Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 12, 2019 | Jun. 30, 2018 | |
Document and Entity Information | |||
Entity Registrant Name | ContraVir Pharmaceuticals, Inc. | ||
Entity Central Index Key | 0001583771 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 13.9 | ||
Entity Common Stock, Shares Outstanding | 17,179,331 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 2,832,429 | $ 5,954,017 |
Prepaid expenses | 135,591 | 108,075 |
Total Current Assets | 2,968,020 | 6,062,092 |
Property and equipment, net | 32,434 | 56,595 |
In-process research and development | 3,190,000 | 3,190,000 |
Goodwill | 1,870,924 | 1,870,924 |
Other assets | 127,794 | 73,289 |
Total Assets | 8,189,172 | 11,252,900 |
Current Liabilities: | ||
Accounts payable | 748,428 | 1,556,883 |
Accrued expenses | 661,421 | 1,046,698 |
Convertible debt | 1,440,000 | |
Total Current Liabilities | 2,849,849 | 2,603,581 |
Contingent consideration | 2,590,000 | 3,380,000 |
Deferred tax liability | 360,700 | 896,700 |
Deferred rent liability | 9,235 | |
Derivative financial instruments, at estimated fair value-warrants | 404,337 | 669,462 |
Total Liabilities | 6,214,121 | 7,549,743 |
Commitments and contingencies (Note 13) | ||
Stockholders' Equity: | ||
Convertible preferred stock | ||
Common stock-$0.0001 par value per share; 120,000,000 shares authorized, 16,608,512 and 9,792,497 shares issued and outstanding at December 31, 2018 and December 31, 2017, respectively | 1,661 | 979 |
Additional paid in capital | 76,651,203 | 69,676,687 |
Accumulated deficit | (76,463,932) | (67,014,637) |
Total Stockholders' Equity | 1,975,051 | 3,703,157 |
Total Liabilities and Stockholders' Equity | 8,189,172 | 11,252,900 |
Series A convertible preferred stock | ||
Stockholders' Equity: | ||
Convertible preferred stock | 855,808 | $ 1,040,128 |
Series C convertible preferred stock | ||
Stockholders' Equity: | ||
Convertible preferred stock | $ 930,311 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 16,608,512 | 9,792,497 |
Common stock, shares outstanding | 16,608,512 | 9,792,497 |
Convertible preferred stock | ||
Convertible preferred stock, par/stated value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Series A convertible preferred stock | ||
Convertible preferred stock, par/stated value (in dollars per share) | $ 10 | $ 10 |
Convertible preferred stock, shares issued | 85,581 | 104,013 |
Convertible preferred stock, shares outstanding | 85,581 | 104,013 |
Series C convertible preferred stock | ||
Convertible preferred stock, par/stated value (in dollars per share) | $ 1,000 | $ 1,000 |
Convertible preferred stock, shares issued | 1,974 | 0 |
Convertible preferred stock, shares outstanding | 1,974 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | |
Costs and Expenses: | |||
Research and development | $ 7,163,530 | $ 7,593,715 | $ 13,651,987 |
General and administrative | 3,358,091 | 7,000,444 | 7,371,885 |
Total Operating Expenses | 10,521,621 | 14,594,159 | 21,023,872 |
Loss from Operations | (10,521,621) | (14,594,159) | (21,023,872) |
Other Income (Expense): | |||
Change in fair value of debt | (108,942) | ||
Interest on debt | (339,158) | ||
Change in fair value of derivative instruments-warrants and contingent consideration | 1,062,769 | 5,056,964 | 4,224,819 |
Loss before income taxes | (9,458,852) | (9,985,295) | (16,799,053) |
Income tax benefit | 1,947,760 | 536,000 | 1,908,003 |
Net loss | (7,511,092) | (9,449,295) | (14,891,050) |
Series C deemed dividend (see note 6) | (8,451,851) | ||
Net loss attributable to Common Stockholders | $ (7,511,092) | $ (17,901,146) | $ (14,891,050) |
Weighted Average Common Shares Outstanding | |||
Basic | 9,678,329 | 12,871,530 | 7,286,304 |
Diluted | 9,678,329 | 12,871,530 | 7,292,327 |
Net loss per Common Share (see note 12) | |||
Basic | $ (0.78) | $ (1.39) | $ (2.04) |
Diluted | $ (0.78) | $ (1.39) | $ (2.41) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Preferred StockSeries A convertible preferred stock | Preferred StockSeries B convertible preferred stock | Preferred StockSeries C convertible preferred stock | Common StockSeries A convertible preferred stock | Common StockSeries C convertible preferred stock | Common Stock | Additional Paid in CapitalSeries A convertible preferred stock | Additional Paid in CapitalSeries C convertible preferred stock | Additional Paid in Capital | Accumulated Deficit | Series C convertible preferred stock | Total |
Balance at Jun. 30, 2016 | $ 12,500,000 | $ 1,200,000 | $ 403 | $ 32,229,672 | $ (44,612,495) | $ 1,317,580 | ||||||
Balance (in shares) at Jun. 30, 2016 | 1,250,000 | 120,000 | 4,028,905 | |||||||||
Changes in Stockholders' Equity | ||||||||||||
Issuance of common stock, net | $ 231 | 24,659,528 | 24,659,759 | |||||||||
Issuance of common stock, net (in shares) | 2,305,235 | |||||||||||
Conversion of preferred stock | $ (11,459,872) | $ (1,200,000) | $ 311 | 12,659,561 | ||||||||
Conversion of preferred stock (in shares) | (1,145,987) | (120,000) | 3,118,271 | |||||||||
Fair value of warrants issued in connection with equity offering | (3,976,501) | (3,976,501) | ||||||||||
Exercise of warrants | $ 1 | 160,416 | 160,417 | |||||||||
Exercise of warrants (in shares) | 6,250 | |||||||||||
Stock option exercise | $ 0 | 31,277 | 31,277 | |||||||||
Exercise of stock options (in shares) | 4,758 | |||||||||||
Stock-based compensation expense | $ 0 | 1,756,385 | 1,756,385 | |||||||||
Net loss | (14,891,050) | (14,891,050) | ||||||||||
Balance at Jun. 30, 2017 | $ 1,040,128 | $ 946 | 67,520,338 | (59,503,545) | 9,057,867 | |||||||
Balance (in shares) at Jun. 30, 2017 | 104,013 | 9,463,419 | ||||||||||
Changes in Stockholders' Equity | ||||||||||||
Issuance of common stock, net | $ 33 | 1,410,608 | 1,410,641 | |||||||||
Issuance of common stock, net (in shares) | 329,078 | |||||||||||
Stock-based compensation expense | 745,741 | 745,741 | ||||||||||
Net loss | (7,511,092) | (7,511,092) | ||||||||||
Balance at Dec. 31, 2017 | $ 1,040,128 | $ 979 | 69,676,687 | (67,014,637) | 3,703,157 | |||||||
Balance (in shares) at Dec. 31, 2017 | 104,013 | 9,792,497 | ||||||||||
Changes in Stockholders' Equity | ||||||||||||
Issuance of common stock, net | $ 97 | 1,986,478 | 1,986,575 | |||||||||
Issuance of Preferred stock | $ 5,734,627 | $ 5,734,627 | ||||||||||
Issuance of Preferred stock (in shares) | 10,826 | |||||||||||
Offering costs related to Issuance | $ (411,259) | $ (411,259) | ||||||||||
Placement agent warrants | (221,269) | 221,269 | ||||||||||
Beneficial conversion feature | (3,771,639) | $ 3,771,639 | ||||||||||
Accretion of beneficial conversion feature | 3,771,639 | (3,771,639) | ||||||||||
Accretion of discount upon conversion | 4,680,212 | (4,680,212) | ||||||||||
Conversion of preferred stock | $ (184,320) | $ (8,852,000) | $ 5 | $ 571 | $ 184,315 | $ 8,851,429 | ||||||
Conversion of preferred stock (in shares) | (18,432) | (8,852) | 48,000 | 5,710,963 | ||||||||
Exercise of warrants | $ 9 | 176,727 | 176,736 | |||||||||
Exercise of warrants (in shares) | 92,000 | |||||||||||
Exercise of stock options (in shares) | 965,052 | |||||||||||
Stock-based compensation expense | 234,510 | 234,510 | ||||||||||
Net loss | (9,449,295) | (9,449,295) | ||||||||||
Balance at Dec. 31, 2018 | $ 855,808 | $ 930,311 | $ 1,661 | $ 76,651,203 | $ (76,463,932) | $ 1,975,051 | ||||||
Balance (in shares) at Dec. 31, 2018 | 85,581 | 1,974 | 16,608,512 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | |
Cash Flows From Operating Activities: | |||
Net loss | $ (7,511,092) | $ (9,449,295) | $ (14,891,050) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Stock-based compensation | 745,741 | 234,510 | 1,700,225 |
Stock issued for services | 56,160 | ||
Change in fair value of derivative instruments-warrants | (1,062,769) | (5,322,362) | (4,224,819) |
Change in fair value of contingent consideration | 265,398 | ||
Change in the fair value of debt | 108,942 | ||
Deferred tax liability adjustment | (372,920) | (536,000) | |
Loss on the sale of assets | 4,474 | ||
Depreciation and amortization expense | 10,969 | 18,787 | 27,993 |
Changes in operating assets and liabilities: | |||
Accounts payable and accrued expense | (111,207) | (897,695) | (2,128,263) |
Deferred rent liability | 9,235 | ||
Prepaid expenses and other assets | 91,992 | (82,021) | 287,644 |
Net Cash used in Operating Activities | (8,209,286) | (15,646,027) | (19,172,110) |
Cash Flows From Investing Activities: | |||
Proceeds from sale of fixed asset | 900 | ||
Purchases of property and equipment | (14,709) | ||
Net Cash Provided by (Used in) Investing Activities | 900 | (14,709) | |
Cash Flows From Financing Activities: | |||
Change in current portion of capital lease | (10,410) | ||
Proceeds from the issuance of common stock | 1,180,555 | 1,635,140 | 24,659,760 |
Proceeds from issuance of Series C Preferred stock, net | 10,414,741 | ||
Proceeds from the exercise of warrants | 142,600 | 85,000 | |
Proceeds from stock options exercised | 31,277 | ||
Proceeds from debt financing | 2,000,000 | ||
Repayment of debt financing | (668,942) | ||
Payment of contingent consideration milestone | (1,000,000) | ||
Net cash provided by Financing Activities | 1,180,555 | 12,523,539 | 24,765,627 |
Net (decrease) increase in cash | (7,028,731) | (3,121,588) | 5,578,808 |
Cash at beginning of period | 12,982,748 | 5,954,017 | 7,403,940 |
Cash at end of period | 5,954,017 | 2,832,429 | 12,982,748 |
Supplementary Disclosure Of Cash Flow Information: | |||
Cash paid for interest | 131,058 | ||
Supplementary Disclosure Of Non-Cash Financing Activities: | |||
Stock issued to employees in lieu of cash payment for accrued bonus | $ 230,086 | 296,037 | |
Issuance of common stock in conjunction with milestone payment | 55,398 | ||
Derecognition of Series C warrants exercised | 34,136 | 75,417 | |
Fair value of warrants issued in conjunction with common stock offering | 5,091,373 | $ 3,976,501 | |
Warrants issued to placement agent | 221,269 | ||
Series A convertible preferred stock | |||
Supplementary Disclosure Of Non-Cash Financing Activities: | |||
Conversion of convertible preferred stock | 184,320 | ||
Series C convertible preferred stock | |||
Supplementary Disclosure Of Non-Cash Financing Activities: | |||
Conversion of convertible preferred stock | 4,680,212 | ||
Beneficial Conversion Factor accreted as Series C dividend | $ 3,771,639 |
Business Overview
Business Overview | 12 Months Ended |
Dec. 31, 2018 | |
Business Overview | |
Business Overview | 1. Business Overview ContraVir Pharmaceuticals Inc. (“ContraVir” or the “Company”) is a biopharmaceutical company focused on the development of targeted pharmaceutical therapies for liver disease. Liver disease may arise from chronic alcohol use, chronic hepatitis B, C and D virus (HBV, HCV, HDV), and non-alcoholic steatohepatitis (NASH). Fat accumulation in the liver (steatosis), inflammation, ballooning degeneration, and fibrosis are some of the changes observed with liver disease. In some instances, disease may progress to cirrhosis and hepatocellular carcinoma (HCC), the most common type of primary liver cancer. The Company is developing two novel oral compounds. The first, ‘CRV431’, is a cyclophilin inhibitor that targets specific isomerases that play an important role in protein folding in health and in disease. To date, in vitro and/or in vivo studies have demonstrated reductions in HBV DNA, HBsAg, HBeAg, inhibition of virus uptake (NTCP transport inhibition), and stimulation of innate immunity. Importantly, in vivo studies in a NASH model of fibrosis and HCC have repeatedly demonstrated CRV431 reduces fibrosis scores and overall liver tumor burden. Hence, CRV431 is a pleiotropic molecule that may not only treat liver disease, but may also serve to reduce important risk factors (e.g., HBV) for developing the disease. The Company has completed a phase 1 study with CRV431 demonstrating safety, tolerability, and pharmacokinetics (PK). The Company’s second compound, ‘TXL’, is more advanced clinically (completed phase 2). TXL is a nucleotide pro-drug of tenofovir that inhibits hepatitis B viral replication, and targets the liver, the reservoir for the hepatitis B virus. CRV431 and TXL have differing modes of action and, therefore, may complement one another in the treatment of HBV. Both compounds address a significant risk factor for the development of liver disease, HBV, whereas CRV431 additionally targets advancing stages of liver disease (e.g., fibrosis/HCC). On June 10, 2016, the Company, through a wholly-owned subsidiary now known as ContraVir Research Inc., acquired Ciclofilin Pharmaceuticals, Inc. a biopharmaceutical company incorporated on January 13, 2014 in California and reincorporated in Delaware on October 15, 2014. Ciclofilin Pharmaceuticals, Inc. had one wholly-owned subsidiary, Ciclofilin Pharmaceuticals Corp., incorporated in Canada on January 24, 2014. Together, Ciclofilin Pharmaceuticals, Inc. and Ciclofilin Pharmaceuticals Corp (“Ciclofilin”) are a wholly-owned subsidiary known as ContraVir Research Inc. that specializes in the development of cyclophilin inhibitors, an emerging class of drugs for infectious, inflammatory, and degenerative diseases. Ciclofilin’s lead drug candidate, CRV431, is a potent cyclophilin inhibitor that blocks multiple HBV activities including entry into cells and replication, and is currently in pre-clinical development. |
Basis of Presentation and Going
Basis of Presentation and Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation and Going Concern | |
Basis of Presentation and Going Concern | 2. Basis of Presentation and Going Concern Basis of presentation The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Any reference in these notes to applicable guidance is meant to refer to GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”). Principles of Consolidation The consolidated financial statements include the accounts of ContraVir and its subsidiaries ContraVir Research Inc. and ContraVir Research Corp, which conducts its operations in Canada. All intercompany balances and transactions have been eliminated in consolidation. Going Concern As of December 31, 2018, ContraVir had $2.8 million in cash. Net cash used in operating activities was $15.6 million for the year ended December 31, 2018. Net loss for the year ended December 31, 2018 was $9.4 million. As of December 31, 2018 the Company had an accumulated deficit of $76.5 million. As of December 31, 2018, ContraVir had working capital of $0.1 million, whereas on December 31, 2017 ContraVir had working capital of $3.5 million. The Company has not generated revenue to date and has incurred substantial losses and negative cash flows from operations since its inception. The Company has historically funded its operations through issuances of convertible debt, common stock and preferred stock. The Company expects to continue to incur losses for the next several years as it expands its research, development and clinical trials of TXL™ and CRV431. The Company is unable to predict the extent of any future losses or when the Company will become profitable, if at all. These consolidated financial statements have been prepared under the assumption that the Company will continue as a going concern. Due to the Company’s recurring and expected continuing losses from operations, the Company has concluded there is substantial doubt in the Company’s ability to continue as a going concern within one year of the issuance of these consolidated financial statements without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company will be required to raise additional capital within the next year to continue the development and commercialization of current product candidates and to continue to fund operations at the current cash expenditure levels. The Company cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company raises additional funds by issuing equity securities, its stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact the Company’s ability to conduct business. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may have to (i) significantly delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that the Company would otherwise seek to develop or commercialize on unfavorable terms. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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 financial statements and the reported amounts of expenses during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates. Cash As of December 31, 2018 and December 31, 2017, the amount of cash was approximately $2.8 million and $6.0 million, respectively, consisting of checking accounts held at U.S. and Canadian commercial banks. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced losses related to these balances. Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three‑tier fair value hierarchy that distinguishes among the following: · Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. · Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Financial instruments consist of cash, accounts payable and derivative instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short term nature, except for derivative instruments, which were marked to market at the end of each reporting period. See Note 6 for additional information of the fair value of the derivative liabilities. The Company recorded contingent consideration in its acquisition of Ciclofilin, which is required to be carried at fair value. See Note 7 for additional information on the fair value of the contingent consideration. Derivative Financial Instruments The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of the warrants, which were deemed to be derivative instruments based on certain contingent put features, was recorded as a derivative liability under the provisions of ASC Topic 815 Derivatives and Hedging (“ASC 815”) upon issuance. Subsequently, the liability is adjusted to fair value as of the end of each reporting period and the changes in the fair value of derivative liabilities are recorded in the statements of operations under the caption “Change in fair value of derivative financial instruments - warrants.” See Note 6 for additional information. The fair value of the warrants, issued in connection with the October 2015, April 2016, and April 2017 common stock offerings were deemed to be derivative instruments due to certain contingent put feature, was determined using the Black-Scholes option pricing model, deemed to be an appropriate model due to the terms of the warrants issued, including a fixed term and exercise price. The warrants, issued in connection with the July 2018 Rights Offering are deemed to be derivative instruments since if the Company does not maintain an effective registration statement, the Company is obligated to deliver registered shares upon exercise and settlement of the warrant because there are further registration and prospectus delivery requirements that are outside of the control of the Company. Therefore the fair value of the warrants were determined using the Black-Scholes option pricing model, deemed to be an appropriate model due to the terms of the warrants issued, including a fixed term and exercise price. The fair value of warrants were affected by changes in inputs to the Black-Scholes option pricing model including the Company’s stock price, expected stock price volatility, the contractual term, and the risk-free interest rate. This model uses Level 3 inputs, including stock price volatility, in the fair value hierarchy established by ASC 820 Fair Value Measurement. At December 31, 2018 and December 31, 2017, the fair value of all warrants was $0.4 million and $0.7 million, respectively, which are classified as a long term derivative liability on the Company’s balance sheets. Property, equipment and depreciation As of December 31, 2018 and December 31, 2017, the Company had $32,434 and $56,595, respectively, of property and equipment, consisting primarily of computer equipment, furniture and fixtures. Expenditures for additions, renewals and improvements will be capitalized at cost. Depreciation will generally be computed on a straight‑line method based on the estimated useful lives of the related assets. The estimated useful lives of the depreciable assets are 2 to 5 years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives, or the remaining term of the lease, whichever is shorter. Depreciation expense for the year ended December 31, 2018, the transition period ended December 31, 2017, and June 30, 2017 was $18,787, $10,969, and $27,993, respectively. Expenditures for repairs and maintenance are charged to operations as incurred. The Company will periodically evaluate whether current events or circumstances indicate that the carrying value of its depreciable assets may not be recoverable. There were no adjustments to the carrying value of property and equipment at December 31, 2018 and December 31, 2017. Lease Accounting The Company accounts for operating lease transactions by recording rent expense on a straight-line basis over the expected life of the lease, commencing on the date it gains possession of leased property. Capital lease transactions are reflected as a liability at the inception of the lease based on the present value of the minimum lease payments or, if lower, the fair value of the property. Assets under capital leases are recorded in property and equipment, net, in the Consolidated Balance Sheets and depreciated over their estimated useful lives. Goodwill and In-Process Research & Development In accordance with ASC Topic 350, Intangibles — Goodwill and Other (“ASC Topic 350”), goodwill and acquired IPR&D are determined to have indefinite lives and, therefore, are not amortized. Instead, they are tested for impairment annually, in the Company’s fourth quarter, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. Pursuant to ASU No. 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill for Impairment, and ASU No. 2012-02, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads the Company to determine that it is more likely than not (that is, a likelihood of more than 50%) that the goodwill or the acquired IPR&D is impaired. If the Company chooses to first assess qualitative factors and determines that it is not more likely than not goodwill or acquired IPR&D is impaired, the Company is not required to take further action to test for impairment. The Company also has the option to bypass the qualitative assessment and perform only the quantitative impairment test, which the Company may choose to do in some periods but not in others. The Company's CRV431 intangible asset and goodwill are assessed for impairment annually on December 31st of the Company’s fiscal year or more frequently if impairment indicators exist. The Company performed a quantitative impairment test of the CRV431 intangible asset and a qualitative impairment test of goodwill. As of December 31, 2018, the Company determined there was no impairment to the Company’s CRV431 intangible asset and goodwill. If the Company performs a quantitative assessment of goodwill, it utilizes the two-step approach prescribed under ASC Topic 350. Step 1 requires a comparison of the carrying value of a reporting unit, including goodwill, to its estimated fair value. The Company tests for impairment at the entity level because it operates on the basis of a single reporting unit. If the carrying value exceeds fair value, the Company then performs Step 2 to measure the amount of impairment loss, if any. In Step 2, the Company estimates the fair value of its individual assets, including identifiable intangible assets, and liabilities to determine the implied fair value of goodwill. The Company then compares the carrying value of its goodwill to its implied fair value. The excess of the carrying value of goodwill over its implied fair value, if any, is recorded as an impairment charge. Goodwill relates to amounts that arose in connection with the acquisition of Ciclofilin. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. There was no impairment of goodwill for the year ended December 31, 2018, the transition period ended December 31, 2017 , or the fiscal year ended June 30, 2017. IPR&D acquired in a business combination is capitalized as indefinite-lived assets on the Company’s consolidated balance sheets at its acquisition-date fair value. Once the project is completed, the carrying value of the IPR&D is reclassified to other intangible assets, net and is amortized over the estimated useful life of the asset. Post-acquisition research and development expenses related to the IPR&D projects are expensed as incurred.The projected discounted cash flow models used to estimate the fair values of the Company’s IPR&D assets, acquired in connection with the Ciclofilin acquisition, reflect significant assumptions regarding the estimates a market participant would make in order to evaluate a drug development asset, including: (i) probability of successfully completing clinical trials and obtaining regulatory approval; (ii) market size, market growth projections, and market share; (iii) estimates regarding the timing of and the expected costs to advance clinical programs to commercialization; (iv) estimates of future cash flows from potential product sales; and (v) a discount rate. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The use of different inputs and assumptions could increase or decrease our estimated discounted future cash flows, the resulting estimated fair values and the amounts of related impairments, if any. If IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to its revised fair value with the related impairment charge recognized in the period in which the impairment occurs. If the carrying value of the asset becomes impaired as the result of unfavorable data from any ongoing or future clinical trial, changes in assumptions that negatively impact projected cash flows, or because of any other information regarding the prospects of successfully developing or commercializing the Company’s programs, the Company could incur significant charges in the period in which the impairment occurs. There was no impairment of IPR&D for the year ended December 31, 2018, the transition period ended December 31, 2017 or the fiscal year ended June 30, 2017. The discount rates applied to the estimated cash flows for the Company’s December 31, 2018 IPR&D impairment test was 35%, depending on the overall risk associated with the particular asset and other market factors. The Company believes the discount rates and other inputs and assumptions are consistent with those that a market participant would use. Our assumed discount rate used in the impairment assessment would have to change by more than 800 basis points for there to be a material change in our analysis. Income Taxes The Company accounts for income taxes under the asset and liability method. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carry-forwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which the Company expects to recover or settle those temporary differences. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in the results of operations in the period that includes the enactment date. The Company reduces the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that the Company will not realize some or all of the deferred tax asset. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is ‘‘more-likely-than-not’’ that the position will be sustained upon examination. Potential interest and penalties associated with unrecognized tax positions are recognized in income tax expense. In conjunction with the acquisition of Ciclofilin in June 2016, a deferred tax liability of $1.3 million was recorded reflecting the difference between the book basis and tax basis of acquired IPR&D. Such deferred income tax liability cannot be used to offset the deferred tax assets when analyzing the Company’s valuation allowance as the acquired IPR&D is considered to have an indefinite life until the Company completes or abandons development of the related IPR&D. The re-measurement of the deferred tax balances to the new corporate rate was completed as of December 31, 2017 and resulted in an adjustment of approximately $900,000 recorded as a reduction in the deferred tax liability offset by a credit to Income Tax benefit at that time. The 2017 Tax Act also changed the Net Operating Loss carryforwards' period to now have an indefinite life. The Company performed an evaluation with regard to the impact of Deferred Tax Assets ("DTA") that were generated by Temporary Differences (such as Stock Compensation, Accrued Vacation, depreciation, etc.) which would reverse and turn into indefinite lived NOL carryforwards and whether the Deferred Tax Liability associated with In-Process R&D could be used to offset indefinite lived DTAs. In March 2018, the Company recorded an adjustment to the valuation allowance in the approximate amount of $536,000 This adjustment reflects the adjustment allowed by the Tax Cuts and Jobs Act of 2017 to utilize indefinite deferred tax liabilities as a source of income against indefinite lived portions of the Company's deferred tax assets in conjunction with the evaluation of the amount of valuation allowance needed.. Contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, and tax matters. In accordance with ASC Topic 450, Accounting for Contingencies, (“ASC 450”), the Company records accruals for such loss contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. The Company, in accordance with this guidance, does not recognize gain contingencies until realized. Research and Development Research and development costs, which include expenditures in connection with an in‑house research and development laboratory, salaries and staff costs, application and filing for regulatory approval of proposed products, purchased in‑process research and development, license costs, regulatory and scientific consulting fees, as well as contract research, insurance and FDA consultants, are accounted for in accordance with ASC Topic 730, Research and Development, (“ASC 730”). Also, as prescribed by this guidance, patent filing and maintenance expenses are considered legal in nature and therefore classified as general and administrative expense, if any. The Company does not currently have any commercial biopharmaceutical products, and does not expect to have such for several years if at all. Accordingly, the Company’s research and development costs are expensed as incurred. While certain of the Company’s research and development costs may have future benefits, the Company’s policy of expensing all research and development expenditures is predicated on the fact that the Company has no history of successful commercialization of product candidates to base any estimate of the number of future periods that would be benefited. Also as prescribed by ASC 730, non‑refundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. As the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided, the deferred amounts would be recognized as an expense. At December 31, 2018 and December 31, 2017, the Company had prepaid research and development costs of $41,514 and $32,903, respectively. Share-based payments ASC Topic 718 “Compensation—Stock Compensation” (“ASC 718”) requires companies to measure the cost of employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. Generally, the Company issues stock options with only service-based vesting conditions and records the expense for these awards using the straight-line method. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company has a limited trading history in its common stock and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company accounts for stock options issued to non-employees in accordance with ASC Topic 505-50 “Equity-Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company’s common stock and updated assumption inputs in the Black-Scholes option-pricing model. ASC 718 requires that cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for options exercised (excess tax benefits) be classified as cash inflows from financing activities and cash outflows from operating activities. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) (see Note 4) which states that excess tax benefits should be classified along with other income tax cash flows as an operating activity. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2017, with early adoption permitted. Due to the Company’s accumulated deficit position, no excess tax benefits have been recognized. Foreign Exchange The functional currency of ContraVir and ContraVir Research Inc. is the U.S. dollar. The functional currency of ContraVir Research Corp. is the Canadian dollar. The Company’s reporting currency is the U.S. dollar. The assets and liabilities of Ciclofilin are translated into U.S. dollars using period-end exchange rates; income and expenses are translated using the average exchange rates for the reporting period. Unrealized foreign currency translation adjustments are deferred in accumulated other comprehensive loss, a separate component of shareholders’ equity. The amount of currency translation adjustment was immaterial at December 31, 2018, December 31, 2017, and June 30, 2017. Transactions in foreign currencies are remeasured into the functional currency of the relevant subsidiaries at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Resulting gains and losses are recorded in other foreign exchange (gain) loss within the consolidated statements of operations. The impact of foreign exchange gains (losses) was immaterial at December 31, 2018, December 31, 2017, and June 30, 2017. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company, through its chief operating decision maker, views its operations and manages the business in one segment. Net loss per share Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC 260”) for all periods presented. In accordance with this guidance, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. Reclassifications Certain prior period balances have been reclassified to conform with the current year presentation. Such reclassification had no impact on the Company’s financial position, results of operations or cash flows in those years. Immaterial Correction of Misstatements Subsequent to the issuance of the unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2018 filed on Form 10-Q, the Company determined that a reclassification was required to correct the disclosure of the components of total stockholders’ equity, namely to increase the amount of Series C convertible preferred stock and to decrease the amount of additional paid-in capital in the approximate amount of $835,000. The reclassification had no effect on total stockholders’ equity; net loss, cash flows or the Company’s financial position as previously reported. The Company also determined that a revision was required to adjust an over accretion upon conversion of the Series C preferred stock to common stock resulting in an adjustment to decrease the previously reported Deemed Dividend and to decrease the amount of Net loss Attributable to Common Shareholders in the approximate amount of $500,000. This adjustment had no impact to net loss or cash flows of the Company or the Company’s financial position as previously reported and was determined to be immaterial and was corrected as an out of period adjustment in the year ended December 31, 2018. In connection with the preparation of the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2018 the Company identified a $0.5 million reduction to the Company’s deferred tax liabilities that should have been recorded to the valuation allowance to reflect the adjustment allowed by the 2017 Tax Act to utilize indefinite deferred tax liabilities as a source of income against indefinite lived portions of the Company’s deferred tax assets in conjunction with the evaluation of the amount of valuation allowance needed. This adjustment was determined to be immaterial and was corrected as an out of period adjustment recorded in the quarter ended March 31, 2018. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 12 Months Ended |
Dec. 31, 2018 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 4. Recent Accounting Pronouncements In August of 2018, the FASB issued ASU 2018-13 — Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement (“ASU 2018-13”), which amends disclosure requirements on fair value measurements in Topic 820. This amendment modifies the valuation process of fair value measurements by removing the disclosure requirements for the valuation processes for Level 3 fair value measurements, clarifying the timing of the measurement uncertainty disclosure, and including the changes in unrealized gains and losses for recurring Level 3 fair value measurements in other comprehensive income if held at the end of the reporting period. It also allows the disclosure of other quantitative information in lieu of the weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The amendments in this ASU are effective for fiscal years beginning after December 15, 2019 and should be applied prospectively for the most recent period presented in the initial fiscal year of adoption. The Company is currently evaluating the impact that this guidance will have on its results of operations, financial position and cash flows. In July of 2018, the FASB issued ASU 2018-11 — Leases (Topic 842) Targeted Improvements (“ASU 2018-11”), which addresses stakeholder’s inquiries that are applicable to the Company regarding reporting requirements for initial adoption of ASU 2016-02. ASU 2018-11 provides entities with an additional (and optional) transition method to adopt the new leases standard in ASU 2016-02, allowing an entity to initially apply the new lease standard at the adoption date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. An entity that elects this additional (and optional) transition method must provide the required Topic 840 disclosures for all periods that continue to be in accordance with Topic 840. The amendments in ASU 2018-11 follow the same effective dates as ASU 2016-02 for the Company. The Company is currently evaluating the impact that this guidance will have in conjunction with the guidance in ASU 2016-02 (see below). In July of 2018, the FASB issued ASU 2018-10 — Codification Improvements to Topic 842, Leases (“ASU 2018-10”), which amends narrow aspects of the guidance issued in the amendments in ASU 2016-02 based on comments and questions raised by stakeholders during the assessment and implementation of ASU 2016-02. The amendments in ASU 2018-10 follow the same effective dates as ASU 2016-02. (see below). In June of 2018, the FASB issued ASU 2018-07 — Compensation — Stock Compensation (Topic 718) (“ASU 2018-07”), which expands the scope of Topic 718 to include share-based payment transaction for acquiring goods and services from nonemployees. The amendments specify that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. The Company is currently evaluating the impact that this guidance will have on its results of operations, financial position and cash flows. In March of 2018, the FASB issued ASU 2018-05 — Income Taxes (Topic 740): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118 (“ASU 2018-05”), which amends the FASB Accounting Standards Codification and XBRL Taxonomy based on the Tax Cuts and Jobs Act (the “Act”) that was signed into law on December 22, 2017 and Staff Accounting Bulletin No. 118 (“SAB 118”) that was released by the Securities and Exchange Commission. The Act changes numerous provisions that impact U.S. corporate tax rates, business-related exclusions, and deductions and credits and may additionally have international tax consequences for many companies that operate internationally. The Company has evaluated the impact of the Act as well as the guidance of SAB 118 and incorporated the changes into the final adjustment of its deferred tax liability and appropriate disclosures in the notes to our consolidated financial statements (See Note 11). In May of 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718): Scope of Modification Accounting (“ASU 2017-09”), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. This guidance is to be applied for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted and should be applied prospectively to an award modified on or after the adoption date. The Company has adopted ASU 2017-09. The adoption of this guidance did not have a material impact on the Company’s financial statements. In January of 2017, the FASB issue ASU No. 2017-04, Intangibles — Goodwill and Other (Topic 350) (“ASU 2017-04”), which amended the 2014 amendments to the FASB Accounting Standards Codification that allowed companies an alternative accounting treatment for subsequently measuring goodwill. This amendment is Phase 1 of a project by the FASB Board to simplify how an entity is required to test goodwill for impairment by eliminating step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. These amendments are to be applied on a prospective basis and are required to be adopted for annual and any interim goodwill impairment tests in fiscal years beginning after December 15, 2019. The Company is currently evaluating the impact that this guidance will have on its results of operations, financial position and cash flows. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which amended the existing accounting standards for the statement of cash flows. The amendments provide guidance on eight classification issues related to the statement of cash flows. The Company is required to adopt the guidance in the first quarter of fiscal 2019 and early adoption is permitted. The amendments should be applied retrospectively to all periods presented. For issues that are impracticable to apply retrospectively, the amendments may be applied prospectively as of the earliest date practicable. The Company is currently evaluating the timing and the impact of these amendments on its statement of cash flows. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The new standard identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company has adopted ASU 2016-09. The adoption of this guidance did not have a material impact on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-02 , Leases (Topic 842) (“ASU 2016-02”) . The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU 2016-02 is effective for annual periods beginning after December 15, 2018, including interim periods within those annual periods, with early adoption permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company’s primary lease arrangement is associated with a lease for its corporate office space. The Company is still evaluating the impact of the adoption of this standard; however, based on the size of the Company’s future operating lease commitments as of December 31, 2018 (discussed in Note 13), the Company expects to record a ROU asset and a lease liability on the balance sheet upon adoption and the Company expects that adoption of the new lease accounting standard will have a material impact on our balance sheet on the date of adoption. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt | |
Debt | 5. Debt On May 8, 2018, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Iliad Research and Trading, L.P. (“IRT”), pursuant to which the Company issued to IRT a secured convertible promissory note (the “Note”) in the aggregate principal amount of $3,325,000 for an aggregate purchase price of $2,000,000 cash and $1,000,000 aggregate principal amount of investor notes (the “Investor Notes”) payable to the Company in four tranches of $250,000 upon request by the Company. Closing occurred on May 9, 2018. The Note carries an original issue discount of $300,000, and the initial principal balance of $2,225,000 also includes original issue discount of $200,000 and $25,000 to cover IRT’s transaction expenses. The Investor Notes have not been drawn as of December 31, 2018. The Note bears interest at the rate of 10% per annum and matures on November 8, 2019. Beginning on November 8, 2018, IRT has the right to redeem all or any portion of the Note up to the Maximum Monthly Redemption Amount which is $500,000. Payments of each redemption amount may be made in cash or shares of Company common stock at Company’s election (so long as the various conditions to paying stock set forth in the Note are satisfied) provided, however, that if the Company’s common stock is trading below $1.60 per share (as adjusted for the reverse stock split), the redemption(s) must be in cash. Common stock issued upon redemption will be issued at a price equal to 80% of the lowest trade price of the common stock for the 20 consecutive trading days prior to the date of redemption, subject to adjustments; provided, however, that in no event will the redemption price be less than $1.60. Because of this feature which allows the lender to redeem the entire outstanding balance at its option within twelve (12) months of initial issuance, the debt is classified as current. The Company also entered into a security agreement with IRT, pursuant to which IRT will receive a security interest in substantially all of the Company’s assets, except for intellectual property. The Company identified numerous embedded features to which bifurcation would be required. The Securities Purchase Agreement requires that the Company comply with certain non-financial covenants customary for financing of this nature which the Company complied with as of December 31, 2018. The Company is eligible to elect the fair value option under ASC 815 and bypass analysis of potential embedded derivatives and further analysis of bifurcation of any such derivatives and has elected such option. Therefore, the debt will be recorded at its fair value upon issuance and subsequently re-measured at each reporting period until maturity. Additionally, all issuance costs incurred in connection with a debt instrument that is measured at fair value pursuant to the election of the fair value option are expensed during the period the debt is acquired. The Company incurred $200,000 of debt issuance costs, which were expensed as incurred due to the election of the fair value option and were included in interest expense in the accompanying consolidated statement of operation for the year ended December 31, 2018. The Note carries total debt discount of $225,000 (comprising of original issue discount of $200,000 and $25,000 payment to IRT for transaction expenses) which was not recorded due to the election of the fair value option. During November and December of 2018, the Company made cash redemption payments totaling $800,000 against the Note, $131,058 of which was applied towards interest resulting in a $1.6 million balance of remaining principal as of December 31, 2018. |
Stockholders' Equity and Deriva
Stockholders' Equity and Derivative Liability - Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity and Derivative Liability - Warrants | |
Stockholders' Equity and Derivative Liability - Warrants | 6. Stockholders’ Equity and Derivative Liability — Warrants Preferred stock, Common Stock and Warrant Offering During the period from August 5, 2016 to September 30, 2018, certain holders of the Company’s Series A Convertible Preferred Stock elected to convert approximately 1.2 million shares of Series A Convertible Preferred stock into approximately 3.0 million shares of the Company’s common stock. Series C Preferred Stock Issuance On July 3, 2018, the Company completed its rights offering pursuant to its effective registration statement on Form S-1. The Company offered for sale units in the rights offering and each unit sold in connection with the rights offering consists of 1 share of the Company’s Series C Convertible Preferred Stock, or Series C, and 575 common stock warrants (the “Rights Offering”). Upon completion of the offering, pursuant to this rights offering, the Company sold an aggregate of 10,826 units at an offering price of $1,000 per unit comprised of 10,826 shares of Series C and 6,224,950 common stock warrants. The Company received net proceeds of $9.9 million, after deducting expenses relating to the Rights Offering, including dealer-manager fees and offering expenses, totaling approximately $0.9 million, and excluding any proceeds received upon exercise of any warrants. The common stock warrants are exercisable at $1.55 per share and subject to adjustments upon the occurrence of certain dilutive events. The warrants expire on the fifth anniversary from their original issuance date. The Company may redeem the warrants for $0.01 per warrant if the Company’s common stock closes above $6.20 per share for ten consecutive trading days, provided that the Company may not do so prior to the first anniversary of the closing of the unit offering. The warrants are being sold under a written public offering. If a warrant is exercised during a period where a registration statement is not declared effective, the Company cannot assert that settlement in unregistered shares is permitted. As a result, the warrants are liability classified and carried at their estimated fair value at each reporting until they are exercised, terminated or otherwise settled. The Company determined that the Series C should not be classified as temporary equity due to its lack of senior liquidation preferences and is not redeemable on a fixed or determinable date. The rights and preferences of the Series C are as follows: Dividends Holders of Series C shares are entitled to dividends, if and when declared on shares of common stock, on an “as-converted” basis. Voting Subject to certain preferred stock class votes specified in the certificate of designation, the holders of Series C shares shall have no voting rights. Liquidation Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Company, holder of Series C shares shall be entitled to receive the same consideration as the holders of the Company’s common stock on an “as converted” basis. Conversion Each share of Series C is convertible into common stock at any time at the option of the holder thereof at the conversion price then in effect. The conversion price for the Series C is determined by dividing the stated value of $1,000 per share by $1.55 per share (subject to adjustments upon the occurrence of certain dilutive events). At any time after the first anniversary of the original issuance date, the Company may, subject to certain conditions, require the conversion of Series C shares. The gross proceeds of the offering were first allocated to the warrants based on the fair value of the warrants at that time, with the residual proceeds allocated to the Series C. All offering costs were allocated between the Series C and the warrants. In addition, the placement agent received, as compensation for the transaction, unregistered equity warrants to purchase 279,381 shares of the Company’s common stock priced at $1.71 per share. The fair value of the placement agent equity classified warrants was $0.2 million at the time of issuance and $0.1 million was allocated to the Series C and $0.1 million was allocated to the liability classified common stock warrants. All costs allocated to the liability classified warrants were expensed immediately and as a component of general and administrative expenses within the Company’s consolidated statement of operations. In connection with the issuance of the Series C and liability classified warrants, the Company recognized the intrinsic value of a beneficial conversion feature of $3.8 million. The beneficial conversion amount was computed as the difference between the Series C effective conversion price and the fair value of the Company’s common stock multiplied by that number of shares issuable upon conversion. As a result of the Company’s issuance of convertible preferred shares that included a beneficial conversion feature, the Company may, upon conversion of the Series C, recognize any unamortized discount resulting from the initial allocation of proceeds issued to the liability classified warrants. During the year ended December 31, 2018, the holders of Series C shares converted 8,852 shares of Series C into 5,710,963 shares of common stock. As a result of the conversion, the Company recognized a deemed dividend charged to additional paid in capital of $4.7 million associated with the difference between the stated and carrying per share values of the Series C , including a $0.5 million accretion related to issuance costs that had been allocated to the Series C which have been presented as a component of net loss attributable to common stockholders in the Company’s consolidated statement of operations. Beneficial Conversion Feature- Series C Preferred Stock Each share of Series C is convertible into shares of common stock, at any time at the option of the holder at a conversion price of $1.55 per share. Based on the guidance in ASC 470-20-20, the Company determined that a beneficial conversion feature exists, as the effective conversion price for the Series C preferred shares at issuance was less than the fair value of the common stock into which the preferred shares are convertible. A beneficial conversion feature based on the intrinsic value of the date of issuances for the Series C was $3.8 million and the preferred stock was discounted by this amount. The beneficial conversion amount of $3.8 million was then accreted back to the preferred stock as a dividend charged to additional paid in capital as the preferred stock was 100% convertible immediately. The $3.8 million accretion was recorded as a dividend reflected in additional paid in capital and also presented as a component of net loss attributable to common stockholders in the Company's consolidated statement of operations. Controlled Equity Offering Sales Agreement On March 9, 2015, the Company entered into a Controlled Equity Offering Sales Agreement (the “Agreement”), with Cantor Fitzgerald & Co., as sales agent (“Cantor”), pursuant to which the Company may offer and sell, from time to time, through Cantor shares of the Company’s common stock, par value $0.0001 per share (the “Shares”), up to an aggregate offering price of $50.0 million. The Company intends to use the net proceeds from these sales to fund research and development activities and for working capital and other general corporate purposes, and possible acquisitions of other companies, products or technologies, though no such acquisitions are currently contemplated. Under the Agreement, Cantor may sell the Shares by methods deemed to be an “at-the-market” offering as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on the Nasdaq Capital Market, on any other existing trading market for the Shares or to or through a market maker. In addition, under the Agreement, Cantor may sell the Shares by any other method permitted by law, including in privately negotiated transactions. Subject to the terms and conditions of the Agreement, Cantor will use commercially reasonable efforts, consistent with its normal trading and sales practices and applicable state and federal law, rules and regulations and the rules of The Nasdaq Capital Market, to sell the Shares from time to time, based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions we may impose). The Company is not obligated to make any sales of the Shares under the Agreement. The offering of Shares pursuant to the Agreement will terminate upon the earlier of (1) the sale of all of the Shares subject to the Agreement or (2) the termination of the Agreement by Cantor or the Company. ContraVir will pay Cantor a commission of up to 3.0% of the gross sales price per share sold and has agreed to provide Cantor with customary indemnification and contribution rights. During the year ended December 31, 2018 and the transition period ended December 31, 2017, the Company sold approximately 766,300 and 280,100 shares of the Company’s common stock resulting in proceeds, net of issuance costs, of approximately $1.6 million and $1.2 million under the Controlled Equity Offering Sales Agreement with Cantor Fitzgerald & Co., as sales agent. Common Stock and Warrant Offering On October 7, 2015, the Company entered into an underwriting agreement related to the public offering and sale of 625,000 shares of common stock and warrants to purchase up to 375,000 shares of common stock, at a fixed combined price to the public of $24.00 under the Company’s prior shelf registration statement on Form S-3. The shares of common stock and warrants were issued separately on October 13, 2015. The warrants are immediately exercisable and will be exercisable for a period of five years from the date of issuance at an exercise price of $34.00 per share. There is not, nor is there expected to be, any trading market for the warrants issued in the offering contemplated by the Underwriting Agreement. The Company also granted the Underwriters a 45-day option to purchase up to an additional 93,750 additional shares of common stock and additional warrants to purchase up to 56,250 shares of common stock at $24.00, which was not exercised. The gross proceeds to the Company were $15 million, before deducting the underwriting discount and other offering expenses payable by the Company of approximately $1.5 million. If the warrants were exercised in full, ContraVir would receive additional proceeds of approximately $12.8 million. If the Company consummates any merger, consolidation, sale or other reorganization event in which its common stock is converted into or exchanged for securities, cash or other property (“Fundamental transaction”), then the Company shall pay at the holder’s option, exercisable at any time commencing on the occurrence or the consummation of the fundamental transaction and continuing for 90 days, an amount of cash equal to the value of the remaining unexercised portion of the warrant as determined in accordance with the Black-Scholes option pricing model on the date of such fundamental transaction. As a result of these terms, in accordance with the guidance contained in ASC Topic 815-40, the Company has determined that the warrants issued in connection with this financing transaction must be recorded as derivative liabilities upon issuance and marked to market on a quarterly basis in the Company’s statement of operations and comprehensive loss. Upon the issuance of these warrants, the fair value of approximately $4.4 million was recorded as derivative financial instruments liability - warrants. The fair value of these liability classified warrants were estimated using the Black-Scholes option pricing model. The Company develops its own assumptions for use in the Black-Scholes option pricing model that do not have observable inputs or available market data to support the fair value. This method of valuation involves using inputs such as the fair value of the Company’s common stock, stock price volatility of comparable companies, the contractual term of the warrants, risk free interest rates and dividend yields. The Company has a limited trading history in its common stock, therefore, expected volatility is based on that of comparable public development stage biotechnology companies. Due to the nature of these inputs, the valuation of the warrants is considered a Level 3 measurement. The following assumptions were used to remeasure the warrants liability as of December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Price of ContraVir common stock $ 0.28 $ 2.88 Expected warrant term (years) 1.78 years 2.78 years Risk-free interest rate 2.48 % 2.09 % Expected volatility 74 % 67 % Dividend yield — — On April 4, 2016, the Company closed on a public offering of 616,197 shares of its common stock and warrants to purchase up to 308,098 shares of common stock, at a fixed combined price to the public of $11.36 under the Company’s prior shelf registration statement on Form S-3. The warrants are immediately exercisable and will be exercisable for a period of five years from the date of issuance at an exercise price of $13.60 per share. There is not, nor is there expected to be, any trading market for the warrants issued in the offering contemplated by the Underwriting Agreement. The gross proceeds to the Company were $7.0 million, before deducting the underwriting discount and other offering expenses payable by the Company of approximately $0.7 million. If the warrants were exercised in full, ContraVir would receive additional proceeds of approximately $4.2 million. If the Company consummates any merger, consolidation, sale or other reorganization event in which its common stock is converted into or exchanged for securities, cash or other property (“Fundamental transaction”), then the Company shall pay at the holder’s option, exercisable at any time commencing on the occurrence or the consummation of the fundamental transaction and continuing for 90 days, an amount of cash equal to the value of the remaining unexercised portion of the warrant as determined in accordance with the Black-Scholes option pricing model on the date of such fundamental transaction. As a result of these terms, in accordance with the guidance contained in ASC Topic 815-40, the Company has determined that the warrants issued in connection with this financing transaction must be recorded as derivative liabilities upon issuance and marked to market on a quarterly basis in the Company’s statement of operations and comprehensive loss. Upon the issuance of these warrants, the fair value of approximately $1.5 million was recorded as derivative financial instruments liability - warrants. The fair value of these liability classified warrants were estimated using the Black-Scholes option pricing model. The Company develops its own assumptions for use in the Black-Scholes option pricing model that do not have observable inputs or available market data to support the fair value. This method of valuation involves using inputs such as the fair value of the Company’s common stock, stock price volatility of comparable companies, the contractual term of the warrants, risk free interest rates and dividend yields. The Company has a limited trading history in its common stock, therefore, expected volatility is based on that of comparable public development stage biotechnology companies. Due to the nature of these inputs, the valuation of the warrants is considered a Level 3 measurement. The following assumptions were used to remeasure the warrants liability as of December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Price of ContraVir common stock $ 0.28 $ 2.88 Expected warrant term (years) 2.26 years 3.00 years Risk-free interest rate 2.48 % 2.09 % Expected volatility 74 % 67 % Dividend yield — — On April 25, 2017, the Company closed on a public offering of 1,500,000 shares of its common stock and warrants to purchase up to 750,000 shares of common stock, at a fixed combined price to the public of $8.00 under the Company’s prior shelf registration statement on Form S-3. The warrants are immediately exercisable and will be exercisable for a period of five years from the date of issuance at an exercise price of $10.00 per share. There is not, nor is there expected to be, any trading market for the warrants issued in the offering contemplated by the Underwriting Agreement. The gross proceeds to the Company were $12.0 million, before deducting the underwriting discount and other offering expenses payable by the Company of approximately $0.5 million. If the warrants were exercised in full, ContraVir would receive additional proceeds of approximately $7.5 million. If the Company consummates any merger, consolidation, sale or other reorganization event in which its common stock is converted into or exchanged for securities, cash or other property (“Fundamental transaction”), then the Company shall pay at the holder’s option, exercisable at any time commencing on the occurrence or the consummation of the fundamental transaction and continuing for 90 days, an amount of cash equal to the value of the remaining unexercised portion of the warrant as determined in accordance with the Black-Scholes option pricing model on the date of such fundamental transaction. As a result of these terms, in accordance with the guidance contained in ASC Topic 815-40, the Company has determined that the warrants issued in connection with this financing transaction must be recorded as derivative liabilities upon issuance and marked to market on a quarterly basis in the Company’s statement of operations and comprehensive loss. Upon the issuance of these warrants, the fair value of approximately $4.0 million was recorded as derivative financial instruments liability - warrants. The fair value of these liability classified warrants were estimated using the Black-Scholes option pricing model. The Company develops its own assumptions for use in the Black-Scholes option pricing model that do not have observable inputs or available market data to support the fair value. This method of valuation involves using inputs such as the fair value of the Company’s common stock, stock price volatility of comparable companies, the contractual term of the warrants, risk free interest rates and dividend yields. The Company has a limited trading history in its common stock, therefore, expected volatility is based on that of comparable public development stage biotechnology companies. Due to the nature of these inputs, the valuation of the warrants is considered a Level 3 measurement. The following assumptions were used to remeasure the warrants liability as of December 31, 2018 and 2017: December 31, 2018 December 31, 2017 Price of ContraVir common stock $ 0.28 $ 2.88 Expected warrant term (years) 3.31 years 4.00 years Risk-free interest rate 2.46 % 2.09 % Expected volatility 74 % 68 % Dividend yield — — The warrants, issued in connection with the July 2018 Rights Offering are deemed to be derivative instruments since if the Company does not maintain an effective registration statement, the Company is obligated to deliver registered shares upon exercise and settlement of the warrant because there are further registration and prospectus delivery requirements that are outside of the control of the company. Therefore the fair value of the warrants were determined using the Black-Scholes option pricing model, deemed to be an appropriate model due to the terms of the warrants issued, including a fixed term and exercise price. The fair value of these liability classified warrants were estimated using the Black-Scholes option pricing model. The Company develops its own assumptions for use in the Black-Scholes option pricing model that do not have observable inputs or available market data to support the fair value. This method of valuation involves using inputs such as the fair value of the Company's common stock, stock price volatility of comparable companies, the contractual term of the warrants, risk free interest rates and dividend yields. The Company has a limited trading history in its common stock, therefore, expected volatility is based on that of comparable public development stage biotechnology companies. Due to the nature of these inputs, the valuation of the warrants is considered a Level 3 measurement. The following assumptions were used to measure the warrants at issuance and to remeasure the liability as of December 31, 2018: December 31, 2018 July 3, 2018 Price of ContraVir common stock $ 0.28 $ 1.36 Expected warrant term (years) 4.50 years 5.00 years Risk-free interest rate 2.51 % 2.72 % Expected volatility 74 % 75 % Dividend yield — — The following table sets forth the components of changes in the ContraVir’s derivative financial instruments liability balance for the periods indicated: Number of Derivative Warrants Instrument Date Description Outstanding Liability 6/30/2017 Balance of derivative financial instruments liability 1,426,848 $ 1,702,231 Change in fair value of warrants for the transition period ended December 31, 2017 — (1,032,769) 12/31/2017 Balance of derivative financial instruments liability 1,426,848 669,462 Issuance of warrants on July 3, 2018 6,224,950 5,091,373 Change in fair value of warrant liability related to warrant exercise (92,000) (41,132) Derecognition of warrants (34,136) Change in fair value of warrants for the year ended December 31, 2018 (5,281,230) 12/31/2018 Balance of derivative financial instruments liability 7,559,798 $ 404,337 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 7. Fair Value Measurements The following table presents the Company’s liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of the year ended December 31, 2018 and the transition period ended December 31, 2017. Quoted Prices in Significant Active Markets for Other Significant Identical Assets Observable Unobservable and Liabilities Inputs Inputs Description Fair value (Level 1) (Level 2) (Level 3) As of December 31, 2018 Convertible Debt $ (1,440,000) $ — $ — $ (1,440,000) Contingent consideration $ (2,590,000) $ — $ — $ (2,590,000) Derivative liabilities related to warrants $ (404,337) $ — $ — $ (404,337) As of December 31, 2017 Contingent consideration $ (3,380,000) $ — $ — $ (3,380,000) Derivative liabilities related to warrants $ (669,462) $ — $ — $ (669,462) The unrealized gains or losses on the derivative liabilities are recorded as a change in fair value of derivative liabilities- warrants in the Company’s statement of operations. See Note 6 for a rollfoward of the derivative liability for the year ended December 31, 2018 and the transition period ended December 31, 2017. The financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company reviews the assets and liabilities that are subject to ASC 815-40. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3. A lattice-based model is used to estimate the fair value of the Secured Convertible Note. The lattice model utilizes a "decision tree" whereby future movement in the company's common stock price is estimated based on a volatility factor. The Company classified the fair value of the Secured Convertible Note as a Level 3 measurement due to the lack of observable market data. The lattice model requires the development and use of assumptions including the Company’s stock price volatility returns, an appropriate risk- free interest rate, default intensity rate and expected recovery rate given default. The estimated fair value of the Secured Convertible Note as of December 31, 2018 was $1.44 million and was based on the following inputs: stock volatility of 80.0 percent, risk- free rate of 2.61 percent related to assumed term of 0.85 years, default Intensity of 23.7 percent and a recovery rate of 30.0 percent. The following table summarizes the changes in fair value of the convertible debt for which the Company has used Level 3 inputs to determine fair value. Fair Value of Convertible Debt Balance at May 8, 2018 $ (2,000,000) Change in fair value (108,942) Repayment of principal of debt financing 668,942 Balance at December 31, 2018 $ (1,440,000) Contingent consideration was related to the acquisition of Ciclofilin and recorded on June 10, 2016. The contingent consideration represented the acquisition date fair value of potential future payments, to be paid in cash and Company stock, upon the achievement of certain milestones and was estimated based on a probability-weighted discounted cash flow model utilizing a discount rate of 6.5% and a stock price of $0.28. We completed the first segment of our Phase 1 clinical activities for CRV431 in October 2018 wherein we reached a major clinical milestone of positive data from a Phase I trial of CRV431 in humans. This achievement triggered the first milestone payment, as stated in the Merger Agreement for the acquisition of Ciclofilin Pharmaceuticals, Inc. (Ciclofilin,) and we paid a related milestone payment of $1,000,000 and issued 100,737 shares of our common stock with a fair value of $55,398, representing 2.5% of our issued and outstanding common stock as of June, 2016, to the Ciclofilin shareholders. Acquisition- related Contingent Consideration Liabilities Balance at June 30, 2017 $ 3,410,000 Change in fair value recorded in earnings (30,000) Balance at December 31, 2017 3,380,000 Settlement of first clinical milestone (1,055,398) Change in fair value recorded in earnings 265,398 Balance at December 31, 2018 $ 2,590,000 |
Indefinite-lived Intangible Ass
Indefinite-lived Intangible Assets and Goodwill | 12 Months Ended |
Dec. 31, 2018 | |
Indefinite-lived Intangible Assets and Goodwill | |
Indefinite-lived Intangible Assets and Goodwill | 8. Indefinite-lived Intangible Assets and Goodwill IPR&D The Company’s IPR&D asset consisted of the following at: December 31, 2018 December 31, 2017 CRV431 $ 3,190,000 $ 3,190,000 Goodwill The table below provides a roll-forward of the Company’s goodwill balance: Amount Goodwill balance at July 1, 2017 $ 1,870,924 Changes for the transition period ended December 31, 2017 — Goodwill balance at December 31, 2017 1,870,924 Changes for the year ended December 31, 2018 — Goodwill balance at December 31, 2018 $ 1,870,924 |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities | |
Accrued Liabilities | 9. Accrued Liabilities The Company’s accrued expenses consist of the following: For the transition Year ended period Ended December 31, 2018 December 31, 2017 Payroll and related costs $ 280,235 $ 539,063 Research and development 184,120 322,842 Professional fees 151,812 75,934 Legal fees 34,072 81,550 Other 11,182 27,309 Total accrued expenses $ 661,421 $ 1,046,698 During the year ended December 31, 2018, the Company paid approximately $1.3 million of severance costs. Approximately $36,000 of severance payments remaining as of December 31, 2018 are included in accrued payroll and related costs. |
Accounting for Share-Based Paym
Accounting for Share-Based Payments | 12 Months Ended |
Dec. 31, 2018 | |
Accounting for Share-Based Payments | |
Accounting for Share-Based Payments | 10. Accounting for Share‑Based Payments On June 3, 2013, ContraVir adopted the 2013 Equity Incentive Plan (the “Plan”). Stock options granted under the Plan will typically vest after three years of continuous service from the grant date and will have a contractual term of ten years. Stockholder and Board approval was obtained on December 2, 2014 to increase the number of authorized shares to 812,500 and on December 14, 2016 Stockholder and Board approval was obtained to increase the number of authorized shares to 962,500. Stockholder and Board approval was obtained on February 21, 2018 to increase the number of authorized shares to 1,337,500. As of December 31, 2018 and December 31, 2017, the Company had 694,904 and 109,851 shares of common stock, respectively, available for grant under the Plan. The Company classifies stock-based compensation expense in its statement of operations in the same manner in which the award recipient's payroll costs are classified or in which the award recipients' service payments are classified. ContraVir recorded the following stock-based compensation expense for the periods shown: For the transition Year ended Period ended December 31, 2018 December 31, 2017 General and administrative $ 271,644 $ 509,072 Research and development (37,134) 236,669 Total stock-based compensation expense $ 234,510 $ 745,741 A summary of stock option activity and of changes in stock options outstanding under the Plan is presented below: Weighted Weighted Average Average Number of Exercise Price Exercise Price Intrinsic Remaining Options Per Share Per Share Value Contractual Term Balance outstanding, June 30, 2017 810,148 $ 0.88 - $ 30.64 $ 12.32 301,011 7.72 years Granted 45,000 $ 2.96 - $ 4.96 $ 4.16 Cancelled (2,500) $ 4.00 - $ 4.96 $ 4.48 Balance outstanding, December 31, 2017 852,648 $ 0.88 - $ 30.64 $ 11.84 5,958 7.00 years Forfeited (126,184) $ 2.96 - $ 16.08 $ 9.44 Cancelled (83,868) $ 4.64 - $ 20.48 $ 1.82 Balance outstanding, December 31, 2018 642,596 $ 0.88 - $ 30.64 $ 12.32 6.02 years Vested awards and those expected to vest at December 31, 2018 639,940 $ 0.88 - $ 30.64 $ 12.66 — 6.06 years Vested and exercisable at December 31, 2018 616,115 $ 0.88 - $ 30.64 $ 12.82 — 6.02 years There were no stock options issued during the year ended December 31, 2018. The weighted-average grant-date fair value of options granted to employees during the transition period ended December 31, 2017 and the year ended June 30, 2017 was $2.64 and $7.44 per share, respectively. The total fair value of shares vested during the year ended December 31, 2018 was $1.1 million. Included within the above table are 0.2 million non-employee options outstanding as of December 31, 2018, of which approximately 19,000 are unvested as of December 31, 2018 and therefore subject to remeasurement. The remeasurement impact for the year ended December 31, 2018 was negative due to a decrease in the Company's stock price, which resulted in a decrease in the related expense recognized. The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. As of December 31, 2018, the unrecognized compensation cost related to non-vested stock options outstanding, net of expected forfeitures, was approximately $0.1 million to be recognized over a weighted-average remaining vesting period of approximately 1.24 years. There were no option awards granted to employees during the year ended December 31, 2018. The following weighted‑average assumptions were used in the Black‑Scholes valuation model to estimate fair value of stock option awards to employees during the periods indicated. For the transition period ended Year Ended December 31, 2017 June 30, 2017 Stock price $ 4.16 $ 11.12 Risk-free interest rate 1.64 % 1.86 % Dividend yield — — Expected volatility 73.05 % 79.18 % Expected term (in years) 6 years 6 years Risk‑free interest rate —Based on the daily yield curve rates for U.S. Treasury obligations with maturities which correspond to the expected term of the Company’s stock options. Dividend yield —ContraVir has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. Expected volatility —Because ContraVir has a limited trading history in its common stock, the Company based expected volatility on that of comparable public development stage biotechnology companies. Expected term —The expected option term represents the period that stock‑based awards are expected to be outstanding based on the simplified method provided in SAB No. 107, which SAB No. 107, options are considered to be “plain vanilla” if they have the following basic characteristics: (i) granted “at‑the‑money”; (ii) exercisability is conditioned upon service through the vesting date; (iii) termination of service prior to vesting results in forfeiture; (iv) limited exercise period following termination of service; and (v) options are non‑transferable and non‑hedgeable. In December 2007, the SEC issued SAB No. 110, Share‑Based Payment , (“SAB No. 110”). SAB No. 110 was effective January 1, 2008 and expresses the views of the Staff of the SEC with respect to extending the use of the simplified method, as discussed in SAB No. 107, in developing an estimate of the expected term of “plain vanilla” share options in accordance with ASC 718. The Company will use the simplified method until it has the historical data necessary to provide a reasonable estimate of expected life in accordance with SAB No. 107, as amended by SAB No. 110. For the expected term, the Company has “plain‑vanilla” stock options, and therefore used a simple average of the vesting period and the contractual term for options granted as permitted by SAB No. 107. Forfeitures— ASC 718 requires forfeitures to be estimated at the time of grant and revised if necessary, in subsequent periods if actual forfeitures differ from those estimates. At April 1, 2016, the Company determined that it had sufficient history of issuing stock options and decreased its estimated forfeiture rate from 10%, which was based on the historical experience of its former parent, to 3%, which is the Company’s actual historical forfeiture rate. The forfeiture rate was 10% through the end of the 3 rd fiscal quarter ended March 31, 2016 and was then adjusted to 3% through the end of the fiscal year June 30, 2016 based on the aforementioned historical analysis. The forfeiture rate was 3% for the year ended December 31, 2018, the transition period ended December 31, 2017, and year ended June 30, 2017. The Company will continue to analyze the forfeiture rate on at least an annual basis or when there are any identified triggers that would justify immediate review. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Income Taxes | 11. Income Taxes The Company provides for income taxes under ASC 740. Under ASC 740, the liability method is used in accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities, and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company’s loss before income taxes was $9,985,295, $9,458,852, and $16,799,053 for the year ended December 31, 2018, the transition period ended December 31, 2017 and the fiscal year ended June 30, 2017, respectively, and was generated entirely in the United States and Canada. The income tax benefit for the year ended December 31, 2018, the transition period ended December 31, 2017 and June 30, 2017 was $0.5 million, $1.9 million and $1.9 million, respectively. The income tax benefits resulted from the sale of state net operating losses totaling $0, $1.5 million, and $1.9 million, respectively, and adjustments to the deferred tax liability resulting from the 2017 Tax Act. The 2017 Tax Act changed the Net Operating Loss carryforwards’ period to now have an indefinite life and the Company recorded a $0.5 million adjustment during the year ended December 31, 2018 and a $0.4 million adjustment during the transition period ended December 31, 2017. The Company has sold a portion of its state NOLs and Research and Development credits in prior years under the State of New Jersey’s Technology Business Tax Certificate Transfer Program and plans to sell additional NOLs and credits under the same program later in 2019. In connection with the preparation of the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2018 the Company identified a $0.5 million reduction to the Company’s deferred tax liabilities that should have been recorded to the valuation allowance to reflect the adjustment allowed by the 2017 Tax Act to utilize indefinite deferred tax liabilities as a source of income against indefinite lived portions of the Company’s deferred tax assets in conjunction with the evaluation of the amount of valuation allowance needed. This adjustment was determined to be immaterial and was corrected as an out of period adjustment recorded in the quarter ended March 31, 2018. Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company’s deferred tax assets are comprised of the following: As of As of As of December 31, 2018 December 31, 2017 June 30, 2017 Federal net operating loss (“NOL”) $ 13,600,500 $ 12,054,400 $ 17,050,000 State NOL 2,116,300 1,148,800 1,597,000 Canadian NOL 1,978,500 1,140,000 560,300 Research and development credits 1,043,300 696,400 522,300 Stock Compensation & Other 1,206,300 1,000,100 1,232,500 Deferred tax asset valuation allowance (19,348,600) (16,039,700) (20,962,100) Total Deferred Tax Asset $ 596,300 $ — $ — Deferred tax liability (In-Process R&D ) $ (957,000) $ (896,700) $ (1,269,600) Total Deferred Tax Liability $ (957,000) $ — $ — Net Deferred Tax Liability $ (360,700) $ (896,700) $ (1,269,600) The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company’s history of operating losses since inception, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance for deferred tax assets as of December 31, 2018, December 31, 2017, and June 30, 2017. The Company has recorded a net deferred tax liability of $360,700 related to in-process research and development as a result of the acquisition of Ciclofilin. It is the Company's position that the acquired in-process research and development is an indefinite-lived intangible asset and is not available as a source of income to support the realization of deferred tax assets. The valuation allowance increased/(decreased) by $3.3 million and ($5.0) million for the year ended December 31, 2018 and the transition period ended December 31, 2017, respectively, due primarily to the generation of net operating losses during the periods and also adjustments due to the December 22, 2017 enactment of the tax reform law. A reconciliation of income tax benefit computed at the statutory federal income tax rate to income taxes as reflected in the financial statements is as follows: For the transition period ended Year Ended December 31, December 31, 2018 2017 U.S. statutory income tax rate 21.0 % 34.0 % State income taxes, net of federal benefit 7.3 (6.6) Sale of New Jersey tax benefits — 16.9 Research and development credits (3.7) 1.9 Net operating loss — — Warrant liability 10.9 3.9 Rate change — (78.3) Foreign Tax Differential 1.7 — Other (1.6) — Valuation allowance (30.3) 49.1 Effective tax rate 5.3 % 20.9 % As of December 31, 2018, December 31, 2017, and June 30, 2016, the Company had U.S. federal and state net operating loss carryforwards of $88.3 million, $73.6 million, and $77.0 million, respectively, which may be available to offset future income tax liabilities and will begin to expire at various dates starting in December 2032. As of December 31, 2018, December 31, 2017, and June 30, 2017, the Company also had foreign net operating loss carryforwards of $7.5 million, $4.3 million, and $2.1 million, respectively, which may be available to offset future income tax liabilities and will begin to expire at various dates starting in December 2033. The Company also had federal and state research and development tax credit carry forwards of approximately $1.0 million as of December 31, 2018, which will begin to expire in December 2036. Under the provisions of the Internal Revenue Code, the NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, respectively, as well as similar state tax provisions. This could limit the amount of tax attributes that the Company can utilize annually to offset future taxable income or tax liabilities. The amount of the annual limitation, if any, will be determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The utilization of these NOLs is subject to limitations based on past and future changes in ownership of the Company pursuant to Section 382. The Company files income tax returns in the United States, Canada and various state jurisdictions. The Company’s federal and state income tax returns from the year of incorporation, 2013, and forward remain subject to examination by the Internal Revenue Service ("IRS") and state authorities. The Company had no unrecognized tax benefits or related interest and penalties accrued through December 31, 2018. The Company would record the effects of interest and penalties as a component of income tax expense. |
Loss per Share
Loss per Share | 12 Months Ended |
Dec. 31, 2018 | |
Loss per Share | |
Loss per Share | 12. Loss per Share Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC 260”) for all periods presented. In accordance with ASC 260, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. In addition, the net loss attributable to common stockholders’ is adjusted for the preferred stock deemed dividends related accretion of beneficial conversion feature and other discount on this instrument for the periods in which the preferred stock is outstanding. The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: For the transition Year ended period ended Year ended Basic net (loss) income per common share December 31, 2018 December 31, 2017 June 30, 2017 Numerator: Net loss attributable to common stockholders - basic $ (17,901,146) $ (7,511,092) $ (14,891,050) Denominator: Basic weighted average common shares outstanding 12,871,530 9,678,329 7,286,304 Net loss per share of common stock—basic $ (1.39) $ (0.78) $ (2.04) Diluted net (loss) income per common share Numerator: Net loss attributable to common stockholders - basic $ (17,901,146) $ (7,511,092) $ (14,891,050) Less: reversal of gain on warrants — — (2,698,015) Net loss attributable to common stockholders - diluted $ (17,901,146) $ (7,511,092) $ (17,589,065) Denominator: Basic weighted average common shares outstanding 12,871,530 9,678,329 7,286,304 Effect of dilutive securities Exercise of warrants — — 6,023 Weighted average shares used to compute diluted net loss per share 12,871,530 9,678,329 7,292,327 Net loss per share of common stock—diluted $ (1.39) $ (0.78) $ (2.41) The following outstanding securities at December 31, 2018, December 31, 2017, and June 30, 2017 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti-dilutive: For the transition Year ended period ended Year ended December 31, 2018 December 31, 2017 June 30, 2017 Common shares issuable upon conversion of Series A preferred stock 222,867 270,867 270,867 Common shares issuable upon conversion of Series C preferred stock 1,273,548 — — Stock options 642,596 852,648 810,148 Warrants – liability classified 7,559,798 1,426,849 676,849 Warrants – equity classified 279,381 — — Total 9,978,190 2,550,364 1,757,864 The liability and equity classified warrants disclosed above have been excluded from the computation of diluted earnings per share because the exercise price of the warrants exceeds the average market price of the Company’s common stock for the period they were outstanding. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 13. Commitments and Contingencies License Agreement with Chimerix, Inc. On December 17, 2014, the Company entered into an exclusive license agreement with Chimerix pursuant to which the Company has licensed TXL (TM) from Chimerix for further clinical development and commercialization. TXL (™) is a highly potent analog of the antiviral drug tenofovir DF (Viread ® ). Under the terms of the agreement, ContraVir licensed TXL (™) from Chimerix in exchange for an upfront payment consisting of 120,000 shares of ContraVir Series B Convertible Preferred Stock. In addition, Chimerix is eligible to receive up to approximately $20 million in clinical, regulatory and initial commercial milestone payments in the United States and Europe, as well as royalties and additional milestone payments based on commercial sales in those territories. Either party may terminate the License Agreement upon the occurrence of a material breach by the other party (subject to standard cure periods), or upon certain events involving the bankruptcy or insolvency of the other party. The Company may also terminate the License Agreement without cause on a country by country basis upon sixty days’ prior written notice to Chimerix. The fair value of the Preferred B shares exchanged for the license was determined to be equal to the amount paid per share of the Series A, as the provision of the Preferred B shares were the same as the Preferred A Shares, based on an arm’s length transaction. Therefore, the fair value of the Preferred B shares issued was $10 per share or $1.2 million. The cost of the license was classified as a research and development expense in the amount of $1.2 million as the compound is early stage, has not yet reached technological feasibility and has no alternative use. As of December 31, 2018, no amounts are due to Chimerix based on the Company’s assessment regarding the probability as to whether the related milestones will be achieved. On September 30, 2016 Chimerix converted all shares of Series B Preferred Stock into approximately 134,000 shares of the Company's common stock. Contractual Obligations In August 2014, the Company entered into a lease for corporate office space in Edison, New Jersey. In December 2017, the Company entered into an amendment to the lease for corporate office space in Edison, New Jersey expanding the office footprint and extending the lease for an approximate 5 year period. Rent expense for the year ended December 31, 2018, the transition period ending December 31, 2017 and year ended June 30, 2017 was $289,504, $101,732, and $183,716, respectively. The Company also leases office and research laboratory space in Edmonton, Canada that is currently on a month to month basis. The following table summarizes annual rental payments for each of the following fiscal years ended December 31, 2018: 2019 $ 202,734 2020 194,529 2021 209,170 2022 and thereafter 266,290 Total $ 872,723 Employment Agreements The Company also has employment agreements with certain employees which require the funding of a specific level of payments, if certain events, such as a change in control, termination without cause or retirement, occur. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions | |
Related Party Transactions | 14. Related Party Transactions One of the Company’s Directors, Timothy Block, is President of the Baruch S. Blumberg Institute (“Blumberg Institute”). On May 29, 2015, the Company entered into a Sponsored Research Agreement (“Agreement”) with Blumberg Institute, pursuant to which the Company is sponsoring research by investigators affiliated with the Blumberg Institute with respect to TXL (TM) . The Company incurred expenses related to the agreement of approximately $50,000, $50,000, and $75,000 for the year ended December 31, 2018, the transition period ended December 31, 2017, and fiscal year ended June 30, 2017, respectively. On June 1, 2016, the Company entered into a consulting agreement with Gabriele Cerrone, one of the Company’s principal stockholders. The agreement is for a term beginning on June 1, 2016 and expires on June 1, 2019. Pursuant to the consulting agreement Mr. Cerrone is paid $10,000 per month. Either party may terminate the agreement at any time upon 30 days prior written notice. On June 16, 2016, Mr. Cerrone was issued 45,000 stock options which vest in 1,250 increments on a monthly basis over 3 years. The Company terminated the consulting agreement with Mr. Cerrone effective as of August 4, 2018. |
Year Ended December 31, 2017 Co
Year Ended December 31, 2017 Comparative Data (Unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Year Ended December 31, 2017 Comparative Data (Unaudited) | |
Six Months Ended December 31, 2016 Comparative Data (Unaudited) | 15. Year Ended December 31, 2017 Comparative Data (Unaudited) For the year ended December 31, 2017 Revenues $ — Costs and Expenses: Research and development 13,368,165 General and administrative 7,277,951 Loss From Operations (20,646,116) Other Income (Expense): Change in fair value of derivative instruments—warrants and contingent consideration 5,618,598 Loss before income taxes (15,027,518) Income tax benefit 1,947,760 Net loss $ (13,079,758) Weighted Average Common Shares Outstanding Basic and Diluted 9,678,329 Net loss per Common Share Basic and Diluted $ (1.35) |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events | |
Subsequent Events | 16. Subsequent Events The Company made a cash redemption payment on the debt to IRT on January 10, 2019 totaling $312,500. The Company also made redemption payments on the debt to IRT on February 14, 2019 and February 28, 2019 utilizing company stock totaling 541,143 shares with a redemption value of $100,000. On February 27, 2019, the Company received a letter from Nasdaq indicating that, based upon the Company’s continued non-compliance with the Minimum Bid Price Rule as well as the fact that the Company has not yet held an annual meeting of shareholders within twelve months of the end of the Company’s fiscal year end, the Company’s common stock would be subject to delisting unless the Company timely requests a hearing before a Nasdaq Hearings Panel (the “Panel”). The Company timely requested a hearing before the Panel and were granted a meeting, scheduled to occur on April 11, 2019. The request will stay any further action by Nasdaq at least pending the issuance of a decision following the hearing and the expiration of any additional extension that may be granted by the Panel. The Company is considering all of its options to regain compliance; however, there can be no assurance that the Panel will grant the Company’s request for continued listing or that the Company will be able to evidence compliance with the continued listing criteria within the period of time that the Panel may grant it to do so. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP 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 financial statements and the reported amounts of expenses during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates. |
Cash | Cash As of December 31, 2018 and December 31, 2017, the amount of cash was approximately $2.8 million and $6.0 million, respectively, consisting of checking accounts held at U.S. and Canadian commercial banks. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced losses related to these balances. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820, Fair Value Measurement (“ASC 820”), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three‑tier fair value hierarchy that distinguishes among the following: · Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. · Level 2—Valuations based on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and models for which all significant inputs are observable, either directly or indirectly. · Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Financial instruments consist of cash, accounts payable and derivative instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short term nature, except for derivative instruments, which were marked to market at the end of each reporting period. See Note 6 for additional information of the fair value of the derivative liabilities. The Company recorded contingent consideration in its acquisition of Ciclofilin, which is required to be carried at fair value. See Note 7 for additional information on the fair value of the contingent consideration. |
Derivative Financial Instruments | Derivative Financial Instruments The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of the warrants, which were deemed to be derivative instruments based on certain contingent put features, was recorded as a derivative liability under the provisions of ASC Topic 815 Derivatives and Hedging (“ASC 815”) upon issuance. Subsequently, the liability is adjusted to fair value as of the end of each reporting period and the changes in the fair value of derivative liabilities are recorded in the statements of operations under the caption “Change in fair value of derivative financial instruments - warrants.” See Note 6 for additional information. The fair value of the warrants, issued in connection with the October 2015, April 2016, and April 2017 common stock offerings were deemed to be derivative instruments due to certain contingent put feature, was determined using the Black-Scholes option pricing model, deemed to be an appropriate model due to the terms of the warrants issued, including a fixed term and exercise price. The warrants, issued in connection with the July 2018 Rights Offering are deemed to be derivative instruments since if the Company does not maintain an effective registration statement, the Company is obligated to deliver registered shares upon exercise and settlement of the warrant because there are further registration and prospectus delivery requirements that are outside of the control of the Company. Therefore the fair value of the warrants were determined using the Black-Scholes option pricing model, deemed to be an appropriate model due to the terms of the warrants issued, including a fixed term and exercise price. The fair value of warrants were affected by changes in inputs to the Black-Scholes option pricing model including the Company’s stock price, expected stock price volatility, the contractual term, and the risk-free interest rate. This model uses Level 3 inputs, including stock price volatility, in the fair value hierarchy established by ASC 820 Fair Value Measurement. At December 31, 2018 and December 31, 2017, the fair value of all warrants was $0.4 million and $0.7 million, respectively, which are classified as a long term derivative liability on the Company’s balance sheets. |
Property, equipment and depreciation | Property, equipment and depreciation As of December 31, 2018 and December 31, 2017, the Company had $32,434 and $56,595, respectively, of property and equipment, consisting primarily of computer equipment, furniture and fixtures. Expenditures for additions, renewals and improvements will be capitalized at cost. Depreciation will generally be computed on a straight‑line method based on the estimated useful lives of the related assets. The estimated useful lives of the depreciable assets are 2 to 5 years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives, or the remaining term of the lease, whichever is shorter. Depreciation expense for the year ended December 31, 2018, the transition period ended December 31, 2017, and June 30, 2017 was $18,787, $10,969, and $27,993, respectively. Expenditures for repairs and maintenance are charged to operations as incurred. The Company will periodically evaluate whether current events or circumstances indicate that the carrying value of its depreciable assets may not be recoverable. There were no adjustments to the carrying value of property and equipment at December 31, 2018 and December 31, 2017. |
Lease Accounting | Lease Accounting The Company accounts for operating lease transactions by recording rent expense on a straight-line basis over the expected life of the lease, commencing on the date it gains possession of leased property. Capital lease transactions are reflected as a liability at the inception of the lease based on the present value of the minimum lease payments or, if lower, the fair value of the property. Assets under capital leases are recorded in property and equipment, net, in the Consolidated Balance Sheets and depreciated over their estimated useful lives. |
Goodwill and In-Process Research & Development | Goodwill and In-Process Research & Development In accordance with ASC Topic 350, Intangibles — Goodwill and Other (“ASC Topic 350”), goodwill and acquired IPR&D are determined to have indefinite lives and, therefore, are not amortized. Instead, they are tested for impairment annually, in the Company’s fourth quarter, and between annual tests if the Company becomes aware of an event or a change in circumstances that would indicate the carrying value may be impaired. Pursuant to ASU No. 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill for Impairment, and ASU No. 2012-02, Intangibles — Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment, the Company has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads the Company to determine that it is more likely than not (that is, a likelihood of more than 50%) that the goodwill or the acquired IPR&D is impaired. If the Company chooses to first assess qualitative factors and determines that it is not more likely than not goodwill or acquired IPR&D is impaired, the Company is not required to take further action to test for impairment. The Company also has the option to bypass the qualitative assessment and perform only the quantitative impairment test, which the Company may choose to do in some periods but not in others. The Company's CRV431 intangible asset and goodwill are assessed for impairment annually on December 31st of the Company’s fiscal year or more frequently if impairment indicators exist. The Company performed a quantitative impairment test of the CRV431 intangible asset and a qualitative impairment test of goodwill. As of December 31, 2018, the Company determined there was no impairment to the Company’s CRV431 intangible asset and goodwill. If the Company performs a quantitative assessment of goodwill, it utilizes the two-step approach prescribed under ASC Topic 350. Step 1 requires a comparison of the carrying value of a reporting unit, including goodwill, to its estimated fair value. The Company tests for impairment at the entity level because it operates on the basis of a single reporting unit. If the carrying value exceeds fair value, the Company then performs Step 2 to measure the amount of impairment loss, if any. In Step 2, the Company estimates the fair value of its individual assets, including identifiable intangible assets, and liabilities to determine the implied fair value of goodwill. The Company then compares the carrying value of its goodwill to its implied fair value. The excess of the carrying value of goodwill over its implied fair value, if any, is recorded as an impairment charge. Goodwill relates to amounts that arose in connection with the acquisition of Ciclofilin. Goodwill represents the excess of the purchase price over the fair value of the net assets acquired when accounted for using the acquisition method of accounting for business combinations. There was no impairment of goodwill for the year ended December 31, 2018, the transition period ended December 31, 2017 , or the fiscal year ended June 30, 2017. IPR&D acquired in a business combination is capitalized as indefinite-lived assets on the Company’s consolidated balance sheets at its acquisition-date fair value. Once the project is completed, the carrying value of the IPR&D is reclassified to other intangible assets, net and is amortized over the estimated useful life of the asset. Post-acquisition research and development expenses related to the IPR&D projects are expensed as incurred.The projected discounted cash flow models used to estimate the fair values of the Company’s IPR&D assets, acquired in connection with the Ciclofilin acquisition, reflect significant assumptions regarding the estimates a market participant would make in order to evaluate a drug development asset, including: (i) probability of successfully completing clinical trials and obtaining regulatory approval; (ii) market size, market growth projections, and market share; (iii) estimates regarding the timing of and the expected costs to advance clinical programs to commercialization; (iv) estimates of future cash flows from potential product sales; and (v) a discount rate. These assumptions are based on significant inputs not observable in the market and thus represent Level 3 measurements within the fair value hierarchy. The use of different inputs and assumptions could increase or decrease our estimated discounted future cash flows, the resulting estimated fair values and the amounts of related impairments, if any. If IPR&D becomes impaired or is abandoned, the carrying value of the IPR&D is written down to its revised fair value with the related impairment charge recognized in the period in which the impairment occurs. If the carrying value of the asset becomes impaired as the result of unfavorable data from any ongoing or future clinical trial, changes in assumptions that negatively impact projected cash flows, or because of any other information regarding the prospects of successfully developing or commercializing the Company’s programs, the Company could incur significant charges in the period in which the impairment occurs. There was no impairment of IPR&D for the year ended December 31, 2018, the transition period ended December 31, 2017 or the fiscal year ended June 30, 2017. The discount rates applied to the estimated cash flows for the Company’s December 31, 2018 IPR&D impairment test was 35%, depending on the overall risk associated with the particular asset and other market factors. The Company believes the discount rates and other inputs and assumptions are consistent with those that a market participant would use. Our assumed discount rate used in the impairment assessment would have to change by more than 800 basis points for there to be a material change in our analysis. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carry-forwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which the Company expects to recover or settle those temporary differences. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in the results of operations in the period that includes the enactment date. The Company reduces the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that the Company will not realize some or all of the deferred tax asset. The Company accounts for uncertain tax positions by recognizing the financial statement effects of a tax position only when, based upon technical merits, it is ‘‘more-likely-than-not’’ that the position will be sustained upon examination. Potential interest and penalties associated with unrecognized tax positions are recognized in income tax expense. In conjunction with the acquisition of Ciclofilin in June 2016, a deferred tax liability of $1.3 million was recorded reflecting the difference between the book basis and tax basis of acquired IPR&D. Such deferred income tax liability cannot be used to offset the deferred tax assets when analyzing the Company’s valuation allowance as the acquired IPR&D is considered to have an indefinite life until the Company completes or abandons development of the related IPR&D. The re-measurement of the deferred tax balances to the new corporate rate was completed as of December 31, 2017 and resulted in an adjustment of approximately $900,000 recorded as a reduction in the deferred tax liability offset by a credit to Income Tax benefit at that time. The 2017 Tax Act also changed the Net Operating Loss carryforwards' period to now have an indefinite life. The Company performed an evaluation with regard to the impact of Deferred Tax Assets ("DTA") that were generated by Temporary Differences (such as Stock Compensation, Accrued Vacation, depreciation, etc.) which would reverse and turn into indefinite lived NOL carryforwards and whether the Deferred Tax Liability associated with In-Process R&D could be used to offset indefinite lived DTAs. In March 2018, the Company recorded an adjustment to the valuation allowance in the approximate amount of $536,000 This adjustment reflects the adjustment allowed by the Tax Cuts and Jobs Act of 2017 to utilize indefinite deferred tax liabilities as a source of income against indefinite lived portions of the Company's deferred tax assets in conjunction with the evaluation of the amount of valuation allowance needed.. |
Contingencies | Contingencies In the normal course of business, the Company is subject to loss contingencies, such as legal proceedings and claims arising out of its business that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, and tax matters. In accordance with ASC Topic 450, Accounting for Contingencies, (“ASC 450”), the Company records accruals for such loss contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. The Company, in accordance with this guidance, does not recognize gain contingencies until realized. |
Research and Development | Research and Development Research and development costs, which include expenditures in connection with an in‑house research and development laboratory, salaries and staff costs, application and filing for regulatory approval of proposed products, purchased in‑process research and development, license costs, regulatory and scientific consulting fees, as well as contract research, insurance and FDA consultants, are accounted for in accordance with ASC Topic 730, Research and Development, (“ASC 730”). Also, as prescribed by this guidance, patent filing and maintenance expenses are considered legal in nature and therefore classified as general and administrative expense, if any. The Company does not currently have any commercial biopharmaceutical products, and does not expect to have such for several years if at all. Accordingly, the Company’s research and development costs are expensed as incurred. While certain of the Company’s research and development costs may have future benefits, the Company’s policy of expensing all research and development expenditures is predicated on the fact that the Company has no history of successful commercialization of product candidates to base any estimate of the number of future periods that would be benefited. Also as prescribed by ASC 730, non‑refundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. As the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided, the deferred amounts would be recognized as an expense. At December 31, 2018 and December 31, 2017, the Company had prepaid research and development costs of $41,514 and $32,903, respectively. |
Share-based payments | Share-based payments ASC Topic 718 “Compensation—Stock Compensation” (“ASC 718”) requires companies to measure the cost of employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. Generally, the Company issues stock options with only service-based vesting conditions and records the expense for these awards using the straight-line method. The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The Company has a limited trading history in its common stock and lacks company-specific historical and implied volatility information. Therefore, it estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies and expects to continue to do so until such time as it has adequate historical data regarding the volatility of its own traded stock price. The expected term of the Company’s stock options has been determined utilizing the “simplified” method for awards that qualify as “plain-vanilla” options. The expected term of stock options granted to non-employees is equal to the contractual term of the option award. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company accounts for stock options issued to non-employees in accordance with ASC Topic 505-50 “Equity-Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. At the end of each financial reporting period prior to completion of the service, the fair value of these awards is remeasured using the then-current fair value of the Company’s common stock and updated assumption inputs in the Black-Scholes option-pricing model. ASC 718 requires that cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for options exercised (excess tax benefits) be classified as cash inflows from financing activities and cash outflows from operating activities. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”) (see Note 4) which states that excess tax benefits should be classified along with other income tax cash flows as an operating activity. This guidance is effective for the Company for annual reporting periods beginning after December 15, 2017, with early adoption permitted. Due to the Company’s accumulated deficit position, no excess tax benefits have been recognized. |
Foreign Exchange | Foreign Exchange The functional currency of ContraVir and ContraVir Research Inc. is the U.S. dollar. The functional currency of ContraVir Research Corp. is the Canadian dollar. The Company’s reporting currency is the U.S. dollar. The assets and liabilities of Ciclofilin are translated into U.S. dollars using period-end exchange rates; income and expenses are translated using the average exchange rates for the reporting period. Unrealized foreign currency translation adjustments are deferred in accumulated other comprehensive loss, a separate component of shareholders’ equity. The amount of currency translation adjustment was immaterial at December 31, 2018, December 31, 2017, and June 30, 2017. Transactions in foreign currencies are remeasured into the functional currency of the relevant subsidiaries at the exchange rate in effect at the date of the transaction. Any monetary assets and liabilities arising from these transactions are translated into the functional currency at exchange rates in effect at the balance sheet date or on settlement. Resulting gains and losses are recorded in other foreign exchange (gain) loss within the consolidated statements of operations. The impact of foreign exchange gains (losses) was immaterial at December 31, 2018, December 31, 2017, and June 30, 2017. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company, through its chief operating decision maker, views its operations and manages the business in one segment. |
Net loss per share | Net loss per share Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC 260”) for all periods presented. In accordance with this guidance, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. |
Reclassifications | Reclassifications Certain prior period balances have been reclassified to conform with the current year presentation. Such reclassification had no impact on the Company’s financial position, results of operations or cash flows in those years. |
Immaterial Correction of Misstatements | Immaterial Correction of Misstatements Subsequent to the issuance of the unaudited condensed consolidated financial statements as of and for the three and nine months ended September 30, 2018 filed on Form 10-Q, the Company determined that a reclassification was required to correct the disclosure of the components of total stockholders’ equity, namely to increase the amount of Series C convertible preferred stock and to decrease the amount of additional paid-in capital in the approximate amount of $835,000. The reclassification had no effect on total stockholders’ equity; net loss, cash flows or the Company’s financial position as previously reported. The Company also determined that a revision was required to adjust an over accretion upon conversion of the Series C preferred stock to common stock resulting in an adjustment to decrease the previously reported Deemed Dividend and to decrease the amount of Net loss Attributable to Common Shareholders in the approximate amount of $500,000. This adjustment had no impact to net loss or cash flows of the Company or the Company’s financial position as previously reported and was determined to be immaterial and was corrected as an out of period adjustment in the year ended December 31, 2018. In connection with the preparation of the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 2018 the Company identified a $0.5 million reduction to the Company’s deferred tax liabilities that should have been recorded to the valuation allowance to reflect the adjustment allowed by the 2017 Tax Act to utilize indefinite deferred tax liabilities as a source of income against indefinite lived portions of the Company’s deferred tax assets in conjunction with the evaluation of the amount of valuation allowance needed. This adjustment was determined to be immaterial and was corrected as an out of period adjustment recorded in the quarter ended March 31, 2018. |
Stockholder's Equity and Deriva
Stockholder's Equity and Derivative Liability - Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Schedule of changes in derivative financial instruments liability balance | Number of Derivative Warrants Instrument Date Description Outstanding Liability 6/30/2017 Balance of derivative financial instruments liability 1,426,848 $ 1,702,231 Change in fair value of warrants for the transition period ended December 31, 2017 — (1,032,769) 12/31/2017 Balance of derivative financial instruments liability 1,426,848 669,462 Issuance of warrants on July 3, 2018 6,224,950 5,091,373 Change in fair value of warrant liability related to warrant exercise (92,000) (41,132) Derecognition of warrants (34,136) Change in fair value of warrants for the year ended December 31, 2018 (5,281,230) 12/31/2018 Balance of derivative financial instruments liability 7,559,798 $ 404,337 |
October 13 2015 | |
Schedule to measure warrants at issuance and remeasure the liability | December 31, 2018 December 31, 2017 Price of ContraVir common stock $ 0.28 $ 2.88 Expected warrant term (years) 1.78 years 2.78 years Risk-free interest rate 2.48 % 2.09 % Expected volatility 74 % 67 % Dividend yield — — |
April 4 2016 | |
Schedule to measure warrants at issuance and remeasure the liability | December 31, 2018 December 31, 2017 Price of ContraVir common stock $ 0.28 $ 2.88 Expected warrant term (years) 2.26 years 3.00 years Risk-free interest rate 2.48 % 2.09 % Expected volatility 74 % 67 % Dividend yield — — |
April 25 2017 | |
Schedule to measure warrants at issuance and remeasure the liability | December 31, 2018 July 3, 2018 Price of ContraVir common stock $ 0.28 $ 1.36 Expected warrant term (years) 4.50 years 5.00 years Risk-free interest rate 2.51 % 2.72 % Expected volatility 74 % 75 % Dividend yield — — |
July 3 2018 | |
Schedule to measure warrants at issuance and remeasure the liability | December 31, 2018 December 31, 2017 Price of ContraVir common stock $ 0.28 $ 2.88 Expected warrant term (years) 3.31 years 4.00 years Risk-free interest rate 2.46 % 2.09 % Expected volatility 74 % 68 % Dividend yield — — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurements | |
Schedule of table represents the liabilities measured and recognized at fair value on a recurring basis | Quoted Prices in Significant Active Markets for Other Significant Identical Assets Observable Unobservable and Liabilities Inputs Inputs Description Fair value (Level 1) (Level 2) (Level 3) As of December 31, 2018 Convertible Debt $ (1,440,000) $ — $ — $ (1,440,000) Contingent consideration $ (2,590,000) $ — $ — $ (2,590,000) Derivative liabilities related to warrants $ (404,337) $ — $ — $ (404,337) As of December 31, 2017 Contingent consideration $ (3,380,000) $ — $ — $ (3,380,000) Derivative liabilities related to warrants $ (669,462) $ — $ — $ (669,462) |
Schedule of changes in fair value of level 3 convertible debt | Fair Value of Convertible Debt Balance at May 8, 2018 $ (2,000,000) Change in fair value (108,942) Repayment of principal of debt financing 668,942 Balance at December 31, 2018 $ (1,440,000) |
Schedule of changes in fair value of contingent consideration | Acquisition- related Contingent Consideration Liabilities Balance at June 30, 2017 $ 3,410,000 Change in fair value recorded in earnings (30,000) Balance at December 31, 2017 3,380,000 Settlement of first clinical milestone (1,055,398) Change in fair value recorded in earnings 265,398 Balance at December 31, 2018 $ 2,590,000 |
Indefinite-lived Intangible A_2
Indefinite-lived Intangible Assets and Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Indefinite-lived Intangible Assets and Goodwill | |
Schedule of IPR&D asset | December 31, 2018 December 31, 2017 CRV431 $ 3,190,000 $ 3,190,000 |
Schedule of roll-forward of goodwill balance | Amount Goodwill balance at July 1, 2017 $ 1,870,924 Changes for the transition period ended December 31, 2017 — Goodwill balance at December 31, 2017 1,870,924 Changes for the year ended December 31, 2018 — Goodwill balance at December 31, 2018 $ 1,870,924 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities | |
Schedule of accrued liabilities | For the transition Year ended period Ended December 31, 2018 December 31, 2017 Payroll and related costs $ 280,235 $ 539,063 Research and development 184,120 322,842 Professional fees 151,812 75,934 Legal fees 34,072 81,550 Other 11,182 27,309 Total accrued expenses $ 661,421 $ 1,046,698 |
Accounting for Share-Based Pa_2
Accounting for Share-Based Payments (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting for Share-Based Payments | |
Schedule of stock based compensation expense | For the transition Year ended Period ended December 31, 2018 December 31, 2017 General and administrative $ 271,644 $ 509,072 Research and development (37,134) 236,669 Total stock-based compensation expense $ 234,510 $ 745,741 |
Summary of stock option activity and of changes in stock options outstanding under the Plan | Weighted Weighted Average Average Number of Exercise Price Exercise Price Intrinsic Remaining Options Per Share Per Share Value Contractual Term Balance outstanding, June 30, 2017 810,148 $ 0.88 - $ 30.64 $ 12.32 301,011 7.72 years Granted 45,000 $ 2.96 - $ 4.96 $ 4.16 Cancelled (2,500) $ 4.00 - $ 4.96 $ 4.48 Balance outstanding, December 31, 2017 852,648 $ 0.88 - $ 30.64 $ 11.84 5,958 7.00 years Forfeited (126,184) $ 2.96 - $ 16.08 $ 9.44 Cancelled (83,868) $ 4.64 - $ 20.48 $ 1.82 Balance outstanding, December 31, 2018 642,596 $ 0.88 - $ 30.64 $ 12.32 6.02 years Vested awards and those expected to vest at December 31, 2018 639,940 $ 0.88 - $ 30.64 $ 12.66 — 6.06 years Vested and exercisable at December 31, 2018 616,115 $ 0.88 - $ 30.64 $ 12.82 — 6.02 years |
Schedule of weighted-average assumptions used to estimate fair value of stock option awards granted to employees | For the transition period ended Year Ended December 31, 2017 June 30, 2017 Stock price $ 4.16 $ 11.12 Risk-free interest rate 1.64 % 1.86 % Dividend yield — — Expected volatility 73.05 % 79.18 % Expected term (in years) 6 years 6 years |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes | |
Schedule of components of deferred tax assets and liabilities | As of As of As of December 31, 2018 December 31, 2017 June 30, 2017 Federal net operating loss (“NOL”) $ 13,600,500 $ 12,054,400 $ 17,050,000 State NOL 2,116,300 1,148,800 1,597,000 Canadian NOL 1,978,500 1,140,000 560,300 Research and development credits 1,043,300 696,400 522,300 Stock Compensation & Other 1,206,300 1,000,100 1,232,500 Deferred tax asset valuation allowance (19,348,600) (16,039,700) (20,962,100) Total Deferred Tax Asset $ 596,300 $ — $ — Deferred tax liability (In-Process R&D ) $ (957,000) $ (896,700) $ (1,269,600) Total Deferred Tax Liability $ (957,000) $ — $ — Net Deferred Tax Liability $ (360,700) $ (896,700) $ (1,269,600) |
Schedule of effective income tax rate (as a percent) | For the transition period ended Year Ended December 31, December 31, 2018 2017 U.S. statutory income tax rate 21.0 % 34.0 % State income taxes, net of federal benefit 7.3 (6.6) Sale of New Jersey tax benefits — 16.9 Research and development credits (3.7) 1.9 Net operating loss — — Warrant liability 10.9 3.9 Rate change — (78.3) Foreign Tax Differential 1.7 — Other (1.6) — Valuation allowance (30.3) 49.1 Effective tax rate 5.3 % 20.9 % |
Loss per Share (Tables)
Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Loss per Share | |
Schedule of computation of basic and diluted net loss per share | For the transition Year ended period ended Year ended Basic net (loss) income per common share December 31, 2018 December 31, 2017 June 30, 2017 Numerator: Net loss attributable to common stockholders - basic $ (17,901,146) $ (7,511,092) $ (14,891,050) Denominator: Basic weighted average common shares outstanding 12,871,530 9,678,329 7,286,304 Net loss per share of common stock—basic $ (1.39) $ (0.78) $ (2.04) Diluted net (loss) income per common share Numerator: Net loss attributable to common stockholders - basic $ (17,901,146) $ (7,511,092) $ (14,891,050) Less: reversal of gain on warrants — — (2,698,015) Net loss attributable to common stockholders - diluted $ (17,901,146) $ (7,511,092) $ (17,589,065) Denominator: Basic weighted average common shares outstanding 12,871,530 9,678,329 7,286,304 Effect of dilutive securities Exercise of warrants — — 6,023 Weighted average shares used to compute diluted net loss per share 12,871,530 9,678,329 7,292,327 Net loss per share of common stock—diluted $ (1.39) $ (0.78) $ (2.41) |
Schedule of outstanding securities excluded from the computation of diluted weighted shares outstanding | For the transition Year ended period ended Year ended December 31, 2018 December 31, 2017 June 30, 2017 Common shares issuable upon conversion of Series A preferred stock 222,867 270,867 270,867 Common shares issuable upon conversion of Series C preferred stock 1,273,548 — — Stock options 642,596 852,648 810,148 Warrants – liability classified 7,559,798 1,426,849 676,849 Warrants – equity classified 279,381 — — Total 9,978,190 2,550,364 1,757,864 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies | |
Schedule of annual rental payments | The following table summarizes annual rental payments for each of the following fiscal years ended December 31, 2018: 2019 $ 202,734 2020 194,529 2021 209,170 2022 and thereafter 266,290 Total $ 872,723 |
Year Ended December 31, 2017 _2
Year Ended December 31, 2017 Comparative Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Year Ended December 31, 2017 Comparative Data (Unaudited) | |
Schedule of Comparative Data | For the year ended December 31, 2017 Revenues $ — Costs and Expenses: Research and development 13,368,165 General and administrative 7,277,951 Loss From Operations (20,646,116) Other Income (Expense): Change in fair value of derivative instruments—warrants and contingent consideration 5,618,598 Loss before income taxes (15,027,518) Income tax benefit 1,947,760 Net loss $ (13,079,758) Weighted Average Common Shares Outstanding Basic and Diluted 9,678,329 Net loss per Common Share Basic and Diluted $ (1.35) |
Business Overview (Details)
Business Overview (Details) | 12 Months Ended | |
Dec. 31, 2018product | Jun. 10, 2016subsidiary | |
Business Overview | ||
Novel compounds in development (number) | product | 2 | |
Ciclofilin | ||
Business Overview | ||
Number of wholly-owned subsidiary | subsidiary | 1 |
Basis of Presentation and Goi_2
Basis of Presentation and Going Concern - Going Concern (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | |
Going Concern | |||
Cash | $ 5,954,017 | $ 2,832,429 | |
Net cash used in operating activities | (8,209,286) | (15,646,027) | $ (19,172,110) |
Net loss | (7,511,092) | (9,449,295) | $ (14,891,050) |
Accumulated deficit | (67,014,637) | (76,463,932) | |
Working capital | $ 3,500,000 | $ 100,000 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Cash (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Summary of Significant Accounting Policies | ||
Cash | $ 2,832,429 | $ 5,954,017 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Derivative Financial Instruments (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative Financial Instruments | ||
Derivative financial instruments, at estimated fair value-warrants | $ 404,337 | $ 669,462 |
Level 3 | Warrants | ||
Derivative Financial Instruments | ||
Derivative financial instruments, at estimated fair value-warrants | $ 400,000 | $ 700,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Property, equipment and depreciation (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | |
Property, equipment and depreciation | |||
Property and equipment, net | $ 56,595 | $ 32,434 | |
Depreciation expense | 10,969 | 18,787 | $ 27,993 |
Carrying value adjustments | $ 0 | $ 0 | |
Minimum | |||
Property, equipment and depreciation | |||
Estimated useful life | 2 years | ||
Maximum | |||
Property, equipment and depreciation | |||
Estimated useful life | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Goodwill and In-Process Research and Development (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | |
Goodwill | |||
Impairment on intangible asset and goodwill | $ 0 | ||
Impairment on goodwill | $ 0 | 0 | $ 0 |
IPR&D | |||
Goodwill | |||
Impairment of IP&D | $ 0 | $ 0 | $ 0 |
Discount rates for impairment test (as a percent) | 35.00% | ||
Discount rate of basis points | 8.00% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 10, 2016 | |
Income Taxes | |||||
Deferred tax liability | $ 896,700 | $ 360,700 | $ 896,700 | ||
Reduction in the deferred tax liability | $ 900,000 | ||||
Deferred tax liability adjustment | $ 536,000 | $ (372,920) | $ (536,000) | ||
Ciclofilin | |||||
Income Taxes | |||||
Deferred tax liability | $ 1,300,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Research and Development | ||
Prepaid research and development costs | $ 41,514 | $ 32,903 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Share-based payments (Details) - ASU 2016-09 | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Share-based payments | |
Excess tax benefits financing activities | $ 0 |
Excess tax benefits operating activities | $ 0 |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Segment Information (Details) | 12 Months Ended |
Dec. 31, 2018segment | |
Summary of Significant Accounting Policies | |
Number of operating segments | 1 |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Immaterial Correction of Misstatements (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2018 | |
Reclassifications | ||
Deferred tax liability adjustment | $ 500,000 | |
Series C convertible preferred stock | ||
Reclassifications | ||
Adjustments made to additional paid in capital | $ 835,000 | |
Prior period reclassification adjustment | $ 500,000 |
Debt (Details)
Debt (Details) | May 09, 2018USD ($)trancheD$ / shares | Nov. 30, 2018USD ($) | Dec. 31, 2018USD ($) |
Debt | |||
Aggregate purchase price in cash | $ 2,000,000 | ||
Debt discount | $ 225,000 | ||
Secured convertible promissory note | |||
Debt | |||
Aggregate principal amount | 3,325,000 | ||
Aggregate purchase price in cash | 2,000,000 | ||
Original issue discount | 300,000 | ||
Initial principal amount | $ 2,225,000 | ||
Debt issuance costs | 200,000 | ||
Bearing interest rate (as percent) | 10.00% | ||
Maximum monthly redemption amount | $ 500,000 | ||
Stock price (in dollars per share) | $ / shares | $ 1.60 | ||
Redemption price (as percent) | 80.00% | ||
Number of consecutive trading days (in days) | D | 20 | ||
Debt discount | $ 200,000 | ||
Cash redemption payments | $ 800,000 | 800,000 | |
Payment on redemption interest | 131,058 | ||
Remaining principal amount | $ 1,600,000 | ||
Secured convertible promissory note | Maximum | |||
Debt | |||
Redemption price per share | $ / shares | $ 1.60 | ||
Secured convertible promissory note | Investor Notes | |||
Debt | |||
Aggregate principal amount | $ 1,000,000 | ||
Number of tranches | tranche | 4 | ||
Periodic payment of debt | $ 250,000 | ||
Debt discount | $ 25,000 |
Stockholders' Equity and Deri_2
Stockholders' Equity and Derivative Liability - Warrants - Preferred stock, Common Stock and Warrant Offering (Details) - shares | 12 Months Ended | 26 Months Ended |
Dec. 31, 2018 | Sep. 30, 2018 | |
Preferred stock, Common Stock and Warrant Offering | ||
Number of shares converted | 8,852 | |
Number of common shares issued upon conversion | 5,710,963 | |
Common Stock | ||
Preferred stock, Common Stock and Warrant Offering | ||
Number of common shares issued upon conversion | 3,000,000 | |
Series A convertible preferred stock | ||
Preferred stock, Common Stock and Warrant Offering | ||
Number of shares converted | 1,200,000 |
Stockholders' Equity and Deri_3
Stockholders' Equity and Derivative Liability - Warrants - Series C Preferred Stock Issuances and Beneficial Conversion Feature (Details) - USD ($) | Jul. 03, 2018 | Dec. 31, 2018 |
Preferred stock, Common Stock and Warrant Offering | ||
Sales of units (in units) | 10,826 | |
Sales price per unit | $ 1,000 | |
Net proceeds from sale of stock | 9,900,000 | $ 10,414,741 |
Underwriting discount and other offering expenses payable | $ 900,000 | |
Redemption price per warrant | $ 0.01 | |
Required common stock price to redeem warrants | $ 6.20 | |
Number of common shares converted to common stock | 8,852 | |
Number of common shares to be issued for each share converted (in shares) | 5,710,963 | |
Deemed dividend charged to additional paid in capital | $ 4,700,000 | |
Stock issuance costs | 500,000 | |
Over-Allotment Option | ||
Preferred stock, Common Stock and Warrant Offering | ||
Warrants offered placement fee | 279,381 | |
Price of ContraVir common stock | $ 1.71 | |
Fair value of warrants | $ 200,000 | |
Series C convertible preferred stock | ||
Preferred stock, Common Stock and Warrant Offering | ||
Sale of shares (in shares) | 10,826 | |
Beneficial conversion amount accreted back as preferred stock | 3,800,000 | |
Amount of beneficial conversion feature | $ 3,771,639 | |
Percentage of preferred stock convertible immediately | 100.00% | |
Series C convertible preferred stock | Over-Allotment Option | ||
Preferred stock, Common Stock and Warrant Offering | ||
Fair value of warrants | $ 100,000 | |
Warrants | ||
Preferred stock, Common Stock and Warrant Offering | ||
Number of common stock offered by company to sale | 575 | |
Warrants issued (in shares) | 6,224,950 | |
Exercise price of warrants (in dollars per share) | $ 1.55 | |
Warrants | Over-Allotment Option | ||
Preferred stock, Common Stock and Warrant Offering | ||
Fair value of warrants | $ 100,000 |
Stockholders' Equity and Deri_4
Stockholders' Equity and Derivative Liability - Warrants - Controlled Equity Offering Sales Agreement (Details) - USD ($) | Mar. 09, 2015 | Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 |
Controlled equity offering sales agreement | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||
Net proceeds from sale of stock | $ 1,180,555 | $ 1,635,140 | $ 24,659,760 | |
Controlled Equity Offering Sales Agreement | ||||
Controlled equity offering sales agreement | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | |||
Maximum aggregate offering price | $ 50,000,000 | |||
Selling agent fee as a percentage of gross sales price per share sold | 3.00% | |||
Sale of shares (in shares) | 280,100 | 766,300 | ||
Net proceeds from sale of stock | $ 1,200,000 | $ 1,600,000 |
Stockholders' Equity and Deri_5
Stockholders' Equity and Derivative Liability - Warrants - Common Stock and Warrant Offering (Details) | Jul. 03, 2018USD ($)$ / shares | Apr. 25, 2017USD ($)$ / sharesshares | Apr. 04, 2016USD ($)$ / sharesshares | Oct. 13, 2015USD ($)$ / shares$ / itemshares | Dec. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Jun. 30, 2017shares |
Common Stock and Warrant Offering | ||||||||
Underwriting discount and other offering expenses payable | $ 900,000 | |||||||
Derivative financial instruments liability - warrants | $ 669,462 | $ 404,337 | $ 669,462 | |||||
Level 3 | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Derivative financial instruments liability - warrants | $ 700,000 | $ 400,000 | $ 700,000 | |||||
Over-Allotment Option | ||||||||
Common Stock and Warrant Offering | ||||||||
Price of ContraVir common stock | $ / shares | $ 1.71 | |||||||
October 13 2015 | ||||||||
Common Stock and Warrant Offering | ||||||||
Sale of shares (in shares) | shares | 625,000 | |||||||
Fixed combined price (in dollars per share) | $ / shares | $ 24 | |||||||
Gross proceeds | $ 15,000,000 | |||||||
Underwriting discount and other offering expenses payable | 1,500,000 | |||||||
Additional proceeds if warrants exercised in full | $ 12,800,000 | |||||||
Price of ContraVir common stock | $ / shares | $ 2.88 | $ 0.28 | $ 2.88 | |||||
Expected warrant term (years) | 1 year 9 months 11 days | 2 years 9 months 11 days | ||||||
Risk-free interest rate (as a percent) | 2.48% | 2.09% | ||||||
Expected volatility (as a percent) | 74.00% | 67.00% | ||||||
October 13 2015 | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Warrants issued (in shares) | shares | 375,000 | |||||||
Exercise period for warrants | 5 years | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 34 | |||||||
October 13 2015 | Level 3 | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Derivative financial instruments liability - warrants | $ 4,400,000 | |||||||
October 13 2015 | Over-Allotment Option | ||||||||
Common Stock and Warrant Offering | ||||||||
Underwriter option period | 45 days | |||||||
Authorized for sale (in shares) | shares | 93,750 | |||||||
Purchase price (in dollars per unit) | $ / item | 24 | |||||||
October 13 2015 | Over-Allotment Option | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Number of warrants offered for sale | shares | 56,250 | |||||||
April 4 2016 | ||||||||
Common Stock and Warrant Offering | ||||||||
Sale of shares (in shares) | shares | 616,197 | |||||||
Fixed combined price (in dollars per share) | $ / shares | $ 11.36 | |||||||
Gross proceeds | $ 7,000,000 | |||||||
Underwriting discount and other offering expenses payable | 700,000 | |||||||
Additional proceeds if warrants exercised in full | $ 4,200,000 | |||||||
Price of ContraVir common stock | $ / shares | 2.88 | $ 0.28 | $ 2.88 | |||||
Expected warrant term (years) | 2 years 3 months 4 days | 3 years | ||||||
Risk-free interest rate (as a percent) | 2.48% | 2.09% | ||||||
Expected volatility (as a percent) | 74.00% | 67.00% | ||||||
April 4 2016 | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Warrants issued (in shares) | shares | 308,098 | |||||||
Exercise period for warrants | 5 years | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 13.60 | |||||||
April 4 2016 | Level 3 | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Derivative financial instruments liability - warrants | $ 1,500,000 | |||||||
April 25 2017 | ||||||||
Common Stock and Warrant Offering | ||||||||
Sale of shares (in shares) | shares | 1,500,000 | |||||||
Fixed combined price (in dollars per share) | $ / shares | $ 8 | |||||||
Gross proceeds | $ 12,000,000 | |||||||
Underwriting discount and other offering expenses payable | 500,000 | |||||||
Additional proceeds if warrants exercised in full | $ 7,500,000 | |||||||
Price of ContraVir common stock | $ / shares | $ 2.88 | $ 0.28 | $ 2.88 | |||||
Expected warrant term (years) | 3 years 3 months 22 days | 4 years | ||||||
Risk-free interest rate (as a percent) | 2.46% | 2.09% | ||||||
Expected volatility (as a percent) | 74.00% | 68.00% | ||||||
April 25 2017 | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Warrants issued (in shares) | shares | 750,000 | |||||||
Exercise period for warrants | 5 years | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 10 | |||||||
April 25 2017 | Level 3 | Warrants | ||||||||
Common Stock and Warrant Offering | ||||||||
Derivative financial instruments liability - warrants | $ 4,000,000 | |||||||
July 3 2018 | ||||||||
Common Stock and Warrant Offering | ||||||||
Price of ContraVir common stock | $ / shares | $ 1.36 | $ 0.28 | ||||||
Expected warrant term (years) | 5 years | 4 years 6 months | ||||||
Risk-free interest rate (as a percent) | 2.72% | 2.51% | ||||||
Expected volatility (as a percent) | 75.00% | 74.00% | ||||||
Common Stock | ||||||||
Common Stock and Warrant Offering | ||||||||
Sale of shares (in shares) | shares | 329,078 | 2,305,235 |
Stockholders' Equity and Deri_6
Stockholders' Equity and Derivative Liability - Warrants - Components of changes (Details) - Warrants - USD ($) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2018 | |
Number of Warrants Outstanding | ||
Balance at the beginning of the period (in shares) | 1,426,848 | 1,426,848 |
Issuance of Warrants (in shares) | 6,224,950 | |
Change in fair value of warrant liability related to warrant exercise (in shares) | (92,000) | |
Balance at end of period (in shares) | 1,426,848 | 7,559,798 |
Level 3 | ||
Derivative Instrument Liability | ||
Balance at the beginning of the period | $ 1,702,231 | $ 669,462 |
Issuance of Warrants | 5,091,373 | |
Change in fair value of warrant liability related to warrant exercise | (1,032,769) | (41,132) |
Derecognition of warrants | (34,136) | |
Change in fair value of warrants | (5,281,230) | |
Balance at end of period | $ 669,462 | $ 404,337 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 10, 2016 | Oct. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2018 |
Fair value measurements | |||||
Contingent consideration | $ (3,380,000) | $ (2,590,000) | $ (2,590,000) | ||
Discount rate (as a percent) | 6.50% | ||||
Stock price | $ 0.28 | ||||
Change in fair value of contingent consideration | |||||
Repayment of principal of debt financing | 668,942 | ||||
Settlement of first milestone in fair value of common stock | $ 55,398 | ||||
Ciclofilin | |||||
Change in fair value of contingent consideration | |||||
Settlement of first milestone in cash | $ 1,000,000 | ||||
Settlement of first milestone in shares of common stock | 100,737 | ||||
Settlement of first milestone in fair value of common stock | $ 55,398 | ||||
Settlement of first milestone in percentage of issued and outstanding common stock | 2.50% | ||||
Convertible debt | |||||
Fair value measurements | |||||
Stock volatality (in percent) | 80.00% | ||||
Risk-free rate (in percent) | 2.61% | ||||
Assumed term (in years) | 10 months 6 days | ||||
Default Intensity (in percent) | 23.70% | ||||
Recovery rate (in percent) | 30.00% | ||||
Level 3 | Contingent Consideration | |||||
Change in fair value of contingent consideration | |||||
Balance at beginning of the period | 3,410,000 | $ 3,380,000 | |||
Change in fair value | (30,000) | 265,398 | |||
Settlement of first clinical milestone | (1,055,398) | ||||
Balance at end of the period | 3,380,000 | 2,590,000 | 2,590,000 | ||
Level 3 | Convertible debt | |||||
Change in fair value of contingent consideration | |||||
Balance at beginning of the period | (2,000,000) | ||||
Change in fair value | (108,942) | ||||
Repayment of principal of debt financing | 668,942 | ||||
Balance at end of the period | (1,440,000) | (1,440,000) | |||
Recurring basis | |||||
Fair value measurements | |||||
Convertible Debt | (1,440,000) | (1,440,000) | |||
Contingent consideration | (3,380,000) | (2,590,000) | (2,590,000) | ||
Derivative liabilities related to Warrants | (669,462) | (404,337) | (404,337) | ||
Recurring basis | Level 3 | |||||
Fair value measurements | |||||
Convertible Debt | (1,440,000) | (1,440,000) | |||
Contingent consideration | (3,380,000) | (2,590,000) | (2,590,000) | ||
Derivative liabilities related to Warrants | $ (669,462) | $ (404,337) | $ (404,337) |
Indefinite-lived Intangible A_3
Indefinite-lived Intangible Assets and Goodwill - IPR&D (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | |
Indefinite-lived Intangible Assets | |||
In-process research and development | $ 3,190,000 | $ 3,190,000 | |
IPR&D | |||
Indefinite-lived Intangible Assets | |||
In-process research and development | 3,190,000 | 3,190,000 | |
Impairment losses on IPR&D | $ 0 | $ 0 | $ 0 |
Indefinite-lived Intangible A_4
Indefinite-lived Intangible Assets and Goodwill - Goodwill (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Roll-forward of goodwill balance | ||
Beginning balance | $ 1,870,924 | $ 1,870,924 |
Ending balance | $ 1,870,924 | $ 1,870,924 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accrued Liabilities | ||
Payroll and related costs | $ 280,235 | $ 539,063 |
Research and development | 184,120 | 322,842 |
Professional fees | 151,812 | 75,934 |
Legal fees | 34,072 | 81,550 |
Other | 11,182 | 27,309 |
Total accrued expenses | 661,421 | $ 1,046,698 |
Severance costs | 1,300,000 | |
Severance costs included in payroll and related costs | $ 36,000 |
Accounting for Share-Based Pa_3
Accounting for Share-Based Payments - Equity Incentive Plan (Details) - USD ($) | Jun. 03, 2013 | Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | Feb. 21, 2018 | Dec. 14, 2016 | Dec. 02, 2014 |
Stock based compensation expense | |||||||
Stock-based compensation expense | $ 745,741 | $ 234,510 | $ 1,700,225 | ||||
Equity Incentive Plan | |||||||
Accounting for Shared-Based Payments | |||||||
Vesting period (in years) | 3 years | ||||||
Contractual term | 10 years | ||||||
Authorized shares (in shares) | 1,337,500 | 962,500 | 812,500 | ||||
Available shares (in shares) | 109,851 | 694,904 | |||||
Stock based compensation expense | |||||||
Stock-based compensation expense | $ 745,741 | $ 234,510 | |||||
General and administrative | Equity Incentive Plan | |||||||
Stock based compensation expense | |||||||
Stock-based compensation expense | 509,072 | 271,644 | |||||
Research and development | Equity Incentive Plan | |||||||
Stock based compensation expense | |||||||
Stock-based compensation expense | $ 236,669 | $ (37,134) |
Accounting for Share-Based Pa_4
Accounting for Share-Based Payments - Activity (Details) - USD ($) | Jul. 01, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 |
Number of Options | |||||
Granted (in shares) | 0 | ||||
Stock options | |||||
Share-based payments | |||||
Weighted average grant date fair value (in dollars per share) | $ 2.64 | $ 7.44 | |||
Non-employee stock options | |||||
Number of Options | |||||
Balance outstanding at the end of the period (in shares) | 200,000 | ||||
Share-based payments | |||||
Unvested options (in shares) | 19,000 | ||||
Stock options | |||||
Number of Options | |||||
Balance outstanding at the beginning of the period (in shares) | 810,148 | 810,148 | 852,648 | ||
Granted (in shares) | 45,000 | ||||
Cancelled (in shares) | 2,500 | (83,868) | |||
Forfeited (in shares) | (126,184) | ||||
Balance outstanding at the end of the period (in shares) | 810,148 | 852,648 | 642,596 | 810,148 | |
Weighted Average Exercise Price Per Share | |||||
Balance outstanding (in dollars per share) | $ 12.32 | $ 11.84 | $ 12.32 | $ 12.32 | |
Granted (in dollars per share) | 4.16 | ||||
Cancelled (in dollars per share) | $ 4.48 | 1.82 | |||
Forfeited (in dollars per share) | $ 9.44 | ||||
Intrinsic Value | |||||
Balance outstanding at the beginning of the period (in dollars) | $ 301,011 | $ 301,011 | $ 5,958 | ||
Balance outstanding at the end of the period (in dollars) | $ 301,011 | $ 5,958 | $ 301,011 | ||
Weighted Average Remaining Contractual Term (in years) | |||||
Balance outstanding term (in years) | 7 years 8 months 19 days | 7 years | 6 years 7 days | ||
Share-based payments | |||||
Total fair value of shares vested during the period | $ 1,100,000 | ||||
Unrecognized compensation cost related to non-vested stock options outstanding | |||||
Unrecognized compensation cost related to non-vested stock (in dollars) | $ 100,000 | ||||
Weighted average remaining vesting period over which unrecognized compensation is expected to be recognized | 1 year 2 months 27 days | ||||
Stock options | Exercise price range $0.88-$30.64 | |||||
Exercise Price Per Share | |||||
Exercise price, low end of the range (in dollars per share) | $ 0.88 | $ 0.88 | $ 0.88 | ||
Exercise price, high end of the range (in dollars per share) | $ 30.64 | 30.64 | 30.64 | ||
Stock options | Exercise price range $2.96-$4.96 | |||||
Exercise Price Per Share | |||||
Exercise price, low end of the range (in dollars per share) | 2.96 | ||||
Exercise price, high end of the range (in dollars per share) | 4.96 | ||||
Stock options | Exercise price range $4.00-$4.96 | |||||
Exercise Price Per Share | |||||
Exercise price, low end of the range (in dollars per share) | 4 | ||||
Exercise price, high end of the range (in dollars per share) | $ 4.96 | ||||
Stock options | Exercise price range $2.96-$16.08 | |||||
Exercise Price Per Share | |||||
Exercise price, low end of the range (in dollars per share) | 2.96 | ||||
Exercise price, high end of the range (in dollars per share) | $ 16.08 | ||||
Stock options | Exercise price range $4.64-$20.48 | |||||
Number of Options | |||||
Vested awards and those expected to vest at the end of the period (in shares) | 639,940 | ||||
Vested and exercisable at the end of the period (in shares) | 616,115 | ||||
Exercise Price Per Share | |||||
Exercise price, low end of the range (in dollars per share) | $ 4.64 | ||||
Exercise price, high end of the range (in dollars per share) | 20.48 | ||||
Weighted Average Exercise Price Per Share | |||||
Vested awards and those expected to vest at the end of the period (in dollars per share) | 12.66 | ||||
Vested and exercisable at the end of the period (in dollars per share) | $ 12.82 | ||||
Weighted Average Remaining Contractual Term (in years) | |||||
Vested awards and those expected to vest at the end of the period (in years) | 6 years 22 days | ||||
Vested and exercisable at the end of the period (in years) | 6 years 7 days |
Accounting for Share-Based Pa_5
Accounting for Share-Based Payments - Assumptions (Details) - $ / shares | Apr. 01, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 |
Accounting for Shared-Based Payments | |||||||
Granted (in shares) | 0 | ||||||
Weighted-average assumptions to determine fair value of stock option awards | |||||||
Estimated future unvested option forfeitures (as a percent) | 10.00% | ||||||
Actual forfeiture rate (as a percent) | 3.00% | 10.00% | 3.00% | 3.00% | 3.00% | 3.00% | |
Stock options | |||||||
Weighted-average assumptions to determine fair value of stock option awards | |||||||
Stock price (in dollars per share) | $ 4.16 | $ 4.16 | $ 11.12 | ||||
Risk-free interest rate (as a percent) | 1.64% | 1.86% | |||||
Expected volatility (as a percent) | 73.05% | 79.18% | |||||
Expected term (in years) | 6 years | 6 years |
Income Taxes - Deferred Taxes (
Income Taxes - Deferred Taxes (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Mar. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 10, 2016 | |
Loss before income taxes | $ (9,458,852) | $ (9,985,295) | $ (15,027,518) | $ (16,799,053) | |||
Income tax benefit | (1,947,760) | (536,000) | (1,947,760) | (1,908,003) | |||
Income tax benefits resulted from the sale of state net operating losses | 1,500,000 | 0 | $ 1,900,000 | ||||
Adjustment to deferred tax liabilities | 400,000 | 500,000 | |||||
Deferred tax liability adjustment | $ 536,000 | (372,920) | (536,000) | ||||
Additional reduction of deferred tax liability adjustment | $ 500,000 | ||||||
Components of deferred tax assets and liabilities | |||||||
Federal net operating loss ("NOL") | 12,054,400 | 13,600,500 | 12,054,400 | ||||
State NOL | 1,148,800 | 2,116,300 | 1,148,800 | ||||
Canadian NOL | 1,140,000 | 1,978,500 | 1,140,000 | ||||
Research and development credits | 696,400 | 1,043,300 | 696,400 | ||||
Stock Compensation and Other | 1,000,100 | 1,206,300 | 1,000,100 | ||||
Deferred tax asset valuation allowance | (16,039,700) | (19,348,600) | (16,039,700) | ||||
Total Deferred Tax Asset | 596,300 | ||||||
Deferred tax liability ( In-Process Research and Development ) | (896,700) | (957,000) | (896,700) | ||||
Total Deferred Tax Liability | (957,000) | ||||||
Net Deferred Tax Liability | (896,700) | (360,700) | $ (896,700) | ||||
Increase (decrease) in valuation allowance | $ (5,000,000) | $ 3,300,000 | |||||
Ciclofilin | |||||||
Components of deferred tax assets and liabilities | |||||||
Deferred tax liability ( In-Process Research and Development ) | $ (360,700) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Benefit (Details) - USD ($) | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes | |||
U.S. statutory income tax rate (as a percent) | 34.00% | 21.00% | |
State income taxes, net of federal benefit (as a percent) | (6.60%) | 7.30% | |
Reduction in the deferred tax liability | $ 900,000 | ||
Sale of New Jersey tax benefits (as a percent) | 16.90% | ||
Research and development credits (as a percent) | 1.90% | (3.70%) | |
Warrant liability (as a percent) | 3.90% | 10.90% | |
Rate change | (78.30%) | ||
Foreign Tax Differential | 1.70% | ||
Other | (1.60%) | ||
Valuation allowance (as a percent) | 49.10% | (30.30%) | |
Effective tax rate (as a percent) | 20.90% | 5.30% |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) - USD ($) $ in Millions | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2016 |
U.S. federal and state | ||||
Operating loss carryforwards | ||||
Net operating loss carryforwards | $ 88.3 | $ 73.6 | $ 77 | |
Tax credit carry forwards | 1 | |||
Foreign | ||||
Operating loss carryforwards | ||||
Net operating loss carryforwards | $ 7.5 | $ 4.3 | $ 2.1 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) | Dec. 31, 2018USD ($) |
Income Taxes | |
Unrecognized Tax Benefits | $ 0 |
Unrecognized tax benefits, interest and penalties accrued | $ 0 |
(Loss) Income per Share (Detail
(Loss) Income per Share (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Numerator: | ||||
Net loss attributable to common stockholders | $ (7,511,092) | $ (17,901,146) | $ (13,079,758) | $ (14,891,050) |
Denominator: | ||||
Basic weighted average common shares outstanding | 9,678,329 | 12,871,530 | 7,286,304 | |
Net loss per share of common stock-basic | $ (0.78) | $ (1.39) | $ (2.04) | |
Numerator: | ||||
Net loss attributable to common stockholders | $ (7,511,092) | $ (17,901,146) | $ (13,079,758) | $ (14,891,050) |
Less: reversal of gain on warrants | (2,698,015) | |||
Net loss attributable to common stockholders - diluted | $ (7,511,092) | $ (17,901,146) | $ (17,589,065) | |
Denominator: | ||||
Basic weighted average common shares outstanding | 9,678,329 | 12,871,530 | 7,286,304 | |
Effect of dilutive securities | ||||
Exercise of warrants | 6,023 | |||
Weighted average shares used to compute diluted net loss per share | 9,678,329 | 12,871,530 | 7,292,327 | |
Net loss per share of common stock-diluted | $ (0.78) | $ (1.39) | $ (2.41) | |
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 2,550,364 | 9,978,190 | 1,757,864 | |
Series A convertible preferred stock | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 270,867 | 222,867 | 270,867 | |
Series C convertible preferred stock | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 1,273,548 | |||
Stock options | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 852,648 | 642,596 | 810,148 | |
Warrants - liability classified | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 1,426,849 | 7,559,798 | 676,849 | |
Warrants | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 279,381 |
Commitments and Contingencies -
Commitments and Contingencies - License Agreement with Chimerix, Inc. (Details) - USD ($) | Dec. 17, 2014 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Sep. 30, 2016 |
Agreement | ||||||
Research and development | $ 7,163,530 | $ 7,593,715 | $ 13,368,165 | $ 13,651,987 | ||
Number of common shares to be issued for each share converted (in shares) | 5,710,963 | |||||
License Agreement | Chimerix, Inc. | ||||||
Agreement | ||||||
Potential milestone payment | $ 20,000,000 | |||||
Agreement termination notice (in days) | 60 days | |||||
Research and development | $ 1,200,000 | |||||
Milestone payment due | $ 0 | |||||
License Agreement | Chimerix, Inc. | Series B convertible preferred stock | ||||||
Agreement | ||||||
Upfront payment (in shares) | 120,000 | |||||
Stated value (in dollars per share) | $ 10 | |||||
Fair value of shares issued | $ 1,200,000 | |||||
Number of common shares to be issued for each share converted (in shares) | 134,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Contractual Obligations (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 | |
Contractual Obligations | ||||
Rent expense | $ 101,732 | $ 289,504 | $ 183,716 | |
Annual rental payments | ||||
2019 | 202,734 | |||
2020 | 194,529 | |||
2021 | 209,170 | |||
2022 and thereafter | 266,290 | |||
Total | $ 872,723 | |||
Term (in years) | 5 years |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Jun. 16, 2016 | Jun. 01, 2016 | Dec. 31, 2017 | Dec. 31, 2018 | Jun. 30, 2017 |
Related Party Transactions | |||||
Granted (in shares) | 0 | ||||
Principal stockholder | Consulting Agreement | |||||
Related Party Transactions | |||||
Monthly payment | $ 10,000 | ||||
Notice period for termination | 30 days | ||||
Principal stockholder | Consulting Agreement | Stock options | |||||
Related Party Transactions | |||||
Granted (in shares) | 45,000 | ||||
Monthly vested increments (in shares) | 1,250 | ||||
Vesting period for stock options granted under the plan | 3 years | ||||
Director | Baruch S. Blumberg Institute | |||||
Related Party Transactions | |||||
Expenses for services | $ 50,000 | $ 50,000 | $ 75,000 |
Year Ended December 31, 2017 _3
Year Ended December 31, 2017 Comparative Data (Unaudited) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | |
Costs and Expenses: | ||||
Research and development | $ 7,163,530 | $ 7,593,715 | $ 13,368,165 | $ 13,651,987 |
General and administrative | 3,358,091 | 7,000,444 | 7,277,951 | 7,371,885 |
Loss from Operations | (10,521,621) | (14,594,159) | (20,646,116) | (21,023,872) |
Other Income (Expense): | ||||
Change in fair value of derivative instruments-warrants and contingent consideration | 1,062,769 | 5,056,964 | 5,618,598 | 4,224,819 |
Loss before income taxes | (9,458,852) | (9,985,295) | (15,027,518) | (16,799,053) |
Income tax benefit | 1,947,760 | 536,000 | 1,947,760 | 1,908,003 |
Net loss attributable to Common Stockholders | $ (7,511,092) | $ (17,901,146) | $ (13,079,758) | $ (14,891,050) |
Weighted Average Common Shares Outstanding | ||||
Basic and Diluted (in shares) | 9,678,329 | |||
Net loss per Common Share (see note 12) | ||||
Basic and Diluted (in dollar per share) | $ (1.35) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 28, 2019 | Feb. 14, 2019 | Jan. 10, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Events | |||||
Cash redemption payment on debt | $ 668,942 | ||||
Stock issued (in shares) | 16,608,512 | 9,792,497 | |||
Subsequent Events | |||||
Subsequent Events | |||||
Cash redemption payment on debt | $ 100,000 | $ 312,500 | |||
Stock issued (in shares) | 541,143 | ||||
Value of stock issued for debt payment | $100,000 |