shares of Series A, Series B and Series C preferred stock, (a) alter or change adversely the powers, preferences or rights given to the Series A, Series B and Series C preferred stock or alter or amend the applicable Certificate of Designation, (b) amend the Company’s certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A, Series B and Series C preferred stock, (c) increase the number of authorized shares of Series A, Series B and Series C preferred stock, or (d) enter into any agreement with respect to any of the foregoing. Aspire Capital Common Stock Purchase Agreement On May 4, 2017, the Company entered into a common stock purchase agreement with Aspire Capital Fund, LLC (“Aspire Capital”), which the Company and Aspire amended and restated on March 29, 2019 (as amended and restated, the “Aspire Purchase Agreement”). The Aspire Purchase Agreement was amended and restated to adjust certain provisions to improve the Company’s access to funding under the agreement. The Company was not required to pay a commitment fee to Aspire Capital to affect the amendment to the Aspire Purchase Agreement. The Company has not made any sales to Aspire under the Aspire Purchase Agreement as of March 29, 2019. The Aspire Purchase Agreement provides access to the Company of up to an aggregate of $6.5 million in proceeds through the sale of shares of its common stock through March 31, 2021. Under the Aspire Purchase Agreement, as amended, on any trading day the Company selects, it has the right, in its sole discretion, to present Aspire Capital with a purchase notice (each, a “Purchase Notice”), directing Aspire Capital (as principal) to purchase up to 100,000 shares of its common stock per trading day (which could be increased by as much as an additional 2,000,000 shares per trading day by mutual agreement), up to an aggregate of $6,500,000 of its common stock, at a per share price (the “Purchase Price”) equal to the lesser of: (i) the lowest sale price of the Company’s common stock on the sale date, or (ii) the arithmetic average of the three lowest closing sale prices for the Company’s common stock during the ten (10) consecutive trading days ending on the trading day immediately preceding the sale date. The aggregate purchase price payable by Aspire Capital on any one purchase date cannot exceed $500,000, unless otherwise mutually agreed. In addition, on any date on which the Company submits a Purchase Notice to Aspire Capital in an amount of at least 100,000 shares and its stock price is not less than $0.25 per share, the Company can also, in its sole discretion, present Aspire Capital with a volume-weighted average price purchase notice (each, a “VWAP Purchase Notice”) directing Aspire Capital to purchase an amount of its common stock equal to up to 30% of the aggregate shares of the Company’s common stock traded on its principal market on the next trading day (the “VWAP Purchase Date”), as determined by the Company. Under the terms of the Aspire Purchase Agreement, the number of shares that can be sold pursuant to Aspire Capital is limited to 1,807,562 (the “Exchange Cap”), which represented 19.99% of the Company’s outstanding shares of common stock as of March 29, 2019, the date the agreement was amended and restated, unless stockholder approval or an exception pursuant to the rules of the NASDAQ Capital Market was obtained to issue more than 19.99%. This limitation would not apply if, at any time the Exchange Cap was reached and at all times thereafter, the average price paid for all shares issued under the Aspire Purchase Agreement was equal to or greater than $0.86 (the “Minimum Price”), which was the closing price of eth Company’s common stock immediately preceding the signing of the agreement. As of March 29, 2019, no shares of common stock have been sold or issued to Aspire Capital under the Aspire Purchase Agreement since May 5, 2017. October 2017 Public Offering On October 3, 2017, the Company closed a public offering, selling an aggregate of (i) 3,455,000 Class A Units consisting of 3,455,000 shares of the Company’s common stock and warrants to purchase 3,455,000 shares of the Company’s common stock at a public offering price of $4.00 per unit, and (ii) 9,180 Class B Units consisting of 9,180 shares of Series A convertible preferred stock, with a stated value of $1,000 per unit, and convertible into an aggregate of 2,295,000 shares of the Company’s common stock, and warrants to purchase an aggregate of 2,295,000 shares of the Company’s common stock. The securities were offered by the Company pursuant to a registration statement filed with the SEC that was declared effective on September 28, 2017. The final prospectus relating to the offering was filed with the SEC on October 2, 2017. The warrants initially had an exercise price of $4.40, were exercisable upon issuance and expire five years from the date of issuance. The warrant agreements provide for an adjustment to the number of common shares issuable under the warrants and/or adjustment to the exercise price, including but not limited to, if: (a) the Company issues shares of common stock as a dividend or distribution to holders of its common stock; (b) the Company subdivides or combines its common stock; or (c) the Company issues new securities at a price less than the exercise price of the warrants. In November 2018, the Company closed a private placement (“PIPE financing”) at a price per share below the exercise price of the warrants resulting in an adjustment of their exercise price from $4.40 to $1.30. In accordance with ASC 2017-11, the Company treated the value of the effect of this down round as a deemed dividend of $1.6 million recognized on the closing date and recorded as a reduction of income available to common stockholders in computing basic and diluted loss per share. The Company granted the underwriters a 45-day option to purchase an additional 862,500 shares of the Company’s common stock and/or warrants to purchase an additional 862,500 shares of the Company’s common stock. At the closing of the offering, the underwriters exercised their over-allotment option for warrants to purchase 297,500 shares of the Company’s common stock. Aggregate gross proceeds to the Company from the public offering were approximately $23.0 million. The Company paid underwriting discounts and commissions of approximately $1.6 million in connection with the offering, and approximately $0.4 million of other expenses in connection with the offering. The Company early adopted the provisions of ASU 2017-11 in recognizing the warrants. As a result, the exercise price reset provisions were excluded from the assessment of whether the warrants are considered indexed to the Company’s own stock. The warrants otherwise meet the requirements for equity classification, and as such were initially classified in Stockholders’ Equity. The Company will recognize the value of the exercise price reset provision if and when it becomes triggered, by recognizing the value of the effect of the exercise price reset as a deemed dividend and a reduction of income available to common stockholders in computing basic earnings per share. The proceeds received in the October 2017 Public Offering were allocated to each instrument on a relative fair value basis. Total proceeds of $23.0 million were allocated as follows: $10.1 million to warrants issued, $7.8 million to Common Stock, and $5.1 million to Series A convertible preferred stock. The allocation resulted in an effective conversion price for the Series A preferred stock that was below the quoted market price of the Company’s common stock on the closing date. As such, the Company recognized a beneficial conversion feature equal to the intrinsic value of the conversion feature on the closing date, resulting in a deemed dividend for the Series A convertible preferred stock of approximately $3.1 million recognized on the closing date. In the nine-month period ended September 30, 2018, holders of 3,180 shares of Series A convertible preferred stock converted their shares of preferred stock into an aggregate of 795,000 shares of common stock at the stated conversion price of $4.00 per share November 2018 Private Placement Financing On November 5, 2018, the Company closed a PIPE financing with certain institutional investors, a key vendor and a member of its board of directors. Net proceeds from the PIPE financing were approximately $5.5 million, after deducting placement agent fees and other offering expenses. The securities sold by the Company consisted of 6,000 shares of a newly designated class of Series B convertible preferred stock of the Company, with a stated value of $1,000 per share and an initial conversion price per share of $1.30 ( subject to customary adjustment for stock dividends and stock splits) and warrants to purchase an aggregate of 2,307,685 shares of the Company’s common stock. Each investor received a warrant to purchase a number of shares of common stock equal to one half the number of shares of common stock into which their Series B convertible preferred stock is initially convertible. The warrants are exercisable immediately for a five-year period and have an exercise price of $1.30 per share (subject to customary adjustment for stock dividends and stock splits but without the down-round protective provisions of previously issued warrants). The proceeds received in the PIPE financing were allocated to each instrument on a relative fair value basis. Total proceeds of $6.0 million were allocated as follows: $1.4 million to warrants issued and $4.6 million to Series B convertible preferred stock. The allocation resulted in an effective conversion price for the Series B preferred stock that was below the quoted market price of the Company’s common stock on the closing date. As such, the issuance was considered a beneficial conversion feature equal to the intrinsic value of the conversion feature on the closing date, resulting in a deemed dividend for the Series B convertible preferred stock of approximately $0.7 million, recognized on the closing date and recorded as a reduction of income available to common stockholders in computing basic and diluted loss per share. Certain investors in the PIPE financing who at the time of closing of the PIPE financing owned shares of the Company’s Series A convertible preferred stock, exchanged, on a 1 for 1 share basis, their shares of Series A convertible preferred stock for shares of a newly designated class of Series C convertible preferred stock of the Company, with a stated value of $1,000 per share and convertible into shares of the Company’s common stock at an initial conversion price per share of $1.64 (subject to customary adjustment for stock dividends and stock splits), (“the Exchange”). As the Series A convertible preferred stock contained a beneficial conversion feature, the Exchange was considered an extinguishment equal to the excess of (a) the fair value of the consideration transferred to the holders of the Series A convertible preferred stock over (b) the carrying amount of the Series A convertible preferred stock on the Company’s balance sheet plus (c) the amount previously recognized for the beneficial conversion feature, or approximately $0.2 million, which was recognized on the closing date and recorded as a reduction of income available to common stockholders in computing basic and diluted loss per share. |
Warrants
Warrants | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | ||
Warrants | NOTE 7 - WARRANTS Warrants to purchase an aggregate of 8,413,017 shares of the Company’s common stock were outstanding at September 30, 2019. These warrants are all vested and exercisable, have exercise prices ranging from $1.30 to $93.00 per share, with a weighted average exercise price of $1.78, and expire at various dates through November 2023. | NOTE 7 — WARRANTS Warrants to purchase an aggregate of 8,413,017 shares of the Company’s common stock were outstanding at December 31, 2018. These warrants are all vested and exercisable, have exercise prices ranging from $1.30 to $93.00 per share, with a weighted average exercise price of $1.78, and expire at various dates through November 2023. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Stock-Based Compensation | NOTE 8 - STOCK-BASED COMPENSATION Equity Incentive Plans The Company has issued equity awards pursuant to its 2015 Equity Incentive Plan (the “2015 Plan”), 2009 Stock Plan and 2008 Stock Plan (collectively the “Plans”). The Plans permit the Company to grant non-statutory stock options, incentive stock options and other equity awards to the Company’s employees, outside directors and consultants; however, incentive stock options may only be granted to the Company’s employees. Beginning June 29, 2015, no further awards may be granted under the 2008 Stock Plan or 2009 Stock Plan. However, to the extent awards under the 2008 Plan or 2009 Plan are forfeited or lapse unexercised or are settled in cash, the common stock subject to such awards will be available for future issuance under the 2015 Plan. On June 2, 2017, the stockholders of the Company approved an amendment to the 2015 Plan at the 2017 annual meeting of stockholders, which among other things, increased the number of shares that may be issued pursuant to awards under the 2015 Plan by 83,800 shares of common stock. On September 15, 2017, the stockholders of the Company approved an amendment to the 2015 Plan at a special meeting of stockholders, which among other things, increased the number of shares that may be issued pursuant to awards under the 2015 Plan by 2,585,871 shares of common stock. As of September 30, 2019, the aggregate number of shares of common stock authorized for issuance under the 2015 Plan, as amended, was 2,750,000 and 183,124 shares were available for issuance as of September 30, 2019. The following represents a summary of the options granted to employees and non-employees that are outstanding at September 30, 2019 and changes during the period then ended: Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Outstanding at December 31, 2018 673,885 $ 19.82 $ ― 8.2 Granted 698,750 $ 0.62 $ ― 9.0 Exercised/ Expired/ Forfeited (28,500 ) $ 0.98 $ ― ― Outstanding at September 30, 2019 1,344,135 $ 10.24 $ ― 8.4 Exercisable at September 30, 2019 531,528 $ 28.66 $ ― 7.4 The exercise price for an option issued under the 2015 Plan is determined by the Board of Directors, but will be (i) in the case of an incentive stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair market value per share on the date of grant; or (B) granted to any other employee, no less than 100% of the fair market value per share on the date of grant; and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the Plans will vest as determined by the Board of Directors but will not exceed a ten-year period. Fair Value of Equity Awards The Company utilizes the Black-Scholes option pricing model to value awards under its Plans. Key valuation assumptions include: ● Expected dividend yield. ● Expected stock-price volatility. ● Risk-free interest rate. ● Expected term. The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows (three months ended September 30, 2018 stock price adjusted for 1-for-10 reverse stock split): For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Expected dividend yield 0.00 % 0.00 % 0.00 % 0.00 % Expected stock-price volatility 69.00% – 69.38 % 48.89% – 50.22 % 46.33% – 69.38 % 46.47% – 53.11 % Risk-free interest rate 1.47% – 1.54 % 2.78% – 3.07 % 1.47% – 2.60 % 2.46% – 3.07 % Expected average term of options 5 –7 7 – 10 5 – 7 5 – 10 Stock price $ 1.04 $ 1.85 – $2.22 $ 0.60 – $1.04 $ 1.85 – $3.40 Restricted Stock Units Certain employees and consultants have been awarded restricted stock units. The restricted stock units include either milestone or time-based vesting. The following table summarizes restricted stock unit activity for the nine months ended September 30, 2019: Number of Weighted Average Grant Date Fair Value Unvested at December 31, 2018 1,100,000 $ 2.73 Granted 35,000 0.63 Forfeited ― ― Expired (35,000 ) 0.63 Unvested at September 30, 2019 1,100,000 $ 2.73 Stock-Based Compensation The Company recognized stock-based compensation expense for services within general and administrative expense in the accompanying statements of operations of approximately $95,000 and $171,000 for the three months ended September 30, 2019 and 2018, respectively, and $364,000 and $562,000 for the nine months ended September 30, 2019 and 2018, respectively. As of September 30, 2019, there was approximately $334,000 of total unrecognized compensation cost related to unvested stock-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.46 years. No stock options were exercised during the nine months ended September 30, 2019. | NOTE 8 — STOCK-BASED COMPENSATION Equity Incentive Plans The Company has issued equity awards pursuant to its 2015 Equity Incentive Plan (the “2015 Plan”), 2009 Stock Plan and 2008 Stock Plan (collectively the “Plans”). The Plans permit the Company to grant non-statutory stock options, incentive stock options and other equity awards to the Company’s employees, outside directors and consultants; however, incentive stock options may only be granted to the Company’s employees. Beginning June 29, 2015, no further awards may be granted under the 2009 Stock Plan or 2008 Stock Plan. However, to the extent awards under the 2008 Plan or 2009 Plan are forfeited or lapse unexercised or are settled in cash, the common stock subject to such awards will be available for future issuance under the 2015 Plan. In June 2017, the stockholders of the Company approved an amendment to the 2015 Plan at the 2017 annual meeting of stockholders, which among other things, increased the number of shares that may be issued pursuant to awards under the 2015 Plan by 83,800 shares of common stock. In September 2017, the stockholders of the Company approved an amendment to the 2015 Plan at a special meeting of stockholders, which among other things, increased the number of shares that may be issued pursuant to awards under the 2015 Plan by 2,585,871 shares of common stock. As of December 31, 2018, the aggregate number of shares of common stock authorized for issuance under the 2015 Plan, as amended, was 2,750,000, and 2,263,374 shares were available for issuance as of December 31, 2018. The following represents a summary of the options granted to employees and non-employees that are outstanding at December 31, 2018 and changes during the period then ended: Number of Shares Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Life (in years) Outstanding at December 31, 2017 254,171 $ 47.43 $ ― 7.3 Options granted 456,718 3.16 ― 8.6 Options forfeited (37,004 ) 3.90 ― ― Outstanding at December 31, 2018 673,885 19.82 ― 8.2 Exercisable at December 31, 2018 290,818 $ 50.19 $ ― 6.9 The exercise price for an option issued under the Plans is determined by the Board of Directors, but will be (i) in the case of an incentive stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair market value per share on the date of grant; or (B) granted to any other employee, no less than 100% of the fair market value per share on the date of grant; and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the Plans will vest as determined by the Board of Directors but will not exceed a ten-year period. The weighted average grant date fair value per share of options granted during the year ended December 31, 2018 was $0.90. Fair Value of Equity Awards The Company utilizes the Black-Scholes option pricing model to value awards under its Plans. Key valuation assumptions include: ● Expected dividend yield. ● Expected stock-price volatility. ● Risk-free interest rate. ● Expected term. The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows (adjusted for 1-for-10 reverse stock split): For the year ended December 31, 2018 2017 Expected dividend yield 0.00 % 0.00 % Expected stock-price volatility 46.47% - 53.11 % 53.08% - 54.08 % Risk-free interest rate 2.46% - 3.07 % 1.89% - 2.58 % Term of options 5 - 10 10 Stock price $ 1.85 - $3.40 $ 0.30 - $3.48 Stock-Based Compensation The Company recognized stock-based compensation expense for services within general and administrative expense in the accompanying statements of operations of approximately $646,000 and $895,000 for the years ended December 31, 2018 and 2017, respectively. As of December 31, 2018, there was approximately $469,000 of total unrecognized compensation cost related to unvested stock-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.6 years. No stock options were exercised during the year ended December 31, 2018 and 2017. |
Related Party Transactions
Related Party Transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Related Party Transactions [Abstract] | ||
Related Party Transactions | NOTE 9 - RELATED PARTY TRANSACTIONS A director of the Company is a managing director of Javelin Venture Partners GP, LLC, the general partner of Javelin Venture Partners GP, L.P., which holds a significant investment in the Company’s common stock and warrants. Two directors of the Company have acted as a managing director of Stonehenge Partners, LLC, which holds an investment in the Company’s common stock. Other than as described above, the Company has not entered into or been a participant in any transaction in which a related party had or will have a direct or indirect material interest for the nine months ended September 30, 2019. | NOTE 10 — RELATED PARTY TRANSACTIONS A director of the Company is a managing director of Javelin Venture Partners GP, LLC, the general partner of Javelin Venture Partners GP, L.P., which holds a significant investment in the Company’s common stock and warrants. Two directors of the Company have acted as a managing director of Stonehenge Partners, LLC, which holds significant investment in the Company’s common stock. Other than disclosed, the Company has not entered into or been a participant in any transaction in which a related party had or will have a direct or indirect material interest. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 — INCOME TAXES As of December 31, 2018, the Company has net operating loss carryforwards of approximately $54 million available to reduce future taxable income, if any, for Federal and state income tax purposes. The U.S. federal and state net operating loss carryforwards will begin to expire in 2028. As of December 31, 2018, the Company has Federal and state research and development credit carryforwards of approximately $2.8 million and $2.3 million, respectively, available to reduce future taxable income, if any, for Federal and state income tax purposes. The Federal credit carryforwards begin to expire in 2029. California credits have no expiration date. Under the Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s net operating loss and research tax credit carryforwards to offset taxable income may be limited based on cumulative changes in ownership. The Company has not completed an analysis to determine whether any such limitations have been triggered as of December 31, 2018. The Company has no income tax affect due to the recognition of a full valuation allowance on the expected tax benefits of future loss carry forwards based on uncertainty surrounding realization of such assets. A reconciliation of the statutory income tax rates and the Company’s effective tax rate is as follows: December 31, 2018 2017 Statutory U.S. federal rate 21.0 % 34.0 % State income tax, net of federal benefit 7.0 % 5.8 % Meals & entertainment (0.1 )% (0.2 )% Valuation allowance (27.96 )% (39.76 )% Provision for income taxes 0.0 % 0.0 % The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the following: As of December 31, 2018 2017 Deferred tax assets: Net operating loss carry forwards $ 15,108,073 $ 10,853,800 Patent costs 382,812 325,615 Accrued Vacation 11,516 21,019 Research and development credit 4,314,813 3,047,985 Stock-based compensation 1,903,104 1,722,380 Other 8,495 6,894 Gross deferred tax assets 21,728,813 15,977,693 Valuation allowance (21,728,813 ) (15,977,693 ) Net deferred tax assets $ — $ — The Company did not record any accruals for income tax accounting uncertainties for the years ended December 31, 2018 and 2017 . Authoritative guidance requires companies to accrue interest and related penalties, if applicable, on all tax positions for which reserves have been established consistent with jurisdictional tax laws. The Company’s policy is to recognize interest and penalties that would be assessed in relation to the settlement value of unrecognized tax benefits as a component of income tax expense. The Company did not accrue either interest or penalties from inception through December 31, 2018. The Company does not have any unrecognized tax benefits that will significantly decrease or increase within 12 months of December 31, 2018. The Company’s major tax jurisdictions are the United States and California. All of the Company’s tax years will remain open three and four years for examination by the Federal and state tax authorities, respectively, from the date of utilization of the net operating loss. The Company does not have any tax audits pending. Regarding 2018 federal tax reform, the Company re-measured certain deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. For certain deferred tax assets, the Company has recorded a decrease of approximately $5.5 million, with a corresponding adjustment to valuation allowance for the year ended December 31, 2018. There is no impact on the tax expense. |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Subsequent Events [Abstract] | ||
Subsequent Events | NOTE 10 – SUBSEQUENT EVENTS In October 2019, the Company announced that it has engaged A.G.P as financial advisor to explore and evaluate strategic alternatives to enhance shareholder value, which may include an acquisition, merger, reverse merger, other business combination, sale of assets, licensing or other strategic transactions. On November 6, 2019, the Company entered into a Sales Agreement (the “ATM Agreement”) with A.G.P., pursuant to which the Company may offer and sell, from time to time through A.G.P., shares of the Company’s common stock having an aggregate offering price of up to $3,673,159 (the “Placement Shares”), subject to the terms and conditions of the ATM Agreement. Unless earlier terminated pursuant to the terms of the ATM Agreement, the ATM Agreement will automatically terminate upon the earlier to occur of (i) issuance and sale of all of the Placement Shares to or through A.G.P. and (ii) August 1, 2022. On November 12, 2019, we entered into an irrevocable consent and waiver agreement (the “Waiver Agreement”) with the holders of our outstanding Series B convertible preferred stock (the “Series B Holders”), who are also parties to that certain Securities Purchase Agreement, dated as of October 30, 2018 (the “2018 Purchaser Agreement”), by and among the Company and the purchasers identified therein (including the Series B Holders). Pursuant to the terms of the Waiver Agreement, the Series B Holders agreed to waive the restriction in Section 4.12(b) of the 2018 Purchase Agreement prohibiting Dilutive Issuances (as defined in the 2018 Purchase Agreement) for the remainder of the Restricted Period (as defined in the 2018 Purchase Agreement), such that Section 4.12(b) of the 2018 Purchase Agreement is of no further force and effect (the “Waiver”). In exchange for the Series B Holders’ Waiver and subject to the other terms and conditions described in the Waiver Agreement, we agreed to reduce the conversion price of the Series B convertible preferred stock from $1.30 to $0.20 per share and to reduce the conversion price of the Series C convertible preferred stock from $1.64 to $0.20 per share, in each case subject to the approval of our stockholders to issue the additional shares of common stock that will be issuable upon conversion of the Series B convertible preferred stock and Series C convertible preferred stock as a result of the Series B Conversion Price Adjustment and the Series C Conversion Price Adjustment as required by the applicable Nasdaq rules, which stockholder approval we agreed to seek by no later than the earlier of (i) our next annual or special meeting of stockholders, or (ii) February 14, 2020. | NOTE 12 — SUBSEQUENT EVENT On May 4, 2017, the Company entered into a common stock purchase agreement with Aspire Capital, which the Company and Aspire amended and restated on March 29, 2019 (as amended and restated, the “Aspire Purchase Agreement”). The Aspire Purchase Agreement was amended and restated to adjust certain provisions to improve the Company’s access to funding under the agreement (see footnote 6). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates and such differences may be material to the financial statements. The more significant estimates and assumptions by management include among others; the valuation allowance of deferred tax assets resulting from net operating losses and the valuation of options on the Company’s common stock. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash consists of amounts held in financial institutions that are immediately available to the Company. The funds are maintained at stable financial institutions, generally at amounts in excess of federally insured limits. Cash equivalents include money market funds and held-to-maturity securities with a maturity date of 90 days or less. As of September 30, 2019, cash and cash equivalents consisted of bank deposits, cash and investments in money market funds. The Company has not realized any losses in such accounts and management believes that the Company is not exposed to significant credit risk due to the financial position of the depository institutions at which those deposits are held. | Cash and Cash Equivalents Cash consists of amounts held in financial institutions and consists of immediately available fund balances. The funds are maintained at stable financial institutions, generally at amounts in excess of federally insured limits. Cash equivalents include money market funds and held-to-maturity securities with a maturity date of 90 days or less. As of December 31, 2018, cash and cash equivalents consisted of bank deposits, cash and investments in money market funds and held-to-maturity securities. The Company has not realized any losses. |
Investments in Marketable Securities | Investments in Marketable Securities Investments in marketable securities are held in a custodial account at a financial institution and managed by the Company’s capital advisors based on the Company’s investment guidelines. All of the Company’s investments in marketable securities are classified as available-for-sale debt securities and are carried at fair value. Interest on these securities, as well as the amortization of discounts and premiums, is included in interest income in the statements of operations. The unrealized gains and losses on these securities are excluded from earnings and reported in other comprehensive income until realized, except when the declines in value are considered to be other than temporary. Other than temporary impairment losses related to credit losses are considered to be realized losses. When available-for-sale debt securities are sold, the cost of the securities is specifically identified and is used to determine the realized gain or loss. Securities classified as current assets have maturity dates of less than or equal to one year from the balance sheet date. | Investment in Marketable Securities Investment in Marketable Securities is held in a custodial account at a financial institution and managed by the Company’s capital advisors based on the Company’s investment guidelines. All of the Company’s investments in marketable securities are classified as available-for-sale debt securities and are carried at fair value. Interest on these securities, as well as the amortization of discounts and premiums, is included in interest income in the Statements of Operations. The unrealized gains and losses on these securities are excluded from earnings and reported in other comprehensive income until realized, except when it considers declines in value to be other than temporary. Other than temporary impairment losses related to credit losses are considered to be realized losses. When available-for-sale debt securities are sold, the cost of the securities is specifically identified and is used to determine the realized gain or loss. Securities classified as current assets have maturity dates of less than or equal to one year from the balance sheet date. |
Operating Leases | Operating Leases The Company determines if a contract contains a lease at inception. The Company’s material operating lease relates to a single office space. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent the Company’s right to use an underlying asset and are based upon the operating lease liabilities adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets. To determine the present value of lease payments not yet paid, the Company estimates incremental secured borrowing rates corresponding to the maturities of the leases. As the Company has no outstanding debt or committed credit facilities, secured or otherwise, the Company estimates this rate based on prevailing financial market conditions, comparable company and credit analysis, and management judgment. The Company’s leases typically contain rent escalations over the lease term. The Company recognize expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use (“ROU”) asset related to the lease. These are amortized through the ROU asset as reductions of expense over the lease term. The Company’s lease agreement does not contain any material residual value guarantees or material restrictive covenants. The Company has no lease agreements with lease and non-lease components. Related to the adoption of Topic 842, the Company’s policy elections were as follows: Separation of lease and non-lease components While the Company does not currently have any lease agreement with lease and non-lease components, the Company elected this expedient to account for lease and non-lease components as separate components. Short-term policy The Company has elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that the Company is reasonably certain to exercise, are not recorded on the balance sheet. Other information related to the Company’s leases is provided below. Nine Months Ended Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease 86,234 Operating lease asset obtained in exchange for lease obligation: Operating lease $ 198,319 Remaining lease term Operating lease 1.1 years Discount rate Operating lease 6.00 % Future payments under non-cancelable extended operating leases having initial or remaining terms of one year or more are as follows for the remaining fiscal year and thereafter: Future minimum lease payments year ending December 31, 2019 (remaining) $ 30,675 2020 103,254 Total future minimum lease payments, undiscounted 133,929 Less imputed interest (4,581 ) Present value of lease liabilities $ 129,348 Operating lease liabilities reported as of September 30, 2019: Operating lease liabilities-current $ 119,074 Operating lease liabilities-non-current 10,274 Total $ 129,348 | |
Equity-linked Financial Instruments | Equity-linked Financial Instruments The Company classifies outstanding common stock warrants with down-round features as equity, if the instrument would otherwise be classified in equity absent the down-round feature. The Company will recognize the value of a down-round feature when it is triggered and the warrant’s strike price has been adjusted downward, as a deemed dividend and reduction of income available to common stockholders in computing basic earnings per share. | |
Property and Equipment | Property and Equipment Property and equipment are recorded at cost and depreciated over their estimated useful lives using the straight-line method (see Note 4). Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is credited or charged to income. Maintenance and repairs are charged to expense as incurred while expenditures for refurbishments and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. | |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company periodically assesses the impairment of long-lived assets in accordance with Accounting Standards Codification (“ASC”) Topic 360, Property Plant and Equipment. | |
Clinical Trial and Pre-Clinical Study Accruals | Clinical Trial and Pre-Clinical Study Accruals The Company makes estimates of accrued expenses as of each balance sheet date in its financial statements based on the facts and circumstances known to it at that time. Accrued expenses for pre-clinical studies and clinical trials are based on estimates of costs incurred and fees that may be associated with services provided by contract research organizations, clinical trial investigational sites, and other related vendors. Payments under certain contracts with such parties depend on factors such as successful enrollment of patients, site initiation and the completion of milestones. In accruing service fees, management estimates the time period over which services will be performed and the level of effort to be expended in each period. If possible, the Company obtains information regarding unbilled services directly from these service providers. However, the Company may be required to estimate these services based on other information available to it. If the Company underestimates or overestimates the activity or fees associated with a study or service at a given point in time, adjustments to research and development expenses may be necessary in future periods. Historically, estimated accrued liabilities have approximated actual expense incurred. Subsequent changes in estimates may result in a material change in the Company’s accruals. | |
Research and Development | Research and Development The Company expenses the cost of research and development as incurred. Research and development expenses comprise costs incurred in performing research and development activities, including clinical trial costs, manufacturing costs for both clinical and pre-clinical materials as well as other contracted services, license fees, and other external costs. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC Topic 730, Research and Development | |
Patent Costs | Patent Costs The Company has no historical data to support a probable future economic benefit for the arising patent applications, filing and prosecution costs. Therefore, patent costs are expensed as incurred. Should the Company experience a legal cost to defend a patent in the future, that cost would be capitalized only when it is part of the cost of retaining and obtaining the future economic benefit of the patent. Costs related to an unsuccessful outcome would be expensed. | |
Stock-based Compensation | Stock-based Compensation Stock-based compensation cost for stock awards issued to employees, members of the Company’s board of directors and non-employees, is measured at the grant date based on the fair value of the award and is recognized as expense over the required service period, which is generally equal to the vesting period. Stock-based compensation is recognized only for those awards that are ultimately expected to vest. Common stock, stock options or warrants issued to non-employees, including consultants and members of the Company’s Scientific Advisory Board as consideration for goods or services received by the Company, are accounted for based on the fair value of the equity instruments issued unless the fair value consideration received can be more reliably measured. The fair value of stock options is determined using the Black-Scholes option-pricing model. The fair value of any options issued to non-employees is recorded as expense over the vesting period. See Note 8 for further information. | |
Fair Value Measurements | Fair Value Measurements The fair value of the Company’s financial instruments reflects the amounts that it estimates it would receive in connection with the sale of an asset or pay in connection with the transfer of a liability in an orderly transaction between market participants at the measurement date (exit price). The Company discloses and recognizes the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). The guidance establishes three levels of the fair value hierarchy as follows: Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date; Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active; Level 3 - Inputs that are unobservable. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires management to make judgments and consider factors specific to the asset or liability. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the year ended December 31, 2018. A summary of the assets and liabilities carried at fair value in accordance with the hierarchy defined above is as follows: Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2018 Assets: Cash and money market fund $ 2,353,825 $ ― $ ― $ 2,353,825 Corporate debt securities ― 6,908,710 ― 6,908,710 Commercial paper ― 2,979,213 ― 2,979,213 Total assets $ 2,353,825 $ 9,887,923 $ ― $ 12,241,748 The Company uses a market approach for determining the fair value of all its Level 1 and Level 2 money market funds and marketable securities. To value its money market funds, the Company values the funds at $1 stable net asset value, which is the market pricing convention for identical assets that the Company has the ability to access. The investments are classified as available-for-sale debt securities. At December 31, 2018, the balance in the Company’s accumulated other comprehensive loss was comprised primarily of activity related to the Company’s available-for-sale debt securities and some activity related to held-to-maturity debt securities. There were no realized gains or losses recognized on the sale or maturity of available-for-sale debt securities for the years ended December 31, 2018 and as a result, the Company did not reclassify any amounts out of accumulated other comprehensive loss for the year. The Company has a limited number of available-for-sale debt securities in insignificant loss positions as of December 31, 2018, which the Company does not intend to sell and has concluded it will not be required to sell before recovery of the amortized cost for the investment at maturity. The following table summarizes the available-for-sale debt securities at December 31, 2018: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities $ 4,010,003 $ 27 $ (463 ) $ 4,009,567 Commercial paper 2,979,583 72 (442 ) 2,979,213 Total available-for-sale debt securities $ 6,989,586 $ 99 $ (905 ) $ 6,988,780 | |
Convertible Preferred Stock | Convertible Preferred Stock The Company follows authoritative accounting guidance to distinguish liabilities from equity when assessing the classification and measurement of preferred stock. Preferred shares subject to mandatory redemptions are considered liabilities and measured at fair value. Conditionally redeemable preferred shares are considered temporary equity. All other preferred shares are considered as stockholders’ equity. | |
Derivative Financial Instruments | Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. Management evaluates all of the Company’s financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. The Company generally uses either the Black-Scholes option-pricing model or a Monte Carlo simulation, as applicable, to value the derivative instruments at inception and subsequent valuation dates when needed. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. | |
Accounting for Income Taxes | Accounting for Income Taxes Deferred tax assets and liabilities are recognized for the expected future consequences of events that have been reflected in the financial statements. Deferred tax assets and liabilities are determined based on the differences between the book and tax basis of assets and liabilities and operating loss carryforwards, using tax rates expected to be in effect for the years in which the differences are expected to reverse. Such differences arise primarily from stock-based compensation and net operating loss carryforwards. The Company records a valuation allowance to reduce deferred income tax assets when it is more likely than not that some portion or all of the deferred tax asset will not be realized. Prior to September 15, 2008, the Company was a limited liability company and the Company’s tax losses and credits generally flowed directly to the members. | |
Net Loss Per Share | Net Loss Per Share The Company determines basic loss per share and diluted loss per share in accordance with the provisions of Accounting Standards Codification (“ASC”) 260, “Earnings per Share.” Basic net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period. Diluted net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. The potentially dilutive stock options issued under the 2015 Plan (described in Note 8), Series A, B and C Convertible Preferred Stock (described in Note 6) and warrants to purchase the Company’s common stock (described in Notes 6 and 7) were not considered in the computation of diluted net loss per share because they would be anti-dilutive. | Net Loss Per Share The Company determines basic net loss per share and diluted net loss per share in accordance with the provisions of ASC 260, “Earnings per Share.” Basic net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period. Diluted net loss per share was calculated by dividing net loss by the weighted-average common shares outstanding during the period using the treasury stock method or the two-class method, whichever is more dilutive. The potentially dilutive stock options issued under the 2015 Stock Plan (described in Note 8), Series A, Series B and Series C Convertible Preferred Stock (described in Note 6) and warrants on the Company’s common stock (described in Notes 6 and 7) were not considered in the computation of diluted net loss per share because they would be anti-dilutive. |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company is required to record all components of comprehensive income (loss) in the financial statements in the period in which they are recognized. Net income (loss) and other comprehensive income (loss), including foreign currency translation adjustments and unrealized gains and losses on investments are reported, net of their related tax effect, to arrive at comprehensive income (loss). For the nine months ended September 30, 2019, comprehensive income consisted of unrealized gains on investments in available-for-sale debt securities. There were no unrealized gains (losses) on investments in available-for-sale debt securities and held-to-maturity debt securities for the nine months ended September 30, 2018. | Comprehensive Income (Loss) Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources. The Company is required to record all components of comprehensive loss in the financial statements in the period in which they are recognized. Net income (loss) and other comprehensive loss, including foreign currency translation adjustments and unrealized gains and losses on investments are reported, net of their related tax effect, to arrive at a comprehensive loss. For the years ended December 31, 2018 and 2017, comprehensive loss comprised of unrealized losses on investments in available-for-sale debt securities and held-to-maturity debt securities. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement” In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments Other accounting standard updates effective after September 30, 2019 are not expected to have a material impact on the Company’s financial statements. | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) Leases (Topic 842) Targeted Improvements The Company will elect the available package of practical expedients, but not the hindsight practical expedient, and implemented internal controls to enable the preparation of financial information on adoption as of January 1, 2019. The standard will have a material impact on the Company’s balance sheets but will not have an impact on its statements of operations. The most significant impact will be the recognition of a ROU asset and lease liability for the Company’s sole operating lease—the Company has no finance leases. Adoption of the standard will not require the Company to restate previously reported results as it will elect to apply a modified retrospective approach at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), an amendment which modifies the measurement recognition of credit losses for most financial assets and certain other instruments. The amendment updates the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets will be presented at the net amount expected to be collected. The amendment also requires that credit losses related to available-for-sale debt securities be recorded as an allowance through net income rather than reducing the carrying amount under the current, other-than-temporary-impairment model. The guidance is effective for fiscal years beginning after December 15, 2020, including interim periods within those fiscal years. Early adoption is permitted for annual periods after December 15, 2018. The Company does not expect the adoption of this guidance will have a material impact on its financial statements. In February 2018, the FASB issued ASU No. 2018-02, Income Statement—Reporting Comprehensive Income (Topic 220), which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the passing of H.R. 1/Public Law No. 115-97, commonly known as the Tax Cuts and Jobs Act (the “Act”) and requires certain disclosures about stranded tax effects. The amendments in ASU No. 2018-02 are effective beginning in 2019, with early adoption permitted, and may be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. Federal corporate tax rate in the Act is recognized. The Company does not expect the adoption of this guidance will have an impact on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation Equity—Equity-Based Payments to Non-Employees Revenue from Contracts with Customers In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement”, an amendment to the accounting guidance on fair value measurements. The guidance modifies the disclosure requirements on fair value measurements, including the removal of disclosures of the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. The guidance also adds certain disclosure requirements related to Level 3 fair value measurements. The guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company does not expect the adoption of this guidance will have a material impact on its financial statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholders’ equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders’ equity presented in the balance sheets must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. However, as provided for by the SEC in Q&A 105.09, the Company will defer presenting its analysis of stockholders’ equity in its quarterly report in Form 10-Q until its quarter ended March 31, 2019. The Company does not expect the adoption of SEC Release No. 33-10532 to have a material impact on its financial position, results of operations or cash flows. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (Topic 842) Targeted Improvements The Company elected the available package of practical expedients, but not the hindsight practical expedient, and implemented internal controls to enable the preparation of financial information on adoption as of January 1, 2019. The standard had a material impact on the Company’s condensed balance sheets, but did not have an impact on its statements of operations and comprehensive loss. The most significant impact was the recognition of a ROU asset and lease liability for the Company’s sole operating lease—the Company had no finance leases. Adoption of the standard did not require the Company to restate previously reported results as it elected to apply a modified retrospective approach at the beginning of the period of adoption rather than at the beginning of the earliest comparative period presented. In June 2018, the FASB issued ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting Compensation—Stock Compensation Equity—Equity-Based Payments to Non-Employees In August 2018, the SEC adopted final rules under SEC Release No. 33-10532, Disclosure Update and Simplification | Recently Adopted Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). The amendments in ASU 2016-01 address certain aspects of recognition, measurement, presentation and disclosure of financial instruments. The Company adopted ASU 2016-01 in the first quarter of 2018. The adoption of this new standard did not have a material impact on the Company’s financial statements. On August 26, 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230), In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. In January 2017, the FASB issued ASU No. 2017-04 “ Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, “ Stock Compensation – Scope of Modification Accounting” In March 2018, the FASB issued ASU No. 2018-05, Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 Note 7. Income Taxes |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Schedule of Supplemental Cash Flow Information Related to Leases | Other information related to the Company’s leases is provided below. Nine Months Ended Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease 86,234 Operating lease asset obtained in exchange for lease obligation: Operating lease $ 198,319 Remaining lease term Operating lease 1.1 years Discount rate Operating lease 6.00 % | |
Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases | Future payments under non-cancelable extended operating leases having initial or remaining terms of one year or more are as follows for the remaining fiscal year and thereafter: Future minimum lease payments year ending December 31, 2019 (remaining) $ 30,675 2020 103,254 Total future minimum lease payments, undiscounted 133,929 Less imputed interest (4,581 ) Present value of lease liabilities $ 129,348 Operating lease liabilities reported as of September 30, 2019: Operating lease liabilities-current $ 119,074 Operating lease liabilities-non-current 10,274 Total $ 129,348 | |
Schedule of Fair Value of Assets and Liabilities | A summary of the assets and liabilities carried at fair value in accordance with the hierarchy defined above is as follows: Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2018 Assets: Cash and money market fund $ 2,353,825 $ ― $ ― $ 2,353,825 Corporate debt securities ― 6,908,710 ― 6,908,710 Commercial paper ― 2,979,213 ― 2,979,213 Total assets $ 2,353,825 $ 9,887,923 $ ― $ 12,241,748 | |
Schedule of Available-for-sale Securities | The following table summarizes the available-for-sale debt securities at December 31, 2018: Amortized Cost Unrealized Gains Unrealized Losses Fair Value Corporate debt securities $ 4,010,003 $ 27 $ (463 ) $ 4,009,567 Commercial paper 2,979,583 72 (442 ) 2,979,213 Total available-for-sale debt securities $ 6,989,586 $ 99 $ (905 ) $ 6,988,780 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of Property and Equipment | Property and equipment consists of the following: Estimated Life September 30, 2019 December 31, 2018 Computers and equipment 5 years $ 17,178 $ 15,589 Furniture and fixtures 7 years 19,158 19,158 Total property and equipment 36,336 34,747 Accumulated depreciation (19,137 ) (14,587 ) Total property and equipment, net $ 17,199 $ 20,160 | Property and equipment consists of the following: Estimated Life December 31, 2018 December 31, 2017 Computer equipment 5 years $ 15,589 $ 13,582 Furniture and fixtures 7 years 19,158 19,158 Total property and equipment 34,747 32,740 Accumulated depreciation (14,587 ) (8,867 ) Property and equipment, net $ 20,160 $ 23,873 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summarized Operating Lease Obligations | The following table summarizes our lease obligations at December 31, 2018: LEASE COMMITMENTS Years ended December 31, Operating Lease 2019 $ 120,898 2020 103,254 Total minimum lease payments $ 224,152 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Summary of Stock Option Activity | The following represents a summary of the options granted to employees and non-employees that are outstanding at September 30, 2019 and changes during the period then ended: Options Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Outstanding at December 31, 2018 673,885 $ 19.82 $ ― 8.2 Granted 698,750 $ 0.62 $ ― 9.0 Exercised/ Expired/ Forfeited (28,500 ) $ 0.98 $ ― ― Outstanding at September 30, 2019 1,344,135 $ 10.24 $ ― 8.4 Exercisable at September 30, 2019 531,528 $ 28.66 $ ― 7.4 | The following represents a summary of the options granted to employees and non-employees that are outstanding at December 31, 2018 and changes during the period then ended: Number of Shares Weighted- Average Exercise Price Aggregate Intrinsic Value Weighted- Average Remaining Contractual Life (in years) Outstanding at December 31, 2017 254,171 $ 47.43 $ ― 7.3 Options granted 456,718 3.16 ― 8.6 Options forfeited (37,004 ) 3.90 ― ― Outstanding at December 31, 2018 673,885 19.82 ― 8.2 Exercisable at December 31, 2018 290,818 $ 50.19 $ ― 6.9 |
Schedule of Assumptions Used in Black-Scholes Option-Pricing Method | The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows (three months ended September 30, 2018 stock price adjusted for 1-for-10 reverse stock split): For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Expected dividend yield 0.00 % 0.00 % 0.00 % 0.00 % Expected stock-price volatility 69.00% – 69.38 % 48.89% – 50.22 % 46.33% – 69.38 % 46.47% – 53.11 % Risk-free interest rate 1.47% – 1.54 % 2.78% – 3.07 % 1.47% – 2.60 % 2.46% – 3.07 % Expected average term of options 5 –7 7 – 10 5 – 7 5 – 10 Stock price $ 1.04 $ 1.85 – $2.22 $ 0.60 – $1.04 $ 1.85 – $3.40 | The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows (adjusted for 1-for-10 reverse stock split): For the year ended December 31, 2018 2017 Expected dividend yield 0.00 % 0.00 % Expected stock-price volatility 46.47% - 53.11 % 53.08% - 54.08 % Risk-free interest rate 2.46% - 3.07 % 1.89% - 2.58 % Term of options 5 - 10 10 Stock price $ 1.85 - $3.40 $ 0.30 - $3.48 |
Schedule of Nonvested Restricted Stock Units | The following table summarizes restricted stock unit activity for the nine months ended September 30, 2019: Number of Weighted Average Grant Date Fair Value Unvested at December 31, 2018 1,100,000 $ 2.73 Granted 35,000 0.63 Forfeited ― ― Expired (35,000 ) 0.63 Unvested at September 30, 2019 1,100,000 $ 2.73 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Statutory Income Tax Rate | A reconciliation of the statutory income tax rates and the Company’s effective tax rate is as follows: December 31, 2018 2017 Statutory U.S. federal rate 21.0 % 34.0 % State income tax, net of federal benefit 7.0 % 5.8 % Meals & entertainment (0.1 )% (0.2 )% Valuation allowance (27.96 )% (39.76 )% Provision for income taxes 0.0 % 0.0 % |
Schedule of Deferred Tax Assets | The tax effects of the temporary differences and carry forwards that give rise to deferred tax assets consist of the following: As of December 31, 2018 2017 Deferred tax assets: Net operating loss carry forwards $ 15,108,073 $ 10,853,800 Patent costs 382,812 325,615 Accrued Vacation 11,516 21,019 Research and development credit 4,314,813 3,047,985 Stock-based compensation 1,903,104 1,722,380 Other 8,495 6,894 Gross deferred tax assets 21,728,813 15,977,693 Valuation allowance (21,728,813 ) (15,977,693 ) Net deferred tax assets $ — $ — |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | Mar. 23, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||
Reverse stock split | 1-for-10 reverse stock split | 1-for-10 reverse stock | 1-for-10 reverse stock | ||||||||
Net loss | $ (2,167,209) | $ (2,815,152) | $ (4,705,766) | $ (4,646,262) | $ (3,584,652) | $ (2,012,690) | $ (9,688,127) | $ (10,243,605) | $ (16,868,711) | $ (7,863,858) | |
Net cash used in operating activities | (12,851,824) | $ (10,130,131) | (13,332,927) | (7,397,912) | |||||||
Net working capital | 100,000 | 100,000 | |||||||||
Accumulated deficit | (79,888,272) | (79,888,272) | (70,200,145) | (53,331,434) | |||||||
Cash and cash equivalents | $ 1,957,395 | $ 1,957,395 | $ 7,812,259 | $ 22,631,971 |
Basis of Presentation (Detail_2
Basis of Presentation (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||
Net loss | $ (2,167,209) | $ (2,815,152) | $ (4,705,766) | $ (4,646,262) | $ (3,584,652) | $ (2,012,690) | $ (9,688,127) | $ (10,243,605) | $ (16,868,711) | $ (7,863,858) |
Net cash used in operating activities | (12,851,824) | $ (10,130,131) | (13,332,927) | (7,397,912) | ||||||
Working capital | 9,300,000 | |||||||||
Accumulated deficit | (79,888,272) | (79,888,272) | (70,200,145) | (53,331,434) | ||||||
Cash and cash equivalents | $ 1,957,395 | $ 1,957,395 | 7,812,259 | $ 22,631,971 | ||||||
Investment in short-term marketable debt securities | $ 7,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||||||
Unrealized gain on debt securities | $ 923 | $ (923) | ||||
Held-to-maturity debt securities |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Details Narrative) (10-K) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Estimated useful lives for plant and equipment, description | straight-line method | |
Impairment charges |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Accounting Policies [Abstract] | ||
Operating cash flows from operating lease | $ 86,234 | |
Operating lease asset obtained in exchange for lease obligation: Operating lease | $ 198,319 | |
Operating lease: Remaining lease term | 1 year 1 month 6 days | |
Operating lease: Discount rate | 6.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Future Minimum Lease Payments Under Non-cancelable Operating Leases (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
2019 (remaining) | $ 30,675 | |
2020 | 103,254 | |
Total future minimum lease payments, undiscounted | 133,929 | |
Less imputed interest | (4,581) | |
Present value of lease liabilities | 129,348 | |
Operating lease liabilities-current | 119,074 | |
Operating lease liabilities-non-current | 10,274 | |
Total | $ 129,348 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Fair Value of Assets and Liabilities (Details) (10-K) | Dec. 31, 2018USD ($) |
Total assets | $ 12,241,748 |
Cash and Money Market Fund [Member] | |
Total assets | 2,353,825 |
Corporate Debt Securities [Member] | |
Total assets | 6,908,710 |
Commercial Paper [Member] | |
Total assets | 2,979,213 |
Level 1 [Member] | |
Total assets | 2,353,825 |
Level 1 [Member] | Cash and Money Market Fund [Member] | |
Total assets | 2,353,825 |
Level 1 [Member] | Corporate Debt Securities [Member] | |
Total assets | |
Level 1 [Member] | Commercial Paper [Member] | |
Total assets | |
Level 2 [Member] | |
Total assets | 9,887,923 |
Level 2 [Member] | Cash and Money Market Fund [Member] | |
Total assets | |
Level 2 [Member] | Corporate Debt Securities [Member] | |
Total assets | 6,908,710 |
Level 2 [Member] | Commercial Paper [Member] | |
Total assets | 2,979,213 |
Level 3 [Member] | |
Total assets | |
Level 3 [Member] | Cash and Money Market Fund [Member] | |
Total assets | |
Level 3 [Member] | Corporate Debt Securities [Member] | |
Total assets | |
Level 3 [Member] | Commercial Paper [Member] | |
Total assets |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Schedule of Available-for-sale Securities (Details) (10-K) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Unrealized Losses | $ (923) | $ 923 | ||
Corporate Debt Securities [Member] | ||||
Amortized Cost | 4,010,003 | |||
Unrealized Gains | 27 | |||
Unrealized Losses | (463) | |||
Fair Value | 4,009,567 | |||
Commercial Paper [Member] | ||||
Amortized Cost | 2,979,583 | |||
Unrealized Gains | 72 | |||
Unrealized Losses | (442) | |||
Fair Value | 2,979,213 | |||
Available-for-sale Securities [Member] | ||||
Amortized Cost | 6,989,586 | |||
Unrealized Gains | 99 | |||
Unrealized Losses | (905) | |||
Fair Value | $ 6,988,780 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 1,600 | $ 1,500 | $ 4,600 | $ 4,300 | $ 5,721 | $ 5,720 |
Property and Equipment (Detai_2
Property and Equipment (Details Narrative) (10-K) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||||||
Depreciation expense | $ 1,600 | $ 1,500 | $ 4,600 | $ 4,300 | $ 5,721 | $ 5,720 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | |||
Total property and equipment | $ 36,336 | $ 34,747 | $ 32,740 |
Accumulated depreciation | (19,137) | (14,587) | (8,867) |
Total property and equipment, net | $ 17,199 | $ 20,160 | 23,873 |
Computers and Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life | 5 years | 5 years | |
Total property and equipment | $ 17,178 | $ 15,589 | 13,582 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Life | 7 years | 7 years | |
Total property and equipment | $ 19,158 | $ 19,158 | $ 19,158 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jul. 09, 2015ft² | |
Lease agreement term | 5 years | ||||||
Rent expense | $ 29,000 | $ 29,000 | $ 88,000 | $ 88,000 | $ 118,000 | $ 115,000 | |
Lease renewal term | 5 years | 5 years | |||||
Lease, option to extend | The Company has the option to extend the term of the lease for one five-year term, provided that the rent would be subject to market adjustment at the beginning of the renewal term. | We have the option to extend the term of the lease for one five-year term, provided that the rent would be subject to market adjustment at the beginning of the renewal term. We will recognize rent expense on a straight-line basis over the lease term. | |||||
California limited partnership [Member] | |||||||
Area of lease | ft² | 2,780 | ||||||
Lease agreement term | 61 months | ||||||
Months 2 Through 13 [Member] | |||||||
Rent expense | $ 9,174 | $ 9,174 | |||||
Months 50 Through 61 [Member] | |||||||
Rent expense | $ 10,325 | $ 10,325 |
Commitments and Contingencies_3
Commitments and Contingencies (Details Narrative) (10-K) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | Jul. 09, 2015ft² | |
Lease agreement term | 5 years | ||||||
Rent expense | $ 29,000 | $ 29,000 | $ 88,000 | $ 88,000 | $ 118,000 | $ 115,000 | |
Lease, option to extend | The Company has the option to extend the term of the lease for one five-year term, provided that the rent would be subject to market adjustment at the beginning of the renewal term. | We have the option to extend the term of the lease for one five-year term, provided that the rent would be subject to market adjustment at the beginning of the renewal term. We will recognize rent expense on a straight-line basis over the lease term. | |||||
Century Park [Member] | |||||||
Area of lease | ft² | 2,780 | ||||||
Lease agreement term | 61 months | ||||||
Months 2 Through 13 [Member] | |||||||
Rent expense | $ 9,174 | $ 9,174 | |||||
Lease term description | Months 2 through 13 of the term | ||||||
Months 50 Through 61 [Member] | |||||||
Rent expense | $ 10,325 | $ 10,325 | |||||
Lease term description | Months 50 through 61 |
Commitments and Contingencies -
Commitments and Contingencies - Summarized Operating Lease Obligations (Details) (10-K) | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 120,898 |
2020 | 103,254 |
Total minimum lease payments | $ 224,152 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | Jul. 23, 2019USD ($) | Mar. 29, 2019USD ($)shares | Mar. 23, 2018 | Sep. 30, 2018 | Sep. 30, 2019USD ($)Integer$ / sharesshares | Dec. 31, 2018$ / sharesshares | Dec. 31, 2017$ / sharesshares | Sep. 30, 2017$ / sharesshares |
Common stock, shares authorized | 225,000,000 | 225,000,000 | 25,000,000 | 225,000,000 | ||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||
Reverse split stock | 1-for-10 reverse stock split | 1-for-10 reverse stock | 1-for-10 reverse stock | |||||
Common stock, shares issued | 9,926,956 | 6,036,562 | 4,940,652 | |||||
Common stock, shares outstanding | 9,926,956 | 6,036,562 | 4,940,652 | |||||
Common stock voting, description | Each share of the Company's common stock is entitled to one vote, and all shares rank equally as to voting and other matters. | |||||||
2017 Aspire Purchase Agreement [Member] | ||||||||
Number of common shares sold | ||||||||
Number of common shares sold, value | $ | $ 6,500,000 | |||||||
Debt instrument convertible consecutive trading days | Integer | 10 | |||||||
Aggregate percentage of shares, direction under purchase | 30.00% | |||||||
Percentage for common stock outstanding | 19.99% | |||||||
2017 Aspire Purchase Agreement [Member] | Minimum [Member] | ||||||||
Number of common shares sold | 100,000 | |||||||
Minimum number of shares to be purchased under purchase notice | 100,000 | |||||||
Minimum stock price under purchase notice | $ / shares | $ 0.25 | |||||||
Average price paid | $ / shares | $ 0.86 | |||||||
2017 Aspire Purchase Agreement [Member] | Maximum [Member] | ||||||||
Maximum purchase price payable on one purchase date | $ | $ 500,000 | |||||||
Number of common stock may be sold | 1,807,562 | |||||||
Percentage for common stock outstanding | 19.99% | |||||||
2017 Aspire Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | March 31, 2021 [Member] | ||||||||
Proceeds from sale of common stock | $ | $ 6,500,000 | $ 6,500,000 | ||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 9,500 | 9,500 | 15,000,000 | |||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares issued | 4,080 | 4,080 | 9,140 | |||||
Preferred stock, shares outstanding | 4,080 | 4,080 | 9,140 | |||||
Preferred stock convertible into common stock conversion price per share | $ / shares | $ 4 | |||||||
Series B Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 6,000 | 6,000 | 6,000 | |||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares issued | 1,850 | 5,608 | 0 | |||||
Preferred stock, shares outstanding | 1,850 | 5,608 | 0 | |||||
Preferred stock convertible into common stock conversion price per share | $ / shares | $ 1.30 | |||||||
Series C Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 1,880 | 1,880 | 1,880 | |||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares issued | 240 | 1,880 | 0 | |||||
Preferred stock, shares outstanding | 240 | 1,880 | 0 | |||||
Preferred stock convertible into common stock conversion price per share | $ / shares | $ 1.64 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details Narrative) (10-K) - USD ($) | Mar. 29, 2019 | Nov. 05, 2018 | Mar. 23, 2018 | Oct. 03, 2017 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Oct. 31, 2017 | Sep. 30, 2017 |
Common stock, shares authorized | 225,000,000 | 225,000,000 | 25,000,000 | 225,000,000 | 225,000,000 | |||||||||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Preferred stock, shares authorized | 15,000,000 | 15,000,000 | ||||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | ||||||||||||
Reverse split stock | 1-for-10 reverse stock split | 1-for-10 reverse stock | 1-for-10 reverse stock | |||||||||||
Common stock, shares issued | 9,926,956 | 6,036,562 | 4,940,652 | 6,036,562 | ||||||||||
Preferred stock voting, description | Each share of the Company's common stock is entitled to one vote, and all shares rank equally as to voting and other matters. | |||||||||||||
Payments to acquire common stock | $ 6,968,991 | |||||||||||||
Number of options granted to purchase shares of common stock | 698,750 | 456,718 | ||||||||||||
Additional warrants to purchase | 8,413,017 | 8,413,017 | 8,413,017 | |||||||||||
Number of options exercised to purchase shares of common stock | ||||||||||||||
Proceeds from public offering | $ 23,029,750 | |||||||||||||
Deemed dividend on preferred stock | 2,537,844 | 3,111,020 | ||||||||||||
Gross proceeds from closing of private placement | $ 6,000,000 | |||||||||||||
October 2017 Public Offering [Member] | ||||||||||||||
Number of options granted to purchase shares of common stock | 862,500 | |||||||||||||
Number of options exercised to purchase shares of common stock | 297,500 | |||||||||||||
Proceeds from public offering | $ 23,000,000 | |||||||||||||
Underwriting discounts and commissions | 1,600,000 | |||||||||||||
Other expenses with offering | 400,000 | |||||||||||||
Deemed dividend | $ 1,600,000 | |||||||||||||
October 2017 Public Offering [Member] | Capital Unit, Class A [Member] | ||||||||||||||
Shares of common stock sold, per share | $ 4 | |||||||||||||
Number of common shares sold | 3,455,000 | |||||||||||||
Number of warrants to purchase common stock | 3,455,000 | |||||||||||||
October 2017 Public Offering [Member] | Capital Unit, Class B [Member] | ||||||||||||||
Number of common shares sold | 9,180 | |||||||||||||
Maximum [Member] | ||||||||||||||
Warrant exercise price per share | $ 93 | |||||||||||||
Exercise price per share | 93 | |||||||||||||
Minimum [Member] | ||||||||||||||
Warrant exercise price per share | 1.30 | $ 1.30 | $ 93 | $ 1.30 | ||||||||||
Exercise price per share | $ 1.30 | 1.30 | $ 93 | 1.30 | ||||||||||
PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||||||||
Number of warrants to purchase common stock | 2,307,685 | |||||||||||||
Gross proceeds from closing of private placement | $ 5,500,000 | |||||||||||||
2017 Aspire Purchase Agreement [Member] | ||||||||||||||
Number of common shares sold | ||||||||||||||
Number of common shares sold, value | $ 6,500,000 | |||||||||||||
Percentage for common stock outstanding | 19.99% | |||||||||||||
2017 Aspire Purchase Agreement [Member] | Maximum [Member] | ||||||||||||||
Maximum purchase price payable on one purchase date | $ 500,000 | |||||||||||||
Number of common stock may be sold | 1,807,562 | |||||||||||||
Percentage for common stock outstanding | 19.99% | |||||||||||||
2017 Aspire Purchase Agreement [Member] | Minimum [Member] | ||||||||||||||
Number of common shares sold | 100,000 | |||||||||||||
Minimum number of shares to be purchased under purchase notice | 100,000 | |||||||||||||
Minimum stock price under purchase notice | $ 0.25 | |||||||||||||
Average price paid | $ 0.86 | |||||||||||||
2017 Aspire Purchase Agreement [Member] | March 2019 [Member] | ||||||||||||||
Shares of common stock sold, per share | $ 0.25 | $ 0.25 | ||||||||||||
Number of common shares sold | 100,000 | |||||||||||||
Number of common shares sold, value | $ 6,500,000 | |||||||||||||
Number of shares possible increase per trading day | 2,000,000 | |||||||||||||
Aggreegate percentage of shares, direction under purchase notice | $ 30 | |||||||||||||
Number of common stock may be sold | 1,807,562 | |||||||||||||
Percentage for common stock outstanding | 19.99% | |||||||||||||
2017 Aspire Purchase Agreement [Member] | March 2019 [Member] | Maximum [Member] | ||||||||||||||
Maximum purchase price payable on one purchase date | $ 500,000 | $ 500,000 | ||||||||||||
Percentage for common stock outstanding | 19.99% | |||||||||||||
2017 Aspire Purchase Agreement [Member] | March 2019 [Member] | Minimum [Member] | ||||||||||||||
Minimum number of shares to be purchased under purchase notice | 100,000 | |||||||||||||
Minimum stock price under purchase notice | $ 0.25 | |||||||||||||
Average price paid | $ 0.86 | |||||||||||||
2017 Aspire Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | ||||||||||||||
Aggregate of shares issued during period | ||||||||||||||
2017 Aspire Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | March 31, 20121 [Member] | ||||||||||||||
Payments to acquire common stock | $ 6,500,000 | |||||||||||||
Warrant [Member] | October 2017 Public Offering [Member] | ||||||||||||||
Number of common shares sold | 3,455,000 | |||||||||||||
Number of warrants to purchase common stock | 2,295,000 | |||||||||||||
Warrant exercise price per share | $ 4.40 | |||||||||||||
Additional warrants to purchase | 862,500 | |||||||||||||
Proceeds from public offering | $ 10,100,000 | |||||||||||||
Warrant term | 5 years | |||||||||||||
Exercise price per share | $ 4.40 | |||||||||||||
Warrant [Member] | PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||||||||
Warrant exercise price per share | $ 1.30 | |||||||||||||
Warrant term | 5 years | |||||||||||||
Exercise price per share | $ 1.30 | |||||||||||||
Warrant [Member] | Private Placement [Member] | Maximum [Member] | October 2017 Public Offering [Member] | ||||||||||||||
Warrant exercise price per share | $ 4.40 | |||||||||||||
Exercise price per share | 4.40 | |||||||||||||
Warrant [Member] | Private Placement [Member] | Minimum [Member] | October 2017 Public Offering [Member] | ||||||||||||||
Warrant exercise price per share | 1.30 | |||||||||||||
Exercise price per share | $ 1.30 | |||||||||||||
Series A Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 9,500 | 9,500 | 15,000,000 | 9,500 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares issued | 4,080 | 4,080 | 9,140 | 4,080 | ||||||||||
Preferred stock, shares outstanding | 4,080 | 4,080 | 9,140 | 4,080 | ||||||||||
Preferred stock convertible into common stock conversion price per share | $ 4 | |||||||||||||
Conversion of stock, shares converted | (1,600) | (1,260) | (320) | |||||||||||
Series B Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 6,000 | 6,000 | 6,000 | 6,000 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares issued | 1,850 | 5,608 | 0 | 5,608 | ||||||||||
Preferred stock, shares outstanding | 1,850 | 5,608 | 0 | 5,608 | ||||||||||
Preferred stock convertible into common stock conversion price per share | $ 1.30 | |||||||||||||
Conversion of stock, shares converted | ||||||||||||||
Series C Preferred Stock [Member] | ||||||||||||||
Preferred stock, shares authorized | 1,880 | 1,880 | 1,880 | 1,880 | ||||||||||
Preferred stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||
Preferred stock, shares issued | 240 | 1,880 | 0 | 1,880 | ||||||||||
Preferred stock, shares outstanding | 240 | 1,880 | 0 | 1,880 | ||||||||||
Preferred stock convertible into common stock conversion price per share | $ 1.64 | |||||||||||||
Conversion of stock, shares converted | ||||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||
Preferred stock convertible into common stock conversion price per share | $ 4 | |||||||||||||
Number of common shares sold | 3,180 | |||||||||||||
Conversion of stock, shares converted | 795,000 | |||||||||||||
Series A Convertible Preferred Stock [Member] | October 2017 Public Offering [Member] | ||||||||||||||
Preferred stock, par value | $ 1,000 | |||||||||||||
Number of common shares sold | 9,180 | |||||||||||||
Conversion of stock, shares converted | 2,295,000 | |||||||||||||
Proceeds from public offering | $ 5,100,000 | |||||||||||||
Deemed dividend on preferred stock | 3,100,000 | |||||||||||||
Series A Convertible Preferred Stock [Member] | PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||||||||
Preferred stock exchange description | Certain investors in the PIPE financing who at the time of closing of the PIPE financing owned shares of the Company's Series A convertible preferred stock, exchanged, on a 1 for 1 share basis, their shares of Series A convertible preferred stock for shares of a newly designated class of Series C convertible preferred stock of the Company, with a stated value of $1,000 per share and convertible into shares of the Company's common stock at an initial conversion price per share of $1.64 (subject to customary adjustment for stock dividends and stock splits), ("the Exchange").. | |||||||||||||
Common Stock [Member] | October 2017 Public Offering [Member] | ||||||||||||||
Proceeds from public offering | $ 7,800,000 | |||||||||||||
Series A Convertible Preferred Stock [Member] | PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||||||||
Preferred stock, par value | $ 1,000 | |||||||||||||
Preferred stock convertible into common stock conversion price per share | $ 1.30 | |||||||||||||
Number of common shares sold | 6,000 | |||||||||||||
Series C Convertible Preferred Stock [Member] | PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||||||||
Preferred stock, par value | $ 1,000 | |||||||||||||
Preferred stock convertible into common stock conversion price per share | $ 1.64 | |||||||||||||
Deemed dividend on preferred stock | $ 700,000 | |||||||||||||
Beneficial conversion feature price | $ 200,000 |
Warrants (Details Narrative)
Warrants (Details Narrative) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Issuance of warrants to purchase of common stock shares | 8,413,017 | 8,413,017 | |
Weighted average exercise price of warrants | $ 1.78 | $ 1.78 | |
Warrant expiration date | Nov. 30, 2023 | ||
Minimum [Member] | |||
Warrants exercise prices ranging | $ 1.30 | $ 1.30 | $ 93 |
Maximum [Member] | |||
Warrants exercise prices ranging | $ 93 |
Warrants (Details Narrative) (1
Warrants (Details Narrative) (10-K) - $ / shares | 12 Months Ended | ||
Dec. 31, 2018 | Sep. 30, 2019 | Dec. 31, 2017 | |
Issuance of warrants to purchase of common stock shares | 8,413,017 | 8,413,017 | |
Weighted average exercise price of warrants | $ 1.78 | $ 1.78 | |
Warrant expiration date | Nov. 30, 2023 | ||
Minimum [Member] | |||
Warrants exercise prices ranging | $ 1.30 | $ 1.30 | $ 93 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | Mar. 23, 2018 | Sep. 15, 2017 | Jun. 02, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Risk-free interest rate | 0.00% | |||||||||
Reverse split stock | 1-for-10 reverse stock split | 1-for-10 reverse stock | 1-for-10 reverse stock | |||||||
Stock based compensation expense | $ 95,000 | $ 171,000 | $ 363,730 | $ 561,755 | $ 645,823 | $ 895,498 | ||||
Unrecognized compensation cost related to un-vested stock based compensation | $ 334,000 | $ 334,000 | $ 469,000 | |||||||
Weighted average period of compensation cost expected to be recognized | 1 year 5 months 16 days | 1 year 6 months | ||||||||
Number of stock options exercised | ||||||||||
2015 Equity Incentive Plan [Member] | ||||||||||
Additional number of shares of common stock authorized to issue | 2,750,000 | |||||||||
Aggregate number of common stock shares authorized for issuance | 2,750,000 | 2,750,000 | ||||||||
Number of common stock available for issuance | 183,124 | 183,124 | 2,697,950 | |||||||
2015 Equity Incentive Plan [Member] | Employee Stock Option [Member] | ||||||||||
Additional number of shares of common stock authorized to issue | 2,585,871 | 83,800 | ||||||||
Aggregate number of common stock shares authorized for issuance | 83,800 | |||||||||
2015 Stock Plan [Member] | Employee Stock Option [Member] | ||||||||||
Stock option description | The exercise price for an option issued under the 2015 Plan is determined by the Board of Directors, but will be (i) in the case of an incentive stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair market value per share on the date of grant; or (B) granted to any other employee, no less than 100% of the fair market value per share on the date of grant; and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the Plans will vest as determined by the Board of Directors but will not exceed a ten-year period. | |||||||||
Vesting period of options | 10 years | 10 years |
Stock-Based Compensation (Det_2
Stock-Based Compensation (Details Narrative) (10-K) - USD ($) | Mar. 23, 2018 | Sep. 15, 2017 | Jun. 02, 2017 | Sep. 30, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Weighted average grant date fair value per share of options granted | $ 0.90 | ||||||||||
Expected dividend yield | $ 0 | ||||||||||
Reverse split stock | 1-for-10 reverse stock split | 1-for-10 reverse stock | 1-for-10 reverse stock | ||||||||
Stock based compensation expense | $ 95,000 | $ 171,000 | $ 363,730 | $ 561,755 | $ 645,823 | $ 895,498 | |||||
Unrecognized compensation cost related to un-vested stock based compensation | $ 334,000 | $ 334,000 | $ 469,000 | ||||||||
Weighted average period of compensation cost expected to be recognized | 1 year 5 months 16 days | 1 year 6 months | |||||||||
Number of stock options exercised | |||||||||||
2015 Equity Incentive Plan [Member] | |||||||||||
Aggregate number of shares of common stock authorized to issue | 2,750,000 | 2,750,000 | |||||||||
Number of common stock shares authorized for issuance | 2,750,000 | ||||||||||
Number of common stock available for issuance | 183,124 | 183,124 | 2,697,950 | ||||||||
2015 Equity Incentive Plan [Member] | Employee Stock Option [Member] | |||||||||||
Aggregate number of shares of common stock authorized to issue | 83,800 | ||||||||||
Common stock shares issued | 2,585,871 | ||||||||||
Number of common stock shares authorized for issuance | 2,585,871 | 83,800 | |||||||||
2015 Stock Plan [Member] | Employee Stock Option [Member] | |||||||||||
Stock option description | The exercise price for an option issued under the Plans is determined by the Board of Directors, but will be (i) in the case of an incentive stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair market value per share on the date of grant; or (B) granted to any other employee, no less than 100% of the fair market value per share on the date of grant; and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the Plans will vest as determined by the Board of Directors but will not exceed a ten-year period. | ||||||||||
Vesting period of options | 10 years | 10 years |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Shares, Options Outstanding, Beginning | 673,885 | 254,171 |
Number of Shares, Options Granted | 698,750 | 456,718 |
Number of Shares, Options Exercised/ Expired/ Forfeited | (28,500) | (37,004) |
Number of Shares, Options Outstanding at Ending | 1,344,135 | 673,885 |
Number of Shares, Options Exercisable | 531,528 | 290,818 |
Weighted Average Exercise Price, Outstanding, Beginning | $ 19.82 | $ 47.43 |
Weighted Average Exercise Price, Options Granted | 0.62 | 3.16 |
Weighted Average Exercise Price, Options Exercised/ Expired/ Forfeited | 0.98 | 3.90 |
Weighted Average Exercise Price, Outstanding at Ending | 10.24 | 19.82 |
Weighted Average Exercise Price, Options Exercisable | $ 28.66 | $ 50.19 |
Aggregate Intrinsic Value, Outstanding, Beginning | ||
Aggregate Intrinsic Value, Options Granted | ||
Aggregate Intrinsic Value, Options Exercised/ Expired/ Forfeited | ||
Aggregate Intrinsic Value, Outstanding at Ending | ||
Aggregate Intrinsic Value, Options Exercisable | ||
Weighted- Average Remaining Contractual Life (in Years), Outstanding, Beginning | 8 years 2 months 12 days | 7 years 3 months 19 days |
Weighted- Average Remaining Contractual Life (in Years), Options Granted | 9 years | 8 years 7 months 6 days |
Weighted- Average Remaining Contractual Life (in Years), Outstanding at Ending | 8 years 4 months 24 days | 8 years 2 months 12 days |
Weighted- Average Remaining Contractual Life (in Years), Options Exercisable | 7 years 4 months 24 days | 6 years 10 months 25 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Assumptions Used in Black-Scholes Option-Pricing Method (Details) - $ / shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% |
Expected stock-price volatility, minimum | 69.00% | 48.89% | 46.33% | 46.47% | 46.47% | 53.08% |
Expected stock-price volatility, maximum | 69.38% | 50.22% | 69.38% | 53.11% | 53.11% | 54.08% |
Risk-free interest rate, minimum | 1.47% | 2.78% | 1.47% | 2.46% | 2.46% | 1.89% |
Risk-free interest rate, maximum | 1.54% | 3.07% | 2.60% | 3.07% | 3.07% | 2.58% |
Expected average term of options | 10 years | |||||
Stock price | $ 1.04 | |||||
Minimum [Member] | ||||||
Expected average term of options | 5 years | 7 years | 5 years | 5 years | 5 years | |
Stock price | $ 1.85 | $ 0.60 | $ 1.85 | $ 1.85 | $ 0.30 | |
Maximum [Member] | ||||||
Expected average term of options | 7 years | 10 years | 7 years | 10 years | 10 years | |
Stock price | $ 2.22 | $ 1.04 | $ 3.40 | $ 3.40 | $ 3.48 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Nonvested Restricted Stock Units (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Units Unvested, Beginning balance | shares | 1,100,000 |
Number of Units Granted | shares | 35,000 |
Number of Units Forfeited | shares | |
Number of Units Expired | shares | (35,000) |
Number of Units Unvested, Ending balance | shares | 1,100,000 |
Weighted Average Grant Date Fair Value Unnvested, Beginning balance | $ / shares | $ 2.73 |
Weighted Average Grant Date Fair Value Granted | $ / shares | 0.63 |
Weighted Average Grant Date Fair Value Forfeited | $ / shares | |
Weighted Average Grant Date Fair Value Expired | $ / shares | 0.63 |
Weighted Average Grant Date Fair Value Unvested, Ending balance | $ / shares | $ 2.73 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) (10-K) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating loss carryforwards | $ 54,000,000 | |
Operating loss carryforwards expire year | 2028 | |
Accruals for income tax accounting uncertainties | ||
Interest or penalties | ||
Unrecognized tax benefits decrease or increase during period | ||
Deferred tax assets percentage | 21.00% | |
Valuation allowance deferred tax assets | $ 5,500,000 | |
Federal [Member] | ||
Research and development credit carryforwards | $ 2,800,000 | |
Research and development credit carryforwards expire year | 2029 | |
State [Member] | ||
Research and development credit carryforwards | $ 2,300,000 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Statutory Income Tax Rate (Details) (10-K) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory U.S. federal rate | 21.00% | 34.00% |
State income tax, net of federal benefit | 7.00% | 5.80% |
Meals & entertainment | (0.10%) | (0.20%) |
Valuation allowance | (27.96%) | (39.76%) |
Provision for income taxes | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) (10-K) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 15,108,073 | $ 10,853,800 |
Patent costs | 382,812 | 325,615 |
Accrued vacation | 11,516 | 21,019 |
Research and development credit | 4,314,813 | 3,047,985 |
Stock-based compensation | 1,903,104 | 1,722,380 |
Other | 8,495 | 6,894 |
Gross deferred tax assets | 21,728,813 | 15,977,693 |
Valuation allowance | (21,728,813) | (15,977,693) |
Net deferred tax assets |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($) | Nov. 12, 2019 | Nov. 06, 2019 |
Sales Agreement [Member] | Private Placement [Member] | ||
Aggregate offering price of common stock | $ 3,673,159 | |
Waiver Agreement [Member] | ||
Aggreement transaction description | The terms of the Waiver Agreement, the Series B Holders agreed to waive the restriction in Section 4.12(b) of the 2018 Purchase Agreement prohibiting Dilutive Issuances (as defined in the 2018 Purchase Agreement) for the remainder of the Restricted Period (as defined in the 2018 Purchase Agreement), such that Section 4.12(b) of the 2018 Purchase Agreement is of no further force and effect (the "Waiver"). In exchange for the Series B Holders' Waiver and subject to the other terms and conditions described in the Waiver Agreement, we agreed to reduce the conversion price of the Series B convertible preferred stock from $1.30 to $0.20 per share and to reduce the conversion price of the Series C convertible preferred stock from $1.64 to $0.20 per share, in each case subject to the approval of our stockholders to issue the additional shares of common stock that will be issuable upon conversion of the Series B convertible preferred stock and Series C convertible preferred stock as a result of the Series B Conversion Price Adjustment and the Series C Conversion Price Adjustment as required by the applicable Nasdaq rules, which stockholder approval we agreed to seek by no later than the earlier of (i) our next annual or special meeting of stockholders, or (ii) February 14, 2020. | |
Waiver Agreement [Member] | Series B Convertible Preferred Stock [Member] | Maximum [Member] | ||
Conversion price per share | $ 1.64 | |
Waiver Agreement [Member] | Series B Convertible Preferred Stock [Member] | Minimum [Member] | ||
Conversion price per share | 0.20 | |
Waiver Agreement [Member] | Series C Convertible Preferred Stock [Member] | Maximum [Member] | ||
Conversion price per share | 1.30 | |
Waiver Agreement [Member] | Series C Convertible Preferred Stock [Member] | Minimum [Member] | ||
Conversion price per share | $ 0.20 |