Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 12, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | TENAX THERAPEUTICS, INC. | |
Entity Central Index Key | 34,956 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 1,465,496 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Balance Sheets (Unaudited)
Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 3,347,183 | $ 1,604,810 |
Marketable securities | 1,509,117 | 6,122,400 |
Accounts receivable | 0 | 50,171 |
Prepaid expenses | 284,857 | 285,512 |
Total current assets | 5,141,157 | 8,062,893 |
Marketable securities | 296,349 | 1,809,428 |
Property and equipment, net | 8,178 | 9,945 |
Other assets | 8,435 | 8,435 |
Total assets | 5,454,119 | 9,890,701 |
Current liabilities | ||
Accounts payable | 392,482 | 611,861 |
Accrued liabilities | 104,300 | 363,306 |
Warrant liabilities | 19,376 | 33,673 |
Total current liabilities | 516,158 | 1,008,840 |
Total liabilities | 516,158 | 1,008,840 |
Commitments and contingencies; see Note 6 | ||
Stockholders' equity | ||
Common stock, par value $.0001 per share; authorized 400,000,000 shares; issued and outstanding 1,465,496 and 1,411,840, respectively | 147 | 141 |
Additional paid-in capital | 223,029,293 | 222,397,198 |
Accumulated other comprehensive loss | (9,981) | (16,193) |
Accumulated deficit | (218,081,498) | (213,499,285) |
Total stockholders' equity | 4,937,961 | 8,881,861 |
Total liabilities and stockholders' equity | $ 5,454,119 | $ 9,890,701 |
Balance Sheets (Unaudited) (Par
Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Stockholders' equity | ||
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 400,000,000 | 400,000,000 |
Common stock, issued | 1,465,496 | 1,411,840 |
Common stock, outstanding | 1,465,496 | 1,411,840 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating expenses | ||||
General and administrative | $ 1,191,577 | $ 1,056,447 | $ 3,933,768 | $ 4,295,336 |
Research and development | 362,628 | 253,973 | 732,365 | 3,528,338 |
Total operating expenses | 1,554,205 | 1,310,420 | 4,666,133 | 7,823,674 |
Net operating loss | 1,554,205 | 1,310,420 | 4,666,133 | 7,823,674 |
Other income | (23,400) | (76,226) | (83,920) | (327,725) |
Net loss | 1,530,805 | 1,234,194 | 4,582,213 | 7,495,949 |
Unrealized (gain)/loss on marketable securities | (6,515) | (3,767) | (6,212) | (12,969) |
Total comprehensive loss | $ 1,524,290 | $ 1,230,427 | $ 4,576,001 | $ 7,482,980 |
Net loss per share, basic and diluted | $ (1.05) | $ (0.87) | $ (3.17) | $ (5.32) |
Weighted average number of common shares outstanding, basic and diluted | 1,462,191 | 1,411,828 | 1,446,377 | 1,410,226 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (4,582,213) | $ (7,495,949) |
Adjustments to reconcile net loss to net cash used in operating activities | ||
Depreciation and amortization | 7,574 | 10,599 |
Issuance and vesting of compensatory stock options and warrants | 255,962 | 426,837 |
Issuance of common stock as compensation | 136,921 | 79,525 |
Issuance of common stock for services rendered | 75,271 | 0 |
Change in fair value of warrants | (14,297) | (190,014) |
Amortization of premium on marketable securities | 82,574 | 158,209 |
Changes in operating assets and liabilities | ||
Accounts receivable, prepaid expenses and other assets | 75,917 | 1,323,018 |
Accounts payable and accrued liabilities | (339,529) | (5,170,671) |
Net cash used in operating activities | (4,301,820) | (10,858,446) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of marketable securities | 0 | (299,172) |
Sale of marketable securities | 6,050,000 | 2,930,082 |
Purchase of property and equipment | (5,807) | (4,536) |
Net cash provided by investing activities | 6,044,193 | 2,626,374 |
Net change in cash and cash equivalents | 1,742,373 | (8,232,072) |
Cash and cash equivalents, beginning of period | 1,604,810 | 9,995,955 |
Cash and cash equivalents, end of period | $ 3,347,183 | $ 1,763,883 |
1. DESCRIPTION OF BUSINESS
1. DESCRIPTION OF BUSINESS | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
1. DESCRIPTION OF BUSINESS | Tenax Therapeutics, Inc. (the “Company”) was originally formed as a New Jersey corporation in 1967 under the name Rudmer, David & Associates, Inc., and subsequently changed its name to Synthetic Blood International, Inc. On June 17, 2008, the stockholders of Synthetic Blood International approved the Agreement and Plan of Merger dated April 28, 2008, between Synthetic Blood International and Oxygen Biotherapeutics, Inc., a Delaware corporation. Oxygen Biotherapeutics was formed on April 17, 2008 by Synthetic Blood International to participate in the merger for the purpose of changing the state of domicile of Synthetic Blood International from New Jersey to Delaware. Certificates of Merger were filed with the states of New Jersey and Delaware and the merger was effective June 30, 2008. Under the Plan of Merger, Oxygen Biotherapeutics was the surviving corporation and each share of Synthetic Blood International common stock outstanding on June 30, 2008 was converted to one share of Oxygen Biotherapeutics common stock. On September 19, 2014, the Company changed its name to Tenax Therapeutics, Inc. On October 18, 2013, the Company created a wholly owned subsidiary, Life Newco, Inc., a Delaware corporation (“Life Newco”), to acquire certain assets of Phyxius Pharma, Inc., a Delaware corporation (“Phyxius”) pursuant to an Asset Purchase Agreement, dated October 21, 2013 (the “Asset Purchase Agreement”), by and among the Company, Life Newco, Phyxius and the stockholders of Phyxius (the “Phyxius Stockholders”). As further discussed in Note 5 below, on November 13, 2013, under the terms and subject to the conditions of the Asset Purchase Agreement, Life Newco acquired certain assets, including a license granting Life Newco an exclusive, sublicenseable right to develop and commercialize pharmaceutical products containing levosimendan, 2.5 mg/ml concentrate for solution for infusion / 5ml vial in the United States and Canada. |
2. SUMMARY OF SIGNIFICANT ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | Basis of Presentation The accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of these financial statements. The condensed consolidated balance sheet at December 31, 2017 has been derived from the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the period ended December 31, 2017. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) rules and regulations. Operating results for the three- and nine-month periods ended September 30, 2018 are not necessarily indicative of results for the full year or any other future periods. As such, it is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2017. Reverse Stock Split The Company initiated a 1-for-20 reverse stock split effective February 23, 2018. All shares and per share amounts in these condensed consolidated financial statements and notes thereto have been retroactively adjusted to give effect to the reverse stock split. Going Concern Management believes the accompanying condensed consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has an accumulated deficit of $218,081,498, at September 30, 2018 and $213,499,285 at December 31, 2017, and used cash in operations of $4,301,820 and $10,858,446 during the nine months ended September 30, 2018 and 2017, respectively. The Company requires substantial additional funds to complete clinical trials and pursue regulatory approvals. Management is actively seeking additional sources of equity and/or debt financing; however, there is no assurance that any additional funding will be available. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying September 30, 2018 balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain present financing, and to generate cash from future operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. Use of Estimates In preparing the unaudited condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates and the operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted. Principles of Consolidation The accompanying condensed consolidated financial statements include the accounts and transactions of the Company and Life Newco, Inc. All material intercompany transactions and balances have been eliminated in consolidation. Liquidity and Management’s Plan At September 30, 2018, the Company had cash and cash equivalents, including the fair value of its marketable securities, of approximately $5.2 million. The Company used $4.3 million of cash for operating activities during the nine months ended September 30, 2018 and had stockholders’ equity of $4.9 million, versus $8.9 million at December 31, 2017. The Company expects to continue to incur expenses related to development of levosimendan for pulmonary hypertension and other potential indications, as well as identifying and developing other potential product candidates. Based on its resources at September 30, 2018, the Company believes that it has sufficient capital to fund its planned operations through the first quarter of calendar year 2019. However, the Company will need substantial additional financing in order to fund its operations beyond such period and thereafter until it can achieve profitability, if ever. The Company depends on its ability to raise additional funds through various potential sources, such as equity and debt financing, or to license its product candidates to another pharmaceutical company. The Company will continue to fund operations from cash on hand and through sources of capital similar to those previously described. The Company cannot assure that it will be able to secure such additional financing, or if available, that it will be sufficient to meet its needs. To the extent that the Company raises additional funds by issuing shares of its common stock or other securities convertible or exchangeable for shares of common stock, stockholders will experience dilution, which may be significant. In the event the Company raises additional capital through debt financings, the Company may incur significant interest expense and become subject to covenants in the related transaction documentation that may affect the manner in which the Company conducts its business. To the extent that the Company raises additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to its technologies or product candidates, or grant licenses on terms that may not be favorable to the Company. Any or all of the foregoing may have a material adverse effect on the Company’s business and financial performance. Net Loss per Share Basic net loss per share, which excludes antidilutive securities, is computed by dividing net loss by the weighted-average number of common shares outstanding for that particular period. In contrast, diluted net loss per share considers the potential dilution that could occur from other equity instruments that would increase the total number of outstanding shares of common stock. Such amounts include shares potentially issuable under outstanding options, restricted stock and warrants. The following outstanding options, warrants and restricted stock were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect. Nine months ended September 30, 2018 2017 Options to purchase common stock 241,744 189,558 Warrants to purchase common stock 120,773 120,773 Restricted stock 19,914 - Recent Accounting Pronouncements The SEC has released SEC Final Rule Release No. 33-10532 Disclosure Update and Simplification, which adopts amendments to certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, GAAP, or changes in the information environment. The amendments also refer certain SEC disclosure requirements that overlap with but require information incremental to GAAP to the Financial Accounting Standards Board (“FASB”) for potential incorporation into GAAP. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. These amendments are part of an initiative by the Division of Corporation Finance to review disclosure requirements applicable to issuers to consider ways to improve the requirements for the benefit of investors and issuers. The amendments became effective on November 5, 2018 and did not have a material impact to the Company. In June 2018, the FASB, issued an accounting standard that provides guidance that aligns the accounting for share-based payment awards issued to employees and nonemployees. Under the new guidance, the existing employee guidance will apply to nonemployee share-based transactions. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. Equity-classified share-based payment awards issued to nonemployees will now be measured on the grant date, and, for performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition. The new guidance also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, Revenue from Contracts with Customers. The standard will be effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company does not believe adoption of this standard will have a material impact on its condensed consolidated financial statements and related disclosures. In July 2017, the FASB, issued an accounting standard that changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The standard will be effective on January 1, 2019. Early adoption is permitted, including adoption in an interim period. The Company does not believe adoption of this standard will have a material impact on its condensed consolidated financial statements and related disclosures. In January 2017, the FASB issued an accounting standard that provides guidance for evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance provides a screen to determine when an integrated set of assets and activities, or a set, does not qualify to be a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in an identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the guidance requires a set to be considered a business to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs and removes the evaluation as to whether a market participant could replace the missing elements. The standard became effective on January 1, 2018 and was adopted on a prospective basis. The Company’s adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. In August 2016, the FASB issued an accounting standard that clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows where diversity in practice exists. The standard became effective in the Company’s first quarter of fiscal 2018. The Company’s adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. In June 2016, the FASB issued an accounting standard that amends how credit losses are measured and reported for certain financial instruments that are not accounted for at fair value through net income. This standard requires that credit losses be presented as an allowance rather than as a write-down for available-for-sale debt securities and will be effective for interim and annual reporting periods beginning January 1, 2020, with early adoption permitted, but not earlier than annual reporting periods beginning January 1, 2019. A modified retrospective approach is to be used for certain parts of this guidance, while other parts of the guidance are to be applied using a prospective approach. The Company does not believe adoption of this standard will have a material impact on its condensed consolidated financial statements and related disclosures. In May 2014, the FASB issued an accounting standard that supersedes nearly all existing revenue recognition guidance under GAAP. The standard is principles-based and provides a five-step model to determine when and how revenue is recognized. The core principle of the standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued a standard to clarify the implementation guidance on principal versus agent considerations, and in April 2016, the FASB issued a standard to clarify the implementation guidance on identifying performance obligations and licensing. The standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. In July 2015, the FASB agreed to defer the effective date of the standard from annual periods beginning after December 15, 2016, to annual periods beginning after December 15, 2017. Early application prior to the original effective date was not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company reviewed its current accounting policies and practices to assess the impact of the guidance on its business processes. Based on this evaluation, the adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued an accounting standard intended to improve financial reporting regarding leasing transactions. The standard will require the Company to recognize on its balance sheet the assets and liabilities for the rights and obligations created by all leased assets. The standard will also require it to provide enhanced disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from all leases, operating and capital, with lease terms greater than 12 months. The standard is effective for financial statements beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its condensed consolidated financial statements and related disclosures. In January 2016, the FASB issued an accounting standard that will enhance the Company’s reporting for financial instruments. The standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Earlier adoption is permitted for interim and annual reporting periods as of the beginning of the fiscal year of adoption. The Company’s adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. |
3. FAIR VALUE
3. FAIR VALUE | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
3. FAIR VALUE | The Company determines the fair value of its financial assets and liabilities in accordance with the FASB Accounting Standards Codification (“ASC”) 820 Fair Value Measurements. The Company's balance sheet includes the following financial instruments: cash and cash equivalents, investments in marketable securities, and warrant liabilities. The Company considers the carrying amount of its cash and cash equivalents to approximate fair value due to the short-term nature of these instruments. Accounting for fair value measurements involves a single definition of fair value, along with a conceptual framework to measure fair value, with a fair value defined as “the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.” The fair value measurement hierarchy consists of three levels: Level one Quoted market prices in active markets for identical assets or liabilities; Level two Inputs other than level one inputs that are either directly or indirectly observable; and Level three Unobservable inputs developed using estimates and assumptions, which are developed by the reporting entity and reflect those assumptions that a market participant would use. The Company applies valuation techniques that (1) place greater reliance on observable inputs and less reliance on unobservable inputs and (2) are consistent with the market approach, the income approach and/or the cost approach, and include enhanced disclosures of fair value measurements in the Company’s condensed consolidated financial statements. Investments in Marketable Securities The Company classifies all of its investments as available-for-sale. Unrealized gains and losses on investments are recognized in comprehensive income/(loss), unless an unrealized loss is considered to be other than temporary, in which case the unrealized loss is charged to operations. The Company periodically reviews its investments for other than temporary declines in fair value below cost basis and whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The Company believes the individual unrealized losses represent temporary declines primarily resulting from interest rate changes. Realized gains and losses are reflected in other income in the Condensed Consolidated Statements of Comprehensive Loss and are determined using the specific identification method with transactions recorded on a settlement date basis. Investments with original maturities at date of purchase beyond three months and which mature at or less than 12 months from the balance sheet date are classified as current. Investments with a maturity beyond 12 months from the balance sheet date are classified as long-term. At September 30, 2018, the Company believes that the costs of its investments are recoverable in all material respects. The following table summarizes the fair value of the Company’s investments by type. The estimated fair value of the Company’s fixed income investments is classified as Level 2 in the fair value hierarchy as defined in U.S. GAAP. These fair values are obtained from independent pricing services which utilize Level 2 inputs: September 30, 2018 Amortized Cost Accrued Interest Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate debt securities $ 1,802,485 $ 12,962 $ - $ (9,981 ) $ 1,805,466 The following table summarizes the scheduled maturity for the Company’s investments at September 30, 2018 and December 31, 2017. September 30, 2018 December 31, 2017 Maturing in one year or less $ 1,509,117 $ 6,122,400 Maturing after one year through three years 296,349 1,809,428 Total investments $ 1,805,466 $ 7,931,828 Warrant liability On July 23, 2013, the Company issued common stock warrants in connection with the issuance of Series C 8% Preferred Stock (the “Series C Warrants”). As part of the offering, the Company issued 137,668 warrants at an exercise price of $52.00 per share and contractual term of 6 years. On November 11, 2013, the Company satisfied certain contractual obligations pursuant to the Series C offering which caused certain “down-round” price protection clauses in the outstanding warrants to become effective on that date. In accordance with ASC 815-40-35-9, the Company reclassified these warrants as a current liability and recorded a warrant liability of $1,380,883, which represents the fair market value of the warrants at that date. The initial fair value recorded as warrants within stockholders’ equity of $233,036 was reversed and the subsequent changes in fair value are recorded as a component of other expense. Financial assets or liabilities are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The Series C Warrants are measured using the Monte Carlo valuation model which is based, in part, upon inputs for which there is little or no observable market data, requiring the Company to develop its own assumptions. The assumptions used in calculating the estimated fair value of the warrants represent the Company’s best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the warrant liabilities and the change in estimated fair value of the warrants could be materially different. Inherent in the Monte Carlo valuation model are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. The Monte Carlo model is used for the Series C Warrants to appropriately value the potential future exercise price adjustments triggered by the anti-dilution provisions. This requires Level 3 inputs which are based on the Company’s estimates of the probability and timing of potential future financings and fundamental transactions. The other assumptions used by the Company are summarized in the following table for the Series C Warrants that were outstanding as of September 30, 2018 and December 31, 2017: Series C Warrants September 30, 2018 December 31, 2017 Closing stock price $ 5.26 $ 9.80 Expected dividend rate 0 % 0 % Expected stock price volatility 90.00 % 81.26 % Risk-free interest rate 2.50 % 1.83 % Expected life (years) 0.81 1.56 As of September 30, 2018, the fair value of the warrant liability was $19,376. The Company recorded a gain of $5,175 and $14,297 for the change in fair value as a component of other income on the condensed consolidated statements of comprehensive loss for the three and nine months ended September 30, 2018, respectively. As of September 30, 2018, there were 12,035 Series C Warrants outstanding. The following tables summarize information regarding assets and liabilities measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017: Fair Value Measurements at Reporting Date Using Balance as of September 30, 2018 Quoted prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Current Assets Cash and cash equivalents $ 3,347,183 $ 3,347,183 $ - $ - Marketable securities $ 1,509,117 $ - $ 1,509,117 $ - Long-term Assets Marketable securities $ 296,349 $ - $ 296,349 $ - Current Liabilities Warrant liabilities $ 19,376 $ - $ - $ 19,376 Fair Value Measurements at Reporting Date Using Balance as of December 31, 2017 Quoted prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Current Assets Cash and cash equivalents $ 1,604,810 $ 1,604,810 $ - $ - Marketable securities $ 6,122,400 $ - $ 6,122,400 $ - Long-term Assets Marketable securities $ 1,809,428 $ - $ 1,809,428 $ - Current Liabilities Warrant liabilities $ 33,673 $ - $ - $ 33,673 There were no significant transfers between levels during the three and nine months ended September 30, 2018. |
4. BALANCE SHEET COMPONENTS
4. BALANCE SHEET COMPONENTS | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
4. BALANCE SHEET COMPONENTS | Property and equipment, net Property and equipment consist of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Laboratory equipment $ 354,861 $ 354,861 Computer equipment and software 94,804 88,998 Office furniture and fixtures 130,192 130,192 579,857 574,051 Less: Accumulated depreciation (571,679 ) (564,106 ) $ 8,178 $ 9,945 Depreciation expense was approximately $2,000 and $3,000 for the three months ended September 30, 2018 and 2017, respectively, and approximately $8,000 and $11,000 for the nine months ended September 30, 2018 and 2017, respectively. Accrued liabilities Accrued liabilities consist of the following as of September 30, 2018 and December 31, 2017: September 30, 2018 December 31, 2017 Operating costs $ 56,345 $ 39,252 Employee related 47,955 324,054 $ 104,300 $ 363,306 |
5. COMMITMENTS AND CONTINGENCIE
5. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
5. COMMITMENTS AND CONTINGENCIES | Simdax license agreement On November 13, 2013, the Company acquired, through its wholly owned subsidiary, Life Newco, that certain License Agreement (the “License”), dated September 20, 2013 by and between Phyxius and Orion Corporation, a global healthcare company incorporated under the laws of Finland (“Orion”), and that certain Side Letter, dated October 15, 2013 by and between Phyxius and Orion. The License grants the Company an exclusive, sublicenseable right to develop and commercialize pharmaceutical products containing levosimendan (the “Product”) in the United States and Canada (the “Territory”) from Orion. Pursuant to the License, the Company must use Orion’s “Simdax®” trademark to commercialize the Product. The License also grants to the Company a right of first refusal to commercialize new developments of the Product, including developments as to the formulation, presentation, means of delivery, route of administration, dosage or indication. Orion’s ongoing role under the License includes sublicense approval, serving as the sole source of manufacture, holding a first right to enforce intellectual property rights in the Territory, and certain regulatory participation rights. Additionally, the Company must grant back to Orion a broad non-exclusive license to any patents or clinical trial data related to the Product developed by the Company under the License. The License has a fifteen (15) year term, provided, however, that the License will continue after the end of the fifteen year term in each country in the Territory until the expiration of Orion’s patent rights in the Product in such country. Pursuant to the terms of the License, the Company paid to Orion a non-refundable up-front payment in the amount of $1.0 million. The License also includes the following development milestones for which the Company shall make non-refundable payments to Orion no later than twenty-eight (28) days after the occurrence of the applicable milestone event: (i) $2.0 million upon the grant of FDA approval, including all registrations, licenses, authorizations and necessary approvals, to develop and/or commercialize the Product in the United States; and (ii) $1.0 million upon the grant of regulatory approval for the Product in Canada. Once commercialized, the Company is obligated to make certain non-refundable commercialization milestone payments to Orion, aggregating up to $13.0 million, contingent upon achievement of certain cumulative net sales amounts in the Territory. The Company must also pay Orion tiered royalties based on net sales of the Product in the Territory made by the Company and its sublicensees. After the end of the term of the License, the Company must pay Orion a royalty based on net sales of the Product in the Territory for as long as Life Newco sells the Product in the Territory. As of September 30, 2018, the Company has not met any of the developmental milestones and, accordingly, has not recorded any liability for the contingent payments due to Orion. |
6. STOCKHOLDERS EQUITY
6. STOCKHOLDERS EQUITY | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
6. STOCKHOLDERS' EQUITY | Preferred Stock Under the Company’s Certificate of Incorporation, the Board of Directors is authorized, without further stockholder action, to provide for the issuance of up to 10,000,000 shares of preferred stock, par value $0.0001 per share, in one or more series, to establish from time to time the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and the qualifications, limitations and restrictions thereof. As of September 30, 2018, no shares of preferred stock are designated, issued or outstanding. Common Stock The Company’s Certificate of Incorporation authorizes it to issue 400,000,000 shares of $0.0001 par value common stock. As of September 30, 2018, there were 1,465,496 shares of common stock issued and outstanding. Warrants As of September 30, 2018, the Company had 120,773 warrants outstanding. There was no warrant activity for the nine months ended September 30, 2018. 2016 Stock Incentive Plan In June 2016, the Company adopted the 2016 Stock Incentive Plan (the “2016 Plan”). Under the 2016 Plan, with the approval of the Compensation Committee of the Board of Directors, the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash-based awards or other stock-based awards. On June 16, 2016, the Company’s stockholders approved the 2016 Plan and authorized for issuance under the 2016 Plan a total of 150,000 shares of common stock. As of September 30, 2018, the Company had 100,000 shares of common stock available for grant under the 2016 Plan. The following table summarizes the shares available for grant under the 2016 Plan for the nine months ended September 30, 2018: Shares Available for Grant Balances, at December 31, 2017 150,000 Options granted (50,000 ) Balances, at September 30, 2018 100,000 2016 Plan Stock Options Stock options granted under the 2016 Plan may be either incentive stock options (“ISOs”), or nonqualified stock options (“NSOs”). ISOs may be granted only to employees. NSOs may be granted to employees, consultants and directors. Stock options under the 2016 Plan may be granted with a term of up to ten years and at prices no less than fair market value at the time of grant. Stock options granted generally vest over three to four years. The following table summarizes the outstanding stock options under the 2016 Plan for the nine months ended September 30, 2018: Outstanding Options Number of Shares Weighted Average Exercise Price Balances, at December 31, 2017 - $ - Options granted 50,000 $ 6.10 Balances, at September 30, 2018 50,000 $ 6.10 The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value. The Company recorded compensation expense for these stock options grants of $29,732 and $59,463 for the three and nine months ended September 30, 2018, respectively. As of September 30, 2018, there were unrecognized compensation costs of approximately $189,744 related to non-vested stock option awards under the 2016 Plan that will be recognized on a straight-line basis over the weighted average remaining vesting period of 2.17 years. 1999 Amended Stock Plan In October 2000, the Company adopted the 1999 Stock Plan, as amended and restated on June 17, 2008 (the “1999 Plan”). Under the 1999 Plan, with the approval of the Compensation Committee of the Board of Directors, the Company may grant stock options, restricted stock, stock appreciation rights and new shares of common stock upon exercise of stock options. On March 13, 2014, the Company’s stockholders approved an amendment to the 1999 Plan which increased the number of shares of common stock authorized for issuance under the 1999 Plan to a total of 200,000 shares, up from 15,000 previously authorized. On September 15, 2015, the Company’s stockholders approved an additional amendment to the 1999 Plan which increased the number of shares of common stock authorized for issuance under the 1999 Plan to a total of 250,000 shares, up from 200,000 previously authorized. The 1999 Plan expired on June 17, 2018 and no new grants may be made under that plan after that date. However, unexpired awards granted under the 1999 Plan remain outstanding and subject to the terms of the 1999 Plan. 1999 Plan Stock Options Stock options granted under the 1999 Plan may be ISOs, or NSOs. ISOs may be granted only to employees. NSOs may be granted to employees, consultants and directors. Stock options under the 1999 Plan may be granted with a term of up to ten years and at prices no less than fair market value for ISOs and no less than 85% of the fair market value for NSOs. Stock options granted generally vest over one to three years. The following table summarizes the outstanding stock options under the 1999 Plan for the nine months ended September 30, 2018: Outstanding Options Number of Shares Weighted Average Exercise Price Balances, at December 31, 2017 188,744 $ 95.24 Options granted 3,000 $ 6.23 Options cancelled - $ - Balances, at September 30, 2018 191,744 $ 93.85 The Company chose the “straight-line” attribution method for allocating compensation costs of each stock option over the requisite service period using the Black-Scholes Option Pricing Model to calculate the grant date fair value. The Company recorded compensation expense for these stock options grants of $62,564 and $196,499 for the three and nine months ended September 30, 2018, respectively. As of September 30, 2018, there were unrecognized compensation costs of approximately $178,962 related to non-vested stock option awards under the 1999 Plan that will be recognized on a straight-line basis over the weighted average remaining vesting period of 1.12 years. Additionally, there were unrecognized compensation costs of approximately $5.9 million related to non-vested stock option awards under the 1999 Plan subject to performance-based vesting milestones with a weighted average remaining life of 1.5 years. As of September 30, 2018, none of these milestones have been achieved. The Company used the following assumptions to estimate the fair value of options granted under its stock option plans for the nine months ended September 30, 2018 and 2017: For the nine months ended September 30, 2018 2017 Risk-free interest rate (weighted average) 2.85 % 2.19 % Expected volatility (weighted average) 102.38 % 99.59 % Expected term (in years) 7 7 Expected dividend yield 0.00 % 0.00 % Risk-Free Interest Rate The risk-free interest rate assumption was based on U.S. Treasury instruments with a term that is consistent with the expected term of the Company’s stock options. Expected Volatility The expected stock price volatility for the Company’s common stock was determined by examining the historical volatility and trading history for its common stock over a term consistent with the expected term of its options. Expected Term The expected term of stock options represents the weighted average period the stock options are expected to remain outstanding. It was calculated based on the Company’s historical experience with its stock option grants. Expected Dividend Yield The expected dividend yield of 0% is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not anticipate paying any dividends in the near future. Forfeitures Stock compensation expense recognized in the statements of operations for the nine months ended September 30, 2018 and 2017 is based on awards ultimately expected to vest, and it has been reduced for estimated 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. Forfeitures were estimated based on the Company’s historical experience. Restricted Stock Grants The following table summarizes the restricted stock grants under the 1999 Plan for the nine months ended September 30, 2018 . Outstanding Restricted Stock Grants Number of Shares Weighted Average Grant Date Fair Value Balances, at December 31, 2017 - $ - Restricted stock granted 85,900 $ 5.82 Restricted stock vested (37,420 ) $ 5.69 Restricted stock cancelled (28,566 ) $ 5.66 Balances, at September 30, 2018 19,914 $ 6.29 The Company recorded compensation expense for these restricted stock grants of approximately $63,000 and $188,000 for the three and nine months ended September 30, 2018, respectively. As of September 30, 2018, there was approximately $63,000 of unrecognized compensation costs related to the non-vested restricted stock grants. |
2. SUMMARY OF SIGNIFICANT ACC_2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements include all adjustments (consisting of normal and recurring adjustments) necessary for a fair presentation of these financial statements. The condensed consolidated balance sheet at December 31, 2017 has been derived from the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the period ended December 31, 2017. Certain footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) rules and regulations. Operating results for the three- and nine-month periods ended September 30, 2018 are not necessarily indicative of results for the full year or any other future periods. As such, it is suggested that these condensed consolidated financial statements be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2017. |
Reverse Stock Split | The Company initiated a 1-for-20 reverse stock split effective February 23, 2018. All shares and per share amounts in these condensed consolidated financial statements and notes thereto have been retroactively adjusted to give effect to the reverse stock split. |
Going Concern | Management believes the accompanying condensed consolidated financial statements have been prepared in conformity with GAAP, which contemplate continuation of the Company as a going concern. The Company has an accumulated deficit of $218,081,498, at September 30, 2018 and $213,499,285 at December 31, 2017, and used cash in operations of $4,301,820 and $10,858,446 during the nine months ended September 30, 2018 and 2017, respectively. The Company requires substantial additional funds to complete clinical trials and pursue regulatory approvals. Management is actively seeking additional sources of equity and/or debt financing; however, there is no assurance that any additional funding will be available. In view of the matters described above, recoverability of a major portion of the recorded asset amounts shown in the accompanying September 30, 2018 balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company’s ability to meet its financing requirements on a continuing basis, to maintain present financing, and to generate cash from future operations. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. |
Use of Estimates | In preparing the unaudited condensed consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the dates of the unaudited condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from these estimates and the operating results for the interim periods presented are not necessarily indicative of the results expected for the full year. On an ongoing basis, management reviews its estimates to ensure that these estimates appropriately reflect changes in the Company’s business and new information as it becomes available. If historical experience and other factors used by management to make these estimates do not reasonably reflect future activity, the Company’s results of operations and financial position could be materially impacted. |
Principles of Consolidation | The accompanying condensed consolidated financial statements include the accounts and transactions of the Company and Life Newco, Inc. All material intercompany transactions and balances have been eliminated in consolidation. |
Liquidity and Management's Plan | At September 30, 2018, the Company had cash and cash equivalents, including the fair value of its marketable securities, of approximately $5.2 million. The Company used $4.3 million of cash for operating activities during the nine months ended September 30, 2018 and had stockholders’ equity of $4.9 million, versus $8.9 million at December 31, 2017. The Company expects to continue to incur expenses related to development of levosimendan for pulmonary hypertension and other potential indications, as well as identifying and developing other potential product candidates. Based on its resources at September 30, 2018, the Company believes that it has sufficient capital to fund its planned operations through the first quarter of calendar year 2019. However, the Company will need substantial additional financing in order to fund its operations beyond such period and thereafter until it can achieve profitability, if ever. The Company depends on its ability to raise additional funds through various potential sources, such as equity and debt financing, or to license its product candidates to another pharmaceutical company. The Company will continue to fund operations from cash on hand and through sources of capital similar to those previously described. The Company cannot assure that it will be able to secure such additional financing, or if available, that it will be sufficient to meet its needs. To the extent that the Company raises additional funds by issuing shares of its common stock or other securities convertible or exchangeable for shares of common stock, stockholders will experience dilution, which may be significant. In the event the Company raises additional capital through debt financings, the Company may incur significant interest expense and become subject to covenants in the related transaction documentation that may affect the manner in which the Company conducts its business. To the extent that the Company raises additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to its technologies or product candidates, or grant licenses on terms that may not be favorable to the Company. Any or all of the foregoing may have a material adverse effect on the Company’s business and financial performance. |
Net Loss per Share | Basic net loss per share, which excludes antidilutive securities, is computed by dividing net loss by the weighted-average number of common shares outstanding for that particular period. In contrast, diluted net loss per share considers the potential dilution that could occur from other equity instruments that would increase the total number of outstanding shares of common stock. Such amounts include shares potentially issuable under outstanding options, restricted stock and warrants. The following outstanding options, warrants and restricted stock were excluded from the computation of basic and diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect. Nine months ended September 30, 2018 2017 Options to purchase common stock 241,744 189,558 Warrants to purchase common stock 120,773 120,773 Restricted stock 19,914 - |
Recent Accounting Pronouncements | The SEC has released SEC Final Rule Release No. 33-10532 Disclosure Update and Simplification, which adopts amendments to certain disclosure requirements that have become redundant, duplicative, overlapping, outdated, or superseded, in light of other SEC disclosure requirements, GAAP, or changes in the information environment. The amendments also refer certain SEC disclosure requirements that overlap with but require information incremental to GAAP to the Financial Accounting Standards Board (“FASB”) for potential incorporation into GAAP. The amendments are intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. These amendments are part of an initiative by the Division of Corporation Finance to review disclosure requirements applicable to issuers to consider ways to improve the requirements for the benefit of investors and issuers. The amendments became effective on November 5, 2018 and did not have a material impact to the Company. In June 2018, the FASB, issued an accounting standard that provides guidance that aligns the accounting for share-based payment awards issued to employees and nonemployees. Under the new guidance, the existing employee guidance will apply to nonemployee share-based transactions. The cost of nonemployee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for nonemployee awards. Equity-classified share-based payment awards issued to nonemployees will now be measured on the grant date, and, for performance conditions, compensation cost associated with the award will be recognized when achievement of the performance condition is probable, rather than upon achievement of the performance condition. The new guidance also clarifies that any share-based payment awards issued to customers should be evaluated under ASC 606, Revenue from Contracts with Customers. The standard will be effective for interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. The Company does not believe adoption of this standard will have a material impact on its condensed consolidated financial statements and related disclosures. In July 2017, the FASB, issued an accounting standard that changes the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. The standard will be effective on January 1, 2019. Early adoption is permitted, including adoption in an interim period. The Company does not believe adoption of this standard will have a material impact on its condensed consolidated financial statements and related disclosures. In January 2017, the FASB issued an accounting standard that provides guidance for evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance provides a screen to determine when an integrated set of assets and activities, or a set, does not qualify to be a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in an identifiable asset or a group of similar identifiable assets, the set is not a business. If the screen is not met, the guidance requires a set to be considered a business to include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs and removes the evaluation as to whether a market participant could replace the missing elements. The standard became effective on January 1, 2018 and was adopted on a prospective basis. The Company’s adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. In August 2016, the FASB issued an accounting standard that clarifies how companies present and classify certain cash receipts and cash payments in the statement of cash flows where diversity in practice exists. The standard became effective in the Company’s first quarter of fiscal 2018. The Company’s adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. In June 2016, the FASB issued an accounting standard that amends how credit losses are measured and reported for certain financial instruments that are not accounted for at fair value through net income. This standard requires that credit losses be presented as an allowance rather than as a write-down for available-for-sale debt securities and will be effective for interim and annual reporting periods beginning January 1, 2020, with early adoption permitted, but not earlier than annual reporting periods beginning January 1, 2019. A modified retrospective approach is to be used for certain parts of this guidance, while other parts of the guidance are to be applied using a prospective approach. The Company does not believe adoption of this standard will have a material impact on its condensed consolidated financial statements and related disclosures. In May 2014, the FASB issued an accounting standard that supersedes nearly all existing revenue recognition guidance under GAAP. The standard is principles-based and provides a five-step model to determine when and how revenue is recognized. The core principle of the standard is that revenue should be recognized when a company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. In March 2016, the FASB issued a standard to clarify the implementation guidance on principal versus agent considerations, and in April 2016, the FASB issued a standard to clarify the implementation guidance on identifying performance obligations and licensing. The standard also requires disclosure of qualitative and quantitative information surrounding the amount, nature, timing and uncertainty of revenues and cash flows arising from contracts with customers. In July 2015, the FASB agreed to defer the effective date of the standard from annual periods beginning after December 15, 2016, to annual periods beginning after December 15, 2017. Early application prior to the original effective date was not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company reviewed its current accounting policies and practices to assess the impact of the guidance on its business processes. Based on this evaluation, the adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. In February 2016, the FASB issued an accounting standard intended to improve financial reporting regarding leasing transactions. The standard will require the Company to recognize on its balance sheet the assets and liabilities for the rights and obligations created by all leased assets. The standard will also require it to provide enhanced disclosures designed to enable users of financial statements to understand the amount, timing, and uncertainty of cash flows arising from all leases, operating and capital, with lease terms greater than 12 months. The standard is effective for financial statements beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact that this standard will have on its condensed consolidated financial statements and related disclosures. In January 2016, the FASB issued an accounting standard that will enhance the Company’s reporting for financial instruments. The standard is effective for financial statements issued for annual periods beginning after December 15, 2017, and interim periods within those annual periods. Earlier adoption is permitted for interim and annual reporting periods as of the beginning of the fiscal year of adoption. The Company’s adoption of this standard did not have a material impact on its condensed consolidated financial statements and related disclosures. |
2. SUMMARY OF SIGNIFICANT ACC_3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Anti-dilutive securities | Nine months ended September 30, 2018 2017 Options to purchase common stock 241,744 189,558 Warrants to purchase common stock 120,773 120,773 Restricted stock 19,914 - |
3. FAIR VALUE (Tables)
3. FAIR VALUE (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value | |
Schedule of investments in marketable securities | September 30, 2018 Amortized Cost Accrued Interest Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value Corporate debt securities $ 1,802,485 $ 12,962 $ - $ (9,981 ) $ 1,805,466 |
Scheduled of investments maturity | September 30, 2018 December 31, 2017 Maturing in one year or less $ 1,509,117 $ 6,122,400 Maturing after one year through three years 296,349 1,809,428 Total investments $ 1,805,466 $ 7,931,828 |
Schedule of assumption for warrant liability | Series C Warrants September 30, 2018 December 31, 2017 Closing stock price $ 5.26 $ 9.80 Expected dividend rate 0 % 0 % Expected stock price volatility 90.00 % 81.26 % Risk-free interest rate 2.50 % 1.83 % Expected life (years) 0.81 1.56 |
Schedule of fair value on a recurring basis | Fair Value Measurements at Reporting Date Using Balance as of September 30, 2018 Quoted prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Current Assets Cash and cash equivalents $ 3,347,183 $ 3,347,183 $ - $ - Marketable securities $ 1,509,117 $ - $ 1,509,117 $ - Long-term Assets Marketable securities $ 296,349 $ - $ 296,349 $ - Current Liabilities Warrant liabilities $ 19,376 $ - $ - $ 19,376 Fair Value Measurements at Reporting Date Using Balance as of December 31, 2017 Quoted prices in Active Markets for Identical Securities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Current Assets Cash and cash equivalents $ 1,604,810 $ 1,604,810 $ - $ - Marketable securities $ 6,122,400 $ - $ 6,122,400 $ - Long-term Assets Marketable securities $ 1,809,428 $ - $ 1,809,428 $ - Current Liabilities Warrant liabilities $ 33,673 $ - $ - $ 33,673 |
4. BALANCE SHEET COMPONENTS (Ta
4. BALANCE SHEET COMPONENTS (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Notes to Financial Statements | |
Property Plant and Equipment | September 30, 2018 December 31, 2017 Laboratory equipment $ 354,861 $ 354,861 Computer equipment and software 94,804 88,998 Office furniture and fixtures 130,192 130,192 579,857 574,051 Less: Accumulated depreciation (571,679 ) (564,106 ) $ 8,178 $ 9,945 |
Accrued Liabilities | September 30, 2018 December 31, 2017 Operating costs $ 56,345 $ 39,252 Employee related 47,955 324,054 $ 104,300 $ 363,306 |
6. STOCKHOLDERS EQUITY (Tables)
6. STOCKHOLDERS EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Equity [Abstract] | |
Shares available for grant under the Plan | Shares Available for Grant Balances, at December 31, 2017 150,000 Options granted (50,000 ) Balances, at September 30, 2018 100,000 |
Stock option activity | Outstanding Options Number of Shares Weighted Average Exercise Price Balances, at December 31, 2017 - $ - Options granted 50,000 $ 6.10 Balances, at September 30, 2018 50,000 $ 6.10 Outstanding Options Number of Shares Weighted Average Exercise Price Balances, at December 31, 2017 188,744 $ 95.24 Options granted 3,000 $ 6.23 Options cancelled - $ - Balances, at September 30, 2018 191,744 $ 93.85 |
Assumptions to estimate the fair value of options granted | For the nine months ended September 30, 2018 2017 Risk-free interest rate (weighted average) 2.85 % 2.19 % Expected volatility (weighted average) 102.38 % 99.59 % Expected term (in years) 7 7 Expected dividend yield 0.00 % 0.00 % |
Restricted stock grants | Outstanding Restricted Stock Grants Number of Shares Weighted Average Grant Date Fair Value Balances, at December 31, 2017 - $ - Restricted stock granted 85,900 $ 5.82 Restricted stock vested (37,420 ) $ 5.69 Restricted stock cancelled (28,566 ) $ 5.66 Balances, at September 30, 2018 19,914 $ 6.29 |
2. SUMMARY OF SIGNIFICANT ACC_4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Options | ||
Anti-dilutive securities | 241,744 | 189,558 |
Warrants | ||
Anti-dilutive securities | 120,773 | 120,773 |
Restricted stock | ||
Anti-dilutive securities | 19,914 | 0 |
2. SUMMARY OF SIGNIFICANT ACC_5
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($) | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Summary Of Significant Accounting Policies | ||||
Accumulated deficit | $ (218,081,498) | $ (213,499,285) | ||
Cash used in operations | (4,301,820) | $ (10,858,446) | ||
Cash and cash equivalents | 3,347,183 | $ 1,763,883 | 1,604,810 | $ 9,995,955 |
Marketable securities | 1,509,117 | 6,122,400 | ||
Stockholders' equity | $ 4,937,961 | $ 8,881,861 |
3. FAIR VALUE (Details)
3. FAIR VALUE (Details) - Corporate debt securities | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Amortized Cost | $ 1,802,485 |
Accrued Interest | 12,962 |
Gross Unrealized Gains | 0 |
Gross Unrealized losses | (9,981) |
Estimated Fair Value | $ 1,805,466 |
3. FAIR VALUE (Details 1)
3. FAIR VALUE (Details 1) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair Value Details 1Abstract | ||
Maturing in one year or less | $ 1,509,117 | $ 6,122,400 |
Maturing after one year through three years | 296,349 | 1,809,428 |
Total investments | $ 1,805,466 | $ 7,931,828 |
3. FAIR VALUE (Details 2)
3. FAIR VALUE (Details 2) - $ / shares | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Expected dividend rate | 0.00% | 0.00% | |
Expected stock price volatility | 102.38% | 99.59% | |
Risk-free interest rate | 2.85% | 2.19% | |
Expected life (years) | 7 years | 7 years | |
Series C Warrants | |||
Closing stock price | $ 5.26 | $ 9.80 | |
Expected dividend rate | 0.00% | 0.00% | |
Expected stock price volatility | 90.00% | 81.26% | |
Risk-free interest rate | 25.00% | 1.83% | |
Expected life (years) | 9 months 22 days | 1 year 6 months 22 days |
3. FAIR VALUE (Details 3)
3. FAIR VALUE (Details 3) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 3,347,183 | $ 1,604,810 |
Marketable securities | 1,509,117 | 6,122,400 |
Long-term Assets | ||
Marketable securities | 296,349 | 1,809,428 |
Current Liabilities | ||
Warrant liabilities | 19,376 | 33,673 |
Level 1 | ||
Current Assets | ||
Cash and cash equivalents | 3,347,183 | 1,604,810 |
Marketable securities | 0 | 0 |
Long-term Assets | ||
Marketable securities | 0 | 0 |
Current Liabilities | ||
Warrant liabilities | 0 | 0 |
Level 2 | ||
Current Assets | ||
Cash and cash equivalents | 0 | 0 |
Marketable securities | 1,509,117 | 6,122,400 |
Long-term Assets | ||
Marketable securities | 296,349 | 1,809,428 |
Current Liabilities | ||
Warrant liabilities | 0 | 0 |
Level 3 | ||
Current Assets | ||
Cash and cash equivalents | 0 | 0 |
Marketable securities | 0 | 0 |
Long-term Assets | ||
Marketable securities | 0 | 0 |
Current Liabilities | ||
Warrant liabilities | $ 19,376 | $ 33,673 |
4. BALANCE SHEET COMPONENTS (De
4. BALANCE SHEET COMPONENTS (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Components | ||
Laboratory equipment | $ 354,861 | $ 354,861 |
Computer equipment and software | 94,804 | 88,998 |
Office furniture and fixtures | 130,192 | 130,192 |
Subtotal | 579,857 | 574,051 |
Less: Accumulated depreciation | (571,679) | (564,106) |
Property Plant and Equipment | $ 8,178 | $ 9,945 |
4. BALANCE SHEET COMPONENTS (_2
4. BALANCE SHEET COMPONENTS (Details 1) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Balance Sheet Components Details 4Abstract | ||
Operating costs | $ 56,345 | $ 39,252 |
Employee related | 47,955 | 324,054 |
Total | $ 104,300 | $ 363,306 |
4. BALANCE SHEET COMPONENTS (_3
4. BALANCE SHEET COMPONENTS (Details Narrative) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Balance Sheet Components Details Narrative Abstract | ||||
Depreciation expense | $ 2,000 | $ 3,000 | $ 8,000 | $ 11,000 |
6. STOCKHOLDERS EQUITY (Details
6. STOCKHOLDERS EQUITY (Details) | 9 Months Ended |
Sep. 30, 2018shares | |
Equity [Abstract] | |
Shares available for grant, beginning | 150,000 |
Options granted | (50,000) |
Shares available for grant, ending | 100,000 |
6. STOCKHOLDERS EQUITY (Detai_2
6. STOCKHOLDERS EQUITY (Details 1) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
2016 Stock Incentive Plan | |
Number of options outstanding, beginning | 0 |
Number of options granted | 50,000 |
Number of options outstanding, ending | 50,000 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 0 |
Weighted average exercise price granted | $ / shares | 6.10 |
Weighted average exercise price outstanding, ending | $ / shares | $ 6.10 |
1999 Amended Stock Plan | |
Number of options outstanding, beginning | 188,744 |
Number of options granted | 3,000 |
Number of options cancelled | 0 |
Number of options outstanding, ending | 191,744 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 95.24 |
Weighted average exercise price granted | $ / shares | 6.23 |
Weighted average exercise price outstanding, ending | $ / shares | $ 93.85 |
6. STOCKHOLDERS EQUITY (Detai_3
6. STOCKHOLDERS EQUITY (Details 2) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Equity [Abstract] | ||
Risk-free interest rate (weighted average) | 2.85% | 2.19% |
Expected volatility (weighted average) | 102.38% | 99.59% |
Expected term (in years) | 7 years | 7 years |
Expected dividend yield | 0.00% | 0.00% |
6. STOCKHOLDERS EQUITY (Detai_4
6. STOCKHOLDERS EQUITY (Details 3) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Equity [Abstract] | |
Number of Restricted Stock Grants, Beginning | shares | 0 |
Number of Restricted Stock Grants, Granted | shares | 85,900 |
Number of Restricted Stock Grants, Vested | shares | (37,420) |
Number of Restricted Stock Grants, Cancelled | shares | (28,566) |
Number of Restricted Stock Grants, Ending | shares | 19,914 |
Weighted Average Grant Date Fair Value, Beginning | $ / shares | $ 0 |
Weighted Average Grant Date Fair Value, Granted | $ / shares | 5.82 |
Weighted Average Grant Date Fair Value, Vested | $ / shares | 5.69 |
Weighted Average Grant Date Fair Value, Cancelled | $ / shares | 5.66 |
Weighted Average Grant Date Fair Value, Ending | $ / shares | $ 6.29 |
6. STOCKHOLDERS EQUITY (Detai_5
6. STOCKHOLDERS EQUITY (Details Narrative) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, authorized | 400,000,000 | 400,000,000 |
Common stock, issued | 1,465,496 | 1,411,840 |
Common stock, outstanding | 1,465,496 | 1,411,840 |