Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 12, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | GT Biopharma, Inc. | |
Entity Central Index Key | 0000109657 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2021 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Entity Incorporation, State or Country Code | DE | |
Entity File Number | 0-8092 | |
Entity Common Stock, Shares Outstanding | 21,127,718 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Current Assets: | ||
Cash and cash equivalents | $ 27,555,000 | $ 5,297,000 |
Prepaid expenses | 88,000 | 364,000 |
Total current assets | 27,643,000 | 5,661,000 |
Current Liabilities: | ||
Accounts payable | 2,377,000 | 2,243,000 |
Accrued expenses | 856,000 | 1,296,000 |
Accrued interest | 0 | 4,838,000 |
Convertible notes payable (net of discount of $4,519,000 at December 31, 2020) | 0 | 26,303,000 |
Line of credit | 31,000 | 31,000 |
Derivative liability | 362,000 | 383,000 |
Total current liabilities | 3,626,000 | 35,094,000 |
Stockholders' Deficit: | ||
Common stock, par value $0.001, 2,000,000,000 shares authorized, 20,517,431 and 5,218,122 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively | 21,000 | 5,000 |
Common stock issuable | 25,956,000 | 0 |
Additional paid-in capital | 623,287,000 | 566,356,000 |
Accumulated deficit | (625,079,000) | (595,628,000) |
Noncontrolling interest | (169,000) | (169,000) |
Total stockholders' deficit | 24,017,000 | (29,433,000) |
Total liabilities and stockholders' deficit | 27,643,000 | 5,661,000 |
Series C | ||
Stockholders' Deficit: | ||
Convertible preferred stock | 1,000 | 1,000 |
Series J | ||
Stockholders' Deficit: | ||
Convertible preferred stock | 0 | 2,000 |
Series K | ||
Stockholders' Deficit: | ||
Convertible preferred stock | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Long term convertible debentures discount | $ 0 | $ 4,519,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, issued | 20,517,431 | 5,218,122 |
Common stock, outstanding | 20,517,431 | 5,218,122 |
Common stock issuable | 7,634,000 | 0 |
Series C | ||
Preferred stock, issued | 96,230 | 96,230 |
Preferred stock, outstanding | 96,230 | 96,230 |
Series J | ||
Preferred stock, issued | 0 | 2,353,548 |
Preferred stock, outstanding | 0 | 2,353,548 |
Series K | ||
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Statement [Abstract] | ||
Revenues | $ 0 | $ 0 |
Operating Expenses: | ||
Research and development | 1,640,000 | 324,000 |
Selling, general and administrative (including $14,296,000 of stock compensation to officers and directors in 2021) | 27,362,000 | 746,000 |
Loss from operations | 29,002,000 | 1,070,000 |
Other Income (Expense): | ||
Change in fair value of derivative liability | (21,000) | 0 |
Interest expense | 696,000 | 638,000 |
Total other expense, net | 675,000 | 638,000 |
Net loss | $ (29,677,000) | $ (1,708,000) |
Net loss per common share - basic and diluted | $ (1.83) | $ (0.41) |
Weighted average common shares outstanding - basic and diluted | 16,239,938 | 4,122,178 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Preferred Stock | Common Stock | Common Shares Issuable | Additional Paid-in Capital | Accumulated Deficit | Noncontrolling Interest | Total |
Beginning balance, shares at Dec. 31, 2019 | 2,449,778 | 69,784,699 | 0 | ||||
Beginning balance, amount at Dec. 31, 2019 | $ 3,000,000 | $ 70,000,000 | $ 0 | $ 548,118,000 | $ (567,332,000) | $ (169,000) | $ (19,310,000) |
Issuance of common stock upon conversion of notes payable, shares | 814,734 | ||||||
Issuance of common stock upon conversion of notes payable, amount | $ 1,000 | 162,000 | 163,000 | ||||
Net loss | (1,708,000) | (1,708,000) | |||||
Ending balance, shares at Mar. 31, 2020 | 2,449,778 | 70,599,433 | 0 | ||||
Ending balance, amount at Mar. 31, 2020 | $ 3,000 | $ 71,000 | $ 0 | 548,280,000 | (569,040,000) | (169,000) | (20,855,000) |
Beginning balance, shares at Dec. 31, 2020 | 2,449,778 | 5,218,122 | |||||
Beginning balance, amount at Dec. 31, 2020 | $ 3,000 | $ 5,000 | $ 0 | 566,356,000 | (595,628,000) | (169,000) | (29,433,000) |
Extinguishment of debt upon adoption of ASU 2020-06 | (4,745,000) | 226,000 | (4,519,000) | ||||
Conversion of Preferred Series J to common stock, shares | (2,353,548) | 692,220 | |||||
Conversion of Preferred Series J to common stock, amount | $ (2,000) | $ 1,000 | 1,000 | 0 | |||
Issuance of common stock upon conversion of notes payable, shares | 3,779,322 | 7,634,000 | |||||
Issuance of common stock upon conversion of notes payable, amount | $ 4,000 | $ 25,956,000 | 12,846,000 | 38,806,000 | |||
Common shares issued upon exercise of warrants, shares | 94,824 | ||||||
Common shares issued upon exercise of warrants, amount | $ 0 | 58,000 | 58,000 | ||||
Issuance of common stock in public offering, net of costs, shares | 4,945,000 | ||||||
Issuance of common stock in public offering, net of costs, amount | $ 5,000 | 24,674,000 | 24,679,000 | ||||
Issuance of common stock for research and development agreement, shares | 189,753 | ||||||
Issuance of common stock for research and development agreement, amount | $ 0 | 1,355,000 | 1,355,000 | ||||
Issuance of common stock for services, shares | 1,957,374 | ||||||
Issuance of common stock for services, amount | $ 2,000 | 8,450,000 | 8,452,000 | ||||
Issuance of common stock for compensation, shares | 3,640,816 | ||||||
Issuance of common stock for compensation, amount | $ 4,000 | 14,292,000 | 14,296,000 | ||||
Net loss | (29,677,000) | (29,677,000) | |||||
Ending balance, shares at Mar. 31, 2021 | 96,230 | 20,517,431 | |||||
Ending balance, amount at Mar. 31, 2021 | $ 1,000 | $ 21,000 | $ 25,956,000 | $ 623,287,000 | $ (625,079,000) | $ (169,000) | $ 24,017,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (29,677,000) | $ (1,708,000) |
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities: | ||
Change in fair value of derivative liability | (21,000) | 0 |
Stock based compensation - consultants and research and development | 9,807,000 | 0 |
Stock based compensation - officers and board of directors | 14,296,000 | 0 |
Convertible notes payable issued for consulting services | 720,000 | 0 |
Changes in Operating Assets and Liabilities: | ||
Prepaid expenses | 276,000 | 63,000 |
Accounts payable and accrued liabilities | 219,000 | 784,000 |
Accrued interest | 696,000 | 638,000 |
Net cash used in operating activities | (3,684,000) | (223,000) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 24,679,000 | 0 |
Proceeds from exercise of warrants | 58,000 | 0 |
Proceeds from notes payable | 1,205,000 | 200,000 |
Net cash provided by financing activities | 25,942,000 | 200,000 |
Net increase (decrease) in cash | 22,258,000 | (23,000) |
Cash at beginning of period | 5,297,000 | 28,000 |
Cash at end of period | 27,555,000 | 5,000 |
Supplemental Disclosures: | ||
Interest paid | 0 | 0 |
Income taxes paid | 0 | 0 |
Common stock issued upon conversion of notes payable and accrued interest | 38,806,000 | 162,000 |
Extinguishment of unamortized debt discount and adjustment to accumulated deficit upon adoption of ASU 2020-06 | 4,519,000 | 0 |
Convertible notes payable issued for consulting services | $ 1,525,000 | $ 0 |
Note 1 - Organization and Opera
Note 1 - Organization and Operations | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Organization and Operations | In 1965, the corporate predecessor of GT Biopharma Inc. (Company), Diagnostic Data, Inc. was incorporated in the State of California. Diagnostic Data changed its incorporation to the State of Delaware in 1972 and changed its name to DDI Pharmaceuticals, Inc. in 1985. In 1994, DDI Pharmaceuticals merged with International BioClinical, Inc. and Bioxytech S.A. and changed its name to OXIS International, Inc. In July 2017, the Company changed its name to GT Biopharma, Inc. The Company is a clinical stage biopharmaceutical company focused on the development and commercialization of novel immuno-oncology products based off our proprietary Tri-specific Killer Engager (TriKE™), Tetra-specific Killer Engager (Dual Targeting TriKEDual Targeting TriKE) platforms. The Company’s TriKE and Dual Targeting TriKE platforms generate proprietary therapeutics designed to harness and enhance the cancer killing abilities of a patient’s own natural killer cells, or NK cells. The accompanying condensed consolidated financial statements are unaudited. These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2020 filed with the SEC on April 16, 2021 (the “2020 Annual Report”). The consolidated balance sheet as of December 31, 2020 included herein was derived from the audited consolidated financial statements as of that date. In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments necessary to fairly present the Company’s financial position and results of operations for the interim periods reflected. Except as noted, all adjustments contained herein are of a normal recurring nature. Results of operations for the fiscal periods presented herein are not necessarily indicative of fiscal year-end results. |
Note 2 - Going Concern
Note 2 - Going Concern | 3 Months Ended |
Mar. 31, 2021 | |
Note 2 - Going Concern | |
Going Concern | The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. As reflected in the accompanying consolidated financial statements, for the three months ended March 31, 2021, the Company incurred a net loss of $29.7 million and used cash in operating activities of $3.7 million. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that these financial statements are issued. The consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. During the three months ended March 31, 2021, the Company received net cash of $24.7 million from the sale of 4,945,000 shares of its common stock pursuant to a public offering. At March 31, 2021, the Company had cash on hand in the amount of $27.6 million. The Company’s current operations have focused on business planning, raising capital, establishing an intellectual property portfolio, hiring, and conducting preclinical studies and clinical trials. The Company does not have any product candidates approved for sale and has not generated any revenue from product sales. The Company has sustained operating losses since inception and expects such losses to continue over the foreseeable future. Management is currently evaluating different strategies to obtain the required funding for future operations. These strategies may include but are not limited to: public offerings of equity and/or debt securities, payments from potential strategic research and development, and licensing and/or marketing arrangements with pharmaceutical companies. If the Company is unable to secure adequate additional funding, its business, operating results, financial condition and cash flows may be materially and adversely affected. Management estimates that the current funds on hand will be sufficient to continue operations through the next six months . |
Note 3 - Summary of Significant
Note 3 - Summary of Significant Account Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Basis of Presentation and Principles of Consolidation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Oxis Biotech, Inc. and Georgetown Translational Pharmaceuticals, Inc. Intercompany transactions and balances have been eliminated in consolidation. In March 2011, the Company agreed to form a joint venture with engage:BDR, Inc., an on-line marketing company that offers both premium and placement-specific display marketing solutions and the ability to distribute campaigns through its own display platforms and channels. The first product to be marketed and sold through the Joint Venture was to be ErgoFlex™ product. In 2014 management of the Company decided to end the sale of any ErgoFlex product. The entity has been discontinued since 2014. Reverse Stock Split On February 10, 2021, the Company completed a 1:17 reverse stock split of the Company's issued and outstanding shares of common stock and all fractional shares were rounded up. All share and per share amounts in the accompanying financial statements have been adjusted retroactively to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented. COVID-19 In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It has also disrupted the normal operations of many businesses. This outbreak could decrease spending, adversely affect demand for the Company’s products, and harm the Company’s business and results of operations. During the three months ended March 31, 2021, the Company believes the COVID-19 pandemic did impact its operating results. However, the Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity. The Company has been following the recommendations of health authorities to minimize exposure risk for its team members, including the temporary closure of its corporate office and having team members work remotely. Most vendors have transitioned to electronic submission of invoices and payments. Accounting Estimates The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include accruals for potential liabilities, valuation of notes payable, assumptions used in deriving the fair value of derivative liabilities, valuation of equity instruments issued for services and realization of deferred tax assets. Actual results could differ from those estimates. Stock-Based Compensation The Company accounts for share-based awards to employees and nonemployees and consultants in accordance with the provisions of ASC 718, Compensation-Stock Compensation. Stock-based compensation cost is measured at fair value on the grant date and that fair value is recognized as expense over the requisite service, or vesting, period. Fair Value of Financial Instruments FASB Accounting Standards Codification ("ASC") 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. The three levels of the fair value hierarchy are as follows: Level 1 Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. Level 2 Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 3 Valuations based on inputs that are unobservable, supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s derivative liability of $362,000 at March 31, 2021 and $383,000 at December 31, 2020 was based on Level 2 measurements. The carrying amounts of the Company’s other financial assets and liabilities, such as cash, prepaid expense, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments. Derivative Financial Instruments The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The fair value of the embedded derivatives are determined using a Binomial valuation method at inception and on subsequent valuation dates. Net Loss Per Share Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Common stock issuable is included in our calculation, as of the date of the underlying agreement. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of convertible notes, stock issuable to the exercise of stock options and warrants have been excluded from the diluted loss per share calculation because their effect is anti-dilutive. These following common stock equivalents were excluded in the computation of the net loss per share because their effect is anti-dilutive. March 31, 2021 March 31, 2020 A. Options to purchase common stock - 3 B. Warrants to purchase common stock 5,318,867 106,650 C. Convertible notes payable - 4,678,823 D. Convertible Series J Preferred stock - 692,220 E. Convertible Series C Preferred stock 7 7 5,318,874 5,477,703 Segments The Company determined its reporting units in accordance with ASC 280, “Segment Reporting” (“ASC 280”). Management evaluates a reporting unit by first identifying its’ operating segments under ASC 280. The Company then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. Management has determined that the Company has one consolidated operating segment. The Company’s reporting segment reflects the manner in which its chief operating decision maker reviews results and allocates resources. The Company’s reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments. Recent Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. The new guidance also requires the if-converted method to be applied for all convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. Adoption of the standard requires using either a modified retrospective or a full retrospective approach. Effective January 1, 2021, we early adopted ASU 2020-06 using the modified retrospective approach. Adoption of the new standard resulted in a decrease to additional paid-in capital of $4,519,000 (see Note 4). Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Note 4 - Convertible Notes Paya
Note 4 - Convertible Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Convertible notes payable consisted of the following: March 31, 2021 December 31, 2020 A. Notes payable issued for cash $ - $ 24,085,000 B. Notes payable issued for settlement agreements - 2,528,000 C. Notes payable issued for forbearance agreements - 3,849,000 D. Notes payable issued for consulting services - 360,000 - 30,822,000 Less unamortized debt discount - (4,519,000 ) Convertible notes, net of discount $ - $ 26,303,000 A. Notes Payable Issued for Cash As part of the Company’s financing activities, the Company issued convertible notes payable in exchange for cash. These notes payable are unsecured, bear interest at a rate of 10% per annum, mature in six months up to one year from the date of issuance, and are convertible to common stock at an average conversion rate of $3.40 per share, subject to certain beneficial ownership limitations . In January 2021, the Company issued similar notes payable in exchange for cash of $1,205,000. B. Notes Payable Issued for Settlement Agreements In fiscal 2019 and 2020, the Company issued its convertible notes payable to resolve claims and disputes pertaining to certain debt and equity instruments issued by the Company in prior years. The notes were unsecured, bear interest at a rate of 10%, mature in six months up to one year from the date of issuance, and are convertible to common stock at a conversion rate of $3.40 per share, as adjusted, subject to certain beneficial ownership limitations . On February 16, 2021 in accordance with the note agreements upon completion of the equity offering discussed in Note 7, these notes were mandatorily converted at a conversion rate of $3.40 per share into 743,529 shares of the Company’s common stock. C. Notes Payable Issued for Forbearance Agreements On June 23, 2020, the Company entered into Standstill and Forbearance Agreements (collectively, the “Forbearance Agreements”) with the holders of $13.2 million aggregate principal amount of the Convertible Notes (the “Default Notes”), which were in default. Pursuant to the Forbearance Agreements, the holders of the Default Notes agreed to forbear from exercising their rights and remedies under the Default Notes (including declaring such Default Notes (together with any default amounts and accrued and unpaid interest) immediately due and payable) until the earlier of (i) the date that the Company completes a future financing in the amount of $15 million and, in connection therewith, commences listing on NASDAQ (collectively, the “New Financing”) or (ii) January 31, 2021 (the “Termination Date”). As of December 31, 2020, outstanding balance of the notes payable amounted to $3,849,000. On February 16, 2021 in accordance with the note agreements upon completion of the equity offering discussed in Note 7, these notes were mandatorily converted at a conversion rate of $3.40 per share into 1,132,059 shares of the Company’s common stock. D. Notes Payable issued for Consulting Agreements In prior years, the Company issued its convertible notes payable in exchange for consulting services. subject to certain beneficial ownership limitations . As of December 31, 2020, outstanding balance of these notes payable amounted to $360,000 In January 2021, the Company issued similar notes payable of $720,000 in exchange for consulting services. In addition, the Company also issued a note payable of $525,000 in exchange for the cancellation of an unpaid consulting fees that was recorded as part of accrued expenses as of December 31, 2020. On February 16, 2021 in accordance with the note agreements upon completion of the equity offering discussed in Note 7, these notes in the aggregate amount of $1,605,000 were mandatorily converted at a conversion rate of $3.40 per share into 472,059 shares of the Company’s common stock. As of December 31, 2020, the Company accrued interest of $4,838,000 related to these convertible notes payable. During the period ended March 31, 2021, the Company accrued interest of $696,000. As a result of the mandatory conversion of the Company’s notes payable, on February 16, 2021, total accrued interest amounted to $5,534,000 were converted to 1,627,647 shares of common stock. As a result, total notes payable of $33,272,000 and accrued interest of $5,534,000 for a total of $38,806,000 were mandatorily converted to 11,413,322 shares of common stock. Adoption of ASU 2020-06 At December 31, 2020, the Company had recorded a note discount of $4,519,000 to account for beneficial conversion feature that existed on the date of issuance for the above notes. On January 1, 2021 the Company chose to adopt Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06, the embedded conversion features are no longer required to be separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. The Company accounted for the adoption of this standard by charging opening additional paid in capital at January 1, 2021. In addition, pursuant to ASU 2020-06, the Company also adjusted accumulated deficit and additional paid in capital by $226,000 to account the derecognition of the $226,000 interest expense recorded in fiscal 2020. |
Note 5 - Line of Credit
Note 5 - Line of Credit | 3 Months Ended |
Mar. 31, 2021 | |
Line of Credit Facility [Abstract] | |
Line of Credit | On November 8, 2010, the Company entered into a financing arrangement with Gemini Pharmaceuticals, Inc., a product development and manufacturing partner of the Company, pursuant to which Gemini Pharmaceuticals made a $250,000 strategic equity investment in the Company and agreed to make a $750,000 purchase order line of credit facility available to the Company. The outstanding principal of all advances under the line of credit will bear interest at the rate of interest of prime plus 2% per annum. As of March 31, 2021 and December 31, 2020, outstanding balance of this credit line amounted to $31,000, respectively. |
Note 7 - Stockholders' Equity (
Note 7 - Stockholders' Equity (Deficit) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' Deficit: | |
Stockholders' Equity (Deficit) | Common Stock Issuable As a result, of the mandatory conversion of the notes payable and accrued interest in the aggregate of $38,806,000 on February 16, 2021, the Company is obligated to issue a total of 11,413,322 shares of common stock to the respective noteholders. As of March 31, 2021, the Company was only able to issue 3,779,322 shares of common stock or approximately 33% or $12,850,000 of the converted notes payable and accrued interest to the respective noteholders. With regards to the remaining 7,634,000 unissued shares of common stock, the Company is in the process of obtaining the necessary supporting documentation from the respective noteholders which will then be provided to the Company’s stock transfer agent as a requirement for the issuance of the common stock certificate. For financial reporting purposes, the Company reported $25,956,000 as common stock issuable in the accompanying statements of stockholders equity to account for the estimated balance of the converted notes payable and accrued interest that the Company has not yet issued the corresponding common stock. Subsequent to March 31, 2021, the Company issued a total of 5,336,191 shares of common stock to these noteholders upon submission of the required documentation to the Company’s stock transfer agent. The following were transactions during the three months ended March 31, 2021: Issuance of Common Stock in public offering On February 16, 2021, the Company completed a public offering of 4,945,000 shares of common stock for net proceeds of $24,679,000, after deducting underwriting discounts, commissions and other direct offering expenses. As part of the offering, the Company also granted these investors, warrants to purchase 5,192,250 shares of common stock. The warrants are fully vested, exercisable at $5.50 per share and will expire in five years. As a result of the completion of the public offering and the successful listing of its shares of common stock on the Nasdaq Capital Markets, convertible notes with an aggregate principal amount of $33,272,000 and accrued interest of $5,534,000 mandatorily converted at its stated conversion rate of $3.40 per share into 11,413,322 shares of the Company’s common stock (see Note 4). Issuance of Common Stock for services - consultants As part of consulting agreements with certain consultants, the Company agreed to grant these consultants common stock equal to 1% and 3% of the fully diluted shares of common stock of the Company upon conversion of options, warrants and Convertible Notes in association with a national markets qualified financing as consideration for entering into the Agreement (with such stock to vest and be delivered within 30 days after the national markets qualified financing). Pursuant to the agreement, approximately 75% of the common stock to be issued will vest immediately while the remaining 25% will vest over a period of two years. On February 16, 2021, the Company completed its equity offering and listed its shares of common stock on the Nasdaq Capital Markets (see Note 7). As a result, the Company issued to these consultants 2,502,518 shares of common stock with a fair value of $9,679,000. Pursuant to current accounting guidelines, as the grant of the common stock is subject to milestone or performance condition, the Company measured the fair value of the common stock on the respective date of the agreement, and then such award was recorded as compensation expense as the milestone or performance condition was met and in accordance with its vesting term of the grant. During the period ended March 31, 2021, pursuant to the vesting terms of the agreements, the Company issued 1,807,374 shares of common stock to these consultants and recorded the corresponding stock compensation expense of $7,239,000. In addition, the Company also issued 150,000 shares of common stock with a fair value of $1,213,000 to other consultants for service rendered. As of March 31, 2021, the fair value of 695,144 unvested shares to be recognized as compensation in future periods amounted to $2,440,000. Issuance of Common Stock for research and development agreement During the three months ended March 31, 2021, the Company issued 189,753 shares of common stock for a research and development agreement valued at $1,355,000. The common shares were valued on the market price at the date of grant. Issuance of Common Stock upon exercise of warrants During the three months ended March 31, 2021, the Company issued 94,824 shares of common stock upon the exercise of warrants resulting in cash proceeds of $58,000. Common Stock Issuable As a result of the mandatory conversion of the notes payable and accrued interest in the aggregate of $38,806,000 on February 16, 2021, the Company is obligated to issue a total of 11,413,322 shares of common stock to the respective noteholders. As of March 31, 2021, the Company was only able to issue 3,779,322 shares of common stock or approximately 33% or $12,850,000 of the converted notes payable and accrued interest to the respective noteholders. With regards to the remaining 7,634,000 unissued shares of common stock, the Company is in the process of obtaining the necessary supporting documentation from the respective noteholders which will then be provided to the Company’s stock transfer agent as a requirement for the issuance of the common stock certificate. For financial reporting purposes, the Company reported $25,956,000 as common stock issuable in the accompanying statements of stockholders equity to account for the estimated balance of the converted notes payable and accrued interest that the Company has not yet issued the corresponding common stock. Subsequent to March 31, 2021, the Company issued a total of 5,336,191 shares of common stock to these noteholders upon submission of the required documentation to the Company’s stock transfer agent. Preferred Stock A. Series J Preferred Stock On September 1, 2017, the Board designated 2,000,000 shares of Series J preferred stock (the “Series J Preferred Stock”). On the same day, the Board issued 1,513,548 shares of Series J Preferred Stock in exchange for the cancellation of certain indebtedness. In the first quarter of 2019, it was discovered that a certificate of designation with respect to the Series J Preferred Stock had never been filed with the Office of the Secretary of State for the State of Delaware. Despite the fact the Company had issued shares of Series J Preferred Stock, the issuance of those shares was not valid and was of no legal effect. To remedy the situation, on April 4, 2019, the Company filed a certificate of designation with the Office of the Secretary State for the State of Delaware designating a series of preferred stock as the Series J-1 preferred stock, par value $0.01 per share (the “Series J-1 Preferred Stock”). On April 19, 2019, the Company issued 840,000 shares of Series J-1 Preferred Stock. The issuance was in lieu of the Series J Preferred Stock that should have been issued on September 1, 2017, and in settlement for not receiving preferred stock until 20 months after the debt for which the stock was issued was cancelled. Shares of the Series J-1 Preferred Stock are convertible at any time, at the option of the holders, into shares of the Company’s common stock at an effective conversion price of $3.40 per share, subject to adjustment for, among other things, stock dividends, stock splits, combinations, reclassifications of our capital stock and mergers or consolidations, and subject to a beneficial ownership limitation which prohibits conversion if such conversion would result in the holder (together with its affiliates) being the beneficial owner of in excess of 9.99% of the Company’s common stock or 692,220 shares of common stock. Shares of the Series J-1 Preferred Stock have the same voting rights a shares of the Company’s common stock, with the holders of the Series J-1 Preferred Stock entitled to vote on an as-converted-to-common stock basis, subject to the beneficial ownership limitation described above, together with the holders of the Company’s common stock on all matters presented to the Company’s stockholders. The Series J-1 Preferred Stock are not entitled to any dividends (unless specifically declared by the Board), but will participate on an as-converted-to-common-stock basis in any dividends to the holders of the Company’s common stock. In the event of the Company’s dissolution, liquidation or winding up, the holders of the Series J-1 Preferred Stock will be on parity with the holders of the Company’s common stock and will participate, on a on an as-converted-to-common stock basis, in any distribution to holders of the Company’s common stock. On February 16, 2021, as a result of the completion of the public offering and the successful listing of its shares of common stock on the Nasdaq Capital Markets, 2,353,548 shares of Series J Preferred stock mandatorily converted at a conversion rate of $3.40 per share into 692,220 shares of the Company’s common stock. B. Series C Preferred Stock The 96,230 shares of Series C preferred stock, par value $0.01 per share (the “Series C Preferred Stock”), are convertible into 7 shares of the Company’s common stock at the option of the holders at any time. The conversion ratio is based on the average closing bid price of the common stock for the fifteen consecutive trading days ending on the date immediately preceding the date notice of conversion is given, but cannot be less than $3.40 or more than $4.9113 common shares for each share of Series C Preferred Stock. The conversion ratio may be adjusted under certain circumstances such as stock splits or stock dividends. The Company has the right to automatically convert the Series C Preferred Stock into common stock if the Company lists its shares of common stock on the Nasdaq National Market and the average closing bid price of the Company’s common stock on the Nasdaq National Market for 15 consecutive trading days exceeds $3,000.00. Each share of Series C Preferred Stock is entitled to the number of votes equal to 0.26 divided by the average closing bid price of the Company’s common stock during the fifteen consecutive trading days immediately prior to the date such shares of Series C Preferred Stock were purchased. In the event of liquidation, the holders of the Series C Preferred Stock shall participate on an equal basis with the holders of the common stock (as if the Series C Preferred Stock had converted into common stock) in any distribution of any of the assets or surplus funds of the Company. The holders of Series C Preferred Stock are entitled to noncumulative dividends if and when declared by the Company’s board of directors (the “Board”). No dividends to holders of the Series C Preferred Stock were issued or unpaid through March 31, 2021. C. Series K Preferred Stock On February 16, 2021, the Board designated 115,000 shares of Series K preferred stock, par value $.01. (the “Series K Preferred Stock”). Shares of the Series K Preferred Stock are convertible at any time, at the option of the holders, into shares of the Company’s common stock at an effective conversion rate of 100 shares of common stock for each share of Series K Preferred. Shares of the Series K Preferred Stock have the same voting rights a shares of the Company’s common stock, with the holders of the Series K Preferred Stock entitled to vote on an as-converted-to-common stock basis, subject to the beneficial ownership limitation, together with the holders of the Company’s common stock on all matters presented to the Company’s stockholders. The Series K Preferred Stock are not entitled to any dividends (unless specifically declared by the Board), but will participate on an as-converted-to-common-stock basis in any dividends to the holders of the Company’s common stock. In the event of the Company’s dissolution, liquidation or winding up, the holders of the Series K Preferred Stock will be on parity with the holders of the Company’s common stock and will participate, on a on an as-converted-to-common stock basis, in any distribution to holders of the Company’s common stock. As of March 31, 2021, there were no Series K Preferred stock issued and outstanding. Stock Warrants Stock warrant transactions for the three months ended March 31, 2021: Number of Warrants Weighted Average Exercise Price Outstanding at December 31, 2020: 221,041 $ 3.40 Granted 5,192,250 5.50 Forfeited/canceled - - Exercised (94,424 ) 3.23 Outstanding at March 31, 2021 5,318,867 $ 5.44 Exercisable at March 31, 2021 5,318,867 $ 5.44 As of March 31. 2021, all issued and outstanding warrants are fully vested and the intrinsic value of these warrants amounted to $7,415,000. The following were transactions during the three months ended March 31, 2021: On February 16, 2021, as part of the Company’s public offering, the Company issued warrants to investors to purchase up to an aggregate of 5,192,250 shares of common stock. The warrants have an exercise price of $5.50 per share, subject to adjustment in certain circumstances and will expire in five years. During the three months ended March 31, 2021, the Company issued 94,424 shares of common stock upon exercise of warrants which also resulted cash proceeds of $58,000. |
Note 8 - Related Party
Note 8 - Related Party | 3 Months Ended |
Mar. 31, 2021 | |
Related Party Transactions [Abstract] | |
Related Party | During the period ended March 31, 2021, the Company recorded consulting expense of $250,000 for services rendered by a consultant who is also an owner of approximately 10% of the Company’s issued and outstanding common stock. In addition, the Company also issued a note payable to this consultant of $525,000 in exchange for the cancellation of unpaid consulting fees of $525,000 that was recorded as part of accrued expenses at December 31, 2020. There was no similar consulting expense incurred during the period ended March 31, 2020. |
Note 9 - Equity Compensation to
Note 9 - Equity Compensation to Officers and Board of Directors | 3 Months Ended |
Mar. 31, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Equity Compensation to Officers and Board of Directors | As part of employment agreements with its CEO and its CFO, these officers were to receive a fully vested stock grant equal to aggregate of 10% and 1.5% of the fully diluted shares of common stock of the Company (calculated with the inclusion of the current stock holdings of Mr. Cataldo) upon conversion of options, warrants and Convertible Notes in association with a national markets qualified financing as consideration for entering into the Agreement (with such stock to vest and be delivered within 30 days after the national markets qualified financing). In addition, the Company also granted similar equity compensation to members of the Company’s Board of Directors wherein these directors were to receive stock grant equal to 1% and 1.25% of the fully diluted shares of common stock of the Company. Pursuant to the agreement, approximately 75% of the common stock to be issued vested immediately while the remaining 25% will vest over a period of two years. On February 16, 2021, the Company completed its equity offering and listed its shares of common stock on the Nasdaq Capital Markets (see Note 7). As such, 4,379,407 shares of its common stock were granted to these officers and directors which had a fair value of $18,621,000. Pursuant to current accounting guidelines, as the grant of the common stock is subject to milestone or performance condition, the Company measured the fair value of the common stock on the respective date of the agreement, and then such award was recorded as compensation expense as the milestone or performance condition is met and in accordance with its vesting term of the grant. During the period ended March 31, 2021, the Company recognized stock compensation of $14,296,000 to account equity compensation to officers and directors of the 3,640,816 shares that vested. As of March 31, 2021, the fair value of the 738,591 unvested shares that will be recognized as compensation in future periods amounted to $4,325,000. |
Note 10 - Commitments and Conti
Note 10 - Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 1. Litigation We are involved in certain legal proceedings that arise from time to time in the ordinary course of our business. Except for income tax contingencies, we record accruals for contingencies to the extent that our management concludes that the occurrence is probable and that the related amounts of loss can be reasonably estimated. Legal expenses associated with the contingency are expensed as incurred. There is no current or pending litigation of any significance with the exception of the matters that have arisen under, and are being handled in, the normal course of business. a. On August 28, 2019, a complaint was filed in the Superior Court of California, County of Los Angeles, West Judicial District, Santa Monica Courthouse, Unlimited Civil Division by Jeffrey Lion, an individual (“Lion”), and by Daniel Vallera, an individual (“Vallera”). Lion and Vallera are referred to jointly as the “Plaintiffs”. The complaint was filed against GT Biopharma, Inc. and its subsidiary Oxis Biotech, Inc. (either of them or jointly, the “Company”). The Plaintiffs allege breach of a license agreement between the Plaintiffs and the Company entered into on or about September 3, 2015. Lion alleges breach of a consulting agreement between Lion and the Company entered into on or about September 1, 2015. Vallera alleges breach of a consulting agreement between Vallera and the Company entered into in or around October, 2018. The Complaint seeks actual damages of $1,670,000, for the fair market value of the number of shares of GT Biopharma, Inc. that at the time of judgment represent 882,353 shares of such stock as of September 1, 2015, and that GT Biopharma, Inc. issue Lion the number of common shares of GT Biopharma, Inc. that at the time of judgment represent 882,353 such shares as of September 1, 2015.The Company filed an answer to the complaint denying many allegations and asserting affirmative defenses. Discovery has commenced and trial is scheduled for May, 2022. The Company believes the case is without merit and will defend it vigorously. b. On March 3, 2021 a complaint was filed by Sheffield Properties in the superior Court of California. County of Ventura. The litigation arises from a commercial lease entered into by GT Biopharma for office space in Westlake Village. GT Biopharma has been served but has not yet answered the complaint. Sheffield Properties seeks damages in excess of $250,000. We intend to vigorously defend against these claims. We believe we have made adequate provision in our financial statements to provide for any potential settlement. 2. Research and Development Agreement: We are party to an exclusive worldwide license agreement with the Regents of the University of Minnesota, to further develop and commercialize cancer therapies using TriKE technology developed by researchers at the university to target NK cells to cancer. Under the terms of the agreement, we receive exclusive rights to conduct research and to develop, make, use, sell, and import TriKE technology worldwide for the treatment of any disease, state or condition in humans. We are responsible for obtaining all permits, licenses, authorizations, registrations and regulatory approvals required or granted by any governmental authority anywhere in the world that is responsible for the regulation of products such as the TriKE technology, including without limitation the FDA in the United States and the European Agency for the Evaluation of Medicinal Products in the European Union. We are presently evaluating GTB-3550, our lead TriKE therapeutic product candidate in a Phase I/II clinical trial. Under the agreement, the University of Minnesota will receive an upfront license fee, royalty fees ranging from 4% to 6%, minimum annual royalty payments of $0.25 million beginning in 2022, $2.0 million in 2025, and $5.0 million in 2027 and certain milestone payments totaling $3.1 million. During the period ended March 31, 2021, the Company recorded research and development expenses of $224,000 pursuant to this agreement. |
Note 11 - Subsequent Events
Note 11 - Subsequent Events | 3 Months Ended |
Mar. 31, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent to March 31, 2021, the Company issued 1,274,096 shares of common stock upon exercise of warrants for cash proceeds of $7,008,000. Subsequent to March 31, 2021, the Company issued a total of 5,336,191 shares of common stock to noteholders whose notes payable and accrued interest were mandatorily converted to common stock on February 16, 2021 (see Note 4) |
Note 3 - Summary of Significa_2
Note 3 - Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Use of Estimates | The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include accruals for potential liabilities, valuation of notes payable, assumptions used in deriving the fair value of derivative liabilities, valuation of equity instruments issued for services and realization of deferred tax assets. Actual results could differ from those estimates. |
Basis of Presentation and Principles of Consolidation | The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Oxis Biotech, Inc. and Georgetown Translational Pharmaceuticals, Inc. Intercompany transactions and balances have been eliminated in consolidation. In March 2011, the Company agreed to form a joint venture with engage:BDR, Inc., an on-line marketing company that offers both premium and placement-specific display marketing solutions and the ability to distribute campaigns through its own display platforms and channels. The first product to be marketed and sold through the Joint Venture was to be ErgoFlex™ product. In 2014 management of the Company decided to end the sale of any ErgoFlex product. The entity has been discontinued since 2014. |
Reverse Stock Split | On February 10, 2021, the Company completed a 1:17 reverse stock split of the Company's issued and outstanding shares of common stock and all fractional shares were rounded up. All share and per share amounts in the accompanying financial statements have been adjusted retroactively to reflect the reverse stock split as if it had occurred at the beginning of the earliest period presented. |
COVID-19 | In March 2020, the World Health Organization declared coronavirus COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, has adversely affected workforces, customers, economies, and financial markets globally. It has also disrupted the normal operations of many businesses. This outbreak could decrease spending, adversely affect demand for the Company’s products, and harm the Company’s business and results of operations. During the three months ended March 31, 2021, the Company believes the COVID-19 pandemic did impact its operating results. However, the Company has not observed any impairments of its assets or a significant change in the fair value of its assets due to the COVID-19 pandemic. At this time, it is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on the Company’s business or results of operations, financial condition, or liquidity. The Company has been following the recommendations of health authorities to minimize exposure risk for its team members, including the temporary closure of its corporate office and having team members work remotely. Most vendors have transitioned to electronic submission of invoices and payments. |
Accounting Estimates | The preparation of financial statements in conformity with Generally Accepted Accounting Principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant estimates include accruals for potential liabilities, valuation of notes payable, assumptions used in deriving the fair value of derivative liabilities, valuation of equity instruments issued for services and realization of deferred tax assets. Actual results could differ from those estimates. |
Stock Based Compensation | The Company accounts for share-based awards to employees and nonemployees and consultants in accordance with the provisions of ASC 718, Compensation-Stock Compensation. Stock-based compensation cost is measured at fair value on the grant date and that fair value is recognized as expense over the requisite service, or vesting, period. |
Fair Value of Financial Instruments | FASB Accounting Standards Codification ("ASC") 820-10 requires entities to disclose the fair value of financial instruments, both assets and liabilities recognized and not recognized on the balance sheet for which it is practicable to estimate fair value. ASC 820-10 defines the fair value of a financial instrument as the amount at which the instrument could be exchanged in a current transaction between willing parties. The three levels of the fair value hierarchy are as follows: Level 1 Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access. Level 2 Valuations based on quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable data for substantially the full term of the assets or liabilities. Level 3 Valuations based on inputs that are unobservable, supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The carrying amount of the Company’s derivative liability of $362,000 at March 31, 2021 and $383,000 at December 31, 2020 was based on Level 2 measurements. The carrying amounts of the Company’s other financial assets and liabilities, such as cash, prepaid expense, accounts payable and accrued expenses approximate their fair values because of the short maturity of these instruments. |
Derivative Financial Instruments | The Company evaluates its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date. The fair value of the embedded derivatives are determined using a Binomial valuation method at inception and on subsequent valuation dates. |
Net Loss per Share | Basic earnings (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Common stock issuable is included in our calculation as of the date of the underlying agreement. Diluted earnings (loss) per share is computed using the weighted-average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of convertible notes, stock issuable to the exercise of stock options and warrants have been excluded from the diluted loss per share calculation because their effect is anti-dilutive. These following common stock equivalents were excluded in the computation of the net loss per share because their effect is anti-dilutive. March 31, 2021 March 31, 2020 A. Options to purchase common stock - 3 B. Warrants to purchase common stock 5,318,867 106,650 C. Convertible notes payable - 4,678,823 D. Convertible Series J Preferred stock - 692,220 E. Convertible Series C Preferred stock 7 7 5,318,874 5,477,703 |
Segments | The Company determined its reporting units in accordance with ASC 280, “Segment Reporting” (“ASC 280”). Management evaluates a reporting unit by first identifying its’ operating segments under ASC 280. The Company then evaluates each operating segment to determine if it includes one or more components that constitute a business. If there are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine if they must be aggregated into one or more reporting units. If applicable, when determining if it is appropriate to aggregate different operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated. Management has determined that the Company has one consolidated operating segment. The Company’s reporting segment reflects the manner in which its chief operating decision maker reviews results and allocates resources. The Company’s reporting segment meets the definition of an operating segment and does not include the aggregation of multiple operating segments. |
Recent Accounting Pronouncements | In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. Under ASU 2020-06, the embedded conversion features are no longer separated from the host contract for convertible instruments with conversion features that are not required to be accounted for as derivatives under Topic 815, or that do not result in substantial premiums accounted for as paid-in capital. Consequently, a convertible debt instrument will be accounted for as a single liability measured at its amortized cost, as long as no other features require bifurcation and recognition as derivatives. The new guidance also requires the if-converted method to be applied for all convertible instruments. ASU 2020-06 is effective for fiscal years beginning after December 15, 2021, with early adoption permitted. Adoption of the standard requires using either a modified retrospective or a full retrospective approach. Effective January 1, 2021, we early adopted ASU 2020-06 using the modified retrospective approach. Adoption of the new standard resulted in a decrease to additional paid-in capital of $4,519,000 (see Note 4). Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Note 3 - Summary of Significa_3
Note 3 - Summary of Significant Account Policies (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Antidilutive shares excluded from net loss | March 31, 2021 March 31, 2020 A. Options to purchase common stock - 3 B. Warrants to purchase common stock 5,318,867 106,650 C. Convertible notes payable - 4,678,823 D. Convertible Series J Preferred stock - 692,220 E. Convertible Series C Preferred stock 7 7 5,318,874 5,477,703 |
Note 4 - Convertible Notes Pa_2
Note 4 - Convertible Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Convertible notes payable | March 31, 2021 December 31, 2020 A. Notes payable issued for cash $ - $ 24,085,000 B. Notes payable issued for settlement agreements - 2,528,000 C. Notes payable issued for forbearance agreements - 3,849,000 D. Notes payable issued for consulting services - 360,000 - 30,822,000 Less unamortized debt discount - (4,519,000 ) Convertible notes, net of discount $ - $ 26,303,000 |
Note 6 - Derivative Liability (
Note 6 - Derivative Liability (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Derivative Liability [Abstract] | |
Fair value assumptions | March 31, 2021 December 31, 2020 Stock Price $ 6.84 $ 7.21 Risk-free interest rate 0.92 % 0.36 % Expected volatility 136 % 135 % Expected life (in years) 4.4 years 4.6 years Expected dividend yield - - Fair Value: Warrants $ 362,000 $ 383,000 |
Note 7 - Stockholders' Equity_2
Note 7 - Stockholders' Equity (Deficit) (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Equity [Abstract] | |
Summary of the warrant activity | Number of Warrants Weighted Average Exercise Price Outstanding at December 31, 2020: 221,041 $ 3.40 Granted 5,192,250 5.50 Forfeited/canceled - - Exercised (94,424 ) 3.23 Outstanding at March 31, 2021 5,318,867 $ 5.44 Exercisable at March 31, 2021 5,318,867 $ 5.44 |
Note 2 - Going Concern (Details
Note 2 - Going Concern (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Accounting Policies [Abstract] | |||
Net loss | $ (29,677,000) | $ (1,708,000) | |
Cash used in operating activities | (3,684,000) | (223,000) | |
Cash received from sale of common stock | 24,679,000 | $ 0 | |
Cash and cash equivalent | $ 27,555,000 | $ 5,297,000 |
Note 3 - Summary of Significa_4
Note 3 - Summary of Significant Accounting Policies (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Anti-dilutive securities | 5,318,874 | 5,477,703 |
Stock Options | ||
Anti-dilutive securities | 0 | 3 |
Warrant | ||
Anti-dilutive securities | 5,318,867 | 106,650 |
Convertible Notes Payable | ||
Anti-dilutive securities | 0 | 4,678,823 |
Series J | ||
Anti-dilutive securities | 0 | 692,220 |
Series C | ||
Anti-dilutive securities | 7 | 7 |
Note 3 - Summary of Significa_5
Note 3 - Summary of Significant Account Policies (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Accounting Policies [Abstract] | ||
Derivative liability | $ 362,000 | $ 383,000 |
Note 4 - Convertible Notes Pa_3
Note 4 - Convertible Notes Payable (Details) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Convertible notes payable | $ 0 | $ 30,822,000 |
Less unamortized debt discount | 0 | (4,519,000) |
Convertible notes, net of discount | 0 | 26,303,000 |
Notes Payable Issued for Cash | ||
Convertible notes payable | 0 | 24,085,000 |
Notes Payable Issued for Settlement Agreements | ||
Convertible notes payable | 0 | 2,528,000 |
Notes Payable Issued for Forbearance Agreements | ||
Convertible notes payable | 0 | 3,849,000 |
Notes Payable Issued for Consulting Services | ||
Convertible notes payable | $ 0 | $ 360,000 |
Note 5 - Line of Credit (Detail
Note 5 - Line of Credit (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Debt Disclosure [Abstract] | ||
Line of credit | $ 31,000 | $ 31,000 |
Note 6 - Derivative Liability_2
Note 6 - Derivative Liability (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Derivative Liability [Abstract] | ||
Stock price | $ 6.84 | $ 7.21 |
Risk-free interest rate | 0.92% | 0.36% |
Expected volatility | 136.00% | 135.00% |
Expected life (in years) | 4 years 4 months 24 days | 4 years 7 months 6 days |
Expected dividend yield | $ 0 | $ 0 |
Fair value of warrants | $ 362,000 | $ 383,000 |
Note 6 - Derivative Liability_3
Note 6 - Derivative Liability (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Derivative Liability [Abstract] | ||
Change in fair value of derivative liability | $ (21,000) | $ 0 |
Note 7 - Stockholders' Deficit
Note 7 - Stockholders' Deficit (Details) | 3 Months Ended |
Mar. 31, 2021$ / sharesshares | |
Equity [Abstract] | |
Outstanding, beginning | shares | 221,041 |
Granted | shares | 5,192,250 |
Forfeited/canceled | shares | 0 |
Exercised | shares | (94,424) |
Outstanding, ending | shares | 5,318,867 |
Exercisable, ending | shares | 5,318,867 |
Outstanding, beginning | $ / shares | $ 3.40 |
Granted | $ / shares | 5.50 |
Forfeited/canceled | $ / shares | 0 |
Exercised | $ / shares | 3.23 |
Outstanding, ending | $ / shares | 5.44 |
Exercisable, ending | $ / shares | $ 5.44 |
Note 7 - Stockholders' Equity_3
Note 7 - Stockholders' Equity (Details Narrative) - USD ($) | Mar. 31, 2021 | Dec. 31, 2020 |
Stockholders' Deficit: | ||
Common stock, authorized | 2,000,000,000 | 2,000,000,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 15,000,000 | 15,000,000 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Common stock, issued | 20,517,431 | 5,218,122 |
Common stock, outstanding | 20,517,431 | 5,218,122 |
Stockbased compensation to be recognized | $ 2,440,000 | |
Intrinsic value of warrants | $ 7,415,000 |
Note 8 - Related Party (Details
Note 8 - Related Party (Details Narrative) | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Related Party Transactions [Abstract] | |
Consulting expense | $ 250,000 |
Note 9 - Equity Compensation _2
Note 9 - Equity Compensation to Officers and Board of Directors (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | ||
Equity compensation to officers and directors | $ 14,296,000 | $ 0 |
Unvested fair value of equity compensation | $ 4,325,000 |
Note 10 - Commitments and Con_2
Note 10 - Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Research and development expense | $ 1,640,000 | $ 324,000 |
Research and Development Agreement | ||
Research and development expense | $ 224,000 |