Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 25, 2020 | Jun. 28, 2019 | |
Document And Entity Information | |||
Entity Registrant Name | RITTER PHARMACEUTICALS INC | ||
Entity Central Index Key | 0001460702 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 7,100,000 | ||
Entity Common Stock, Shares Outstanding | 45,713,862 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2019 |
Balance Sheets
Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 1,699,971 | $ 7,812,259 |
Accrued interest receivable | 771 | 54,456 |
Investment in marketable securities | 6,988,780 | |
Prepaid expenses and other current assets | 509,519 | 421,522 |
Total current assets | 2,210,261 | 15,277,017 |
Other assets | ||
Right-of-use assets | 93,032 | |
Other assets | 478,075 | 22,725 |
Total other assets | 571,107 | 22,725 |
Property and equipment, net | 15,656 | 20,160 |
Total Assets | 2,797,024 | 15,319,902 |
Current liabilities | ||
Accounts payable | 1,417,317 | 4,512,316 |
Accrued expenses | 179,258 | 1,407,843 |
Lease liabilities | 100,471 | |
Other liabilities | 13,359 | |
Total current liabilities | 1,697,046 | 5,933,518 |
Stockholders' equity | ||
Common stock, $0.001 par value; 225,000,000 shares authorized; 19,108,331 and 6,036,562 shares issued and outstanding as of December 31, 2019 and 2018, respectively | 19,108 | 6,037 |
Additional paid-in capital | 79,885,078 | 71,505,160 |
Accumulated other comprehensive loss | (923) | |
Accumulated deficit | (80,333,164) | (70,200,145) |
Total stockholders' equity | 1,099,978 | 9,386,384 |
Total Liabilities and Stockholders' Equity | 2,797,024 | 15,319,902 |
Series A Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, value | 2,289,324 | |
Total stockholders' equity | 2,289,324 | |
Series B Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, value | 1,288,956 | 3,906,931 |
Total stockholders' equity | 1,288,956 | 3,906,931 |
Series C Preferred Stock [Member] | ||
Stockholders' equity | ||
Preferred stock, value | 240,000 | 1,880,000 |
Total stockholders' equity | $ 240,000 | $ 1,880,000 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2019 | Dec. 31, 2018 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 225,000,000 | 225,000,000 |
Common stock, shares issued | 19,108,331 | 6,036,562 |
Common stock, shares outstanding | 19,108,331 | 6,036,562 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 9,500 | 9,500 |
Preferred stock, shares issued | 0 | 4,080 |
Preferred stock, shares outstanding | 0 | 4,080 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 6,000 | 6,000 |
Preferred stock, shares issued | 1,850 | 5,608 |
Preferred stock, shares outstanding | 1,850 | 5,608 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 1,880 | 1,880 |
Preferred stock, shares issued | 240 | 1,880 |
Preferred stock, shares outstanding | 240 | 1,880 |
Statements of Operations and Co
Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Operating costs and expenses: | |||
Research and development (a) | [1] | $ 6,126,972 | $ 12,259,940 |
Patent costs | 146,281 | 204,396 | |
General and administrative | 4,570,932 | 5,425,033 | |
Total operating costs and expenses | 10,844,185 | 17,889,369 | |
Operating loss | (10,844,185) | (17,889,369) | |
Other income: | |||
Interest income | 123,052 | 126,835 | |
Settlement of accounts payable (a) | [1] | 588,114 | 893,823 |
Total other income | 711,166 | 1,020,658 | |
Net loss | (10,133,019) | (16,868,711) | |
Other comprehensive gain (loss): | |||
Unrealized gain (loss) on debt securities | 923 | (923) | |
Comprehensive loss | (10,132,096) | (16,869,634) | |
Net Loss | (10,133,019) | (16,868,711) | |
Deemed dividend of preferred stock | (2,537,844) | ||
Net loss applicable to common stockholders | $ (10,133,019) | $ (19,406,555) | |
Net loss per common share - basic and diluted | $ (1.06) | $ (3.66) | |
Weighted average common shares outstanding - basic and diluted | 9,570,061 | 5,304,667 | |
[1] | For comparative presentation purposes, settlement of accounts payable of $893,823 for the year ended December 31, 2018 was reclassified out of research and development and into settlement of accounts payable under other income. |
Statements of Operations and _2
Statements of Operations and Comprehensive Loss (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Income Statement [Abstract] | |||
Settlement of accounts payable | [1] | $ 588,114 | $ 893,823 |
[1] | For comparative presentation purposes, settlement of accounts payable of $893,823 for the year ended December 31, 2018 was reclassified out of research and development and into settlement of accounts payable under other income. |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) | Series A Preferred Stock [Member] | Series B Preferred Stock [Member] | Series C Preferred Stock [Member] | Common Stock [Member] | Additiona Paid-in Capital [Member] | Additional Accumulated Deficit [Member] | Other Comprehensive Loss [Member] | Total |
Balance at Dec. 31, 2017 | $ 5,128,536 | $ 4,940 | $ 68,323,940 | $ (53,331,434) | $ 20,125,982 | |||
Balance, shares at Dec. 31, 2017 | 9,140 | 4,939,639 | ||||||
Payout to stockholders for fractional shares | (3,256) | (3,256) | ||||||
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) | |||||
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 | ||||||
Stock-based compensation | 645,823 | 645,823 | ||||||
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 loss on investment in marketable debt securities | (923) | (923) | ||||||
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 | ||||
Payout to stockholders for fractional shares | ||||||||
Stock-based compensation | 438,248 | 438,248 | ||||||
Conversion of Series A preferred shares into common stock | $ (2,289,324) | $ 1,020 | 2,288,304 | |||||
Conversion of Series A preferred shares into common stock, shares | (4,080) | 1,020,000 | ||||||
Conversion of Series B preferred shares into common stock | $ 2,890 | $ 2,615,085 | ||||||
Conversion of Series B preferred shares into common stock, shares | 2,890,396 | |||||||
Unrealized loss on investment in marketable debt securities | $ 923 | |||||||
Shareholders fractional adjustment, shares | (2) | |||||||
Issuance of common shares from ATM Agreement | $ 8,126 | $ 1,448,942 | $ 1,457,068 | |||||
Issuance of common shares from ATM Agreement, shares | 8,126,375 | |||||||
Stock issuance costs of ATM Agreement | (49,626) | (49,626) | ||||||
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 | ||||||
Settlement of RSUs | $ 35 | (35) | ||||||
Settlement of RSUs, shares | 35,000 | |||||||
Change in unrealized loss on available-for-sale securities | 923 | 923 | ||||||
Change in unrealized loss on available-for-sale securities, shares | ||||||||
Net loss | (10,133,018) | (10,133,019) | ||||||
Balance at Dec. 31, 2019 | $ 1,288,956 | $ 240,000 | $ 19,108 | $ 79,885,078 | $ (80,333,164) | $ 1,099,978 | ||
Balance, shares at Dec. 31, 2019 | 1,850 | 240 | 19,108,331 |
Statements of Cash Flows
Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Cash flows from operating activities | |||
Net loss | $ (10,133,019) | $ (16,868,711) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation | 6,093 | 5,721 | |
Amortization of right-of-use assets | 105,287 | ||
Stock-based compensation | 438,248 | 645,823 | |
Settlement of accounts payable | [1] | 588,114 | 893,823 |
Amortization of discount on available-for-sale debt securities | (9,769) | (19,789) | |
Change in unrealized gain (loss) on investment in marketable debt securities | 923 | (923) | |
Changes in operating assets and liabilities: | |||
Accrued interest receivable | 53,685 | (54,456) | |
Prepaid expenses and other current assets | (87,997) | (254,122) | |
Other assets | (455,350) | (12,399) | |
Accounts payable | (2,506,885) | 3,168,559 | |
Accrued expenses | (1,228,585) | 953,591 | |
Lease liabilities | (97,848) | ||
Other liabilities | (13,359) | (2,398) | |
Net cash and cash equivalents used in operating activities | (14,516,690) | (13,332,927) | |
Cash flows from investing activities | |||
Purchase of property and equipment | (1,589) | (2,008) | |
Purchase of investment in marketable securities | (6,968,991) | ||
Sale of investments in marketable debt securities | 6,998,549 | ||
Net cash and cash equivalents provided by (used) in investing activities | 6,996,960 | (6,970,999) | |
Cash flows from 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 from ATM Agreement | 1,457,068 | ||
Stock issuance costs of ATM Agreement | (49,626) | ||
Payout to shareholders for fractional shares | (3,256) | ||
Net cash and cash equivalents provided by financing activities | 1,407,442 | 5,484,214 | |
Net decrease in cash and cash equivalents | (6,112,288) | (14,819,712) | |
Cash and cash equivalents at beginning of year | 7,812,259 | 22,631,971 | |
Cash and cash equivalents at end of year | 1,699,971 | 7,812,259 | |
Supplemental disclosure of cash flow activities: | |||
Cash paid for taxes | 187,095 | 2,233 | |
Supplemental disclosure of non-cash investing and financing activities: | |||
Deemed dividend on preferred stock | 2,537,844 | ||
Conversion of preferred stock to common stock | 6,547,299 | 2,057,794 | |
Conversion of Series A preferred stock to Series C preferred stock | 1,880,000 | ||
Right-of-use assets obtained in exchange for lease liabilities | (198,319) | ||
Lease liabilities arising from obtaining right-of-use assets | $ 100,471 | ||
[1] | For comparative presentation purposes, settlement of accounts payable of $893,823 for the year ended December 31, 2018 was reclassified out of research and development and into settlement of accounts payable under other income. |
Organization and Principal Acti
Organization and Principal Activities | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Principal Activities | NOTE 1 — ORGANIZATION AND PRINCIPAL ACTIVITIES Since its inception, Ritter Pharmaceuticals, Inc. (“Ritter” or the “Company”) has focused on the development of 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 (“GOS”), 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. Ritter was formed as a Nevada limited liability company on March 29, 2004 under the name Ritter Natural Sciences, LLC. Its first prototype LI product, Lactagen™, was an alternative LI treatment method with a mechanism of action similar to RP-G28. In 2004, clinical testing was conducted with Lactagen, which included a 61-subject double-blind placebo controlled clinical trial. The results were published in the Federation of American Societies for Experimental Biology in May 2005. In early 2008, the Company initiated a prescription drug development program by developing RP-G28, an improved, second-generation version of Lactagen, based on the belief that if it was successful in gaining approval from the U.S. Food and Drug Administration (“FDA”), it would be able to make stronger claims of both efficacy and safety, garner more medical community support and reach a wider market in the effort to treat LI. In November 2010, Ritter was awarded a grant from the United States government’s Health Care Bill program, the Qualifying Therapeutic Discovery Project, to help fund the development of RP-G28. This grant program provides support for innovative projects that are determined by the U.S. Department of Health and Human Services to have reasonable potential to result in new therapies that treat areas of unmet medical need and/or prevent, detect or treat chronic or acute diseases and conditions. In November 2011, the Company completed a Phase 2a clinical trial of RP-G28. Positive trends were seen when the entire per protocol study population was analyzed, including some statistically significant subgroup. The combined data demonstrated proof of concept and suggested that RP-G28 administration produced a positive therapeutic effect. RP-G28 was also well tolerated with no significant study-drug related adverse effects. In October 2016, the Company completed a Phase 2b multi-center, randomized, double-blind, placebo-controlled, parallel group trial of RP-G28. Topline results of the trial were announced in March 2017. Results showed a clinically meaningful benefit to subjects in the reduction of LI symptoms across a variety of outcome measures. The majority of analyses showed positive outcome measures and the robustness of the data point to a clear drug effect. Treatment patients not only reported meaningful reduced symptoms, but also 30 days after taking the treatment, patients reported adequate relief from LI symptoms and satisfaction with the results of the treatment, with RP-G28 preventing or treating their LI symptoms. Greater milk and dairy product consumption was also reported by patients. In August 2017, the Company held an End-of-Phase 2 meeting with the FDA’s Division of Gastroenterology and Inborn Errors Products. The purpose of the meeting was to obtain the FDA’s feedback on its Phase 3 program. The Company reached general consensus with the FDA on certain elements of its Phase 3 program and clear guidance and recommendations on many necessary components of its Phase 3 program; including the clinical, non-clinical, and chemistry, manufacturing and controls (“CMC”) requirements needed to support a new drug application (“NDA”) submission. In June 2018, the Company initiated the first pivotal Phase 3 clinical trial of RP-G28. Called “Liberatus”, this study was to determine the efficacy, safety and tolerability of RP-G28 to treat LI when compared to placebo. The study was a multicenter, randomized, double-blind, placebo-controlled, parallel-group study conducted in the United States. Trial enrollment exceeded expectations, concluding with approximately 557 subjects randomized. More than 30 U.S. sites participated in the study. The protocol design included a 2-week screening period that included one week of study drug administration, a randomized 30-day study drug treatment period and a 90-day “real world experience” period to assess study drug response and durability of effect after treatment as patients consumed their normal diets including dairy products. The primary endpoint of the study was the mean change in LI symptom composite score 30-days post-treatment compared to baseline. Secondary endpoints were to examine the safety, tolerability and meaningfulness of treatment benefit with RP-G28 and the durability of effect of treatment with RP-G28 on reduction of LI symptoms after real-world lactose exposure. The study utilized the prior validated symptom assessment measure and patient questionnaires to capture relevant outcomes. In addition, risk-based data review was used to monitor and assess potential protocol deviations and site quality indicators. The Company completed enrollment of the Liberatus Phase 3 clinical trial of RP-G28 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. On October 7, 2019, the Company announced publicly that it had engaged AGP as a financial advisor to explore and evaluate potential strategic alternatives, as it continued to analyze the results of the trial to better understand the data and clinical outcome to assess a path forward for RP-G28. All further development efforts for RP-G28 have been suspended, until such time as the Company determines a path forward. On January 15, 2020, Ritter entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Qualigen Inc. (“Qualigen”), pursuant to which a wholly owned Company Merger Sub will merge with and into Qualigen, with Qualigen surviving as a wholly owned subsidiary of Ritter Pharmaceuticals, Inc. If the merger is consummated, the combined company does not intend to continue the clinical development of RP-G28. Pursuant to the terms of the Merger Agreement, at the Effective Time (as defined in the Merger Agreement), Ritter and John Beck, the Company’s Chief Financial Officer, acting as the initial contingent value right (“CVR”) holders’ representative and in his capacity as a consultant to Ritter, will enter into a Contingent Value Rights Agreement (the “CVR Agreement”), pursuant to which, each stockholder of record as of immediately prior to the Effective Time (after giving effect to the exercise of any outstanding stock options or warrants and the conversion of any outstanding preferred stock, but not to be adjusted for any reverse split to be effected in connection with the merger) will receive one CVR for each share of capital stock held by such stockholder, entitling the holder to receive the net proceeds, if any, from any sale, license, transfer, spin-off or other monetizing event of all or any part of our current business or all or any part of our intellectual property or technology (a “Legacy Monetization”) that is entered into during the period beginning on the date the Merger Agreement was signed and ending on the third anniversary of the closing date of the merger. Under the CVR Agreement, the combined company agreed to commit up to $350,000 (subject to reduction pursuant to the terms of the Merger Agreement) for certain expenses to be incurred by us in pursuing and closing any Legacy Monetization. The CVRs will not be transferable by the holders of CVRs (“CVR Holders”), except in certain limited circumstances, will not be certificated or evidenced by any instrument, will not accrue interest and will not be registered with the Securities and Exchange Commission (the “SEC”) or listed for trading on any exchange. The CVRs will terminate on the tenth anniversary of the Effective Time (the “CVR Termination Date”). No payments with respect to the CVRs will be payable in respect of any Legacy Monetization proceeds actually received after the CVR Termination Date by us. From and after the CVR Termination Date, any further proceeds received by us arising from any Legacy Monetization will be retained by Ritter and will not be distributed to the CVR Holders. The Company may not be successful in completing the merger. If the merger is not completed, Ritter may seek to pursue the development and commercialization of RP-G28 as either a prescription drug, OTC product or dietary supplement for the consumer healthcare industry, which would, in any case, require significant additional funding. If Ritter is unable to obtain funding for the development of RP-G28, whether through potential collaborative, partnering or other strategic arrangements or otherwise, it will likely be required to cease operations The Company currently operates in one business segment focusing on the potential future 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 | 12 Months Ended |
Dec. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | NOTE 2 — BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with 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 $10.1 million and $16.9 million for the years ended December 31, 2019 and 2018, respectively, and had net cash used in operating activities of approximately $14.5 million and $13.3 million, for the years ended December 31, 2019 and 2018, respectively. At December 31, 2019, the Company had working capital of approximately $0.5 million, an accumulated deficit of approximately $80.3 million, cash and cash equivalents of approximately $1.7 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. If the Plan of Merger is not successful, the Company may close down operations and operate as a shell company if the Company cannot raise the cash to continue operations. 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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, 2019, cash and cash equivalents consisted of bank deposits, cash and investments in money market funds. 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 and comprehensive loss. The unrealized gains and losses on these securities are excluded from earnings and reported in other comprehensive loss 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, 2019. 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, 2019 Assets: Money market fund $ 1,552,115 $ ― $ ― $ 1,552,115 Total assets $ 1,552,115 $ ― $ ― $ 1,552,115 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 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 were classified as available-for-sale debt securities. At December 31, 2019, 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. Realized gains and losses are included in earnings The Company had no available-for-sale or held-to-maturity debt securities as of December 31, 2019. 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. 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, 2019 and 2018, comprehensive loss comprised of unrealized losses on investments in available-for-sale debt securities and held-to-maturity debt securities. 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 December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Other accounting standard updates effective after December 31, 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 adopted this guidance as of January 1, 2019. The standard had a material impact on the Company’s 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 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | NOTE 4 — PROPERTY AND EQUIPMENT Property and equipment consists of the following: Estimated Life December 31, 2019 December 31, 2018 Computer 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 (20,680 ) (14,587 ) Property and equipment, net $ 15,656 $ 20,160 Depreciation expense of approximately $6,100 and $5,700 was recognized for each of the years ended December 31, 2019 and 2018, respectively, and is classified in general and administrative expense in the accompanying Statements of Operations and Comprehensive Loss. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 5 — COMMITMENTS AND CONTINGENCIES Master Services Agreement In May 2018, Ritter entered into an Amended and Restated Master Services Agreement (“Service Agreement”) with a clinical research organization (“CRO”), pursuant to which the CRO agreed to 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, that Ritter entered into with 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. Ritter 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. Ritter may terminate the Services Agreement or any task without cause immediately upon giving the CRO notice of such termination. The CRO may, with advance notice to Ritter, terminate a task order if Ritter has materially defaulted on its obligations under the Services Agreement or any task order and has not cured such material default, as described in the Services Agreement. Clinical Supply and Cooperation Agreement with Ricerche Sperimentali Montale SpA (“RSM”) Under the terms of the Supply Agreement with RSM on July 22, 2015, Ritter is required to pay RSM $400,000 within 10 days following FDA approval of an NDA for the first product owned or controlled by Ritter using Improved GOS as its active pharmaceutical ingredient. Offer Letter Amendments On October 15, 2019, Ritter entered into amendments to the respective employment offer letters of Andrew J. Ritter, its Chief Executive Officer, John W. Beck, its Chief Financial Officer, and Ira E. Ritter, its Chief Strategic Officer (the “Offer Letter Amendments”). Pursuant to the terms of the Offer Letter Amendments, each of Ritter’s executive officers agreed to defer a portion of his annual base salary (the “Deferred Amounts”), as set forth below, until such time as the board of directors, in its sole discretion, decides to pay the Deferred Amounts (or any portion of the Deferred Amounts) to the executive officers, if ever. Name of Executive Officer Annual Deferred Amount Andrew J. Ritter $ 70,200 John W. Beck $ 33,000 Ira E. Ritter $ 53,820 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, recognized on a straight-line basis, was approximately $117,000 and $118,000 for the years ended December 31, 2019 and 2018, respectively, and is recorded in general and administrative expenses in the accompanying statements of operations and comprehensive loss. Other information related to our leases is provided below. Year Ended Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease $ 114,978 Operating lease asset obtained in exchange for lease obligation: Operating lease $ 198,319 Remaining lease term Operating lease 0.8 years Discount rate Operating lease 6.0 % 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, 2020 (10 months) $ 103,254 Total future minimum lease payments, undiscounted 103,254 Less imputed interest (2,783 ) Present value of lease liabilities $ 100,471 Operating lease liabilities reported as of December 31, 2019: Operating lease liabilities-current $ 100,471 Operating lease liabilities-non-current — Total $ 100,471 The following table summarizes our lease obligations at December 31, 2019: LEASE COMMITMENTS Years ended December 31, Operating Lease 2020 $ 103,254 Total minimum lease payments $ 103,254 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 | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 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 of which are designated as preferred stock, consisting of (i) 9,500 shares that have been designated Series A convertible preferred stock, (ii) 6,000 shares that have been designated as Series B convertible preferred stock, and (iii) 1,880 shares that have been designated as Series C convertible preferred stock. Pursuant to the terms of the Certificate of Incorporation, the board of directors has the authority to issue preferred stock in one or more classes or series and to fix the designations, powers, preferences and rights, and the qualifications, limitations or restrictions thereof, including dividend rights, conversion right, voting rights, terms of redemption, liquidation preferences and the number of shares constituting any class or series, without further vote or action by the stockholders. 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, 2019, the Company had 19,108,331 shares of common stock, 0 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 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 and on July 23, 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 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 selected, it had 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 could not exceed $500,000, unless otherwise mutually agreed. In addition, on any date on which the Company submitted a Purchase Notice to Aspire Capital in an amount of at least 100,000 shares and its stock price was not less than $0.25 per share, the Company could 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 could be sold pursuant to Aspire Capital was 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 December 31, 2019, the Company has not sold any shares of common stock under this agreement. Subsequent to December 31, 2019 the Company sold approximately 1.8 million shares of common stock under this agreement resulting in proceeds of approximately $0.5 million. 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. At-the-Market Offering Agreement On November 6, 2019, the Company entered into an at the market sales agreement (“ATM Agreement”) with AGP, pursuant to which it may offer and sell, from time to time through AGP, shares of its common stock (the “Placement Shares”) having an aggregate offering price of up to $3,673,159 (which was subsequently increased to $8,030,917), 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 AGP and (ii) August 1, 2022. As of December 31, 2019, the Company sold approximately 8.1 million shares of common stock under the ATM Agreement resulting net proceeds to of approximately $1.4 million after commissions and expenses of approximately $50,000. Subsequent to December 31, 2019 the Company sold approximately 16.8 million shares of common stock under this agreement resulting in net proceeds of approximately $4.4 million after commissions and expenses of approximately $0.2 million. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2019 | |
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 December 31, 2019. These warrants are all vested and exercisable, have exercise prices ranging from $0.15 to $93.00 per share, with a weighted average exercise price of $0.95, and expire at various dates through November 2023. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2019 | |
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 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, 2019, the aggregate number of shares of common stock authorized for issuance under the 2015 Plan, as amended, was 2,750,000, and 1,737,615 shares were available for issuance as of December 31, 2019. The following represents a summary of the options granted to employees and non-employees that are outstanding at December 31, 2019 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, 2018 673,885 $ 19.82 $ ― 8.2 Options granted 698,750 0.62 ― 8.6 Options forfeited (207,991 ) 27.50 ― ― Outstanding at December 31, 2019 1,164,644 6.93 ― 8.4 Exercisable at December 31, 2019 481,883 $ 20.54 $ ― 7.8 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, 2019 was $0.62. 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, 2019 2018 Expected dividend yield 0.00 % 0.00 % Expected stock-price volatility 46.33% - 69.38 % 46.47% - 53.11 % Risk-free interest rate 1.47% - 2.60 % 2.46% - 3.07 % Term of options 5 - 7 5 - 10 Stock price $ 0.60 - $1.04 $ 1.85 - $3.40 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 $438,000 and $646,000 for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, there was approximately $254,000 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 1.4 years. No stock options were exercised during the year ended December 31, 2019 and 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
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 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, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 — INCOME TAXES As of December 31, 2019, the Company has net operating loss carryforwards of approximately $63.5 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, 2019, the Company has Federal and state research and development credit carryforwards of approximately $3.2 million and $3.1 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, 2019. 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, 2019 2018 Statutory U.S. federal rate 21.0 % 21.0 % State income tax, net of federal benefit 7.0 % 7.0 % Meals & entertainment (0.1 )% (0.1 )% Valuation allowance (27.9 )% (27.9 )% 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, 2019 2018 Deferred tax assets: Net operating loss carry forwards $ 17,773,202 $ 15,108,073 Patent costs 423,747 382,812 Accrued Vacation 12,832 11,516 Research and development credit 5,241,066 4,314,813 Stock-based compensation 2,025,742 1,903,104 Other 10,200 8,495 Gross deferred tax assets 25,486,789 21,728,813 Valuation allowance (25,486,789 ) (21,728,813 ) Net deferred tax assets $ — $ — The Company did not record any accruals for income tax accounting uncertainties for the years ended December 31, 2019 and 2018 . 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, 2019. The Company does not have any unrecognized tax benefits that will significantly decrease or increase within 12 months of December 31, 2019. 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. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 — SUBSEQUENT EVENTS On January 15, 2020, Ritter entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Qualigen Inc. (“Qualigen”), pursuant to which the Merger Sub will merge with and into Qualigen, with Qualigen surviving as a wholly owned subsidiary of Ritter. Upon closing, on a pro forma basis and based upon the number of shares of Ritter common stock expected to be issued in the merger, the pre-merger Ritter securityholders are expected to own approximately 7.5% of the combined company, on a fully diluted basis, and the pre-merger Qualigen securityholders are expected to own approximately 92.5% of the combined company, on a fully diluted basis. To consummate the merger, Ritter and Qualigen stockholders must adopt and approve the Merger Agreement and a series of Merger-related proposals. In addition to obtaining such stockholder approvals and appropriate regulatory approvals, each of the other closing conditions set forth in the Merger Agreement must be satisfied or waived. Risks Related to COVID-19 Pandemic The recent outbreak of COVID-19 originated in Wuhan, China, in December 2019 and has since spread to multiple countries, including the United States and several European countries. On March 11, 2020, the World Health Organization declared the outbreak a pandemic. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic is difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact the Company’s short-term and long-term liquidity and the Company’s and Qualigen’s ability to complete the Plan of Merger on a timely basis or at all. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential delays or impacts on its business, financing or other activities or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which we rely. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
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 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 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, 2019, cash and cash equivalents consisted of bank deposits, cash and investments in money market funds. |
Investments in Marketable Securities | 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 and comprehensive loss. The unrealized gains and losses on these securities are excluded from earnings and reported in other comprehensive loss 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 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, 2019. 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, 2019 Assets: Money market fund $ 1,552,115 $ ― $ ― $ 1,552,115 Total assets $ 1,552,115 $ ― $ ― $ 1,552,115 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 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 were classified as available-for-sale debt securities. At December 31, 2019, 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. Realized gains and losses are included in earnings The Company had no available-for-sale or held-to-maturity debt securities as of December 31, 2019. |
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. |
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 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 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, 2019 and 2018, 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 December 2019, the FASB issued ASU No. 2019-12, “ Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Other accounting standard updates effective after December 31, 2019 are not expected to have a material impact on the Company’s financial statements. |
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 adopted this guidance as of January 1, 2019. The standard had a material impact on the Company’s 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 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
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, 2019 Assets: Money market fund $ 1,552,115 $ ― $ ― $ 1,552,115 Total assets $ 1,552,115 $ ― $ ― $ 1,552,115 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 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consists of the following: Estimated Life December 31, 2019 December 31, 2018 Computer 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 (20,680 ) (14,587 ) Property and equipment, net $ 15,656 $ 20,160 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Annual Deferred Amount | Name of Executive Officer Annual Deferred Amount Andrew J. Ritter $ 70,200 John W. Beck $ 33,000 Ira E. Ritter $ 53,820 |
Schedule of Other Information Related Operating Leases in Cash Flow Information | Other information related to our leases is provided below. Year Ended Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease $ 114,978 Operating lease asset obtained in exchange for lease obligation: Operating lease $ 198,319 Remaining lease term Operating lease 0.8 years Discount rate Operating lease 6.0 % |
Schedule of Future Payments Under Non-cancelable Operating Lease | 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, 2020 (10 months) $ 103,254 Total future minimum lease payments, undiscounted 103,254 Less imputed interest (2,783 ) Present value of lease liabilities $ 100,471 Operating lease liabilities reported as of December 31, 2019: Operating lease liabilities-current $ 100,471 Operating lease liabilities-non-current — Total $ 100,471 |
Summarized Operating Lease Obligations | The following table summarizes our lease obligations at December 31, 2019: LEASE COMMITMENTS Years ended December 31, Operating Lease 2020 $ 103,254 Total minimum lease payments $ 103,254 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 December 31, 2019 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, 2018 673,885 $ 19.82 $ ― 8.2 Options granted 698,750 0.62 ― 8.6 Options forfeited (207,991 ) 27.50 ― ― Outstanding at December 31, 2019 1,164,644 6.93 ― 8.4 Exercisable at December 31, 2019 481,883 $ 20.54 $ ― 7.8 |
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 (adjusted for 1-for-10 reverse stock split): For the year ended December 31, 2019 2018 Expected dividend yield 0.00 % 0.00 % Expected stock-price volatility 46.33% - 69.38 % 46.47% - 53.11 % Risk-free interest rate 1.47% - 2.60 % 2.46% - 3.07 % Term of options 5 - 7 5 - 10 Stock price $ 0.60 - $1.04 $ 1.85 - $3.40 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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, 2019 2018 Statutory U.S. federal rate 21.0 % 21.0 % State income tax, net of federal benefit 7.0 % 7.0 % Meals & entertainment (0.1 )% (0.1 )% Valuation allowance (27.9 )% (27.9 )% 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, 2019 2018 Deferred tax assets: Net operating loss carry forwards $ 17,773,202 $ 15,108,073 Patent costs 423,747 382,812 Accrued Vacation 12,832 11,516 Research and development credit 5,241,066 4,314,813 Stock-based compensation 2,025,742 1,903,104 Other 10,200 8,495 Gross deferred tax assets 25,486,789 21,728,813 Valuation allowance (25,486,789 ) (21,728,813 ) Net deferred tax assets $ — $ — |
Organization and Principal Ac_2
Organization and Principal Activities (Details Narrative) | Jan. 15, 2020USD ($) |
Subsequent Event [Member] | Merger Agreement [Member] | |
Expenses incurred | $ 350,000 |
Basis of Presentation (Details
Basis of Presentation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Net loss | $ (10,133,019) | $ (16,868,711) |
Net cash used in operating activities | (14,516,690) | (13,332,927) |
Working capital | 500,000 | |
Accumulated deficit | (80,333,164) | (70,200,145) |
Cash and cash equivalents | $ 1,699,971 | $ 7,812,259 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Estimated useful lives for plant and equipment, description | straight-line method | |
Impairment charges |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Fair Value of Assets and Liabilities (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Total assets | $ 1,552,115 | $ 12,241,748 |
Money Market Fund [Member] | ||
Total assets | 1,552,115 | |
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 | 1,552,115 | 2,353,825 |
Level 1 [Member] | Money Market Fund [Member] | ||
Total assets | 1,552,115 | |
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] | Money Market Fund [Member] | ||
Total assets | ||
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] | Money Market Fund [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 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 6,100 | $ 5,700 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 36,336 | $ 34,747 |
Accumulated depreciation | (20,680) | (14,587) |
Property and equipment, net | $ 15,656 | 20,160 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 5 years | |
Total property and equipment | $ 17,178 | 15,589 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 7 years | |
Total property and equipment | $ 19,158 | $ 19,158 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Narrative) | 12 Months Ended | ||
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jul. 09, 2015ft² | |
Rent expense | $ 117,000 | $ 118,000 | |
Lease renewal term | 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. | ||
Supply Agreement [Member] | |||
Repayment of supply commitments | $ 400,000 | ||
Century Park [Member] | |||
Area of lease | ft² | 2,780 | ||
Lease agreement term | 61 months | ||
Months 2 Through 13 [Member] | |||
Rent expense | $ 9,174 | ||
Lease term description | Months 2 through 13 of the term | ||
Months 50 Through 61 [Member] | |||
Rent expense | $ 10,325 | ||
Lease term description | Months 50 through 61 |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Annual Deferred Amount (Details) | Oct. 15, 2019USD ($) |
Andrew J. Ritter [Member] | |
Annual Deferred Amount | $ 70,200 |
John W. Beck [Member] | |
Annual Deferred Amount | 33,000 |
Ira E. Ritter [Member] | |
Annual Deferred Amount | $ 53,820 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Other Information Related Operating Leases in Cash Flow Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease | $ 114,978 | |
Operating lease asset obtained in exchange for lease obligation: Operating lease | $ 198,319 | |
Remaining lease term Operating lease | 29 days | |
Discount rate Operating lease | 6.00% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Payments Under Non-cancelable Operating Lease (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Operating lease liabilities-current | $ 100,471 | |
Operating Lease [Member] | ||
2020 (10 months) | 103,254 | |
Total future minimum lease payments, undiscounted | 103,254 | |
Less imputed interest | (2,783) | |
Present value of lease liabilities | 100,471 | |
Operating lease liabilities-current | 100,471 | |
Operating lease liabilities-non-current | ||
Total | $ 100,471 |
Commitments and Contingencies_5
Commitments and Contingencies - Summarized Operating Lease Obligations (Details) | Dec. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2020 | $ 103,254 |
Total minimum lease payments | $ 103,254 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) | Nov. 06, 2019USD ($) | Mar. 29, 2019USD ($) | Nov. 05, 2018USD ($)$ / sharesshares | Mar. 23, 2018 | Mar. 27, 2020USD ($)shares | Dec. 31, 2019USD ($)Integer$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Sep. 30, 2017$ / sharesshares |
Common stock, shares authorized | 225,000,000 | 225,000,000 | 225,000,000 | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Preferred stock, shares authorized | 15,000,000 | |||||||
Preferred stock, par value | $ / shares | $ 0.001 | |||||||
Reverse split stock | 1-for-10 reverse stock split | 1-for-10 reverse stock | ||||||
Common stock, shares issued | 19,108,331 | 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 | |||||||
Gross proceeds from closing of private placement | $ | 6,000,000 | |||||||
Deemed dividend on preferred stock | $ | $ 2,537,844 | |||||||
Maximum [Member] | ||||||||
Warrant exercise price per share | $ / shares | $ 93 | |||||||
Minimum [Member] | ||||||||
Warrant exercise price per share | $ / shares | $ 0.15 | |||||||
PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||
Gross proceeds from closing of private placement | $ | $ 5,500,000 | |||||||
Number of warrants to purchase common stock | 2,307,685 | |||||||
PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | Warrant [Member] | ||||||||
Warrant exercise price per share | $ / shares | $ 1.30 | |||||||
Warrant term | 5 years | |||||||
2017 Aspire Purchase Agreement [Member] | March 2019 [Member] | ||||||||
Number of common shares sold | 100,000 | |||||||
Number of shares possible increase per trading day | 2,000,000 | |||||||
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% | |||||||
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 | |||||||
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 | $ / shares | $ 0.25 | |||||||
Average price paid | $ / shares | $ 0.86 | |||||||
2017 Aspire Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | ||||||||
Number of common shares sold | ||||||||
2017 Aspire Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | Subsequent Event [Member] | ||||||||
Number of common shares sold | 1,800,000 | |||||||
Number of common shares sold, value | $ | $ 500,000 | |||||||
2017 Aspire Purchase Agreement [Member] | Aspire Capital Fund LLC [Member] | March 31, 2021 [Member] | ||||||||
Payments to acquire common stock | $ | $ 6,500,000 | |||||||
ATM Sales Agreement [Member] | ||||||||
Number of common stock shares sold under ATM agreement | 8,100,000 | |||||||
Value of common stock shares sold under ATM agreement | $ | $ 1,400,000 | |||||||
Expenses related to ATM agreement | $ | $ 50,000 | |||||||
ATM Sales Agreement [Member] | Private Placement [Member] | ||||||||
Number of common shares sold, value | $ | $ 3,673,159 | |||||||
ATM Sales Agreement [Member] | Private Placement [Member] | Subsequently Increased [Member] | ||||||||
Number of common shares sold, value | $ | $ 8,030,917 | |||||||
ATM Sales Agreement [Member] | Subsequent Event [Member] | ||||||||
Number of common stock shares sold under ATM agreement | 16,800,000 | |||||||
Value of common stock shares sold under ATM agreement | $ | $ 4,400,000 | |||||||
Expenses related to ATM agreement | $ | $ 200,000 | |||||||
Series A Convertible Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 9,500 | |||||||
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"). | |||||||
Series B Convertible Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 6,000 | |||||||
Series B Convertible Preferred Stock [Member] | PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||
Preferred stock, par value | $ / shares | $ 1,000 | |||||||
Preferred stock convertible into common stock conversion price per share | $ / shares | $ 1.30 | |||||||
Number of common shares sold | 6,000 | |||||||
Series C Convertible Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 1,880 | |||||||
Series C Convertible Preferred Stock [Member] | PIPE Financing [Member] | November 2018 Private Placement Financing [Member] | ||||||||
Preferred stock, par value | $ / shares | $ 1,000 | |||||||
Preferred stock convertible into common stock conversion price per share | $ / shares | $ 1.64 | |||||||
Deemed dividend on preferred stock | $ | $ 700,000 | |||||||
Beneficial conversion feature price | $ | $ 200,000 | |||||||
Series A Preferred Stock [Member] | ||||||||
Preferred stock, shares authorized | 9,500 | 9,500 | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||
Preferred stock, shares issued | 0 | 4,080 | ||||||
Preferred stock, shares outstanding | 0 | 4,080 | ||||||
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 | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||
Preferred stock, shares issued | 1,850 | 5,608 | ||||||
Preferred stock, shares outstanding | 1,850 | 5,608 | ||||||
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 | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | ||||||
Preferred stock, shares issued | 240 | 1,880 | ||||||
Preferred stock, shares outstanding | 240 | 1,880 | ||||||
Preferred stock convertible into common stock conversion price per share | $ / shares | $ 1.64 |
Warrants (Details Narrative)
Warrants (Details Narrative) | Dec. 31, 2019$ / sharesshares |
Issuance of warrants to purchase of common stock shares | shares | 8,413,017 |
Weighted average exercise price of warrants | $ 0.95 |
Warrant expiration date | Nov. 30, 2023 |
Minimum [Member] | |
Warrants exercise prices ranging | $ 0.15 |
Maximum [Member] | |
Warrants exercise prices ranging | $ 93 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | Mar. 23, 2018 | Sep. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2019 | Dec. 31, 2018 |
Weighted average grant date fair value per share of options granted | $ 0.62 | ||||
Expected dividend yield | 0.00% | 0.00% | |||
Risk-free interest rate | 0.00% | ||||
Reverse split stock | 1-for-10 reverse stock split | 1-for-10 reverse stock | |||
Stock based compensation expense | $ 438,248 | $ 645,823 | |||
Unrecognized compensation cost related to un-vested stock based compensation | $ 254,000 | ||||
Weighted average period of compensation cost expected to be recognized | 1 year 4 months 24 days | ||||
Number of stock options exercised | |||||
2015 Equity Incentive Plan [Member] | |||||
Aggregate number of common stock shares authorized for issuance | 2,750,000 | ||||
Number of common stock available for issuance | 1,737,615 | ||||
2015 Equity Incentive Plan [Member] | Employee Stock Option [Member] | |||||
Additional number of shares of common stock authorized to issue | 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 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock Option Activity (Details) | 12 Months Ended |
Dec. 31, 2019USD ($)$ / sharesshares | |
Share-based Payment Arrangement [Abstract] | |
Number of Shares, Options Outstanding, Beginning | shares | 673,885 |
Number of Shares, Options granted | shares | 698,750 |
Number of Shares, Options forfeited | shares | (207,991) |
Number of Shares, Options Outstanding at Ending | shares | 1,164,644 |
Number of Shares, Options Exercisable | shares | 481,883 |
Weighted Average Exercise Price, Outstanding, Beginning | $ 19.82 |
Weighted Average Exercise Price, Options granted | 0.62 |
Weighted Average Exercise Price, Options forfeited | 27.50 |
Weighted Average Exercise Price, Outstanding at Ending | 6.93 |
Weighted Average Exercise Price, Options Exercisable | $ 20.54 |
Aggregate Intrinsic Value, Outstanding, Beginning | $ | |
Aggregate Intrinsic Value, Options granted | |
Aggregate Intrinsic Value, Options 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 |
Weighted- Average Remaining Contractual Life (in Years), Options granted | 8 years 7 months 6 days |
Weighted- Average Remaining Contractual Life (in Years), Outstanding at Ending | 8 years 4 months 24 days |
Weighted- Average Remaining Contractual Life (in Years), Options Exercisable | 7 years 9 months 18 days |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Assumptions Used in Black-Scholes Option-Pricing Method (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Expected dividend yield | 0.00% | 0.00% |
Expected stock-price volatility, minimum | 46.33% | 46.47% |
Expected stock-price volatility, maximum | 69.38% | 53.11% |
Risk-free interest rate, minimum | 1.47% | 2.46% |
Risk-free interest rate, maximum | 2.60% | 3.07% |
Minimum [Member] | ||
Term of options | 5 years | 5 years |
Stock price | $ 0.60 | $ 1.85 |
Maximum [Member] | ||
Term of options | 7 years | 10 years |
Stock price | $ 1.04 | $ 3.40 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating loss carryforwards | $ 63,500,000 | |
Operating loss carryforwards expire year | 2028 | |
Accruals for income tax accounting uncertainties | ||
Interest or penalties | ||
Unrecognized tax benefits decrease or increase during period | ||
Federal [Member] | ||
Research and development credit carryforwards | $ 3,200,000 | |
Research and development credit carryforwards expire year | 2029 | |
State [Member] | ||
Research and development credit carryforwards | $ 3,100,000 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Statutory Income Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Statutory U.S. federal rate | 21.00% | 21.00% |
State income tax, net of federal benefit | 7.00% | 7.00% |
Meals & entertainment | 0.10% | (0.10%) |
Valuation allowance | (27.90%) | (27.90%) |
Provision for income taxes | 0.00% | 0.00% |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carry forwards | $ 17,773,202 | $ 15,108,073 |
Patent costs | 423,747 | 382,812 |
Accrued Vacation | 12,832 | 11,516 |
Research and development credit | 5,241,066 | 4,314,813 |
Stock-based compensation | 2,025,742 | 1,903,104 |
Other | 10,200 | 8,495 |
Gross deferred tax assets | 25,486,789 | 21,728,813 |
Valuation allowance | (25,486,789) | (21,728,813) |
Net deferred tax assets |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | Jan. 15, 2020 |
Subsequent Event [Member] | Merger Agreement [Member] | |
Owning percentage discription | Upon closing, on a pro forma basis and based upon the number of shares of Ritter common stock expected to be issued in the merger, the pre-merger Ritter securityholders are expected to own approximately 7.5% of the combined company, on a fully diluted basis, and the pre-merger Qualigen securityholders are expected to own approximately 92.5% of the combined company, on a fully diluted basis. |