Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Mar. 31, 2015 | 10-May-15 | |
Document And Entity Information | ||
Entity Registrant Name | Cocrystal Pharma, Inc. | |
Entity Central Index Key | 1412486 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -19 | |
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 | 692,280,783 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2015 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $14,257 | $3,970 |
Accounts receivable | 146 | 122 |
Marketable securities | 993 | 1,975 |
Prepaid and other current assets | 192 | 144 |
Mortgage note receivable, current portion | 166 | 165 |
Total current assets | 15,754 | 6,376 |
Property and equipment, net | 245 | 284 |
Deposits | 31 | 31 |
Mortgage note receivable, long-term portion | 2,412 | 2,431 |
In process research and development | 184,966 | 184,966 |
Goodwill | 65,195 | 65,195 |
Total assets | 268,603 | 259,283 |
Current liabilities: | ||
Accounts payable | 737 | 299 |
Accrued expenses | 455 | 394 |
Derivative liabilities | 13,456 | 8,464 |
Total current liabilities | 14,648 | 9,157 |
Long-term liabilities | ||
Deferred rent | 62 | 62 |
Deferred tax liability | 65,195 | 65,195 |
Total long-term liabilities | 65,257 | 65,257 |
Total liabilities | 79,905 | 74,414 |
Series A convertible preferred stock, $0.001 par value; 1,000 shares authorized, 0 and 1,000 issued and outstanding at March 31, 2015 and December 31, 2014, issued in the merger with RFS Pharma, LLC | 178,218 | |
Stockholders' equity: | ||
Series B convertible preferred stock, $.001 par value; 5,000 shares authorized; 0 and 1,000 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively | 1 | |
Common stock, $.001 par value; 800,000 and 200,000 shares authorized, 687,219 and 122,494 issued and outstanding as of March 31, 2015 and December 31, 2014, respectively | 687 | 123 |
Additional paid-in capital | 217,731 | 18,725 |
Accumulated other comprehensive income (loss), net of tax | -744 | 236 |
Accumulated deficit | -28,976 | -12,434 |
Total stockholders' equity | 188,698 | 6,651 |
Total liabilities and stockholders' equity | $268,603 | $259,283 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Stockholders' equity (deficit): | ||
Preferred stock, par value | $0.00 | |
Preferred stock, shares authorized | 5,000,000 | |
Common stock, par value | $0.00 | |
Common stock, shares authorized | 800,000,000 | 200,000,000 |
Common stock, shares issued | 687,219,618 | 122,494,000 |
Common stock, shares outstanding | 687,219,618 | 122,494,000 |
Series A Convertible Preferred Stock | ||
Stockholders' equity (deficit): | ||
Preferred stock, par value | $0.00 | |
Preferred stock, shares authorized | 1,000,000 | |
Preferred stock, shares issued | 0 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 1,000,000 |
Series B Convertible Preferred Stock | ||
Stockholders' equity (deficit): | ||
Preferred stock, par value | $0.00 | |
Preferred stock, shares authorized | 5,000,000 | |
Preferred stock, shares issued | 0 | 1,000,000 |
Preferred stock, shares outstanding | 0 | 1,000,000 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) (unaudited) (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Income Statement [Abstract] | ||
Grant Revenues | $27 | |
Operating Expenses: | ||
Research and Development | 1,560 | 967 |
General and Administrative | 635 | 565 |
Total operating expenses | 2,195 | 1,532 |
Loss from operations | -2,168 | -1,532 |
Interest income | 44 | |
Fair value of warrant liabilities in excess of proceeds from financing | -946 | |
Change in fair value of derivative liabilities | -14,418 | 2,106 |
Total other income (expense), net | -14,374 | 1,160 |
Loss before income taxes | -16,542 | -372 |
Income tax benefit | ||
Net loss | -16,542 | -372 |
Comprehensive loss: | ||
Net loss | -16,542 | -372 |
Unrealized loss on marketable securities, net of tax | -980 | -1,451 |
Total comprehensive loss | ($17,522) | ($1,823) |
Net loss per common share: | ||
Net loss per share, basic and diluted | ($0.04) | $0 |
Weighed average common shares outstanding, basic and diluted | 439,892,000 | 32,447,100 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (UNAUDITED) (USD $) | Series A Convertible Preferred Stock | Series B Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated other comprehensive loss | Accumulated Deficit | Total |
In Thousands, except Share data | |||||||
Beginning Balance, Amount at Dec. 31, 2014 | $178,218 | $1 | $123 | $18,725 | $236 | ($12,434) | $6,651 |
Beginning Balance, Shares at Dec. 31, 2014 | 1,000,000 | 1,000,000 | 122,494,000 | ||||
Exercise of common stock options, Shares | 161 | ||||||
Exercise of common stock options, Amount | 20 | 20 | |||||
Conversion of Series A and Series B Convertible Preferred Stock | -1,000,000 | -1,000,000 | 545,844,000 | ||||
Conversion of Series A and Series B Convertible Preferred Stock, Amount | -178,218 | -1 | 546 | 177,673 | 178,218 | ||
Stock-based compensation | 93 | 93 | |||||
Sale of common shares, Shares | 12,839 | ||||||
Sale of common shares, Amount | 13 | 11,799 | 11,812 | ||||
Unrealized gain on marketable securities | -980 | -980 | |||||
Exercise of warrants, Shares | 5,881 | ||||||
Exercise of warrants, Amount | 5 | 9,421 | 9,426 | ||||
Net loss | -16,542 | -16,542 | |||||
Ending Balance, Amount at Mar. 31, 2015 | $687 | $217,731 | ($744) | ($28,976) | $188,698 | ||
Ending Balance, Shares at Mar. 31, 2015 | 687,219,000 |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Operating activities: | ||
Net loss | ($16,542) | ($372) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 45 | 57 |
Stock based compensation | 93 | 11 |
Fair value of warrant liabilities in excess of proceeds from financing | 946 | |
Change in fair value of derivative liabilities | 14,418 | -2,106 |
Changes in operating assets and liabilities, net of effects of reverse Merger with BiozonePharmaceuticals, Inc. and the merger with RFS Pharma, LLC: | ||
Prepaid expenses and other current assets | -72 | -10 |
Accounts payable and accrued expenses | 499 | -306 |
Net cash used in operating activities | -1,559 | -1,780 |
Investing activities: | ||
Cash acquired in reverse merger with Biozone Pharmaceuticals, Inc. | 589 | |
Purchase of fixed assets | -5 | |
Long term deposits | -13 | |
Principal payments received on mortgage notes receivable | 19 | |
Net cash provided by investing activities | 14 | 576 |
Financing activities | ||
Proceeds from exercise of stock options | 20 | 19 |
Proceeds from issuance of common stock and warrants | 11,812 | 2,750 |
Net cash provided by financing activities | 11,832 | 2,769 |
Net increase in cash and cash equivalents | 10,287 | 1,565 |
Cash and cash equivalents at beginning of period | 3,970 | 1,034 |
Cash and cash equivalents at end of period | 14,257 | 2,599 |
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Unrealized loss on marketable securities | -980 | -1,451 |
Estimated fair value of warrants exchanged for common shares | 9,426 | |
Assets acquired and liabilities assumed in reverse Merger with Biozone Pharmaceuticals, Inc. | ||
Prepaid expenses and other current assets | 3 | |
Marketable securities | 8,737 | |
Accounts payable and accrued expenses | 410 | |
Derivative liabilities | $10,475 |
Organization_and_Significant_A
Organization and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Organization and Significant Accounting Policies | Overview |
Cocrystal Pharma, Inc. (“the Company”) was formerly incorporated in Nevada under the name Biozone Pharmaceuticals, Inc. On January 2, 2014, Biozone Pharmaceuticals, Inc. sold substantially all of its assets to MusclePharm Corporation (“MusclePharm”), and, on the same day, merged with Cocrystal Discovery, Inc.(“Discovery”) in a transaction accounted for as a reverse merger. Following the merger, the Company assumed Discovery’s business plan and operations. On March 18, 2014, the Company reincorporated in Delaware under the name Cocrystal Pharma, Inc. | |
Effective November 25, 2014, Cocrystal Pharma, Inc. and affiliated entities completed a series of merger transactions as a result of which Cocrystal Pharma, Inc. merged with RFS Pharma, LLC, a Georgia limited liability company (“RFS Pharma”). We refer to the surviving entity of this merger as “Cocrystal” or the “Company.” | |
Cocrystal is a biotechnology company which develops novel medicines for use in the treatment of human viral diseases. Cocrystal has developed proprietary structure-based drug design technology and antiviral nucleoside chemistry to create first-in-class and best-in-class antiviral drug candidates. Our focus is to pursue the development and commercialization of broad-spectrum antiviral drug candidates that will transform the treatment and prophylaxis of hepatitis C, Norovirus, and influenza. By concentrating our research and development efforts on viral replication inhibitors, we plan to leverage our infrastructure and expertise in these areas. | |
The Company operates in only one segment. Management uses cash flow as the primary measure to manage its business and does not segment its business for internal reporting or decision-making. | |
The Company’s activities since inception have consisted principally of acquiring product and technology rights, raising capital, and performing research and development. Successful completion of the Company’s development programs and, ultimately, the attainment of profitable operations are dependent on future events, including, among other things, its ability to access potential markets; secure financing; develop a customer base; attract, retain and motivate qualified personnel; and develop strategic alliances. Through March 31, 2015, the Company has funded its operations through equity offerings, private placements of convertible debt, and debt financings. | |
As of March 31, 2015, the Company had an accumulated deficit of $29.0 million. During the three month period ended | |
March 31, 2015, the Company had a loss from operations of $2.2 million. Cash used in operating activities was approximately $1.6 million for the three months ended March 31, 2015. The Company expects to continue to incur substantial operating losses and negative cash flows from operations over the next several years during its clinical development phase. | |
Basis of Presentation and Significant Accounting Policies | |
The accompanying condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), have been condensed or omitted pursuant to those rules and regulations. We believe disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year. All intercompany accounts and transactions have been eliminated in consolidation. Reference is made to the audited annual financial statements of Cocrystal Pharma, Inc. included in our Annual Report on Form 10-K for the year ended December 31, 2014 filed on March 31, 2015 (“Annual Report”) which contain information useful to understanding the Company's businesses and financial statement presentations. The condensed consolidated balance sheet as of December 31, 2014 was derived from the Company's most recent audited financial statements, but does not include all disclosures required by GAAP for a year-end balance sheet. Our significant accounting policies and practices are presented in Note 2 to the financial statements included in the Form 10-K. | |
Use of Estimates | |
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. | |
Recent Accounting Pronouncements | |
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 requires management to determine whether substantial doubt exists regarding the entity’s going concern presumption, which generally refers to an entity’s ability to meet its obligations as they become due. If substantial doubt exists but is not alleviated by management’s plan, the footnotes must specifically state that “there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued”. In addition, if substantial doubt exists, regardless of whether such doubt was alleviated, entities must disclose (a) principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans, if any); (b) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (c) management’s plans that are intended to mitigate the conditions or events that raise substantial doubt, or that did alleviate substantial doubt, about the entity’s ability to continue as a going concern. If substantial doubt has not been alleviated, these disclosures should become more extensive in subsequent reporting periods as additional information becomes available. In the period that substantial doubt no longer exists (before or after considering management’s plans), management should disclose how the principal conditions and events that originally gave rise to substantial doubt have been resolved. The ASU applies prospectively to all entities for annual periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted. The Company has not adopted the provisions of this ASU. Upon adoption, the Company will use this guidance to evaluate going concern. |
Fair_Value_Measurements
Fair Value Measurements | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Fair Value Measurements | ASC 820 defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: | ||||||||||||||||
Level 1 — quoted prices in active markets for identical assets or liabilities. | |||||||||||||||||
Level 2 — other significant observable inputs for the assets or liabilities through corroboration with market data at the measurement date. | |||||||||||||||||
Level 3 — significant unobservable inputs that reflect management’s best estimate of what market participants would use to price the assets or liabilities at the measurement date. | |||||||||||||||||
The Company categorized its cash equivalents as Level 1 fair value measurements. As further discussed in Note 7 below, certain of the Company’s marketable securities were subject to restrictions on sale as of March 31, 2015 because they are held in escrow pending resolution of the lease dispute discussion in Note 7. They are considered to be a Level 2 fair value measurement. The valuation for the 260,000 marketable securities categorized as Level 2 was based on applying a discount for lack of marketability to the quoted market price of the issuer’s unrestricted securities. The Company categorized its warrants potentially settleable in cash as Level 3 fair value measurements. The warrants potentially settleable in cash are measured at fair value on a recurring basis and are being marked to fair value at each reporting date until they are completely settled or meet the requirements to be accounted for as component of stockholders’ equity. The warrants are valued using the Black-Scholes option-pricing model as discussed in Note 4 below. | |||||||||||||||||
The following table presents a summary of fair values of assets and liabilities that are remeasured at fair value at each balance sheet date as of March 31, 2015 and December 31, 2014, and their placement within the fair value hierarchy as discussed above (in thousands): | |||||||||||||||||
March 31, | Quoted Prices in Active Markets | Significant Other Observable Inputs | Unobservable Inputs | ||||||||||||||
Description | 2015 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | |||||||||||||||||
Marketable securities | 993 | - | 993 | - | |||||||||||||
Total assets | $ | 993 | $ | - | $ | 993 | $ | - | |||||||||
Liabilities: | |||||||||||||||||
Warrants potentially settleable in cash | $ | 13,456 | $ | - | $ | - | $ | 13,456 | |||||||||
Total liabilities | $ | 13,456 | $ | - | $ | - | $ | 13,456 | |||||||||
December 31, | Quoted Prices in Active Markets | Significant Other Observable Inputs | Unobservable Inputs | ||||||||||||||
Description | 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | |||||||||||||||||
Marketable securities | 1,975 | - | 1,975 | - | |||||||||||||
Total assets | $ | 1,975 | $ | - | $ | 1,975 | $ | - | |||||||||
Liabilities: | |||||||||||||||||
Warrants potentially settleable in cash | $ | 8,464 | $ | - | $ | - | $ | 8,464 | |||||||||
Total liabilities | $ | 8,464 | $ | - | $ | - | $ | 8,464 | |||||||||
The Company has not transferred any financial instruments into or out of Level 3 classification during the three months ended March 31, 2015 or 2014. A reconciliation of the beginning and ending Level 3 liabilities for the three months ended March 31, 2015 and 2014 is as follows: | |||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Balance , January 1, | $ | 8,464 | $ | 23 | |||||||||||||
Change in fair value of Teva option | - | (23 | ) | ||||||||||||||
Estimated fair value of warrants assumed in merger on January 2, 2014 | - | 10,475 | |||||||||||||||
Estimated fair value of warrants issued in January 2014 common stock sale | - | 3,696 | |||||||||||||||
Estimated fair value of warrants exchanged for common shares | (9,426 | ) | - | ||||||||||||||
Change in fair value of warrants | 14,418 | (2,082 | ) | ||||||||||||||
Balance at March 31, 2015 and 2014 | $ | 13,456 | $ | 12,089 | |||||||||||||
Stockholders_equity
Stockholders' equity | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Notes to Financial Statements | |||||
Stockholders' equity | Preferred Stock — The Company has authorized up to 5,000,000 shares of preferred stock, $0.001 par value per share, for issuance. In connection with the Merger Agreement with Discovery, the Company issued to Discovery’s security holders 1,000,000 shares of the Company’s Series B Convertible Preferred Stock (“Series B”). The Series B shares automatically converted into 205,083,086 shares of the Company’s common stock on March 3, 2015 as a result of the Company’s shareholders approving an increase in the number of the Company’s authorized common shares to 800,000,000. | ||||
In connection with the merger with RFS Pharma in November 2014, the Company created a new series of Series A Preferred Stock (“Series A”). The Series A shares automatically converted into 340,760,802 shares of the Company’s common stock on March 3, 2015 as a result of the Company’s shareholders approving an increase in the number of the Company’s authorized common shares to 800,000,000. | |||||
Common Stock — The Company has authorized up to 800,000,000 shares of common stock, $0.001 par value per share, and had 687,219,618 shares issued and outstanding as of March 31, 2015. | |||||
On March 25, 2015, the Company entered into binding Securities Purchase Agreements with each of its directors and a number of other accredited investors who agreed to purchase 16,304,350 shares of the Company’s common stock at $0.92 per share for a total of $15,000,000. The Company’s principal shareholders and two of its directors, Dr. Raymond Schinazi and Dr. Phillip Frost, each purchased $3,187,667 of common stock although Dr. Schinazi’s agreement was subject to the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. As of March 31, 2015, the Company had received approximately $11,800,000 related to these sales of common stock. In April 2015, the Company was notified that there was an early termination of the Hart-Scott Rodino waiting period, and the Company received approximately $3,200,000 from Dr. Schinazi related to his purchase of these sales of common stock. See Note 11 for further information about this recent private placement. | |||||
Shares of common stock are reserved for future issuance as follows as of March 31, 2015 (in thousands): | |||||
As of | |||||
31-Mar-15 | |||||
Options to purchase common stock | 21 | ||||
Options reserved for future issuance under the Company's 2007 Incentive Plan | 31 | ||||
Warrants to purchase common stock | 12,580 | ||||
Total | 12,632 | ||||
Warrants
Warrants | 3 Months Ended | ||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||
Notes to Financial Statements | |||||||||||||||||||||||||||||||||||||
Warrants | The following is a summary of activity in the number of warrants outstanding to purchase the Company’s common stock for the three months ended March 31, 2015 (in thousands): | ||||||||||||||||||||||||||||||||||||
Warrants accounted for as: | Warrants accounted for as: | ||||||||||||||||||||||||||||||||||||
Equity | Liabilities | ||||||||||||||||||||||||||||||||||||
Jan-12 | Mar-13 | Apr-13 | Feb-12 | Aug-13 | Oct-13 | Oct-13 | Jan-14 | Total | |||||||||||||||||||||||||||||
warrants | warrants | warrants | warrants | warrants | warrants | Series A | warrants | ||||||||||||||||||||||||||||||
warrants | |||||||||||||||||||||||||||||||||||||
Outstanding, December 31, 2014 | 650 | 455 | 1,864 | 1,000 | 10,000 | 200 | 7,100 | 5,500 | 26,769 | ||||||||||||||||||||||||||||
Warrants exercised | - | - | (564 | ) | - | (7,000 | ) | (200 | ) | (6,125 | ) | (300 | ) | (14,189 | ) | ||||||||||||||||||||||
Outstanding, March 31, 2015 | 650 | 455 | 1,300 | 1,000 | 3,000 | - | 975 | 5,200 | 12,580 | ||||||||||||||||||||||||||||
Expiration date | 11-Jan-16 | 1-Mar-16 | 25-Apr-18 | 28-Feb-16 | 26-Aug-23 | 18-Oct-18 | 24-Oct-23 | 16-Jan-24 | |||||||||||||||||||||||||||||
Warrants consist of warrants potentially settleable in cash, which are liability-classified warrants, and equity-classified warrants. | |||||||||||||||||||||||||||||||||||||
Warrants classified as liabilities | |||||||||||||||||||||||||||||||||||||
Liability-classified warrants consist of warrants issued in connection with equity financings in February 2012, August 2013, October 2013 and January 2014. These warrants are potentially settleable in cash and were determined not to be indexed to the Company’s own stock and are therefore accounted for as liabilities. | |||||||||||||||||||||||||||||||||||||
The estimated fair value of outstanding warrants accounted for as liabilities is determined at each balance sheet date. Any decrease or increase in the estimated fair value of the warrant liability since the most recent balance sheet date is recorded in the consolidated statement of comprehensive loss as changes in fair value of derivative liabilities. The fair value of the warrants classified as liabilities is estimated using the Black-Scholes option-pricing model with the following inputs as of March 31, 2015: | |||||||||||||||||||||||||||||||||||||
Feb-12 | Aug-13 | Oct-13 | Jan-14 | ||||||||||||||||||||||||||||||||||
warrants | warrants | warrants | warrants | ||||||||||||||||||||||||||||||||||
Strike price | $ | 0.6 | $ | 0.4 | $ | 0.5 | $ | 0.5 | |||||||||||||||||||||||||||||
Expected term (years) | 0.9 | 8.4 | 8.6 | 8.8 | |||||||||||||||||||||||||||||||||
Cumulative volatility % | 84 | % | 104 | % | 103 | % | 103 | % | |||||||||||||||||||||||||||||
Risk-free rate % | 0.26 | % | 1.82 | % | 1.83 | % | 1.85 | % | |||||||||||||||||||||||||||||
The Company’s expected volatility is based on a combination of implied volatilities of similar publicly traded entities given that the Company has limited history of its own observable stock price. The expected life assumption is based on the remaining contractual terms of the warrants. The risk-free rate is based on the zero coupon rates in effect at the balance sheet date. The dividend yield used in the pricing model is zero, because the Company has no present intention to pay cash dividends. | |||||||||||||||||||||||||||||||||||||
Warrants classified as equity | |||||||||||||||||||||||||||||||||||||
Warrants that were recorded in equity at fair value upon issuance, and are not reported as liabilities on the balance sheet, are included in the above table which shows all warrants. |
Stockbased_compensation
Stock-based compensation | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Notes to Financial Statements | |||||||||||||||||
Stock-based compensation | The Company recorded approximately $93,000 and $11,000 of stock-based compensation related to employee and non-employee stock options for the three months ended March 31, 2015 and 2014, respectively. As of March 31, 2015, there was $2,266,000 of unrecognized compensation cost related to outstanding options that is expected to be recognized as a component of the Company’s operating expenses over a weighted average period of 1.1 years. | ||||||||||||||||
As of March 31, 2015, an aggregate of 53,599,046 shares of common stock were reserved for issuance under the Company’s 2007 Equity Incentive Plan, including 21,143,880 shares subject to outstanding common stock options granted under the plan and 31,157,015 shares available for future grants. The administrator of the plan determines the times when an option may become exercisable at the time of grant. Vesting periods of options granted to date have not exceeded five years. The options generally will expire, unless previously exercised, no later than ten years from the grant date. The Company is using unissued shares for all shares issued for options and restricted share awards. | |||||||||||||||||
The following schedule presents activity in the Company’s outstanding stock options for the three months ended March 31, 2015 (in thousands, except per share amounts): | |||||||||||||||||
Number of shares available for grant | Total options outstanding | Weighted Average Exercise Price | Aggregate Intrinsic Value | ||||||||||||||
Balance at December 31, 2014 | 32,863 | 19,600 | $ | 0.1 | $ | 26,656 | |||||||||||
Exercised | (162 | ) | 0.12 | (217 | ) | ||||||||||||
Granted | (1,750 | ) | 1,750 | 1.02 | 779 | ||||||||||||
Cancelled | 44 | (44 | ) | 0.11 | (59 | ) | |||||||||||
Balance at March 31, 2015 | 31,157 | 21,144 | $ | 0.18 | $ | 27,159 | |||||||||||
The aggregate intrinsic value of outstanding and exercisable options at March 31, 2015 was calculated based on the closing price of the Company’s common stock as reported on the Over-the-Counter Bulletin Board and the OTCQx markets on March 31, 2015 of $1.46 per share less the exercise price of the options. The aggregate intrinsic value is calculated based on the positive difference between the closing fair market value of the Company’s common stock and the exercise price of the underlying options. |
Net_Loss_per_Share
Net Loss per Share | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Notes to Financial Statements | |||||||||
Net Loss per Share | The Company accounts for and discloses net loss per common share in accordance with FASB ASC Topic 260, Earnings Per Share. Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding (which includes the common share equivalents of the outstanding Series B preferred shares prior to their conversion to common stock in March 2015). Diluted net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares that would have been outstanding during the period assuming the issuance of common shares for all potential dilutive common shares outstanding. Potential common shares consist of shares issuable upon the exercise of stock options and warrants. Because the inclusion of potential common shares would be anti-dilutive for the three months ended March 31, 2015 and 2014, diluted net loss per common share is the same as basic net loss per common share for these periods. | ||||||||
The following table sets forth the number of potential common shares excluded from the calculations of net loss per diluted share because their inclusion would be anti-dilutive (in thousands): | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Options to purchase common stock | 21 | 4,156 | |||||||
Warrants to purchase common stock | 12,580 | 26,769 | |||||||
Total | 12,601 | 30,925 |
Marketable_securities_held
Marketable securities held | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Marketable securities held | As of March 31, 2015, the Company owns 260,000 shares of MusclePharm common stock. The 260,000 shares were part of 600,000 shares originally issued to the Company related to the Company’s sale of assets to MusclePharm that were required to be held in escrow until October 2014 to satisfy any breaches of representations under the Biozone Merger Agreement. The 600,000 shares received by the Company that were not required to be held in escrow were sold for $5,400,000 in June 2014. On September 29, 2014, the Company signed a Memo of Understanding in which it agreed to release 90,000 shares of MusclePharm stock out of the original balance of 600,000 shares held in escrow in exchange for a release from all claims which MusclePharm had made concerning assets which it acquired in its purchase of assets from the Company in January 2014. The Company recognized a net loss on the return of these MusclePharm shares of $584,000 in the year ended December 31, 2014. In October 2014, MusclePharm exercised its right to repurchase 250,000 shares of MusclePharm shares at $10.00 per share. MusclePharm did not withdraw the portion of its claim that relates to a then pending eviction proceeding (See note 10) and continues to hold in escrow 260,000 shares of its stock pending such time as MusclePharm and the Company can reach a mutually agreeable arrangement with respect to the MusclePharm lease; however, it no longer has the option to repurchase such shares at $10.00 per share. As of March 31, 2015, the Company owned 260,000 MusclePharm shares which were recorded at their estimated fair value of $993,000. |
Mortgage_Note_Receivable
Mortgage Note Receivable | 3 Months Ended |
Mar. 31, 2015 | |
Receivables [Abstract] | |
Mortgage Note Receivable | In June 2014, the Company acquired a mortgage note from a bank for $2,626,290 which is collateralized by, among other things, the underlying real estate and related improvements. The property subject to the mortgage is owned by an entity managed by Daniel Fisher, one of the founders of Biozone, and is currently under lease to MusclePharm. At March 31, 2015, the carrying amount of the mortgage note receivable was $2,578,000, which consisted of $2,461,000 of principal, $91,000 of interest and $26,000 of fees paid to the selling bank. The mortgage note has a maturity date of August 1, 2032 and bears an interest rate of 7.24%. The Company records its mortgage note receivable at the amount advanced to the borrower, which includes the stated principal amount and certain loan origination and commitment fees that are recognized over the term of the mortgage note. Interest income is accrued as earned over the term of the mortgage note. The Company evaluates the collectability of both interest and principal of the note to determine whether it is impaired. The note would be considered to be impaired if, based on current information and events, the Company determined that it was probable that it would be unable to collect all amounts due according to the existing contractual terms. If the note were considered to be impaired, the amount of loss would be calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the note’s effective interest rate or to the fair value of the Company’s interest in the underlying collateral, less the cost to sell. No impairment loss has been recognized in connection with the mortgage note receivable. |
Income_Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. |
As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate. The Company has recorded a net deferred tax liability of $65,195,000 as of March 31, 2015 and December 31, 2014 as it has not considered the deferred tax liability, which is related to acquired in-process research and development, to be a future source of taxable income in evaluating the need for a valuation allowance against its deferred tax assets due to the in-process research and development asset being considered an indefinite-lived intangible asset. |
Contingencies
Contingencies | 3 Months Ended |
Mar. 31, 2015 | |
Notes to Financial Statements | |
Contingencies | From time to time, we are a party to, or otherwise involved in, legal proceedings arising in the normal course of business. As of the date of this report, except as described below, we are not aware of any proceedings, threatened or pending, against us which, if determined adversely, would have a material effect on our business, results of operations, cash flows or financial position. |
The Company was named in two legal proceedings involving Daniel Fisher. | |
The first proceeding was an action filed in Contra Costa County, California by the landlord, which is an entity managed by Mr. Fisher, to evict MusclePharm as a tenant from real property our now inactive subsidiary, Biozone Laboratories, Inc. (“Biozone Labs”) previously leased. | |
On March 27, 2014, the landlord filed suit in the Contra Costa County Court against us and Biozone Labs, as well as MusclePharm, alleging an assignment of the lease to MusclePharm in January 2014 was a violation of the lease and its provision requiring the landlord’s consent for a change of control. As indicated above, the landlord failed to either approve or reject the proposed assignment when requested in December 2013. | |
On February 24, 2015, Mr. Fisher agreed to withdraw this lawsuit without prejudice in exchange for an agreement that all parties would be responsible for their own legal fees. | |
In the second proceeding, the Company has been named as a party to a lawsuit filed on April 15, 2014 in Contra Costa County, California by the same entity managed by Mr. Fisher. Also named in this action are two of the Company’s subsidiaries – BioZone Labs and Cocrystal Discovery. The action seeks recovery on a promissory note purportedly executed by BioZone Labs in the principal amount of $295,000 in 2007. Motions challenging the sufficiency of the allegations in the complaint were filed in the third quarter, 2014. The motions were granted and plaintiff was given an opportunity to amend the complaint, and plaintiff has filed an amended complaint. The Company intends to vigorously defend the action. | |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | On April 13, 2015, the Company expanded its private placement offering of common stock from $15,000,000 to $18,000,000. On April 28, 2015, the Company closed on an additional $860,000 in proceeds to a total of four accredited investors for the sale of an additional 934,805 shares. The Company intends to use the net proceeds of the offering for working capital and general corporate purposes. All of the securities were issued and sold in reliance upon the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933 (the “Act”) and Rule 506 promulgated thereunder. These securities may not be offered or sold in the United States in the absence of an effective registration statement or exemption from the registration requirements under the Act. |
On April 13, 2015, the Board of Directors of the Company adopted the 2015 Equity Incentive Plan (the “Plan”). The Plan provides for the grant of incentive stock options, qualified stock options, restricted stock awards, restricted stock units, stock appreciation rights, and performance shares or units (collectively, the “Stock Awards”) and cash awards. Awards may be granted under the Plan to our employees, non-employee directors and independent contractors. The maximum number of shares of common stock available for issuance under the Plan is 81,157,135 shares which includes 31,157,135 which were issuable under the Company’s 2007 Equity Incentive Plan (the “Prior Plan”). The Company will no longer be issuing any shares under the Prior Plan. | |
Also on April 13, 2015, the Company granted to each of its non-employee directors 350,000 10-year stock options. The options are exercisable at $1.17 per share and vest in four equal annual increments with the first vesting date being April 13, 2016, subject to continued service on each applicable vesting date. The Company also granted 200,000 10-year options to Gerald McGuire, the Company’s Chief Financial Officer, with identical vesting terms as described in the prior sentence. Additionally, the Company and Gary Wilcox, a director, entered into an at-will employment agreement whereby Mr. Wilcox is being paid at the rate of $100,000 per year. |
Transactions_with_Related_Part
Transactions with Related Parties | 3 Months Ended |
Mar. 31, 2015 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | On February 23, 2015, the Company entered into an agreement with Dr. Gary Wilcox, the Company’s Chief Executive Officer, pursuant to which Dr. Wilcox agreed to terminate all benefits under his employment agreement with the Company, entered into as of January 2, 2014. Prior to its termination, Dr. Wilcox’s employment agreement had provided for a base salary, target bonus, and stock options. Dr. Wilcox will continue to serve as the Company’s Chief Executive Officer on an at will basis. |
On February 23, 2015, the Company also entered into an agreement (the “Amended Agreement”) with Dr. Sam Lee, the Company’s President, amending the terms of Dr. Lee’s employment agreement with the Company, entered into as of January 2, 2014 (the “Original Agreement”). The Amended Agreement eliminated the target bonus and grant of stock options available under the Original Agreement, and reduced the amount of severance payable to Dr. Lee in the event of termination without cause to six months’ salary. | |
On March 13, 2015, in connection with his appointment as Interim Chief Executive Officer, Mr. Meckler entered an employment agreement with the Company, which was amended on March 17, 2015 for purposes of clarification (as amended, the “Agreement”). Under the terms of the Agreement, Mr. Meckler will receive a salary of $20,000 a month in addition to compensation for his services as a director. Effective March 23, 2015, Mr. Meckler also received a grant of an option to purchase up to 1,750,000 shares of the Company’s common stock, vesting in six approximately equal monthly installments beginning on the one-month anniversary of the date of grant. Mr. Meckler will also be eligible to receive a discretionary bonus of up to $100,000 based on performance criteria to be established by the Board of Directors. The Agreement has an initial term of six months, subject to renewal upon mutual agreement of the Company and Mr. Meckler. | |
As further described under Note 3, above, in March 2015, the Company accepted Securities Purchase Agreements representing investor commitments totaling $15,000,000 in a private placement offering of 16,304,350 shares of the Company’s common stock at a purchase price of $0.92 per share. The purchasers included all seven members of the Board and Dr. Roger Kornberg, the Company’s Chief Scientist. | |
The company leases laboratory facilities and equipment, located in Tucker Georgia, from C.S. Family, LLC, a limited liability company that is wholly owned by Raymond F. Schinazi, Chairman. This lease terminates December 31, 2016. | |
Organization_and_Significant_A1
Organization and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2015 | |
Organization And Significant Accounting Policies Policies | |
Basis of Presentation and Significant Accounting Policies | The accompanying condensed consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission ("SEC"). Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles ("GAAP"), have been condensed or omitted pursuant to those rules and regulations. We believe disclosures made are adequate to make the information presented not misleading. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary to fairly state the financial position, results of operations and cash flows with respect to the interim condensed consolidated financial statements have been included. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year. All intercompany accounts and transactions have been eliminated in consolidation. Reference is made to the audited annual financial statements of Cocrystal Pharma, Inc. included in our Annual Report on Form 10-K for the year ended December 31, 2014 filed on March 31, 2015 (“Annual Report”) which contain information useful to understanding the Company's businesses and financial statement presentations. The condensed consolidated balance sheet as of December 31, 2014 was derived from the Company's most recent audited financial statements, but does not include all disclosures required by GAAP for a year-end balance sheet. Our significant accounting policies and practices are presented in Note 2 to the financial statements included in the Form 10-K. |
Use of Estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. |
Recent Accounting Pronouncements | In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (ASU 2014-15). ASU 2014-15 requires management to determine whether substantial doubt exists regarding the entity’s going concern presumption, which generally refers to an entity’s ability to meet its obligations as they become due. If substantial doubt exists but is not alleviated by management’s plan, the footnotes must specifically state that “there is substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued”. In addition, if substantial doubt exists, regardless of whether such doubt was alleviated, entities must disclose (a) principal conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern (before consideration of management’s plans, if any); (b) management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations; and (c) management’s plans that are intended to mitigate the conditions or events that raise substantial doubt, or that did alleviate substantial doubt, about the entity’s ability to continue as a going concern. If substantial doubt has not been alleviated, these disclosures should become more extensive in subsequent reporting periods as additional information becomes available. In the period that substantial doubt no longer exists (before or after considering management’s plans), management should disclose how the principal conditions and events that originally gave rise to substantial doubt have been resolved. The ASU applies prospectively to all entities for annual periods ending after December 15, 2016, and to annual and interim periods thereafter. Early adoption is permitted. The Company has not adopted the provisions of this ASU. Upon adoption, the Company will use this guidance to evaluate going concern. |
Fair_Value_Measurements_Tables
Fair Value Measurements (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Fair Value Measurements Tables | |||||||||||||||||
Financial instruments carried at fair value on a recurring | |||||||||||||||||
March 31, | Quoted Prices in Active Markets | Significant Other Observable Inputs | Unobservable Inputs | ||||||||||||||
Description | 2015 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | |||||||||||||||||
Marketable securities | 993 | - | 993 | - | |||||||||||||
Total assets | $ | 993 | $ | - | $ | 993 | $ | - | |||||||||
Liabilities: | |||||||||||||||||
Warrants potentially settleable in cash | $ | 13,456 | $ | - | $ | - | $ | 13,456 | |||||||||
Total liabilities | $ | 13,456 | $ | - | $ | - | $ | 13,456 | |||||||||
December 31, | Quoted Prices in Active Markets | Significant Other Observable Inputs | Unobservable Inputs | ||||||||||||||
Description | 2014 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | |||||||||||||||||
Marketable securities | 1,975 | - | 1,975 | - | |||||||||||||
Total assets | $ | 1,975 | $ | - | $ | 1,975 | $ | - | |||||||||
Liabilities: | |||||||||||||||||
Warrants potentially settleable in cash | $ | 8,464 | $ | - | $ | - | $ | 8,464 | |||||||||
Total liabilities | $ | 8,464 | $ | - | $ | - | $ | 8,464 | |||||||||
Level 3 financial assets and liabilities | |||||||||||||||||
Fair Value Measurements Using Significant Unobservable Inputs | |||||||||||||||||
(Level 3) | |||||||||||||||||
2015 | 2014 | ||||||||||||||||
Balance , January 1, | $ | 8,464 | $ | 23 | |||||||||||||
Change in fair value of Teva option | - | (23 | ) | ||||||||||||||
Estimated fair value of warrants assumed in merger on January 2, 2014 | - | 10,475 | |||||||||||||||
Estimated fair value of warrants issued in January 2014 common stock sale | - | 3,696 | |||||||||||||||
Estimated fair value of warrants exchanged for common shares | (9,426 | ) | - | ||||||||||||||
Change in fair value of warrants | 14,418 | (2,082 | ) | ||||||||||||||
Balance at March 31, 2015 and 2014 | $ | 13,456 | $ | 12,089 | |||||||||||||
Stockholders_equity_Tables
Stockholders' equity (Tables) | 3 Months Ended | ||||
Mar. 31, 2015 | |||||
Stockholders Equity Tables | |||||
Common stock reserved future issuance | |||||
As of | |||||
31-Mar-15 | |||||
Options to purchase common stock | 21 | ||||
Options reserved for future issuance under the Company's 2007 Incentive Plan | 31 | ||||
Warrants to purchase common stock | 12,580 | ||||
Total | 12,632 |
Warrants_Tables
Warrants (Tables) | 3 Months Ended | ||||||||||||||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||||||||||||||
Warrants Tables | |||||||||||||||||||||||||||||||||||||
Warrant activity | |||||||||||||||||||||||||||||||||||||
Warrants accounted for as: | Warrants accounted for as: | ||||||||||||||||||||||||||||||||||||
Equity | Liabilities | ||||||||||||||||||||||||||||||||||||
Jan-12 | Mar-13 | Apr-13 | Feb-12 | Aug-13 | Oct-13 | Oct-13 | Jan-14 | Total | |||||||||||||||||||||||||||||
warrants | warrants | warrants | warrants | warrants | warrants | Series A | warrants | ||||||||||||||||||||||||||||||
warrants | |||||||||||||||||||||||||||||||||||||
Outstanding, December 31, 2014 | 650 | 455 | 1,864 | 1,000 | 10,000 | 200 | 7,100 | 5,500 | 26,769 | ||||||||||||||||||||||||||||
Warrants exercised | - | - | (564 | ) | - | (7,000 | ) | (200 | ) | (6,125 | ) | (300 | ) | (14,189 | ) | ||||||||||||||||||||||
Outstanding, March 31, 2015 | 650 | 455 | 1,300 | 1,000 | 3,000 | - | 975 | 5,200 | 12,580 | ||||||||||||||||||||||||||||
Expiration date | 11-Jan-16 | 1-Mar-16 | 25-Apr-18 | 28-Feb-16 | 26-Aug-23 | 18-Oct-18 | 24-Oct-23 | 16-Jan-24 | |||||||||||||||||||||||||||||
Fair value of each option award | |||||||||||||||||||||||||||||||||||||
Feb-12 | Aug-13 | Oct-13 | Jan-14 | ||||||||||||||||||||||||||||||||||
warrants | warrants | warrants | warrants | ||||||||||||||||||||||||||||||||||
Strike price | $ | 0.6 | $ | 0.4 | $ | 0.5 | $ | 0.5 | |||||||||||||||||||||||||||||
Expected term (years) | 0.9 | 8.4 | 8.6 | 8.8 | |||||||||||||||||||||||||||||||||
Cumulative volatility % | 84 | % | 104 | % | 103 | % | 103 | % | |||||||||||||||||||||||||||||
Risk-free rate % | 0.26 | % | 1.82 | % | 1.83 | % | 1.85 | % |
Stockbased_compensation_Tables
Stock-based compensation (Tables) | 3 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Stock-based Compensation Tables | |||||||||||||||||
Stock option plans | |||||||||||||||||
Number of shares available for grant | Total options outstanding | Weighted Average Exercise Price | Aggregate Intrinsic Value | ||||||||||||||
Balance at December 31, 2014 | 32,863 | 19,600 | $ | 0.1 | $ | 26,656 | |||||||||||
Exercised | (162 | ) | 0.12 | (217 | ) | ||||||||||||
Granted | (1,750 | ) | 1,750 | 1.02 | 779 | ||||||||||||
Cancelled | 44 | (44 | ) | 0.11 | (59 | ) | |||||||||||
Balance at March 31, 2015 | 31,157 | 21,144 | $ | 0.18 | $ | 27,159 | |||||||||||
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 3 Months Ended | ||||||||
Mar. 31, 2015 | |||||||||
Net Loss Per Share Tables | |||||||||
Potential common shares, anti-dilutive | |||||||||
Three months ended March 31, | |||||||||
2015 | 2014 | ||||||||
Options to purchase common stock | 21 | 4,156 | |||||||
Warrants to purchase common stock | 12,580 | 26,769 | |||||||
Total | 12,601 | 30,925 |
Organization_and_Significant_A2
Organization and Significant Accounting Policies (Details Narrative) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Dec. 31, 2014 |
Organization And Significant Accounting Policies Details Narrative | |||
State of incorporation | Delaware | ||
Accumulated deficit | ($28,976) | ($12,434) | |
Loss from operations | -2,168 | -1,532 | |
Cash used in operating activities | ($1,559) | ($1,780) |
Fair_Value_Measurements_Detail
Fair Value Measurements (Details) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
In Thousands, unless otherwise specified | ||
Assets: | ||
Marketable securities | $993 | $1,975 |
Total assets | 993 | 1,975 |
Liabilities: | ||
Warrants potentially settleable in cash | 13,456 | 8,464 |
Total liabilities | 13,456 | 8,464 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Assets: | ||
Marketable securities | ||
Total assets | ||
Liabilities: | ||
Warrants potentially settleable in cash | ||
Total liabilities | ||
Significant Other Observable Inputs (Level 2) [Member] | ||
Assets: | ||
Marketable securities | 993 | 1,975 |
Total assets | 993 | 1,975 |
Liabilities: | ||
Warrants potentially settleable in cash | ||
Total liabilities | ||
Unobservable Inputs (Level 3) [Member] | ||
Assets: | ||
Marketable securities | ||
Total assets | ||
Liabilities: | ||
Warrants potentially settleable in cash | 13,456 | 8,464 |
Total liabilities | $13,456 | $8,464 |
Fair_Value_Measurements_Detail1
Fair Value Measurements (Details 1) (USD $) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Balance, beginning | $23 | |
Change in fair value of Teva option | -23 | |
Estimated fair value of warrants assumed in merger on January 2, 2014 | 10,475 | |
Estimated fair value of warrants issued in January 2014 common stock sale | 3,696 | |
Estimated fair value of warrants exchanged for common shares | 9,426,000 | |
Change in fair value of warrants for the year ended December 31, 2014 | -2,082 | |
Balance, ending | 12,089 | |
Unobservable Inputs (Level 3) [Member] | ||
Balance, beginning | 8,464 | |
Change in fair value of Teva option | ||
Estimated fair value of warrants assumed in merger on January 2, 2014 | ||
Estimated fair value of warrants issued in January 2014 common stock sale | ||
Estimated fair value of warrants exchanged for common shares | -9,426 | |
Change in fair value of warrants for the year ended December 31, 2014 | -14,418 | |
Balance, ending | $13,456 |
Fair_Value_Measurements_Detail2
Fair Value Measurements (Details Narrative) | Mar. 31, 2015 |
Fair Value Measurements Details Narrative | |
Level 2 marketable securities | 260,000 |
Stockholders_equity_Details
Stockholders' equity (Details) | Mar. 31, 2015 | Dec. 31, 2014 |
Stockholders Equity Details | ||
Options to purchase common stock | 21,000 | |
Options reserved for future issuance under the Company's 2007 Incentive Plan | 31,000 | |
Warrants to purchase common stock | 12,580 | 26,769 |
Total reserved for future issuance | 12,632 |
Stockholders_equity_Details_Na
Stockholders' equity (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | 0 Months Ended | 1 Months Ended | |||
Apr. 13, 2015 | Apr. 28, 2015 | Mar. 25, 2015 | Mar. 31, 2015 | Apr. 30, 2015 | Mar. 03, 2015 | Jan. 02, 2012 | Nov. 25, 2014 | Dec. 31, 2014 | |
Preferred Stock authorized | 5,000,000 | ||||||||
Par value per share | $0.00 | ||||||||
Common stock authorized | 800,000,000 | 200,000,000 | |||||||
Common stock, par value | $0.00 | ||||||||
Common stock, shares issued | 687,219,618 | 122,494,000 | |||||||
Common stock, shares outstanding | 687,219,618 | 122,494,000 | |||||||
Private Placement [Member] | |||||||||
Sale of common stock | 934,805 | 16,304,350 | |||||||
Sale of common stock, price per share | $0.92 | ||||||||
Proceeds from private placement | $18,000,000 | $860,000 | $15,000,000 | $11,800,000 | |||||
Private Placement [Member] | Director [Member] | |||||||||
Proceeds from private placement | 3,200,000 | ||||||||
Sale of common stock, value | $3,187,667 | ||||||||
Series B Convertible Preferred Stock | |||||||||
Preferred Stock authorized | 5,000,000 | ||||||||
Par value per share | $0.00 | ||||||||
Preferred stock issued upon merger | 1,000,000 | ||||||||
Conversion of preferred to common stock | 205,083,086 | ||||||||
Series A Convertible Preferred Stock | |||||||||
Preferred Stock authorized | 1,000,000 | ||||||||
Par value per share | $0.00 | ||||||||
Conversion of preferred to common stock | 340,760,802 |
Warrants_Details
Warrants (Details) | 3 Months Ended |
Mar. 31, 2015 | |
Outstanding, Beginning | 26,769 |
Warrants exercised | -14,189 |
Outstanding, End of period | 12,580 |
January 2012 warrants [Member] | |
Outstanding, Beginning | 650 |
Warrants exercised | |
Outstanding, End of period | 650 |
Expiration date | 11-Jan-16 |
February 2012 warrants [Member] | |
Outstanding, Beginning | 455 |
Warrants exercised | |
Outstanding, End of period | 455 |
Expiration date | 1-Mar-16 |
June 2013 (A) warrants [Member] | |
Outstanding, Beginning | 1,864 |
Warrants exercised | -564 |
Outstanding, End of period | 1,300 |
Expiration date | 25-Apr-18 |
June 2013 (B) warrants [Member] | |
Outstanding, Beginning | 1,000 |
Warrants exercised | |
Outstanding, End of period | 1,000 |
Expiration date | 28-Feb-16 |
August 2013 warrants [Member] | |
Outstanding, Beginning | 10,000 |
Warrants exercised | -7,000 |
Outstanding, End of period | 3,000 |
Expiration date | 26-Aug-23 |
October 2013 warrants [Member] | |
Outstanding, Beginning | 200 |
Warrants exercised | -200 |
Outstanding, End of period | |
Expiration date | 18-Oct-18 |
Series A 2013 warrants [Member] | |
Outstanding, Beginning | 7,100 |
Warrants exercised | -6,125 |
Outstanding, End of period | 975 |
Expiration date | 24-Oct-23 |
January 2014 warrants [Member] | |
Outstanding, Beginning | 5,500 |
Warrants exercised | -300 |
Outstanding, End of period | 5,200 |
Expiration date | 16-Jan-24 |
Warrants_Details_1
Warrants (Details 1) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
February 2012 warrants [Member] | |
Strike price | $0.60 |
Expected term (years) | 10 months 24 days |
Cumulative volatility % | 84.00% |
Risk-free rate % | 0.26% |
August 2013 warrants [Member] | |
Strike price | $0.40 |
Expected term (years) | 8 years 4 months 24 days |
Cumulative volatility % | 104.00% |
Risk-free rate % | 1.82% |
October 2013 warrants [Member] | |
Strike price | $0.50 |
Expected term (years) | 8 years 7 months 6 days |
Cumulative volatility % | 103.00% |
Risk-free rate % | 1.83% |
January 2014 Warrants [Member] | |
Strike price | $0.50 |
Expected term (years) | 8 years 9 months 18 days |
Cumulative volatility % | 103.00% |
Risk-free rate % | 1.85% |
Stockbased_compensation_Detail
Stock-based compensation (Details) (Employee Stock Option [Member], USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Employee Stock Option [Member] | |
Number of shares available for grant | |
Shares available for future grant, beginning balance | 32,863,000 |
Number of shares, Granted | 1,750,000 |
Number of shares, Cancelled | 44,000 |
Shares available for future grant, ending balance | 31,157,000 |
Option activity | |
Number of shares, Outstanding beginning balance | 19,600,000 |
Number of shares, Exercised | 162,000 |
Number of shares, Granted | 1,750,000 |
Number of shares, Cancelled | 44,000 |
Number of shares, Outstanding ending balance | 21,144,000 |
Weighted average exercise price, Outstanding beginning balance | $0.10 |
Weighted average exercise price, Exercised | $0.12 |
Weighted average exercise price, Granted | $1.02 |
Weighted average exercise price, Cancelled | $0.11 |
Weighted average exercise price, Outstanding ending balance | $0.18 |
Aggregate intrinsic value, Outstanding beginning balance | $26,656,000 |
Aggregate intrinsic value, Exercised | 217,000 |
Aggregate intrinsic value, Granted | 779,000 |
Aggregate intrinsic value, Cancelled | 59,000 |
Aggregate intrinsic value, Outstanding ending balance | $27,159,000 |
Stockbased_compensation_Detail1
Stock-based compensation (Details Narrative) (USD $) | 3 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Apr. 13, 2015 | |
Option, value per share | $1.46 | ||
Employee stock-based compensation expense | $93,000 | $11,000 | |
Unrecognized compensation expense | $2,266,000 | ||
Weighted average period | 1 year 1 month 6 days | ||
2007 Equity Incentive Plan [Member] | |||
Shares available for future grant | 31,157,015 | ||
Options outstanding under plan | 21,143,880 | ||
Authorized for future issuance | 53,599,046 | 31,157,135 |
Net_Loss_per_Share_Details_1
Net Loss per Share (Details 1) | 3 Months Ended | |
Mar. 31, 2015 | Mar. 31, 2014 | |
Anti-dilutive securities | 12,601 | 30,925 |
Stock Option [Member] | ||
Anti-dilutive securities | 21 | 4,156 |
Warrant [Member] | ||
Anti-dilutive securities | 12,580 | 26,769 |
Marketable_securities_held_Det
Marketable securities held (Details Narrative) (USD $) | 3 Months Ended |
In Thousands, except Share data, unless otherwise specified | Mar. 31, 2015 |
Portion of shares in escrow | 600 |
Sale of shares | $5,400 |
Shares released | 90 |
Recognized loss on return of shares | 584 |
Musclepharm repurchase of shares | 250 |
MusclePharm [Member] | |
Common stock shares owned | 260 |
Price per share | $10 |
Fair value of escrowed Musclepharm securities | $993 |
Mortgage_Notes_and_Other_Recei
Mortgage Notes and Other Receivable (Details Narrative) (USD $) | 1 Months Ended | 3 Months Ended |
Jun. 30, 2014 | Mar. 31, 2015 | |
Mortgage Notes And Other Receivable Details Narrative | ||
Mortgage note acquired from bank | $2,626,920 | |
Carrying amount of mortgage note receivable | 2,578,000 | |
Interest rate | 7.24% | |
Principal | 2,461,000 | |
Interest | 91,000 | |
Fees | $26,000 |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | Mar. 31, 2015 | Dec. 31, 2014 |
Income Tax Disclosure [Abstract] | ||
Net deferred tax liability | $65,195,000 | $65,195,000 |
Contingencies_Details_Narrativ
Contingencies (Details Narrative) (USD $) | 3 Months Ended |
Mar. 31, 2015 | |
Contingencies Details Narrative | |
Claim made on default note | $295,000 |
Subsequent_Events_Details_Narr
Subsequent Events (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |
Apr. 13, 2015 | Apr. 28, 2015 | Mar. 25, 2015 | Mar. 31, 2015 | Apr. 30, 2015 | |
Director [Member] | |||||
Stock option grant | 350,000 | ||||
Stock option grant, option term | 10 years | ||||
Stock option grant, exercise price | $1.17 | ||||
Employment agreement salary | $100,000 | ||||
Chief Financial Officer [Member] | |||||
Stock option grant | 200,000 | ||||
Stock option grant, option term | 10 years | ||||
2015 Equity Incentive Plan [Member] | |||||
Authorized for future issuance | 81,157,135 | ||||
2007 Equity Incentive Plan [Member] | |||||
Authorized for future issuance | 31,157,135 | 53,599,046 | |||
Private Placement [Member] | |||||
Sale of common stock | 934,805 | 16,304,350 | |||
Proceeds from private placement | 18,000,000 | 860,000 | 15,000,000 | 11,800,000 | |
Private Placement [Member] | Director [Member] | |||||
Proceeds from private placement | $3,200,000 |
Transactions_with_Related_Part1
Transactions with Related Parties (Details Narrative) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |
Apr. 13, 2015 | Apr. 28, 2015 | Mar. 25, 2015 | Mar. 31, 2015 | Mar. 17, 2015 | |
Private Placement [Member] | |||||
Sale of common stock | 934,805 | 16,304,350 | |||
Sale of common stock, price per share | $0.92 | ||||
Proceeds from private placement | $18,000,000 | $860,000 | $15,000,000 | $11,800,000 | |
Chief Executive Officer [Member] | |||||
Stock option grant | 1,750,000 | ||||
Chief Executive Officer [Member] | Minimum [Member] | |||||
Employment agreement salary | 20,000 | ||||
Employment agreement eligible bonus | $100,000 |