CervoMed (CRVO) 10-Q 14 Nov 16 2016 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Oct. 31, 2016
Document Information [Line Items]
Entity Registrant Name	Diffusion Pharmaceuticals Inc.
Entity Central Index Key	1,053,691
Trading Symbol	dffn
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Common Stock, Shares Outstanding (in shares)		10,345,637
Document Type	10-Q
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Amendment Flag	false

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 3,021,388	$ 1,997,192
Prepaid expenses, deposits and other current assets	265,125	45,921
Total current assets	3,286,513	2,043,113
Property and equipment, net of accumulated depreciation of of $234,070 and $215,028, respectively	85,577	51,996
Intangible asset	8,639,000
Goodwill	6,929,258
Other assets	106,565	181,487
Total assets	19,046,913	2,276,596
Current liabilities:
Accounts payable	757,466	424,675
Other accrued expenses and liabilities	1,043,839	621,669
Current portion of convertible debt	1,880,000	424,964
Total current liabilities	3,681,305	1,471,308
Convertible debt, net of current portion	550,000	818,646
Deferred income taxes	3,279,363
Other liabilities	49,932	28,265
Total liabilities	7,560,600	2,318,219
Stockholders’ Equity (Deficit):
1,000,000,000 shares authorized; 10,345,637 and 8,118,939 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	10,346	8,119
Additional paid-in capital	69,094,497	42,102,876
Accumulated deficit	(57,618,530)	(42,152,618)
Total stockholders' equity (deficit)	11,486,313	(41,623)
Total liabilities and stockholders' equity (deficit)	$ 19,046,913	$ 2,276,596

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Property and equipment, accumulated depreciation	$ 234,070	$ 215,028
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	10,345,637	8,118,939
Common stock, shares outstanding (in shares)	10,345,637	8,118,939

Condensed Consolidated Statemen

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating expenses:
Research and development	$ 1,941,743	$ 922,234	$ 5,739,456	$ 2,602,900
General and administrative	3,852,406	421,985	10,070,878	1,227,860
Depreciation	5,822	2,228	19,520	6,154
Loss from operations	5,799,971	1,346,447	15,829,854	3,836,914
Interest expense, net	1,378	76,170	854	160,315
Loss from operations before income tax benefit	(5,801,349)	(1,422,617)	(15,830,708)	(3,997,229)
Income tax benefit	(364,796)		(364,796)
Net loss	$ (5,436,553)	$ (1,422,617)	$ (15,465,912)	$ (3,997,229)
Per share information:
Net loss per share of common stock, basic and diluted (in dollars per share)	$ (0.53)	$ (0.64)	$ (1.52)	$ (1.81)
Weighted average shares outstanding, basic and diluted (in shares)	10,333,898	2,222,257	10,198,491	2,213,437

Condensed Consolidated Stateme5

Condensed Consolidated Statement of Changes in Stockholders' Equity (Deficit) (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance (in shares) at Dec. 31, 2015	8,118,939
Balance at Dec. 31, 2015	$ 8,119	$ 42,102,876	$ (42,152,618)	$ (41,623)
Fair value of RestorGenex shares (in shares)	1,861,503			1,861,503
Fair value of RestorGenex shares	$ 1,862	19,544,138		$ 19,546,000
Estimated fair value of RestorGenex stock options outstanding		1,321,000		1,321,000
Estimated fair value of RestorGenex warrants outstanding		384,000		$ 384,000
Stock Issued During Period, Shares, Issued for Services	148,073			45,643
Stock Issued During Period, Value, Issued for Services	$ 148	1,409,215		$ 1,409,363
Conversion of convertible debt (in shares)	217,122			217,122
Conversion of convertible debt	$ 217	711,278		$ 711,495
Settlement of litigation matter upon issuance of convertible debt		2,500,000		2,500,000
Stock-based compensation expense		1,121,990		1,121,990
Net loss			(15,465,912)	(15,465,912)
Balance (in shares) at Sep. 30, 2016	10,345,637
Balance at Sep. 30, 2016	$ 10,346	$ 69,094,497	$ (57,618,530)	$ 11,486,313

Unaudited Consolidated Statemen

Unaudited Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities:
Net loss	$ (15,465,912)	$ (3,997,229)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	19,520	6,154
Loss on sale or disposal of assets	6,761
Stock-based compensation expense	1,121,990	373,989
Common stock issued for advisory services	1,409,363
Abandonment of in-process research and development intangible asset	951,000
Change in deferred income taxes	(364,796)
Settlement of litigation matter	2,500,000
Non-cash interest expense	7,067	160,315
Changes in operating assets and liabilities:
Prepaid expenses, deposits and other assets	50,918	6,652
Accounts payable, accrued expenses and other liabilities	410,014	530,785
Net cash used in operating activities	(9,354,075)	(2,919,334)
Cash flows provided by investing activities:
Purchases of property and equipment	(2,331)	(13,644)
Maturities of certificates of deposit		2,500,000
Cash received in reverse merger transaction	8,500,602
Net cash provided by investing activities	8,498,271	2,486,356
Cash flows provided by financing activities:
Proceeds from the issuance of convertible debt	1,880,000
Net cash provided by financing activities	1,880,000
Net increase (decrease) in cash and cash equivalents	1,024,196	(432,978)
Cash and cash equivalents at beginning of period	1,997,192	2,336,519
Cash and cash equivalents at end of period	3,021,388	1,903,541
Supplemental disclosure of non-cash investing and financing activities:
Conversion of convertible notes and related accrued interest into common stock	711,495	47,742
Consideration in connection with RestorGenex Corporation merger transaction	$ 21,261,000	$ 0

Note 1 - Organization and Descr

Note 1 - Organization and Description of Business	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Nature of Operations [Text Block]	1. Organization and Description of Business Diffusion Pharmaceuticals Inc. (“Diffusion” or the “Company”), a Delaware Corporation, is a clinical stage biotechnology company focused on extending the life expectancy of cancer patients by improving the effectiveness of current standard-of-care treatments, including radiation therapy and chemotherapy. The Company’s lead product candidate, trans sodium crocetinate (“TSC”), uses a novel mechanism to re-oxygenate the microenvironment of solid cancerous tumors, thereby enhancing tumor cells’ response to conventional treatment without additional side effects. TSC has received orphan drug designations for the treatment of glioblastoma multiforme (“GBM”) and metastatic brain cancer. The Company expects to enter a Phase III study in newly diagnosed GBM patients and potentially a Phase II study in patients with pancreatic cancer in the next twelve months, assuming the availability of financial resources. On August 17, 2016, the Company effected a 1-for-10 reverse split of its common stock. Any references in the unaudited condensed consolidated financial statements and related notes to share or per share amounts give retroactive effect to this reverse stock split. On January 8, 2016, the Company completed a merger (the “Merger”) of a wholly-owned subsidiary with Diffusion Pharmaceuticals LLC (“Diffusion LLC”) pursuant to an Agreement and Plan of Merger, dated December 15, 2015, by and among the Company, Arco Merger Sub LLC and Diffusion LLC (the “Merger Agreement”) and, as a result, Diffusion LLC became a wholly-owned subsidiary of the Company. At the effective time of the Merger, each outstanding unit of membership interest of Diffusion LLC (“Diffusion Units”) was converted into the right to receive 0.3652658 shares of the Company’s common stock, as determined pursuant to the Merger Agreement (“Exchange Ratio”). Also at the effective time of the Merger, $1,125,000 of Diffusion LLC convertible notes were outstanding and the rights of the holders of each outstanding convertible promissory note convertible into Diffusion Units (“Diffusion Convertible Notes”) were converted into the right to convert such securities into a number of shares of the Company’s common stock equal to the number of Diffusion Units into which such Diffusion Convertible Notes would have been convertible under the terms of the note in effect immediately prior to the consummation of the Merger multiplied by the Exchange Ratio. In addition, at the effective time of the Merger and as a result of the Merger, all outstanding options to purchase Diffusion Units were converted into and became options to purchase the Company’s common stock on terms substantially identical to those in effect prior to the effective time of the Merger, except for adjustments to the underlying number of shares and the exercise price based on the Exchange Ratio. As a result of the Merger, at the Effective Time, after taking into account the adjustments to the number of shares and exercise price as a result of the Merger, the Company assumed options to purchase Diffusion Units which converted into options to purchase an aggregate of 1,495,249 shares of the Company’s common stock with a weighted average exercise price of $3.91 per share. No fractional shares of the Company’s common stock were issued in connection with the Merger, and holders of Diffusion Units were eligible to receive cash in lieu thereof. The Merger transaction was accounted for as a reverse acquisition under the acquisition method of accounting. Because Diffusion LLC’s pre-transaction owners held an 84.1% economic and voting interest in the combined company immediately following the closing of the Merger, Diffusion LLC is considered to be the acquirer of the Company for accounting purposes. Accordingly, the historical financial statements of Diffusion LLC became the Company’s historical financial statements including the comparative prior periods. All references in the unaudited interim condensed consolidated financial statements to the number of shares and per-share amounts of common stock have been retroactively restated to reflect the Exchange Ratio. Immediately following the Merger, the holders of the Company’s common stock immediately prior to the Merger held 1,861,503 shares, or approximately 15.9% of the common stock of the combined company, in each case, on a fully-diluted basis (subject to certain exceptions and adjustments).

Note 2 - Liquidity

Note 2 - Liquidity	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Substantial Doubt about Going Concern [Text Block]	2. Liquidity The Company has not generated any revenues from product sales and has funded operations primarily from the proceeds of private placements of its membership units and convertible notes. Substantial additional financing will be required by the Company to continue to fund its research and development activities. No assurance can be given that any such financing will be available when needed or that the Company’s research and development efforts will be successful. The Company regularly explores alternative means of financing its operations and seeks funding through various sources, including public and private securities offerings, collaborative arrangements with third parties and other strategic alliances and business transactions. However, the Company currently does not have any commitments to obtain additional funds and may be unable to obtain sufficient funding in the future on acceptable terms, if at all. If the Company cannot obtain funding in the immediate future, it will need to delay, scale back or eliminate some or all of its research and development programs or enter into collaborations with third parties to: commercialize potential products or technologies that it might otherwise seek to develop or commercialize independently; consider various strategic alternatives, including a merger or sale of the Company; or cease operations. If the Company engages in collaborations, it may receive lower consideration upon commercialization of such products than if it had not entered into such arrangements or if it entered into such arrangements at later stages in the product development process. The Company has prepared its financial statements assuming that it will continue as a going concern, which contemplates realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses since inception and it expects to generate losses from operations for the foreseeable future primarily due to research and development costs for its potential product candidates. Various internal and external factors will affect whether and when the Company’s product candidates become approved drugs and how significant their market share will be. The regulatory approval and market acceptance of the Company’s proposed future products (if any), length of time and cost of developing and commercializing these product candidates and/or failure of them at any stage of the drug approval process will materially affect the Company’s financial condition and future operations. The Company believes its cash and cash equivalents at September 30, 2016 are sufficient to fund operations and meet its research and development goals into the early first quarter of 2017.

Note 3 - Basis of Presentation

Note 3 - Basis of Presentation and Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Significant Accounting Policies [Text Block]	3. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as found in the Accounting Standard Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”), and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements of the Company include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of September 30, 2016, its results of operations for the three and nine months ended September 30, 2016 and 2015 and cash flows for the nine months ended September 30, 2016 and 2015. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The unaudited interim condensed consolidated financial statements presented herein do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2015 filed with the SEC on Form 8-K/A on March 25, 2016. The Company’s members’ capital at December 31, 2015 has been recast as common stock and additional paid in capital. On August 17, 2016, the Company effected a 1-for-10 reverse split of its common stock. The accompanying unaudited condensed consolidated financial statements and these notes give retroactive effect to this reverse stock split. Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts payable, and accrued expenses approximate fair value due to the short-term nature of those instruments. As of September 30, 2016 and December 31, 2015, the fair value of the Company’s outstanding convertible notes was approximately $5,950,000 and $4,800,000, respectively. The fair value of the convertible notes are determined using a binomial lattice model that utilizes certain unobservable inputs that fall within Level 3 of the fair value hierarchy. Cash and Cash Equivalents The Company considers any highly liquid investments, such as money market funds, with original maturities of three months or less to be cash and cash equivalents. DIFFUSION PHARMACEUTICALS INC. NOTES TO UNAUDITED Condensed CONSOLIDATED FINANCIAL STATEMENTS Property and Equipment The Company records property and equipment at cost less accumulated depreciation and amortization. Costs of renewals and improvements that extend the useful lives of the assets are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is recognized on a straight-line basis over the estimated useful lives of the assets, which generally range from five to fifteen years. The Company amortizes leasehold improvements over the shorter of the estimated useful life of the asset or the term of the related lease. Upon retirement or disposition of assets, the costs and related accumulated depreciation and amortization are removed from the accounts with the resulting gains or losses, if any, reflected in results of operations. Long-Lived Assets Long-lived assets are reviewed for potential impairment whenever events indicate that the carrying amount of such assets may not be recoverable. The Company does this by comparing the carrying value of the long-lived assets with the estimated future undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. If it is determined an impairment exists, the asset is written down to its estimated fair value. The Company has not recognized any impairment of long-lived assets during the nine months ended September 30, 2016. Intangible Assets Intangible assets are comprised of identifiable in-process research and development (“IPR&D”) assets and are considered indefinite-lived intangible assets and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written-off and the Company will record a non-cash impairment loss. For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives. In August 2016, the Company abandoned the future development efforts for the IPR&D asset associated with the Company’s RES-440 product candidate, and the value of the IPR&D asset was written down to $0 (See Note 4). Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized, but is subject to an annual impairment test. The Company has a single reporting unit and all goodwill relates to that reporting unit. The Company performs its annual goodwill impairment test on October 1 of its fiscal year or more frequently if changes in circumstances or the occurrence of events suggest that an impairment exists. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit’s goodwill is less than the carrying value of the reporting unit’s goodwill. The Company has not recognized any impairment of goodwill during the nine months ended September 30, 2016. Research and Development Major components of research and development costs include internal research and development (such as salaries and related employee benefits, equity-based compensation, supplies and allocated facility costs) and contracted services (research and development activities performed on the Company’s behalf). Costs incurred for research and development are expensed as incurred. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the services provided, the Company may record net prepaid or accrued expenses relating to these costs. Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered. Patent Costs Patent costs, including related legal costs, are expensed as incurred and are recorded within general and administrative expenses in the statements of operations. Income Taxes Prior to the Merger, Diffusion LLC was treated as a partnership for federal and state income tax purposes. Diffusion LLC’s taxable income or loss, as well as certain other tax attributes, were passed through directly to its members and were reported in each member’s individual income tax return. Upon completion of the Merger as discussed in Note 1, the Company converted from a partnership to a corporation for accounting purposes. As a corporation, the Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on its income tax return it files, if such a position is more likely than not to be sustained. Debt The current and noncurrent portions of accrued interest related to the Company’s Convertible Notes and 2016 Convertible Notes are included within other accrued expenses and liabilities and other liabilities, respectively, on the accompanying consolidated balance sheets. Debt issuance costs incurred in connection with debt financing arrangements are amortized to interest expense over the life of the respective financing arrangement using the effective interest method. Stock-Based Compensation The Company measures employee and nonemployee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the award. Stock-based awards issued to non-employees are revalued until the award vests. The Company uses the Black-Scholes option pricing model to value its stock option awards. Estimating the fair value of stock option awards requires management to apply judgment and make estimates, including the volatility of the Company’s common stock, the expected term of the Company’s stock options, the expected dividend yield and the fair value of the Company’s common stock on the measurement date. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected life of stock options was estimated using the “simplified method” for employee options as the Company has no historical information to develop reasonable expectations about future exercise patterns and post vesting employment termination behavior for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For options granted to non-employees, the Company uses the remaining contractual life. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of option grants. The Company assumes no dividend yield because dividends are not expected to be paid in the near future, which is consistent with the Company’s history of not paying dividends. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option. Net Loss Per Share Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible debt, warrants, stock options and unvested restricted stock that would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities outstanding as of September 30, 2016 and 2015 have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive: September 30, 2016 2015 Convertible debt 749,280 5,847,645 Common stock warrants 460,721 — Stock options 2,010,409 1,109,605 Unvested restricted stock awards 10,738 18,410 3,231,148 6,975,660 Amounts in the table reflect the common stock equivalents of the noted instruments. Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Compensation – Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued ASU 2016-06, Contingent Put and Call Options in Debt Instruments In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern Reclassification Certain prior period balances have been reclassified to conform with the current period presentation.

Note 4 - Acquisition

Note 4 - Acquisition	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Business Combination Disclosure [Text Block]	4. Acquisition Merger of RestorGenex Corporation and Diffusion Pharmaceuticals LLC On December 15, 2015, the Company, formerly known as RestorGenex Corporation (“RestorGenex”), entered into the Merger Agreement with Diffusion LLC. On January 8, 2016, the Company completed the Merger, with Diffusion LLC surviving as a wholly-owned subsidiary of the Company. Subsequent to the Merger, the Company was renamed “Diffusion Pharmaceuticals Inc.” and the Company’s ticker symbol on the OTC Bulletin Board was changed from “RESX” to “DFFN.” In November 2016, the Company's common stock was approved for listing on the NASDAQ Capital Market and will continue to trade under the ticker symbol "DFFN". Diffusion LLC and RestorGenex entered into the merger agreement in an effort to provide improved access to the capital markets in order to obtain the resources necessary to accelerate development of TSC in multiple clinical programs and continue to build an oncology-focused company. The Merger transaction was accounted for as a reverse acquisition under the acquisition method of accounting. Because Diffusion LLC’s pre-transaction owners held an 84.1% economic and voting interest in the combined company immediately following the completion of the Merger, Diffusion LLC is considered to be the acquirer of RestorGenex for accounting purposes. Each Diffusion Unit was converted into the right to receive 0.3652658 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), as determined pursuant to the Exchange Ratio. Additionally, the right of holders of Diffusion Convertible Notes to convert such notes into Diffusion Units was converted into the right to convert such notes into a number of shares of Common Stock equal to the number of Diffusion Units into which such note would have been convertible under the terms of the note in effect immediately prior to the consummation of the Merger multiplied by the Exchange Ratio. In addition, all outstanding options to purchase Diffusion Units were assumed by the Company and the right to exercise converted into stock options to purchase Common Stock on terms substantially identical to those in effect prior to the Merger transaction, except for adjustments to the underlying number of shares and the exercise price based on the Exchange Ratio. In connection with the Merger, the Company’s Board of Directors authorized, declared and effected a distribution of contingent value rights (“CVRs”) to shareholders of the Company as of the close of business on January 7, 2016. Each CVR is a non-transferable right to potentially receive certain cash payments in the event the Company receives net cash payments during the five-year period after the Merger as a result of the sale, transfer, license or similar transaction or any other agreement to the extent relating to the development of the Company’s product currently known as RES-440, a “soft” anti-androgen. See below and Note 11 for additional fair value information. The purchase consideration in a reverse acquisition is determined with reference to the value of equity that the accounting acquirer, Diffusion LLC, would have had to issue to the owners of the accounting acquiree, RestorGenex, to give the pre-acquisition RestorGenex equity holders the same percentage interest in Diffusion LLC that such pre-acquisition RestorGenex equity holders held in the Company immediately following the reverse acquisition. The purchase price was calculated as follows: Fair value of RestorGenex shares outstanding $ 19,546,000 Estimated fair value of RestorGenex stock options outstanding 1,321,000 Estimated fair value of RestorGenex warrants outstanding 384,000 CVRs – RES-440 product candidate 10,000 Total preliminary purchase price $ 21,261,000 The Merger transaction has been accounted for using the acquisition method of accounting, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The valuation technique utilized to value the IPR&D was the cost approach. The following table summarizes the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the acquisition date: Cash and cash equivalents $ 8,500,602 Prepaid expenses and other assets 195,200 Property and equipment 57,531 Intangible assets 9,600,000 Goodwill 6,929,258 Accrued liabilities (377,432 ) Deferred tax liability (3,644,159 ) Net assets acquired $ 21,261,000 The above allocation of the purchase price is based on certain preliminary valuations and other analyses that have not been completed as of the date of the filing. Any changes in the estimated fair values of the net assets recorded for the Merger upon the finalization of more detailed analyses of the facts and circumstances that existed at the date of the transaction may change the allocation of the purchase price. As such, the purchase price allocations for this transaction are preliminary estimates, which are subject to change within the measurement period. During the three months ended September 30, 2016, the Company corrected the valuation of the acquired intangible assets and recorded an additional $283,000 and $107,226 to the estimated fair value of acquired intangible assets and deferred tax liability, respectively. As a result, goodwill decreased by $175,773. Qualitative factors supporting the recognition of goodwill due to the Merger include the Company’s anticipated enhanced ability to secure additional capital and gain access to capital market opportunities as a public company and the potential value created by having a more well-rounded clinical development portfolio by adding the earlier stage RestorGenex products to the Company’s later state product portfolio. Intangible assets acquired were as follows: Acquisition Date Fair Value Accumulated Amortization Impairment Upon Abandonment Carrying Value at September 30, 2016 RES 529 $ 8,639,000 $ - $ - $ 8,639,000 RES 440 961,000 - (961,000 ) - Total in-process research and development costs (IPR&D) $ 9,600,000 $ - $ (961,000 ) $ 8,639,000 The Company’s novel PI3K/Akt/mTOR pathway inhibitor, RES-529, is in preclinical development for oncology. Through a series of in vitro and in vivo animal models, RES-529 has been shown to have activity in several cancer types due to its ability to target and inhibit the PI3K/Akt/mTOR signal transduction pathway. RES-529 is a first-in-class inhibitor of both TORC1 and TORC2 that is mechanistically differentiated from other PI3K/Akt/mTOR pathway inhibitors currently in development. RES-529 has shown activity in both in vitro and in vivo glioblastoma animal models and has been demonstrated to be orally bioavailable and can cross the blood brain barrier. In August 2016, the Board of Directors determined that RES-440, a “soft” anti-androgen compound for the treatment of acne vulgaris, was outside the Company’s core product focus, and was not a priority. Therefore, future development efforts were abandoned in the third quarter of 2016. In connection with its review of such abandonment, the Company concluded RES-440 was impaired in its entirety and the CVRs were remeasured and determined to have no value as of September 30, 2016. The abandonment resulted in a net impairment charge of $951,000 and was recorded as a component of research and development expenses within the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2016. The abandonment also resulted in an income tax benefit of $364,796. Pro Forma Financial Information (Unaudited) The following pro forma financial information reflects the condensed consolidated results of operations of the Company as if the acquisition of RestorGenex had taken place on January 1, 2015. The pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected on the assumed date. Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net revenues $ N/A $ — $ — $ — Net loss $ N/A $ (3,576,120 ) $ (13,900,691 ) $ (13,636,471 ) Basic and diluted loss per share $ N/A $ (0.87 ) $ (1.36 ) $ (3.31 ) Non-recurring pro forma transaction costs directly attributable to the Merger were $1,644,768 for the nine month period ended September 30, 2016 and have been deducted from the net loss presented above. The costs deducted from the nine months ended September 30, 2016 periods included a success fee of $1,000,000 and approximately 46,000 shares of common stock with a fair market value of $487,500 paid to a financial advisor upon the closing of the Merger on January 8, 2016. The three months ended September 30, 2016 are not presented as those results include RestorGenex results. Additionally, the Company incurred approximately $3,000,000 in severance costs as a result of resignations of executive officers immediately prior to the Merger. These costs are excluded from the pro forma financial information for the three and nine months ended September 30, 2016. The Company excluded an $11,100,000 goodwill impairment charge incurred by RestorGenex from the pro forma financial information for the three and nine month periods ended September 30, 2015.

Note 5 - Other Accrued Expenses

Note 5 - Other Accrued Expenses and Liabilities	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Other Liabilities Disclosure [Text Block]	5. Other Accrued Expenses and Liabilities Other accrued expenses and liabilities consisted of the following: September 30, 2016 December 31, 2015 Accrued interest payable $ 927 $ 14,009 Accrued payroll and payroll related expenses 491,678 56,947 Accrued professional fees 142,056 327,950 Accrued clinical studies expenses 326,410 184,737 Other accrued expenses 82,768 38,026 Total $ 1,043,839 $ 621,669

Note 6 - Convertible Debt

Note 6 - Convertible Debt	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Debt Disclosure [Text Block]	6. Convertible Debt The following table provides the details of the Convertible Notes outstanding at September 30, 2016: Note Issue Date Maturity Date Conversion Price Interest Rate Total Principal 2016 Convertible Notes 9/27/2016 9/27/2017 $ 3.50 6.00 % $ 1,880,000 Series B Note 3/15/2011 6/30/2018 $ 2.74 1.00 % 550,000 Total principal amount $ 2,430,000 On September 27, 2016, the Company issued and sold convertible promissory notes (“2016 Convertible Notes”) in an aggregate principal amount of $1,880,000. The 2016 Convertible Notes were issued to an investor and certain other parties in connection with the settlement of a litigation matter (see Note 9). The 2016 Convertible Notes have a term of one year and bear interest at a rate of 6.0% per annum with the principal and accrued interest due upon the earlier of the maturity date or conversion date. At any time prior to the maturity date, the holders may elect to convert, in whole or in part, the 2016 Convertible Notes (including any accrued but unpaid interest) into shares of the Company’s common stock, par value $0.001 per share, at a conversion price of $3.50 per share. In the event of a Change of Control (as defined in the 2016 Convertible Notes), the holders of the 2016 Convertible Notes may declare the aggregate outstanding amount of the 2016 Convertible Notes to be immediately due and payable or may elect to convert the 2016 Convertible Notes and any accrued but unpaid interest as if such conversion took place on the maturity date. The Company accounted for the issuance of the convertible promissory notes in accordance with ASC 470-10-25 and, at the time of issuance, recorded a litigation settlement expense of $2,500,000 which represents the difference between the estimated fair value of the 2016 Convertible Notes issued and the cash received from the noteholders. From December 2009 through December 2015, Diffusion LLC issued unsecured convertible promissory notes (the “Convertible Notes”) for gross proceeds of $22,384,320. The Convertible Notes bear interest at either 1% or 1.5% per annum. The Convertible Notes accrue interest beginning on the date of issuance, with the principal and accrued interest due upon the earlier of the maturity date or conversion date. At any time prior to the maturity date, the holders may elect to convert, in whole or in part, the Convertible Notes and any related accrued but unpaid interest into common stock of the Company at a price per share equal to the conversion price. In the event of a Change of Control or a Qualified Financing (each as defined below), the holders of the Convertible Notes may declare the aggregate outstanding amount of the Convertible Notes to be immediately due and payable or may elect to convert the Convertible Notes and any accrued but unpaid interest as if such conversion took place on the maturity date. A Change of Control is defined as: (i) a merger or consolidation in which the members immediately prior to the transaction do not own, directly or indirectly, more than 50% of the membership interest of the surviving company; (ii) the acquisition of more than 50% of the Company’s outstanding membership interest by a single person, entity or group or persons or entities acting in concert or (iii) the sale or transfer of all or substantially all of the assets of the Company. A Qualified Financing is defined as a sale of units or other transaction that results in gross proceeds to the Company of at least $15,000,000, including the conversion of the Convertible Notes. Through the date the financial statements were available to be issued, there have been no Change of Control or Qualified Financing events. The Company may prepay the Convertible Notes, in full or in part, at any time on a pari passu basis. Upon receipt of notice that the Company intends to prepay the Convertible Notes, holders will have the option to convert their notes in lieu of payment. At the effective time of the Merger, $1,125,000 in aggregate principal amount of Convertible Notes were outstanding and the rights of the holders of each such outstanding Convertible Note convertible into Diffusion Units were converted into the right to convert such securities into a number of shares of the Company’s common stock equal to the number of Diffusion Units such Convertible Note would be convertible into pursuant to its terms multiplied by the Exchange Ratio. During the nine months ended September 30, 2016, the following Convertible Notes and the related accrued interest were converted into 217,122 shares of common stock: Convertible Note Series Principal Accrued Interest Total Principal and Accrued Interest B $ 20,000 $ 962 $ 20,962 C 425,000 14,538 439,538 E 50,000 770 50,770 F 200,000 225 200,225 Total $ 695,000 $ 16,495 $ 711,495 During the three and nine months ended September 30, 2015, $54,500 and $1,361 of Series C principal and accrued interest, respectively, were converted into equity.

Note 7 - Stockholder's Equity

Note 7 - Stockholder's Equity	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Stockholders' Equity Note Disclosure [Text Block]	7. Stockholder’s Equity Common Stock In connection with the reverse merger, as discussed in Note 4, the Company ascribed non-cash consideration of $384,000 to 478,200 warrants outstanding prior to the reverse merger. During the nine months ended September 30, 2016, the Company is deemed to have issued 2,226,698 shares of its common stock of which 1,861,503 are shares held by the former shareholders of RestorGenex immediately prior to the completion of the Merger, 45,643 shares were issued for advisory services provided to Diffusion LLC in connection with the Merger, 102,430 shares were issued for general financial advisory services provided to Diffusion Pharmaceuticals Inc. and 217,122 shares were issued pursuant to conversions of convertible debt as discussed in Note 6. The Company did not purchase or retire any shares of its common stock. Legacy RestorGenex Warrants During the nine months ended September 30, 2016, the Company did not grant any warrants to purchase shares of its common stock and no warrants were exercised. During the nine months ended September 30, 2016, warrants to purchase an aggregate of 17,479 shares of common stock expired unexercised. Warrants to purchase an aggregate of 460,721 shares of the Company’s common stock were outstanding and exercisable as of September 30, 2016, with per share exercise prices ranging from $20.00 to $750.00 and a weighted average exercise price of $54.27 per share.

Note 8 - Stock-based Compensati

Note 8 - Stock-based Compensation	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	8. Stock-Based Compensation Stock-based Compensation Upon consummation of the Merger, all outstanding options to purchase Diffusion LLC units were converted into stock options to purchase the Company’s common stock on terms substantially identical to those in effect prior to the reverse merger, except for adjustments to the underlying number of shares and the exercise price based on the Exchange Ratio. At the time of the Merger, there were 301,156 RestorGenex stock options that were exercisable for shares of the Company’s common stock at a weighted average exercise price of $40.13 per share. The Company recorded stock-based compensation expense in the following expense categories of its unaudited interim condensed consolidated statements of operations for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Research and development $ 174,932 $ 78,289 $ 601,260 $ 197,871 General and administrative 215,425 63,119 520,730 176,118 Total stock-based compensation expense $ 390,357 $ 141,408 $ 1,121,990 $ 373,989 The following table summarizes the activity related to all stock option grants to employees and non-employees for the nine months ended September 30, 2016: Number of Options Weighted average exercise price per share Weighted average remaining contractual life (in years) Balance at January 1, 2016 1,495,615 $ 3.92 RestorGenex options outstanding 301,156 40.13 Cancelled (48,190 ) 61.30 Granted 261,828 8.89 Outstanding at September 30, 2016 2,010,409 $ 8.62 7.6 Exercisable at September 30, 2016 1,357,109 $ 9.64 7.1 Vested and expected to vest at September 30, 2016 2,006,156 $ 8.62 7.6 At September 30, 2016, there was $3,076,088 of unrecognized compensation cost related to non-vested options of which $402,910 is attributable to 67,597 options issued to non-employees and subject to re-measurement until vested. The total unrecognized compensation expense will be recognized as expense over a weighted-average period of 5.9 years. Generally, the options have a ten-year term and vest in equal monthly installments over three years. In August 2016, the Company granted an option to purchase 204,907 shares of Common Stock to a new director in connection with his appointment to the board of directors. The options will vest in equal quarterly installments over ten years and any options exercised are restricted from being sold until August 2021. All options granted were valued using the Black-Scholes model and assumptions used to value the options granted during the first nine months of 2016 were as follows: Grant date fair value $7.30 - $8.01 Exercise price $8.75 - $9.60 Expected term (in years) 5.77 - 7.48 Risk-free interest rate 1.2% - 1.5% Expected volatility 106.8% - 124.0% Dividend yield 0% Restricted Stock Awards As of September 30, 2016, and December 31, 2015, there were 10,738 and 15,341, respectively, unvested shares of restricted stock. During the three and nine months ended September 30, 2016, 1,534 and 4,603 shares vested, respectively, and the Company recognized stock-based compensation expense of $3,024 and $9,057 during the three and nine months ended September 30, 2016, respectively. At September 30, 2016, there was $20,538 of unrecognized compensation cost related to unvested restricted stock that will be recognized as expense over a weighted average period of 1.7 years. 2015 Equity Plan The 2015 Equity Plan, as amended in July 2016, currently allows for the issuance of up to a maximum of 500,000 shares of common stock in connection with the grant of stock-based awards, including stock options, restricted stock, restricted stock units, stock appreciation rights and other types of awards as deemed appropriate, not including shares subject to awards assumed in connection with certain transactions, including the Merger. As of September 30, 2016, there were 237,507 shares of common stock available for future issuance under the 2015 Equity Plan. In addition, beginning on January 1, 2017, on each January 1 st st

Note 9 - Commitments and Contin

Note 9 - Commitments and Contingencies	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Commitments and Contingencies Disclosure [Text Block]	9. Commitments and Contingencies Office Space Rental The Company leases office and laboratory facilities in Charlottesville, Virginia under a month-to-month cancelable operating lease. Rent expense related to the operating lease was $18,200 and $16,500 for the three months ended September 30, 2016 and 2015, respectively and $53,500 and $49,500 for the nine months ended September 30, 2016 and 2015, respectively. In connection with the acquisition of RestorGenex in January 2016 (see Note 4), the Company assumed leased office space totaling approximately 2,900 square feet in Buffalo Grove, Illinois. The term of the lease commenced on September 15, 2014 and will continue through February 28, 2018. Rent expense related to the operating lease was $15,300 and $61,000 for the three and nine months ended September 30, 2016, respectively. During the nine months ended September 30, 2016, the Company vacated these leased premises and recorded an associated rent liability pursuant to Accounting Standard Codification Topic 420, Exit or Disposal Cost Obligations (ASC 420) The Company’s contractual obligations with respect to rental commitment in Illinois as of September 30, 2016 was as follows: Rental Commitments Payments due by period: One year $ 75,300 Two years 31,600 Three years — Thereafter — Total $ 106,900 Legal Proceedings From time to time, the Company is subject to various pending or threatened legal actions and proceedings, including those that arise in the ordinary course of its business, which may include employment matters, breach of contract disputes and stockholder litigation. Such actions and proceedings are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time. The Company records a liability in its unaudited interim condensed consolidated financial statements for costs related to claims, including future legal costs, settlements and judgments, when the Company has assessed that a loss is probable and an amount can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. The Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. In the opinion of management, as of September 30, 2016, the amount of liability, if any, with respect to these matters, individually or in the aggregate, will not materially affect the Company’s unaudited interim condensed consolidated results of operations, financial position or cash flows. On August 7, 2014, a complaint was filed in the Superior Court of Los Angeles County, California by Paul Feller, the Company’s former Chief Executive Officer under the caption Paul Feller v. RestorGenex Corporation, Pro Sports & Entertainment, Inc., ProElite, Inc. and Stratus Media Group, GmbH On September 21, 2015, David Schmidt, a former member of Diffusion LLC and current stockholder of the Company, filed suit (the “Original Complaint”) in the Circuit Court for Albemarle County, Virginia (Case. No. CL15-791, David G. Schmidt v. Diffusion Pharmaceuticals LLC), which Complaint was amended on April 14, 2016 (the “Amended Complaint”). In December 2009, Mr. Schmidt purchased a $1.5 million convertible promissory note from Diffusion LLC which he elected to immediately convert in full into membership units at the contractual per-unit conversion price of $3.50. In 2012, Diffusion LLC negotiated a reduction of the conversion price, from $3.50 to $1.00, with respect to the notes in such series that remained outstanding at such time. The Original Complaint alleged that this renegotiation represented a breach of contract with respect to Mr. Schmidt’s previously converted convertible note, and requested relief of specific performance requiring Diffusion LLC to issue him an additional 1,071,432.50 units, representing the additional number of units he would have received had he converted at the renegotiated conversion price. The claim was dismissed on March 14, 2016 for failure to state a viable cause of action, but Mr. Schmidt was given 21 days to file an amended complaint. The Amended Complaint alleged that Mr. Schmidt was denied the opportunity to exercise preemptive rights under Diffusion LLC’s Operating Agreement to purchase the additional 1,071,432.50 units for $1 per unit. The sole relief sought by Mr. Schmidt was an order of specific performance requiring the Company to issue him 391,358 shares of the Common Stock (the equivalent of 1,071,432.50 Diffusion Units multiplied by the Exchange Ratio) in exchange for his payment of $1,071,432.50. On September 27, 2016, the Company, Diffusion LLC, Mr. Schmidt and the other parties thereto entered into a Settlement Agreement (the “Settlement Agreement”) pursuant to which, among other things, (i) Mr. Schmidt and Diffusion each agreed to submit a consent order to the Court dismissing all claims set forth in the Amended Complaint with prejudice and without an admission of liability by any party, (ii) Mr. Schmidt and Diffusion each released, on behalf of such party and its heirs, assigns, representatives, affiliates and agents, all claims and causes of action of any nature against the other party existing as of the date of the Settlement Agreement and (iii) as consideration therefor, the Company agreed to issue and sell, to Mr. Schmidt and the other parties to the Settlement Agreement, the 2016 Convertible Notes in an aggregate principal amount of $1,880,000. The Company recognized a litigation settlement charge of $2,500,000 which represents the difference between the fair value of the 2016 Convertible Notes issued and the cash received from Mr. Schmidt and other parties. The settlement charge was recorded as a component of general and administrative expenses within the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2016.

Note 10 - Income Taxes

Note 10 - Income Taxes	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Income Tax Disclosure [Text Block]	10. Income Taxes Deferred tax assets and liabilities are determined based on the differences between the financial statement carrying amounts and tax bases of assets and liabilities using enacted tax rates in effect for years in which differences are expected to reverse. A deferred tax liability of $3,644,159 was recorded for the basis differences associated with indefinite-lived in-process R&D assets. Due to their indefinite-lived treatment, the related deferred tax liabilities are not expected to reverse in a period that would support the realization of the Company’s deferred tax assets. The Company maintains a valuation allowance against its deferred tax assets. In August 2016, the Company abandoned future development efforts for the IPR&D asset associated with RES-440 and recorded an impairment charge of $961,000 which is equal to its acquired value. Upon recognizing the impairment, the Company recognized an income tax benefit of $364,796 and reduced the carrying value of the related deferred tax liability as of September 30, 2016 (Note 4). The Company has incurred net operating losses for federal and state income tax purposes since inception. The Tax Reform Act of 1986 (the “Act”) provides for limitation on the use of net operating loss and research and development tax credit carryforwards following certain ownership changes (as defined in the Act) that could limit the Company’s ability to utilize these carryforwards. The Company may have experienced various ownership changes as a result of past financings and acquisitions. Accordingly, the Company’s ability to utilize the aforementioned carryforwards may be limited. Additionally, U.S. tax laws limit the time during which these carryforwards may be applied against future taxes; therefore, the Company has determined it is more likely than not that these net operating losses will not be realized.

Note 11 - Fair Value Measuremen

Note 11 - Fair Value Measurements	9 Months Ended
	Sep. 30, 2016
Notes to Financial Statements
Fair Value Disclosures [Text Block]	11. Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: ● Level 1—Quoted prices in active markets for identical assets or liabilities. ● Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. ● Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis: September 30, 2016 (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 3,021,388 $ — $ — December 31, 2015 (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 1,997,192 $ — $ — Contingent Value Rights Distribution In December 2015, the Company’s Board of Directors authorized, declared and effected a distribution of the CVRs to shareholders of the Company as of the close of business on January 7, 2016 (the “CVR Record Date”) at a rate of one CVR for each share of Common Stock. The CVRs, which are not certificated and not attached to the shares of Common Stock, were payable immediately prior to the effective time. Each CVR represents a non-transferable right (subject to certain limited exceptions) to potentially receive certain cash payments in the event the Company receives net cash payments during the five-year period after the Merger as a result of the sale, transfer, license or similar transaction relating to the Company’s product currently known as RES-440, which is a “soft” anti-androgen, upon the terms and subject to the conditions set forth in a contingent value rights agreement, dated January 8, 2016, between the Company and Computershare, Inc., as rights agent (the “CVR Agreement”). The aggregate cash payments to be distributed to the holders of the CVRs, if any, will be equal to the amount of net cash payments received by the Company as a result of the sale, transfer, license or similar transaction relating to RES-440, as determined pursuant to the CVR Agreement, but will not exceed $50,000,000 in the aggregate. Any option or warrant holder of the Company as of the record date for the CVRs would, at the time of exercise, be entitled to receive one CVR for each share of the Company’s common stock issued upon the future exercise of the option or warrant, which would entitle the holder to a pro rata portion of any CVR payments made after the date of exercise. In connection with the abandonment of the RES-440 IPR&D asset (see Note 4), the Company remeasured the value of each CVR and as of September 30, 2016, determined the CVRs have no value. The reconciliation of the contingent consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) is as follows: Contingent Consideration Issued in connection with the Merger transaction $ 10,000 Change in fair value upon abandonment of RES-440 (10,000 ) Balance at September 30, 2016 $ —

Significant Accounting Policies

Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Basis of Accounting, Policy [Policy Text Block]	Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information as found in the Accounting Standard Codification (“ASC”) and Accounting Standards Updates (“ASUs”) of the Financial Accounting Standards Board (“FASB”), and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities and Exchange Commission (the “SEC”). In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements of the Company include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of September 30, 2016, its results of operations for the three and nine months ended September 30, 2016 and 2015 and cash flows for the nine months ended September 30, 2016 and 2015. Operating results for the three and nine months ended September 30, 2016 are not necessarily indicative of the results that may be expected for the year ending December 31, 2016. The unaudited interim condensed consolidated financial statements presented herein do not contain the required disclosures under GAAP for annual financial statements. The accompanying unaudited interim condensed consolidated financial statements should be read in conjunction with the annual audited financial statements and related notes as of and for the year ended December 31, 2015 filed with the SEC on Form 8-K/A on March 25, 2016. The Company’s members’ capital at December 31, 2015 has been recast as common stock and additional paid in capital. On August 17, 2016, the Company effected a 1-for-10 reverse split of its common stock. The accompanying unaudited condensed consolidated financial statements and these notes give retroactive effect to this reverse stock split.
Fair Value of Financial Instruments, Policy [Policy Text Block]	Fair Value of Financial Instruments The carrying amounts of the Company’s financial instruments, including cash equivalents, accounts payable, and accrued expenses approximate fair value due to the short-term nature of those instruments. As of September 30, 2016 and December 31, 2015, the fair value of the Company’s outstanding convertible notes was approximately $[5,858,000] and $4,800,000, respectively. The fair value of the convertible notes are determined using a binomial lattice model that utilizes certain unobservable inputs that fall within Level 3 of the fair value hierarchy.
Cash and Cash Equivalents, Policy [Policy Text Block]	Cash and Cash Equivalents The Company considers any highly liquid investments, such as money market funds, with original maturities of three months or less to be cash and cash equivalents.
Property, Plant and Equipment, Policy [Policy Text Block]	Property and Equipment The Company records property and equipment at cost less accumulated depreciation and amortization. Costs of renewals and improvements that extend the useful lives of the assets are capitalized. Maintenance and repairs are expensed as incurred. Depreciation is recognized on a straight-line basis over the estimated useful lives of the assets, which generally range from five to fifteen years. The Company amortizes leasehold improvements over the shorter of the estimated useful life of the asset or the term of the related lease. Upon retirement or disposition of assets, the costs and related accumulated depreciation and amortization are removed from the accounts with the resulting gains or losses, if any, reflected in results of operations.
Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]	Long-Lived Assets Long-lived assets are reviewed for potential impairment whenever events indicate that the carrying amount of such assets may not be recoverable. The Company does this by comparing the carrying value of the long-lived assets with the estimated future undiscounted cash flows expected to result from the use of the assets, including cash flows from disposition. If it is determined an impairment exists, the asset is written down to its estimated fair value. The Company has not recognized any impairment of long-lived assets during the nine months ended September 30, 2016.
Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block]	Intangible Assets Intangible assets are comprised of identifiable in-process research and development (“IPR&D”) assets and are considered indefinite-lived intangible assets and are assessed for impairment annually or more frequently if impairment indicators exist. If the associated research and development effort is abandoned, the related assets will be written-off and the Company will record a non-cash impairment loss. For those compounds that reach commercialization, the IPR&D assets will be amortized over their estimated useful lives. In August 2016, the Company abandoned the future development efforts for the IPR&D asset associated with the Company’s RES-440 product candidate, and the value of the IPR&D asset was written down to $0 (See Note 4).
Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block]	Goodwill Goodwill is the excess of the cost of an acquired entity over the net amounts assigned to tangible and intangible assets acquired and liabilities assumed. Goodwill is not amortized, but is subject to an annual impairment test. The Company has a single reporting unit and all goodwill relates to that reporting unit. The Company performs its annual goodwill impairment test on October 1 of its fiscal year or more frequently if changes in circumstances or the occurrence of events suggest that an impairment exists. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded to the extent that the implied fair value of the reporting unit’s goodwill is less than the carrying value of the reporting unit’s goodwill. The Company has not recognized any impairment of goodwill during the nine months ended September 30, 2016.
Research and Development Expense, Policy [Policy Text Block]	Research and Development Major components of research and development costs include internal research and development (such as salaries and related employee benefits, equity-based compensation, supplies and allocated facility costs) and contracted services (research and development activities performed on the Company’s behalf). Costs incurred for research and development are expensed as incurred. At the end of the reporting period, the Company compares payments made to third-party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the services provided, the Company may record net prepaid or accrued expenses relating to these costs. Upfront milestone payments made to third parties who perform research and development services on the Company’s behalf are expensed as services are rendered.
Legal Costs, Policy [Policy Text Block]	Patent Costs Patent costs, including related legal costs, are expensed as incurred and are recorded within general and administrative expenses in the statements of operations.
Income Tax, Policy [Policy Text Block]	Income Taxes Prior to the Merger, Diffusion LLC was treated as a partnership for federal and state income tax purposes. Diffusion LLC’s taxable income or loss, as well as certain other tax attributes, were passed through directly to its members and were reported in each member’s individual income tax return. Upon completion of the Merger as discussed in Note 1, the Company converted from a partnership to a corporation for accounting purposes. As a corporation, the Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The Company recognizes the benefit of an uncertain tax position that it has taken or expects to take on its income tax return it files, if such a position is more likely than not to be sustained.
Debt, Policy [Policy Text Block]	Debt The current and noncurrent portions of accrued interest related to the Company’s Convertible Notes and 2016 Convertible Notes are included within other accrued expenses and liabilities and other liabilities, respectively, on the accompanying consolidated balance sheets. Debt issuance costs incurred in connection with debt financing arrangements are amortized to interest expense over the life of the respective financing arrangement using the effective interest method.
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]	Stock-Based Compensation The Company measures employee and nonemployee stock-based awards at grant-date fair value and records compensation expense on a straight-line basis over the vesting period of the award. Stock-based awards issued to non-employees are revalued until the award vests. The Company uses the Black-Scholes option pricing model to value its stock option awards. Estimating the fair value of stock option awards requires management to apply judgment and make estimates, including the volatility of the Company’s common stock, the expected term of the Company’s stock options, the expected dividend yield and the fair value of the Company’s common stock on the measurement date. As a result, if factors change and management uses different assumptions, stock-based compensation expense could be materially different for future awards. The expected life of stock options was estimated using the “simplified method” for employee options as the Company has no historical information to develop reasonable expectations about future exercise patterns and post vesting employment termination behavior for its stock option grants. The simplified method is based on the average of the vesting tranches and the contractual life of each grant. For options granted to non-employees, the Company uses the remaining contractual life. For stock price volatility, the Company uses comparable public companies as a basis for its expected volatility to calculate the fair value of option grants. The Company assumes no dividend yield because dividends are not expected to be paid in the near future, which is consistent with the Company’s history of not paying dividends. The risk-free interest rate is based on U.S. Treasury notes with a term approximating the expected life of the option.
Earnings Per Share, Policy [Policy Text Block]	Net Loss Per Share Basic loss per share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each period. Diluted loss per share includes the effect, if any, from the potential exercise or conversion of securities, such as convertible debt, warrants, stock options and unvested restricted stock that would result in the issuance of incremental shares of common stock. In computing the basic and diluted net loss per share applicable to common stockholders, the weighted average number of shares remains the same for both calculations due to the fact that when a net loss exists, dilutive shares are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities outstanding as of September 30, 2016 and 2015 have been excluded from the computation of diluted weighted average shares outstanding, as they would be anti-dilutive: September 30, 2016 2015 Convertible debt 749,280 5,847,645 Common stock warrants 460,721 — Stock options 2,010,409 1,109,605 Unvested restricted stock awards 10,738 18,410 3,231,148 6,975,660 Amounts in the table reflect the common stock equivalents of the noted instruments.
New Accounting Pronouncements, Policy [Policy Text Block]	Recent Accounting Pronouncements In March 2016, the FASB issued ASU 2016-09, Compensation – Improvements to Employee Share-Based Payment Accounting In March 2016, the FASB issued ASU 2016-06, Contingent Put and Call Options in Debt Instruments In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) In August 2014, the FASB issued ASU 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
Reclassification, Policy [Policy Text Block]	Reclassification Certain prior period balances have been reclassified to conform with the current period presentation.

Note 3 - Basis of Presentatio19

Note 3 - Basis of Presentation and Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block]	September 30, 2016 2015 Convertible debt 749,280 5,847,645 Common stock warrants 460,721 — Stock options 2,010,409 1,109,605 Unvested restricted stock awards 10,738 18,410 3,231,148 6,975,660

Note 4 - Acquisition (Tables)

Note 4 - Acquisition (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Business Combination, Preliminary Purchase Price Consideration [Table Text Block]	Fair value of RestorGenex shares outstanding $ 19,546,000 Estimated fair value of RestorGenex stock options outstanding 1,321,000 Estimated fair value of RestorGenex warrants outstanding 384,000 CVRs – RES-440 product candidate 10,000 Total preliminary purchase price $ 21,261,000
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]	Cash and cash equivalents $ 8,500,602 Prepaid expenses and other assets 195,200 Property and equipment 57,531 Intangible assets 9,600,000 Goodwill 6,929,258 Accrued liabilities (377,432 ) Deferred tax liability (3,644,159 ) Net assets acquired $ 21,261,000
Schedule of Finite-Lived Intangible Assets [Table Text Block]	Acquisition Date Fair Value Accumulated Amortization Impairment Upon Abandonment Carrying Value at September 30, 2016 RES 529 $ 8,639,000 $ - $ - $ 8,639,000 RES 440 961,000 - (961,000 ) - Total in-process research and development costs (IPR&D) $ 9,600,000 $ - $ (961,000 ) $ 8,639,000
Business Acquisition, Pro Forma Information [Table Text Block]	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net revenues $ N/A $ — $ — $ — Net loss $ N/A $ (3,576,120 ) $ (13,900,691 ) $ (13,636,471 ) Basic and diluted loss per share $ N/A $ (0.87 ) $ (1.36 ) $ (3.31 )

Note 5 - Other Accrued Expens21

Note 5 - Other Accrued Expenses and Liabilities (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Other Current Liabilities [Table Text Block]	September 30, 2016 December 31, 2015 Accrued interest payable $ 927 $ 14,009 Accrued payroll and payroll related expenses 491,678 56,947 Accrued professional fees 142,056 327,950 Accrued clinical studies expenses 326,410 184,737 Other accrued expenses 82,768 38,026 Total $ 1,043,839 $ 621,669

Note 6 - Convertible Debt (Tabl

Note 6 - Convertible Debt (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Convertible Debt [Table Text Block]	Note Issue Date Maturity Date Conversion Price Interest Rate Total Principal 2016 Convertible Notes 9/27/2016 9/27/2017 $ 3.50 6.00 % $ 1,880,000 Series B Note 3/15/2011 6/30/2018 $ 2.74 1.00 % 550,000 Total principal amount $ 2,430,000
Schedule of Debt Conversions [Table Text Block]	Convertible Note Series Principal Accrued Interest Total Principal and Accrued Interest B $ 20,000 $ 962 $ 20,962 C 425,000 14,538 439,538 E 50,000 770 50,770 F 200,000 225 200,225 Total $ 695,000 $ 16,495 $ 711,495

Note 8 - Stock-based Compensa23

Note 8 - Stock-based Compensation (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Table Text Block]	Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Research and development $ 174,932 $ 78,289 $ 601,260 $ 197,871 General and administrative 215,425 63,119 520,730 176,118 Total stock-based compensation expense $ 390,357 $ 141,408 $ 1,121,990 $ 373,989
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]	Number of Options Weighted average exercise price per share Weighted average remaining contractual life (in years) Balance at January 1, 2016 1,495,615 $ 3.92 RestorGenex options outstanding 301,156 40.13 Cancelled (48,190 ) 61.30 Granted 261,828 8.89 Outstanding at September 30, 2016 2,010,409 $ 8.62 7.6 Exercisable at September 30, 2016 1,357,109 $ 9.64 7.1 Vested and expected to vest at September 30, 2016 2,006,156 $ 8.62 7.6
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]	Grant date fair value $7.30 - $8.01 Exercise price $8.75 - $9.60 Expected term (in years) 5.77 - 7.48 Risk-free interest rate 1.2% - 1.5% Expected volatility 106.8% - 124.0% Dividend yield 0%

Note 9 - Commitments and Cont24

Note 9 - Commitments and Contingencies (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Maturities of Contractual Obligations [Table Text Block]	Rental Commitments Payments due by period: One year $ 75,300 Two years 31,600 Three years — Thereafter — Total $ 106,900

Note 11 - Fair Value Measurem25

Note 11 - Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2016
Notes Tables
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]	September 30, 2016 (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 3,021,388 $ — $ — December 31, 2015 (Level 1) (Level 2) (Level 3) Assets Cash and cash equivalents $ 1,997,192 $ — $ —
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]	Contingent Consideration Issued in connection with the Merger transaction $ 10,000 Change in fair value upon abandonment of RES-440 (10,000 ) Balance at September 30, 2016 $ —

Note 1 - Organization and Des26

Note 1 - Organization and Description of Business (Details Textual)	Aug. 17, 2016	Jan. 08, 2016USD ($)$ / sharesshares	Sep. 30, 2016shares
Reverse Stock Split [Member ]
Stockholders' Equity Note, Stock Split, Conversion Ratio	10
Diffusion LLC [Member] | Former Equity Holders of Diffusion LLC [Member]
Percentage of Common Stock Outstanding Owned		84.10%
Diffusion LLC [Member] | Equity Holders of RestorGenex [Member]
Percentage of Common Stock Outstanding Owned		15.90%
Diffusion LLC [Member]
Business Combination, Number of Shares Called by Each Previously Held Unit of Membership Interest		0.3652658
Convertible Notes Payable | $		$ 1,125,000
Business Combination, Number of Shares Called by Share Options Assumed		1,495,249
Business Combination, Share Options Assumed, Weighted-average Exercise Price | $ / shares		$ 3.91
Stock Issued During Period, Shares, Acquisitions		1,861,503
Stock Issued During Period, Shares, Acquisitions			1,861,503

Note 3 - Basis of Presentatio27

Note 3 - Basis of Presentation and Summary of Significant Accounting Policies (Details Textual)	Aug. 17, 2016	Sep. 30, 2016USD ($)	Dec. 31, 2015USD ($)
Reverse Stock Split [Member ]
Stockholders' Equity Note, Stock Split, Conversion Ratio	10
Fair Value, Inputs, Level 3 [Member]
Convertible Debt, Fair Value Disclosures		$ 5,950,000	$ 4,800,000
Minimum [Member]
Property, Plant and Equipment, Useful Life		5 years
Maximum [Member]
Property, Plant and Equipment, Useful Life		15 years
RES-440 [Member]
Intangible Assets, Net (Excluding Goodwill)		$ 0
Impairment of Long-Lived Assets to be Disposed of		$ 0

Note 3 - Basis of Presentatio28

Note 3 - Basis of Presentation and Summary of Significant Accounting Policies - Outstanding Dilutive Securities (Details) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Convertible Debt Securities [Member]
Anti-dilutive securities (in shares)	749,280	5,847,645
Warrant [Member]
Anti-dilutive securities (in shares)	460,721
Employee Stock Option [Member]
Anti-dilutive securities (in shares)	2,010,409	1,109,605
Restricted Stock [Member]
Anti-dilutive securities (in shares)	10,738	18,410
Anti-dilutive securities (in shares)	3,231,148	6,975,660

Note 4 - Acquisition (Details T

Note 4 - Acquisition (Details Textual) - USD ($)	Jan. 08, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015
Diffusion LLC [Member] | Former Equity Holders of Diffusion LLC [Member]
Percentage of Common Stock Outstanding Owned	84.10%
Diffusion LLC [Member] | Acquisition-related Costs [Member]
Business Combination, Acquisition Related Costs				$ 1,644,768
Diffusion LLC [Member] | Success Fee Agreement Costs [Member]
Payments for Other Fees	$ 1,000,000
Stock Issued During Period, Shares, Issued for Services	46,000
Stock Issued During Period, Value, Issued for Services	$ 487,500
Diffusion LLC [Member]
Business Combination, Number of Shares Called by Each Previously Held Unit of Membership Interest	0.3652658
Business Combination, Period Following Merger in Which Receipt of Cash for Discontinued Product Assets Would Trigger Contingent Value Right Payements	5 years
Business Combination, Provisional Information, Initial Accounting Incomplete, Adjustment, Intangibles		$ 283,000
Adjustment to Deferred Tax Liabilities, Intangible Assets		107,226
Goodwill, Purchase Accounting Adjustments		(175,773)
In Process Research and Development Costs (IPR&D) [Member]
Common Stock, Par or Stated Value Per Share	$ 0.001
Intangible Assets, Net (Excluding Goodwill)		8,639,000		8,639,000
Impairment of Intangible Assets (Excluding Goodwill)				961,000
RES-440 [Member] | Research and Development Expense [Member]
Impairment of Intangible Assets (Excluding Goodwill)				951,000
RES-440 [Member]
Intangible Assets, Net (Excluding Goodwill)		$ 0		0
Impairment of Intangible Assets (Excluding Goodwill)				961,000
RestorGenex [Member]
Impairment of Intangible Assets (Excluding Goodwill)					$ 11,000,000
Asset Impairment Charges			$ 11,100,000
Abandonmnet of In-Process Research and Development Intangible Asset [Member]
Income Tax Expense (Benefit)				$ 364,796
Executive Officers [Member]
Severance Costs	$ 3,000,000
Common Stock, Par or Stated Value Per Share		$ 0.001		$ 0.001		$ 0.001
Income Tax Expense (Benefit)		$ (364,796)		$ (364,796)
Stock Issued During Period, Shares, Issued for Services				45,643
Stock Issued During Period, Value, Issued for Services				$ 1,409,363

Note 4 - Acquisition - Purchase

Note 4 - Acquisition - Purchase Price Consideration (Details) - RestorGenex [Member] - Diffusion LLC [Member]	Jan. 08, 2016USD ($)
Fair value of RestorGenex shares outstanding	$ 19,546,000
Estimated fair value of RestorGenex stock options outstanding	1,321,000
Estimated fair value of RestorGenex warrants outstanding	384,000
CVRs – RES-440 product candidate	10,000
Total preliminary purchase price	$ 21,261,000

Note 4 - Acquisition - Summary

Note 4 - Acquisition - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($)	Sep. 30, 2016	Jan. 08, 2016	Dec. 31, 2015
Diffusion LLC [Member]
Cash and cash equivalents		$ 8,500,602
Prepaid expenses and other assets		195,200
Property and equipment		57,531
Intangible assets		9,600,000
Goodwill		6,929,258
Accrued liabilities		(377,432)
Deferred tax liability		(3,644,159)
Net assets acquired		$ 21,261,000
Goodwill	$ 6,929,258

Note 4 - Acquisition - Intangib

Note 4 - Acquisition - Intangible Assets, Net - Intangible Assets, Net (Details)	9 Months Ended
	Sep. 30, 2016USD ($)
RES-529 [Member]
Gross carrying amount	$ 8,639,000
Intangible Assets, Net (Excluding Goodwill)	8,639,000
RES-440 [Member]
Gross carrying amount	961,000
Intangible Assets, Net (Excluding Goodwill)	0
Intangible assets, impairment	(961,000)
In Process Research and Development Costs (IPR&D) [Member]
Gross carrying amount	9,600,000
Intangible Assets, Net (Excluding Goodwill)	8,639,000
Intangible assets, impairment	$ (961,000)

Note 4 - Acquisition - Pro Form

Note 4 - Acquisition - Pro Forma Financial Information (Details) - Diffusion LLC [Member] - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Net revenues
Net loss	$ (3,576,120)	$ (13,900,691)	$ (13,636,471)
Basic and diluted loss per share (in dollars per share)	$ (0.87)	$ (1.36)	$ (3.31)

Note 5 - Other Accrued Expens34

Note 5 - Other Accrued Expenses and Liabilities - Summary of Accrued Expenses (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Accrued interest payable	$ 927	$ 14,009
Accrued payroll and payroll related expenses	491,678	56,947
Accrued professional fees	142,056	327,950
Accrued clinical studies expenses	326,410	184,737
Other accrued expenses	82,768	38,026
Total	$ 1,043,839	$ 621,669

Note 6 - Convertible Debt (Deta

Note 6 - Convertible Debt (Details Textual) - USD ($)	Sep. 27, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Dec. 31, 2015	Jan. 08, 2016
2016 Convertible Notes [Member] | Settlement Agreement [Member]
Debt Instrument, Face Amount	$ 1,880,000
Debt Instrument, Term	1 year
Debt Instrument, Interest Rate, Stated Percentage	6.00%
Common Stock, Par or Stated Value Per Share	$ 0.001
Debt Instrument, Convertible, Conversion Price	$ 3.50
Litigation Settlement, Expense	$ 2,500,000
2016 Convertible Notes [Member]
Debt Instrument, Interest Rate, Stated Percentage			6.00%
Debt Instrument, Convertible, Conversion Price			$ 3.50
Convertible Notes [Member] | Minimum [Member]
Debt Instrument, Interest Rate, Stated Percentage					1.00%
Convertible Notes [Member] | Maximum [Member]
Debt Instrument, Interest Rate, Stated Percentage					1.50%
Convertible Notes [Member]
Proceeds from Issuance of Unsecured Debt					$ 22,384,320
Qualified Financing, Minimum Amount of Gross Proceeds			$ 15,000,000
Debt Conversion, Converted Instrument, Shares Issued			217,122
Convertible Note Series C [Member]
Debt Conversion, Converted Instrument, Amount		$ 54,500	$ 439,538	$ 1,361
Diffusion LLC [Member]
Convertible Notes Payable						$ 1,125,000
Common Stock, Par or Stated Value Per Share			$ 0.001		$ 0.001
Litigation Settlement, Expense			$ 2,500,000
Debt Conversion, Converted Instrument, Amount			$ 711,495	$ 47,742

Note 6 - Convertible Debt - Out

Note 6 - Convertible Debt - Outstanding Convertible Notes (Details)	9 Months Ended
	Sep. 30, 2016USD ($)$ / shares
2016 Convertible Notes [Member]
Issue Date	Sep. 27, 2016
Maturity Date	Sep. 27, 2017
Conversion Price (in dollars per share) | $ / shares	$ 3.50
Interest Rate	6.00%
Total principal amount	$ 1,880,000
Convertible Note Series B [Member]
Issue Date	Mar. 15, 2011
Maturity Date	Jun. 30, 2018
Conversion Price (in dollars per share) | $ / shares	$ 2.74
Interest Rate	1.00%
Total principal amount	$ 550,000
Total principal amount	$ 2,430,000

Note 6 - Convertible Debt - Con

Note 6 - Convertible Debt - Conversion of Convertible Notes and Related Accrued Interest (Details) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Convertible Note Series B [Member]
Principal		$ 20,000
Accrued Interest		962
Debt Conversion, Converted Instrument, Amount		20,962
Convertible Note Series C [Member]
Principal		425,000
Accrued Interest		14,538
Debt Conversion, Converted Instrument, Amount	$ 54,500	439,538	$ 1,361
Convertible Note Series E [Member]
Principal		50,000
Accrued Interest		770
Debt Conversion, Converted Instrument, Amount		50,770
Convertible Note Series F [Member]
Principal		200,000
Accrued Interest		225
Debt Conversion, Converted Instrument, Amount		200,225
Principal		695,000
Accrued Interest		16,495
Debt Conversion, Converted Instrument, Amount		$ 711,495	$ 47,742

Note 7 - Stockholder's Equity (

Note 7 - Stockholder's Equity (Details Textual) - USD ($)	Jan. 08, 2016	Jan. 07, 2016	Sep. 30, 2016
Legacy RestorGenex Warrants [Member] | Minimum [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 20
Legacy RestorGenex Warrants [Member] | Maximum [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights			750
Legacy RestorGenex Warrants [Member] | Weighted Average [Member]
Class of Warrant or Right, Exercise Price of Warrants or Rights			$ 54.27
Legacy RestorGenex Warrants [Member]
Class of Warrant or Right, Exercised During Period			0
Class of Warrant or Right, Granted			0
Class of Warrant or Right, Exercisable			460,721
Class of Warrant or Rights, Expired			17,479
Class of Warrant or Right, Outstanding			460,721
Diffusion LLC [Member]
Noncash or Part Noncash Divestiture, Amount of Consideration Received		$ 384,000
Stock Issued During Period, Shares, Acquisitions	1,861,503
General Financial Advisory Services [Member]
Stock Issued During Period, Shares, Issued for Services			102,430
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		478,200
Stock Issued During Period, Shares, Total			2,226,698
Stock Issued During Period, Shares, Acquisitions			1,861,503
Stock Issued During Period, Shares, Issued for Services			45,643
Stock Issued During Period, Shares, Conversion of Convertible Securities			217,122

Note 8 - Stock-based Compensa39

Note 8 - Stock-based Compensation (Details Textual) - USD ($)	Jul. 21, 2016	Aug. 31, 2016	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015	Jan. 08, 2016	Dec. 31, 2015
Non-employees [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Stock Options			$ 402,910		$ 402,910
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					67,597
Board of Directors Chairman [Member] | Employee Stock Option [Member] | Vest Quarterly [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period		10 years
Board of Directors Chairman [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross		204,907
Employee Stock Option [Member] | Vest Monthly [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period					3 years
Employee Stock Option [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period					10 years
Restricted Stock [Member]
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition					1 year 255 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number			10,738		10,738			15,341
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period			1,534		4,603
Allocated Share-based Compensation Expense			$ 3,024		$ 9,057
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options			$ 20,538		$ 20,538
Restorgenex Corporation 2015 Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	500,000
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant			237,507		237,507
Percentage of Total Shares Eligible for Plan Reserve, On an Annual Basis	4.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number			1,357,109		1,357,109		301,156
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price			$ 9.64		$ 9.64		$ 40.13
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized			$ 3,076,088		$ 3,076,088
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross					261,828
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition					5 years 328 days
Allocated Share-based Compensation Expense			$ 390,357	$ 141,408	$ 1,121,990	$ 373,989

Note 8 - Stock-based Compensa40

Note 8 - Stock-based Compensation - Summary of Stock-basedCompensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Research and Development Expense [Member]
Allocated Share-based Compensation Expense	$ 174,932	$ 78,289	$ 601,260	$ 197,871
General and Administrative Expense [Member]
Allocated Share-based Compensation Expense	215,425	63,119	520,730	176,118
Allocated Share-based Compensation Expense	$ 390,357	$ 141,408	$ 1,121,990	$ 373,989

Note 8 - Stock-based Compensa41

Note 8 - Stock-based Compensation - Stock Option Activity (Details) - $ / shares	9 Months Ended
	Sep. 30, 2016	Jan. 08, 2016
Diffusion LLC [Member]
RestorGenex options outstanding (in shares)	301,156
RestorGenex options outstanding (in dollars per share)	$ 40.13
Balance at January 1, 2016 (in shares)	1,495,615
Balance at January 1, 2016 (in dollars per share)	$ 3.92
Cancelled (in shares)	(48,190)
Cancelled (in dollars per share)	$ 61.30
Granted (in shares)	261,828
Granted (in dollars per share)	$ 8.89
Options outstanding (in shares)	2,010,409
Options outstanding, weighted-average per share exercise price (in dollars per share)	$ 8.62
Options outstanding, weighted-average remaining contractual life	7 years 219 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Number	1,357,109	301,156
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Exercise Price	$ 9.64	$ 40.13
Exercisable at September 30, 2016	7 years 36 days
Vested and expected to vest at September 30, 2016 (in shares)	2,006,156
Vested and expected to vest at September 30, 2016 (in dollars per share)	$ 8.62
Vested and expected to vest at September 30, 2016	7 years 219 days

Note 8 - Stock-based Compensa42

Note 8 - Stock-based Compensation - Share-based Payment Award, Fair Value Assumptions (Details)	9 Months Ended
	Sep. 30, 2016$ / shares
Minimum [Member]
Grant date fair value (in dollars per share)	$ 7.30
Exercise price (in dollars per share)	$ 8.75
Expected term (in years)	5 years 281 days
Maximum [Member]
Grant date fair value (in dollars per share)	$ 8.01
Exercise price (in dollars per share)	$ 9.60
Expected term (in years)	7 years 175 days
Risk-free interest rate	1.20%
Risk-free interest rate	1.50%
Expected volatility	106.80%
Expected volatility	124.00%
Dividend yield	0.00%

Note 9 - Commitments and Cont43

Note 9 - Commitments and Contingencies (Details Textual)	Sep. 27, 2016USD ($)$ / shares	Sep. 15, 2014ft²shares	Dec. 15, 2009USD ($)$ / sharesshares	Sep. 30, 2016USD ($)$ / shares	Sep. 30, 2015USD ($)	Sep. 30, 2016USD ($)$ / sharesshares	Sep. 30, 2015USD ($)	Dec. 31, 2012$ / shares
Charlottesville, Virginia [Member] | Building [Member]
Operating Leases, Rent Expense, Net				$ 18,200	$ 16,500	$ 53,500	$ 49,500
Buffalo Grove, Illinois [Member] | Building [Member] | Long Term Operating Lease Agreement [Member]
Operating Leases, Rent Expense, Net				$ 15,300		$ 61,000
Area of Real Estate Property | ft²		2,900
David G. Schmidt v. Diffusion Pharmaceuticals, LLC [Member] | Scenario, Actual [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares			$ 3.50					$ 1
David G. Schmidt v. Diffusion Pharmaceuticals, LLC [Member] | If Conversion Price $1.00 per Unit Rather Than $3.50 per Unit [Member]
Debt Conversion, Converted Instrument, Shares Issued | shares			1,071,432.5
David G. Schmidt v. Diffusion Pharmaceuticals, LLC [Member]
Debt Conversion, Original Debt, Amount			$ 1,500,000
Amended David G. Schmidt V Diffusion Pharmaceuticals LLC [Member] | If Conversion Price $1.00 per Unit Rather Than $3.50 per Unit [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares				$ 1		$ 1
Debt Conversion, Converted Instrument, Shares Issued | shares		1,071,432.5
Amended David G. Schmidt V Diffusion Pharmaceuticals LLC [Member]
Loss Contingency, Damages Sought, Shares | shares						391,358
Loss Contingency, Damages Sought, Proceeds From Plaintiff						$ 1,071,432.50
Settlement Agreement [Member] | 2016 Convertible Notes [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares	$ 3.50
Debt Instrument, Face Amount	$ 1,880,000
Litigation Settlement, Expense	$ 2,500,000
2016 Convertible Notes [Member]
Debt Instrument, Convertible, Conversion Price | $ / shares				$ 3.50		$ 3.50
Accrued Rent				$ 19,403		$ 19,403
Debt Conversion, Original Debt, Amount						695,000
Litigation Settlement, Expense						$ 2,500,000

Note 9 - Commitments and Cont44

Note 9 - Commitments and Contingencies - Contractual Obligations (Details)	Sep. 30, 2016USD ($)
Payments due by period:
One year	$ 75,300
Two years	31,600
Three years
Thereafter
Total	$ 106,900

Note 10 - Income Taxes (Details

Note 10 - Income Taxes (Details Textual) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
In Process Research and Development Costs (IPR&D) [Member]
Deferred Tax Liabilities, Net	$ 3,644,159		$ 3,644,159
Impairment of Intangible Assets (Excluding Goodwill)			961,000
RES-440 [Member] | Research and Development Expense [Member]
Impairment of Intangible Assets (Excluding Goodwill)			951,000
RES-440 [Member]
Impairment of Intangible Assets (Excluding Goodwill)			961,000
Abandonmnet of In-Process Research and Development Intangible Asset [Member]
Income Tax Expense (Benefit)			364,796
Income Tax Expense (Benefit)	$ (364,796)		$ (364,796)

Note 11 - Fair Value Measurem46

Note 11 - Fair Value Measurements (Details Textual) - Diffusion LLC [Member]	Jan. 08, 2016USD ($)
Business Combination, Number of Contingent Value Rights per Share Called by Each Previously Held Share of Common Stock	1
Business Combination, Period Following Merger in Which Receipt of Cash for Discontinued Product Assets Would Trigger Contingent Value Right Payements	5 years
Business Combination, Contingent Value Right Payout Maximum	$ 50,000,000

Note 11 - Fair Value Measurem47

Note 11 - Fair Value Measurements - Fair Value On a Recurring Basis (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Inputs, Level 1 [Member] | Fair Value, Measurements, Recurring [Member]
Assets
Cash and cash equivalents	$ 3,021,388	$ 1,997,192

Note 11 - Fair Value Measurem48

Note 11 - Fair Value Measurements - Reconciliation of Contingent Consideration Liability (Details) - Contingent Consideration [Member]	9 Months Ended
	Sep. 30, 2016USD ($)
Issued in connection with the Merger transaction	$ 10,000
Change in fair value upon abandonment of RES-440	(10,000)
Contingent consideration liability