Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 11, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | NVUS | |
Entity Registrant Name | Novus Therapeutics, Inc. | |
Entity Central Index Key | 0001404281 | |
Entity Current Reporting Status | Yes | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 19,384,562 | |
Entity File Number | 001-36620 | |
Entity Tax Identification Number | 20-1000967 | |
Entity Address, Address Line One | 19900 MacArthur Blvd., | |
Entity Address, Address Line Two | Suite 550 | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92612 | |
City Area Code | (949) | |
Local Phone Number | 238-8090 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity Incorporation, State or Country Code | DE | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash | $ 8,764 | $ 8,791 |
Prepaid expenses and other current assets | 997 | 1,180 |
Total current assets | 9,761 | 9,971 |
Property and equipment, net | 1 | 5 |
Operating lease asset, net | 228 | 316 |
Other assets | 511 | 639 |
Total assets | 10,501 | 10,931 |
Current liabilities: | ||
Accounts payable | 150 | 329 |
Current operating lease liability | 188 | 180 |
Accrued severance | 490 | |
Accrued expenses and other liabilities | 269 | 813 |
Total current liabilities | 1,097 | 1,322 |
Non-current operating lease liability | 48 | 144 |
Total liabilities | 1,145 | 1,466 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity: | ||
Preferred stock, $0.001 par value, 5,000,000 shares authorized at June 30, 2020 and December 31, 2019; 511 and 0 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | ||
Common stock, $0.001 par value, 200,000,000 shares authorized at June 30, 2020 and December 31, 2019; 19,379,562 and 12,967,338 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 19 | 13 |
Additional paid-in capital | 77,682 | 67,034 |
Accumulated deficit | (68,345) | (57,582) |
Total stockholders’ equity | 9,356 | 9,465 |
Total liabilities and stockholders’ equity | $ 10,501 | $ 10,931 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 511 | 0 |
Preferred stock, shares outstanding | 511 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 19,379,562 | 12,967,338 |
Common stock, shares outstanding | 19,379,562 | 12,967,338 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Operating expenses | ||||
Research and development | $ 832 | $ 2,297 | $ 2,480 | $ 5,286 |
General and administrative | 1,269 | 1,792 | 2,999 | 3,678 |
Restructuring expense | 490 | 490 | ||
Total operating expenses | 2,591 | 4,089 | 5,969 | 8,964 |
Loss from operations | (2,591) | (4,089) | (5,969) | (8,964) |
Other income (expense), net | 5 | (4) | 35 | (10) |
Warrant inducement expense | (4,829) | |||
Net loss and comprehensive loss | $ (2,586) | $ (4,093) | $ (10,763) | $ (8,974) |
Net loss per share, basic and diluted | $ (0.15) | $ (0.35) | $ (0.63) | $ (0.85) |
Weighted-average common shares outstanding, basic and diluted | 16,981,540 | 11,751,110 | 17,124,331 | 10,595,511 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] |
Beginning Balance at Dec. 31, 2018 | $ 14,492 | $ 9 | $ 56,054 | $ (41,571) | |
Beginning Balance, Shares at Dec. 31, 2018 | 9,422,143 | ||||
Issuance of common stock at-the-market, net of issuance costs | 107 | 107 | |||
Issuance of common stock at-the-market, net of issuance costs, Shares | 25,218 | ||||
Issuance of common stock in connection with exercise of warrants, net of issuance costs | 9,569 | $ 4 | 9,565 | ||
Issuance of common stock in connection with exercise of warrants, net of issuance costs, Shares | 3,449,112 | ||||
Issuance of common stock in connection with exercise of options, shares | 78,450 | ||||
Stock-based compensation | 838 | 838 | |||
Net loss and other comprehensive loss | (8,974) | (8,974) | |||
Ending Balance at Jun. 30, 2019 | 16,032 | $ 13 | 66,564 | (50,545) | |
Ending Balance, Shares at Jun. 30, 2019 | 12,974,923 | ||||
Beginning Balance at Mar. 31, 2019 | 9,929 | $ 9 | 56,372 | (46,452) | |
Beginning Balance, Shares at Mar. 31, 2019 | 9,447,361 | ||||
Issuance of common stock in connection with exercise of warrants, net of issuance costs | 9,569 | $ 4 | 9,565 | ||
Issuance of common stock in connection with exercise of warrants, net of issuance costs, Shares | 3,449,112 | ||||
Issuance of common stock in connection with exercise of options, shares | 78,450 | ||||
Stock-based compensation | 627 | 627 | |||
Net loss and other comprehensive loss | (4,093) | (4,093) | |||
Ending Balance at Jun. 30, 2019 | 16,032 | $ 13 | 66,564 | (50,545) | |
Ending Balance, Shares at Jun. 30, 2019 | 12,974,923 | ||||
Beginning Balance at Dec. 31, 2019 | 9,465 | $ 13 | 67,034 | (57,582) | |
Beginning Balance, Shares at Dec. 31, 2019 | 12,967,338 | ||||
Issuance of common stock in connection with exercise of warrants, net of issuance costs | 5,191 | $ 7 | 5,184 | ||
Issuance of common stock in connection with exercise of warrants, net of issuance costs, Shares | 6,898,224 | ||||
Issuance of common stock in connection with conversion of preferred stock | $ 3 | (3) | |||
Issuance of common stock in connection with conversion of preferred stock, shares | (3,285) | 3,285,000 | |||
Issuance of common stock in connection with vesting of restricted stock units | 25,000 | ||||
Cancellation of common stock in connection with exchange for preferred stock | $ (4) | 4 | |||
Cancellation of common stock in connection with exchange for preferred stock, Shares | 3,796 | (3,796,000) | |||
Warrant inducement expense | 4,829 | 4,829 | |||
Stock-based compensation | 634 | 634 | |||
Net loss and other comprehensive loss | (10,763) | (10,763) | |||
Ending Balance at Jun. 30, 2020 | 9,356 | $ 19 | 77,682 | (68,345) | |
Ending Balance, Shares at Jun. 30, 2020 | 511 | 19,379,562 | |||
Beginning Balance at Mar. 31, 2020 | 11,745 | $ 3,796 | $ 16 | 77,488 | (65,759) |
Beginning Balance, Shares at Mar. 31, 2020 | 16,069,562 | ||||
Issuance of common stock in connection with conversion of preferred stock | $ 3 | (3) | |||
Issuance of common stock in connection with conversion of preferred stock, shares | (3,285) | 3,285,000 | |||
Issuance of common stock in connection with vesting of restricted stock units | 25,000 | ||||
Stock-based compensation | 197 | 197 | |||
Net loss and other comprehensive loss | (2,586) | (2,586) | |||
Ending Balance at Jun. 30, 2020 | $ 9,356 | $ 19 | $ 77,682 | $ (68,345) | |
Ending Balance, Shares at Jun. 30, 2020 | 511 | 19,379,562 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Operating activities | |||||
Net loss | $ (2,586) | $ (4,093) | $ (10,763) | $ (8,974) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Depreciation and amortization | 4 | 4 | |||
Amortization of operating lease asset | 88 | 86 | |||
Warrant inducement expense | 4,829 | ||||
Stock-based compensation | 197 | 627 | 634 | 838 | |
Changes in operating assets and liabilities: | |||||
Prepaid expenses and other assets | 311 | (60) | |||
Accounts payable and accrued expenses | (233) | (759) | |||
Operating lease liability | (88) | (80) | |||
Net cash used in operating activities | (5,218) | (8,945) | |||
Financing activities | |||||
Proceeds from issuances of common stock, net | 9,676 | ||||
Proceeds from exercise of warrants, net | 5,191 | ||||
Net cash provided by financing activities | 5,191 | 9,676 | |||
Net change in cash | (27) | 731 | |||
Cash at beginning of period | $ 8,764 | $ 13,703 | $ 8,791 | $ 12,972 | $ 12,972 |
Cash at end of period | $ 8,791 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1. Description of Business Novus Therapeutics, Inc. is a specialty pharmaceutical company focused on developing products for patients with disorders of the ear, nose, and throat (“ENT”). Unless otherwise indicated, references to the terms “Novus,” “our,” “us,” “we”, or the “Company” refer to Novus Therapeutics, Inc. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and Article 8 of Regulation S-X requirements as set forth by the Securities and Exchange Commission (“SEC”) for interim financial information and reflect all adjustments and disclosures, which are, in the opinion of management, of a normal and recurring nature, and considered necessary for a fair presentation of the financial information contained herein. Pursuant to these rules and regulations, the unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of results of operations and comprehensive loss, financial position, and cash flows in conformity with GAAP. The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements and accompanying notes of Novus for the year ended December 31, 2019 included in the Annual Report on Form 10-K filed by the Company with the SEC on March 16, 2020. The results of operations and comprehensive loss for the three and six months ended June 30, 2020 are not necessarily indicative of results expected for the full fiscal year or any other future period. Principles of Consolidation Novus, a Delaware corporation, owns 100% of the issued and outstanding common stock or other ownership interest in Otic Pharma, Ltd., a private limited company organized under the laws of the State of Israel (“Otic”). Otic owns 100% of the issued and outstanding common stock or other ownership interest in its U.S. subsidiary, Otic Pharma, Inc. The functional currency of the Company’s foreign subsidiary is the U.S. Dollar; however, certain expenses, assets and liabilities are transacted at the local currency. These transactions are translated from the local currency into U.S. Dollars at exchange rates during or at the end of the reporting period. The activities of the Company’s foreign subsidiary are not significant to the condensed consolidated financial statements. All significant intercompany accounts and transactions among the entities have been eliminated from the condensed consolidated financial statements. Liquidity and Financial Condition The Company has experienced recurring net losses and negative cash flows from operating activities since its inception. The Company recorded a net loss of $2.6 million and $10.8 million for the three and six months ended June 30, 2020, respectively. As of June 30, 2020, the Company had cash of $8.8 million, working capital of $8.7 million and an accumulated deficit of $68.3 million. Due to continuing operational activities, the Company expects to continue to incur net losses into the foreseeable future. In order to continue these activities, the Company may need to raise additional funds through future public or private debt and equity financings or strategic collaboration and licensing arrangements. The Company’s ability to raise additional capital in the equity and debt markets is dependent on a number of factors, including, but not limited to, the market demand for the Company’s common stock, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional capital at a price or on terms that are favorable to the Company. If the Company issues equity or convertible debt securities to raise additional funding, its existing stockholders may experience dilution, it may incur significant financing costs, and the new equity or convertible debt securities may have rights, preferences and privileges senior to those of its existing stockholders. If the Company issues debt securities to raise additional funding, it would incur additional debt service obligations, it could become subject to additional restrictions limiting its ability to operate its business, and it may be required to further encumber its assets. Adequate additional funding may not be available to us on acceptable terms on a timely basis, or at all. During fiscal year 2019 and in the first six months of 2020, the Company has implemented, and will continue to implement, certain cost cutting measures to reduce its cash flow requirements, including a reduction in force, which was announced in June 2020. Consistent with the actions the Company has taken in the past, it will execute the appropriate steps to enable the continued operation of the business and preservation of the value of its assets, including but not limited to actions such as reduced personnel-related costs, delay or curtailment of the Company’s research and development activities, and other discretionary expenses that are within the Company’s control. These initiatives, if required, may have an adverse impact on the Company’s ability to achieve certain of its planned objectives as it seeks strategic alternatives. On August 8, 2019, the Company received written notice (the “Notification Letter”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities maintain a minimum closing bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum closing bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company’s common stock for the 30 consecutive business days prior to the date of the Notification Letter, the Company did not meet the minimum closing bid price requirement. The Notification Letter stated that the Company had 180 calendar days, or until February 4, 2020, to regain compliance with Nasdaq Listing Rule 5550(a)(2). On February 6, 2020, the Company received written notice that Nasdaq determined that it is eligible for an additional 180-day extension (the “Extension Letter”), or until August 3, 2020, to regain compliance with the minimum bid price requirement. The Extension Letter does not impact the Company’s listing on the Nasdaq Capital Market at this time. To regain compliance, the closing bid price of the Company’s common stock must be at least $1.00 per share for a minimum of 10 consecutive business days at any time prior to August 3, 2020 On April 21, 2020, the Company received an additional notice from Nasdaq (the “Tolling Notice”), which stated that, due to current market conditions, Nasdaq has determined to toll the compliance period for the minimum bid price requirement through June 30, 2020. As a result, the new date by which the Company has to regain compliance with the minimum bid price requirement is October 19, 2020. The Company intends to monitor the closing bid price of its common stock and consider its available options to resolve its noncompliance with the minimum bid price requirement. On May 12, 2020, the Company’s stockholders approved and adopted an amendment to the Company’s Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock at a ratio ranging from 1 share-for-10 shares up to a ratio of 1 share-for-30 shares, which ratio will be selected by the Company’s Board of Directors and set forth in a public announcement. Management may effect the reverse stock split at any time prior to December 31, 2020. If the Company’s stock price does not meet or exceed $1.00 per share prior to the compliance deadline, management expects to effect the reverse stock split in order to regain compliance. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or that the Company will otherwise be in compliance with other Nasdaq listing criteria. If the Company fails to regain compliance with the minimum bid requirement or to meet the other applicable continued listing requirements for the Nasdaq Capital Market in the future and Nasdaq determines to delist its common stock, the delisting could adversely affect the market price and liquidity of the Company’s common stock and reduce its ability to raise additional capital. If the Company’s common stock is delisted by Nasdaq, the common stock may be eligible to trade on the OTC Bulletin Board or another market. Any such alternative would likely result in it being more difficult for the Company to raise additional capital through the public or private sale of equity securities and for investors to dispose of, or obtain accurate quotations as to the market value of, the common stock and could result in a decrease in the trading price of our common stock. In addition, there can be no assurance that the common stock would be eligible for trading on any such alternative exchange or markets. At the time of issuance of the condensed consolidated financial statements for the period ended June 30, 2020, the Company concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern for the twelve months from the date of filing of this quarterly report on Form 10-Q. The financial information and the condensed consolidated financial statements included in this filing have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. This financial information and these condensed consolidated financial statements do not include any adjustments that may result from an unfavorable outcome of this uncertainty. Our ability to continue as a going concern is dependent upon our ability to successfully secure sources of financing and ultimately achieve profitable operations. Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s unaudited condensed consolidated financial statements and accompanying notes. The most significant estimates in the Company’s condensed consolidated financial statements relate to stock-based transactions, accruals for liabilities, operating lease liability, and other matters that affect the condensed consolidated financial statements and related disclosures. Actual results could differ materially from those estimates under different assumptions or conditions and the differences may be material to the condensed Cash and Cash Equivalents Cash represents cash deposits held at financial institutions. The Company considers all liquid investments purchased with an original maturity of three months or less and that can be liquidated without prior notice or penalty to be cash equivalents. Cash equivalents are held for the purpose of meeting short-term liquidity requirements, rather than for investment purposes. The Company had no cash equivalents at June 30, 2020 and December 31, 2019. Concentration of Credit Risk and Other Risks and Uncertainties As of June 30, 2020 and December 31, 2019, all of the Company’s long-lived assets were located in the United States. Financial instruments that are subject to concentration of credit risk consist primarily of cash equivalents. The Company’s policy is to invest cash in institutional money market funds to limit the amount of credit exposure. At times, the Company maintains cash equivalents in short‑term money market funds and it has not experienced any losses on its cash equivalents. The Company’s products will require approval from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies before commercial sales can commence. There can be no assurance that the Company’s products will receive any of these required approvals. The denial or delay of such approvals may impact the Company’s business in the future. In addition, after approval by the FDA, there is still an ongoing risk of adverse events that did not appear during the product approval process. The Company is subject to risks common to companies in the pharmaceutical industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of products, product liability, the volatility of its stock price and the need to obtain additional financing. Our facilities and equipment, including those of our suppliers and vendors, may be affected by natural or man-made disasters. Our administrative office is based in Irvine, California and we manage all our research and development activities through third parties that are located throughout the world. We have taken precautions to safeguard our facilities, equipment and systems, including insurance, health and safety protocols, and off-site storage of computer data. However, our facilities and systems, as well as those of our third-party suppliers and vendors, may be vulnerable to earthquakes, fire, storm, health emergencies, including the ongoing COVID-19 pandemic, power loss, telecommunications failures, physical and software break-ins, software viruses and similar events which could cause substantial delays in our operations, damage or destroy our equipment or inventory, and cause us to incur additional expenses and delay research and development activities. In addition, the insurance coverage we maintain may not be adequate to cover our losses in any circumstance and may not continue to be available to use on acceptable terms, or at all. Reportable Segments Operating segments under GAAP are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer and the Company has determined that it operates in one business segment, which is the development of Long-Lived Assets Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Additions, major renewals and improvements are capitalized, and repair and maintenance costs are charged to expense as incurred. Leasehold improvements are amortized over the remaining life of the initial lease term or the estimated useful lives of the assets, whichever is shorter. The carrying value of long-lived assets, including operating lease right-of-use assets and intangible assets, is evaluated whenever events or changes in business circumstances or the Company’s planned use of long-lived assets indicate, based on undiscounted future operating cash flows, that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. When an indicator of impairment exists, undiscounted future operating cash flows of long-lived assets are compared to their respective carrying value. If the carrying value is greater than the undiscounted future operating cash flows of long-lived assets, the long-lived assets are written down to their respective fair values and an impairment loss is recorded. Fair value is determined primarily using the discounted cash flows expected to be generated from the use of assets. Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected cash flows. No impairments of tangible assets have been identified during the periods presented. Research and Development Expenses Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services and non-cash stock-based compensation. Research and development costs are expensed as incurred. Amounts due under contracts with third parties may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed. The Company contracts with third parties to perform various clinical trial activities in the on-going development of potential products. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to its vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of portions of the clinical trial or similar conditions. The Company’s accrual for clinical trials is based on estimates of the services received and efforts expended pursuant to contracts with clinical trial centers and clinical research organizations. These contracts may be terminated by the Company upon written notice and the Company is generally only liable for actual effort expended by the organizations to the date of termination, although in certain instances the Company may be further responsible for termination fees and penalties, as well as reasonable shutdown costs. The Company estimates its research and development expenses and the related accrual as of each balance sheet date based on the facts and circumstances known to the Company at that time. There have been no material adjustments to the Company’s prior‑period accrued estimates for clinical trial activities through June 30, 2020. Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, preferred stock, convertible notes and accrued interest, stock options, warrants and restricted stock units are considered to be potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, basic and diluted net loss per share was the same for the periods presented due to the Company’s net loss position. For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 (In thousands, except share and per share data) Net loss and comprehensive loss used in the calculation of basic and diluted loss per share $ (2,586 ) $ (4,093 ) $ (10,763 ) $ (8,974 ) Net loss per share, basic and diluted $ (0.15 ) $ (0.35 ) $ (0.63 ) $ (0.85 ) Weighted-average number of common shares outstanding, basic and diluted 16,981,540 11,751,110 17,124,331 10,595,511 The computation of diluted earnings per share excludes stock options, warrants, and restricted stock units that are anti-dilutive. As of June 30, 2020 and 2019, common share equivalents of 9,481,958 shares and 8,233,947 shares were anti-dilutive, respectively. Stock-based Compensation The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair value. The fair value of stock options is determined using the Black-Scholes option pricing model, using assumptions that are subjective and require significant judgment and estimation by management. The risk-free rate assumption was based on observed yields from governmental zero-coupon bonds with an equivalent term. The expected volatility assumption was based on historical volatilities of a group of comparable industry companies whose share prices are publicly available. The peer group was developed based on companies in the pharmaceutical industry. The expected term of stock options represents the weighted-average period that the stock options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determined the expected life assumption using the simplified method for options granted to employees, which is an average of the options ordinary vesting period and the contractual term for options granted to nonemployees. The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not expect to pay dividends at any time in the foreseeable future. The Company recognizes forfeitures on an actual basis and as such did not estimate forfeitures to calculate stock-based compensation. Restricted Stock Units (“RSU”) and Performance-Based Restricted Stock Units (“PRSU”) are measured and recognized based on the quoted market price of our common stock on the date of grant. The Company’s 2014 Stock Incentive Plan (the “2014 Plan”) and 2014 Employee Stock Purchase Plan (the “ESPP” and, together with the 2014 Plan, the “Plans”) each provide for an annual increase in shares available for grant, beginning with the fiscal year ending December 31, 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2024. In March 2020, the board of directors approved an increase of 518,693 shares issuable under the 2014 Plan and 129,673 shares issuable under the ESPP. Th e number of shares reserved for issuance under the 2014 Plan and ESPP were 401,648 and 433,394 shares, respectively, as of June 30, 2020. Recently Adopted Accounting Pronouncements No new accounting pronouncement issued or effective during the fiscal period had or is expected to have a material impact on the Company’s condensed |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Note 3. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following (in thousands): June 30, December 31, 2020 2019 Prepaid insurance $ 471 $ 734 Prepaid clinical 217 102 Prepaid other 64 45 Insurance receivable 162 245 Other current assets 83 54 Total prepaid expenses and other current assets $ 997 $ 1,180 |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | Note 4. Accrued Expenses and Other Liabilities Accrued expenses and other liabilities consisted of the following (in thousands): June 30, December 31, 2020 2019 Accrued compensation and related expenses $ 8 $ 40 Accrued clinical 32 437 Accrued professional services 105 130 Accrued vacation 115 199 Accrued other 9 7 Total accrued expenses and other liabilities $ 269 $ 813 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 5. Commitments and Contingencies Operating Leases The Company leases office space under a single operating lease. Total rental expense for the operating lease in the accompanying condensed consolidated statements of operations and comprehensive loss was The Company has an operating lease for 5,197 of office space in Irvine, California, that expires on September 30, 2021, as amended. The Company determines if a contract contains a lease at inception. Our office lease has a remaining term of 1.25 years and does not include options to extend the lease for additional periods. Operating lease assets and liabilities are recognized at the lease commencement date. Operating lease liabilities represent the present value of lease payments not yet paid. Operating lease assets represent our right to use an underlying asset and are based upon the operating lease liabilities as adjusted for prepayments or accrued lease payments, initial direct costs, lease incentives, and impairment of operating lease assets Our lease contains rent escalations over the lease term. We recognize expense for these leases on a straight-line basis over the lease term. Additionally Our lease agreement does not contain any material residual value guarantees or material restrictive covenants. While we do not currently have any lease agreement with lease and non-lease components, we elected to account for lease and non-lease components as separate components. We have elected the short-term lease recognition exemption for all applicable classes of underlying assets. Short-term disclosures include only those leases with a term greater than one month and 12 months or less, and expense is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less, that do not include an option to purchase the underlying asset that we are reasonably certain to exercise, are not recorded on the balance sheet. The components of lease expense were as follows: Six Months Ended June 30, 2020 Operating lease cost (a) $ 98 (a) Other information related to leases was as follows (in thousands, except lease term and discount rate): Six Months Ended June 30, 2020 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease $ 93 Remaining lease term Operating lease 1.25 years Discount rate Operating lease 3.25 % Future payments under noncancelable operating leases having initial or remaining terms of one year or more are as follows for the remaining fiscal year and thereafter (in thousands): Years ending 2020 (remainder of) $ 95 2021 146 Total minimum lease payments 241 Less imputed interest (5 ) Present value of lease liabilities 236 Less current portion (188 ) $ 48 Grants and Licenses Israeli Innovation Authority Grant From 2012 through 2015, the Company received grants in the amount of approximately $537,000 from the Israeli Innovation Authority (previously the Office of Chief Scientist) of the Israeli Ministry of Economy and Industry designated for investments in research and development. The grants are linked to the U.S. Dollar and bear annual interest of LIBOR. The grants are to be repaid out of royalties from sales of the products developed by the Company from its investments in research and development. Because the Company has not yet earned revenues related to these investments and cannot estimate potential royalties, no liabilities related to these grants have been recorded as of each period presented. Repayment of the grant is contingent upon the successful completion of the Company’s research and development programs and generating sales. The Company has no obligation to repay these grants, if the research and development program fails, is unsuccessful or aborted or if no sales are generated. The Company has not yet generated sales as of June 30, 2020; therefore, no liability was recorded for the repayment in the accompanying condensed consolidated financial statements. Otodyne License Agreement In November 2015, the Company entered into an exclusive license agreement with Scientific Development and Research, Inc. and Otodyne, Inc. (collectively, the “Licensors”) granting the Company exclusive worldwide rights to develop and commercialize OP0201, a potential first-in-class treatment option for patients at risk for or with otitis media (middle ear inflammation with or without infection), which is often caused by Eustachian tube dysfunction (“ETD”). Under the terms of the agreement, the Company is obligated to use commercially reasonable efforts to seek approval for and commercialize at least one product for otitis media in the U.S. and key European markets (France, Germany, Italy, Spain, and the United Kingdom). The Company is responsible for prosecuting, maintaining, and enforcing all related intellectual property and will be the sole owner of improvements. Under the agreement with the Licensors, the Company paid license fees totaling $750,000 and issued 9,780 common shares to the Licensors, which was expensed to research and development during the year ended December 31, 2015. In December 2015, the Licensors completed transfer of all technology, including the active Investigational New Drug application for OP0201 to the Company. The Company is obligated to pay up to $42.1 million in development and regulatory milestones if OP0201 is approved for three indications in the United States, two in Europe, and two in Japan. The Company is also obligated to pay up to $36.0 million in sales-based milestones, beginning with sales exceeding $1.0 billion in a calendar year. The Company is also obligated to pay a tiered royalty for a period up to eight years, on a country-by-country basis. The royalty ranges from a low-single to mid-single percentage of net sales. The Company made a $300,000 milestone payment in March 2019 related to the first patient enrolled in a phase 2 study. There were no milestones achieved during the six months ended June 30, 2020. Legal Matters The Company is involved in various lawsuits and claims arising in the ordinary course of business, including actions with respect to intellectual property, employment, and contractual matters. In connection with these matters, the Company assesses, on a regular basis, the probability and range of possible loss based on the developments in these matters. A liability is recorded in the financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable results could occur, assessing contingencies is highly subjective and requires judgments about future events. The Company regularly reviews outstanding legal matters to determine the adequacy of the liabilities accrued and related disclosures. The amount of ultimate loss may differ from these estimates. Each matter presents its own unique circumstances, and prior litigation does not necessarily provide a reliable basis on which to predict the outcome, or range of outcomes, in any individual proceeding. Because of the uncertainties related to the occurrence, amount, and range of loss on any pending litigation or claim, the Company does not consider a liability probable and is currently unable to predict their ultimate outcome, and, with respect to any pending litigation or claim where no liability has been accrued, to make a meaningful estimate of the reasonably possible loss or range of loss that could result from an unfavorable outcome. In the event that opposing litigants in outstanding litigation proceedings or claims ultimately succeed at trial and any subsequent appeals on their claims, any potential loss or charges in excess of any established accruals, individually or in the aggregate, could have a material adverse effect on the Company’s business, financial condition, results of operations, and/or cash flows in the period in which the unfavorable outcome occurs or becomes probable, and potentially in future periods. Legal Proceedings On September 22, 2014, Tokai , the legal predecessor of the Company, On July 25, 2017, a purported stockholder of Tokai filed a lawsuit in the U.S. District Court for the District of Massachusetts, entitled Peter B. Angelos v. Tokai Pharmaceuticals, Inc., et al., No. 1:17-cv-11365-MLW. On September 7, 2018, plaintiff filed an amended complaint. Defendants moved to dismiss the amended complaint on October 15, 2018. Plaintiff opposed defendants’ motion on November 19, 2018, defendants filed a reply in support of their motion on December 17, 2018, and plaintiff filed a sur-reply in support of his opposition on January 8, 2019. On February 18, 2020, the court held a hearing on defendants’ motion to dismiss. The court also ordered the parties to confer and notify it by March 10, 2020, if they reached an agreement to settle the case. On March 10, 2020, pursuant to the court’s order, the parties advised the court they did not agree on a settlement. On July 15, 2020, Plaintiff filed a Notice of Supplemental Authority, and on July 21, 2020, defendants filed a response. The Company intends to vigorously defend against these claims. Given the uncertainty of litigation, the preliminary stage of this case, and the legal standards that must be met for, among other things, success on the merits, the Company is unable to predict the ultimate outcome of this action, and therefore it cannot estimate the reasonably possible loss or range of loss that may result from this action. Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnification. The Company’s exposure under these agreements is unknown because it involves future claims that may be made against the Company but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future because of these indemnification obligations. No amounts associated with such indemnifications have been recorded to date. Contingencies From time to time, the Company may have certain contingent liabilities that arise in the ordinary course of business activities. The Company accrues a liability for such matters when it is probable that future expenditures will be made, and such expenditures can be reasonably estimated. There have been no contingent liabilities requiring accrual at June 30, 2020. |
Stockholders' Equity
Stockholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | Note 6. Stockholders’ Equity Equity Distribution Agreement On July 23, 2018, the Company filed a prospectus and prospectus supplement (the “2018 Prospectus”) under which the Company may offer and sell, from time to time, pursuant to an equity distribution agreement with Piper Jaffray & Co., up to $9.8 million in shares of its common stock. As of December 31, 2019 and June 30, 2020, 25,218 shares have been sold under the 2018 Prospectus for gross proceeds of approximately $110,000. 2019 Equity Offering On April 30, 2019, the Company entered into a securities purchase agreement with certain investors pursuant to which the Company agreed to sell, in a registered direct offering, an aggregate 3,449,112 shares of its common stock for gross proceeds of approximately $10.7 million under its effective shelf registration statement on Form S-3 (File No. 333-226286), which became effective on July 31, 2018. In a concurrent private placement, the Company also agreed, pursuant to the securities purchase agreement, to issue to such investors Series A warrants to purchase up to 3,449,112 shares of its common stock at an exercise price of $4.00 with a term of eighteen months (the “Series A Warrants”) and Series B warrants to purchase up 3,449,112 shares of its common stock at an exercise price of $4.00 with a term of five years (the “Series B Warrants”). The Series B Warrants become exercisable only upon the exercise of the Series A Warrants. In addition, the Company agreed to issue to the placement agent warrants to purchase up to 172,456 shares of common stock representing 5.0% of the aggregate number of shares of common stock sold in this offering. The placement agent warrants have substantially the same terms as the Series A Warrants issued to the investors in the concurrent private placement, except that the placement agent warrants have an exercise price equal to $3.87 or 125% of the offering price per share and will expire on April 30, 2024. All the warrants issued in connection with the 2019 Equity Offering contained put options that allow the holders of the warrants the right to receive, for each warrant share that would have been issuable upon an exercise immediately prior to the occurrence of an effective change in control event defined as a fundamental transaction, the number of shares of common stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of common stock for which this warrant is exercisable immediately prior to such fundamental transaction. The Company evaluated the embedded put option contained in the warrants under the guidance of Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging Warrant Exercise Transaction On January 10, 2020 and January 15, 2020, the Company entered into warrant exercise agreements (the “Exercise Agreements”) with the holders (the “Holders”) of its Series A Warrants and Series B Warrants (collectively, the “Warrants”), issued in the 2019 Equity Offering, pursuant to which the Holders agreed to exercise in cash their Warrants to purchase an aggregate of 6,898,224 shares of the Company’s common stock at a reduced exercise price of $0.715 per share, plus an additional $0.125 per share for the issuance of the private placement warrants for gross proceeds (before placement agent fees and expenses) to the Company of approximately $5.8 million (the “Exercise Transaction”). Under the Exercise Agreements, the Company also agreed to issue to the Holders new warrants to purchase up to 6,898,224 shares of the Company’s common stock at an exercise price of $0.72 per share, with an exercise period of five and a half years (the “Private Placement Warrants”). The Private Placement Warrants transaction subsequently closed and the Private Placement Warrants were issued on January 14, 2020 with respect to the Warrants exercised on January 10, 2020 and on or about January 17, 2020, with respect to the Warrants exercised on January 15, 2020. In addition, the Company agreed to issue to the placement agent warrants to purchase up to 344,911 shares of common stock, representing 5.0% of the aggregate number of shares of common stock issued in the Exercise Transaction. The placement agent warrants have substantially the same terms as the Private Placement Warrants issued to the Holders, except that the placement agent warrants have an exercise price equal to $1.05. A warrant inducement expense of $4.8 million was recorded which was determined using the Black-Scholes option pricing model and was calculated as the difference between the fair value of the Warrants prior to, and immediately after, the reduction in the exercise price on the date of repricing in addition to the fair value of the Private Placement Warrants issued. As of June 30, 2020, a total of 7,415,591 warrants were available for exercise. The shares of common stock underlying the registered direct placement agent warrants are registered for offer and sale under the Securities Act of 1933, as amended (the “Securities Act”), pursuant to the Company’s effective registration statement on Form S-1 (File No. 333-232011). The shares of common stock underlying the Private Placement Warrants and related placement agent warrants are registered for offer and sale under the Securities Act pursuant to the Company’s effective registration statement on Form S-1 (File No. 333-237379). The following table shows the warrant activity: Rollforward of Warrant Activity Registered direct warrants, Series A Registered direct warrants, Series B Registered direct warrants, placement agent Private placement warrants Private placement warrants, placement agent Total Balance as of December 31, 2019 3,449,112 3,449,112 172,456 — — 7,070,680 Issued — — — 6,898,224 344,911 7,243,135 Exercised (3,449,112 ) (3,449,112 ) — — — (6,898,224 ) Cancelled/Expired — — — — — — Balance as of June 30, 2020 — — 172,456 6,898,224 344,911 7,415,591 Common Stock Exchange Agreement On February 13, 2020, the Company entered into an exchange agreement (the “Exchange Agreement”) with Biotechnology Value Fund, L.P., Biotechnology Value Fund II, L.P. and Biotechnology Value Trading Fund OS, L.P. (the “Exchanging Stockholders”), pursuant to which the Exchanging Stockholders exchanged (the “Exchange”) 3,796,000 shares of the Company’s common stock for 3,796 shares of newly designated Series X Convertible Preferred Stock (the “Series X Preferred Stock”). The Company agreed to reimburse the Exchanging Stockholders for their expenses in connection with the Exchange up to a total of $25,000, which was recorded as operating expense in the Company’s condensed consolidated statements of operations and comprehensive loss. The Exchange was completed on February 19, 2020. On February 13, 2020, in connection with the Exchange, the Company filed a Certificate of Designation setting forth the preferences, rights and limitations of the Series X Preferred Stock with the Secretary of State of the State of Delaware. The number of shares so designated shall be 10,000 and Series X Preferred Stock shall have a par value of $0.001 per share. Each share of Series X Preferred Stock will be convertible into 1,000 shares of common stock at the option of the holder at any time; subject to certain limitations, including, that the holder will be prohibited from converting Series X Preferred Stock into common stock if, as a result of such conversion, the holder, together with its affiliates, would beneficially own a number of shares of common stock above a conversion blocker, which is initially set at 9.99% of the total common stock then issued and outstanding immediately following the conversion of such shares of Series X Preferred Stock. In the event of the Company’s liquidation, dissolution or winding up, holders of Series X Preferred Stock will participate pari passu with any distribution of proceeds to holders of common stock. Holders of Series X Preferred Stock are entitled to receive dividends on shares of Series X Preferred Stock equal (on an as-if-converted-to-common stock basis) to and in the same form as dividends actually paid on the common stock or other junior securities of the Company. Shares of Series X Preferred Stock will generally have no voting rights, except as required by law and except that the consent of a majority of the holders of the outstanding Series X Preferred Stock will be required to amend the terms of the Series X Preferred Stock. SEC Accounting Series Release No. 268 , Presentation in Financial Statements of “Redeemable Preferred Stocks” Series X Preferred Stock has two (2) separate and distinct embedded features. They are: (1) optional conversion by holder and (2) redemption put feature upon fundamental transaction. Each share of Series X Preferred Stock shall be convertible into 1,000 shares of common stock, at the option of the holder, at any time after the date of issuance. The Company evaluated the embedded optional conversion feature in accordance with the guidance under ASC 815, Derivatives and Hedging Each share of Series X Preferred Stock contains redemption put features that allow the holders of the Series X Preferred Stock the right to receive, in lieu of the right to receive conversion shares, for each conversion share that would have been issuable upon such conversion immediately prior to the occurrence of an effective change in control (“Fundamental Transaction”), the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one share of common stock Derivatives and Hedging On June 1, 2020 and June 10, 2020, the Exchanging Stockholders converted a total of 3,285 shares of Series X Preferred Stock into 3,285,000 shares of common stock. As of June 30, 2020, 511 shares of Series X Preferred Stock remain outstanding. Stock-Based Compensation Total stock-based compensation expense was recognized in our condensed consolidated statements of operations and comprehensive loss as follows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 49 $ 186 $ 203 $ 222 General and administrative 148 441 431 616 Total stock-based compensation $ 197 $ 627 $ 634 $ 838 During the six months ended June 30, 2020, PRSUs awarded to employees totaling 55,000 shares vested and resulted in the recognition of $204,765 in stock-based compensation expense. |
Restructuring Expense
Restructuring Expense | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Expense | Note 7. Restructuring Expense On June 11, 2020, following the announcement regarding the topline results from the phase 2a clinical trial of OP0201, in June 2020, Novus announced that its board of directors approved a plan to reduce the size of its workforce. The workforce reduction, which was completed in June 2020, was designed to reduce the Company’s operating expenses while it is conducting a review of development and strategic alternatives. For the three months ended June 30, 2020, Novus incurred $0.5 million in expenses related to the workforce reduction and expects to pay these amounts in the next nine months. Total liability for restructuring expenses and their utilization are summarized as follows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Restructuring charges at beginning of period $ — $ — $ — $ — Charged 490 — 490 — Paid — — — — Restructuring charges at end of period $ 490 $ — $ 490 $ — |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and Article 8 of Regulation S-X requirements as set forth by the Securities and Exchange Commission (“SEC”) for interim financial information and reflect all adjustments and disclosures, which are, in the opinion of management, of a normal and recurring nature, and considered necessary for a fair presentation of the financial information contained herein. Pursuant to these rules and regulations, the unaudited condensed consolidated financial statements do not include all information and notes necessary for a complete presentation of results of operations and comprehensive loss, financial position, and cash flows in conformity with GAAP. The accompanying unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited financial statements and accompanying notes of Novus for the year ended December 31, 2019 included in the Annual Report on Form 10-K filed by the Company with the SEC on March 16, 2020. The results of operations and comprehensive loss for the three and six months ended June 30, 2020 are not necessarily indicative of results expected for the full fiscal year or any other future period. |
Principles of Consolidation | Principles of Consolidation Novus, a Delaware corporation, owns 100% of the issued and outstanding common stock or other ownership interest in Otic Pharma, Ltd., a private limited company organized under the laws of the State of Israel (“Otic”). Otic owns 100% of the issued and outstanding common stock or other ownership interest in its U.S. subsidiary, Otic Pharma, Inc. The functional currency of the Company’s foreign subsidiary is the U.S. Dollar; however, certain expenses, assets and liabilities are transacted at the local currency. These transactions are translated from the local currency into U.S. Dollars at exchange rates during or at the end of the reporting period. The activities of the Company’s foreign subsidiary are not significant to the condensed consolidated financial statements. All significant intercompany accounts and transactions among the entities have been eliminated from the condensed consolidated financial statements. |
Liquidity and Financial Condition | Liquidity and Financial Condition The Company has experienced recurring net losses and negative cash flows from operating activities since its inception. The Company recorded a net loss of $2.6 million and $10.8 million for the three and six months ended June 30, 2020, respectively. As of June 30, 2020, the Company had cash of $8.8 million, working capital of $8.7 million and an accumulated deficit of $68.3 million. Due to continuing operational activities, the Company expects to continue to incur net losses into the foreseeable future. In order to continue these activities, the Company may need to raise additional funds through future public or private debt and equity financings or strategic collaboration and licensing arrangements. The Company’s ability to raise additional capital in the equity and debt markets is dependent on a number of factors, including, but not limited to, the market demand for the Company’s common stock, which itself is subject to a number of development and business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional capital at a price or on terms that are favorable to the Company. If the Company issues equity or convertible debt securities to raise additional funding, its existing stockholders may experience dilution, it may incur significant financing costs, and the new equity or convertible debt securities may have rights, preferences and privileges senior to those of its existing stockholders. If the Company issues debt securities to raise additional funding, it would incur additional debt service obligations, it could become subject to additional restrictions limiting its ability to operate its business, and it may be required to further encumber its assets. Adequate additional funding may not be available to us on acceptable terms on a timely basis, or at all. During fiscal year 2019 and in the first six months of 2020, the Company has implemented, and will continue to implement, certain cost cutting measures to reduce its cash flow requirements, including a reduction in force, which was announced in June 2020. Consistent with the actions the Company has taken in the past, it will execute the appropriate steps to enable the continued operation of the business and preservation of the value of its assets, including but not limited to actions such as reduced personnel-related costs, delay or curtailment of the Company’s research and development activities, and other discretionary expenses that are within the Company’s control. These initiatives, if required, may have an adverse impact on the Company’s ability to achieve certain of its planned objectives as it seeks strategic alternatives. On August 8, 2019, the Company received written notice (the “Notification Letter”) from The Nasdaq Stock Market LLC (“Nasdaq”) notifying the Company that it was not in compliance with the minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2) for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities maintain a minimum closing bid price of $1.00 per share, and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the minimum closing bid price requirement exists if the deficiency continues for a period of 30 consecutive business days. Based on the closing bid price of the Company’s common stock for the 30 consecutive business days prior to the date of the Notification Letter, the Company did not meet the minimum closing bid price requirement. The Notification Letter stated that the Company had 180 calendar days, or until February 4, 2020, to regain compliance with Nasdaq Listing Rule 5550(a)(2). On February 6, 2020, the Company received written notice that Nasdaq determined that it is eligible for an additional 180-day extension (the “Extension Letter”), or until August 3, 2020, to regain compliance with the minimum bid price requirement. The Extension Letter does not impact the Company’s listing on the Nasdaq Capital Market at this time. To regain compliance, the closing bid price of the Company’s common stock must be at least $1.00 per share for a minimum of 10 consecutive business days at any time prior to August 3, 2020 On April 21, 2020, the Company received an additional notice from Nasdaq (the “Tolling Notice”), which stated that, due to current market conditions, Nasdaq has determined to toll the compliance period for the minimum bid price requirement through June 30, 2020. As a result, the new date by which the Company has to regain compliance with the minimum bid price requirement is October 19, 2020. The Company intends to monitor the closing bid price of its common stock and consider its available options to resolve its noncompliance with the minimum bid price requirement. On May 12, 2020, the Company’s stockholders approved and adopted an amendment to the Company’s Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock at a ratio ranging from 1 share-for-10 shares up to a ratio of 1 share-for-30 shares, which ratio will be selected by the Company’s Board of Directors and set forth in a public announcement. Management may effect the reverse stock split at any time prior to December 31, 2020. If the Company’s stock price does not meet or exceed $1.00 per share prior to the compliance deadline, management expects to effect the reverse stock split in order to regain compliance. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or that the Company will otherwise be in compliance with other Nasdaq listing criteria. If the Company fails to regain compliance with the minimum bid requirement or to meet the other applicable continued listing requirements for the Nasdaq Capital Market in the future and Nasdaq determines to delist its common stock, the delisting could adversely affect the market price and liquidity of the Company’s common stock and reduce its ability to raise additional capital. If the Company’s common stock is delisted by Nasdaq, the common stock may be eligible to trade on the OTC Bulletin Board or another market. Any such alternative would likely result in it being more difficult for the Company to raise additional capital through the public or private sale of equity securities and for investors to dispose of, or obtain accurate quotations as to the market value of, the common stock and could result in a decrease in the trading price of our common stock. In addition, there can be no assurance that the common stock would be eligible for trading on any such alternative exchange or markets. At the time of issuance of the condensed consolidated financial statements for the period ended June 30, 2020, the Company concluded that there is substantial doubt regarding the Company’s ability to continue as a going concern for the twelve months from the date of filing of this quarterly report on Form 10-Q. The financial information and the condensed consolidated financial statements included in this filing have been prepared on a basis that assumes that we will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. This financial information and these condensed consolidated financial statements do not include any adjustments that may result from an unfavorable outcome of this uncertainty. Our ability to continue as a going concern is dependent upon our ability to successfully secure sources of financing and ultimately achieve profitable operations. |
Use of Estimates | Use of Estimates The preparation of the Company’s consolidated financial statements in conformity with GAAP requires management to make informed estimates and assumptions that affect the reported amounts of assets, liabilities and expenses and the disclosure of contingent assets and liabilities in the Company’s unaudited condensed consolidated financial statements and accompanying notes. The most significant estimates in the Company’s condensed consolidated financial statements relate to stock-based transactions, accruals for liabilities, operating lease liability, and other matters that affect the condensed consolidated financial statements and related disclosures. Actual results could differ materially from those estimates under different assumptions or conditions and the differences may be material to the condensed |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash represents cash deposits held at financial institutions. The Company considers all liquid investments purchased with an original maturity of three months or less and that can be liquidated without prior notice or penalty to be cash equivalents. Cash equivalents are held for the purpose of meeting short-term liquidity requirements, rather than for investment purposes. The Company had no cash equivalents at June 30, 2020 and December 31, 2019. |
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties As of June 30, 2020 and December 31, 2019, all of the Company’s long-lived assets were located in the United States. Financial instruments that are subject to concentration of credit risk consist primarily of cash equivalents. The Company’s policy is to invest cash in institutional money market funds to limit the amount of credit exposure. At times, the Company maintains cash equivalents in short‑term money market funds and it has not experienced any losses on its cash equivalents. The Company’s products will require approval from the U.S. Food and Drug Administration (“FDA”) and foreign regulatory agencies before commercial sales can commence. There can be no assurance that the Company’s products will receive any of these required approvals. The denial or delay of such approvals may impact the Company’s business in the future. In addition, after approval by the FDA, there is still an ongoing risk of adverse events that did not appear during the product approval process. The Company is subject to risks common to companies in the pharmaceutical industry, including, but not limited to, new technological innovations, clinical development risk, establishment of appropriate commercial partnerships, protection of proprietary technology, compliance with government and environmental regulations, uncertainty of market acceptance of products, product liability, the volatility of its stock price and the need to obtain additional financing. Our facilities and equipment, including those of our suppliers and vendors, may be affected by natural or man-made disasters. Our administrative office is based in Irvine, California and we manage all our research and development activities through third parties that are located throughout the world. We have taken precautions to safeguard our facilities, equipment and systems, including insurance, health and safety protocols, and off-site storage of computer data. However, our facilities and systems, as well as those of our third-party suppliers and vendors, may be vulnerable to earthquakes, fire, storm, health emergencies, including the ongoing COVID-19 pandemic, power loss, telecommunications failures, physical and software break-ins, software viruses and similar events which could cause substantial delays in our operations, damage or destroy our equipment or inventory, and cause us to incur additional expenses and delay research and development activities. In addition, the insurance coverage we maintain may not be adequate to cover our losses in any circumstance and may not continue to be available to use on acceptable terms, or at all. |
Reportable Segments | Reportable Segments Operating segments under GAAP are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the Chief Operating Decision Maker (“CODM”), or decision-making group, in deciding how to allocate resources and in assessing performance. The CODM is the Company’s Chief Executive Officer and the Company has determined that it operates in one business segment, which is the development of |
Long-Lived Assets | Long-Lived Assets Property and equipment are recorded at cost. Depreciation is computed using the straight-line method over the estimated useful lives of the respective assets. Additions, major renewals and improvements are capitalized, and repair and maintenance costs are charged to expense as incurred. Leasehold improvements are amortized over the remaining life of the initial lease term or the estimated useful lives of the assets, whichever is shorter. The carrying value of long-lived assets, including operating lease right-of-use assets and intangible assets, is evaluated whenever events or changes in business circumstances or the Company’s planned use of long-lived assets indicate, based on undiscounted future operating cash flows, that their carrying amounts may not be fully recoverable or that their useful lives are no longer appropriate. When an indicator of impairment exists, undiscounted future operating cash flows of long-lived assets are compared to their respective carrying value. If the carrying value is greater than the undiscounted future operating cash flows of long-lived assets, the long-lived assets are written down to their respective fair values and an impairment loss is recorded. Fair value is determined primarily using the discounted cash flows expected to be generated from the use of assets. Significant management judgment is required in the forecast of future operating results that are used in the preparation of expected cash flows. No impairments of tangible assets have been identified during the periods presented. |
Research and Development Expenses | Research and Development Expenses Research and development expenses include personnel and facility-related expenses, outside contracted services including clinical trial costs, manufacturing and process development costs, research costs and other consulting services and non-cash stock-based compensation. Research and development costs are expensed as incurred. Amounts due under contracts with third parties may be either fixed fee or fee for service, and may include upfront payments, monthly payments and payments upon the completion of milestones or receipt of deliverables. Non-refundable advance payments under agreements are capitalized and expensed as the related goods are delivered or services are performed. The Company contracts with third parties to perform various clinical trial activities in the on-going development of potential products. The financial terms of these agreements are subject to negotiation, vary from contract to contract and may result in uneven payment flows to its vendors. Payments under the contracts depend on factors such as the achievement of certain events, successful enrollment of patients, and completion of portions of the clinical trial or similar conditions. The Company’s accrual for clinical trials is based on estimates of the services received and efforts expended pursuant to contracts with clinical trial centers and clinical research organizations. These contracts may be terminated by the Company upon written notice and the Company is generally only liable for actual effort expended by the organizations to the date of termination, although in certain instances the Company may be further responsible for termination fees and penalties, as well as reasonable shutdown costs. The Company estimates its research and development expenses and the related accrual as of each balance sheet date based on the facts and circumstances known to the Company at that time. There have been no material adjustments to the Company’s prior‑period accrued estimates for clinical trial activities through June 30, 2020. |
Net Loss Per Share | Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, preferred stock, convertible notes and accrued interest, stock options, warrants and restricted stock units are considered to be potentially dilutive securities and are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive. Therefore, basic and diluted net loss per share was the same for the periods presented due to the Company’s net loss position. For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 (In thousands, except share and per share data) Net loss and comprehensive loss used in the calculation of basic and diluted loss per share $ (2,586 ) $ (4,093 ) $ (10,763 ) $ (8,974 ) Net loss per share, basic and diluted $ (0.15 ) $ (0.35 ) $ (0.63 ) $ (0.85 ) Weighted-average number of common shares outstanding, basic and diluted 16,981,540 11,751,110 17,124,331 10,595,511 The computation of diluted earnings per share excludes stock options, warrants, and restricted stock units that are anti-dilutive. As of June 30, 2020 and 2019, common share equivalents of 9,481,958 shares and 8,233,947 shares were anti-dilutive, respectively. |
Stock-based Compensation | Stock-based Compensation The Company recognizes compensation expense for all stock-based awards based on the grant-date estimated fair value. The fair value of stock options is determined using the Black-Scholes option pricing model, using assumptions that are subjective and require significant judgment and estimation by management. The risk-free rate assumption was based on observed yields from governmental zero-coupon bonds with an equivalent term. The expected volatility assumption was based on historical volatilities of a group of comparable industry companies whose share prices are publicly available. The peer group was developed based on companies in the pharmaceutical industry. The expected term of stock options represents the weighted-average period that the stock options are expected to be outstanding. Because the Company does not have historical exercise behavior, it determined the expected life assumption using the simplified method for options granted to employees, which is an average of the options ordinary vesting period and the contractual term for options granted to nonemployees. The expected dividend assumption was based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not expect to pay dividends at any time in the foreseeable future. The Company recognizes forfeitures on an actual basis and as such did not estimate forfeitures to calculate stock-based compensation. Restricted Stock Units (“RSU”) and Performance-Based Restricted Stock Units (“PRSU”) are measured and recognized based on the quoted market price of our common stock on the date of grant. The Company’s 2014 Stock Incentive Plan (the “2014 Plan”) and 2014 Employee Stock Purchase Plan (the “ESPP” and, together with the 2014 Plan, the “Plans”) each provide for an annual increase in shares available for grant, beginning with the fiscal year ending December 31, 2019 and continuing for each fiscal year until, and including, the fiscal year ending December 31, 2024. In March 2020, the board of directors approved an increase of 518,693 shares issuable under the 2014 Plan and 129,673 shares issuable under the ESPP. Th e number of shares reserved for issuance under the 2014 Plan and ESPP were 401,648 and 433,394 shares, respectively, as of June 30, 2020. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements No new accounting pronouncement issued or effective during the fiscal period had or is expected to have a material impact on the Company’s condensed |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Common Share Equivalents Included from Computation of Net Loss Per Share | For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 (In thousands, except share and per share data) Net loss and comprehensive loss used in the calculation of basic and diluted loss per share $ (2,586 ) $ (4,093 ) $ (10,763 ) $ (8,974 ) Net loss per share, basic and diluted $ (0.15 ) $ (0.35 ) $ (0.63 ) $ (0.85 ) Weighted-average number of common shares outstanding, basic and diluted 16,981,540 11,751,110 17,124,331 10,595,511 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Prepaid Expense And Other Assets Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): June 30, December 31, 2020 2019 Prepaid insurance $ 471 $ 734 Prepaid clinical 217 102 Prepaid other 64 45 Insurance receivable 162 245 Other current assets 83 54 Total prepaid expenses and other current assets $ 997 $ 1,180 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Payables And Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consisted of the following (in thousands): June 30, December 31, 2020 2019 Accrued compensation and related expenses $ 8 $ 40 Accrued clinical 32 437 Accrued professional services 105 130 Accrued vacation 115 199 Accrued other 9 7 Total accrued expenses and other liabilities $ 269 $ 813 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Components of Lease Expense | The components of lease expense were as follows: Six Months Ended June 30, 2020 Operating lease cost (a) $ 98 (a) |
Schedule of Other Information Related to Leases | Other information related to leases was as follows (in thousands, except lease term and discount rate): Six Months Ended June 30, 2020 Supplemental Cash Flows Information Cash paid for amounts included in the measurement of lease liability: Operating cash flows from operating lease $ 93 Remaining lease term Operating lease 1.25 years Discount rate Operating lease 3.25 % |
Schedule of Future Payments Under Noncancelable Operating Leases | Future payments under noncancelable operating leases having initial or remaining terms of one year or more are as follows for the remaining fiscal year and thereafter (in thousands): Years ending 2020 (remainder of) $ 95 2021 146 Total minimum lease payments 241 Less imputed interest (5 ) Present value of lease liabilities 236 Less current portion (188 ) $ 48 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Warrant Activity | The following table shows the warrant activity: Rollforward of Warrant Activity Registered direct warrants, Series A Registered direct warrants, Series B Registered direct warrants, placement agent Private placement warrants Private placement warrants, placement agent Total Balance as of December 31, 2019 3,449,112 3,449,112 172,456 — — 7,070,680 Issued — — — 6,898,224 344,911 7,243,135 Exercised (3,449,112 ) (3,449,112 ) — — — (6,898,224 ) Cancelled/Expired — — — — — — Balance as of June 30, 2020 — — 172,456 6,898,224 344,911 7,415,591 |
Schedule of Stock-Based Compensation Expense Recognized | Total stock-based compensation expense was recognized in our condensed consolidated statements of operations and comprehensive loss as follows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Research and development $ 49 $ 186 $ 203 $ 222 General and administrative 148 441 431 616 Total stock-based compensation $ 197 $ 627 $ 634 $ 838 |
Restructuring Expense (Tables)
Restructuring Expense (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Schedule of Total Liability For Restructuring Expenses and Their Utilization | Total liability for restructuring expenses and their utilization are summarized as follows (in thousands): For the Three Months Ended June 30, For the Six Months Ended June 30, 2020 2019 2020 2019 Restructuring charges at beginning of period $ — $ — $ — $ — Charged 490 — 490 — Paid — — — — Restructuring charges at end of period $ 490 $ — $ 490 $ — |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | May 12, 2020$ / shares | Aug. 08, 2019$ / shares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)Segmentshares | Jun. 30, 2019USD ($)shares | Mar. 31, 2020shares | Dec. 31, 2019USD ($) |
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Net loss | $ (2,586,000) | $ (4,093,000) | $ (10,763,000) | $ (8,974,000) | ||||
Cash | 8,764,000 | 8,764,000 | $ 8,791,000 | |||||
Working capital | 8,700,000 | 8,700,000 | ||||||
Accumulated deficit | (68,345,000) | $ (68,345,000) | (57,582,000) | |||||
Closing bid price per NASDAQ listing notification letter | $ / shares | $ 1 | |||||||
Consecutive business days for closing bid price of common stock | 30 days | |||||||
Stock market granted additional calendar days | 180 days | |||||||
Closing bid price of common stock per NASDAQ listing notification letter | $ / shares | $ / shares | $ 1 | |||||||
Number of consecutive business days required to regain compliance | 10 days | |||||||
Reverse stock split, description | On May 12, 2020, the Company’s stockholders approved and adopted an amendment to the Company’s Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock at a ratio ranging from 1 share-for-10 shares up to a ratio of 1 share-for-30 shares, which ratio will be selected by the Company’s Board of Directors and set forth in a public announcement. Management may effect the reverse stock split at any time prior to December 31, 2020. If the Company’s stock price does not meet or exceed $1.00 per share prior to the compliance deadline, management expects to effect the reverse stock split in order to regain compliance. | |||||||
Cash, cash equivalents and restricted cash, maturity period | three months or less | |||||||
Cash equivalents or restricted cash | $ 0 | $ 0 | $ 0 | |||||
Number of operating business segments | Segment | 1 | |||||||
Impairment of tangible assets | $ 0 | |||||||
Antidilutive securities excluded from computation of earnings per share, amount | shares | 9,481,958 | 8,233,947 | ||||||
2014 Stock Incentive Plan [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Increase in number of shares of common stock authorized for issuance | shares | 518,693 | |||||||
Common stock, number of shares reserved for issuance | shares | 401,648 | 401,648 | ||||||
2014 Employee Stock Purchase Plan [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Increase in number of shares of common stock authorized for issuance | shares | 129,673 | |||||||
Common stock, number of shares reserved for issuance | shares | 433,394 | 433,394 | ||||||
Reverse Stock Split [Member] | Minimum [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Stock split, conversion ratio | 0.1 | |||||||
Reverse Stock Split [Member] | Maximum [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Stock split, conversion ratio | 0.3 | |||||||
Stock price per share | $ / shares | $ 1 | |||||||
Otic Pharma [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Ownership percentage | 100.00% | 100.00% | ||||||
Otic Pharma, Inc. [Member] | ||||||||
Summary Of Significant Accounting Policies [Line Items] | ||||||||
Ownership percentage | 100.00% | 100.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Common Share Equivalents Included from Computation of Net Loss Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Earnings Per Share [Abstract] | ||||
Net loss and comprehensive loss used in the calculation of basic and diluted loss per share | $ (2,586) | $ (4,093) | $ (10,763) | $ (8,974) |
Net loss per share, basic and diluted | $ (0.15) | $ (0.35) | $ (0.63) | $ (0.85) |
Weighted-average common shares outstanding, basic and diluted | 16,981,540 | 11,751,110 | 17,124,331 | 10,595,511 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets - Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Prepaid Expense And Other Assets Current [Abstract] | ||
Prepaid insurance | $ 471 | $ 734 |
Prepaid clinical | 217 | 102 |
Prepaid other | 64 | 45 |
Insurance receivable | 162 | 245 |
Other current assets | 83 | 54 |
Total prepaid expenses and other current assets | $ 997 | $ 1,180 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Schedule of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities And Other Liabilities [Abstract] | ||
Accrued compensation and related expenses | $ 8 | $ 40 |
Accrued clinical | 32 | 437 |
Accrued professional services | 105 | 130 |
Accrued vacation | 115 | 199 |
Accrued other | 9 | 7 |
Total accrued expenses and other liabilities | $ 269 | $ 813 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Mar. 31, 2019USD ($) | Dec. 31, 2015USD ($) | Nov. 30, 2015USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)ft²Milestone | Jun. 30, 2019USD ($) | |
Other Commitments [Line Items] | |||||||
Rental expense | $ 47,000 | $ 47,000 | $ 93,000 | $ 95,000 | |||
Area of office space | ft² | 5,197 | ||||||
Lease expiration date | Sep. 30, 2021 | ||||||
Remaining term of office lease | 1 year 3 months | ||||||
Debt outstanding | 0 | $ 0 | |||||
Number of milestones achieved | Milestone | 0 | ||||||
Milestone payment | $ 300,000 | ||||||
Indemnification obligations amount | 0 | $ 0 | |||||
Contingent liabilities | $ 0 | $ 0 | |||||
License Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
Sales based milestone payment | $ 36,000,000 | ||||||
Royalty payment period | 8 years | ||||||
License Agreement [Member] | Maximum [Member] | |||||||
Other Commitments [Line Items] | |||||||
Development and regulatory milestone payments | $ 42,100,000 | ||||||
License Agreement [Member] | Minimum [Member] | |||||||
Other Commitments [Line Items] | |||||||
Sales required to achieve milestone payment | 1,000,000,000 | ||||||
Office of Chief Scientist of Israeli Ministry of Economy and Industry [Member] | |||||||
Other Commitments [Line Items] | |||||||
Grants received | $ 537,000 | ||||||
Scientific Development and Research, Inc. and Otodyne, Inc. [Member] | License Agreement [Member] | |||||||
Other Commitments [Line Items] | |||||||
License fees paid | $ 750,000 | ||||||
Share issued as consideration | shares | 9,780 |
Commitments and Contingencies_2
Commitments and Contingencies - Components of Lease Expense (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Commitments And Contingencies Disclosure [Abstract] | |
Operating lease cost | $ 98 |
Commitments and Contingencies_3
Commitments and Contingencies - Schedule of Other Information Related to Leases (Detail) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Cash paid for amounts included in the measurement of lease liability: | |
Operating cash flows from operating lease | $ 93 |
Remaining lease term | |
Operating lease | 1 year 3 months |
Discount rate | |
Operating lease | 3.25% |
Commitments and Contingencies_4
Commitments and Contingencies - Schedule of Future Payments Under Noncancelable Operating Leases (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Commitments And Contingencies Disclosure [Abstract] | ||
2020 (remainder of) | $ 95 | |
2021 | 146 | |
Total minimum lease payments | 241 | |
Less imputed interest | (5) | |
Present value of lease liabilities | 236 | |
Less current portion | (188) | $ (180) |
Non-current operating lease liability | $ 48 | $ 144 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | Jun. 10, 2020shares | Feb. 13, 2020USD ($)Feature$ / sharesshares | Jan. 15, 2020USD ($)$ / sharesshares | Apr. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2020$ / sharesshares | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($)$ / sharesshares | Jul. 23, 2018USD ($) |
Class Of Stock [Line Items] | |||||||||
Proceeds from issuance of common stock | $ | $ 9,676,000 | ||||||||
Warrant inducement expense | $ | $ 4,829,000 | ||||||||
Warrants available for exercise | 7,415,591 | 7,415,591 | 7,070,680 | ||||||
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||
Preferred shares outstanding | 511 | 511 | 0 | ||||||
PRSUs [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Number of shares vested | 55,000 | ||||||||
Value of shares vested | $ | $ 204,765 | ||||||||
Series A Warrants [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants available for exercise | 0 | 0 | 3,449,112 | ||||||
Series B Warrants [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants available for exercise | 0 | 0 | 3,449,112 | ||||||
Series X Preferred Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Conversion of stock, shares converted | 3,285 | ||||||||
Number of embedded features within preferred stock | Feature | 2 | ||||||||
Preferred shares outstanding | 511 | 511 | |||||||
Securities Purchase Agreement [Member] | 2019 Equity Offering [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Common stock shares agreed to sell | 3,449,112 | ||||||||
Common stock shares gross proceeds value | $ | $ 10,700,000 | ||||||||
Private Placement [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants available for exercise | 6,898,224 | 6,898,224 | 0 | ||||||
Private Placement [Member] | Series A Warrants [Member] | 2019 Equity Offering [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrant exercise price per share | $ / shares | $ 4 | ||||||||
Warrants exercisable term | 18 months | ||||||||
Private Placement [Member] | Series B Warrants [Member] | 2019 Equity Offering [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrant exercise price per share | $ / shares | $ 4 | ||||||||
Warrants exercisable term | 5 years | ||||||||
Placement Agent [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants available for exercise | 172,456 | 172,456 | 172,456 | ||||||
Placement Agent [Member] | 2019 Equity Offering [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrant exercise price per share | $ / shares | $ 3.87 | ||||||||
Percentage of warrants to issue shares of common stock | 5.00% | ||||||||
Percentage of warrant exercise price per share | 125.00% | ||||||||
Warrants offering price maturity date | Apr. 30, 2024 | ||||||||
Common Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Issuance of common stock in connection with conversion of preferred stock, shares | 3,285,000 | 3,285,000 | |||||||
Number of shares vested | 25,000 | 25,000 | |||||||
Common Stock [Member] | Series X Preferred Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Issuance of common stock in connection with conversion of preferred stock, shares | 3,285,000 | ||||||||
Common Stock [Member] | Private Placement [Member] | Series A Warrants [Member] | Maximum [Member] | 2019 Equity Offering [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants to issue shares of common stock | 3,449,112 | ||||||||
Common Stock [Member] | Private Placement [Member] | Series B Warrants [Member] | Maximum [Member] | 2019 Equity Offering [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants to issue shares of common stock | 3,449,112 | ||||||||
Common Stock [Member] | Placement Agent [Member] | Maximum [Member] | 2019 Equity Offering [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants to issue shares of common stock | 172,456 | ||||||||
Warrant Exercise Agreements [Member] | Warrants [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Common stock shares gross proceeds value | $ | $ 5,800,000 | ||||||||
Warrants to issue shares of common stock | 6,898,224 | ||||||||
Warrant reduced exercise price per share | $ / shares | $ 0.715 | ||||||||
Warrant additional exercise price per share | $ / shares | 0.125 | ||||||||
Warrant Exercise Agreements [Member] | Common Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrant exercise price per share | $ / shares | $ 0.72 | ||||||||
Warrants exercisable term | 5 years 6 months | ||||||||
Warrant Exercise Agreements [Member] | Common Stock [Member] | Maximum [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants to issue shares of common stock | 6,898,224 | ||||||||
Warrant Exercise Agreements [Member] | Common Stock [Member] | Placement Agent [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrant exercise price per share | $ / shares | $ 1.05 | ||||||||
Percentage of warrants to issue shares of common stock | 5.00% | ||||||||
Warrant Exercise Agreements [Member] | Common Stock [Member] | Placement Agent [Member] | Maximum [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Warrants to issue shares of common stock | 344,911 | ||||||||
Piper Jaffray & Co. [Member] | Equity Distribution Agreement [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Equity distribution agreement maximum value of common shares issuable | $ | $ 9,800,000 | ||||||||
Piper Jaffray & Co. [Member] | Equity Distribution Agreement [Member] | Common Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Common stock number of shares issued | 25,218 | 25,218 | |||||||
Proceeds from issuance of common stock | $ | $ 110,000 | $ 110,000 | |||||||
Exchanging Stockholders [Member] | Exchange Agreement [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Reimbursement of expenses | $ | $ 25,000 | ||||||||
Conversion of stock blocker provision percentage | 9.99% | ||||||||
Exchanging Stockholders [Member] | Exchange Agreement [Member] | Series X Preferred Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Conversion of stock, shares issued | 3,796 | ||||||||
Number of designated preferred stock shares | 10,000 | ||||||||
Preferred stock, par value | $ / shares | $ 0.001 | ||||||||
Exchanging Stockholders [Member] | Exchange Agreement [Member] | Common Stock [Member] | |||||||||
Class Of Stock [Line Items] | |||||||||
Conversion of stock, shares converted | 3,796,000 | ||||||||
Convertible preferred stock, shares issued upon conversion of each share | 1,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Warrant Activity (Detail) | 6 Months Ended |
Jun. 30, 2020shares | |
Class Of Warrant Or Right [Line Items] | |
Beginning Balance | 7,070,680 |
Issued | 7,243,135 |
Exercised | (6,898,224) |
Cancelled/Expired | 0 |
Ending Balance | 7,415,591 |
Registered Direct Warrants, Series A [Member] | |
Class Of Warrant Or Right [Line Items] | |
Beginning Balance | 3,449,112 |
Issued | 0 |
Exercised | (3,449,112) |
Cancelled/Expired | 0 |
Ending Balance | 0 |
Registered Direct Warrants, Series B [Member] | |
Class Of Warrant Or Right [Line Items] | |
Beginning Balance | 3,449,112 |
Issued | 0 |
Exercised | (3,449,112) |
Cancelled/Expired | 0 |
Ending Balance | 0 |
Registered Direct Warrants, Placement Agent [Member] | |
Class Of Warrant Or Right [Line Items] | |
Beginning Balance | 172,456 |
Issued | 0 |
Exercised | 0 |
Cancelled/Expired | 0 |
Ending Balance | 172,456 |
Private Placement Warrants [Member] | |
Class Of Warrant Or Right [Line Items] | |
Beginning Balance | 0 |
Issued | 6,898,224 |
Exercised | 0 |
Cancelled/Expired | 0 |
Ending Balance | 6,898,224 |
Private Placement Warrants, Placement Agent [Member] | |
Class Of Warrant Or Right [Line Items] | |
Beginning Balance | 0 |
Issued | 344,911 |
Exercised | 0 |
Cancelled/Expired | 0 |
Ending Balance | 344,911 |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Stock-Based Compensation Expense Recognized (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 197 | $ 627 | $ 634 | $ 838 |
Research and Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | 49 | 186 | 203 | 222 |
General and Administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation | $ 148 | $ 441 | $ 431 | $ 616 |
Restructuring Expense - Additio
Restructuring Expense - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Restructuring And Related Activities [Abstract] | ||
Expenses related to workforce reduction | $ 490 | $ 490 |
Restructuring Expense - Schedul
Restructuring Expense - Schedule of Total Liability For Restructuring Expenses and Their Utilization (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Restructuring And Related Activities [Abstract] | ||
Charged | $ 490 | $ 490 |
Restructuring charges at end of period | $ 490 | $ 490 |