Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 10, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | NEUROONE MEDICAL TECHNOLOGIES Corp | |
Entity Central Index Key | 1,500,198 | |
Amendment Flag | false | |
Trading Symbol | NMTC | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 7,864,994 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 70,029 | |
Prepaid expenses and other assets | 7,146 | |
Total current assets | 77,175 | |
Intangible assets, net | 190,637 | |
Total assets | 267,812 | |
Current liabilities: | ||
Accrued expenses | 916,734 | |
Short-term promissory notes and unsecured loan | 204,074 | |
Convertible promissory notes, net and accrued interest | 1,459,841 | |
Premium debt conversion derivative | 441,823 | |
Total current liabilities | 3,022,472 | |
Warrant liability | 774,172 | |
Total liabilities | 3,796,644 | |
Commitments and contingencies (Note 4) | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value; 10,000,000 and 5,000,000 shares authorized as of September 30, 2017 and December 31, 2016, respectively; no shares issued or outstanding as of September 30, 2017 and December 31, 2016. | ||
Common stock, $0.001 par value ; 100,000,000 and 45,000,000 shares authorized as of September 30, 2017 and December 31, 2016, respectively; and 7,864,994 and 5,216,565 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively. | 7,865 | |
Additional paid-in capital | 162,741 | |
Accumulated deficit | (3,699,438) | |
Total stockholders' deficit | (3,528,832) | |
Total liabilities and stockholders' deficit | $ 267,812 | |
NeuroOne, Inc. [Member] | ||
Current assets: | ||
Cash | $ 522,217 | |
Prepaid expenses and other assets | 53,823 | |
Total current assets | 576,040 | |
Intangible assets, net | 180,890 | |
Total assets | 756,930 | |
Current liabilities: | ||
Accrued expenses | 264,343 | |
Short-term promissory notes and unsecured loan | 50,000 | |
Convertible promissory notes, net and accrued interest | 225,197 | |
Premium debt conversion derivative | 137,650 | |
Total current liabilities | 677,190 | |
Warrant liability | 345,960 | |
Total liabilities | 1,023,150 | |
Commitments and contingencies (Note 4) | ||
Stockholders' deficit: | ||
Preferred stock, $0.001 par value; 10,000,000 and 5,000,000 shares authorized as of September 30, 2017 and December 31, 2016, respectively; no shares issued or outstanding as of September 30, 2017 and December 31, 2016. | ||
Common stock, $0.001 par value ; 100,000,000 and 45,000,000 shares authorized as of September 30, 2017 and December 31, 2016, respectively; and 7,864,994 and 5,216,565 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively. | 31 | |
Additional paid-in capital | 119 | |
Accumulated deficit | (266,370) | |
Total stockholders' deficit | (266,220) | |
Total liabilities and stockholders' deficit | $ 756,930 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Common stock, par value | $ 0.001 | |
Common stock, shares authorized | 100,000,000 | |
Common stock, shares issued | 7,864,994 | |
Common stock, shares outstanding | 7,864,994 | |
NeuroOne, Inc. [Member] | ||
Preferred stock, par value | $ 0.001 | |
Preferred stock, shares authorized | 5,000,000 | |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Common stock, par value | $ 0.001 | |
Common stock, shares authorized | 45,000,000 | |
Common stock, shares issued | 5,216,565 | |
Common stock, shares outstanding | 5,216,565 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating expenses: | ||||
Total operating expenses | $ 893,792 | $ 8,600 | $ 1,918,208 | $ 33,056 |
Loss from operations | (893,792) | (8,600) | (1,918,208) | 33,056 |
Interest expense | (515,377) | (3,635) | (1,134,529) | 10,698 |
Net loss and comprehensive loss | $ (1,409,169) | $ (12,235) | $ (3,052,737) | $ 43,754 |
Net loss per share: | ||||
Basic and diluted | $ (0.18) | $ (0.01) | $ (0.41) | $ (0.03) |
Number of shares used in per share calculations: | ||||
Basic and diluted | 7,864,994 | 1,658,051 | 7,369,457 | 1,658,051 |
NeuroOne LLC | ||||
Operating expenses: | ||||
General and administrative | $ 1,941 | $ 6,009 | ||
Research and development | 0 | 0 | ||
Total operating expenses | 1,941 | 6,009 | ||
Loss from operations | (1,941) | (6,009) | ||
Interest expense | (3,635) | (10,698) | ||
Net loss and comprehensive loss | $ (5,576) | $ (16,707) | ||
NeuroOne, Inc. [Member] | ||||
Operating expenses: | ||||
General and administrative | $ 622,141 | $ 1,798,131 | ||
Research and development | 271,651 | 500,408 | ||
Total operating expenses | 893,792 | 2,298,539 | ||
Loss from operations | (893,792) | (2,298,539) | ||
Interest expense | (515,377) | (1,134,529) | ||
Net loss and comprehensive loss | $ (1,409,169) | $ (3,433,068) | ||
Net loss per share: | ||||
Basic and diluted | $ (0.19) | $ (0.55) | ||
Number of shares used in per share calculations: | ||||
Basic and diluted | 7,540,135 | 6,217,076 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net loss | $ (3,052,737) | $ 43,754 |
NeuroOne LLC | ||
Operating activities | ||
Net loss | (16,707) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization | 5,823 | |
Stock-based compensation | 0 | |
Forgiveness of share subscription agreement for founders' shares | 0 | |
Non-cash interest on convertible promissory notes | 0 | |
Non-cash discount amortization on short-term promissory notes and convertible promissory notes | 0 | |
Non-cash note issuance costs attributed to warrant liability | 0 | |
Revaluation of premium debt conversion derivative | 0 | |
Revaluation of warrant liability | 0 | |
Change in assets and liabilities: | ||
Prepaid expenses and other assets | 0 | |
Accrued expenses | 10,884 | |
Net cash used in operating activities | 0 | |
Financing activities | ||
Proceeds from issuance of short-term promissory notes and convertible promissory notes | 0 | |
Proceeds from issuance of warrants | 0 | |
Repayment of short-term unsecured loan | 0 | |
Issuance costs related to short-term promissory notes and convertible promissory notes | 0 | |
Issuance costs related to warrants | 0 | |
Net cash provided by financing activities | 0 | |
Net decrease in cash | 0 | |
Cash at beginning of period | 0 | |
Cash at end of period | 0 | |
Supplemental non-cash investing and financing transactions: | ||
Bifurcation of premium conversion derivative related to convertible promissory notes | 0 | |
Accrued issuance costs attributed to short term promissory notes and convertible promissory notes | 0 | |
Accrued issuance costs attributed to warrant liability | 0 | |
Common stock issued in connection with purchase of intangible assets | $ 0 | |
NeuroOne, Inc. [Member] | ||
Operating activities | ||
Net loss | (3,433,068) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization | 13,368 | |
Stock-based compensation | 76,794 | |
Forgiveness of share subscription agreement for founders' shares | 9,051 | |
Non-cash interest on convertible promissory notes | 76,359 | |
Non-cash discount amortization on short-term promissory notes and convertible promissory notes | 943,427 | |
Non-cash note issuance costs attributed to warrant liability | 38,119 | |
Revaluation of premium debt conversion derivative | 90,212 | |
Revaluation of warrant liability | (12,707) | |
Change in assets and liabilities: | ||
Prepaid expenses and other assets | 46,677 | |
Accrued expenses | 642,099 | |
Net cash used in operating activities | (1,509,669) | |
Financing activities | ||
Proceeds from issuance of short-term promissory notes and convertible promissory notes | 675,705 | |
Proceeds from issuance of warrants | 502,415 | |
Repayment of short-term unsecured loan | (50,000) | |
Issuance costs related to short-term promissory notes and convertible promissory notes | (38,719) | |
Issuance costs related to warrants | (31,920) | |
Net cash provided by financing activities | 1,057,481 | |
Net decrease in cash | (452,188) | |
Cash at beginning of period | 522,217 | |
Cash at end of period | 70,029 | |
Supplemental non-cash investing and financing transactions: | ||
Bifurcation of premium conversion derivative related to convertible promissory notes | 213,961 | |
Accrued issuance costs attributed to short term promissory notes and convertible promissory notes | 42,811 | |
Accrued issuance costs attributed to warrant liability | 38,119 | |
Common stock issued in connection with purchase of intangible assets | $ 23,115 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2017 | |
Organization and Basis of Presentation [Abstract] | |
Organization and Basis of Presentation | NOTE 1 – Organization and Basis of Presentation On July 20, 2017, NeuroOne Medical Technologies Corporation , a Delaware Corporation, (the “Company”), through a wholly owned acquisition subsidiary, acquired 100% of the outstanding capital stock of NeuroOne, Inc. (“NeuroOne”) in a reverse triangular merger and reorganization pursuant to Section 368(a) of the Internal Revenue Code (the “Acquisition”). The Acquisition was accounted for as a capital transaction, or reverse recapitalization. NeuroOne was the accounting acquirer in this transaction. As such, the historical financial statements of NeuroOne and its predecessor NeuroOne LLC (the “LLC”) reflect operations of the Company for all periods presented prior to the date of Acquisition. NeuroOne, Inc. was formed on October 7, 2016 and acquired the LLC on October 27, 2016 (the “Merger”) as described more fully below. The accompanying condensed consolidated financial statements subsequent to the Acquisition include those of the Company, as well as those of its wholly owned subsidiary NeuroOne. Subsequent to the Acquisition, the Company’s operating activities are the same as those of NeuroOne, an early-stage medical technology company, engaged in the development of comprehensive neuromodulation cEEG and sEEG monitoring, ablation, and brain stimulation solutions to diagnose and treat patients with epilepsy, Parkinson’s disease, dystonia, essential tremors, and other brain related disorders. The Company is based in Eden Prairie, Minnesota. Acquisition The transactions contemplated by the agreement were consummated on July 20, 2017 (the “Closing”) and, pursuant to the terms of the agreement, (i) all outstanding shares of common stock of NeuroOne, par value $0.0001 per share (the “NeuroOne Shares”) were exchanged for shares of the Company’s common stock, par value $0.001 per share (the “Company Shares”) based on the exchange ratio of 17.0103706 Company Shares for every one NeuroOne Share (the “Exchange Ratio”), resulting in the Company issuing, on July 20, 2017, an aggregate of 6,291,994 Company Shares for all of the then-outstanding NeuroOne Shares, (ii) all outstanding options of NeuroOne were replaced with options to purchase Company Shares based on the Exchange Ratio, with corresponding adjustments to their respective exercise prices, pursuant to which the Company reserved 992,265 Company Shares for issuance upon the exercise of options, (iii) all warrants of NeuroOne, Inc. were replaced with warrants to purchase Company Shares and (iv) the Company assumed the outstanding convertible promissory notes of NeuroOne. NeuroOne options had been issued pursuant to the NeuroOne 2016 Equity Incentive Plan. Pursuant to the agreement, the Company assumed the NeuroOne 2016 Equity Incentive Plan upon the Closing. Pursuant to the Acquisition, the Company acquired 100% of NeuroOne Shares in exchange for the issuance of Company Shares and NeuroOne became the Company’s wholly-owned subsidiary. Also at the Closing, Mr. Samad (the majority owner of the Company prior to the Acquisition) tendered for cancellation 3,500,000 Company Shares held by him as part of the conditions to Closing. At the time of Acquisition, the Company had authorized 100,000,000 shares of common stock with a par value of $0.001 and 10,000,000 shares of preferred stock with a par value of $0.001. All issued and outstanding common stock share amounts, options for common stock and per share amounts contained in the condensed consolidated financial statements were retroactively adjusted to reflect the Exchange Ratio for all periods presented. The number of authorized shares for common and preferred stock and their respective par values per share as of December 31, 2016 reflect those of the Company prior to the Acquisition. Merger The LLC was formed on December 12, 2013 and operated as a limited liability company until it was merged with and into NeuroOne on October 27, 2016 with NeuroOne as the surviving entity of the “Merger”. NeuroOne was formed on October 7, 2016 under different ownership than the LLC. As a result of the Merger, all of the properties, rights, privileges, powers and franchises of the LLC vested in NeuroOne, and all debts, liabilities and duties of the LLC became the debts, liabilities and duties of NeuroOne with the exception of the LLC’s license agreement with Wisconsin Alumni Research Foundation (“WARF”) which required WARF’s approval for transfer (See Note 4 – Commitments and Contingencies). The purpose of the Merger was to change the jurisdiction of NeuroOne’s incorporation from Minnesota to Delaware, change the ownership of the LLC’s underlying assets, and to convert from a limited liability company to a corporation. NeuroOne and the LLC were not entities under common control. As the LLC did not have an integrated set of activities that contained the required complement of inputs, processes and outputs to be considered a business, the Merger was accounted for as an asset acquisition as prescribed under Accounting Standards Codification (ASC) 805 – Business Combinations Basis of presentation The accompanying condensed consolidated financial statements have been prepared by the Company, without audit, pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to such rules and regulations. The condensed consolidated financial statements may not include all disclosures required by U.S. GAAP; however, the Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes thereto for the fiscal year ended December 31, 2016 included in the NeuroOne Current Report on Form 8-K filed on July 20, 2017. The condensed balance sheet at December 31, 2016 was derived from the audited financial statements of NeuroOne. In the opinion of management, all adjustments, consisting of only normal recurring adjustments that are necessary to present fairly the financial position, results of operations, and cash flows for the interim periods, have been made. The results of operations for the interim periods are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
Going Concern
Going Concern | 9 Months Ended |
Sep. 30, 2017 | |
Going Concern [Abstract] | |
Going Concern | NOTE 2 – Going Concern The accompanying condensed consolidated financial statements have been prepared on the basis that the Company will continue as a going concern. The Company has incurred losses since inception and had an accumulated deficit of $3,699,438 as of September 30, 2017. Prior to the Merger, the LLC also incurred losses since its inception and had cumulative losses of $49,930 as of the date of the Merger. The Company does not have adequate liquidity to fund its operations throughout fiscal 2018 without raising additional funds. These factors raise substantial doubt about its ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments that might result from the outcome of this condition. Management intends to seek additional financing to fund operations. If the Company is not able to raise additional working capital, it will have a material adverse effect on the operations of the Company and the development of its technology. Through September 30, 2017, the Company has completed both a $253,000 short-term promissory note financing and a $1,625,120 convertible promissory note financing of a planned $2.5 million subscription. The Company does not have adequate liquidity to fund its operations throughout fiscal 2017 without raising additional funds. Management believes that the currently available resources from the short-term promissory note and convertible promissory note financings combined with funds expected to be raised in the last quarter of fiscal 2017 will be sufficient to enable the Company to meet its operating plan through at least September 30, 2018. However, if the Company is unable to raise additional funds, or the Company’s anticipated operating results are not achieved, management believes planned expenditures may need to be reduced in order to extend the time period that existing resources can fund the Company’s operations. If management is unable to obtain the necessary capital, it may have to cease operations. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 3 – Summary of Significant Accounting Policies Management’s Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash. The Company’s cash is held by one financial institution in the United States. Amounts on deposit may at times exceed federally insured limits. Management believes that the financial institution is financially sound, and accordingly, minimal credit risk exists with respect to the financial institution. As of September 30, 2017, the Company did not have deposits in excess of federally insured amounts. Prior to October 27, 2016, the LLC did not maintain a bank account. Any expenses incurred while the LLC was organized as a limited liability company were paid by the sole member of the LLC. Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. As of September 30, 2017 and December 31, 2016, the fair values of cash, other assets, accrued expenses and the unsecured loan approximated their carrying values because of the short-term nature of these assets or liabilities. The estimated fair value of the short-term promissory notes and the convertible promissory notes of the Company was based on amortized cost which was deemed to approximate fair value. The fair value of the warrant liability and premium conversion derivative associated with the convertible promissory notes was based on cash flow models discounted at current implied market rates evidenced in recent arms-length transactions representing expected returns by market participants for similar instruments which were based on Level 3 inputs. There were no transfers between fair value hierarchy levels during the three and nine month periods ended September 30, 2017. The fair value of financial instruments measured on a recurring basis is as follows: As of September 30, 2017 Description Total Level 1 Level 2 Level 3 Liabilities: Warrant liability $ 774,172 $ — $ — $ 774,172 Premium conversion derivative 441,823 — — 441,823 Total liabilities at fair value $ 1,215,995 $ — $ — $ 1,215,995 As of December 31, 2016 Description Total Level 1 Level 2 Level 3 Liabilities: Warrant liability $ 345,960 $ — $ — $ 345,960 Premium conversion derivative 137,650 — — 137,650 Total liabilities at fair value $ 483,610 $ — $ — $ 483,610 The following table provides a roll-forward of the warrant liability and premium conversion derivative measured at fair value on a recurring basis using unobservable level 3 inputs for the nine months ended September 30, 2017: Warrant liability Nine months ended Balance as of beginning of period $ 345,960 Issuance of warrants in connection with convertible promissory notes 440,919 Change in fair value of warrant liability (12,707 ) Balance as of end of period $ 774,172 Premium conversion derivative Nine months ended Balance as of beginning of period $ 137,650 Value assigned to the underlying derivative in connection with convertible notes 213,961 Change in fair value of premium conversion derivative 90,212 Balance as of end of period $ 441,823 There were no financial instruments measured on a fair value recurring basis during the nine month period ended September 30, 2016. Intellectual Property NeuroOne and the LLC have entered into two licensing agreements with major research institutions, which allows for access to certain patented technology and know-how. Milestone payments under those agreements are capitalized and amortized to general and administrative expense over the expected useful life of the acquired technology. Impairment of Long-Lived Assets The Company evaluates their long-lived assets, which consists entirely of licensed intellectual property for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. The Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Through September 30, 2017, the Company has not impaired any long-lived assets. Debt Issuance Costs Debt issuance costs are recorded as a reduction of the short-term promissory notes and convertible promissory notes. Amortization of debt issuance costs is calculated using the straight-line method over the term of respective short-term and convertible promissory notes, which approximates the effective interest method, and is recorded in interest expense in the accompanying condensed consolidated statements of operations. Research and Development Costs Research and development costs are charged to expense as incurred. Research and development expenses may 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 730, Research and Development Warrant Liability The Company issued warrants to purchase equity securities in connection with the issuance of the convertible promissory notes (see Note 8 – Convertible Promissory Notes and Warrant Agreements). The Company accounts for these warrants as a liability at fair value as the number of shares were not fixed and determinable at the issuance date. Additionally, issuance costs associated with the warrants are expensed as incurred and reflected as interest expense in the accompanying condensed consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrant, or until such time, if any, as the number of shares to be exercised becomes fixed, at which point the warrants will be classified in stockholders’ (deficit) equity provided that there are sufficient authorized and unissued shares of common stock to settle the warrants and redeem any other contracts that may require settlement in shares of common stock. Any future change in fair value of the warrant liability will be recognized as a component of interest expense in the condensed consolidated statements of operations. Premium Debt Conversion Derivative The Company evaluates all conversion and redemption features contained in a debt instrument to determine if there are any embedded derivatives that require separation from the host debt instrument. An embedded derivative that requires separation is bifurcated from its host debt instrument and a corresponding discount to the host debt instrument is recorded. The discount is amortized and recorded to interest expense over the term of the host debt instrument using the straight-line method which approximates the effective interest method. The separated embedded derivative is accounted for separately on a fair market value basis. The Company records the fair value changes of a separated embedded derivative to interest expense at each reporting period. The Company issued convertible promissory notes that contained a 125% conversion premium in the event that a qualified financing occurs at a price under $2.25 per common share (see Note 8 – Convertible Promissory Notes and Warrant Agreements). We also issued 2017 Convertible Notes that contained a 125% conversion premium in the event that a qualified financing occurs at a price under $2.8125 per common share (see Note 13 – Subsequent Events). The Company determined that the redemption feature under the convertible promissory notes qualified as an embedded derivative and was separated from its debt host. Income Taxes For NeuroOne, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion of all of the deferred tax asset will not be realized. The LLC operated as a single-member LLC from formation on December 12, 2013 until it was merged into NeuroOne on October 27, 2016. As such, it was a disregarded legal entity for income tax purposes. Accordingly, no provision for income taxes was included in the financial statements for the period from January 1, 2016 through October 26, 2016. Net Loss Per Share The LLC was a single-member LLC for which no units were outstanding. Accordingly, earnings per share is not presented for the LLC. For NeuroOne, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company’s stock options, convertible promissory notes and warrants are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the stock options and warrants. Diluted earnings with respect to the convertible promissory notes utilizing the if-converted method was not applicable during the three and nine months ended September 30, 2017 as no conditions required for conversion had occurred during these periods. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss reported for the three and nine months ended September 30, 2017. The following potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three and nine month periods ended September 30, 2017: Warrants 1,074,181 Stock options 365,716 Recent Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2016-09) In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | NOTE 4 – Commitments and Contingencies WARF License Agreement On October 1, 2014, the LLC entered into an exclusive start-up company license agreement with the Wisconsin Alumni Research Foundation (“WARF”) for WARF’s neural probe array and thin film electrode technology (the “2014 WARF Agreement”). The LLC was to make $110,000 in milestone payments depending on achievement of certain development and approval milestones or within twelve months of signing the 2014 WARF Agreement. Additionally, if the LLC was successful in obtaining regulatory approval, the LLC was to pay royalties to WARF on a percentage of net sales of products of the licensed technology. Under the terms of the 2014 WARF Agreement, amounts that remained unpaid more than 30 days after they were due, accrued interest at 1 percent per month. Milestone payments due in 2015 were not made to WARF. From October 27, 2016 until the 2014 WARF Agreement was amended as described below, the LLC was in default under the 2014 WARF Agreement. In addition, the LLC was not able to transfer the rights and obligations under the 2014 WARF Agreement to NeuroOne at the time of the Merger (October 27, 2016) without the consent of WARF, which was received when the 2014 WARF Agreement was amended in February 2017 as described below. In connection with the Merger and in accordance with ASC 805-50, NeuroOne estimated the fair value of consideration payable to WARF and recorded an intangible asset of $90,000 with a corresponding accrued expense. This agreement was subsequently amended in February 2017 (as so amended, the “2017 WARF Agreement”) whereby WARF consented to the transfer of the rights and obligations under the license agreement from the LLC to NeuroOne (which are now the Company’s rights and obligations, following the Acquisition). In the 2017 WARF Agreement, a contingent payment amount of $120,000 is due in the event that the Company completes a qualified financing. The Company is also obligated to pay royalties to WARF based on a percentage of net sales of products of licensed technology with minimum royalties of $50,000 and $100,000 for calendar years 2019 and 2020, respectively, and $150,000 per year beginning in 2021 through the duration of the 2017 WARF Agreement. Subject to earlier termination, the WARF License otherwise expires by its terms on the date that no valid claims on the patents licensed thereunder remain. The Company expects the latest expiration of a licensed patent to occur in 2030. The 2017 WARF Agreement is also subject to certain cancellation provisions with 90 days’ notice should the Company elect not to continue to use the licensed technology. The Company has agreed to diligently develop, manufacture, market and sell products under the WARF License in the United States during the term of the agreement and, specifically, that the Company will submit a business plan to WARF by February 1, 2018 and file an application for 510(k) marketing clearance with the FDA by February 1, 2019. WARF may terminate the 2017 WARF Agreement in the event that the Company fails to meet these milestones on 30 days’ written notice, if the Company defaults on the payments of amounts due to WARF or fails to timely submit development reports, actively pursue the development plan or breaches any other covenant in the 2017 WARF Agreement and fails to remedy such default in 90 days or in the event of certain bankruptcy events involving the Company. WARF may also terminate this license (i) on 90 days’ notice if the Company fails to have commercial sales of one or more FDA-approved products under the 2017 WARF Agreement by March 31, 2019 or (ii) if, after royalties earned on sales begin to be paid, such earned royalties cease for more than four calendar quarters. Mayo Agreement On October 3, 2014, the LLC entered into an exclusive license and development agreement with the Mayo Foundation for Medical Education and Research (“Mayo”) related to certain intellectual property and development services for thin film electrode technology (“2014 Mayo Agreement”). The LLC was to make milestone payments depending on achievement of certain development and approval milestones and sales targets, none of which were met as of December 31, 2015. Additionally, if the LLC was successful in obtaining regulatory approval, the LLC was to pay royalties to Mayo based on a percentage of net sales of products of the licensed technology through the term of the 2014 Mayo Agreement, set to expire May 25, 2037. Also, the LLC was obligated to issue common stock to Mayo if certain events occurred. Upon the LLC’s Merger with NeuroOne on October 27, 2016, the rights under the 2014 Mayo Agreement transferred to NeuroOne, and certain milestones were attained. Therefore, NeuroOne recorded $300 related to 10,000 shares of common stock issued to Mayo and $91,709 for the intellectual property. Milestone payments due under the 2014 Mayo Agreement and accrued were $91,709 as of September 30, 2017 and December 31, 2016. Under the terms of the 2014 Mayo Agreement, amounts that remained unpaid accrued interest at 2 percent above the prime rate. Milestone payments due in 2016 were not made to Mayo. As such, prior to the amendment of the 2014 Mayo Agreement in May 2017), NeuroOne was in default under the 2014 Mayo Agreement. Mayo and NeuroOne amended and restated the 2014 Mayo Agreement in May 2017 (as so amended and restated, the “2017 Mayo Agreement”). Pursuant to the 2017 Mayo Agreement, NeuroOne issued 50,556 shares of common stock to Mayo to settle the amount of common stock NeuroOne was previously obligated to issue under the 2014 Mayo Agreement and to amend the terms of the 2014 Mayo Agreement. NeuroOne recorded an additional $23,115 to intangible assets related to the fair value of the 2017 stock issuance to Mayo. As a part of the 2017 Mayo Agreement, as amended in November 2017, the $91,709 milestone payment is to be paid upon the earlier of a qualified financing or December 31, 2017. Other NeuroOne received a letter in May 2017 from the former employer of certain employees of NeuroOne, claiming that NeuroOne and those individuals have wrongfully used or disclosed alleged trade secrets of the former employer and that the individuals breached non-competition or non-solicitation agreements with such party. The Company and the individuals intend to vigorously defend against these claims, if litigation results. |
Intangibles
Intangibles | 9 Months Ended |
Sep. 30, 2017 | |
Intangibles [Abstract] | |
Intangibles | NOTE 5 – Intangibles Intangible assets consisted of the following at September 30, 2017: Useful Life License agreement, October 27, 2016 12-13 years $ 182,159 Less: amortization (1,269 ) Net Intangibles, December 31, 2016 180,890 License agreement amendment 23,115 Less: amortization (13,368 ) Net Intangibles, September 30, 2017 $ 190,637 Amortization expense was $4,264 and $13,368 for NeuroOne and the Company for the three and nine months ended September 30, 2017, respectively, and $1,941 and $5,823 for the LLC for the three and nine months ended September 30, 2016. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | NOTE 6 – Accrued Expenses Accrued expenses consisted of the following at September 30, 2017 and December 31, 2016: September 30, December 31, Accrued license fees $ 182,009 $ 182,009 Accrued services 531,607 31,186 Accrued issuance costs 32,306 22,015 Accrued compensation and payroll related costs 170,812 28,252 Accrued interest — 881 Total accrued expenses $ 916,734 $ 264,343 |
Short-Term Promissory Notes and
Short-Term Promissory Notes and Unsecured Loan | 9 Months Ended |
Sep. 30, 2017 | |
Short-Term Promissory Notes and Unsecured Loan\Convertible Promissory Notes and Warrant Agreements [Abstract] | |
Short-Term Promissory Notes and Unsecured Loan | NOTE 7 – Short-Term Promissory Notes and Unsecured Loan Short-Term Promissory Notes In August 2017, the Company’s Board of Directors authorized and the Company issued short-term unsecured promissory notes (the “Short-Term Notes”) for aggregate gross proceeds of $253,000 prior to issuance costs of $3,030 which were discounted from the Short-Term Notes and are being amortized ratably to interest expense over the term of the Short-Term Notes. For the three and nine month period ended September 30, 2017, discount amortization charged to interest expense related to the issuance costs was $733. The Short-Term Notes do not bear interest on principal and require the Company to repay the principal upon maturity on February 18, 2018. In addition, upon maturity, under the provisions of the Short-Term Notes, the holders will receive 126,500 common stock purchase warrants upon maturity with a term of 5 years at an exercise price of $1.80 which will be immediately exercisable upon issue. A portion of the proceeds from the Short-Term Notes was allocated to the warrants based on their relative fair value to the underlying Short-Term Notes. The proceeds allocated to the warrants were recorded as additional paid in capital in the accompanying condensed consolidated balance sheets and were discounted from the Short-Term Notes in the amount of $61,496. The relative fair value of the warrants was based on the Black-Scholes method with the following assumptions: risk-free interest rate 1.77 percent; expected volatility 48 percent; expected life 5.5 years; and expected dividend yield 0 percent. The underlying stock price used in the analysis is on a non-marketable basis and is according to a separate 409A valuation analysis. The discount related to the warrants is being amortized to interest expense ratably over the term of the Short-Term Notes which amounted to $14,868 during the three and nine month period ended September 30, 2017. Unsecured Loan NeuroOne received a $50,000 short-term unsecured loan in November 2016 from the placement agent for its convertible promissory note financing (see Note 8 – Convertible Promissory Notes and Warrant Agreements). NeuroOne incurred no fees or interest costs for this temporary loan and it was repaid in full in February 2017. |
Convertible Promissory Notes an
Convertible Promissory Notes and Warrant Agreements | 9 Months Ended |
Sep. 30, 2017 | |
Short-Term Promissory Notes and Unsecured Loan\Convertible Promissory Notes and Warrant Agreements [Abstract] | |
Convertible Promissory Notes and Warrant Agreements | NOTE 8 – Convertible Promissory Notes and Warrant Agreements Convertible Promissory Notes In November 2016 and then amended in June 2017, the Company’s Board of Directors authorized the Company to issue convertible promissory notes (the “Convertible Notes”) and common stock purchase warrants for aggregate gross proceeds of up to $2.5 million. As of September 30, 2017, the Company has issued $1,625,120 of Convertible Notes and common stock purchase warrants to investors. The Convertible Notes are unsecured. The Convertible Notes bear interest at a fixed rate of 8 percent per annum and require the Company to repay the principal and accrued and unpaid interest thereon at the earlier of November 21, 2017 or the consummation of the next equity or equity-linked round of financing resulting in more than $3.0 million in gross proceeds (a “Qualified Financing”). If a Qualified Financing occurs before November 21, 2017, the outstanding principal and accrued and unpaid interest on the Convertible Notes automatically converts into the securities issued by the Company in such financing based on the greater number of securities resulting from either the outstanding principal and accrued interest on the Convertible Notes divided by $1.80, or the outstanding principal and accrued interest on the Convertible Notes multiplied by 1.25, divided by the price paid per security in the Qualified Financing. If the Company fails to complete a Qualified Financing by November 21, 2017, the Convertible Notes will be immediately due and payable on such date. If a change of control transaction or initial public offering occurs prior to a Qualified Financing, the Convertible Notes would, at the election of the holders of a majority of the outstanding principal of the Convertible Notes, either become payable on demand as of the closing date of such transaction or become convertible into shares of common stock immediately prior to such transaction at a price per share equal to the lesser of the per share value as determined by the Company’s Board of Directors as if in connection with the granting of stock based compensation, or in a private sale to a third party in an arms’ length transaction, or at the per share consideration to be paid in such transaction. Change of control means a merger or consolidation with another entity in which the Company’s stockholders do not own more than 50 percent of the outstanding voting power of the surviving entity or the disposition of all or substantially all of the assets of the Company. The warrants granted holders the option to purchase either (i) if exercised after conversion of the Convertible Notes, the number of shares issuable upon the conversion of the Convertible Notes, or (ii) if exercised prior to conversion of the Convertible Notes, the number of shares of common stock equal to the outstanding principal and accrued interest on the Convertible Note held by such warrant holder divided by $1.80. The warrants were immediately exercisable on the date of issuance and expire on November 21, 2021. In June 2017, however, the Company amended the terms of the common stock purchase warrants under the Convertible Notes to be exercisable only in the event of conversion of the outstanding principal and accrued interest on the related Convertible Notes. The amount of warrant shares to be issued are now fixed to the number of shares of common stock received by the holder of the Convertible Notes upon conversion of such holder’s Convertible Notes, and to an exercise price equal to the price at which the Convertible Notes convert into common shares. The warrants were accounted for as a liability because there is no set exercise price. A Monte Carlo simulation model was used to estimate the aggregate fair value of the warrants as of September 30, 2017. Input assumptions used were as follows: risk-free interest rate 1.79 percent; expected volatility 50 percent; expected life 4.14 years; and expected dividend yield 0 percent. The underlying stock price used in the analysis is on a non-marketable basis and is according to a separate 409A valuation analysis. The convertible promissory note proceeds assigned to the warrants were $440,919 and $345,640 during the nine months ended September 30, 2017 and for the period from October 7, 2016 to December 31, 2016, respectively, which represented their fair value at issuance, and were discounted from the Convertible Notes and reflected as a warrant liability. The discount is being amortized to interest expense over the term of the Convertible Notes using the straight-line method which approximates the effective interest method. The amortization expense was $284,637 and $601,794 for the three and nine months ended September 30, 2017, respectively. The Company recorded the fair value changes of the warrant liability associated with the Convertible Notes to interest expense which amounted to $6,546 and $(12,707) for the three and nine months ended September 30, 2017, respectively. At the time of their issuance, the Convertible Notes contained a 125% conversion premium in the event that a Qualified Financing occurs at a price under $2.25 per common share. The Company determined that the redemption feature under the Convertible Notes qualified as an embedded derivative and was separated from its debt host. The bifurcation of the embedded derivative from its debt host resulted in a discount to the Convertible Notes in the amount of $213,961 and $137,564 during the nine months ended September 30, 2017 and during the period from October 7, 2016 to December 31, 2016, respectively. The discount is being amortized to interest expense over the term of the Convertible Notes using the straight-line method which approximates the effective interest method. The amortization expense was $133,367 and $266,848 for the three and nine month period ended September 30, 2017, respectively. The embedded derivative was accounted for separately on a fair market value basis. The Company recorded the fair value changes of the premium debt conversion derivative associated with the Convertible Notes to interest expense which amounted to $15,406 and $90,212 for the three and nine months ended September 30, 2017, respectively. In connection with the Convertible Notes, the Company incurred issuance costs in the amount of $151,915, which included (i) a placement agent cash fee, which was $113,610 for the Convertible Notes issued through June 19, 2017 (ii) the obligation to issue a warrant to the placement agent (the “placement agent warrant”) which will have an exercise price of $2.00 per share of common stock and had a total fair value of $4,855 at September 30, 2017 and (iii) legal expenses of $33,450. The placement agent warrant is issuable at the time the private placement transaction closes. The placement agent warrant will be immediately exercisable on the date of issuance and will expire five years following the date of issuance. The placement agent is to receive a placement agent warrant to purchase shares of common stock in an amount equal to 8 percent of the common stock (or common stock equivalents) purchased by investors in the private placement transaction. As of September 30, 2017 and December 31, 2016, the Company has an obligation to issue a placement agent warrant for the purchase of approximately 63,000 and 29,000 shares of common stock, respectively. The Company recorded an issuance cost discount to the Convertible Notes in the amount of $39,781 and $37,469 for the nine months ended September 30, 2017 and for the period from October 7, 2016 to December 31, 2016, respectively, of which $27,317 and $59,184 was amortized to interest expense during the three and nine months ended September 30, 2017, respectively. The balance of the issuance costs in the amount of zero and $38,119 was attributed to the common stock purchase warrants and was immediately recorded as interest expense upon issuance during the three and nine months ended September 30, 2017, respectively. The placement agent is also entitled to receive warrants to purchase common stock in an amount equal to 10 percent of the common stock (common stock equivalents) purchased by certain investors in subsequent equity financing rounds (see Note 13 – Subsequent Events). Such warrants if issued will have an exercise price determined in relation to the pricing of the subsequent financing rounds and will be immediately exercisable once issued. |
Investment Banker Fee
Investment Banker Fee | 9 Months Ended |
Sep. 30, 2017 | |
Investment Banker Fee [Abstract] | |
Investment Banker Fee | NOTE 9 – Investment Banker Fee Investment Banker Fee NeuroOne paid a $50,000 non-refundable fee to an investment banker in December 2016 to raise equity financing. This fee is reflected in NeuroOne’s December 31, 2016 balance sheet as a prepaid expense. NeuroOne subsequently concluded that the investment banker was not expected to raise any equity and therefore expensed the fee in March 2017. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | NOTE 10 – Stock-Based Compensation NeuroOne formally adopted an equity incentive plan (“the 2016 Plan”) on October 27, 2016 which was subsequently adopted by the Company upon completion of the Acquisition. In addition, the Company adopted a 2017 Equity Incentive Plan (the “2017 Plan”) on April 17, 2017. The 2016 and 2017 Plans provide for the issuance of restricted shares and stock options to employees, directors, and consultants of the Company. The Company reserved 2,292,265 shares of common stock (as adjusted for the exchange ratio in connection with the Acquisition) for issuance under the 2016 and 2017 Plans on a combined basis. The Company began granting stock options and restricted stock awards in the second quarter of 2017. During the three and nine-month period ended September 30, 2017, zero and 365,716 stock options for shares of common stock were granted, respectively, to directors and consultants at a weighted average exercise price of $0.035 per share. The stock options granted during the nine month period ended September 30, 2017 had a weighted average grant date fair value of $0.014 per share with various vesting periods and expire in ten years. In addition, the Company issued zero and 215,453 shares of restricted common stock with performance vesting conditions from the 2016 Plan during the three and nine month period ended September 30, 2017, respectively. All performance vesting conditions for the restricted common stock were met as of September 30, 2017. Compensation expense associated with restricted common stock shares was $7,220. Stock-based compensation expense was included in general and administrative and research and development costs as follows in the accompanying condensed statements of operations: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 General and administrative $ — $ — $ 2,065 $ — Research and development 64,945 — 74,729 — Total stock-based compensation $ 64,945 $ — $ 76,794 $ — The weighted-average assumptions used in the Black-Scholes option-pricing model are as follows for the stock options granted during the three and nine month periods ended September 30, 2017: Three Months Nine Months Expected stock price volatility — % 47.8 % Expected life of options (years) — 5.0 Expected dividend yield — % 0 % Risk free interest rate — % 1.9 % During the three and nine months ended September 30, 2017, 42,525 and 365,716 stock options vested, respectively, and zero and 215,453 restricted stock awards vested, respectively. The weighted average fair value per share of options vesting during the three and nine months ended September 30, 2017 was $0.014. No stock options were forfeited during the three and nine months ended September 30, 2017. As of September 30, 2017, 1,711,096 shares were available for future issuance on a combined basis under the 2016 and 2017 Plans. There was no unrecognized stock-based compensation cost for stock options and restricted common stock as of September 30, 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | NOTE 11 – Income Taxes The effective tax rate for the three and nine months ended September 30, 2017 was zero percent. As a result of the analysis of all available evidence as of September 30, 2017 and December 31, 2016, the Company recorded a full valuation allowance on its net deferred tax assets. Consequently, the Company reported no income tax benefit during the three and nine month periods ended September 30, 2017. If the Company’s assumptions change and the Company believes that it will be able to realize these deferred tax assets, the tax benefits relating to any reversal of the valuation allowance on deferred tax assets will be recognized as a reduction of future income tax expense. If the assumptions do not change, each period the Company could record an additional valuation allowance on any increases in the deferred tax assets. The LLC operated as a single-member LLC from formation on December 12, 2013 until it was merged into NeuroOne on October 27, 2016. As such, the LLC was a disregarded legal entity for income tax purposes. Accordingly, no provision for income taxes was included in the financial statements for the three or nine month periods ended September 30, 2016. |
Stockholders'_Member Deficit
Stockholders'/Member Deficit | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders'/Member Deficit [Abstract] | |
Stockholders'/Member Deficit | NOTE 12 – Stockholders’/Member Deficit In June 2017, the purchase price owed by the seven individuals for the founders’ shares of NeuroOne under their respective subscription agreements totaling $9,051 was forgiven by NeuroOne prior to the Acquisition. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 – Subsequent Events On October 4, 2017, the Company entered into a Subscription Agreement (the “Subscription Agreement”) with certain accredited investors (the “Subscribers”), pursuant to which the Company, in a private placement (the “Private Placement”), agreed to issue and sell to the Subscribers 8% convertible promissory notes (each, a “Note” and collectively, the “2017 Convertible Notes”) and warrants (the “New Warrants”) to purchase shares of the Company’s capital stock. The initial closing of the Private Placement was consummated on October 4, 2017, and, on that date, the Company issued Notes in an aggregate principal amount of $150,000 to the Subscribers. Between November 2, 2017 and November 7, 2017, the Company entered into Subscription Agreements with additional Subscribers, and issued Notes in a principal amount of $215,000 to those Subscribers. The Company may conduct any number of additional closings so long as the final closing occurs on or before the five-month anniversary of the initial closing date and the amount does not exceed $1,000,000 or a higher amount determined by the Board of Directors. The 2017 Convertible Notes bear interest at a fixed rate of 8% per annum and require the Company to repay the principal and accrued and unpaid interest thereon on October 4, 2022 (the “Maturity Date”). If the Company raises more than $3,000,000 in an equity financing before the Maturity Date (the “Qualified Financing”), the outstanding principal and accrued and unpaid interest on the 2017 Convertible Notes shall automatically convert into the securities issued by the Company in such financing based on the greater number of such securities resulting from either (i) the outstanding principal and accrued interest on the 2017 Convertible Notes divided by $2.25 or (ii) the outstanding principal and accrued interest on the Notes multiplied by 1.25, divided by the price paid per security in such financing. If a change of control transaction occurs prior to the earlier of a Qualified Financing or the Maturity Date, the 2017 Convertible Notes would, at the election of the holders of a majority of the outstanding principal of the 2017 Convertible Notes, either become payable on demand as of the closing date of such transaction or become convertible into shares of common stock immediately prior to such transaction at a price per share equal to the lesser of (i) the per share value of the common stock as determined by our Board of Directors as if in connection with the granting of stock based compensation or in a private sale to a third party in an arms’ length transaction or (ii) at the per share consideration to be paid in such transaction (the date of any such conversion of the 2017 Convertible Notes pursuant to this paragraph, is referred to herein as the “Conversion Date”). Change of control means a merger or consolidation with another entity in which our stockholders do not own more than 50% of the outstanding voting power of the surviving entity or the disposition of all or substantially all of the Company’s assets. Each New Warrant grants the holder the option to purchase the number of shares of capital stock of the Company issuable upon the conversion of the 2017 Convertible Notes held by such holder at a per share exercise price equal to the price at which the 2017 Convertible Notes converted. The New Warrants are exercisable commencing on the Conversion Date and expire on the five year anniversary of the Conversion Date. The exercise price and number of the shares of our common stock issuable upon exercising the New Warrants will be subject to adjustment in the event of any stock dividends and splits, reverse stock split, recapitalization, reorganization or similar transaction, as described therein. The placement agent is also entitled to receive a warrant to purchase common stock in an amount equal to 10 percent of the common stock (common stock equivalents) purchased by certain investors in subsequent equity financing rounds. Such warrant, if issued will have an exercise price determined in relation to the pricing of the subsequent financing and will be immediately exercisable once issued. In such subsequent equity financing rounds, the placement agent is also entitled to receive a cash fee equal to 10 percent of the total amount of capital received by the Company, as well as a cash amount representing a non-accountable expense allowance equal to 3% of the aggregate gross proceeds raised in such financing. Subscription Agreements Pursuant to the Subscription Agreements, the Company is entitled to receive notice in the event a holder elects to sell or receives a bona fide offer for any portion of the 2017 Convertible Notes or New Warrants, and the right to purchase the 2017 Convertible Notes or New Warrants on the same terms as the proposed sale or bona fide offer, as applicable, as long as the Company exercises that right within 15 days of receiving written notice. The Company has granted the Subscribers indemnification rights with respect to its representations, warranties, covenants and agreements under the Subscription Agreements. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Summary of Significant Accounting Policies [Abstract] | |
Management's Use of Estimates | Management’s Use of Estimates The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash. The Company’s cash is held by one financial institution in the United States. Amounts on deposit may at times exceed federally insured limits. Management believes that the financial institution is financially sound, and accordingly, minimal credit risk exists with respect to the financial institution. As of September 30, 2017, the Company did not have deposits in excess of federally insured amounts. Prior to October 27, 2016, the LLC did not maintain a bank account. Any expenses incurred while the LLC was organized as a limited liability company were paid by the sole member of the LLC. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s accounting for fair value measurements of assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring or nonrecurring basis adheres to the Financial Accounting Standards Board (FASB) fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows: Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the Company at the measurement date. Level 2 Inputs: Other than quoted prices included in Level 1 inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. Level 3 Inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. As of September 30, 2017 and December 31, 2016, the fair values of cash, other assets, accrued expenses and the unsecured loan approximated their carrying values because of the short-term nature of these assets or liabilities. The estimated fair value of the short-term promissory notes and the convertible promissory notes of the Company was based on amortized cost which was deemed to approximate fair value. The fair value of the warrant liability and premium conversion derivative associated with the convertible promissory notes was based on cash flow models discounted at current implied market rates evidenced in recent arms-length transactions representing expected returns by market participants for similar instruments which were based on Level 3 inputs. There were no transfers between fair value hierarchy levels during the three and nine month periods ended September 30, 2017. The fair value of financial instruments measured on a recurring basis is as follows: As of September 30, 2017 Description Total Level 1 Level 2 Level 3 Liabilities: Warrant liability $ 774,172 $ — $ — $ 774,172 Premium conversion derivative 441,823 — — 441,823 Total liabilities at fair value $ 1,215,995 $ — $ — $ 1,215,995 As of December 31, 2016 Description Total Level 1 Level 2 Level 3 Liabilities: Warrant liability $ 345,960 $ — $ — $ 345,960 Premium conversion derivative 137,650 — — 137,650 Total liabilities at fair value $ 483,610 $ — $ — $ 483,610 The following table provides a roll-forward of the warrant liability and premium conversion derivative measured at fair value on a recurring basis using unobservable level 3 inputs for the nine months ended September 30, 2017: Warrant liability Nine months ended Balance as of beginning of period $ 345,960 Issuance of warrants in connection with convertible promissory notes 440,919 Change in fair value of warrant liability (12,707 ) Balance as of end of period $ 774,172 Premium conversion derivative Nine months ended Balance as of beginning of period $ 137,650 Value assigned to the underlying derivative in connection with convertible notes 213,961 Change in fair value of premium conversion derivative 90,212 Balance as of end of period $ 441,823 There were no financial instruments measured on a fair value recurring basis during the nine month period ended September 30, 2016. |
Intellectual Property | Intellectual Property NeuroOne and the LLC have entered into two licensing agreements with major research institutions, which allows for access to certain patented technology and know-how. Milestone payments under those agreements are capitalized and amortized to general and administrative expense over the expected useful life of the acquired technology. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company evaluates their long-lived assets, which consists entirely of licensed intellectual property for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. The Company assesses the recoverability of long-lived assets by determining whether or not the carrying value of such assets will be recovered through undiscounted expected future cash flows. If the asset is considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired asset. Through September 30, 2017, the Company has not impaired any long-lived assets. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs are recorded as a reduction of the short-term promissory notes and convertible promissory notes. Amortization of debt issuance costs is calculated using the straight-line method over the term of respective short-term and convertible promissory notes, which approximates the effective interest method, and is recorded in interest expense in the accompanying condensed consolidated statements of operations. |
Research and Development Costs | Research and Development Costs Research and development costs are charged to expense as incurred. Research and development expenses may 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 730, Research and Development |
Warrant Liability | Warrant Liability The Company issued warrants to purchase equity securities in connection with the issuance of the convertible promissory notes (see Note 8 – Convertible Promissory Notes and Warrant Agreements). The Company accounts for these warrants as a liability at fair value as the number of shares were not fixed and determinable at the issuance date. Additionally, issuance costs associated with the warrants are expensed as incurred and reflected as interest expense in the accompanying condensed consolidated statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the exercise or expiration of the warrant, or until such time, if any, as the number of shares to be exercised becomes fixed, at which point the warrants will be classified in stockholders’ (deficit) equity provided that there are sufficient authorized and unissued shares of common stock to settle the warrants and redeem any other contracts that may require settlement in shares of common stock. Any future change in fair value of the warrant liability will be recognized as a component of interest expense in the condensed consolidated statements of operations. |
Premium Debt Conversion Derivative | Premium Debt Conversion Derivative The Company evaluates all conversion and redemption features contained in a debt instrument to determine if there are any embedded derivatives that require separation from the host debt instrument. An embedded derivative that requires separation is bifurcated from its host debt instrument and a corresponding discount to the host debt instrument is recorded. The discount is amortized and recorded to interest expense over the term of the host debt instrument using the straight-line method which approximates the effective interest method. The separated embedded derivative is accounted for separately on a fair market value basis. The Company records the fair value changes of a separated embedded derivative to interest expense at each reporting period. The Company issued convertible promissory notes that contained a 125% conversion premium in the event that a qualified financing occurs at a price under $2.25 per common share (see Note 8 – Convertible Promissory Notes and Warrant Agreements). We also issued 2017 Convertible Notes that contained a 125% conversion premium in the event that a qualified financing occurs at a price under $2.8125 per common share (see Note 13 – Subsequent Events). The Company determined that the redemption feature under the convertible promissory notes qualified as an embedded derivative and was separated from its debt host. |
Income Taxes | Income Taxes For NeuroOne, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax base and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that some portion of all of the deferred tax asset will not be realized. The LLC operated as a single-member LLC from formation on December 12, 2013 until it was merged into NeuroOne on October 27, 2016. As such, it was a disregarded legal entity for income tax purposes. Accordingly, no provision for income taxes was included in the financial statements for the period from January 1, 2016 through October 26, 2016. |
Net Loss Per Share | Net Loss Per Share The LLC was a single-member LLC for which no units were outstanding. Accordingly, earnings per share is not presented for the LLC. For NeuroOne, basic loss per share of common stock is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period. Diluted earnings or loss per share of common stock is computed similarly to basic earnings or loss per share except the weighted average shares outstanding are increased to include additional shares from the assumed exercise of any common stock equivalents, if dilutive. The Company’s stock options, convertible promissory notes and warrants are considered common stock equivalents for this purpose. Diluted earnings is computed utilizing the treasury method for the stock options and warrants. Diluted earnings with respect to the convertible promissory notes utilizing the if-converted method was not applicable during the three and nine months ended September 30, 2017 as no conditions required for conversion had occurred during these periods. No incremental common stock equivalents were included in calculating diluted loss per share because such inclusion would be anti-dilutive given the net loss reported for the three and nine months ended September 30, 2017. The following potential common shares were not considered in the computation of diluted net loss per share as their effect would have been anti-dilutive for the three and nine month periods ended September 30, 2017: Warrants 1,074,181 Stock options 365,716 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In January 2016, the FASB issued ASU No. 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting (ASU 2016-09) In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share, Distinguishing Liabilities from Equity and Derivatives and Hedging |
Organization and Basis of Pre20
Organization and Basis of Presentation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Organization and Basis of Presentation [Abstract] | |
Schedule of unaudited pro forma consolidated statements of operations | September 30, September 30, Three months ended Nine months ended 2017 2016 2017 2016 Total operating expenses $ 893,792 $ 8,600 $ 1,918,208 $ 33,056 Loss from operations (893,792 ) (8,600 ) (1,918,208 ) (33,056 ) Interest expense (515,377 ) (3,635 ) (1,134,529 ) (10,698 ) Net loss $ (1,409,169 ) $ (12,235 ) $ (3,052,737 ) $ (43,754 ) Net loss per share: Basic and diluted $ (0.18 ) $ (0.01 ) $ (0.41 ) $ (0.03 ) Number of shares used in per share calculations: Basic and diluted 7,864,994 1,658,051 7,369,457 1,658,051 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of fair value of financial instruments measured on a recurring basis | As of September 30, 2017 Description Total Level 1 Level 2 Level 3 Liabilities: Warrant liability $ 774,172 $ — $ — $ 774,172 Premium conversion derivative 441,823 — — 441,823 Total liabilities at fair value $ 1,215,995 $ — $ — $ 1,215,995 As of December 31, 2016 Description Total Level 1 Level 2 Level 3 Liabilities: Warrant liability $ 345,960 $ — $ — $ 345,960 Premium conversion derivative 137,650 — — 137,650 Total liabilities at fair value $ 483,610 $ — $ — $ 483,610 |
Schedule of warrant liability and premium conversion derivative measured at fair value on a recurring basis | Warrant liability Nine months ended Balance as of beginning of period $ 345,960 Issuance of warrants in connection with convertible promissory notes 440,919 Change in fair value of warrant liability (12,707 ) Balance as of end of period $ 774,172 |
Schedule of computation of diluted net loss per share | Warrants 1,074,181 Stock options 365,716 |
Fair Value, Inputs, Level 3 [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
Schedule of warrant liability and premium conversion derivative measured at fair value on a recurring basis | Premium conversion derivative Nine months ended Balance as of beginning of period $ 137,650 Value assigned to the underlying derivative in connection with convertible notes 213,961 Change in fair value of premium conversion derivative 90,212 Balance as of end of period $ 441,823 |
Intangibles (Tables)
Intangibles (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Intangibles [Abstract] | |
Schedule of Intangible Assets | Useful Life License agreement, October 27, 2016 12-13 years $ 182,159 Less: amortization (1,269 ) Net Intangibles, December 31, 2016 180,890 License agreement amendment 23,115 Less: amortization (13,368 ) Net Intangibles, September 30, 2017 $ 190,637 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Accrued Expenses [Abstract] | |
Schedule of accrued expenses | September 30, December 31, Accrued license fees $ 182,009 $ 182,009 Accrued services 531,607 31,186 Accrued issuance costs 32,306 22,015 Accrued compensation and payroll related costs 170,812 28,252 Accrued interest — 881 Total accrued expenses $ 916,734 $ 264,343 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stock-Based Compensation [Abstract] | |
Schedule of stock-based compensation expense | Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 General and administrative $ — $ — $ 2,065 $ — Research and development 64,945 — 74,729 — Total stock-based compensation $ 64,945 $ — $ 76,794 $ — |
Schedule of weighted-average assumptions used Black-Scholes option-pricing model | Three Months Nine Months Expected stock price volatility — % 47.8 % Expected life of options (years) — 5.0 Expected dividend yield — % 0 % Risk free interest rate — % 1.9 % |
Organization and Basis of Pre25
Organization and Basis of Presentation (Details) | 1 Months Ended | ||
Jul. 20, 2017$ / sharesshares | Sep. 30, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | |
Organization and Basis of Presentation (Textual) | |||
Common stock, shares authorized | 100,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||
Preferred stock, shares authorized | 10,000,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||
Description of acquisition | (i) All outstanding shares of common stock of NeuroOne, par value $0.0001 per share (the "NeuroOne Shares") were exchanged for shares of the Company's common stock, par value $0.001 per share (the "Company Shares") based on the exchange ratio of 17.0103706 Company Shares for every one NeuroOne Share (the "Exchange Ratio"), resulting in the Company issuing, on July 20, 2017, an aggregate of 6,291,994 Company Shares for all of the then-outstanding NeuroOne Shares, (ii) all outstanding options of NeuroOne were replaced with options to purchase Company Shares based on the Exchange Ratio, with corresponding adjustments to their respective exercise prices, pursuant to which the Company reserved 992,265 Company Shares for issuance upon the exercise of options. | ||
Par value of Company's common stock issued in lieu of exchange | $ / shares | $ 0.001 | ||
NeuroOne, Inc. [Member] | |||
Organization and Basis of Presentation (Textual) | |||
Common stock, shares authorized | 45,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||
Preferred stock, shares authorized | 5,000,000 | ||
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 | ||
Common stock, ownership percentage | 100.00% | ||
Par value of outstanding shares of common stock of NeuroOne | $ / shares | $ 0.0001 | ||
Common shares exchange ratio | 17.0103706 | ||
Aggregate shares issued of the then-outstanding NeuroOne Shares | 6,291,994 | ||
Reserved for future issuance shares exercise of options | 992,265 | ||
Cancellation of shares | 3,500,000 |
Going Concern (Details)
Going Concern (Details) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Going Concern (Textual) | |
Accumulated deficit | $ 3,699,438 |
Short-term promissory note | 253,000 |
Convertible promissory note financing | 1,625,120 |
Proceeds from subscription | 2,500,000 |
NeuroOne LLC [Member] | |
Going Concern (Textual) | |
Cumulative losses | $ 49,930 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Liabilities [Abstract] | ||
Warrant liability | $ 774,172 | |
Premium conversion derivative | 441,823 | |
Total liabilities at fair value | 1,215,995 | |
Level 1 [Member] | ||
Liabilities [Abstract] | ||
Warrant liability | 0 | |
Premium conversion derivative | 0 | |
Total liabilities at fair value | 0 | |
Level 2 [Member] | ||
Liabilities [Abstract] | ||
Warrant liability | 0 | |
Premium conversion derivative | 0 | |
Total liabilities at fair value | 0 | |
Level 3 [Member] | ||
Liabilities [Abstract] | ||
Warrant liability | 774,172 | |
Premium conversion derivative | 441,823 | |
Total liabilities at fair value | $ 1,215,995 | |
NeuroOne, Inc. [Member] | ||
Liabilities [Abstract] | ||
Warrant liability | $ 345,960 | |
Premium conversion derivative | 137,650 | |
Total liabilities at fair value | 483,610 | |
NeuroOne, Inc. [Member] | Level 1 [Member] | ||
Liabilities [Abstract] | ||
Warrant liability | 0 | |
Premium conversion derivative | 0 | |
Total liabilities at fair value | 0 | |
NeuroOne, Inc. [Member] | Level 2 [Member] | ||
Liabilities [Abstract] | ||
Warrant liability | 0 | |
Premium conversion derivative | 0 | |
Total liabilities at fair value | 0 | |
NeuroOne, Inc. [Member] | Level 3 [Member] | ||
Liabilities [Abstract] | ||
Warrant liability | 345,960 | |
Premium conversion derivative | 137,650 | |
Total liabilities at fair value | $ 483,610 |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Details 1) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Schedule of warrant liability [Abstract] | |
Balance as of end of period | $ 774,172 |
Warrant [Member] | |
Schedule of warrant liability [Abstract] | |
Balance as of beginning of period | 345,960 |
Issuance of warrants in connection with convertible promissory notes | 440,919 |
Change in fair value of warrant liability | (12,707) |
Balance as of end of period | $ 774,172 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details 2) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Schedule of Premium conversion derivative [Abstract] | |
Balance as of end of period | $ 441,823 |
Premium conversion derivative [Member] | |
Schedule of Premium conversion derivative [Abstract] | |
Balance as of beginning of period | 137,650 |
Value assigned to the underlying derivative in connection with convertible notes | 213,961 |
Change in fair value of premium conversion derivative | 90,212 |
Balance as of end of period | $ 441,823 |
Summary of Significant Accoun30
Summary of Significant Accounting Policies (Details 3) | 9 Months Ended |
Sep. 30, 2017shares | |
Stock options [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive computation of diluted net loss per share | 365,716 |
Warrants [Member] | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Anti-dilutive computation of diluted net loss per share | 1,074,181 |
Summary of Significant Accoun31
Summary of Significant Accounting Policies (Details Textual) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Summary of Significant Accounting Policies (Textual) | ||
Debt conversion description | The Company issued convertible promissory notes that contained a 125% conversion premium in the event that a qualified financing occurs at a price under $2.25 per common share (see Note 8 Convertible Promissory Notes and Warrant Agreements). We also issued 2017 Convertible Notes that contained a 125% conversion premium in the event that a qualified financing occurs at a price under $2.8125 per common share (see Note 13 Subsequent Events). | |
Financial instruments measured on a fair value recurring basis | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Oct. 01, 2014 | Oct. 27, 2016 | Sep. 30, 2017 | Dec. 31, 2016 |
WARF License Agreement [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Milestone payments in connection with WARF License Agreement | $ 110,000 | |||
Estimated the fair value of consideration payable to WARF recorded as an intangible asset with a corresponding accrued expense | $ 90,000 | |||
Contingent payment due in the event of completion of financing | 120,000 | |||
Minimum royalties for the year 2019 | 50,000 | |||
Minimum royalties for the year 2020 | 100,000 | |||
Royalties per year beginning from 2021 | $ 150,000 | |||
Accrued interest | 1.00% | |||
Mayo Agreement [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Value of share issued as royalty upon the achievement of milestone | $ 300 | |||
Share issued as royalty upon the achievment of milestone | 10,000 | |||
Milestone amount recorded for intellectual property | $ 91,709 | |||
Milestone payments accrued | $ 91,709 | $ 91,709 | ||
Expiry date | May 25, 2037 | |||
NeuroOne, Inc. [Member] | Mayo Agreement [Member] | ||||
Commitments and Contingencies (Textual) | ||||
Share issued as royalty upon the achievment of milestone | 50,556 | |||
Additional amount of intangible assets | $ 23,115 |
Intangibles (Details)
Intangibles (Details) - Intangible Assets [Member] - USD ($) | 2 Months Ended | 9 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Schedule of Intangible Assets [Abstract] | |||
Net Intangibles, Beginning Balance | $ 180,890 | ||
License agreement | 182,159 | ||
License agreement amendment | 23,115 | ||
Less: amortization | (1,269) | (13,368) | |
Net Intangibles, Ending Balance | $ 180,890 | $ 190,637 | |
Minimum [Member] | |||
Schedule of Intangible Assets [Abstract] | |||
License agreement Useful Life | 12 years | ||
Maximum [Member] | |||
Schedule of Intangible Assets [Abstract] | |||
License agreement Useful Life | 13 years |
Intangibles (Details Textual)
Intangibles (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
NeuroOne LLC [Member] | ||||
Intangibles (Textual) | ||||
Amortization of Intangible Assets | $ 1,941 | $ 5,823 | ||
NeuroOne, Inc. [Member] | ||||
Intangibles (Textual) | ||||
Amortization of Intangible Assets | $ 4,264 | $ 13,368 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of Accrued expenses [Abstract] | ||
Accrued license fees | $ 182,009 | |
Accrued services | 531,607 | |
Accrued issuance costs | 32,306 | |
Accrued compensation and payroll related costs | 170,812 | |
Accrued interest | 0 | |
Total accrued expenses | $ 916,734 | |
NeuroOne, Inc. [Member] | ||
Schedule of Accrued expenses [Abstract] | ||
Accrued license fees | $ 182,009 | |
Accrued services | 31,186 | |
Accrued issuance costs | 22,015 | |
Accrued compensation and payroll related costs | 28,252 | |
Accrued interest | 881 | |
Total accrued expenses | $ 264,343 |
Short-Term Promissory Notes a36
Short-Term Promissory Notes and Unsecured Loan (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |
Aug. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2017 | Nov. 30, 2016 | |
Unsecured Loan [Member] | ||||
Short-Term Promissory Notes and Unsecured Loan (Textual) | ||||
Short-term unsecured loan | $ 50,000 | |||
Short-Term Promissory Notes [Member] | ||||
Short-Term Promissory Notes and Unsecured Loan (Textual) | ||||
Aggregate gross proceeds of short-term unsecured promissory notes | $ 253,000 | |||
Issuance costs discounted of short-term unsecured promissory notes | $ 3,030 | |||
Discount amortization charged to interest expense related to issuance costs | $ 733 | $ 733 | ||
Short-term unsecured promissory notes maturity date | Feb. 18, 2018 | |||
Common stock purchase warrants | 126,500 | |||
Warrants maturity term | 5 years | |||
Warrants exercise price | $ 1.80 | |||
Warrants recorded as additional paid in capital and discounted from short-term notes | $ 61,496 | |||
Fair value of warrants risk-free interest rate | 1.77% | |||
Fair value of warrants expected volatility | 48.00% | |||
Fair value of warrants expected life | 5 years 6 months | |||
Fair value of warrants expected dividend yield | 0.00% | |||
Discount related to warrants amortized to interest expense | $ 14,868 | $ 14,868 |
Convertible Promissory Notes 37
Convertible Promissory Notes and Warrant Agreements (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Dec. 31, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Convertible Promissory Notes and Warrant Agreements (Textual) | ||||
Convertible promissory notes and common stock purchase warrants for aggregate gross proceeds | $ 2,500,000 | |||
Convertible notes and common stock purchase warrants to investors | $ 1,625,120 | 1,625,120 | ||
Convertible Promissory Notes [Member] | ||||
Convertible Promissory Notes and Warrant Agreements (Textual) | ||||
Convertible promissory notes and common stock purchase warrants for aggregate gross proceeds | 2,500,000 | |||
Convertible notes and common stock purchase warrants to investors | $ 1,625,120 | $ 1,625,120 | ||
Convertible notes bear interest at fixed rate | 8.00% | 8.00% | ||
Repay principal and accrued and unpaid interest earlier | Nov. 21, 2017 | |||
Gross proceeds of equity qualified financing | $ 3,000,000 | |||
Description of outstanding principal and accrued interest | If a Qualified Financing occurs before November 21, 2017, the outstanding principal and accrued and unpaid interest on the Convertible Notes automatically converts into the securities issued by the Company in such financing based on the greater number of securities resulting from either the outstanding principal and accrued interest on the Convertible Notes divided by $1.80, or the outstanding principal and accrued interest on the Convertible Notes multiplied by 1.25, divided by the price paid per security in the Qualified Financing. If the Company fails to complete a Qualified Financing by November 21, 2017, the Convertible Notes will be immediately due and payable on such date. | |||
Description of maximum voting power of surviving entity | Change of control means a merger or consolidation with another entity in which the Company's stockholders do not own more than 50 percent of the outstanding voting power of the surviving entity or the disposition of all or substantially all of the assets of the Company. | |||
Amount of convertible note held by warrant holder | $ 1.80 | $ 1.80 | ||
Warrants exercisable date of issuance and expire | Nov. 21, 2021 | |||
Fair value of warrants risk-free interest rate | 1.79% | |||
Fair value of warrants expected volatility | 50.00% | |||
Fair value of warrants expected life | 4 years 1 month 20 days | |||
Fair value of warrants expected dividend yield | 0.00% | |||
Convertible promissory note proceeds assigned to warrants | $ 345,640 | $ 440,919 | ||
Amortization expense | 284,637 | 601,794 | ||
Convertible notes to interest expense | $ 6,546 | $ (12,707) | ||
Convertible notes conversion premium | 125.00% | |||
Convertible notes conversion price per common share | $ 2.25 | $ 2.25 | ||
Discount to convertible notes | 137,564 | $ 213,961 | ||
Convertible notes of conversion premium amortization expense | $ 133,367 | 266,848 | ||
Premium debt conversion derivative interest expense | 15,406 | $ 90,212 | ||
Percentage of common stock purchase warrants | 10.00% | |||
Convertible Promissory Notes [Member] | Private placement agent [Member] | ||||
Convertible Promissory Notes and Warrant Agreements (Textual) | ||||
Convertible notes to interest expense | 27,317 | $ 59,184 | ||
Discount to convertible notes | $ 37,469 | $ 39,781 | ||
Convertible notes incurred issuance costs | $ 151,915 | |||
Description of convertible notes issuance costs | In connection with the Convertible Notes, the Company incurred issuance costs in the amount of $151,915, which included (i) a placement agent cash fee, which was $113,610 for the Convertible Notes issued through June 19, 2017 (ii) the obligation to issue a warrant to the placement agent (the "placement agent warrant") which will have an exercise price of $2.00 per share of common stock and had a total fair value of $4,855 at September 30, 2017 and (iii) legal expenses of $33,450. | |||
Warrant term | 5 years | |||
Common stock purchase warrants | 29,000 | 63,000 | ||
Percentage of common stock purchase warrants | 8.00% | |||
Issuance costs attributed to common stock purchase warrants | $ 0 | $ 38,119 |
Investment Banker Fee (Details)
Investment Banker Fee (Details) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Investment Banker Fee (Textual) | |
Non-refundable fee to investment banker | $ 50,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 64,945 | $ 76,794 | ||
General and administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 2,065 | |||
Research and development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 64,945 | $ 74,729 |
Stock-Based Compensation (Det40
Stock-Based Compensation (Details 1) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Stock-Based Compensation [Abstract] | ||
Expected stock price volatility | 0.00% | 47.80% |
Expected life of options (years) | 0 years | 5 years |
Expected dividend yield | 0.00% | 0.00% |
Risk free interest rate | 0.00% | 1.90% |
Stock-Based Compensation (Det41
Stock-Based Compensation (Details Textual) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / sharesshares | |
Stock-Based Compensation (Textual) | ||
Stock options granted weighted average grant date fair value | $ / shares | $ 0.014 | $ 0.014 |
Shares of restricted common stock vested | 0 | 215,453 |
Stock options vested shares | 42,525 | 365,716 |
Stock options forfeited | 0 | 0 |
Unrecognized stock-based compensation cost for stock options and restricted common stock | $ | $ 0 | $ 0 |
Compensation expense associated with restricted common stock | $ | $ 7,220 | |
2016 Plan [Member] | Employees, directors, and consultants [Member] | ||
Stock-Based Compensation (Textual) | ||
Shares of restricted common stock vested | 0 | 215,453 |
2016 and 2017 Plans [Member] | ||
Stock-Based Compensation (Textual) | ||
Reserved shares of common stock for issuance | 1,711,096 | 1,711,096 |
2016 and 2017 Plans [Member] | Employees, directors, and consultants [Member] | ||
Stock-Based Compensation (Textual) | ||
Reserved shares of common stock for issuance | 2,292,265 | 2,292,265 |
Stock options for shares of common stock granted | 0 | 365,716 |
Stock options weighted average exercise price for shares of common stock granted | $ / shares | $ 0.035 | |
Stock options granted weighted average grant date fair value | $ / shares | $ 0.014 | $ 0.014 |
Stock options vesting periods | 10 years | |
Stock options expire | 10 years |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Taxes (Textual) | ||||
Effective tax rate | 0.00% | 0.00% | ||
NeuroOne LLC [Member] | ||||
Income Taxes (Textual) | ||||
Provision for income taxes | $ 0 | $ 0 | ||
NeuroOne, Inc. [Member] | ||||
Income Taxes (Textual) | ||||
Provision for income taxes | $ 0 | $ 0 |
Stockholders'_Member Deficit (D
Stockholders'/Member Deficit (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Jun. 30, 2017 | Sep. 30, 2017 | |
NeuroOne, Inc. [Member] | ||
Stockholders'/Member Deficit (Textual) | ||
Forgiveness of share subscription agreement for founders' shares | $ 9,051 | $ 9,051 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Events [Member] - USD ($) | Oct. 04, 2017 | Nov. 06, 2017 |
Subsequent Events (Textual) | ||
Principal amount | $ 115,000 | |
Subsequent event, description | If the Company raises more than $3,000,000 in an equity financing before the Maturity Date (the "Qualified Financing"), the outstanding principal and accrued and unpaid interest on the Notes shall automatically convert into the securities issued by the Company in such financing based on the greater number of such securities resulting from either (i) the outstanding principal and accrued interest on the Notes divided by $2.25 or (ii) the outstanding principal and accrued interest on the Notes multiplied by 1.25, divided by the price paid per security in such financing. If a change of control transaction occurs prior to the earlier of a Qualified Financing or the Maturity Date, the Notes would, at the election of the holders of a majority of the outstanding principal of the Notes, either become payable on demand as of the closing date of such transaction or become convertible into shares of common stock immediately prior to such transaction at a price per share equal to the lesser of (i) the per share value of the common stock as determined by our Board of Directors as if in connection with the granting of stock based compensation or in a private sale to a third party in an arms' length transaction or (ii) at the per share consideration to be paid in such transaction (the date of any such conversion of the Notes pursuant to this paragraph, is referred to herein as the "Conversion Date"). Change of control means a merger or consolidation with another entity in which our stockholders do not own more than 50% of the outstanding voting power of the surviving entity or the disposition of all or substantially all of the Company's assets. | |
Private Placement [Member] | ||
Subsequent Events (Textual) | ||
Percentage of convertible promissory notes | 8.00% | |
Convertible notes bear interest at fixed rate | 8.00% | |
Principal amount | $ 150,000 | |
Maturity date | Oct. 4, 2022 | |
Subsequent event, description | The Company may conduct any number of additional closings so long as the final closing occurs on or before the five-month anniversary of the initial closing date and the amount does not exceed $1,000,000 or a higher amount determined by the Board of Directors. | |
Total amount of capital received, percentage | 10.00% | |
Percentage of non-accountable expense | 3.00% | |
Placement Agent [Member] | ||
Subsequent Events (Textual) | ||
Percentage of convertible promissory notes | 10.00% | |
Warrants exercise price | $ 0 |