Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2015 | Oct. 30, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | Trovagene, Inc. | |
Entity Central Index Key | 1,213,037 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2015 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,722,602 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 74,149,797 | $ 27,293,798 |
Accounts receivable | 66,967 | 56,694 |
Prepaid expenses and other assets | 600,931 | 369,259 |
Total current assets | 74,817,695 | 27,719,751 |
Property and equipment, net | 1,842,213 | 840,387 |
Other assets | 362,946 | 336,708 |
Total Assets | 77,022,854 | 28,896,846 |
Current liabilities: | ||
Accounts payable | 1,100,073 | 747,799 |
Accrued expenses | 2,124,080 | 1,841,808 |
Current portion of long-term debt | 3,745,198 | 1,898,548 |
Total current liabilities | 6,969,351 | 4,488,155 |
Long-term debt, less current portion | 11,519,160 | 13,053,117 |
Derivative financial instruments | 3,675,926 | 3,006,021 |
Total Liabilities | $ 22,164,437 | $ 20,547,293 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity | ||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 60,600 shares outstanding at September 30, 2015 and December 31, 2014; designated as Series A Convertible Preferred Stock with liquidation preference of $606,000 at September 30, 2015 and December 31, 2014 | $ 60 | $ 60 |
Common stock, $0.0001 par value, 150,000,000 shares authorized; 29,722,602 and 18,915,794 shares issued and outstanding at September 30, 2015 and December 31, 2014, respectively | 2,972 | 1,891 |
Additional paid-in capital | 156,355,718 | 89,739,511 |
Accumulated deficit | (101,500,333) | (81,391,909) |
Total stockholders’ equity | 54,858,417 | 8,349,553 |
Total liabilities and stockholders’ equity | $ 77,022,854 | $ 28,896,846 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares outstanding | 60,600 | 60,600 |
Series A Convertible Preferred Stock, liquidation preference (in dollars) | $ 606,000 | $ 606,000 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 29,722,602 | 18,915,794 |
Common stock, shares outstanding | 29,722,602 | 18,915,794 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Income Statement [Abstract] | ||||
Royalty income | $ 51,301 | $ 57,199 | $ 222,931 | $ 213,780 |
License fees | 0 | 0 | 0 | 10,000 |
Diagnostic service revenue | 6,026 | 0 | 10,712 | 0 |
Total revenues | 57,327 | 57,199 | 233,643 | 223,780 |
Costs and expenses: | ||||
Cost of revenue | 173,537 | 0 | 429,992 | 0 |
Research and development | 2,546,533 | 1,990,251 | 7,428,349 | 4,829,945 |
Selling and marketing | 1,798,263 | 540,584 | 4,508,766 | 1,699,988 |
General and administrative | 1,948,546 | 1,466,592 | 5,756,047 | 4,135,310 |
Total operating expenses | 6,466,879 | 3,997,427 | 18,123,154 | 10,665,243 |
Loss from operations | (6,409,552) | (3,940,228) | (17,889,511) | (10,441,463) |
Interest income | 17,368 | 3,470 | 32,988 | 7,940 |
Interest expense | (352,727) | (389,871) | (1,133,068) | (454,082) |
Gain (loss) from change in fair value of derivative instruments — warrants | 4,017,212 | (1,029,333) | (1,105,270) | 1,220,655 |
Other (income) loss, net | (8,130) | (19,255) | 4,617 | 24,845 |
Net loss and comprehensive loss | (2,735,829) | (5,375,217) | (20,090,244) | (9,642,105) |
Preferred stock dividend | (6,060) | (6,060) | (18,180) | (16,955) |
Net loss and comprehensive loss attributable to common stockholders | $ (2,741,889) | $ (5,381,277) | $ (20,108,424) | $ (9,659,060) |
Net loss per common share - basic (in USD per share) | $ (0.10) | $ (0.28) | $ (0.80) | $ (0.51) |
Net loss per common share - diluted (in USD per share) | $ (0.23) | $ (0.28) | $ (0.96) | $ (0.62) |
Weighted average shares outstanding — basic | 28,560,211 | 18,902,783 | 25,014,966 | 18,902,783 |
Weighted average shares outstanding — diluted | 29,128,235 | 18,902,783 | 25,204,307 | 19,012,775 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Operating activities | ||
Net loss | $ (20,090,244) | $ (9,642,105) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Net loss (gain) on disposal of fixed assets | 4,562 | (24,845) |
Depreciation and amortization | 250,600 | 169,599 |
Stock based compensation expense | 2,758,847 | 1,384,959 |
Amortization of debt costs | 253,028 | 96,060 |
Accretion of discount on debt | 59,665 | 28,686 |
Loss (gain) from the change in fair value of derivative instruments - warrants | 1,105,270 | (1,220,655) |
Changes in operating assets and liabilities: | ||
Increase in other assets | (10,273) | (10,452) |
(Increase) decrease in accounts receivable | (231,672) | 16,624 |
Increase in prepaid expenses | (26,238) | (195,229) |
Increase in accounts payable and accrued expenses | 616,366 | 536,844 |
Net cash used in operating activities | (15,310,089) | (8,860,514) |
Investing activities: | ||
Capital expenditures, net | (1,256,988) | (235,623) |
Net cash used in investing activities | (1,256,988) | (235,623) |
Financing activities: | ||
Proceeds from sales of common stock, net of expenses | 61,215,398 | 0 |
Proceeds from exercise of options | 818,251 | 0 |
Proceeds from exercise of warrants | 1,389,427 | 0 |
Net borrowings under debt agreements | 0 | 14,938,723 |
Net repayments from equipment line of credit | 0 | (515,964) |
Net cash provided by financing activities | 63,423,076 | 14,422,759 |
Net change in cash and equivalents | 46,855,999 | 5,326,622 |
Cash and cash equivalents—Beginning of period | 27,293,798 | 25,836,937 |
Cash and cash equivalents—End of period | 74,149,797 | 31,163,559 |
Supplementary disclosure of cash flow activity: | ||
Cash paid for taxes | 800 | 2,400 |
Cash paid for interest | 795,375 | 248,506 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Preferred stock dividends accrued | 18,180 | 16,955 |
Warrants issued in connection with Loan and Security Agreement | 0 | 235,857 |
Reclassification of derivative financial instruments to additional paid in capital | $ 435,365 | $ 0 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Business Organization and Overview On April 26, 2002, the Company was incorporated in the State of Florida. On July 2, 2004, the Company acquired Xenomics, a California corporation, which was in business to develop and commercialize urine-based molecular diagnostics technology. In 2007, the Company changed its fiscal year end from January 31 to December 31. In January 2010, the Company re-domesticated its state of incorporation from Florida to Delaware and changed its name to Trovagene, Inc. In June 2012, the Company’s common stock was listed on The NASDAQ Capital Market under the ticker symbol TROV. Trovagene, Inc. (“Trovagene” or the “Company”) is a molecular diagnostic company that focuses on the development and commercialization of a proprietary urine-based cell-free molecular diagnostic technology for use in disease detection and monitoring across a variety of medical disciplines. Trovagene’s primary internal focus is to leverage its novel urine-based molecular diagnostic platform to facilitate improvements in the field of oncology, while the Company’s external focus includes entering into collaborations to develop the Company’s technology in areas such as infectious disease, transplant medicine, and prenatal genetics. The Company’s goal is to improve treatment outcomes for cancer patients using its proprietary technology to detect and quantitatively monitor cell-free DNA in urine. Circulating tumor DNA (“ctDNA”) is a subtype of cell-free DNA, and represents the mutant cell-free DNA that we use to detect and monitor cancer. Basis of Presentation The accompanying consolidated financial statements of Trovagene, which include its wholly owned subsidiaries Xenomics, Inc., a California corporation and Etherogen, Inc., a Delaware corporation, have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). All intercompany balances and transactions have been eliminated. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with GAAP and the rules and regulations of the Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed consolidated financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair statement of the results for the periods presented. All such adjustments are of a normal and recurring nature. The operating results presented in these unaudited interim condensed consolidated financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto for the year ended December 31, 2014 included in the Company’s annual report on Form 10-K filed with the SEC on March 12, 2015. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with 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. Revenue Recognition Revenue is recognized when persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. Milestone, Royalty and License Revenues The Company licenses and sublicenses its patent rights to healthcare companies, medical laboratories and biotechnology partners. These agreements may involve multiple elements such as license fees, royalties and milestone payments. Revenue is recognized when the criteria described above have been met as well as the following: • Up-front nonrefundable license fees pursuant to agreements under which the Company has no continuing performance obligations are recognized as revenues on the effective date of the agreement and when collection is reasonably assured. • Minimum royalties are recognized as earned, and royalties in excess of minimum amounts are recognized upon receipt of payment when collection is assured. • Milestone payments are recognized when both the milestone is achieved and the related payment is received. Diagnostic Service Revenues Revenue for clinical laboratory tests may come from several sources, including commercial third-party payors, such as insurance companies and health maintenance organizations, government payors, such as Medicare and Medicaid in the United States, patient self-pay and, in some cases, from hospitals or referring laboratories who, in turn, might bill third-party payors for testing. The Company is recognizing diagnostic service revenue on the cash collection basis until such time as it is able to properly estimate collections on third party reimbursements. Derivative Financial Instruments—Warrants The Company has issued common stock warrants in connection with the execution of certain equity financings. Such warrants are classified as derivative liabilities under the provisions of Financial Accounting Standards Board (“FASB”) ASC 815 Derivatives and Hedging (“ASC 815”) and are recorded at their fair market value as of each reporting period. Such warrants do not meet the exemption that a contract should not be considered a derivative instrument if it is (1) indexed to its own stock and (2) classified in stockholders’ equity. Changes in fair value of derivative liabilities are recorded in the consolidated statement of operations under the caption “Change in fair value of derivative instruments.” The fair value of warrants is determined using the Black-Scholes option-pricing model using assumptions regarding the volatility of Trovagene’s common share price, the fair value of the underlying common shares, the remaining life of the warrant, and the risk-free interest rates at each period end. The Company thus uses model-derived valuations where inputs are observable in active markets to determine the fair value and accordingly classifies such warrants in Level 3 per ASC 820, Fair Value Measurements . At September 30, 2015 , and December 31, 2014 , the fair value of these warrants was $3,675,926 and $3,006,021 , respectively, and were included in the derivative financial instruments liability on the balance sheet. Net Loss Per Share Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share , for all periods presented. In accordance with this guidance, basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. Preferred dividends are included in income available to common stockholders in the computation of basic and diluted earnings per share. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding for the period. Common share equivalents are only included when their effect is dilutive. The following table sets forth the computation of basic and diluted earnings per share: Three Months Nine Months 2015 2014 2015 2014 Numerator: Net loss attributable to common shareholders $ (2,741,889 ) $ (5,381,277 ) $ (20,108,424 ) $ (9,659,060 ) Adjustment for change in fair value of derivative instruments - warrants (4,017,212 ) — (4,017,212 ) (2,217,142 ) Net loss used for diluted loss per share $ (6,759,101 ) $ (5,381,277 ) $ (24,125,636 ) $ (11,876,202 ) Denominator for basic and diluted net loss per share: Weighted average shares used to compute basic loss per share 28,560,211 18,902,783 25,014,966 18,902,783 Adjustments to reflect assumed exercise of warrants 568,024 — 189,341 109,992 Weighted average shares used to compute diluted net loss per share 29,128,235 18,902,783 25,204,307 19,012,775 Net loss per share attributable to common stockholders: Basic $ (0.10 ) $ (0.28 ) $ (0.80 ) $ (0.51 ) Diluted $ (0.23 ) $ (0.28 ) $ (0.96 ) $ (0.62 ) The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their effect was anti-dilutive: September 30, 2015 2014 Options to purchase Common Stock 6,514,130 4,233,749 Warrants to purchase Common Stock 4,565,947 5,288,325 Series A Convertible Preferred Stock 63,125 63,125 11,143,202 9,585,199 Recent Accounting Pronouncements In April 2015, a new accounting standard was issued that amends the presentation for debt issuance costs. Upon adoption, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in other assets on our consolidated balance sheets. This new standard will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. Adoption of this new standard is not expected to have a material impact on our consolidated balance sheets or related disclosures. In August 2014, the FASB issued an amendment to the accounting guidance related to the evaluation of an entity to continue as a going concern. The amendment establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern in connection with preparing financial statements for each annual and interim reporting period. The amendment also gives guidance to determine whether to disclose information about relevant conditions and events when there is substantial doubt about an entity’s ability to continue as a going concern. The amended guidance is effective prospectively for fiscal years beginning after December 15, 2016. The new guidance will not have an impact on the Company’s financial position, results of operations or cash flows. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of September 30, 2015 and December 31, 2014 : Fair Value Measurements at Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market fund (1) $ 73,493,510 $ — $ 73,493,510 Total Assets $ 73,493,510 $ — $ — $ 73,493,510 Liabilities: Derivative liabilities related to warrants $ — $ — $ 3,675,926 $ 3,675,926 Total Liabilities $ — $ — $ 3,675,926 $ 3,675,926 Fair Value Measurements at Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market fund (1) $ 27,123,587 $ — $ — $ 27,123,587 Total Assets $ 27,123,587 $ — $ — $ 27,123,587 Liabilities: Derivative liabilities related to warrants $ — $ — $ 3,006,021 $ 3,006,021 Total Liabilities $ — $ — $ 3,006,021 $ 3,006,021 (1) Included as a component of cash and cash equivalents on the accompanying condensed consolidated balance sheets. The following table sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the nine months ended September 30, 2015 : Description Balance at Fair Value of Warrants Reclassified to Additional Paid in Capital Unrealized Loss Balance at Derivative liabilities related to Warrants 3,006,021 (435,365 ) 1,105,270 3,675,926 The unrealized loss on the derivative liabilities is recorded as a change in fair value of derivative liabilities in the Company’s condensed consolidated statement of operations. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company reviews the assets and liabilities that are subject to ASC Topic 815-40. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consist of the following: As of September 30, As of December 31, Furniture and office equipment $ 868,708 $ 365,955 Leasehold Improvements 39,401 39,401 Laboratory equipment 1,666,970 968,901 2,575,079 1,374,257 Less—accumulated depreciation and amortization (732,866 ) (533,870 ) Property and equipment, net $ 1,842,213 $ 840,387 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Debt | Debt Equipment Line of Credit In June 2013, the Company entered into a Loan and Security Agreement (“Equipment Line of Credit”) with Silicon Valley Bank that provided for cash borrowings for equipment of up to $1.0 million , secured by the equipment financed. Under the terms of the agreement, interest was the greater of 5% or 4.6% above the U.S. Treasury Note as of the date of each borrowing. Interest only payments were due on borrowings through December 31, 2013, with both interest and principal payments commencing in January 2014. Any equipment advances after December 31, 2013 were subject to principal and interest payments immediately over a 30 -month period following the advance. In June 2014, the equipment loan was paid in full, the Company had no further obligations thereunder, and the bank released its security interest in such assets. The Company recorded approximately $61,000 in interest expense related to the Equipment Line of Credit from January 1, 2014, until loan was paid in full in June 2014. Loan and Security Agreement In June 2014, the Company entered into a $15,000,000 loan and security agreement (“Agreement”) under which the lenders provided the Company a term loan, which was funded at closing. The interest rate is 7.07% per annum. Under the Agreement, the Company makes interest only payments on the outstanding amount of the loan on a monthly basis through July 2015, after which equal monthly payments of principal and interest are due until the loan maturity date of July 1, 2018. Included in the Agreement was a provision to extend the interest only payment to February 1, 2016 upon the Company’s receipt of unrestricted net cash proceeds from the sale of equity securities of not less than $30 million by June 30, 2015. In June 2015, the Company entered into an amendment to the Agreement (“Amendment”), which reduced the amount of unrestricted net cash proceeds to not less than $21 million from the sale of equity securities to qualify for an interest extension. The Company met the conditions in the Amendment related to the interest extension, as a result, the interest only payments that were to expire on August 1, 2015 have been extended for six months to February 1, 2016, when both interest and principal payments will commence. The loan is secured by a security interest in all of the Company’s assets except intellectual property, which is subject to a negative pledge. In connection with the loan, the lenders received a warrant to purchase an aggregate 85,470 shares of the Company’s common stock at an exercise price of $3.51 per share exercisable for ten years from the date of issuance. The original value of the warrants, totaling $235,857 , was recorded as debt discount and additional paid-in capital as the warrants were equity classified. As of September 30, 2015 , a warrant to purchase 42,735 shares of common stock remains outstanding. At the Company’s option, it may prepay all of the outstanding principal balance, subject to certain pre-payment fees ranging from 1% to 3% of the prepayment amount. In the event of a final payment of the loans under the loan agreement, either in the event of repayment of the loan at maturity or upon any prepayment, the Company is obligated to pay the amortized portion of the final fee of $1,050,000 . The Company is also subject to certain affirmative and negative covenants under the Agreement, including limitations on its ability to: undergo certain change of control events; convey, sell, lease, license, transfer or otherwise dispose of any equipment financed by loans under the loan agreement; create, incur, assume, guarantee or be liable with respect to indebtedness, subject to certain exceptions; grant liens on any equipment financed under the loan agreement; and make or permit any payment on specified subordinated debt. In addition, under the Agreement, subject to certain exceptions, the Company is required to maintain with the lender its primary operating, other deposit and securities accounts. Furthermore, under the amendment to the Agreement, the Company is required to be in compliance with healthcare laws and regulations and terms and conditions of healthcare permits. The Company was in compliance with all covenants as of September 30, 2015 . As of September 30, 2015 , amounts due under the Agreement include $3,745,198 in current liabilities and $11,519,160 in long-term liabilities. The Company recorded $1,133,068 in interest expense related to the Agreement during the nine months ended September 30, 2015 . Future minimum principal payments under the loan and security agreement are as follows: September 30, 2016 $ 3,745,198 2017 5,958,379 2018 5,296,423 Total long-term obligations $ 15,000,000 |
Derivative Financial Instrument
Derivative Financial Instruments - Warrants | 9 Months Ended |
Sep. 30, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments - Warrants | Derivative Financial Instruments — Warrants Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, Contracts in Entity’s Own Equity, Trovagene determined that certain warrants issued in connection with the execution of certain equity financings must be recorded as derivative liabilities. In accordance with ASC Topic 815-40, the warrants are also being re-measured at each balance sheet date based on estimated fair value, and any resultant change in fair value is being recorded in the Company’s statement of operations. The Company estimates the fair value of these warrants using the Black-Scholes option pricing model. The range of assumptions used to determine the fair value of the warrants valued using the Black-Scholes option pricing model during the periods indicated was: Nine Months Ended September 30, 2015 2014 Estimated fair value of Trovagene common stock 5.69-10.15 3.50-5.73 Expected warrant term 3.3-3.8 years 4.3-4.8 years Risk-free interest rate 0.89-1.01% 1.62-1.78% Expected volatility 75-77% 74-83% Dividend yield 0 % 0 % Expected volatility is based on the volatility of a peer group of companies with attributes similar to Trovagene. The warrants have a transferability provision and based on guidance provided in SAB 107 for instruments issued with such a provision, Trovagene used the full contractual term as the expected term of the warrants. The risk free rate is based on the U.S. Treasury security rates consistent with the expected remaining term of the warrants at each balance sheet date. The following table sets forth the components of changes in the Company’s derivative financial instruments liability balance, valued using the Black-Scholes option pricing method, for the periods indicated. Date Description Warrants Derivative Instrument Liability December 31, 2014 Balance of derivative financial instruments liability 1,013,961 $ 3,006,021 Exercised warrants (46,666 ) (435,365 ) Change in fair value of warrants during the period recognized as a loss in the condensed consolidated statement of operations — 1,105,270 September 30, 2015 Balance of derivative financial instruments liability 967,295 $ 3,675,926 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Common Stock On January 25, 2013, the Company filed a Form S-3 Registration Statement to offer and sell in one or more offerings, any combination of common stock, preferred stock, warrants, or units having an aggregate initial offering price not exceeding $150,000,000 . The preferred stock, warrants, and units may be convertible or exercisable or exchangeable for common stock or preferred stock or other Trovagene securities. This form was declared effective on February 4, 2013. In addition, in connection with the Form S-3, the Company entered into an agreement with Cantor Fitzgerald & Co. (“Agent”) on January 25, 2013 to issue and sell up to $30,000,000 of shares of common stock through the Agent. As payment for its services, the Agent is entitled to a 3% commission on gross proceeds. During the nine months ended September 30, 2015 , the Company issued a total of 10,806,808 shares of Common Stock. The Company received gross proceeds of approximately $63.2 million from the sale of 9,711,110 shares of its common stock through an underwritten public offerings in February and July 2015. The Company also received gross proceeds of approximately $2.8 million from the sale of 285,421 shares of its common stock at a weighted average price of $9.66 under the agreement with the Agent. In addition, 250,166 shares were issued upon exercise of options for a weighted average price of $3.27 , 282,975 shares were issued upon exercise of warrants for a weighted average price of $4.91 , and 277,136 shares were issued upon net exercise of 449,403 warrants at a weighted average exercise price of $3.05 . Stock Options Stock-based compensation expense related to Trovagene options have been recognized in operating results as follow: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Included in research and development expense $ 342,122 $ 171,150 $ 1,054,443 $ 526,803 Included in cost of revenue 7,518 — 22,468 — Included in selling and marketing expense 225,892 49,887 480,006 102,556 Included in general and administrative expense 348,127 184,663 1,201,929 755,600 Total stock-based compensation expense $ 923,659 $ 405,700 $ 2,758,846 $ 1,384,959 The unrecognized compensation cost related to non-vested stock options outstanding at September 30, 2015 and 2014 , net of expected forfeitures, was $10,308,131 and $3,805,661 , respectively, both to be recognized over a weighted-average remaining vesting period of approximately three years . The weighted average remaining contractual term of outstanding options as of September 30, 2015 was approximately eight years . The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions during the following periods indicated: Nine Months Ended 2015 2014 Risk-free interest rate 1.77 % 1.83 % Dividend yield 0 % 0 % Expected volatility 76 % 82 % Expected term 6.1 years 5.6 years A summary of stock option activity and changes in stock options outstanding is presented below: Total Options Weighted Average Exercise Price Per Share Intrinsic Value Balance outstanding, December 31, 2014 4,913,472 $ 4.66 $ 2,808,083 Granted 2,174,000 7.54 Exercised (250,166 ) 3.27 Canceled / Forfeited (212,175 ) 4.56 Expired (111,001 ) 14.42 Balance outstanding, September 30, 2015 6,514,130 5.51 6,732,205 Exercisable at September 30, 2015 2,425,605 4.41 4,211,758 The Trovagene Inc. 2014 Equity Incentive Plan (the “2014 EIP”) authorizing up to 2,500,000 shares of common stock for issuance under the Plan was approved by the Board of Directors in June 2014 and approved by the Shareholders at the September 17, 2014 Annual Shareholders’ Meeting. An additional 2,500,000 shares of common stock for issuance was authorized by the Board of Directors in March 2015 and approved by the Shareholders at the June 10, 2015 Annual Shareholders’ Meeting. As of September 30, 2015 there were 1,813,332 shares available for issuance under the 2014 EIP. The Company will hold a special meeting of stockholders on December 9, 2015 to consider and act upon a proposal to approve an amendment to the 2014 EIP to increase the number of shares issuable to 7,500,000 shares from 5,000,000 shares. Warrants A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below: Total Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Balance outstanding, December 31, 2014 6,265,620 $ 3.85 3.57 Exercised (732,378 ) 3.77 Balance outstanding, September 30, 2015 5,533,242 3.86 2.79 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Executive and Consulting Agreements The Company has longer-term contractual commitments with various consultants and employees, including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). The executive agreements with the CEO, CFO and Chief Commercial Officer (“CCO”) provide for severance payments. The executive agreement with the CEO also provides for a bonus payment in cash or stock upon the earlier of meeting certain trading volumes and market price of Trovagene’s common stock for a minimum period of ninety days or in the event of a change in control where the Company’s per share enterprise value equal or exceeds $7.50 . If the market price and volume target is realized, the bonus is approximately $3.5 million . If a change of control occurs at the targeted enterprise values, the bonus is equal to 4% of the enterprise value. Lease Agreement The Company currently leases approximately 13,000 square feet of office and laboratory space at a monthly rental rate of approximately $30,000 . On June 11, 2015, the Company entered into an amendment to the lease agreement which will expand the square footage to approximately 22,600 square feet at a monthly rental rate of approximately $60,000 . The amended lease will expire on December 31, 2021. The amended monthly rental rate will be effective when the Company commences business operations in the expanded premises, expected to occur in the first quarter of 2016. Research and Development Agreements The Company has entered into a variety of collaboration and specimen transfer agreements relating to its development efforts. Included in research and development expense, the Company has recorded approximately $1.1million for the nine months ended September 30, 2015 relating to services provided by the collaborators in connection with these agreements. The Company is a party to various agreements under which it licenses technology on an exclusive basis in the field of human diagnostics. License fees are generally calculated as a percentage of product revenues, with rates that vary by agreement. To date, payments have not been material. Contingencies During the Company's internal review process, contingencies were identified regarding various federal and state tax exposures related to issues with respect to certain executive compensation. The settlement of such contingencies may be potentially material to the Company. The Company accrues a liability when it believes that it is both probable that a liability has been incurred and that it can reasonably estimate the amount of the loss. The Company reviews the accruals and adjusts them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel and other relevant information. The Company has not recorded any accrued liabilities related to the potential federal and state tax exposure during the periods presented. To the extent new information is obtained and the Company's views on the probable outcomes of claims, suits, assessments, investigations or legal proceedings change, changes in the Company's accrued liabilities would be recorded in the period in which such determination is made. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In January 2015, the Company entered into a one year consulting agreement with Thomas Adams, Ph.D., our Chairman of the Board, pursuant to which Dr. Adams will provide consulting services in connection with applying the Company’s technology in the field of infectious disease with the first application be to detection of JC virus mutants in the presence of wild type in human urine as a prognostic indicator of the development of PML disease. Under the agreement, the Company has committed to pay $9,500 per month for the services performed by Dr. Adams. Through the nine months ended September 30, 2015 , the Company has incurred and recorded $85,500 of consulting fees related to the agreement. In September 2015, the Company entered into a research agreement with University of Turin (“University”) to collaborate on a program of research to develop, optimize and test molecular profiling tools for plasma and urine ctDNA in cancer. Dr. Alberto Bardelli, the Principal Investigator of the University who oversees this research program is also a member of the Scientific Advisory Board of the Company. Under the agreement, the Company has committed to pay up to $529,000 for the services performed by the University. In addition, the Company may pay royalties to the University on revenue generated by the Company from the commercialization of any tools developed during the collaboration. As of September 30, 2015 , the Company has incurred and recorded approximately $48,000 of research and development expenses related to the agreement. No royalty expense has been incurred as of September 30, 2015 . |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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. |
Revenue Recognition | Revenue Recognition Revenue is recognized when persuasive evidence that an arrangement exists, delivery has occurred, the price is fixed or determinable, and collection is reasonably assured. Milestone, Royalty and License Revenues The Company licenses and sublicenses its patent rights to healthcare companies, medical laboratories and biotechnology partners. These agreements may involve multiple elements such as license fees, royalties and milestone payments. Revenue is recognized when the criteria described above have been met as well as the following: • Up-front nonrefundable license fees pursuant to agreements under which the Company has no continuing performance obligations are recognized as revenues on the effective date of the agreement and when collection is reasonably assured. • Minimum royalties are recognized as earned, and royalties in excess of minimum amounts are recognized upon receipt of payment when collection is assured. • Milestone payments are recognized when both the milestone is achieved and the related payment is received. Diagnostic Service Revenues Revenue for clinical laboratory tests may come from several sources, including commercial third-party payors, such as insurance companies and health maintenance organizations, government payors, such as Medicare and Medicaid in the United States, patient self-pay and, in some cases, from hospitals or referring laboratories who, in turn, might bill third-party payors for testing. The Company is recognizing diagnostic service revenue on the cash collection basis until such time as it is able to properly estimate collections on third party reimbursements. |
Derivative Financial Instruments-Warrants | Derivative Financial Instruments—Warrants The Company has issued common stock warrants in connection with the execution of certain equity financings. Such warrants are classified as derivative liabilities under the provisions of Financial Accounting Standards Board (“FASB”) ASC 815 Derivatives and Hedging (“ASC 815”) and are recorded at their fair market value as of each reporting period. Such warrants do not meet the exemption that a contract should not be considered a derivative instrument if it is (1) indexed to its own stock and (2) classified in stockholders’ equity. Changes in fair value of derivative liabilities are recorded in the consolidated statement of operations under the caption “Change in fair value of derivative instruments.” The fair value of warrants is determined using the Black-Scholes option-pricing model using assumptions regarding the volatility of Trovagene’s common share price, the fair value of the underlying common shares, the remaining life of the warrant, and the risk-free interest rates at each period end. The Company thus uses model-derived valuations where inputs are observable in active markets to determine the fair value and accordingly classifies such warrants in Level 3 per ASC 820, Fair Value Measurements . |
Net Loss Per Share | Net Loss Per Share Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share , for all periods presented. In accordance with this guidance, basic net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. Preferred dividends are included in income available to common stockholders in the computation of basic and diluted earnings per share. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding for the period. Common share equivalents are only included when their effect is dilutive. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In April 2015, a new accounting standard was issued that amends the presentation for debt issuance costs. Upon adoption, such costs shall be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in other assets on our consolidated balance sheets. This new standard will be effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. Adoption of this new standard is not expected to have a material impact on our consolidated balance sheets or related disclosures. In August 2014, the FASB issued an amendment to the accounting guidance related to the evaluation of an entity to continue as a going concern. The amendment establishes management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern in connection with preparing financial statements for each annual and interim reporting period. The amendment also gives guidance to determine whether to disclose information about relevant conditions and events when there is substantial doubt about an entity’s ability to continue as a going concern. The amended guidance is effective prospectively for fiscal years beginning after December 15, 2016. The new guidance will not have an impact on the Company’s financial position, results of operations or cash flows. In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”). The standard provides companies with a single model for accounting for revenue arising from contracts with customers and supersedes current revenue recognition guidance, including industry-specific revenue guidance. The core principle of the model is to recognize revenue when control of the goods or services transfers to the customer, as opposed to recognizing revenue when the risks and rewards transfer to the customer under the existing revenue guidance. ASU 2014-09 is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted. The guidance permits companies to either apply the requirements retrospectively to all prior periods presented, or apply the requirements in the year of adoption, through a cumulative adjustment. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Computation of Basic and Diluted Earnings per Share | The following table sets forth the computation of basic and diluted earnings per share: Three Months Nine Months 2015 2014 2015 2014 Numerator: Net loss attributable to common shareholders $ (2,741,889 ) $ (5,381,277 ) $ (20,108,424 ) $ (9,659,060 ) Adjustment for change in fair value of derivative instruments - warrants (4,017,212 ) — (4,017,212 ) (2,217,142 ) Net loss used for diluted loss per share $ (6,759,101 ) $ (5,381,277 ) $ (24,125,636 ) $ (11,876,202 ) Denominator for basic and diluted net loss per share: Weighted average shares used to compute basic loss per share 28,560,211 18,902,783 25,014,966 18,902,783 Adjustments to reflect assumed exercise of warrants 568,024 — 189,341 109,992 Weighted average shares used to compute diluted net loss per share 29,128,235 18,902,783 25,204,307 19,012,775 Net loss per share attributable to common stockholders: Basic $ (0.10 ) $ (0.28 ) $ (0.80 ) $ (0.51 ) Diluted $ (0.23 ) $ (0.28 ) $ (0.96 ) $ (0.62 ) |
Schedule of Antidilutive Securities Excluded from the Calculation of Diluted Net Loss per Share | The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their effect was anti-dilutive: September 30, 2015 2014 Options to purchase Common Stock 6,514,130 4,233,749 Warrants to purchase Common Stock 4,565,947 5,288,325 Series A Convertible Preferred Stock 63,125 63,125 11,143,202 9,585,199 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of the Company’s Assets and Liabilities that are Measured and Recognized at Fair Value on a Recurring Basis Classified Under the Appropriate Level of the Fair Value Hierarchy | The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of September 30, 2015 and December 31, 2014 : Fair Value Measurements at Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market fund (1) $ 73,493,510 $ — $ 73,493,510 Total Assets $ 73,493,510 $ — $ — $ 73,493,510 Liabilities: Derivative liabilities related to warrants $ — $ — $ 3,675,926 $ 3,675,926 Total Liabilities $ — $ — $ 3,675,926 $ 3,675,926 Fair Value Measurements at Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Money market fund (1) $ 27,123,587 $ — $ — $ 27,123,587 Total Assets $ 27,123,587 $ — $ — $ 27,123,587 Liabilities: Derivative liabilities related to warrants $ — $ — $ 3,006,021 $ 3,006,021 Total Liabilities $ — $ — $ 3,006,021 $ 3,006,021 (1) Included as a component of cash and cash equivalents on the accompanying condensed consolidated balance sheets. |
Schedule of Changes in the Fair Value of the Company’s Level 3 Liabilities | The following table sets forth a summary of changes in the fair value of the Company’s Level 3 liabilities for the nine months ended September 30, 2015 : Description Balance at Fair Value of Warrants Reclassified to Additional Paid in Capital Unrealized Loss Balance at Derivative liabilities related to Warrants 3,006,021 (435,365 ) 1,105,270 3,675,926 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Components of Property and Equipment | Property and equipment consist of the following: As of September 30, As of December 31, Furniture and office equipment $ 868,708 $ 365,955 Leasehold Improvements 39,401 39,401 Laboratory equipment 1,666,970 968,901 2,575,079 1,374,257 Less—accumulated depreciation and amortization (732,866 ) (533,870 ) Property and equipment, net $ 1,842,213 $ 840,387 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Debt Disclosure [Abstract] | |
Schedule of Future Minimum Principal Payments Under Loan and Security Agreement | Future minimum principal payments under the loan and security agreement are as follows: September 30, 2016 $ 3,745,198 2017 5,958,379 2018 5,296,423 Total long-term obligations $ 15,000,000 |
Derivative Financial Instrume20
Derivative Financial Instruments - Warrants (Tables) - Black Scholes Option Pricing Method | 9 Months Ended |
Sep. 30, 2015 | |
Derivative financial instruments | |
Schedule of Assumptions Used to Determine the Fair Value of the Warrants | The range of assumptions used to determine the fair value of the warrants valued using the Black-Scholes option pricing model during the periods indicated was: Nine Months Ended September 30, 2015 2014 Estimated fair value of Trovagene common stock 5.69-10.15 3.50-5.73 Expected warrant term 3.3-3.8 years 4.3-4.8 years Risk-free interest rate 0.89-1.01% 1.62-1.78% Expected volatility 75-77% 74-83% Dividend yield 0 % 0 % |
Schedule of Components of Changes in the Company’s Derivative Financial Instruments Liability Balance | The following table sets forth the components of changes in the Company’s derivative financial instruments liability balance, valued using the Black-Scholes option pricing method, for the periods indicated. Date Description Warrants Derivative Instrument Liability December 31, 2014 Balance of derivative financial instruments liability 1,013,961 $ 3,006,021 Exercised warrants (46,666 ) (435,365 ) Change in fair value of warrants during the period recognized as a loss in the condensed consolidated statement of operations — 1,105,270 September 30, 2015 Balance of derivative financial instruments liability 967,295 $ 3,675,926 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense related to Trovagene options have been recognized in operating results as follow: Three Months Ended Nine Months Ended 2015 2014 2015 2014 Included in research and development expense $ 342,122 $ 171,150 $ 1,054,443 $ 526,803 Included in cost of revenue 7,518 — 22,468 — Included in selling and marketing expense 225,892 49,887 480,006 102,556 Included in general and administrative expense 348,127 184,663 1,201,929 755,600 Total stock-based compensation expense $ 923,659 $ 405,700 $ 2,758,846 $ 1,384,959 |
Schedule of Assumptions to Estimate Fair Value of Stock Option Awards | The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted average assumptions during the following periods indicated: Nine Months Ended 2015 2014 Risk-free interest rate 1.77 % 1.83 % Dividend yield 0 % 0 % Expected volatility 76 % 82 % Expected term 6.1 years 5.6 years |
Summary of Stock Option Activity and of Changes in Stock Options Outstanding | A summary of stock option activity and changes in stock options outstanding is presented below: Total Options Weighted Average Exercise Price Per Share Intrinsic Value Balance outstanding, December 31, 2014 4,913,472 $ 4.66 $ 2,808,083 Granted 2,174,000 7.54 Exercised (250,166 ) 3.27 Canceled / Forfeited (212,175 ) 4.56 Expired (111,001 ) 14.42 Balance outstanding, September 30, 2015 6,514,130 5.51 6,732,205 Exercisable at September 30, 2015 2,425,605 4.41 4,211,758 |
Summary of Warrant Activity and Changes in Warrants Outstanding | A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below: Total Warrants Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term Balance outstanding, December 31, 2014 6,265,620 $ 3.85 3.57 Exercised (732,378 ) 3.77 Balance outstanding, September 30, 2015 5,533,242 3.86 2.79 |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Derivative financial instruments | ||
Derivative liabilities related to warrants | $ 3,675,926 | $ 3,006,021 |
Warrants | Black Scholes Option Pricing Method | ||
Derivative financial instruments | ||
Derivative liabilities related to warrants | $ 3,675,926 | $ 3,006,021 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Numerator: | ||||
Numerator: Net loss attributable to common shareholders | $ (2,741,889) | $ (5,381,277) | $ (20,108,424) | $ (9,659,060) |
Adjustment for change in fair value of derivative instruments - warrants | (4,017,212) | 0 | (4,017,212) | (2,217,142) |
Net loss used for diluted loss per share | $ (6,759,101) | $ (5,381,277) | $ (24,125,636) | $ (11,876,202) |
Denominator for basic and diluted net loss per share: | ||||
Weighted average shares used to compute basic loss per share | 28,560,211 | 18,902,783 | 25,014,966 | 18,902,783 |
Adjustments to reflect assumed exercise of warrants | 568,024 | 0 | 189,341 | 109,992 |
Weighted average shares used to compute diluted net loss per share | 29,128,235 | 18,902,783 | 25,204,307 | 19,012,775 |
Net loss per share attributable to common stockholders: | ||||
Net loss per common share - basic (in USD per share) | $ (0.10) | $ (0.28) | $ (0.80) | $ (0.51) |
Net loss per common share - diluted (in USD per share) | $ (0.23) | $ (0.28) | $ (0.96) | $ (0.62) |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Details 3) - shares | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Net Loss Per Share | ||
Antidilutive securities excluded from the calculation of basic and diluted loss per share (in shares) | 11,143,202 | 9,585,199 |
Stock options | ||
Net Loss Per Share | ||
Antidilutive securities excluded from the calculation of basic and diluted loss per share (in shares) | 6,514,130 | 4,233,749 |
Warrants | ||
Net Loss Per Share | ||
Antidilutive securities excluded from the calculation of basic and diluted loss per share (in shares) | 4,565,947 | 5,288,325 |
Series A Convertible Preferred Stock | ||
Net Loss Per Share | ||
Antidilutive securities excluded from the calculation of basic and diluted loss per share (in shares) | 63,125 | 63,125 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Liabilities: | ||
Derivative liabilities related to warrants | $ 3,675,926 | $ 3,006,021 |
Recurring basis | ||
Assets: | ||
Money market fund | 73,493,510 | 27,123,587 |
Total Assets | 73,493,510 | 27,123,587 |
Liabilities: | ||
Derivative liabilities related to warrants | 3,675,926 | 3,006,021 |
Total Liabilities | 3,675,926 | 3,006,021 |
Recurring basis | Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | ||
Assets: | ||
Money market fund | 73,493,510 | 27,123,587 |
Total Assets | 73,493,510 | 27,123,587 |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Liabilities: | ||
Derivative liabilities related to warrants | 3,675,926 | 3,006,021 |
Total Liabilities | $ 3,675,926 | $ 3,006,021 |
Fair Value Measurements (Deta26
Fair Value Measurements (Details 2) - Warrants | 9 Months Ended |
Sep. 30, 2015USD ($) | |
Reconciliation of the beginning and ending balances | |
Balance at December 31, 2014 | $ 3,006,021 |
Fair Value of Warrants Reclassified to Additional Paid in Capital | (435,365) |
Unrealized Loss | 1,105,270 |
Balance at September 30, 2015 | $ 3,675,926 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2015 | Dec. 31, 2014 |
Property, equipment and depreciation and amortization | ||
Property and equipment, gross | $ 2,575,079 | $ 1,374,257 |
Less—accumulated depreciation and amortization | (732,866) | (533,870) |
Property and equipment, net | 1,842,213 | 840,387 |
Furniture and office equipment | ||
Property, equipment and depreciation and amortization | ||
Property and equipment, gross | 868,708 | 365,955 |
Leasehold Improvements | ||
Property, equipment and depreciation and amortization | ||
Property and equipment, gross | 39,401 | 39,401 |
Laboratory equipment | ||
Property, equipment and depreciation and amortization | ||
Property and equipment, gross | $ 1,666,970 | $ 968,901 |
Debt (Details)
Debt (Details) - USD ($) | 1 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2013 | Jun. 30, 2014 | Sep. 30, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | |
Debt | |||||||
Minimum unrestricted net cash proceeds required to extend the interest only payment to a later date | $ 30,000,000 | ||||||
Amended minimum unrestricted net cash proceeds required to extend the interest only payment to a later date | $ 21,000,000 | ||||||
Period of extension for interest only payment | 6 months | ||||||
Value of warrants recorded as debt discount and additional paid in capital | $ 0 | $ 235,857 | |||||
Amount borrowed included in current liabilities | 3,745,198 | $ 1,898,548 | |||||
Amount borrowed, long-term liabilities | 11,519,160 | $ 13,053,117 | |||||
Secured Debt | |||||||
Debt | |||||||
Interest expenses recorded | $ 1,133,068 | ||||||
Face value of term loan | $ 15,000,000 | $ 15,000,000 | |||||
Interest rate | 7.07% | 7.07% | |||||
Number of common shares that can be purchased upon exercise of warrant | 85,470 | 85,470 | 42,735 | ||||
Exercise price of warrants (in USD per share) | $ 3.51 | $ 3.51 | |||||
Exercisable term | 10 years | ||||||
Value of warrants recorded as debt discount and additional paid in capital | $ 235,857 | $ 235,857 | |||||
Amortized portion of final fee upon repayment | $ 1,050,000 | ||||||
Future minimum principal payments | |||||||
2,016 | 3,745,198 | ||||||
2,017 | 5,958,379 | ||||||
2,018 | 5,296,423 | ||||||
Total long-term obligations | $ 15,000,000 | ||||||
Secured Debt | Minimum | |||||||
Debt | |||||||
Pre-payment fees (as a percent) | 1.00% | ||||||
Secured Debt | Maximum | |||||||
Debt | |||||||
Pre-payment fees (as a percent) | 3.00% | ||||||
Loan and Security Agreement | |||||||
Debt | |||||||
Maximum borrowing capacity of credit facility | $ 1,000,000 | ||||||
Fixed interest rate to determine variable interest (as a percent) | 5.00% | ||||||
Variable spread over U.S. Treasury Note rate of interest (as a percent) | 4.60% | ||||||
Period for payment of principal and interest after date of advances | 30 months | ||||||
Interest expenses recorded | $ 61,000 |
Derivative Financial Instrume29
Derivative Financial Instruments - Warrants (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Changes in the Company's derivative financial instruments liability balance | ||||
Balance of warrants outstanding at the beginning of the period (in shares) | 6,265,620 | |||
Exercised (in shares) | (732,378) | |||
Balance of warrants outstanding at the end of the period (in shares) | 5,533,242 | 5,533,242 | ||
Balance of derivative financial instruments liability at the beginning of the period | $ 3,006,021 | |||
Derivative instrument liability | (435,365) | |||
Change in fair value of warrants during the period recognized as a gain in the condensed consolidated statement of operations | $ (4,017,212) | $ 1,029,333 | 1,105,270 | $ (1,220,655) |
Balance of derivative financial instruments liability at the end of the period | $ 3,675,926 | $ 3,675,926 | ||
Warrants | Black Scholes Option Pricing Method | ||||
Range of assumptions used to determine the fair value of warrants | ||||
Dividend yield (as a percent) | 0.00% | 0.00% | ||
Changes in the Company's derivative financial instruments liability balance | ||||
Balance of warrants outstanding at the beginning of the period (in shares) | 1,013,961 | |||
Exercised (in shares) | (46,666) | |||
Balance of warrants outstanding at the end of the period (in shares) | 967,295 | 967,295 | ||
Balance of derivative financial instruments liability at the beginning of the period | $ 3,006,021 | |||
Balance of derivative financial instruments liability at the end of the period | $ 3,675,926 | $ 3,675,926 | ||
Warrants | Black Scholes Option Pricing Method | Minimum | ||||
Range of assumptions used to determine the fair value of warrants | ||||
Estimated fair value of Trovagene common stock (in dollars per share) | $ 5.69 | $ 3.50 | ||
Expected warrant term | 3 years 3 months 18 days | 4 years 3 months | ||
Risk-free interest rate | 0.89% | 1.62% | ||
Expected volatility (as a percent) | 75.00% | 74.00% | ||
Warrants | Black Scholes Option Pricing Method | Maximum | ||||
Range of assumptions used to determine the fair value of warrants | ||||
Estimated fair value of Trovagene common stock (in dollars per share) | $ 10.15 | $ 5.73 | ||
Expected warrant term | 3 years 9 months 18 days | 4 years 9 months 18 days | ||
Risk-free interest rate | 1.01% | 1.78% | ||
Expected volatility (as a percent) | 77.00% | 83.00% |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | Jan. 25, 2013 | Sep. 30, 2015 | Sep. 30, 2014 |
Proceeds from sales of common stock, net of expenses | $ 61,215,398 | $ 0 | |
Exercised warrants (in shares) | 732,378 | ||
Warrant exercise price of $3.05 per share | |||
Exercised warrants (in shares) | 449,403 | ||
Common Stock | |||
Shares of common stock issued | 10,806,808 | ||
Common Stock | Option exercise price, weighted average of $3.31 per share | |||
Shares issued upon exercise of options | 250,166 | ||
Exercise price of stock options exercised (in USD per share) | $ 3.27 | ||
Common Stock | Warrant exercise price, weighted average of $4.29 | |||
Exercised warrants (in shares) | 282,975 | ||
Exercise price of warrants (in USD per share) | $ 4.91 | ||
Common Stock | Warrant exercise price of $3.05 per share | |||
Issuance of common stock upon net exercise of warrant (in shares) | 277,136 | ||
Exercise price of warrants (in USD per share) | $ 3.05 | ||
Public Offering and Controlled Equity Offering | Underwritten Public Offering 2015 | Common Stock | |||
Shares of common stock issued | 9,711,110 | ||
Proceeds from sales of common stock, net of expenses | $ 63,200,000 | ||
Price per share (in USD per share) | $ 9.66 | ||
Agent | Public Offering and Controlled Equity Offering | |||
Commission as percentage of gross proceeds | 3.00% | ||
Agent | Public Offering and Controlled Equity Offering | Underwritten Public Offering 2015 | Common Stock | |||
Shares of common stock issued | 285,421 | ||
Proceeds from sales of common stock, net of expenses | $ 2,800,000 | ||
Maximum | Public Offering and Controlled Equity Offering | |||
Aggregate initial offering price | $ 150,000,000 | ||
Maximum | Agent | Public Offering and Controlled Equity Offering | |||
Aggregate initial offering price | $ 30,000,000 |
Stockholders' Equity (Details 2
Stockholders' Equity (Details 2) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Stock-based compensation expense | ||||
Total stock based compensation expense | $ 923,659 | $ 405,700 | $ 2,758,846 | $ 1,384,959 |
Research and Development Expense | ||||
Stock-based compensation expense | ||||
Total stock based compensation expense | 342,122 | 171,150 | 1,054,443 | 526,803 |
Cost of Revenue | ||||
Stock-based compensation expense | ||||
Total stock based compensation expense | 7,518 | 22,468 | ||
Selling and Marketing Expense | ||||
Stock-based compensation expense | ||||
Total stock based compensation expense | 225,892 | 49,887 | 480,006 | 102,556 |
General and Administrative Expense | ||||
Stock-based compensation expense | ||||
Total stock based compensation expense | $ 348,127 | $ 184,663 | $ 1,201,929 | $ 755,600 |
Stockholders' Equity (Details 3
Stockholders' Equity (Details 3) - USD ($) | Jun. 10, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Dec. 09, 2015 | Jun. 30, 2015 | Dec. 31, 2014 | Sep. 17, 2014 |
Stock options | |||||||
Weighted-average assumptions | |||||||
Risk-free interest rate | 1.77% | 1.83% | |||||
Dividend yield (as a percent) | 0.00% | 0.00% | |||||
Expected volatility (as a percent) | 76.00% | 82.00% | |||||
Expected term | 6 years 19 days | 5 years 7 months 6 days | |||||
Unrecognized compensation cost | |||||||
Unrecognized compensation cost | $ 10,308,131 | $ 3,805,661 | |||||
Weighted-average remaining vesting period for recognition | 3 years | ||||||
Options outstanding, weighted average contractual life | 8 years | ||||||
Number of Options | |||||||
Balance outstanding at the beginning of the period (in shares) | 4,913,472 | ||||||
Granted (in shares) | 2,174,000 | ||||||
Exercised (in shares) | (250,166) | ||||||
Cancelled / Forfeited (in shares) | (212,175) | ||||||
Expired (in shares) | (111,001) | ||||||
Balance outstanding at the end of the period (in shares) | 6,514,130 | ||||||
Vested and exercisable at the end of the period (in shares) | 2,425,605 | ||||||
Weighted Average Exercise Price Per Share | |||||||
Balance outstanding at the beginning of the period (in USD per share) | $ 4.66 | ||||||
Granted (in USD per share) | 7.54 | ||||||
Exercised (in USD per share) | 3.27 | ||||||
Canceled / Forfeited (in USD per share) | 4.56 | ||||||
Expired (in USD per share) | 14.42 | ||||||
Balance outstanding at the end of the period (in USD per share) | 5.51 | ||||||
Vested and exercisable at the end of the period (in USD per share) | $ 4.41 | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | |||||||
Options outstanding, intrinsic value | $ 6,732,205 | $ 2,808,083 | |||||
Vested and exercisable at the end of the period, intrinsic value | $ 4,211,758 | ||||||
2014 EIP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | |||||||
Authorized shares under the plan | 5,000,000 | 2,500,000 | |||||
Additional shares under the plan | 2,500,000 | ||||||
Number of remaining shares available for issuance | 1,813,332 | ||||||
Scenario, Plan [Member] | 2014 EIP | |||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | |||||||
Authorized shares under the plan | 7,500,000 |
Stockholders' Equity (Details 4
Stockholders' Equity (Details 4) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2015 | Dec. 31, 2014 | |
Number of Warrants | ||
Balance of warrants outstanding at the beginning of the period (in shares) | 6,265,620 | |
Exercised (in shares) | (732,378) | |
Balance of warrants outstanding at the end of the period (in shares) | 5,533,242 | 6,265,620 |
Weighted Average Exercise Price Per Share | ||
Weighted average exercise price of warrants at the beginning of the period (in USD per share) | $ 3.85 | |
Exercised (in USD per share) | 3.77 | |
Weighted average exercise price of warrants at the end of the period (in USD per share) | $ 3.86 | $ 3.85 |
Term | ||
Weighted Average Remaining Contractual Term | 2 years 9 months 13 days | 3 years 6 months 26 days |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jun. 11, 2015USD ($)ft² | Sep. 30, 2015USD ($)ft²$ / shares |
Lease Agreements | ||
Area under lease (in square feet) | ft² | 13,000 | |
Area of land after expansion (in square feet) | ft² | 22,600 | |
Monthly rental rate | $ 60,000 | $ 30,000 |
Executive Agreement With Chief Executive Office | ||
Executive and Consulting Agreements | ||
Bonus payment threshold for number of days related to trading volumes and market price | 90 days | |
Potential bonus payment related to the executive agreement with the CEO | $ 3,500,000 | |
Potential bonus payment if a change in control occurs at the targeted enterprise values (as a percent) | 4.00% | |
Executive Agreement With Chief Executive Office | Minimum | ||
Executive and Consulting Agreements | ||
Enterprise value threshold for the executive agreement with the CEO (in USD per share) | $ / shares | $ 7.50 | |
Research and Development Agreements | Research and Development Expense | ||
Lease Agreements | ||
Revenue and license fee expense | $ 1,100,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2015 |
Board of Directors Chairman | |||
Related Party Transaction [Line Items] | |||
Length of consulting agreement with related party | 1 year | ||
Monthly commitment for services performed, accounts payable, related parties, current | $ 9,500 | ||
Scientific Advisory Board Member | |||
Related Party Transaction [Line Items] | |||
Commitment to pay for services performed, related party | 529,000 | ||
Research and development expense with related party | $ 48,000 | ||
Royalty expense | $ 0 | ||
541690 Other Scientific and Technical Consulting Services [Member] | Board of Directors Chairman | |||
Related Party Transaction [Line Items] | |||
Research and development expense with related party | $ 85,500 |