Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 12, 2020 | |
Document And Entity Information | ||
Entity Registrant Name | Cell Source, Inc. | |
Entity Central Index Key | 0001569340 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Mar. 31, 2020 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2020 | |
Entity Common Stock Shares Outstanding | 27,329,933 | |
Entity Interactive Data Current | Yes |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Assets: | ||
Cash | $ 16,522 | $ 27,908 |
Prepaid expenses | 85,713 | 57,196 |
Other current assets | 29,425 | 29,679 |
Total Assets | 131,660 | 114,783 |
Current Liabilities: | ||
Accounts payable | 312,794 | 135,415 |
Accrued expenses | 1,145,457 | 1,051,961 |
Accrued expenses - related parties | 81,501 | 195,334 |
Accrued interest | 470,103 | 426,516 |
Accrued interest - related parties | 157,657 | 146,491 |
Accrued compensation | 605,257 | 603,520 |
Advances payable | 235,500 | 235,500 |
Advances payable - related party | 100,000 | 100,000 |
Notes payable, net of debt discount of $0 and $1,292, as of March 31, 2020 and December 31, 2019, respectively | 1,113,000 | 1,111,708 |
Notes payable - related parties | 150,000 | 150,000 |
Convertible notes payable, net of debt discount of $52,890 and $1,467 as of March 31, 2020 and December 31, 2019, respectively | 1,570,110 | 966,533 |
Convertible notes payable - related parties | 225,000 | 225,000 |
Derivative liabilities | 351,900 | |
Accrued dividend payable | 223,151 | 11,846 |
Total Current Liabilities | 6,389,530 | 5,711,724 |
Convertible notes payable - non-current portion | 145,000 | |
Total Liabilities | 6,389,530 | 5,856,724 |
Commitments and contingencies (Note 8) | ||
Stockholders' Deficiency: | ||
Common Stock, $0.001 par value, 200,000,000 shares authorized; 27,329,933 and 27,076,762 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 27,330 | 27,077 |
Additional paid-in capital | 15,673,117 | 15,375,565 |
Accumulated deficit | (21,959,575) | (21,145,828) |
Total Stockholders' Deficiency | (6,257,870) | (5,741,941) |
Total Liabilities and Stockholders' Deficiency | 131,660 | 114,783 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Deficiency: | ||
Convertible Preferred Stock, $0.001 par value, 10,000,000 shares authorized; Series A Convertible Preferred Stock, 1,335,000 shares designated, 1,258,416 and 1,245,083 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively; liquidation preference of $9,661,271 and $9,349,969 as of March 31, 2020 and December 31, 2019, respectively | $ 1,258 | $ 1,245 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Current Liabilities: | ||
Notes payable, net of debt discount | $ 0 | $ 1,292 |
Stockholders' Deficiency: | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 27,329,933 | 27,076,762 |
Common stock, shares outstanding | 27,329,933 | 27,076,762 |
Series A Convertible Preferred Stock [Member] | ||
Stockholders' Deficiency: | ||
Convertible preferred stock, shares designated | $ 1,335,000 | $ 1,335,000 |
Convertible preferred stock, shares issued | 1,258,416 | 1,245,083 |
Convertible preferred stock, shares outstanding | 1,258,416 | 1,245,083 |
Convertible preferred stock liquidation preference | 9,661,271 | 9,349,969 |
Convertible Notes Payable [Member] | ||
Current Liabilities: | ||
Notes payable, net of debt discount | $ 52,890 | $ 1,467 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Operating Expenses: | ||
Research and development | $ 257,545 | $ 724,742 |
Research and development - related party | 61,667 | 25,000 |
General and administrative | 414,120 | 421,290 |
Total Operating Expenses | 733,332 | 1,171,032 |
Loss From Operations | (733,332) | (1,171,032) |
Other (Expense) Income: | ||
Interest expense | (76,483) | (76,867) |
Interest expense - related parties | (11,166) | (740) |
Amortization of debt discount | (8,302) | |
Change in fair value of derivative liabilities | 16,977 | 52,600 |
Loss on extinguishment of debt | (1,441) | |
Loss on exchange of notes payable for Series A Convertible Preferred Stock | (262,470) | |
Total Other Expense | (80,415) | (287,477) |
Net Loss | (813,747) | (1,458,509) |
Dividend attributable to Series A preferred stockholders | (211,305) | (148,035) |
Net Loss Applicable to Common Stockholders | $ (1,025,052) | $ (1,606,544) |
Net Loss Per Common Share - Basic and Diluted | $ (0.04) | $ (0.06) |
Weighted Average Common Shares Outstanding - Basic and Diluted | 29,120,597 | 28,121,446 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIT (Unaudited) - USD ($) | Total | Convertible Preferred Stock - Series A [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] |
Balance, shares at Jan. 01, 2019 | 860,291 | 26,077,611 | |||
Balance, amount at Jan. 01, 2019 | $ (4,920,171) | $ 860 | $ 26,078 | $ 11,723,224 | $ (16,670,333) |
Issuance of Series A Convertible Preferred Stock for cash, shares | 43,331 | ||||
Issuance of Series A Convertible Preferred Stock for cash, amount | 325,000 | $ 43 | 324,957 | ||
Issuance of Series A Convertible Preferred Stock in exchange for notes payable, shares | 145,367 | ||||
Issuance of Series A Convertible Preferred Stock in exchange for notes payable, amount | 1,090,254 | $ 145 | 1,090,109 | ||
Series A Convertible Preferred Stock dividends: Accrual of earned dividends | (148,035) | (148,035) | |||
Net loss | $ (1,458,509) | $ (1,458,509) | |||
Balance, shares at Mar. 31, 2019 | 1,048,989 | 26,077,611 | |||
Balance, amount at Mar. 31, 2019 | $ (5,111,461) | $ 1,048 | $ 26,078 | $ 12,990,255 | $ (18,128,842) |
Balance, shares at Jan. 01, 2020 | 1,245,083 | 27,076,762 | |||
Balance, amount at Jan. 01, 2020 | $ (5,741,941) | $ 1,245 | $ 27,077 | $ 15,375,565 | $ (21,145,828) |
Issuance of Series A Convertible Preferred Stock for cash, shares | 13,333 | ||||
Issuance of Series A Convertible Preferred Stock for cash, amount | 100,000 | $ 13 | 99,987 | ||
Series A Convertible Preferred Stock dividends: Accrual of earned dividends | (211,305) | (211,305) | |||
Net loss | (813,747) | $ (813,747) | |||
Issuance of common stock in connection with extension of notes payable, shares | 227,500 | ||||
Issuance of common stock in connection with extension of notes payable, amount | 56,875 | $ 227 | 56,648 | ||
Reclassification of derivative liabilities to equity | 345,830 | 345,830 | |||
Stock-based compensation: Common stock, shares | 25,671 | ||||
Stock-based compensation: Common stock, amount | $ 6,418 | $ 26 | $ 6,392 | ||
Balance, shares at Mar. 31, 2020 | 1,258,416 | 27,329,933 | |||
Balance, amount at Mar. 31, 2020 | $ (6,257,870) | $ 1,258 | $ 27,330 | $ 15,673,117 | $ (21,959,575) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (813,747) | $ (1,458,509) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Change in fair value of derivative liabilities | (16,977) | (52,600) |
Amortization of debt discount | 8,302 | |
Loss on exchange of notes payable for preferred shares | 262,470 | |
Loss on extinguishment of debt | 1,441 | |
Non-cash interest expense - warrants | 18,668 | 33,016 |
Stock-based compensation: | ||
Warrants | (98) | (9) |
Common stock | 4,626 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | (28,517) | 4,009 |
Other current assets | 254 | (2,560) |
Accounts payable | 177,379 | 492,501 |
Accrued expenses | 60,601 | 193,431 |
Accrued expenses - related parties | (113,833) | 25,000 |
Accrued interest | 68,233 | 76,861 |
Accrued interest - related parties | 748 | 740 |
Accrued compensation | 14,534 | 20,206 |
Net Cash Used In Operating Activities | (618,386) | (405,444) |
Cash Flows From Financing Activities: | ||
Proceeds from cash advances | 75,000 | |
Proceeds from issuance of convertible notes payable | 575,000 | |
Proceeds from issuance of Series A Preferred Stock | 100,000 | 325,000 |
Repayment of convertible notes payable | (68,000) | |
Net Cash Provided By Financing Activities | 607,000 | 400,000 |
Net Decrease In Cash | (11,386) | (5,444) |
Cash - Beginning of Period | 27,908 | 18,934 |
Cash - End of Period | 16,522 | 13,490 |
Supplemental Disclosures of Cash Flow Information: | ||
Cash paid for: Interest | ||
Cash paid for: Income taxes | ||
Non-cash investing and financing activities: | ||
Original issue discount in connection with convertible note payable | 3,000 | |
Preferred stock issued in exchange for notes and advances payable | 1,090,254 | |
Accrual of earned preferred stock dividends | (211,305) | (148,035) |
Reclassification of derivative liabilities to equity | 345,830 | |
Issuance of placement agent warrants | 10,907 | |
Issuance of common stock as debt discount in connection with extension of notes payable | 56,875 | |
Repayment of convertible note payable and accrued interest by third party | $ 100,896 |
Business Organization, Nature o
Business Organization, Nature of Operations and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Business Organization, Nature of Operations and Basis of Presentation | |
Note 1 - Business Organization and Nature of Operations | Organization and Operations Cell Source, Inc. (“Cell Source”, “CSI” or the “Company”) is a Nevada corporation formed on June 6, 2012 that is the parent company of Cell Source Limited (“CSL”), a wholly owned subsidiary which was founded in Israel in 2011 in order to commercialize a suite of inventions relating to certain cancer treatments. The Company is a biotechnology company focused on developing cell therapy treatments based on the management of immune tolerance. The Company’s lead prospective product is its patented Veto Cell immune system management technology, which is an immune tolerance biotechnology that enables the selective blocking of immune responses. CSL’s Veto Cell immune system management technology is based on technologies patented, owned, and licensed to CSL by Yeda Research and Development Company Limited, an Israeli corporation (“Yeda”) (see Note 7, Related Party Transactions Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, such statements include all adjustments (consisting only of normal recurring items) which are considered necessary for a fair presentation of the condensed consolidated financial position of the Company as of March 31, 2020 and the condensed consolidated results of its operations and cash flows for the three months ended March 31, 2020 and 2019. The results of operations for the three months ended March 31, 2020 are not necessarily indicative of the operating results for the full year ending December 31, 2020 or any other period. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related disclosures of the Company as of December 31, 2019 and for the year then ended which were included in the Company’s Annual Report on Form 10-K that was filed with the Securities and Exchange Commission (“SEC”) on March 30, 2020. |
Going Concern and Management Pl
Going Concern and Management Plans | 3 Months Ended |
Mar. 31, 2020 | |
Going Concern and Management Plans | |
Note 2 - Going Concern and Management Plans | During the three months ended March 31, 2020, the Company had not generated any revenues, had a net loss of approximately $814,000 and had used cash in operations of approximately $618,000. As of March 31, 2020, the Company had a working capital deficiency of approximately $6,258,000 and an accumulated deficit of approximately $21,960,000. Subsequent to March 31, 2020 and as more fully described in Note 9, Subsequent Events The Company is currently funding its operations on a month-to-month basis. While there can be no assurance that it will be successful, the Company is in active negotiations to raise additional capital. The Company’s primary sources of operating funds since inception have been equity and debt financings. Management’s plans include continued efforts to raise additional capital through debt and equity financings. There is no assurance that these funds will be sufficient to enable the Company to fully complete its development activities or attain profitable operations. If the Company is unable to obtain such additional financing on a timely basis or, notwithstanding any request the Company may make, if the Company’s debt holders do not agree to convert their notes into equity or extend the maturity dates of their notes, the Company may have to curtail its development, marketing and promotional activities, which would have a material adverse effect on the Company’s business, financial condition and results of operations, and ultimately the Company could be forced to discontinue its operations and liquidate. The accompanying condensed consolidated financial statements have been prepared in conformity with U.S. GAAP, which contemplate continuation of the Company as a going concern and the realization of assets and satisfaction of liabilities in the normal course of business. The carrying amounts of assets and liabilities presented in the financial statements do not necessarily purport to represent realizable or settlement values. The condensed consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies | |
Note 3 - Summary of Significant Accounting Policies | Since the date of the Annual Report on Form 10-K for the year ended December 31, 2019, there have been no material changes to the Company’s significant accounting policies. Loss Per Share The Company computes basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share includes the dilution that would occur upon the exercise or conversion of all dilutive securities into common stock using the “treasury stock” and/or “if converted” methods, as applicable. Weighted average shares outstanding for the three months ended March 31, 2020 and 2019 includes the weighted average impact of warrants to purchase an aggregate of 2,043,835 shares of common stock because their exercise price was determined to be nominal. The common stock equivalents associated with the following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: March 31, 2020 2019 Options 3,782,004 - Warrants 4,125,810 6,374,157 Convertible notes 2,555,477 1,069,101 Convertible preferred stock 12,584,160 10,489,890 Total 23,047,451 17,933,148 Convertible notes are assumed to be converted at the rate of $0.75 per common share, which is the conversion price. However, such conversion rates are subject to adjustment under certain circumstances, which may result in the issuance of common shares greater than the amount indicated. Reclassifications Certain prior period accrued liabilities have been reclassified from accrued compensation to accrued interest to conform to the fiscal 2020 presentation. These reclassifications have no impact on the previously reported net loss. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value | |
Note 4 - Fair Value | During the three months ended March 31, 2020, in connection with the extension of certain convertible notes payable that previously contained a variable conversion price with no floor and, a result, triggered sequencing, the parties agreed to amend the conversion terms such that a conversion price floor of $0.75 per share was established. As a result, the Company had no remaining outstanding instruments with a variable conversion price with no floor and, accordingly, the Company reclassified derivative liabilities with an aggregate fair value of $345,830 to additional paid-in capital. See Note 5, Notes Payable and Convertible Notes Payable The following table summarizes the Company’s instruments recorded at fair value as of March 31, 2020 and December 31, 2019: Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable Liabilities Inputs Inputs Total (Level 1) (Level 2) (Level 3) Accrued compensation - common stock $ 38,229 $ - $ - $ 38,229 Accrued compensation - warrants 6,926 - - 6,926 Accrued interest - warrants 65,592 - - 65,592 Accrued interest - warrants - related party 126,350 - - 126,350 Balance - March 31, 2020 $ 237,097 $ - $ - $ 237,097 Accrued compensation - common stock $ 40,021 $ - $ - $ 40,021 Accrued compensation - warrants 17,931 - - 17,931 Accrued interest - warrants 57,343 - - 57,343 Accrued interest - warrants - related party 115,932 - - 115,932 Derivative liabilities 351,900 - - 351,900 Balance - December 31, 2019 $ 583,127 $ - $ - $ 583,127 Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. As of March 31, 2020, the Company’s Level 3 liabilities shown in the above table consist of accrued obligations to issue warrants and common stock. As of December 31, 2019, the Company’s Level 3 liabilities shown in the above table consist of sequenced warrants with no price floor as the Company is unable to determine if it will have sufficient authorized common stock to settle such arrangements, warrants deemed to be derivative liabilities according to the Company’s sequencing policy in accordance with ASC 815-40-35-12, the embedded conversion options within its convertible notes payable and an accrued obligation to issue warrants and common stock. In applying the Black-Scholes option pricing model utilized in the valuation of Level 3 liabilities, the Company used the following approximate assumptions: For the Three Months Ended March 31, 2020 2019 Risk-free interest rate 0.33% - 1.55 % 2.21% - 2.44 % Expected term (years) 0.52 - 5.00 0.02 - 5.00 Expected volatility 110 % 110 % Expected dividends 0.00 % 0.00 % The expected term used is the contractual life of the instrument being valued. Since the Company’s stock has not been publicly traded for a sufficiently long period of time or with significant volume, the Company is utilizing an expected volatility based on a review of the historical volatilities, over a period of time, equivalent to the expected life of the instrument being valued, of similarly positioned public companies within its industry. The risk-free interest rate was determined from the implied yields from U.S. Treasury zero-coupon bonds with a remaining term consistent with the expected term of the instrument being valued. The following table provides a summary of the changes in fair value, including net transfers in and/or out, of all Level 3 liabilities measured at fair value on a recurring basis using unobservable inputs during the three months ended March 31, 2020: Accrued Accrued Derivative Interest Compensation Liability Total Balance - December 31, 2019 $ 173,275 $ 57,952 $ 351,900 $ 583,127 Accrued compensation - common stock - 4,626 - 4,626 Accrued interest - common stock 56,875 - - 56,875 Accrued interest - warrants 8,571 - - 8,571 Accrued interest - warrants - related party 11,243 - - 11,243 Change in fair value (1,147 ) (128 ) (16,977 ) (18,252 ) Issuance of warrants - (10,877 ) 10,907 30 Issuance of common stock (56,875 ) (6,418 ) - (63,293 ) Reclassification of derivative liabilities to equity - - (345,830 ) (345,830 ) Balance - March 31, 2020 $ 191,942 $ 45,155 $ - $ 237,097 As of March 31, 2020, the Company had an obligation to issue 152,916 shares of common stock to service providers that had a fair value of $38,229, which was a component of accrued compensation on the condensed consolidated balance sheet. See Note 6, Stockholders’ Deficiency – Stock Warrants |
Notes Payable and Convertible N
Notes Payable and Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2020 | |
Notes Payable and Convertible Notes Payable | |
Note 5 - Notes Payable and Convertible Notes Payable | As of March 31, 2020 and through the date of this filing, notes payable with principal amounts totaling $1,888,000 were past due and are classified as current liabilities on the condensed consolidated balance sheet as of March 31, 2020. Such notes continue to accrue interest and all relevant penalties have been accrued as of March 31, 2020. Of such past due notes payable, a holder of a note with principal amount of $250,000 issued a notice of default. See Note 8, Commitments and Contingencies – Litigation During the three months ended March 31, 2020 and 2019, the Company recorded interest expense of $87,649 and $77,607, respectively, and amortization of debt discount of $8,302 and $0, respectively. As of March 31, 2020 and December 31, 2019, the Company had $627,760 and $573,007, respectively, of accrued interest (including interest in the form of warrants (see Note 4)) and penalties related to notes payable, which is included with accrued interest and accrued interest – related parties on the condensed consolidated balance sheets. Convertible Notes Payable On January 3, 2020, a third party repaid a convertible note in full on behalf of the Company, which payment included a prepayment penalty for an aggregate total payment of $100,896 (principal and interest of $68,000 and $32,896, respectively), which was fully repaid by the Company as of March 31, 2020. The Company determined the transaction was a note extinguishment and recorded a loss on extinguishment of $1,441 in the condensed consolidated statements of operations. On January 10, 2020, the Company issued a convertible note payable in the principal amount of $78,000. The note accrues interest at 12% per annum and matures on January 10, 2021. Any amount of principal or interest which is not paid at maturity shall accrue interest at 22% per annum. The note also includes certain prepayment penalties that provide for payments ranging from 115% to 140% of the then-outstanding principal and interest. The note is convertible at the option of the holder into common stock at 61% of the lowest trading price during the ten (10) consecutive trading days prior to the conversion date at any time during the period which is 180 days following the issuance date of the convertible note and ending on the later of (i) January 10, 2021 or (ii), in the event of default, the date of the payment of the default amount. The convertible note contained an original issuance discount of $3,000 which was recorded as a debt discount and will be amortized over the term of the note. On various dates from February 20, 2020 through February 24, 2020, the maturity dates of three convertible notes in the aggregate principal amount of $145,000 were extended to February 15, 2021. In connection with these extensions, the parties agreed that (i) the Company would issue an aggregate of 227,500 shares of common stock to the holders with a fair value of $56,875 and (ii) a conversion price floor of $0.75 per share would be established. The fair value of the common stock was setup as a debt discount and will be amortized over the amended term of the notes. On March 31, 2020, the Company issued the shares of common stock. On March 2, 2020, the Company received further proceeds of $500,000 through a previously issued convertible note in the principal amount of $1,500,000, such that the Company had now received aggregate proceeds of $1,000,000 under the convertible note. |
Stockholders' Deficiency
Stockholders' Deficiency | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Note 6 - Stockholders' Deficiency | Common Stock On March 31, 2020, the Company issued 25,671 shares of immediately vested common stock with a fair value of $6,418 to a service provider in connection with consulting services provided. See Note 5, Notes Payable and Convertible Notes Payable Series A Convertible Preferred Stock On January 29, 2020, the Board of Directors extended the expiration date of the Private Placement Memorandum (“PPM”) to March 31, 2020 and has authorized two sixty-day extensions beyond that date at management’s discretion, under which the Company continues to raise up to $10,000,000 via the sale of up to 1,333,333 shares of Series A Convertible Preferred Stock at $7.50 per share. On March 25, 2020, the Board of Directors extended the expiration date of the PPM to May 30, 2020. On various dates from January 14, 2020 through January 24, 2020, the Company received proceeds of $100,000 through the sale of 13,333 shares of Series A Convertible Preferred Stock at $7.50 per share. During the three months ended March 31, 2020 and 2019, the Company accrued and recorded cumulative Series A Convertible Preferred Stock dividends of $211,305 and $148,035, respectively, with an increase in liabilities and a corresponding decrease in additional paid-in capital. Stock Warrants On February 13, 2020, the Company issued five-year placement agent warrants to purchase 66,653 shares of common stock at $0.75 per share in satisfaction of accrued liabilities of $10,907 that were earned in connection with the sale of Series A Convertible Preferred Stock during the year ended December 31, 2019. Stock-Based Compensation During the three months ended March 31, 2020 and 2019, the Company recognized expense (benefit) of $4,528 and $(9), respectively, of stock-based compensation related to common stock and warrants. As of March 31, 2020, there was no unrecognized stock-based compensation expense. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2020 | |
Related Party Transactions | |
Note 7 - Related Party Transactions | In 2011, the Company entered into a Research and License Agreement with Yeda for Veto Cell technology. As Yeda is a founder and a significant shareholder of the Company, it is a related party. During the three months ended March 31, 2020 and 2019, the Company recorded research and development expense of $61,667 and $25,000 respectively, in connection with the agreement with Yeda. As of March 31, 2020 and December 31, 2019, the Company was required to issue warrants to purchase an aggregate of 831,500 and 756,500, respectively, shares of common stock at an exercise price of $0.75 per share to directors of the Company in connection with loans made to the Company. As a result, the Company had accrued $126,350 and $115,932 associated with the fair value of the obligations as of March 31, 2020 and December 31, 2019, respectively, which amount is included in accrued interest – related parties on the condensed consolidated balance sheets. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments and Contingencies | |
Note 8 - Commitments and Contingencies | MD Anderson Sponsored Research Agreements The Company recognized $237,545 and $684,255 of research and development expenses during the three months ended March 31, 2020 and 2019, respectively, associated with services provided by The University of Texas M.D. Anderson Cancer Center (“MD Anderson”) in the periods, under the two agreements with MD Anderson dated November 2019 and February 2019. As of March 31, 2020 and December 31, 2019, the Company had $495,018 and $382,398, respectively, of accrued research and development expenses pursuant to the agreements with MD Anderson, which are included within accrued expenses on the condensed consolidated balance sheets. Litigation Certain conditions may exist as of the date the condensed consolidated financial statements are issued, which may result in a loss to the Company, but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company, or unasserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or unasserted claims, as well as the perceived merits of the amount of relief sought or expected to be sought therein. If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s consolidated financial statements. If the assessment indicates that a potential material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability and an estimate of the range of possible losses, if determinable and material, would be disclosed. In January 2019, the holder of a promissory note in the principal amount of $250,000 due on March 16, 2016 instituted a collection action in the Supreme Court of the State of New York, County of New York. A motion for summary judgement was heard on March 7, 2019 and the Company did not oppose the motion. The Company has had discussion with respect to entering into an agreement providing for a payment plan with the holder of the note, but no agreement has yet been reached. Loss contingencies considered remote are generally not disclosed, unless they involve guarantees, in which case the guarantees would be disclosed. There can be no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows. As of March 31, 2020 and December 31, 2019, the Company has not accrued any amounts for contingencies. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events | |
Note 9 - Subsequent Events | The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the financial statements were issued. Management is currently evaluating the impact of the COVID-19 pandemic on the industry and has concluded that, while it is reasonably possible that COVID-19 could have a negative effect on the Company’s financial position and results of operations, the specific impact is not readily determinable as of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Advances On May 6, 2020, the Company received proceeds of $100,000 through a non-interest-bearing advance. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies (Policies) | |
Loss Per Share | The Company computes basic net loss per share by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share includes the dilution that would occur upon the exercise or conversion of all dilutive securities into common stock using the “treasury stock” and/or “if converted” methods, as applicable. Weighted average shares outstanding for the three months ended March 31, 2020 and 2019 includes the weighted average impact of warrants to purchase an aggregate of 2,043,835 shares of common stock because their exercise price was determined to be nominal. The common stock equivalents associated with the following securities are excluded from the calculation of weighted average dilutive common shares because their inclusion would have been anti-dilutive: March 31, 2020 2019 Options 3,782,004 - Warrants 4,125,810 6,374,157 Convertible notes 2,555,477 1,069,101 Convertible preferred stock 12,584,160 10,489,890 Total 23,047,451 17,933,148 Convertible notes are assumed to be converted at the rate of $0.75 per common share, which is the conversion price. However, such conversion rates are subject to adjustment under certain circumstances, which may result in the issuance of common shares greater than the amount indicated. |
Reclassifications | Certain prior period accrued liabilities have been reclassified from accrued compensation to accrued interest to conform to the fiscal 2020 presentation. These reclassifications have no impact on the previously reported net loss. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Summary of Significant Accounting Policies (Policies) | |
Schedule of weighted average dilutive common shares anti-dilutive | March 31, 2020 2019 Options 3,782,004 - Warrants 4,125,810 6,374,157 Convertible notes 2,555,477 1,069,101 Convertible preferred stock 12,584,160 10,489,890 Total 23,047,451 17,933,148 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Fair Value (Tables) | |
Schedule of valuation of company's derivatives using quoted prices | Quoted Prices In Active Significant Markets for Other Significant Identical Observable Unobservable Liabilities Inputs Inputs Total (Level 1) (Level 2) (Level 3) Accrued compensation - common stock $ 38,229 $ - $ - $ 38,229 Accrued compensation - warrants 6,926 - - 6,926 Accrued interest - warrants 65,592 - - 65,592 Accrued interest - warrants - related party 126,350 - - 126,350 Balance - March 31, 2020 $ 237,097 $ - $ - $ 237,097 Accrued compensation - common stock $ 40,021 $ - $ - $ 40,021 Accrued compensation - warrants 17,931 - - 17,931 Accrued interest - warrants 57,343 - - 57,343 Accrued interest - warrants - related party 115,932 - - 115,932 Derivative liabilities 351,900 - - 351,900 Balance - December 31, 2019 $ 583,127 $ - $ - $ 583,127 |
Schedule of valuation of Level 3 liabilities | For the Three Months Ended March 31, 2020 2019 Risk-free interest rate 0.33% - 1.55 % 2.21% - 2.44 % Expected term (years) 0.52 - 5.00 0.02 - 5.00 Expected volatility 110 % 110 % Expected dividends 0.00 % 0.00 % |
Schedule of changes in fair value of liabilities measured at fair value on a recurring basis | Accrued Accrued Derivative Interest Compensation Liability Total Balance - December 31, 2019 $ 173,275 $ 57,952 $ 351,900 $ 583,127 Accrued compensation - common stock - 4,626 - 4,626 Accrued interest - common stock 56,875 - - 56,875 Accrued interest - warrants 8,571 - - 8,571 Accrued interest - warrants - related party 11,243 - - 11,243 Change in fair value (1,147 ) (128 ) (16,977 ) (18,252 ) Issuance of warrants - (10,877 ) 10,907 30 Issuance of common stock (56,875 ) (6,418 ) - (63,293 ) Reclassification of derivative liabilities to equity - - (345,830 ) (345,830 ) Balance - March 31, 2020 $ 191,942 $ 45,155 $ - $ 237,097 |
Business Organization, Nature_2
Business Organization, Nature of Operations and Basis of Presentation (Details Narrative) | 3 Months Ended |
Mar. 31, 2020 | |
Business Organization, Nature of Operations and Basis of Presentation (Details Narrative) | |
Entity date of incorporation | Jun. 6, 2012 |
Entity state of incorporation | Nevada |
Going Concern and Management _2
Going Concern and Management Plans (Detail Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Going Concern and Management Plans (Detail Narrative) | |||
Net Loss | $ (813,747) | $ (1,458,509) | |
Net Cash Used In Operating Activities | (618,386) | (405,444) | |
Working capital deficiency | (6,258,000) | ||
Accumulated deficit | (21,959,575) | $ (21,145,828) | |
Proceeds from issuance of Series A Convertible Preferred Stock | $ 100,000 | $ 325,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share | 23,047,451 | 17,933,148 |
Convertible Notes [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 2,555,477 | 1,069,101 |
Convertible Preferred Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 12,584,160 | 10,489,890 |
Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 4,125,810 | 6,374,157 |
Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | 3,782,004 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Detail Narrative) - $ / shares | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Summary of Significant Accounting Policies (Detail Narrative) | ||
Weighted average impact of warrants | 2,043,835 | 2,043,835 |
Convertible notes, conversion price | $ 0.75 |
Fair Value (Details)
Fair Value (Details) - USD ($) | Mar. 31, 2020 | Dec. 31, 2019 |
Accrued compensation - common stock | $ 38,229 | $ 40,021 |
Accrued compensation - warrants | 6,926 | 17,931 |
Accrued interest - warrants | 65,592 | 57,343 |
Accrued interest - warrants - related party | 126,350 | 115,932 |
Derivative liability | 351,900 | |
Balance | 237,097 | 583,127 |
Fair Value, Inputs, Level 1 [Member] | ||
Accrued compensation - warrants | ||
Derivative liability | ||
Balance | ||
Accrued compensation - common stock | ||
Fair Value, Inputs, Level 2 [Member] | ||
Accrued compensation - warrants | ||
Accrued interest - warrants | ||
Derivative liability | ||
Balance | ||
Accrued compensation - common stock | ||
Fair Value, Inputs, Level 3 [Member] | ||
Accrued compensation - warrants | 6,926 | 17,931 |
Accrued interest - warrants - related party | 126,350 | 115,932 |
Derivative liability | 351,900 | |
Balance | 237,097 | 583,127 |
Accrued compensation - common stock | 38,229 | 40,021 |
Accrued interest - warrants | $ 65,592 | $ 57,343 |
Fair Value (Details 1)
Fair Value (Details 1) - Fair Value, Inputs, Level 3 [Member] | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Expected dividends | 0.00% | 0.00% |
Expected volatility | 110.00% | 110.00% |
Minimum [Member] | ||
Risk free interest rate | 0.33% | 2.21% |
Expected term (Years) | 6 months 7 days | 7 days |
Maximum [Member] | ||
Risk free interest rate | 1.55% | 2.44% |
Expected term (Years) | 5 years | 5 years |
Fair value (Details 2)
Fair value (Details 2) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Beginning balance | $ 583,127 |
Accrued compensation - common stock | 4,626 |
Accrued interest - common stock | 56,875 |
Accrued interest - warrants | 8,571 |
Accrued interest - warrants - related party | 11,243 |
Change in fair value | (18,252) |
Issuance of warrants | 30 |
Issuance of common stock | (63,293) |
Reclassification of derivative liabilities to equity | (345,830) |
Ending balance | 237,097 |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Accrued Interest [Member] | |
Beginning balance | 173,275 |
Accrued interest - common stock | 56,875 |
Change in fair value | (1,147) |
Issuance of warrants | |
Issuance of common stock | (56,875) |
Ending balance | 191,942 |
Accrued compensation - common stock | |
Accrued interest - warrants | 8,571 |
Accrued interest - warrants - related party | 11,243 |
Reclassification of derivative liabilities to equity | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Accrued Compensation [Member] | |
Beginning balance | 57,592 |
Accrued interest - common stock | |
Change in fair value | (128) |
Issuance of warrants | (10,877) |
Issuance of common stock | (6,418) |
Ending balance | 45,155 |
Accrued compensation - common stock | 4,626 |
Accrued interest - warrants | |
Accrued interest - warrants - related party | |
Reclassification of derivative liabilities to equity | |
Fair Value, Inputs, Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Derivative Liability [Member] | |
Beginning balance | 351,900 |
Accrued interest - common stock | |
Change in fair value | (16,977) |
Issuance of warrants | 10,907 |
Issuance of common stock | |
Accrued compensation - common stock | |
Accrued interest - warrants | |
Accrued interest - warrants - related party | |
Reclassification of derivative liabilities to equity | (345,830) |
Ending balance |
Fair Value (Details Narrative)
Fair Value (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Reclassification of derivative liabilities to equity | $ 345,830 | |
Conversion price amended | $ 0.75 | |
Fair Value, Inputs, Level 3 [Member] | ||
Accrued compensation - common stock | $ 38,229 | |
Common stoock to be issued | $ 152,916 |
Notes Payable and Convertible_2
Notes Payable and Convertible Notes Payable (Details Narrative) - USD ($) | 3 Months Ended | |||
Mar. 31, 2020 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Amortization of debt discount | $ 8,302 | |||
Repayment of convertible note payable and accrued interest by third party | 100,896 | |||
Repayment of convertible note payable and accrued interest by third party, Principal amount | 68,000 | |||
Repayment of convertible note payable and accrued interest by third party, Interest | 32,896 | |||
Loss on extinguishment of debt | (1,441) | (1,441) | ||
Interest expense | (76,483) | (76,867) | ||
Original issue discount in connection with convertible note payable | 3,000 | |||
Proceeds from convertible notes | 575,000 | |||
Current liabilities | $ 6,389,530 | $ 6,389,530 | $ 5,711,724 | |
Convertible Notes Payable [Member] | ||||
Maturity date | Feb. 15, 2021 | |||
Conversion terms, description | In connection with these extensions, the parties agreed that (i) the Company would issue an aggregate of 227,500 shares of common stock to the holders with a fair value of $56,875 and (ii) a conversion price floor of $0.75 per share would be established. The fair value of the common stock was setup as a debt discount and will be amortized over the amended term of the notes. On March 31, 2020, the Company issued the shares of common stock. | |||
Notes Payable, principal amount | $ 145,000 | $ 145,000 | ||
Accrued interest and penalties | $ 627,760 | 627,760 | 573,007 | |
Interest expense | $ 87,649 | $ 77,607 | ||
Convertible Notes Payable Two [Member] | ||||
Maturity date | Jan. 10, 2021 | |||
Conversion terms, description | The note also includes certain prepayment penalties that provide for payments ranging from 115% to 140% of the then-outstanding principal and interest. The note is convertible at the option of the holder into common stock at 61% of the lowest trading price during the ten (10) consecutive trading days prior to the conversion date at any time during the period which is 180 days following the issuance date of the convertible note and ending on the later of (i) January 10, 2021 or (ii), in the event of default, the date of the payment of the default amount. | |||
Notes Payable, principal amount | $ 78,000 | $ 78,000 | ||
Interest rate | 12.00% | |||
Interest for the conversion exceeding the maturity | 22.00% | |||
Convertible Notes Payable One [Member] | March 2, 2020 [Member] | ||||
Notes Payable, principal amount | $ 1,500,000 | $ 1,500,000 | ||
Agreegate proceeds from notes | 1,000,000 | |||
Proceeds from convertible notes | 500,000 | |||
Note Payable [Member] | ||||
Notes Payable, principal amount | 250,000 | 250,000 | ||
Current liabilities | $ 1,888,000 | $ 1,888,000 |
Stockholders Deficiency (Detail
Stockholders Deficiency (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Stock-based compensation expense (benefit) | $ 4,528 | $ (9) |
Dividend attributable to Series A preferred stockholders | $ (211,305) | (148,035) |
Shsres issued for servicies | 25,671 | |
Shares issued for servces, value | $ 6,418 | |
Issuance of placement agent warrants | $ 10,907 | |
January 29, 2020 [Member] | ||
Private placement memorandum description | the Board of Directors extended the expiration date of the Private Placement Memorandum (“PPM”) to March 31, 2020 and has authorized two sixty-day extensions beyond that date at management’s discretion, under which the Company continues to raise up to $10,000,000 via the sale of up to 1,333,333 shares of Series A Convertible Preferred Stock at $7.50 per share. On March 25, 2020, the Board of Directors extended the expiration date of the PPM to May 30, 2020. | |
January 14, 2020 through January 24, 2020 [Member] | Series A Convertible Preferred Stock [Member] | ||
Share price | $ 7.50 | |
Proceeds from issuance of shares | $ 100,000 | |
Sale of stock shares sold | 13,333 | |
Warrant [Member] | ||
Issuance of placement agent warrants | $ 10,907 | |
Common stock to be issued to placement agent | 66,653 | |
Common share price | $ 0.75 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Research and development - related party | $ 61,667 | $ 25,000 | |
Warrant [Member] | |||
Accrued interest related party | $ 126,350 | $ 115,932 | |
Warrants exchanged to acquire common shares | 831,500 | 756,500 | |
Exercise price | $ 0.75 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Collection action promissory note in the principal amount | $ 250,000 | |||
Research and development expense | $ 257,545 | $ 724,742 | ||
Accrued liabilities, current | 1,145,457 | $ 1,051,961 | ||
MD Anderson [Member] | ||||
Research and development expense | 237,545 | $ 684,255 | ||
Accrued liabilities, current | $ 495,018 | $ 382,398 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Subsequent Event [Member] | May 6 [Member] | |
Proceeds from non interest bearing advance | $ 100,000 |