Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 10, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | CorMedix Inc. | |
Entity Central Index Key | 1,410,098 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 97,844,285 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 4,701,978 | $ 10,379,729 |
Restricted cash | 171,553 | 171,553 |
Short-term investments | 0 | 1,604,198 |
Trade receivables | 3,478 | 64,148 |
Inventories, net | 672,937 | 594,194 |
Prepaid research and development expenses | 22,613 | 86,652 |
Other prepaid expenses and current assets | 168,188 | 367,177 |
Total current assets | 5,740,747 | 13,267,651 |
Property and equipment, net | 185,802 | 186,282 |
TOTAL ASSETS | 5,926,549 | 13,453,933 |
Current liabilities | ||
Accounts payable | 7,308,823 | 1,808,311 |
Accrued expenses | 5,080,302 | 4,363,867 |
Deferred revenue | 15,441 | 88,404 |
Total current liabilities | 12,404,566 | 6,260,582 |
TOTAL LIABILITIES | 12,404,566 | 6,260,582 |
COMMITMENTS AND CONTINGENCIES | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock - $0.001 par value: 2,000,000 shares authorized; 419,585 shares issued and outstanding at June 30, 2018 and December 31, 2017 | 420 | 420 |
Common stock - $0.001 par value: 160,000,000 shares authorized; 85,019,240 and 71,413,790 shares issued and outstanding at June 30, 2018 and December 31, 2017, respectively | 85,019 | 71,414 |
Accumulated other comprehensive income | 97,403 | 98,433 |
Additional paid-in capital | 164,239,299 | 159,197,950 |
Accumulated deficit | (170,900,158) | (152,174,866) |
TOTAL STOCKHOLDERS' EQUITY | (6,478,017) | 7,193,351 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 5,926,549 | $ 13,453,933 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 419,585 | 419,585 |
Preferred stock, shares outstanding | 419,585 | 419,585 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 160,000,000 | 160,000,000 |
Common stock, shares issued | 85,019,240 | 71,413,790 |
Common stock, shares outstanding | 85,019,240 | 71,413,790 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE GAIN (LOSS) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Revenue | ||||
Net sales | $ 7,551 | $ 136,168 | $ 30,760 | $ 175,727 |
Cost of sales | (33,663) | (18,052) | (62,238) | (111,624) |
Gross profit (loss) | (26,112) | 118,116 | (31,478) | 64,103 |
Operating Expenses | ||||
Research and development | (6,600,215) | (5,089,624) | (14,880,657) | (10,013,891) |
Selling, general and administrative | (1,945,825) | (2,051,093) | (3,848,838) | (4,691,819) |
Total Operating Expenses | (8,546,040) | (7,140,717) | (18,729,495) | (14,705,710) |
Loss From Operations | (8,572,152) | (7,022,601) | (18,760,973) | (14,641,607) |
Other Income (Expense) | ||||
Interest income | 10,196 | 28,578 | 24,971 | 52,009 |
Foreign exchange transactions gain (loss) | 5,043 | (5,537) | (4,154) | (6,823) |
Change in fair value of derivative liability | 0 | 1,853,365 | 0 | 1,853,365 |
Interest expense | 0 | 0 | (1,873) | 0 |
Total Other Income (Expense) | 15,239 | 1,876,406 | 18,944 | 1,898,551 |
Net Loss | (8,556,913) | (5,146,195) | (18,742,029) | (12,743,056) |
Other Comprehensive Income (Loss): | ||||
Unrealized gain from investments | 0 | 300 | 0 | 10,413 |
Foreign currency translation gain (loss) | 394 | 6,077 | (1,030) | 5,085 |
Total comprehensive income (loss) | 394 | 6,377 | (1,030) | 15,498 |
Comprehensive Loss | $ (8,556,519) | $ (5,139,818) | $ (18,743,059) | $ (12,727,558) |
Net Loss Per Common Share - Basic and Diluted | $ (0.10) | $ (0.10) | $ (0.24) | $ (0.27) |
Weighted Average Common Shares Outstanding - Basic and Diluted | 82,354,273 | 52,583,177 | 78,692,987 | 46,637,083 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) | Common Stock | Non-Voting Preferred Stock - Series B, Series C-2, Series C-3, Series D and Series E | Accumulated Other Comprehensive Income | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, Shares at Dec. 31, 2017 | 71,413,790 | 419,585 | ||||
Beginning balance, Amount at Dec. 31, 2017 | $ 71,414 | $ 420 | $ 98,433 | $ 159,197,950 | $ (152,174,866) | $ 7,193,351 |
Proceeds from ATM sale of common stock, net, Shares | 13,434,437 | |||||
Proceeds from ATM sale of common stock, net, Amount | $ 13,434 | 4,136,279 | 4,149,713 | |||
Issuance of vested restricted stock, Shares | 43,385 | |||||
Issuance of vested restricted stock, Amount | $ 43 | (43) | ||||
Stock issued for payment of deferred fees, Shares | 127,628 | |||||
Stock issued for payment of deferred fees, Amount | $ 128 | 173,645 | 173,773 | |||
Stock-based compensation | 731,468 | 731,468 | ||||
Cumulative effect of adoption of ASC 606 (Note 1) | 16,737 | 16,737 | ||||
Other comprehensive income | (1,030) | (1,030) | ||||
Net loss | (18,742,029) | (18,742,029) | ||||
Ending balance, Shares at Jun. 30, 2018 | 85,019,240 | 419,585 | ||||
Ending balance, Amount at Jun. 30, 2018 | $ 85,019 | $ 420 | $ 97,403 | $ 164,239,299 | $ (170,900,058) | $ (6,478,017) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (18,742,029) | $ (12,743,056) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation | 731,468 | 849,643 |
Change in fair value of derivative liability | 0 | (1,853,365) |
Inventory reserve decrease | 0 | (187,000) |
Depreciation | 38,734 | 17,671 |
Non-cash interest expense | 0 | 2,020 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in trade receivables | 61,220 | (133,119) |
(Increase) decrease in inventory | (78,743) | 40,598 |
Decrease (increase) in prepaid expenses and other current assets | 263,151 | (400,152) |
Increase in accounts payable | 5,498,465 | 117,509 |
Increase (decrease) in accrued expenses | 911,636 | (212,061) |
Decrease in deferred revenue | (73,686) | (8,599) |
Net cash used in operating activities | (11,389,784) | (14,509,911) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of short-term investments | 0 | (9,279,217) |
Sale of short-term investments | 1,604,198 | 10,504,355 |
Purchase of equipment | (38,225) | (3,922) |
Net cash provided by investing activities | 1,565,973 | 1,221,216 |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from sale of common stock from at-the-market program | 4,149,713 | 347,361 |
Proceeds from the public offering of common stock and warrants | 0 | 12,798,325 |
Proceeds from exercise of stock options | 0 | 6,800 |
Net cash provided by financing activities | 4,149,713 | 13,152,486 |
Foreign exchange effect on cash | (3,653) | 9,107 |
NET DECREASE IN CASH | (5,677,751) | (127,102) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - BEGINNING OF PERIOD | 10,551,282 | 8,236,043 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - END OF PERIOD | 4,873,531 | 8,108,941 |
Cash paid for interest | 1,873 | 0 |
Supplemental Disclosure of Non-Cash Financing Activities: | ||
Conversion of preferred stock to common stock | 0 | 7 |
Issuance of common stock for vested restricted stock units | 43 | 0 |
Unrealized gain from investments | 0 | 10,413 |
Issuance of common stock for payment of deferred fees | $ 173,773 | $ 10,218 |
1. Organization, Business and B
1. Organization, Business and Basis of Presentation | 6 Months Ended |
Jun. 30, 2018 | |
Organization Business And Basis Of Presentation | |
Organization, Business and Basis of Presentation | Organization and Business CorMedix Inc. (“CorMedix” or the “Company”), a biopharmaceutical company focused on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory diseases, was incorporated in the State of Delaware on July 28, 2006. In 2013, the Company formed a wholly-owned subsidiary, CorMedix Europe GmbH. The Company’s primary focus is to develop its lead product candidate, Neutrolin®, for potential commercialization in the United States (“U.S.”) and other key markets. The Company has in-licensed the worldwide rights to develop and commercialize Neutrolin, which is a novel anti-infective solution (a formulation of taurolidine, citrate and heparin 1000 u/ml) under development in the U.S. for the reduction and prevention of catheter-related infections and thrombosis in patients requiring central venous catheters in clinical settings such as dialysis, critical/intensive care, and oncology. The Company launched its first Phase 3 clinical trial in hemodialysis patients with catheters in the U.S. in December 2015. The clinical trial, named Catheter Lock Solution Investigational Trial or LOCK-IT-100, is a prospective, multicenter, randomized, double-blind, active control trial designed to demonstrate the efficacy and safety of Neutrolin in preventing catheter-related bloodstream infections, or CRBSI, in subjects receiving hemodialysis therapy as treatment for end stage renal disease. On July 25, 2018, the Company announced that the independent Data Safety Monitoring Board (“DSMB”) had completed its review of the interim analysis of the data from the LOCK-IT-100 study and, because the pre-specified level of statistical significance was reached and efficacy had been demonstrated, the DSMB recommended the study be terminated early. No safety concerns were reported by the DSMB based on the interim analysis. The Company will initiate dialogue with the U.S. Food and Drug Administration (“FDA”) on the appropriate next steps for the development of Neutrolin based on the results of the interim analysis. Although two pivotal clinical trials to demonstrate safety and effectiveness of Neutrolin generally are required by the FDA to secure marketing approval in the U.S., in light of the interim analysis results and the DSMB recommendation, the Company plans to meet with the FDA as soon as possible to seek agreement on the required next steps to file a new drug application (“NDA”) for Neutrolin. The necessary activities for the submission of an NDA for Neutrolin are dependent on the Company’s ability to raise sufficient funds through various potential sources, such as equity, debt financings, and/or strategic relationships (see Notes 2 and 5). The Company can provide no assurances that the FDA will not require a second clinical trial for an NDA for Neutrolin, or that financing or strategic relationships will be available on acceptable terms, or at all, to complete its clinical development program for Neutrolin. The Company received CE Mark approval for Neutrolin in 2013 and commercially launched Neutrolin in Germany for the prevention of catheter-related bloodstream infections and maintenance of catheter patency in hemodialysis patients using a tunneled, cuffed central venous catheter for vascular access. Neutrolin is registered and is being sold in certain European Union and Middle Eastern countries. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions for Form 10-Q and Article 8 of Regulation S-X. Accordingly, the unaudited condensed consolidated financial statements do not include all information and footnotes required by GAAP for complete annual financial statements. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of such interim results. Interim operating results are not necessarily indicative of results that may be expected for the full year ending December 31, 2018 or for any subsequent period. These unaudited condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto of the Company which are included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 19, 2018. The accompanying condensed balance sheet as of December 31, 2017 has been derived from the audited financial statements included in such Form 10-K. Recently Adopted Accounting Pronouncements The Financial Accounting Standards Board (“FASB”) issued new guidance related to how an entity should recognize revenue. The guidance specifies that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. In addition, the guidance expands the required disclosures related to revenue and cash flows from contracts with customers. The Company adopted the new revenue recognition standard as of January 1, 2018 using the modified retrospective method, which requires the cumulative effect of adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The majority of the Company’s revenue relates to the sale of finished products to various customers, and the adoption did not have a material impact on revenue recognized from these transactions. The Company accelerated the remaining deferred revenue under these agreements and recorded the reserve for returns and allowances as cumulative effect adjustments to opening retained earnings at January 1, 2018. The following table presents the Company’s revenue for the three months ended June 30, 2018 under the ASC 606 model as compared to revenue under the previous guidance: Revenue As Reported Revenue Under Previous Guidance Difference Net sales $ 5,345 $ 5,345 $ - Revenue recognized under agreement with warranty - 7,511 7,511 Revenue recognized under Wonik Agreement 2,206 2,206 - Total net sales $ 7,551 $ 15,062 $ 7,511 The following table presents the Company’s revenue for the six months ended June 30, 2018 under the ASC 606 model as compared to revenue under the previous guidance: Revenue As Reported Revenue Under Previous Guidance Difference Net sales $ 26,348 $ 26,348 $ - Revenue recognized under agreement with warranty - 37,669 37,669 Revenue recognized under Wonik Agreement 4,412 4,412 - Total net sales $ 30,760 $ 68,429 $ 37,669 In October 2015, the Company shipped product with less than 75% of its remaining shelf life to a customer and issued a guarantee that the specific product shipped would be replaced by the Company if the customer was not able to sell the product before it expired. As a result of this warranty, the Company may have an additional performance obligation (i.e. accept returned product and deliver new product to the customer) if the customer is unable to sell the short-dated product. As the result of the adoption of ASC 606, the Company accelerated the recognition of the deferred revenue and related cost of sales in the net amount of $70,500 and recorded the warranty obligation in the amount of $52,900 upon adoption. In January 2016, the FASB issued a new standard that modifies certain aspects of the recognition, measurement, presentation, and disclosure of financial instruments. The accounting standard update was effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The Company adopted this guidance on January 1, 2018, which did not have a material impact on the Company’s consolidated financial statements. In August 2016, the FASB issued new guidance which clarifies how certain cash receipts and cash payments are presented and classified in the statement of cash flows in order to reduce diversity in practice. The guidance was effective for the Company beginning in the first quarter of fiscal year 2018. The Company adopted this guidance on January 1, 2018 and it did not have an impact on its consolidated financial statements. In November 2016, the FASB issued new guidance which clarifies how restricted cash is presented and classified in the statement of cash flows. The guidance is effective for the Company beginning in the first quarter of fiscal year 2018. The Company adopted this guidance on January 1, 2018 and has included restricted cash in its beginning and ending cash balances on the statement of cash flows for the six months ended June 30, 2018 and 2017. In May 2017, the FASB issued new guidance which clarifies the application of stock-based accounting guidance when a change is made to the terms or conditions of a share-based payment award. The guidance was effective for the Company beginning in the first quarter of fiscal year 2018. The Company adopted this guidance on January 1, 2018 and it did not have an impact on its consolidated financial statements. Recent Authoritative Accounting Pronouncements In February 2016, the FASB issued new guidance related to how an entity should lease assets and lease liabilities. The guidance specifies that an entity who is a lessee under lease agreements should recognize lease assets and lease liabilities for those leases classified as operating leases under previous FASB guidance. Accounting for leases by lessors is largely unchanged under the new guidance. In July 2018, the FASB issued new guidance with targeted improvements which include a new transition method and a practical expedient for separating components of a contract intended to reduce costs and ease implementation of the lease standard. In June 2018, the FASB issued a new guidance which expands the scope of ASC 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019. Early adoption is permitted. The Company is evaluating the impact of adopting this guidance on its consolidated financial statements. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Liquidity, Going Concern and Uncertainties The Company’s operations are subject to a number of other factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s product candidates; the ability to obtain regulatory approval to market the Company’s products; the ability to manufacture successfully; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, Company products; and the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products. Management has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within a year after the date the consolidated financial statements contained in this Report are issued. As of June 30, 2018, the Company had an accumulated deficit of $170.9 million, and had incurred losses from operations of $8.6 million and $18.8 million for the three and six months ended June 30, 2018, respectively, and its cash position decreased from $10.6 million at December 31, 2017 to $4.9 million at June 30, 2018. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Based on the current development plans for Neutrolin and the Company’s other operating requirements, as well as the current status of its negotiations with its contract research organization (“CRO”), management believes that the existing cash and cash equivalents at June 30, 2018, plus the funds raised under the at-the-market common stock issuance program (the “ATM Program”) through August 10, 2018, will be adequate to fund the costs of closing the LOCK-IT-100 study and to hold its planned meeting with the FDA with respect to Neutrolin’s proposed development path. A successful outcome of the Company’s negotiations with its CRO may enable the Company to continue its operations into 2019; or if no such agreement is reached, additional financing may be required during the fourth quarter of 2018. On March 9, 2018, the Company entered into a new At-the-Market Issuance Sales Agreement with B. Riley for the sale of up to $14.7 million of the Company’s common stock, the registration statement for which was filed on March 9, 2018 and became effective on April 16, 2018, the same date on which the prior At-the-Market Issuance Sales Agreement with B. Riley entered into in 2016 expired. Under the ATM Program, the Company sold 3,116,213 shares of common stock and realized net proceeds of approximately $929,000 during the quarter ended June 30, 2018 and 13,434,437 shares and realized $4.1 million of net proceeds for the six months ended June 30, 2018. The Company’s continued operations will depend on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing of its products in order to complete the development and commercialization of Neutrolin until it achieves profitability, if ever. Management is actively pursuing financing plans but can provide no assurances that such financing or strategic relationships will be available on acceptable terms, or at all. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Basis of Consolidation The condensed consolidated financial statements include the accounts of the Company and CorMedix Europe GmbH, its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Financial Instruments Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents in bank deposit and other interest bearing accounts, the balances of which, at times, may exceed federally insured limits. The following table is the reconciliation under the aforementioned new accounting standard that modifies certain aspects of the recognition, measurement, presentation and disclosure of financial instruments as shown on the Company’s condensed consolidated statement of cash flows: June 30, 2018 June 30, 2017 Cash and cash equivalents $ 4,701,978 $ 7,937,388 Restricted cash 171,553 171,553 Total cash, cash equivalents and restricted cash $ 4,873,531 $ 8,108,941 The appropriate classification of marketable securities is determined at the time of purchase and reevaluated as of each balance sheet date. Investments in marketable debt and equity securities classified as available-for-sale are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Changes in fair value that are considered temporary are reported in the condensed consolidated statement of operations. Realized gains and losses, amortization of premiums and discounts and interest and dividends earned are included in income (expense). For declines in the fair value of equity securities that are considered other-than-temporary, impairment losses are charged to other (income) expense, net. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. There were no deemed permanent impairments at June 30, 2018 or December 31, 2017. The Company’s marketable securities are highly liquid and consist of U.S. government agency securities, high-grade corporate obligations and commercial paper with original maturities of more than 90 days. As of June 30, 2018, the Company has no marketable securities and at December 31, 2017, all of the Company’s investments had contractual maturities of less than one year. The following table summarizes the amortized cost, unrealized gains and losses and the fair value at June 30, 2018 and December 31, 2017: June 30, 2018: Amortized Cost Gross Unrealized Losses Gross Unrealized Gains Fair Value Money Market Funds included in Cash Equivalents $ - $ - $ - $ - Total June 30, 2018 $ - $ - $ - $ - December 31, 2017: Money Market Funds included in Cash Equivalents $ 6,032,034 $ - $ - $ 6,032,034 Corporate Securities 905,625 (112 ) - 905,516 Commercial Paper 698,682 - - 698,682 Subtotal 1,604,307 (112 ) - 1,604,198 Total December 31, 2017 $ 7,636,341 $ (112 ) $ - $ 7,636,232 Fair Value Measurements The Company’s financial instruments recorded in the consolidated balance sheets include cash and cash equivalents, accounts receivable, investment securities, accounts payable and accrued expenses. The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their estimated fair values based upon the short-term nature of their maturity dates. The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets recorded at fair value on the Company’s condensed consolidated balance sheets are categorized as follows: ● Level 1 inputs—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs— Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs). ● Level 3 inputs—Unobservable inputs for the asset or liability, which are supported by little or no market activity and are The following table provides the carrying value and fair value of the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017: June 30, 2018: Carrying Value Level 1 Level 2 Level 3 Money Market Funds $ - $ - $ - $ - Total June 30, 2018 $ - $ - $ - $ - December 31, 2017: Money Market Funds $ 6,032,034 $ 6,032,034 $ - $ - Corporate Securities 905,516 - 905,516 - Commercial Paper 698,682 - 698,682 - Subtotal 1,604,198 - 1,604,198 $ - Total December 31, 2017 $ 7,636,232 $ 6,032,034 $ 1,604,198 $ - Foreign Currency Translation and Transactions The condensed consolidated financial statements are presented in U.S. Dollars (“USD”), the reporting currency of the Company. For the financial statements of the Company’s foreign subsidiary, whose functional currency is the EURO, foreign currency asset and liability amounts, are translated into USD at end-of-period exchange rates. Foreign currency income and expenses are translated at average exchange rates in effect during the period in which the income and expenses were recognized. Translation gains and losses are included in other comprehensive loss. The Company has intercompany loans between the parent company based in New Jersey and its German subsidiary. The intercompany loans outstanding are not expected to be repaid in the foreseeable future and unrealized foreign exchange movements related to long-term intercompany loans are recognized in other comprehensive income. Foreign currency exchange transaction gain (loss) is the result of re-measuring transactions denominated in a currency other than the functional currency of the entity recording the transaction. Restricted Cash As of June 30, 2018 and December 31, 2017, the Company has restricted cash in connection with the patent and utility model infringement proceedings against TauroPharm (see Note 5). The Company was required by the District Court Mannheim to provide a security deposit of approximately $132,000 to cover legal fees in the event TauroPharm is entitled to reimbursement of these costs. The Company furthermore had to provide a deposit in the amount of $40,000 in connection with the unfair competition proceedings in Cologne. Prepaid Research and Development and Other Prepaid Expenses Prepaid expenses consist of payments made in advance to vendors relating to service contracts for clinical trial development, manufacturing, preclinical development and insurance policies. These advanced payments are amortized to expense either as services are performed or over the relevant service period using the straight-line method. Inventories, net Inventories are valued at the lower of cost or net realizable value on a first in, first out basis. Inventories consist of raw materials (including labeling and packaging), work-in-process, and finished goods, if any, for the Neutrolin product. Inventories consist of the following: June 30, 2018 December 31, 2017 Raw materials $ 93,716 $ 141,233 Work in process 294,267 526,067 Finished goods 387,954 29,894 Inventory reserve (103,000 ) (103,000 ) Total $ 672,937 $ 594,194 Accounts Payable Accounts payable consist of invoices received from vendors. At June 30, 2018, the balance increased by approximately $5,500,000 from $1,808,000 balance at December 31, 2017, due to the suspension of payments to the CRO while negotiations regarding financial considerations for the interim analysis continue. Accrued Expenses Accrued expenses consist of the following: June 30, 2018 December 31, 2017 Professional and consulting fees $ 324,286 $ 485,089 Accrued payroll and payroll taxes 775,222 755,221 Clinical trial and manufacturing development 3,756,595 2,884,924 Product development 80,001 80,001 Market research - 116,466 Other 144,198 42,166 Total $ 5,080,302 $ 4,363,867 Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective method. ASC 606 prescribes a five step model for recognizing revenue which includes (i) identifying contracts with customers; (ii) identifying performance obligations; (iii) determining the transaction price; (iv) allocating the transaction price; and (v) recognizing revenue. The Company recognizes net sales upon shipment of product to the dialysis centers and upon meeting the five step model prescribed by ASC 606 outlined above. Deferred Revenue In August 2014, the Company entered into an exclusive distribution agreement (the “Wonik Agreement”) with Wonik Corporation, a South Korean company, to market, sell and distribute Neutrolin for hemodialysis and oncolytic patients upon receipt of regulatory approval in Korea. Upon execution of the Wonik Agreement, Wonik paid the Company a non-refundable $50,000 payment and will pay an additional $50,000 upon receipt of the product registration necessary to sell Neutrolin in the Republic of Korea (the “Territory”). Product registration in the Territory is contingent upon the marketing approval of Neutrolin in the U.S. The term of the Wonik Agreement commenced on August 8, 2014 and will continue for three years after the first commercial sale of Neutrolin in the Territory. The non-refundable up-front payment is being recognized as revenue on a straight-line basis over the contractual term of the Agreement. The Company recognized $2,200 revenue related to the Wonik agreement for each of the three months ended June 30,2018 and 2017, and $4,400 each for the six months ended June 30, 2018 and 2017. Deferred revenue related to the Wonik Agreement at June 30, 2018 and December 31, 2017 amounted to approximately $15,400 and $19,800, respectively. Loss per common share Basic loss per common share excludes any potential dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. However, since their effect is anti-dilutive, the Company has excluded potentially dilutive shares. The following potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive. Six Months Ended June 30, 2018 2017 Series C non-voting convertible preferred stock 2,540,000 2,790,000 Series D non-voting convertible preferred stock 1,479,240 1,479,240 Series E non-voting convertible preferred stock 1,959,759 1,959,759 Series F non-voting convertible preferred stock 12,345,679 - Shares underlying outstanding warrants 22,892,891 33,052,578 Shares underlying restricted stock units 97,529 61,414 Shares underlying outstanding stock options 5,505,795 5,709,545 Total 46,820,893 45,052,536 Stock-Based Compensation The Company accounts for stock options granted to employees, officers and directors according to ASC No. 718, “Compensation — Stock Compensation” The Company accounts for stock options granted to non-employees on a fair value basis using the Black-Scholes option pricing model in accordance with ASC 718 and ASC No. 505-50, “Equity-Based Payments to Non-Employees” Research and Development Research and development costs are charged to expense as incurred. Research and development includes fees associated with operational consultants, contract clinical research organizations, contract manufacturing organizations, clinical site fees, contract laboratory research organizations, contract central testing laboratories, licensing activities, and allocated executive, human resources and facilities expenses. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial and the invoices received from its external service providers. As actual costs become known, the Company adjusts its accruals in the period when actual costs become known. Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development expense. |
3. Stockholders' Equity
3. Stockholders' Equity | 6 Months Ended |
Jun. 30, 2018 | |
STOCKHOLDERS' EQUITY | |
Stockholders' Equity | Common Stock The Company had a prior sales agreement with B. Riley for its ATM Program, which agreement expired on April 16, 2018, and under which the Company could issue and sell up to an aggregate of $60.0 million of shares of its common stock. On March 9, 2018, the Company entered into a new agreement with B. Riley for the sale of up to $14.7 million of the Company’s common stock under the ATM Program, the registration statement for which was filed on March 9, 2018 and became effective on April 16, 2018. The registration statement is for an aggregate of $70.0 million of the Company’s securities, including the $14.7 million of common stock allocated to the ATM program. Under the ATM Program, the Company may issue and sell common stock from time to time through B. Riley acting as agent, subject to limitations imposed by the Company and subject to B. Riley’s acceptance, such as the number or dollar amount of shares registered under the registration statement to which the offering relates. B. Riley is entitled to a commission of up to 3% of the gross proceeds from the sale of common stock sold under the ATM Program. During the three and six months ended June 30, 2018, the Company sold 3,116,213 and 13,434,437 shares of common stock, respectively, under the ATM Program and realized net proceeds of approximately $929,000 and $4.1 million for the three and six months ended June 30, 2018, respectively. During the six months ended June 30, 2018, the Company issued an aggregate of 43,385 shares of its common stock upon the vesting of restricted stock units issued to the Company’s board of directors. During the six months ended June 30, 2018, the Company issued an aggregate of 127,628 shares of its common stock to its certain board members for payment of deferred fees. Preferred Stock The Company is authorized to issue up to 2,000,000 shares of preferred stock in one or more series without stockholder approval. The Company’s board of directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock. Of the 2,000,000 shares of preferred stock authorized, the Company’s board of directors has designated (all with par value of $0.001 per share) the following: As of June 30, 2018 As of December 31, 2017 Preferred Shares Outstanding Liquidation Preference (Per Share) Total Liquidation Preference Preferred Shares Outstanding Liquidation Preference (Per Share) Total Liquidation Preference Series C-2 150,000 10.0 1,500,000 150,000 10.0 1,500,000 Series C-3 104,000 10.0 1,040,000 104,000 10.0 1,040,000 Series D 73,962 21.0 1,553,202 73,962 21.0 1,553,202 Series E 89,623 49.2 4,409,452 89,623 49.2 4,409,452 Series F 2,000 1,000 2,000,000 2,000 1,000 2,000,000 Total 419,585 10,502,654 419,585 10,502,654 On November 9, 2017, the Company entered into a securities purchase agreement with existing institutional investors (the “Buyers”), pursuant to which, on November 16, 2017, the Company sold $2.0 million of its Series F convertible preferred stock (“Series F Stock”) at $1,000 per share. Based on the terms of the Series F Stock, the conversion price was set at $0.162 on April 2, 2018, currently convertible anytime at the Buyers’ option. The conversion price of the Series F Stock is subject to anti-dilution adjustment for customary recapitalization events such as stock splits, as well as full ratchet anti-dilution protection in the event that the Company does not obtain the subordination of the Series C-3 preferred stock to that of the Series F Stock or obtain stockholder approval, if required by NYSE American rules, of the issuance of common stock that exceeds NYSE American rules. The Series F Stock will be mandatorily convertible if certain equity conditions are met. As of June 30, 2018, the last condition has not been met, which condition is the subordination of the outstanding Series C-3 preferred stock to the Series F Stock, therefore, the Series F Stock is not mandatorily convertible as of June 30, 2018. When and if that condition is met, the Series F Stock will be mandatorily convertible. Pursuant to the terms of the Series F Stock, a holder will be prohibited from converting shares of Series F Stock into shares of common stock if, as a result of such conversion, (i) such holder, together with its affiliates, would beneficially own more than 9.99% of the total number of shares of the Company’s common stock then issued and outstanding, or (ii) the Company would issue shares in an amount equal to or greater than 20% of the shares of common stock outstanding on November 9, 2017, unless the Company has received the approval of its stockholders for such overage. Stock Options During the six months ended June 30, 2018, the Company granted ten-year qualified and non-qualified stock options covering an aggregate of 623,000 shares of the Company’s common stock under the 2013 Stock Incentive Plan. The weighted average exercise price of these options is $0.41 per share. During the three and six months ended June 30, 2018, total compensation expense for stock options issued to employees, directors, officers and consultants was $337,000 and $687,000, respectively, and $383,000 and $814,000 for the three and six months ended June 30, 2017, respectively. As of June 30, 2018, there was $2,275,000 in total unrecognized compensation expense related to stock options granted which expense will be recognized over an expected remaining weighted average period of 1.5 years. The fair value of the grants are determined using the Black-Scholes option pricing model with the following assumptions: Six Months Ended June 30, 2018 2017 Expected Term 5 years 5 years Volatility 92.97% - 95.51% 101.69% - 105.07% Dividend yield 0.0% 0.0% Risk-free interest rate 2.63% - 2.92% 1.77% - 1.99% Weighted average grant date fair value of options granted during the period $0.30 $1.27 The Company estimated the expected term of the stock options granted based on anticipated exercises in future periods. The expected term of the stock options granted to consultants is based upon the full term of the respective option agreements. The expected stock price volatility for the Company’s stock options is calculated based on the historical volatility since the initial public offering of the Company’s common stock in March 2010, with a lookback period equal to the expected term of the respective award. The expected dividend yield of 0.0% reflects the Company’s current and expected future policy for dividends on the Company’s common stock. To determine the risk-free interest rate, the Company utilized the U.S. Treasury yield curve in effect at the time of grant with a term consistent with the expected term of the Company’s awards which is 5 years for employees and 10 years for non-employees. The following table summarizes the Company’s stock options activity and related information for the six months ended June 30, 2018: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at beginning of period 4,962,795 $ 2.04 7.5 $ 247,500 Forfeited (49,182 ) $ 1.41 $ 0 Expired (30,818 ) $ 1.17 $ 0 Granted 623,000 $ 0.41 $ 500 Outstanding at end of period 5,505,795 $ 1.86 7.3 $ 500 Vested at end of period 2,777,265 $ 1.86 5.9 $ 21 There were no stock option exercises during the six months ended June 30, 2018 and during the six months ended June 30, 2017, the total intrinsic value of stock options exercised was $13,200. The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying options and the quoted closing price of the common stock of the Company at the end of the reporting period for those options that have an exercise price below the quoted closing price. Restricted Stock Units During the six months ended June 30, 2018, the Company granted an aggregate of 74,500 restricted stock units (“RSUs”) to its directors under its 2013 Stock Incentive Plan with a weighted average grant date fair value of $0.57 per share. The fair value of each RSU was estimated to be the closing price of the Company’s common stock on each date of grant. These RSUs will vest in full on the first anniversary of the grant date, subject to continued service on the board. During the three and six months ended June 30, 2018, compensation expense recorded for the RSUs was $21,000 and $44,000, respectively, and $15,000 and $36,000 for the three and six months ended June 30, 2017. Unrecognized compensation expense for these RSUs amounted to $48,000. The expected weighted average period for the expense to be recognized is 0.57 years. Warrants As of June 30, 2018, there were 22,892,891 outstanding warrants with a weighted average exercise price of $1.07 |
4. Related Party Transactions
4. Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | On March 19, 2018, the Company entered into a binding term sheet with Elliott Management Corporation for a proposed $3.0 million backstop facility. The proposed backstop facility would be available for drawing between April 16, 2018 and July 31, 2018. In view of the DSMB recommendation to terminate the LOCK-IT-100 study for efficacy and the Company’s ongoing negotiations with its CRO regarding financial considerations for the interim efficacy analysis of the LOCK-IT-100 study, the Company has determined to not draw down on this facility. Pursuant to the November 2017 consulting agreement between the Company and Gary Gelbfish, a director, in June 2018 the Company accrued $160,000 in fees submitted by Dr. Gelbfish under the consulting agreement for his work in the data quality review for the interim analysis of the Company’s LOCK-IT-100 clinical trial for Neutrolin. Under the terms of the consulting agreement, Dr. Gelbfish is compensated at the rate of $800 per hour. |
5. Commitments and Contingencie
5. Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Contingency Matters On September 9, 2014, the Company filed in the District Court of Mannheim, Germany a patent infringement action against TauroPharm GmbH and Tauro-Implant GmbH as well as their respective CEOs (the “Defendants”) claiming infringement of the Company’s European Patent EP 1 814 562 B1, which was granted by the European Patent Office (the “EPO”) on January 8, 2014 (the “Prosl European Patent”). The Prosl European Patent covers the formulation of taurolidine and citrate with low dose heparin in a catheter lock solution for maintaining patency and preventing infection in hemodialysis catheters. In this action, the Company claims that the Defendants infringe on the Prosl European Patent by manufacturing and distributing catheter locking solutions to the extent they are covered by the claims of the Prosl European Patent. The Company believes that its patent is sound and is seeking injunctive relief and raising claims for information, rendering of accounts, calling back, destruction and damages. Separately, TauroPharm has filed an opposition with the EPO against the Prosl European Patent alleging that it lacks novelty and inventive step. The Company cannot predict what other defenses the Defendants may raise, or the ultimate outcome of either of these related matters. In the same complaint against the same Defendants, the Company also alleged an infringement (requesting the same remedies) of ND Partners’ utility model DE 20 2005 022 124 U1 (the “Utility Model”), which the Company believes is fundamentally identical to the Prosl European Patent in its main aspects and claims. The Court separated the two proceedings and the Prosl European Patent and the Utility Model claims are now being tried separately. TauroPharm has filed a cancellation action against the Utility Model before the German Patent and Trademark Office (the “German PTO”) based on the similar arguments as those in the opposition against the Prosl European Patent. On March 27, 2015, the District Court held a hearing to evaluate whether the Utility Model has been infringed by TauroPharm in connection with the manufacture, sale and distribution of its TauroLock-HEP100TM and TauroLock-HEP500TM products. A hearing before the same court was held on January 30, 2015 on the separate, but related, question of infringement of the Prosl European Patent by TauroPharm. The Court issued its decisions on May 8, 2015, staying both proceedings. In its decisions, the Court found that the commercialization by TauroPharm in Germany of its TauroLock catheter lock solutions Hep100 and Hep500 infringes both the Prosl European Patent and the Utility Model and further that there is no prior use right that would allow TauroPharm to continue to make, use or sell its product in Germany. However, the Court declined to issue an injunction in favor of the Company that would preclude the continued commercialization by TauroPharm based upon its finding that there is a sufficient likelihood that the EPO, in the case of the Prosl European Patent, or the German PTO, in the case of the Utility Model, may find that such patent or utility model is invalid. Specifically, the Court noted the possible publication of certain instructions for product use that may be deemed to constitute prior art. As such, the District Court determined that it will defer any consideration of the request by the Company for injunctive and other relief until such time as the EPO or the German PTO made a final decision on the underlying validity of the Prosl European Patent and the Utility Model. The opposition proceeding against the Prosl European Patent before the EPO is ongoing. The EPO held a hearing in the opposition proceeding on November 25, 2015. In its preliminary consideration of the matter, the EPO (and the German PTO) had regarded the patent as not inventive or novel due to publication of prior art. However, the EPO did not issue a decision at the end of the hearing but adjourned the matter due to the fact that the panel was of the view that Claus Herdeis, one of the managing directors of TauroPharm, has to be heard as a witness in a further hearing in order to close some gaps in the documentation presented by TauroPharm as regards the publication of the prior art. The German PTO held a hearing in the validity proceedings relating to the Utility Model on June 29, 2016, at which the panel affirmed its preliminary finding that the Utility Model was invalid based upon prior publication of a reference to the benefits that may be associated with adding heparin to a taurolidine based solution. The decision has only a declaratory effect, as the Utility Model had expired in November 2015. Furthermore, it has no bearing on the ongoing consideration by the EPO of the validity and possible infringement of the Prosl European Patent. The Company filed an appeal against the ruling on September 7, 2016. In October 2016, TauroPharm submitted a further writ to the EPO requesting a date for the hearing and bringing forward further arguments, in particular in view of the June 2016 decision of the German PTO on the invalidity of the utility model, which we have appealed. On November 22, 2017, the EPO in Munich, Germany held a further oral hearing in this matter. At the hearing, the panel held that the Prosl European Patent would be invalidated because it did not meet the requirements of novelty based on a technical aspect of the European intellectual property law. The Company disagrees with this decision and plans to appeal. The Company’s appeal will be based, in part, on the written opinion to be issued by the Opposition Division, which is expected by the third quarter of 2018. The Company continues to believe that the Prosl European Patent is indeed novel and that its validity should be maintained. There can be no assurance that the Company will prevail in this matter with either the German PTO or the EPO. In addition, the ongoing Unfair Competition litigation brought by the Company against TauroPharm is not affected and will continue. On January 16, 2015, the Company filed a complaint against TauroPharm GmbH and its managing directors in the District Court of Cologne, Germany. In the complaint, the Company alleges violation of the German Unfair Competition Act by TauroPharm for the unauthorized use of its proprietary information obtained in confidence by TauroPharm. The Company alleges that TauroPharm is improperly and unfairly using its proprietary information relating to the composition and manufacture of Neutrolin, in the manufacture and sale of TauroPharm’s products TauroLockTM, TauroLock-HEP100 and TauroLock-HEP500. The Company seeks a cease and desist order against TauroPharm from continuing to manufacture and sell any product containing taurolidine (the active pharmaceutical ingredient (“API”) of Neutrolin) and citric acid in addition to possible other components, damages for any sales in the past and the removal of all such products from the market. An initial hearing in the District Court of Cologne, Germany was held on November 19, 2015 to consider the Company’s claims. In this hearing, the presiding judge explained that the court needed more information with regard to several aspects of the case. As a consequence, the court issued an interim decision in the form of a court order outlining several issues of concern that relate primarily to the court's interest in clarifying the facts and reviewing any and all available documentation, in particular with regard to the question which specific know-how was provided to TauroPharm by whom and when. The Company's legal team has prepared the requested reply and produced the respective documentation. TauroPharm has also filed another writ within the same deadline and both parties have filed further writs at the end of April setting out their respective argumentation in more detail. A further oral hearing in this matter was held on November 15, 2016. In this hearing, the court heard arguments from CorMedix and TauroPharm concerning the allegations of unfair competition. The court made no rulings from the bench,and indicated that it is prepared to further examine the underlying facts of the Company's allegations. On March 7, 2017, the court issued another interim decision in the form of a court order outlining again several issues relating to the argumentation of both sides in the proceedings. In particular the court requested the Company to further specify its requests and to further substantiate in even more detail which know know-how was provided by Biolink to TauroPharm by whom and when. The court also raised the question whether the know-how provided at the time to TauroPharm could still be considered to be secret know-how or may have become public in the meantime. The court granted both sides the opportunity to reply to this court order and provide additional facts and evidence until May 15, 2017. Both parties have submitted further writs in this matter and the court has now scheduled a further hearing on May 8, 2018. After having been rescheduled several times, the hearing will now take place on November 20, 2018. The Company intends to continue to pursue this matter, and to provide additional supplemental documentary and other evidence as may be necessary to support its claims. In connection with the aforementioned patent and utility model infringement proceedings against TauroPharm, the Company was required by the District Court Mannheim to provide a security deposit of approximately $132,000 to cover legal fees in the event TauroPharm is entitled to reimbursement of these costs. The Company recorded the deposit as restricted cash for the year ended December 31, 2015. The Company furthermore had to provide a deposit in the amount of $40,000 in connection with the unfair competition proceedings in Cologne. These amounts are shown as restricted cash on the condensed consolidated balance sheets. Commitments Manufacturing The Company has developed a program aimed at reducing the cost of goods of Neutrolin through a more efficient, custom synthesis of the active ingredient taurolidine. As part of that program, on April 8, 2015, the Company entered into a Preliminary Services Agreement with [RC]2 Pharma Connect LLC (“RC2”), pursuant to which RC2 will coordinate certain manufacturing services related to taurolidine that the Company believes are necessary for the submission of its planned new drug application for Neutrolin to the FDA, as well as any foreign regulatory applications. The services related to this agreement were completed in the first quarter of 2017 at a total cost of $1.8 million. The API produced under this agreement has been manufactured for future commercial sales in the EU and Middle East and used for the U.S. Phase 3 clinical trial. The Company also has several service agreements with RC2 for the manufacture of clinical supplies to support its Phase 3 clinical trials for an aggregate amount of $8.9 million at June 30, 2018. During the three and six months ended June 30, 2018, the Company recognized research and development expense of approximately $56,000 and $159,000, respectively, related to these agreements and approximately $349,000 and $896,000 for the three and six months ended June 30, 2017, respectively. The Company may terminate these agreements upon 30 days written notice and is only obligated for project costs and reasonable project shut down costs provided through the date of termination. Clinical and Regulatory In December 2015, the Company entered into a Master Service Agreement and Work Orders (the “Master Service Agreement”) with a CRO to help the Company conduct its Phase 3 multicenter, double-blind, randomized active control study to demonstrate the safety and effectiveness of Neutrolin in preventing catheter-related bloodstream infections and blood clotting in subjects receiving hemodialysis therapy as treatment for end stage renal disease. In May 2017, the Company signed a contract modification with its CRO for an additional budgeted cost of $7.2 million to cover the extension of the estimated study timeline, incorporate several protocol amendments and take on several new tasks related to the enrollment sites. Given the changes to the study agreed with the FDA, the Company signed a second contract modification with its CRO increasing the budget by $6.3 million, to cover the continuation of trial enrollment, the increased length of time in which patients are enrolled and additional activities related to the collection of retrospective data outside the treatment centers. During the three and six months ended June 30, 2018, the Company recognized $3,242,000 and $9,040,000 in research and development expense related to this agreement, respectively, and $2,811,000 and $5,365,000 during the three and six months ended June 30, 2017, respectively. At June 30, 2018, the total CRO contract was $33 million, increasing from its original amount of $19.2 million. The Company determined that certain issues delayed the completion of the interim efficacy analysis, and it is in negotiations with its CRO regarding financial considerations. The Company is assessing the possible outcomes of its discussions with its CRO on its anticipated cash needs and future commitments. As such, the current contract is subject to further modifications. In-Licensing In 2008, the Company entered into a License and Assignment Agreement (the “NDP License Agreement”) with ND Partners, LLP (“NDP”). Pursuant to the NDP License Agreement, NDP granted the Company exclusive, worldwide licenses for certain antimicrobial catheter lock solutions, processes for treating and inhibiting infections, a biocidal lock system and a taurolidine delivery apparatus, and the corresponding United States and foreign patents and applications (the “NDP Technology”). The Company acquired such licenses and patents through its assignment and assumption of NDP’s rights under certain separate license agreements by and between NDP and Dr. Hans-Dietrich Polaschegg, Dr. Klaus Sodemann and Dr. Johannes Reinmueller. As consideration in part for the rights to the NDP Technology, the Company paid NDP an initial licensing fee of $325,000 and granted NDP a 5% equity interest in the Company, consisting of 39,980 shares of the Company’s common stock. The Company is required to make payments to NDP upon the achievement of certain regulatory and sales-based milestones. Certain of the milestone payments are to be made in the form of shares of common stock currently held in escrow for NDP, and other milestone payments are to be paid in cash. The maximum aggregate number of shares issuable upon achievement of milestones is 145,543 shares. In 2014, a certain milestone was achieved resulting in the release of 36,386 shares held in escrow. The number of shares held in escrow as of June 30, 2018 and 2017 is 109,157 shares of common stock. The maximum aggregate amount of cash payments due upon achievement of milestones is $3,000,000 with the balance being $2,500,000 as of June 30, 2018 and 2017. Events that trigger milestone payments include but are not limited to the reaching of various stages of regulatory approval and upon achieving certain worldwide net sales amounts. There were no milestones achieved during the six month periods ending June 30, 2018 and 2017. The NDP License Agreement may be terminated by the Company on a country-by-country basis upon 60 days prior written notice. If the NDP License Agreement is terminated by either party, the Company’s rights to the NDP Technology will revert back to NDP. |
6. Concentrations
6. Concentrations | 6 Months Ended |
Jun. 30, 2018 | |
Concentrations | |
Concentrations | At June 30, 2018, approximately 89% of net accounts receivable was due from two customers (53% and 26%). During the three months and six months ended June 30, 2018, the Company had revenue from two customers that each exceeded 10% of its total sales (34% and 28%) and (36% and 14%), respectively. During the three and six months ended June 30, 2017, two customers also exceeded 10% of the Company’s total sales (48% and 36%) and (50% and 33%), respectively. At December 31, 2017, approximately 81% of net accounts receivable was due from two customers (57% and 24%). During the year ended December 31, 2017 and 2016, the Company had revenue from two customers that each exceeded 10% of its total sales (25% and 19%) and (24% and 12%), respectively. |
7. Subsequent Events
7. Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | During July 2018 through August 10, 2018, the Company issued an aggregate of 13,807,818 shares under its ATM Program with a weighted average sale price of $0.51 per share, resulting in net proceeds of approximately $6.9 million. |
2. Summary of Significant Acc14
2. Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Liquidity, Going Concern and Uncertainties | The Company’s operations are subject to a number of other factors that can affect its operating results and financial condition. Such factors include, but are not limited to: the results of clinical testing and trial activities of the Company’s product candidates; the ability to obtain regulatory approval to market the Company’s products; the ability to manufacture successfully; competition from products manufactured and sold or being developed by other companies; the price of, and demand for, Company products; and the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products. Management has evaluated whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within a year after the date the consolidated financial statements contained in this Report are issued. As of June 30, 2018, the Company had an accumulated deficit of $170.9 million, and had incurred losses from operations of $8.6 million and $18.8 million for the three and six months ended June 30, 2018, respectively, and its cash position decreased from $10.6 million at December 31, 2017 to $4.9 million at June 30, 2018. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. Based on the current development plans for Neutrolin and the Company’s other operating requirements, as well as the current status of its negotiations with its contract research organization (“CRO”), management believes that the existing cash and cash equivalents at June 30, 2018, plus the funds raised under the at-the-market common stock issuance program (the “ATM Program”) through August 10, 2018, will be adequate to fund the costs of closing the LOCK-IT-100 study and to hold its planned meeting with the FDA with respect to Neutrolin’s proposed development path. A successful outcome of the Company’s negotiations with its CRO may enable the Company to continue its operations into 2019; or if no such agreement is reached, additional financing may be required during the fourth quarter of 2018. On March 9, 2018, the Company entered into a new At-the-Market Issuance Sales Agreement with B. Riley for the sale of up to $14.7 million of the Company’s common stock, the registration statement for which was filed on March 9, 2018 and became effective on April 16, 2018, the same date on which the prior At-the-Market Issuance Sales Agreement with B. Riley entered into in 2016 expired. Under the ATM Program, the Company sold 3,116,213 shares of common stock and realized net proceeds of approximately $929,000 during the quarter ended June 30, 2018 and 13,434,437 shares and realized $4.1 million of net proceeds for the six months ended June 30, 2018. The Company’s continued operations will depend on its ability to raise additional capital through various potential sources, such as equity and/or debt financings, strategic relationships, or out-licensing of its products in order to complete the development and commercialization of Neutrolin until it achieves profitability, if ever. Management is actively pursuing financing plans but can provide no assurances that such financing or strategic relationships will be available on acceptable terms, or at all. The financial statements do not include any adjustments relating to the recoverability and classification of asset carrying amounts or the amount and classification of liabilities that might result should the Company be unable to continue as a going concern. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. |
Basis of Consolidation | The condensed consolidated financial statements include the accounts of the Company and CorMedix Europe GmbH, its wholly owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Financial Instruments | Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and short-term investments. The Company maintains its cash and cash equivalents in bank deposit and other interest bearing accounts, the balances of which, at times, may exceed federally insured limits. The following table is the reconciliation under the aforementioned new accounting standard that modifies certain aspects of the recognition, measurement, presentation and disclosure of financial instruments as shown on the Company’s condensed consolidated statement of cash flows: June 30, 2018 June 30, 2017 Cash and cash equivalents $ 4,701,978 $ 7,937,388 Restricted cash 171,553 171,553 Total cash, cash equivalents and restricted cash $ 4,873,531 $ 8,108,941 The appropriate classification of marketable securities is determined at the time of purchase and reevaluated as of each balance sheet date. Investments in marketable debt and equity securities classified as available-for-sale are reported at fair value. Fair value is determined using quoted market prices in active markets for identical assets or liabilities or quoted prices for similar assets or liabilities or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Changes in fair value that are considered temporary are reported in the condensed consolidated statement of operations. Realized gains and losses, amortization of premiums and discounts and interest and dividends earned are included in income (expense). For declines in the fair value of equity securities that are considered other-than-temporary, impairment losses are charged to other (income) expense, net. The Company considers available evidence in evaluating potential impairments of its investments, including the duration and extent to which fair value is less than cost. There were no deemed permanent impairments at June 30, 2018 or December 31, 2017. The Company’s marketable securities are highly liquid and consist of U.S. government agency securities, high-grade corporate obligations and commercial paper with original maturities of more than 90 days. As of June 30, 2018, the Company has no marketable securities and at December 31, 2017, all of the Company’s investments had contractual maturities of less than one year. The following table summarizes the amortized cost, unrealized gains and losses and the fair value at June 30, 2018 and December 31, 2017: June 30, 2018: Amortized Cost Gross Unrealized Losses Gross Unrealized Gains Fair Value Money Market Funds included in Cash Equivalents $ - $ - $ - $ - Total June 30, 2018 $ - $ - $ - $ - December 31, 2017: Money Market Funds included in Cash Equivalents $ 6,032,034 $ - $ - $ 6,032,034 Corporate Securities 905,625 (112 ) - 905,516 Commercial Paper 698,682 - - 698,682 Subtotal 1,604,307 (112 ) - 1,604,198 Total December 31, 2017 $ 7,636,341 $ (112 ) $ - $ 7,636,232 |
Fair Value Measurements | The Company’s financial instruments recorded in the consolidated balance sheets include cash and cash equivalents, accounts receivable, investment securities, accounts payable and accrued expenses. The carrying value of certain financial instruments, primarily cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their estimated fair values based upon the short-term nature of their maturity dates. The Company categorizes its financial instruments into a three-level fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument. Financial assets recorded at fair value on the Company’s condensed consolidated balance sheets are categorized as follows: ● Level 1 inputs—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 inputs— Significant other observable inputs (e.g., quoted prices for similar items in active markets, quoted prices for identical or similar items in markets that are not active, inputs other than quoted prices that are observable such as interest rate and yield curves, and market-corroborated inputs). ● Level 3 inputs—Unobservable inputs for the asset or liability, which are supported by little or no market activity and are The following table provides the carrying value and fair value of the Company’s financial assets measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017: June 30, 2018: Carrying Value Level 1 Level 2 Level 3 Money Market Funds $ - $ - $ - $ - Total June 30, 2018 $ - $ - $ - $ - December 31, 2017: Money Market Funds $ 6,032,034 $ 6,032,034 $ - $ - Corporate Securities 905,516 - 905,516 - Commercial Paper 698,682 - 698,682 - Subtotal 1,604,198 - 1,604,198 $ - Total December 31, 2017 $ 7,636,232 $ 6,032,034 $ 1,604,198 $ - |
Foreign Currency Translation and Transactions | The condensed consolidated financial statements are presented in U.S. Dollars (“USD”), the reporting currency of the Company. For the financial statements of the Company’s foreign subsidiary, whose functional currency is the EURO, foreign currency asset and liability amounts, are translated into USD at end-of-period exchange rates. Foreign currency income and expenses are translated at average exchange rates in effect during the period in which the income and expenses were recognized. Translation gains and losses are included in other comprehensive loss. The Company has intercompany loans between the parent company based in New Jersey and its German subsidiary. The intercompany loans outstanding are not expected to be repaid in the foreseeable future and unrealized foreign exchange movements related to long-term intercompany loans are recognized in other comprehensive income. Foreign currency exchange transaction gain (loss) is the result of re-measuring transactions denominated in a currency other than the functional currency of the entity recording the transaction. |
Restricted Cash | As of June 30, 2018 and December 31, 2017, the Company has restricted cash in connection with the patent and utility model infringement proceedings against TauroPharm (see Note 5). The Company was required by the District Court Mannheim to provide a security deposit of approximately $132,000 to cover legal fees in the event TauroPharm is entitled to reimbursement of these costs. The Company furthermore had to provide a deposit in the amount of $40,000 in connection with the unfair competition proceedings in Cologne. |
Prepaid Research and Development | Prepaid expenses consist of payments made in advance to vendors relating to service contracts for clinical trial development, manufacturing, preclinical development and insurance policies. These advanced payments are amortized to expense either as services are performed or over the relevant service period using the straight-line method. |
Inventories, net | Inventories are valued at the lower of cost or net realizable value on a first in, first out basis. Inventories consist of raw materials (including labeling and packaging), work-in-process, and finished goods, if any, for the Neutrolin product. Inventories consist of the following: June 30, 2018 December 31, 2017 Raw materials $ 93,716 $ 141,233 Work in process 294,267 526,067 Finished goods 387,954 29,894 Inventory reserve (103,000 ) (103,000 ) Total $ 672,937 $ 594,194 |
Accounts Payable | Accounts Payable Accounts payable consist of invoices received from vendors. At June 30, 2018, the balance increased by approximately $5,500,000 from $1,808,000 balance at December 31, 2017, due to the suspension of payments to the CRO while negotiations for certain remediation efforts and financial considerations continue. |
Accrued Expenses | Accrued expenses consist of the following: June 30, 2018 December 31, 2017 Professional and consulting fees $ 324,286 $ 485,089 Accrued payroll and payroll taxes 775,222 755,221 Clinical trial and manufacturing development 3,756,595 2,884,924 Product development 80,001 80,001 Market research - 116,466 Other 144,198 42,166 Total $ 5,080,302 $ 4,363,867 |
Revenue Recognition | The Company adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective method. ASC 606 prescribes a five step model for recognizing revenue which includes (i) identifying contracts with customers; (ii) identifying performance obligations; (iii) determining the transaction price; (iv) allocating the transaction price; and (v) recognizing revenue. The Company recognizes net sales upon shipment of product to the dialysis centers and upon meeting the five step model prescribed by ASC 606 outlined above. |
Deferred Revenue | In August 2014, the Company entered into an exclusive distribution agreement (the “Wonik Agreement”) with Wonik Corporation, a South Korean company, to market, sell and distribute Neutrolin for hemodialysis and oncolytic patients upon receipt of regulatory approval in Korea. Upon execution of the Wonik Agreement, Wonik paid the Company a non-refundable $50,000 payment and will pay an additional $50,000 upon receipt of the product registration necessary to sell Neutrolin in the Republic of Korea (the “Territory”). Product registration in the Territory is contingent upon the marketing approval of Neutrolin in the U.S. The term of the Wonik Agreement commenced on August 8, 2014 and will continue for three years after the first commercial sale of Neutrolin in the Territory. The non-refundable up-front payment is being recognized as revenue on a straight-line basis over the contractual term of the Agreement. The Company recognized $2,200 revenue related to the Wonik agreement for each of the six months ended June 30, 2018 and 2017. Deferred revenue related to the Wonik Agreement at June 30, 2018 and December 31, 2017 amounted to approximately $15,400 and $19,800, respectively. |
Loss per common share | Basic loss per common share excludes any potential dilution and is computed by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted net loss per common share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. However, since their effect is anti-dilutive, the Company has excluded potentially dilutive shares. The following potentially dilutive shares have been excluded from the calculation of diluted net loss per share as their effect would be anti-dilutive. Six Months Ended June 30, 2018 2017 Series C non-voting convertible preferred stock 2,540,000 2,790,000 Series D non-voting convertible preferred stock 1,479,240 1,479,240 Series E non-voting convertible preferred stock 1,959,759 1,959,759 Series F non-voting convertible preferred stock 12,345,679 - Shares underlying outstanding warrants 22,892,891 33,052,578 Shares underlying restricted stock units 97,529 61,414 Shares underlying outstanding stock options 5,505,795 5,709,545 Total 46,820,893 45,052,536 |
Stock-Based Compensation | The Company accounts for stock options granted to employees, officers and directors according to ASC No. 718, “Compensation — Stock Compensation” The Company accounts for stock options granted to non-employees on a fair value basis using the Black-Scholes option pricing model in accordance with ASC 718 and ASC No. 505-50, “Equity-Based Payments to Non-Employees” |
Research and Development | Research and development costs are charged to expense as incurred. Research and development includes fees associated with operational consultants, contract clinical research organizations, contract manufacturing organizations, clinical site fees, contract laboratory research organizations, contract central testing laboratories, licensing activities, and allocated executive, human resources and facilities expenses. The Company accrues for costs incurred as the services are being provided by monitoring the status of the trial and the invoices received from its external service providers. As actual costs become known, the Company adjusts its accruals in the period when actual costs become known. Costs related to the acquisition of technology rights and patents for which development work is still in process are charged to operations as incurred and considered a component of research and development expense. |
1. Organization, Business and15
1. Organization, Business and Basis of Presentation (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Organization Business And Basis Of Presentation Tables Abstract | |
Schedule of revenue under previous guidance | Revenue As Reported Revenue Under Previous Guidance Difference Net sales $ 5,345 $ 5,345 $ — Revenue recognized under agreement with warranty — 7,511 7,511 Revenue recognized under Wonik Agreement 2,206 2,206 — Total net sales $ 7,551 $ 15,062 $ 7,511 Revenue As Reported Revenue Under Previous Guidance Difference Net sales $ 26,348 $ 26,348 $ — Revenue recognized under agreement with warranty — 37,669 37,669 Revenue recognized under Wonik Agreement 4,412 4,412 — Total net sales $ 30,760 $ 68,429 $ 37,669 |
2. Summary of Significant Acc16
2. Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Cash and cash equivalents | June 30, 2018 June 30, 2017 Cash and cash equivalents $ 4,701,978 $ 7,937,388 Restricted cash 171,553 171,553 Total cash, cash equivalents and restricted cash $ 4,873,531 $ 8,108,941 |
Marketable securities | June 30, 2018: Amortized Cost Gross Unrealized Losses Gross Unrealized Gains Fair Value Money Market Funds included in Cash Equivalents $ - $ - $ - $ - Total June 30, 2018 $ - $ - $ - $ - December 31, 2017: Money Market Funds included in Cash Equivalents $ 6,032,034 $ - $ - $ 6,032,034 Corporate Securities 905,625 (112 ) - 905,516 Commercial Paper 698,682 - - 698,682 Subtotal 1,604,307 (112 ) - 1,604,198 Total December 31, 2017 $ 7,636,341 $ (112 ) $ - $ 7,636,232 |
Carrying and fair value of financial assets | June 30, 2018: Carrying Value Level 1 Level 2 Level 3 Money Market Funds $ - $ - $ - $ - Total June 30, 2018 $ - $ - $ - $ - December 31, 2017: Money Market Funds $ 6,032,034 $ 6,032,034 $ - $ - Corporate Securities 905,516 - 905,516 - Commercial Paper 698,682 - 698,682 - Subtotal 1,604,198 - 1,604,198 $ - Total December 31, 2017 $ 7,636,232 $ 6,032,034 $ 1,604,198 $ - |
Schedule of inventories | June 30, 2018 December 31, 2017 Raw materials $ 93,716 $ 141,233 Work in process 294,267 526,067 Finished goods 387,954 29,894 Inventory reserve (103,000 ) (103,000 ) Total $ 672,937 $ 594,194 |
Schedule of accrued expenses | June 30, 2018 December 31, 2017 Professional and consulting fees $ 324,286 $ 485,089 Accrued payroll and payroll taxes 775,222 755,221 Clinical trial and manufacturing development 3,756,595 2,884,924 Product development 80,001 80,001 Market research - 116,466 Other 144,198 42,166 Total $ 5,080,302 $ 4,363,867 |
Schedule of anti-dilutive securities excluded from calculation of diluted net loss per share | Six Months Ended June 30, 2018 2017 Series C non-voting convertible preferred stock 2,540,000 2,790,000 Series D non-voting convertible preferred stock 1,479,240 1,479,240 Series E non-voting convertible preferred stock 1,959,759 1,959,759 Series F non-voting convertible preferred stock 12,345,679 - Shares underlying outstanding warrants 22,892,891 33,052,578 Shares underlying restricted stock units 97,529 61,414 Shares underlying outstanding stock options 5,505,795 5,709,545 Total 46,820,893 45,052,536 |
3. Stockholders' Equity (Tables
3. Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
STOCKHOLDERS' EQUITY | |
Preferred stock | As of June 30, 2018 As of December 31, 2017 Preferred Shares Outstanding Liquidation Preference (Per Share) Total Liquidation Preference Preferred Shares Outstanding Liquidation Preference (Per Share) Total Liquidation Preference Series C-2 150,000 10.0 1,500,000 150,000 10.0 1,500,000 Series C-3 104,000 10.0 1,040,000 104,000 10.0 1,040,000 Series D 73,962 21.0 1,553,202 73,962 21.0 1,553,202 Series E 89,623 49.2 4,409,452 89,623 49.2 4,409,452 Series F 2,000 1,000 2,000,000 2,000 1,000 2,000,000 Total 419,585 10,502,654 419,585 10,502,654 |
Fair value assumptions for Black Sholes | Six Months Ended June 30, 2018 2017 Expected Term 5 years 5 years Volatility 92.97% - 95.51% 101.69% - 105.07% Dividend yield 0.0% 0.0% Risk-free interest rate 2.63% - 2.92% 1.77% - 1.99% Weighted average grant date fair value of options granted during the period $0.30 $1.27 |
Summary of Option Activity under Plan and Related Information | Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at beginning of period 4,962,795 $ 2.04 7.5 $ 247,500 Forfeited (49,182 ) $ 1.41 $ 0 Expired (30,818 ) $ 1.17 $ 0 Granted 623,000 $ 0.41 $ 500 Outstanding at end of period 5,505,795 $ 1.86 7.3 $ 500 Vested at end of period 2,777,265 $ 1.86 5.9 $ 21 |
1. Organization, Business and18
1. Organization, Business and Basis of Presentation (Details) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2018 | Jun. 30, 2018 | |
Net sales | $ 5,345 | $ 26,348 |
Revenue recognized under agreement with warranty | 0 | 0 |
Revenue recognized under Wonik Agreement | 2,206 | 4,412 |
Total net sales | 7,551 | 30,760 |
Revenue Under Previous Guidance | ||
Net sales | 5,345 | 26,348 |
Revenue recognized under agreement with warranty | 7,511 | 37,669 |
Revenue recognized under Wonik Agreement | 2,206 | 4,412 |
Total net sales | 15,062 | 68,429 |
Difference | ||
Net sales | 0 | 0 |
Revenue recognized under agreement with warranty | 7,511 | 37,669 |
Revenue recognized under Wonik Agreement | 0 | 0 |
Total net sales | $ 7,511 | $ 37,669 |
2. Summary of Significant Acc19
2. Summary of Significant Accounting Policies (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2016 |
Summary Of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 4,701,978 | $ 7,937,388 | ||
Restricted cash | 171,553 | 171,553 | ||
Total cash, cash equivalents and restricted cash | $ 4,873,531 | $ 10,551,282 | $ 8,108,941 | $ 8,236,043 |
2. Summary of Significant Acc20
2. Summary of Significant Accounting Policies (Details 1) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Amortized cost | $ 0 | $ 7,636,341 |
Gross unrealized losses | 0 | (112) |
Gross unrealized gains | 0 | 0 |
Fair value | 0 | 7,636,232 |
Money Market Funds included in Cash Equivalents | ||
Amortized cost | 0 | 6,032,034 |
Gross unrealized losses | 0 | 0 |
Gross unrealized gains | 0 | 0 |
Fair value | $ 0 | 6,032,034 |
Corporate Securities | ||
Amortized cost | 905,625 | |
Gross unrealized losses | (112) | |
Gross unrealized gains | 0 | |
Fair value | 905,516 | |
Commercial Paper | ||
Amortized cost | 698,682 | |
Gross unrealized losses | 0 | |
Gross unrealized gains | 0 | |
Fair value | 698,682 | |
Subtotal | ||
Amortized cost | 1,604,307 | |
Gross unrealized losses | (112) | |
Gross unrealized gains | 0 | |
Fair value | $ 1,604,198 |
2. Summary of Significant Acc21
2. Summary of Significant Accounting Policies (Details 2) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Carrying Value | $ 0 | $ 7,636,232 |
Level 1 | ||
Carrying Value | 0 | 6,032,034 |
Level 2 | ||
Carrying Value | 0 | 1,604,198 |
Level 3 | ||
Carrying Value | 0 | 0 |
Money Market Funds included in Cash Equivalents | ||
Carrying Value | 0 | 6,032,034 |
Money Market Funds included in Cash Equivalents | Level 1 | ||
Carrying Value | 0 | 6,032,034 |
Money Market Funds included in Cash Equivalents | Level 2 | ||
Carrying Value | 0 | 0 |
Money Market Funds included in Cash Equivalents | Level 3 | ||
Carrying Value | $ 0 | 0 |
Corporate Securities | ||
Carrying Value | 905,516 | |
Corporate Securities | Level 1 | ||
Carrying Value | 0 | |
Corporate Securities | Level 2 | ||
Carrying Value | 905,516 | |
Corporate Securities | Level 3 | ||
Carrying Value | 0 | |
Commercial Paper | ||
Carrying Value | 698,682 | |
Commercial Paper | Level 1 | ||
Carrying Value | 0 | |
Commercial Paper | Level 2 | ||
Carrying Value | 698,682 | |
Commercial Paper | Level 3 | ||
Carrying Value | 0 | |
Subtotal | ||
Carrying Value | 1,604,198 | |
Subtotal | Level 1 | ||
Carrying Value | 0 | |
Subtotal | Level 2 | ||
Carrying Value | 1,604,198 | |
Subtotal | Level 3 | ||
Carrying Value | $ 0 |
2. Summary of Significant Acc22
2. Summary of Significant Accounting Policies (Details 3) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Summary Of Significant Accounting Policies Details 2Abstract | ||
Raw materials | $ 93,716 | $ 141,233 |
Work in process | 294,267 | 526,067 |
Finished goods | 387,954 | 29,894 |
Inventory reserve | (103,000) | (103,000) |
Total | $ 672,937 | $ 594,194 |
2. Summary of Significant Acc23
2. Summary of Significant Accounting Policies (Details 4) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Professional and consulting fees | $ 324,286 | $ 485,089 |
Accrued payroll and payroll taxes | 775,222 | 755,221 |
Clinical trial and manufacturing development | 3,756,595 | 2,884,924 |
Product development | 80,001 | 80,001 |
Market research | 0 | 116,466 |
Other | 144,198 | 42,166 |
Total | $ 5,080,302 | $ 4,363,867 |
2. Summary of Significant Acc24
2. Summary of Significant Accounting Policies (Details 5) - shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Shares | 46,820,893 | 15,980,443 |
Series C non-voting convertible preferred stock | ||
Antidilutive Shares | 2,540,000 | 2,790,000 |
Series D non-voting convertible preferred stock | ||
Antidilutive Shares | 1,479,240 | 1,479,240 |
Series E non-voting convertible preferred stock | ||
Antidilutive Shares | 1,959,759 | 1,959,759 |
Series F non-voting convertible preferred stock | ||
Antidilutive Shares | 12,345,679 | |
Warrants | ||
Antidilutive Shares | 22,892,891 | 33,052,578 |
Shares underlying restricted stock units | ||
Antidilutive Shares | 97,529 | 61,414 |
Shares underlying outstanding stock options | ||
Antidilutive Shares | 5,505,795 | 5,709,545 |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Summary Of Significant Accounting Policies Details Narrative Abstract | |||||
Accumulated deficit | $ (170,900,158) | $ (170,900,158) | $ (152,174,866) | ||
Loss from Operations | (8,572,152) | $ (7,022,601) | (18,760,973) | $ (14,641,607) | |
Deferred revenue | 15,400 | 15,400 | $ 19,800 | ||
Deferred revenue recognized | $ 2,200 | $ 2,200 | $ 4,400 | $ 4,400 |
3. Stockholders' Equity (Detail
3. Stockholders' Equity (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Preferred shares outstanding | 419,585 | 419,585 |
Total Liquidation Preference | $ 10,502,654 | $ 10,502,654 |
Series C-2 | ||
Preferred shares outstanding | 150,000 | 150,000 |
Liquidation Preference (Per Share) | $ 10 | $ 10 |
Total Liquidation Preference | $ 1,500,000 | $ 1,500,000 |
Series C-3 | ||
Preferred shares outstanding | 104,000 | 104,000 |
Liquidation Preference (Per Share) | $ 10 | $ 10 |
Total Liquidation Preference | $ 1,040,000 | $ 1,040,000 |
Series D | ||
Preferred shares outstanding | 73,962 | 73,962 |
Liquidation Preference (Per Share) | $ 21 | $ 21 |
Total Liquidation Preference | $ 1,553,202 | $ 1,553,202 |
Series E | ||
Preferred shares outstanding | 89,623 | 89,623 |
Liquidation Preference (Per Share) | $ 49.2 | $ 49.2 |
Total Liquidation Preference | $ 4,409,452 | $ 4,409,452 |
Series F | ||
Preferred shares outstanding | 2,000 | 2,000 |
Liquidation Preference (Per Share) | $ 1,000 | $ 1,000 |
Total Liquidation Preference | $ 2,000,000 | $ 2,000,000 |
3. Stockholders' Equity (Deta27
3. Stockholders' Equity (Details 1) - $ / shares | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Stockholders Equity | ||
Expected Term | 5 years | 5 years |
Volatility, minimum | 92.97% | 101.69% |
Volatility, maximum | 95.51% | 105.07% |
Dividend yield | 0.00% | 0.00% |
Risk-free interest rate, minimum | 2.63% | 1.77% |
Risk-free interest rate, maximum | 2.92% | 1.99% |
Weighted-average fair value of options granted during the period | $ 0.30 | $ 1.27 |
3. Stockholders' Equity (Deta28
3. Stockholders' Equity (Details 2) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Stockholders Equity Details 1Abstract | ||
Number of Options Outstanding, Beginning | 4,962,795 | |
Number of Options Forfeited | (49,182) | |
Number of Options Expired | (30,818) | |
Number of Options Granted | 623,000 | |
Number of Options Outstanding, Ending | 5,505,795 | |
Number of Options Vested | 2,777,265 | |
Weighted Average Exercise Price Outstanding, Beginning | $ 2.04 | |
Weighted Average Exercise Price Forfeited | 1.41 | |
Weighted Average Exercise Price Expired | 1.17 | |
Weighted Average Exercise Price Granted | 0.41 | |
Weighted Average Exercise Price Outstanding, Ending | 1.86 | |
Weighted Average Exercise Price, Vested | $ 1.86 | |
Weighted Average Remaining Contractual Life (in years) Outstanding, Beginning | 7 years 6 months | |
Weighted Average Remaining Contractual Life (in years) Outstanding, Ending | 7 years 3 months 18 days | |
Weighted Average Remaining Contractual Life (in years), Vested | 5 years 10 months 24 days | |
Aggregate Intrinsic Value Outstanding, Beginning | $ 247,500 | |
Aggregate Intrinsic Value, Forfeited | $ 0 | |
Aggregate Intrinsic Value, Granted | $ 500 | |
Aggregate Intrinsic Value, Exercised | $ 13,200 | |
Aggregate Intrinsic Value Outstanding, Ending | $ 500 | |
Aggregate Intrinsic Value, Vested | $ 21 |
3. Stockholders' Equity (Deta29
3. Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Common stock issued | 3,116,213 | 13,434,437 | ||
Common stock proceeds | $ 929,000 | $ 4,100,000 | ||
Stock-based compensation for stock options issued | 337,000 | $ 383,000 | 687,000 | $ 814,000 |
Unrecognized compensation expense | 2,275,000 | $ 2,275,000 | ||
Warrants, weighted average remaining contractual life | 1 year 6 months | |||
Intrinsic value of stock options exercised | 13,200 | |||
Outstanding warrants | 22,892,891 | |||
Restricted Stock Unit | ||||
Compensation expense | 21,000 | $ 15,000 | $ 44,000 | $ 36,000 |
Unrecognized compensation expense | $ 48,000 | $ 48,000 | ||
Warrants, weighted average remaining contractual life | 6 months 25 days | |||
Restricted stock units issued | 74,500 |
5. Commitments and Contingenc30
5. Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments And Contingencies | ||||
Research and development expenses - manufacturing | $ 56,000 | $ 349,000 | $ 159,000 | $ 896,000 |
Research and development expense - clinical and regulatory | $ 3,242,000 | $ 2,811,000 | 9,040,000 | $ 5,365,000 |
Agreements amount, maximum | $ 33,000,000 |
6. Concentrations (Details Narr
6. Concentrations (Details Narrative) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Concentration risk | 10.00% | 10.00% | 10.00% | |||
Accounts Receivable | Customer A | ||||||
Concentration risk | 53.00% | 57.00% | ||||
Accounts Receivable | Customer B | ||||||
Concentration risk | 26.00% | 24.00% | ||||
Accounts Receivable | Two Customers | ||||||
Concentration risk | 89.00% | 81.00% | ||||
Revenue | Customer A | ||||||
Concentration risk | 34.00% | 48.00% | 36.00% | 50.00% | 25.00% | 24.00% |
Revenue | Customer B | ||||||
Concentration risk | 28.00% | 36.00% | 14.00% | 33.00% | 19.00% | 12.00% |
Revenue | Two Customers | ||||||
Concentration risk | 10.00% | 10.00% | 10.00% |