Document_and_Entity_Informatio
Document and Entity Information | 12 Months Ended |
Dec. 31, 2014 | |
Document And Entity Information | |
Entity Registrant Name | Bone Biologics, Corp. |
Entity Central Index Key | 1419554 |
Document Type | S-1 |
Document Period End Date | 31-Dec-14 |
Amendment Flag | FALSE |
Entity Filer Category | Smaller Reporting Company |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Current assets | ||
Cash | $2,661,396 | $1,538 |
Prepaid expenses | 89,517 | 10,767 |
Deferred transaction costs | 75,000 | |
Deferred financing fees | 983,857 | |
Other receivable - related party | 75,000 | |
Total current assets | 3,809,770 | 87,305 |
Property and Equipment, net | 11,621 | |
Total assets | 3,821,391 | 87,305 |
Current liabilities | ||
Accounts payable and accrued expenses | 215,389 | 1,525,604 |
Advances due to related party | 41,300 | |
Notes payable to related party | 3,659,328 | 3,947,817 |
Notes payable, net of debt discount | 180,690 | |
Total current liabilities | 3,874,717 | 5,695,411 |
Notes payable, net of debt discount | 3,645,194 | |
Total liabilities | 7,519,911 | 5,695,411 |
Commitments and Contingencies | ||
Stockholders' deficit | ||
Preferred Stock, $0.001 par value per share; 20,000,000 shares authorized; none issued or outstanding at December 31, 2014 and 2013 | ||
Common stock, $0.001 par value per share; 100,000,000 shares authorized; 24,269,047 and 10,928,099 shares issued and outstanding at December 31, 2014 and 2013, respectively | 24,269 | 10,928 |
Additional paid-in capital | 8,315,128 | 1,994,470 |
Accumulated deficit | -12,037,917 | -7,613,504 |
Total stockholders' deficit | -3,698,520 | -5,608,106 |
Total liabilities and stockholders' deficit | $3,821,391 | $87,305 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 24,269,047 | 10,928,099 |
Common stock, shares outstanding | 24,269,047 | 10,928,099 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Statement [Abstract] | ||
Revenues | ||
Cost of revenues | ||
Gross profit | ||
Operating expenses | ||
Research and development | 623,522 | 188,236 |
General and administrative | 1,509,306 | 483,749 |
Transaction costs | 877,776 | |
Total operating expenses | 3,010,604 | 671,985 |
Loss from operations | -3,010,604 | -671,985 |
Other expense | ||
Other expense | -9,624 | |
Interest expense, net | -1,402,585 | -409,419 |
Total other expense | -1,412,209 | -409,419 |
Loss before provision for income taxes | -4,422,813 | -1,081,404 |
Provision for income taxes | 1,600 | 800 |
Net loss | ($4,424,413) | ($1,082,204) |
Weighted average shares outstanding - basic and diluted | 14,952,205 | 10,928,099 |
Loss per share - basic and diluted | ($0.30) | ($0.10) |
Consolidated_Statements_of_Sto
Consolidated Statements of Stockholders' Deficit (USD $) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2012 | $10,928 | $1,844,103 | ($6,531,301) | ($4,676,270) |
Balance, shares at Dec. 31, 2012 | 10,928,099 | |||
Warrants issued in connection with Bridge Notes | 150,367 | 150,367 | ||
Stock Compensation | ||||
Net Loss | -1,082,203 | -1,082,204 | ||
Balance at Dec. 31, 2013 | 10,928 | 1,994,470 | -7,613,504 | -5,608,106 |
Balance, shares at Dec. 31, 2013 | 10,928,099 | |||
Warrants issued in connection with Notes Payable | 2,312,755 | 2,312,755 | ||
Issuance of common stock, net of issuance costs | 500 | 479,500 | 480,000 | |
Issuance of common stock, net of issuance costs, shares | 500,000 | |||
Shares issued to existing AFH Acquisition X, Inc. shareholders | 3,854 | -3,854 | ||
Shares issued to existing AFH Acquisition X, Inc. shareholders, shares | 3,853,600 | |||
Debt converted into common shares | 2,658 | 2,488,350 | 2,491,008 | |
Debt converted into common shares, shares | 2,658,234 | |||
Warrants issued for Services | 787,266 | 787,266 | ||
Stock Compensation | 256,641 | 256,641 | ||
Common shares issued for collateral on note payable | 6,329 | 6,329 | ||
Common shares issued for collateral on note payable, shares | 6,329,114 | |||
Net Loss | -4,424,413 | -4,424,413 | ||
Balance at Dec. 31, 2014 | $24,269 | $8,315,128 | ($12,037,917) | ($3,698,520) |
Balance, shares at Dec. 31, 2014 | 24,269,047 |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Operating activities | ||
Net loss | ($4,424,413) | ($1,082,204) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 280 | |
Accrued interest expense | 318,215 | 340,268 |
Debt discount amortization | 437,115 | 67,104 |
Debt financing costs amortization | 60,398 | |
Warrants issued with Line of Credit | 520,487 | |
Stock-based compensation | 256,642 | |
Warrants issued to Consultants | 379,349 | |
Loss on sale of marketable securities | 9,624 | |
Transaction costs financed through notes payable | 590,000 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | -78,750 | -10,767 |
Deferred financing costs | -543,401 | 4,717 |
Other receivables - related party | -75,000 | |
Advances due to related party | -41,300 | 41,300 |
Accounts payable and accrued expenses | -164,864 | 114,217 |
Net cash (used in) operating activities | -2,755,618 | -525,365 |
Investing activities | ||
Purchase of furniture and equipment | -11,901 | |
Proceeds from sale of marketable securities | 37,377 | |
Net cash provided by investing activities | 25,476 | |
Financing activities | ||
Proceeds from the issuance of common stock | 480,000 | |
Repayment of debt | -590,000 | |
Proceeds from issuance of notes payable - related party | 553,371 | 524,533 |
Repayment of notes payable - related party | -303,371 | |
Proceeds from issuance of notes payable | 5,250,000 | |
Net cash provided by financing activities | 5,390,000 | 524,533 |
Net increase (decrease) in cash | 2,659,858 | -832 |
Cash, beginning of period | 1,538 | 2,370 |
Cash, end of period | 2,661,396 | 1,538 |
Supplemental non-cash information | ||
Conversion of notes payable and accrued interest | 129,717 | |
Accrued transaction costs | 2,047 | |
Issuance of warrants in connection with Notes Payable, net of amortization included above | 248,744 | 150,367 |
Issuance of warrants in payment of financing fees | 21,738 | |
Interest paid | 72,014 | |
Taxes paid | $1,600 | $800 |
The_Company
The Company | 12 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | 1. The Company |
Bone Biologics, Corp. (“Bone” or the “Company”) was incorporated under the laws of the State of Delaware on October 18, 2007 as AFH Acquisition X, Inc. Pursuant to a Merger Agreement, dated September 19, 2014, Merger Sub merged with and into Bone Biologics Inc., with Bone Biologics Inc. remaining as the surviving corporation in the Merger. Upon the consummation of the Merger, the separate existence of Merger Sub ceased. On September 22, 2014 the Company officially changed its name to “Bone Biologics, Corp.” to more accurately reflect the nature of its business, and Bone Biologics, Inc. became a wholly-owned subsidiary of the Company. Bone Biologics, Inc. was incorporated in California on March 9, 2004. | |
Bone is a biotechnology company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein, known as UCB-1 (or “Nell-1”). The Nell-1 protein is an osteoinductive recombinant protein that provides target specific control over bone regeneration. The protein has been licensed exclusively for worldwide applications to Bone Biologics through a technology transfer from the University of California, Los Angeles (“UCLA”). Bone Biologics recently received guidance from the United States Food and Drug Administration (“FDA”) that Nell-1 will be classified as a combination product with a device lead. | |
The Company is a development stage entity. The production and marketing of the Company’s products and its ongoing research and development activities will be subject to extensive regulation by numerous governmental authorities in the United States. Prior to marketing in the United States, any drug developed by the Company must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Food, Drug and Cosmetic Act. The Company has limited experience in conducting and managing the preclinical and clinical testing necessary to obtain regulatory approval. There can be no assurance that the Company will not encounter problems in clinical trials that will cause the Company or the FDA to delay or suspend clinical trials. | |
The Company’s success will depend in part on its ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries. There can be no assurance that patents issued to or licensed by the Company will not be challenged, invalidated, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the Company. | |
Recapitalization | |
In connection with the Merger described above, the 5,000,000 outstanding shares of Common Stock of the Company prior to the Merger were consolidated into 3,853,600 shares of Common Stock and the remaining shares were cancelled. | |
Additionally, all of the issued and outstanding shares of Bone Biologics Inc.’s $0.0001 par value common stock converted into a combined total of 19,897,587 shares of the Company’s Common Stock (including 2,151,926 shares issuable upon the exercise of outstanding warrants and 5,648,658 shares issuable upon the conversion of debt). In exchange, Bone Biologics agreed to pay AFH Holding & Advisory, LLC (“AFH”) the principal sum of $590,000. | |
Going Concern and Liquidity | |
The Company has no significant operating history and, from March 9, 2004 (inception) to December 31, 2014, has generated a net loss of approximately $12 million. The Company will continue to incur significant expenses for development activities for their lead product Nell-1. Operating expenditures for the next twelve months are estimated at $3.6 million. The accompanying consolidated financial statements for the year ended December 31, 2014, have been prepared assuming the Company will continue as a going concern. In connection with the LOI (see Note 4), management intends to raise additional debt and/or equity financing to fund future operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company’s needs. | |
The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies | ||||||||
Basis of Presentation | |||||||||
The accompanying consolidated financial statements and related notes include activities of the Company, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). | |||||||||
Use of Estimates | |||||||||
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Significant estimates include warrants, stock options and income tax valuation allowances. Actual results could differ from those estimates. | |||||||||
Principles of consolidation | |||||||||
The consolidated financial statements include the accounts of the Company (and its wholly-owned subsidiary, Bone Biologics, Inc.). All significant intercompany transactions have been eliminated. | |||||||||
Fair Value of Financial Instruments | |||||||||
The Company’s financial instruments are accounts receivable, accounts payable, and notes payable. The recorded values of accounts receivable and accounts payable approximate their values based on their short term nature. Notes payable are recorded at their issue value or if warrants are attached at their issue value less the value of the warrant. | |||||||||
The Company defines fair value 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 must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable: | |||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||
Level 3 assumptions: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities resulting from embedded derivatives associated with certain warrants to purchase common stock. | |||||||||
Property and Equipment | |||||||||
Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal. | |||||||||
Impairment of Long-Lived Assets | |||||||||
The long-lived assets held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was no impairment in the value of long-lived assets during the year ended December 31, 2014. | |||||||||
Research and Development Costs | |||||||||
Research and development costs include, but are not limited to, patents and license expenses, payroll and other personnel expenses, consultants, expenses incurred under agreements with contract research and manufacturing organizations and animal clinical investigative sites and the cost to manufacture clinical trial materials. Costs related to research, design and development of products are charged to research and development expense as incurred. | |||||||||
Patents and Licenses | |||||||||
In March 2006, the Company entered into an exclusive license agreement (“Exclusive License Agreement”), with UCLA for the worldwide application of the Nell-1 protein through a technology transfer. See Note 4 for commitments related to the Exclusive License Agreement. Patent expenses include costs to acquire the license of Nell -1, which was de minimus, and costs to file patent applications related to Nell-1. | |||||||||
Bone expenses the costs incurred to file patent applications, all costs related to abandoned patent applications and maintenance costs, and these costs are included in research and development expenses. Costs associated with licenses acquired to be able to use products from third parties prior to receipt of regulatory approval to market the related products are also expensed. The Company’s licensed technologies may have alternative future uses in that they are enabling (or platform) technologies that can be the basis for multiple products that would each target a specific indication. Costs of acquisition of licenses are expensed. | |||||||||
Deferred Financing and Transaction Costs | |||||||||
Deferred financing costs represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective interest method, while deferred financing costs from equity financings are netted against the gross proceeds received from the equity financings. | |||||||||
During the year ended December 31, 2014, the Company capitalized deferred financing costs of $401,118 in connection with the Extra Warrants issued to AFH (See Note 4) and $617,018 related to issuance of notes payable. Amortization of deferred financing costs was $60,398 and $-0- for the years ended December 31, 2014 and 2013, respectively. | |||||||||
Deferred transaction costs represent fees associated with the merger. All costs have been expensed as of the merger date. | |||||||||
Other receivables – related party | |||||||||
Other receivables – related party represent a receivable from AFH Holding & Advisory, a shareholder, for fees paid on their behalf for legal services. | |||||||||
Concentration of Credit Risk and Other Risks and Uncertainties | |||||||||
Cash balances are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. As of January 1, 2013, federal insurance coverage is $250,000 per depositor at each financial institution. A substantial majority of the Company’s cash and cash equivalent bank balances exceed federally insured limits. | |||||||||
Stock Based Compensation | |||||||||
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). | |||||||||
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. | |||||||||
Income Taxes | |||||||||
Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due and deferred taxes resulting from timing differences in recording of transactions for tax purposes and financial reporting purposes. | |||||||||
The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are received or settled. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. | |||||||||
The accounting provisions related to uncertain income tax positions require the Company to determine whether any tax position in all open years meets a more likely than not threshold of being sustained upon examination by the applicable taxing authority. The Company did not have any changes to its liability for uncertain tax positions as at December 31, 2014 and 2013. | |||||||||
The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of December 31, 2014 and 2013. | |||||||||
Loss per Common Share | |||||||||
The Company utilizes FASB ASC Topic No. 260, Earnings per Share. Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted loss per common share reflects the potential dilution that could occur if convertible debentures, options and warrants were to be exercised or converted or otherwise resulted in the issuance of common stock that then shared in the earnings of the entity. | |||||||||
Since the effects of outstanding options, warrants, and the conversion of convertible debt are anti-dilutive in all periods presented, shares of common stock underlying these instruments have been excluded from the computation of loss per common share. | |||||||||
The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of December 31, 2014 and 2013: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Warrants | 7,023,464 | 634,300 | |||||||
Stock options | 757,977 | — | |||||||
Convertible promissory notes | 6,911,659 | 5,095,427 | |||||||
14,693,100 | 5,729,727 | ||||||||
New Accounting Standards | |||||||||
The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its consolidated financial statements. | |||||||||
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the quarter ended June 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915. | |||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company currently has no revenues and doesn’t expect any impact of adopting this guidance. | |||||||||
In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements. | |||||||||
August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard for the year ending December 31, 2014. |
Property_and_Equipment
Property and Equipment | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment | 3. Property and Equipment | ||||||||
Property and equipment consist of the following at: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Furniture and equipment | $ | 11,901 | $ | - | |||||
Less accumulated depreciation | (280 | ) | - | ||||||
$ | 11,621 | $ | - | ||||||
Depreciation expense for the years December 31, 2014 and 2013 was $280 and $-0-, respectively. |
Accounts_Payable_and_Accrued_E
Accounts Payable and Accrued Expenses | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Accounts Payable and Accrued Expenses | 4. Accounts Payable and Accrued Expenses | ||||||||
Accounts payable and accrued expenses consist of the following: | |||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Interest expense | $ | 87,774 | $ | 1,158,465 | |||||
Professional services | 119,776 | 114,849 | |||||||
Patents | - | 85,412 | |||||||
Deferred compensation | - | 90,199 | |||||||
Transaction costs | - | 75,000 | |||||||
Payroll liabilities | 7,839 | 1,679 | |||||||
$ | 215,389 | $ | 1,525,604 |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies |
Letter of Intent | |
In August of 2012, the Bone Biologics, Inc., along with its then majority owner and debt holder, MTF, entered into a Letter of Intent (“LOI”) with AFH to consummate a business combination through a share exchange, reverse merger, or other similar transactions resulting in the Company becoming a public entity (“The Transaction”). In August, 2013, the LOI was amended and restated, and on May 7, 2014, the LOI was again amended and restated. The Amended and Restated Letter of Intent dated May 7, 2014 (the “Amended LOI”) contemplates and defines the following events: | |
Consummation of Bridge Financings (“Closing I”) | |
In April 2013 and September 2013, the Company’s Board approved the Company to borrow up to an aggregate principal amount of $300,000 (April Bridge Financing) and $250,000 (September Bridge Financing) pursuant to the sale and issuance of convertible promissory notes and warrants to purchase common stock of the Company (collectively, the “Bridge Financings”). The note accrues interest at a rate of 12% per year and is payable each quarter. A warrant to purchase the Company’s common stock equal to 50% of the original principal amount at $1.00 per share was issued to each Bridge Financing participant. Principal and unpaid accrued interest may be converted into equity securities issued in the Company’s next equity financing in an aggregate amount of at least $2.5 million at a price equal to the price paid by investors in the next equity financing. On April 29, 2013 and on June 5, 2013, the Company borrowed $100,000 from MTF and $100,000 from Orthofix, Corp., respectively, under the April Bridge Financing. In September 2013, the Company borrowed $50,000 from AFH under the April Bridge Financing. In October 2013, the Company borrowed an additional $150,000 from Orthofix under the September Bridge Financing. | |
Consummation of Business Combination (“Closing II”) | |
Under the amended LOI, it was contemplated that the Company and its equity holders will consummate a share exchange, reverse merger, or other business combination, with a Delaware corporation publicly reporting pursuant to United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), or a private Delaware corporation (“Acquisition Co.”), either directly or indirectly through an affiliate. If the post-business combination entity is not already a corporation publicly reporting pursuant to the Exchange Act, AFH will assist the post business combination entity with the filing of an appropriate registration statement resulting in the Company becoming a public company (“PubCo”). The Company affected a merger on September 19, 2014 (See Note 1 Recapitalization). AFH received $590,000 in connection with the Business Combination. | |
Consummation of the Private Placement (“Closing III”) | |
Subsequent to Closing II, AFH will use its best efforts to assist PubCo in procuring one or more investors for a private financing, whether debt or equity, of up to $10.0 million. Such transaction is to include an over-allotment option of 15% at AFH’s discretion (the “Private Placement”). The Company closed on $1,000,000 in July 2014 and $5,000,000 of convertible debt in October 2014. At the consummation of Closing III, AFH Group shall be entitled to receive warrants to purchase up to 500,000 share of common stock of PubCo at the per share price of the shares offered in the Private Placement with a 5 year term and a cashless exercise provision (the “Extra Warrants”). | |
Consummation of the PIPE Transaction (“Closing IV”) | |
Subsequent to Closing III, AFH Advisory will use its best efforts to assist PubCo in procuring an investment bank (the “Bank”) to facilitate a private investment in public equity transaction in an amount between $8.0 million and $10.0 million through the sale of securities of PubCo (the “PIPE”). Such transaction will include a 15% over allotment at AFH and/or the Bank’s discretion. Such transaction is contingent upon the appointment of a Bank and filing appropriate forms with the Financial Industry Regulatory Authority, Corp. (“FINRA”). | |
Consummation of Initial Public Offering (“Closing V”) | |
Subsequent to Closing IV, AFH will assist PubCo in procuring a Bank to act as underwriter for an initial public offering in an amount of up to $40.0 million (the “Initial Public Offering”). The Initial Public Offering shall include a 15% over allotment option at AFH and/or the Bank’s discretion. Such a transaction is contingent upon the appointment of the Bank. | |
License Commitment | |
In connection with the Exclusive License Agreement, the Company is required to pay a royalty fee beginning in the first year of commercial sale of the licensed product equal to 3% of net sales on a quarterly basis with an annual minimum royalty of $25,000 for the life of the patent rights. In addition to the royalty fees, the Company is also required to pay UCLA a $10,000 annual maintenance fee, $50,000 upon FDA marketing approval and $25,000 upon first commercial sale. | |
On October 22, 2013, the Exclusive License Agreement was amended. The following additional fees will be due to UCLA i) 2% of the amount raised in the Private Placement or if the Private Placement did not close or was less than $2.5 million then a fee of $100,000 was due and payable by June 1, 2014, ii) $25,000 due upon closing of Phase 1 clinical trial and iii) $50,000 due upon closing of Phase 3 clinical trial. The Company paid the fee of $100,000 in June 2014. | |
Contingencies | |
The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. | |
Indemnification | |
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations. | |
In accordance with its amended and restated certificate of incorporation and amended and restated bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date and the Company has a director and officer insurance policy that enables it to recover a portion of any amounts paid for future potential claims. |
Notes_Payable_to_Related_Party
Notes Payable to Related Party | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||
Notes Payable to Related Party | 6. Notes Payable to Related Party | ||||||||||||||
As of December 31, 2014 and 2013, the Company had a total of $3,747,102 and $5,095,427, respectively, of notes outstanding (principal and interest) including unamortized discount, with MTF a related party, which consisted of the following: | |||||||||||||||
Note Type | Issue Date | Maturity | Interest Rate | December 31, 2014 | December 31, 2013 | ||||||||||
Date(1) | |||||||||||||||
Convertible Promissory Note | 1/18/08 | 3/31/15 | PRIME + 1 ½% | $ | - | $ | 1,479,654 | ||||||||
Promissory Note | 11/4/08 | 3/31/15 | PRIME + 3% | - | 343,429 | ||||||||||
Promissory Note | 3/17/09 | 3/31/15 | PRIME + 8% | - | 584,745 | ||||||||||
Promissory Note | 8/24/09 | 3/31/15 | LIBOR + 8% | - | 23,193 | ||||||||||
Tranched Promissory Note | 9/30/09 | 3/31/15 | LIBOR + 8% | - | 2,570,126 | ||||||||||
Bridge Note, net of discount | 4/29/13 | 10/14/14 | 12% | - | 94,280 | ||||||||||
New MTF Convertible Promissory Note | 9/19/14 | 3/31/15 | 8.50% | 3,747,102 | |||||||||||
3,747,102 | 5,095,427 | ||||||||||||||
Less: Accrued interest expense | 87,774 | 1,147,610 | |||||||||||||
Notes payable to related party, net of debt discount | $ | 3,659,328 | $ | 3,947,817 | |||||||||||
-1 | As amended. | ||||||||||||||
Accrued interest on the notes payable to related party of $87,774 and $1,147,610 is recorded in accrued expenses at December 31, 2014 and 2013, respectively. | |||||||||||||||
Convertible Related Party Promissory Notes | |||||||||||||||
The related party convertible promissory notes are considered hybrid instruments, which consist of a debt host instrument together with a conversion feature, thus giving the holder of a convertible note an option to convert into an equity instrument providing the holder a residual interest in the Company. The holder of a convertible promissory note also has the option to present its convertible promissory note to the Company and demand payment under the terms of the note after the maturity date or upon the occurrence of certain events such as the failure of the Company to make a payment on the note when due, bankruptcy or certain other liquidation events. The Company concluded that the convertible promissory notes would be accounted for as a typical debt instrument with related interest expense recorded in the Company’s statements of operations. The Company concluded that there is no beneficial conversion feature as of the date of issuance of the convertible notes. However, the note contains a contingent feature whereby the conversion rate may be lowered if a financing occurs at a lower rate than the note’s conversion rate. If the contingency is met and the conversion feature is determined to be “beneficial” in a future accounting period, an additional financing cost would be recorded for the beneficial conversion feature in the Company’s statements of operations at that time. | |||||||||||||||
In January 2008, the Company issued a $1,107,000 convertible promissory note (“January 2008 Note”) to MTF in accordance with the Convertible Promissory Note dated January 18, 2008, as amended. This note’s principal and accrued interest was converted into Common Stock on September 19, 2014. | |||||||||||||||
The Company issued promissory notes to MTF in November 2008 of $250,000 (“November 2008 Note”), in March 2009 of $400,000 (“March 2009 Note) and in August 2009 of $16,400 (August 2009 Note”). On September 19, 2014 these notes’ principal and accrued interest were consolidated into the New MTF Convertible Note. | |||||||||||||||
In September 2009, the Company entered into a tranched promissory note with MTF (“Tranched Note”), allowing the Company to initially borrow up to $445,000 in a series of one or more tranches. The Tranched Note was subsequently amended which, among other things, increased the maximum advance amount to $2,090,000. The Company borrowed a total of $2,088,350 under the Tranched Note through September 19, 2014. This note’s principal and accrued interest was consolidated into the New MTF Convertible Note. | |||||||||||||||
In May, 2014, the Company entered into a convertible promissory note with MTF (the “2014 Note”) for $250,000 with interest at 7% per annum compounded annually and a maturity date of June 15, 2015. In the event of a financing of not less than $1 million, the 2014 Note automatically converts into Equity Securities, as defined in the 2014 Note, at a 25% discount to the price paid per share in such financing. In connection with the 2014 Note, the Company issued a warrant to purchase 166,667 shares of the Company’s common stock at an exercise price of $1.50 per share and 4 year term (See Note 7). In July 2014, the 2014 Note and related warrants were assigned to Orthofix. | |||||||||||||||
Upon consummation of the merger, the 2008 January Convertible Note was converted into 1,533,356 shares of common stock of the Company. Upon consummation of the merger, MTF also converted all their outstanding Series A and B Preferred Stock, 5,829,438 shares, into common stock. | |||||||||||||||
Bridge Note | |||||||||||||||
In April 2013 the Company borrowed $100,000 from MTF under the April Bridge Financing. The convertible promissory note accrued interest at a rate of 12% per year and payable per quarter. A warrant to purchase the Company’s common stock equal to 50% of the original principal amount divided by $1.00 was issued to the Bridge Financing participant. Principal and unpaid accrued interest may be converted into equity securities issued in the Company’s next equity financing in an aggregate amount of at least $2.5 million at a price equal to the price paid by investors in the next equity financing. In June 2014, the note held by MTF under the April Bridge Financing was amended to extend the maturity date to October 14, 2014. The note was converted into Common Stock on September 19, 2014. | |||||||||||||||
MTF Short Term 2014 Loan | |||||||||||||||
On September 15, 2014, Bone and MTF entered into a loan agreement and accompanying promissory note to fund the continued operations of Bone prior to the Merger. Pursuant to the MTF Short Term 2014 Loan, MTF has agreed to advance an initial $250,000 to Bone and, at Bone’s request and subject to the terms and conditions of the MTF Short Term 2014 Loan, to advance up to an additional $250,000 to Bone. The MTF Short Term 2014 Loan has an interest rate of eight and one-half percent (8.5%) accruing annually. The MTF Short Term 2014 Loan matures on the earlier to occur of (i) the date on which at least $1 million is loaned to or invested in the Company and (ii) December 31, 2014. In further consideration of the MTF 2014 Loan, Bone granted to MTF 625,000 warrants at a strike price of $1.62. On October 27, 2014 the balance was paid in full and the line of credit was cancelled. | |||||||||||||||
New MTF Convertible Note | |||||||||||||||
On September 19, 2014, the MTF 2008 and 2009 Promissory Notes and any related loan agreements, credit agreements, guarantee agreements or other agreements related to the MTF 2008 and 2009 Promissory Notes were cancelled and the Company issued MTF a convertible promissory note in the face amount of $3,659,328 (the “New MTF Convertible Note”). Pursuant to the terms of the New MTF Convertible Note, 50% of all principal and accrued and unpaid interest due under the New MTF Convertible Note will be converted into common stock of the Company upon the closing of the PIPE. The remainder of the New MTF Convertible Note, including all accrued and unpaid interest, will be converted upon consummation of the Initial Public Offering. |
Notes_Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Notes Payable | 7. Notes Payable |
Convertible Notes Payable | |
The convertible promissory notes are considered hybrid instruments, which consist of a debt host instrument together with a conversion feature, thus giving the holder of a convertible note an option to convert into an equity instrument providing the holder a residual interest in the Company. The holder of a convertible promissory note also has the option to present its convertible promissory note to the Company and demand payment under the terms of the note after the maturity date or upon the occurrence of certain events such as the failure of the Company to make a payment on the note when due, bankruptcy or certain other liquidation events. The Company concluded that the convertible promissory notes would be accounted for as a typical debt instrument with related interest expense recorded in the Company’s statements of operations. The Company concluded that there is no beneficial conversion feature as of the date of issuance of the convertible notes. | |
Bridge Notes | |
In June 2013, the Company borrowed $100,000 from Orthofix, Corp. under the April Bridge Financing, and in September 2013 and October 2013 the Company borrowed $50,000 from AFH and an additional $150,000 from Orthofix, Corp. under the September Bridge Financing. The convertible promissory notes accrue interest at a rate of 12% per year and payable per quarter. A warrant to purchase the Company’s common stock equal to 50% of the original principal amount divided by $1.00 was issued to the Bridge Financing participant. Principal and unpaid accrued interest may be converted into equity securities issued in the Company’s next equity financing in an aggregate amount of at least $2.5 million at a price equal to the price paid by investors in the next equity financing. These notes were converted into Common Stock on September 19, 2014. | |
Orthofix Subsequent Financing | |
On July 1, 2014, (i) Orthofix purchased $500,000 worth of Bone Biologics Common Stock or the Subsequent Orthofix Shares; (ii) was issued the Subsequent Orthofix Convertible Promissory Notes in the principal amount of $500,000 (which includes the assignment of a $250,000 2014 note from MTF) and convertible into 666,666 worth of the Company’s Common Stock at $0.75 per share; and (iii) was issued the Subsequent Orthofix Warrants (including the assignment of warrants by MTF issued in connection with a 2014 note) which were exercisable for 333,334 shares of Bone Biologics Common Stock at an exercise price per share of $1.50 (the “Orthofix Subsequent Financing”). Upon subscribing for the Subsequent Orthofix Shares, the Subsequent Orthofix Convertible Promissory Notes and accrued interest converted into a combined total of 668,904 shares of Bone Biologics Common Stock in accordance with the terms of the Subsequent Orthofix Convertible Promissory Notes. | |
At the closing of the Subsequent Orthofix Shares and Notes, AFH Advisory was entitled to receive warrants to purchase up to 500,000 shares of Common Stock of the Company (See Note 7). | |
Secured Convertible Note and Warrant | |
On October 24, 2014, Bone issued a convertible promissory note in the amount of $5,000,000 (the “Convertible Note”) to Hankey Capital, LLC (“Hankey Capital”). The Convertible Note matures on October 24, 2017 (the “Maturity Date”) and bears interest at an annual rate of interest of the “prime rate” (as quoted in the “Money Rates” section of The Wall Street Journal) plus 4.0%, with a minimum rate of 8.5% per annum until maturity, with interest payable monthly in arrears. Prior to the Maturity Date, Hankey Capital has a right, in their sole discretion, to convert the Convertible Note into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), at a conversion rate equal to the greater of (i) $1.58 per share and (ii) 70% of the average daily price for the Common Stock as measured over the course of the 60 day period prior to the conversion. | |
The Convertible Note is secured by certain collateral shares of Common Stock issued by the Company in the name of Hankey Capital, in such amount so as to maintain a loan to value ratio of no greater than 50% (the “Collateral”). 6,329,114 shares were issued upon closing the Convertible Note. The number of shares in the Collateral shall be adjusted on a yearly basis. The shares representing the Collateral contain a restrictive legend. The Company shall seek to register the Collateral shares initially delivered on the date of the Convertible Note pursuant to the Registration Rights Agreement described below. Upon the effectiveness of such Registration Statement, the Company will remove the restrictive legends from the Collateral shares so long as Hankey Capital agrees in any event not to sell any Collateral shares if Hankey Capital is notified that the Registration Statement is no longer effective. Hankey Capital may hold the Collateral in any brokerage account of its choosing, but shall not transfer, sell or otherwise dispose of any Collateral, except during the existence of an Event of Default, as defined in the Convertible Note. The Convertible Note is further secured by collateral assignments of all the Company’s license agreements. | |
The principal amount of the loan is pre-payable in whole or in part at any time, without premium or penalty. Upon any voluntary partial prepayment of outstanding principal, Hankey Capital shall return Collateral shares to the Company in the amount necessary, if any, to maintain the loan to value ratio at no less than 50%. Upon a full payment of the outstanding principal, all Collateral shares shall be returned return and cancelled. Hankey Capital shall also return Collateral shares under the same terms in case of partial or full conversion of the Convertible Note. | |
The Company paid a commitment fee in the amount of 3% of the original principal amount of the loan ($150,000) to Hankey Capital. The Company intends to use the proceeds of the Convertible Note for working capital and general corporate purposes. | |
On October 24, 2014, the Company also issued a warrant to Hankey Capital for 3,955,697 shares of Common Stock at an exercise price per share of $1.58. The Warrant will expire on October 24, 2017. The Warrant also includes such other terms that are normal and customary for warrants of this type. | |
Registration Rights Agreement | |
On October 24, 2014, the Company entered into a Registration Rights Agreement with Hankey Capital, for certain demand registration rights and unlimited piggyback registration rights for the shares underlying the Convertible Note and the Warrant, and subject to an agreed lock up period. Pursuant to the Registration Rights Agreement, Hankey Capital may at any time request registration of their registrable shares. Within 30 days of such demand, the Company will provide written notice of such request to all other holders of registrable securities and will include in such registration all registrable shares with respect to which the Company has received written requests for inclusion within twenty-five (25) days after delivery of the Company’s notice. The Company has agreed to pay all registration expenses relating to up to three long-form registrations or short-form registrations for Hankey Capital. | |
Whenever the Company proposes to register any of its securities under the Securities Act (other than pursuant to a demand registration under the Registration Rights Agreement) and the registration form to be used may be used for the registration of any registrable shares, the Company will give prompt written notice to all holders of the registrable shares of its intention to effect such a registration and will include in such registration all registrable shares (in accordance with the priorities set forth in the Registration Rights Agreement) with respect to which the Company has received written requests for inclusion within fifteen (15) days after the delivery of the Company’s notice. Pursuant to Registration Rights Agreement, holders of registrable shares and the Company agree not to effect any public sale or distribution of equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the six (6) months following, the effective date of the Company’s merger with Bone Biologics, Inc. on September 19, 2014. | |
On October 24, 2014, Forefront Capital was issued a warrant to purchase 126,582 shares of Common Stock upon completion of the Hankey Capital Convertible Note. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Equity [Abstract] | |||||||
Stockholders' Equity | 8. Stockholders’ Equity | ||||||
Preferred Stock | |||||||
The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 20,000,000 shares of preferred stock. No shares have been issued. | |||||||
Common Stock | |||||||
The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 100,000,000 shares of common stock. As of December 31, 2014, the Company had an aggregate of 24,269,047 shares of common stock outstanding. | |||||||
In connection with the Convertible Note to Hankey Capital, Bone issued 6,329,114 common shares as collateral. (See Note 7) | |||||||
Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared by the Board from inception through December 31, 2014. | |||||||
Common Stock Warrants | |||||||
As of December 31, 2014, the Company had outstanding unexercised common stock warrants as follows: | |||||||
Date Issued | Exercise Price | Number of Shares | |||||
2006 | $0.17 | 60,920 | |||||
2009 | $0.44 | 118,383 | |||||
2010 | $0.44 | 254,997 | |||||
2013 | $1.00 | 200,000 | |||||
2014 | $1.00 - $1.62 | 6,389,164 | |||||
Total warrants at December 31, 2014 | 7,023,464 | ||||||
In connection with the Bridge Financings (see Notes 6 and 7), warrants were issued to purchase 200,000 shares of the Company’s common stock at an exercise price of $1.00 per share. The warrants expire in seven years from issuance date and may be exercised for cash or, if the current market price of the Company’s common stock is greater than the per share exercise price, by surrender of a portion of the warrant in a cashless exercise. The initial fair value of the warrant was estimated at an aggregate value of $171,143 using the Black-Scholes option pricing model with a volatility of 109%, a risk free interest rate of 1.10% to 2.11%. The fair value on the warrants was recorded as a debt issuance cost and is being amortized to interest expense over the term of the note. | |||||||
In connection with a 2014 MTF note, assigned to Orthofix in July 2014, the Company issued a warrant to purchase 166,667 shares of the Company’s common stock at an exercise price of $1.50 per share and 4 year term (See Note 7). The warrants had a fair value of $111,804, calculated using the Black-Scholes option pricing model with a volatility of 109%, a risk free interest rate of 0.79%. | |||||||
In connection with the Orthofix Subsequent Financing, the Company issued a warrant to purchase 166,667 shares of the Company’s common stock at an exercise price of $1.50 per share and 4 year term (See Note 7). The warrants had a fair value of $116,164, calculated using the Black-Scholes option pricing model with a volatility of 100.83%, a risk free interest rate of 1.66%. The fair value on the warrants was recorded as a debt issuance cost and is being amortized to interest expense over the term of the note. | |||||||
Extra Warrants | |||||||
At the closing of the Subsequent Orthofix Shares and Notes, AFH Advisory was entitled to receive the 500,000 Extra Warrants. AFH Advisory has normal and customary piggyback registration rights with respect to the shares of Common Stock issuable upon exercise of the Extra Warrants. The warrants expire on February 2, 2020 and may be exercised for cash or, if the current market price of the Company’s common stock is greater than the per share exercise price, by surrender of a portion of the warrant in a cashless exercise. The initial fair value of the warrants was estimated at an aggregate value of $407,917, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 109.42%, risk-free interest rate of 2.17%, contractual term of 5 years and dividend yield of 0%. The warrants are classified as permanent equity. | |||||||
Agent Warrants | |||||||
Forefront or its designees will receive the Agent Warrant. Such Agent Warrant will be issued at the closing of the Private Placement and shall provide, among other things, that the Agent Warrant shall: (i) be exercisable at the price of the securities (or the exercise price of the securities) issued to the investors in the offering, (ii) expire five (5) years from the date of issuance, (iii) include customary registration rights, including the registration rights provided to the Investors, (iv) contain provisions for cashless exercise and (v) include such other terms that are normal and customary for warrants of this type. In addition, Forefront or its designees will receive an Advisory Warrant equal to 2.0% of the Company’s post-merger and financing fully diluted shares outstanding upon the closing of $2.5 million of investors on which Forefront is eligible to receive compensation. | |||||||
Forefront was issued a warrant to purchase 46,667 shares of Common Stock at $1.00 per share upon completion of the Orthofix Subsequent Financing. The warrants expire in five years from issuance date and may be exercised for cash or, if the current market price of the Company’s common stock is greater than the per share exercise price, by surrender of a portion of the warrant in a cashless exercise. The initial fair value of the warrants was estimated at an aggregate value of $28,629, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 109.1%, risk-free interest rate of 0.39%, contractual term of 2.5 years and dividend yield of 0%. | |||||||
Forefront was issued a warrant to purchase 126,582 shares of Common Stock at $1.00 per share upon completion of the Hankey Capital Secured Term Note. The warrants expire in five years from issuance date and may be exercised for cash or, if the current market price of the Company’s common stock is greater than the per share exercise price, by surrender of a portion of the warrant in a cashless exercise. The initial fair value of the warrants was estimated at an aggregate value of $197,441, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 101.05%, risk-free interest rate of 1.52%, contractual term of 5 years and dividend yield of 0%. | |||||||
MTF Short Term 2014 Loan | |||||||
In further consideration of the MTF 2014 Loan, Bone granted to MTF 625,000 warrants at a strike price of $1.62. The warrants expire in seven years from issuance date and may be exercised for cash or, if the current market price of the Company’s common stock is greater than the per share exercise price, by surrender of a portion of the warrant in a cashless exercise. The initial fair value of the warrants was estimated at an aggregate value of $520,487, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 113.7%, risk-free interest rate of 0.0117%, contractual term of seven years and dividend yield of 0%. The fair value on the warrants was recorded as a debt issuance cost and amortized to interest expense over the term of the note. For the year ended December 31, 2014, $520,487 of the debt issuance costs was amortized to interest expense as the Note is payable on demand. | |||||||
Warrants issued to Consultants | |||||||
On July 11, 2014, the Company granted warrants to purchase up to 12,625 shares of Common Stock of at a strike price of $0.00 per share, with a 4 year term to a consultant. The initial fair value of the warrant was estimated at an aggregate value of $12,625, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 100.77%, risk-free interest rate of 1.28%, contractual term of 4 years and dividend yield of 0%. The fair value on the warrant was recorded as general and administrative expense upon issuance. | |||||||
On September 19, 2014, the Company granted warrants to purchase up to 3% of the Company’s fully diluted shares of common stock outstanding as of the date of closing of the Merger totaling 699,671 shares of Common Stock of at a strike price of $1.00 per share, with a 7 year term to a consultant. The warrant will vest over a two-year period from the effective date, with 33.33% of the shares subject to the warrant becoming vested and exercisable on the date that the consulting agreement is executed, 33.33% of the shares subject to the option becoming vested and exercisable on the date that is twelve (12) months after the effective date, and 33.34% of the shares subject to the warrant vesting and becoming exercisable on the date that is twenty four (24) months after the effective date. The initial fair value of the warrant was estimated at an aggregate value of $614,049, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 113.7%, risk-free interest rate of 2.29%, contractual term of 7 years and dividend yield of 0%. The fair value on the warrant was recorded as general and administrative expense and amortized over the term of the agreement. As of December 31, 2014, total unrecognized consulting cost related to unvested warrants was $324,532. The cost is expected to be recognized over a weighted average period of 1.75 years. | |||||||
On September 30, 2014, the Company granted warrants to purchase up to 89,588 shares of Common Stock of at a strike price of $1.00 per share, with a 7 year term to a consultant. The initial fair value of the warrants was estimated at an aggregate value of $77,207, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 108.9%, risk-free interest rate of 2.20%, contractual term of 7 years and dividend yield of 0%. The fair value on the warrant was recorded as general and administrative expense upon issuance. | |||||||
Secured Term Note and Warrant | |||||||
In connection with the Hankey Capital Secured Term Note, the Company issued a warrant for 3,955,697 shares of Common Stock at an exercise price per share of $1.58. The Warrant will expire on October 24, 2017. The initial relative fair value of the warrants was estimated at a relative value of $1,434,000, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 96.77%, risk-free interest rate of 0.82%, contractual term of 3 years and dividend yield of 0%. The fair value on the warrants was recorded as a debt discount and amortized to interest expense over the term of the note. | |||||||
The total debt discount costs related to our outstanding debt was for the years ended December 31, 2014 and 2013, $437,115 and $67,104, respectively. These costs were amortized to interest expense. The unamortized debt discount at December 31, 2014 was $1,354,806. The cost is expected to be recognized over a period of 2.75 years. The unamortized debt discount at December 31, 2013 was $83,263. |
StockBased_Compensation
Stock-Based Compensation | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Stock-Based Compensation | 9. Stock-based Compensation | ||||||||||||||||
2014 Stock Option Plan | |||||||||||||||||
2,642,898 shares of our common stock have been initially authorized and reserved for issuance under our 2014 Stock Plan as option awards. This reserve may be increased by the Board on January 1, 2015 and each subsequent anniversary through January 1, 2024 by up to the number of shares of stock equal to 5% of the number of shares of stock issued and outstanding on the immediately preceding December 31. Appropriate adjustments will be made in the number of authorized shares and other numerical limits in our 2014 Stock Option Plan and in outstanding awards to prevent dilution or enlargement of participants’ rights in the event of a stock split or other change in our capital structure. Shares subject to awards granted under our 2014 Stock Option Plan which expire, are repurchased or are cancelled or forfeited will again become available for issuance under our 2014 Stock Option Plan. The shares available will not be reduced by awards settled in cash. Shares withheld to satisfy tax withholding obligations will not again become available for grant. The gross number of shares issued upon the exercise of stock appreciation rights or options exercised by means of a net exercise or by tender of previously owned shares will be deducted from the shares available under our 2014 Stock Option Plan. | |||||||||||||||||
Awards may be granted under our 2014 Stock Option Plan to our employees, including officers, director or consultants, and our present or future affiliated entities. While we may grant incentive stock options only to employees, we may grant non-statutory stock options, stock appreciation rights, restricted stock purchase rights or bonuses, restricted stock units, performance shares, performance units and cash-based awards or other stock based awards to any eligible participant. | |||||||||||||||||
The 2014 Stock Option Plan will be administered by our compensation committee. Subject to the provisions of our 2014 Stock Option Plan, the compensation committee determines, in its discretion, the persons to whom, and the times at which, awards are granted, as well as the size, terms and conditions of each award. All awards are evidenced by a written agreement between us and the holder of the award. The compensation committee has the authority to construe and interpret the terms of our 2014 Stock Option Plan and awards granted under our 2014 Stock Option Plan. | |||||||||||||||||
During the year ended December 31, 2014 and 2013, the Company had stock-based compensation expense of $323,510 and $-0-, respectively, related to issuances to the Company’s employees and directors, included in reported net loss. The total amount of stock-based compensation for the year ended December 31, 2014 and 2013, related solely to the issuance of stock options. | |||||||||||||||||
A summary of stock option activity for the year ended December 31, 2014, is presented below: | |||||||||||||||||
Number of | Weighted | Weighted | |||||||||||||||
Shares | Average | ||||||||||||||||
Remaining | Exercise | Average | Intrinsic | ||||||||||||||
Subject to Exercise | Options | Price | Life (Years) | Value | |||||||||||||
Outstanding as of January 1, 2014 | - | $ | - | - | - | ||||||||||||
Granted – 2014 | 757,977 | 1 | 7.69 | ||||||||||||||
Forfeited – 2014 | - | $ | - | - | - | ||||||||||||
Exercised – 2014 | - | $ | - | - | - | ||||||||||||
Outstanding as of December 31, 2014 | 757,977 | $ | 1 | 7.69 | - | ||||||||||||
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between our closing stock price on the respective date and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their options. There have not been any options exercised during the years ended December 31, 2014 and 2013. | |||||||||||||||||
All options that the Company granted during the year ended December 31, 2014, were granted at the per share fair value on the grant date. Vesting of options differs based on the terms of each option. The Company has valued the options at their date of grant utilizing the Black Scholes option pricing model. As of the issuance of these consolidated financial statements, there was not an active public market for the Company’s shares. Accordingly, the fair value of the underlying options was determined based on the historical volatility data of similar companies, considering the industry, products and market capitalization of such other entities. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options as calculated using the simplified method. The expected life of the options used was based on the contractual life of the option granted. Stock-based compensation is a non-cash expense because we settle these obligations by issuing shares of our common stock from our authorized shares instead of settling such obligations with cash payments. | |||||||||||||||||
The Company utilized the Black-Scholes option pricing model. The assumptions used for the year ended December 31, 2014 are as follows: | |||||||||||||||||
31-Dec-14 | |||||||||||||||||
Risk free interest rate | 1.83%-1.84% | ||||||||||||||||
Expected life (in years) | 4.5 to 6 | ||||||||||||||||
Expected Volatility | 96.64%-98.7% | ||||||||||||||||
Expected dividend yield | 0% | ||||||||||||||||
A summary of the changes in the Company’s non-vested options during the year ended December 31, 2014, is as follows: | |||||||||||||||||
Number of | Weighted Average | Intrinsic Value | |||||||||||||||
Non-vested Options | Fair Value at | ||||||||||||||||
Grant Date | |||||||||||||||||
Non-vested at January 1, 2014 | - | $ | - | - | |||||||||||||
Vested in year ended December 31, 2014 | 256,508 | $ | 0.73 | - | |||||||||||||
Non-vested at December 31, 2014 | 501,469 | $ | 0.73 | - | |||||||||||||
Exercisable at December 31, 2014 | 256,508 | $ | 0.73 | - | |||||||||||||
Outstanding at December 31, 2014 | 757,977 | $ | 0.73 | - | |||||||||||||
As of December 31, 2014, total unrecognized compensation cost related to unvested stock options was $297,148. The cost is expected to be recognized over a weighted average period of 1.75 years. |
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Income Taxes | 10. Income Taxes | ||||||||
The provision for income taxes consists of the following: | |||||||||
Year Ended December 31, | 2014 | 2013 | |||||||
Current: | |||||||||
Federal | $ | - | $ | - | |||||
State | 1,600 | 800 | |||||||
Total current | 1,600 | 800 | |||||||
Deferred: | |||||||||
Federal | - | - | |||||||
State | - | - | |||||||
Total deferred | - | - | |||||||
Provision for income taxes | $ | 1,600 | $ | 800 | |||||
The components of deferred tax assets and liabilities consist of the following: | |||||||||
December 31, | 2014 | 2013 | |||||||
Deferred tax assets | |||||||||
Net operating losses | $ | 2,631,000 | $ | 1,866,000 | |||||
Patents | 326,000 | 560,000 | |||||||
Accrued expenses | 952,000 | 550,000 | |||||||
R&D credits | 85,000 | 57,000 | |||||||
Warrants | 765,000 | 45,000 | |||||||
Total | 4,759,000 | 3,078,000 | |||||||
Less: Valuation allowance | (4,759,000 | ) | (3,078,000 | ) | |||||
$ | - | $ | - | ||||||
The Company’s federal and state net operating loss carryfowards at December 31, 2014 and 2013 were approximately $6,638,000 and $4,681, 000, respectively, and will begin to expire in 2020 if not utilized. | |||||||||
The Company reviews its deferred tax assets for realization based upon historical taxable income, prudent and feasible tax planning strategies, the expected timing of the reversals of existing temporary differences and expected future taxable income. The Company has concluded that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance against the net deferred tax assets in the amount of $4,759,000 at December 31, 2014. The net change in the valuation allowance for the year ended December 31, 2014 was $1,680,000. | |||||||||
The effective tax rate differs from the statutory tax rate principally due to the change in valuation allowance, nondeductible permanent differences, credits, and state income taxes. | |||||||||
The Company’s effective tax rate is 0% for income tax for the years ended December 31, 2014 and 2013. Based on the weight of available evidence, including cumulative losses since inception and expected future losses, the Company has determined that it is more likely than not that the deferred tax asset amount will not be realized and therefore a valuation allowance has been provided on net deferred tax assets. | |||||||||
The Company files tax returns for U.S. Federal and State of California. The Company is not currently subject to any income tax examinations. Since the Company’s inception, the Company had incurred losses from operations, which generally allows all tax years to remain open. | |||||||||
Uncertain Tax Positions | |||||||||
The Company recognizes the consolidated financial statement effects of a tax position when it becomes more likely than not, based upon the technical merits, that the position will be sustained upon examination. | |||||||||
The Company recognizes interest and/or penalties related to uncertain tax positions. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected in the period that such determination is made. The interest and penalties are recognized as other expense and not tax expense. The Company currently has no interest and penalties related to uncertain tax positions. |
Related_Party_Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. Related Party Transactions |
In September 2006, the Company entered into a consulting agreement with one of its stockholders whom previously served as chairman, president and CEO of the Company. The Company paid $178,597 and $120,000, respectively, for the years ended December 31, 2014 and 2013 in consulting fees to this related party. Additionally, on September 19, 2014 the Company issued a warrant to purchase 699,671 shares of the Company’s common stock. (See Note 8) | |
One of the Company’s co-founders had previously provided research and development consulting services to the Company and earned an aggregate of $320,000 of fees from inception to January 2010. Of the $320,000, $52,500 has been deferred for payment until the Company’s next equity financing. As of December 31, 2013, the $52,500 deferred payment was included in the accrued expenses. On October 27, 2014 the deferred payment was fully paid. | |
In September 2013 the Company entered into a consulting agreement with MTF for the services of Michael Schuler. Immediately following the Merger, the Company entered into a consulting agreement with MTF, which has agreed to provide the services of Mr. Schuler to the Company as a contractor. Pursuant to the agreement, Mr. Schuler will serve as the Company’s Interim Chief Executive Officer for a period of 6 months. The agreement shall automatically renew for successive three (3) month periods unless either party provides written notice to the other party at least 10 days in advance of the renewal term of its decision not to renew the term. The agreement is intended to be temporary in nature, and will cease once the Company retains a permanent Chief Executive Officer. There are no payments due to MTF or Mr. Schuler with respect to any change in control of the Company or termination of the consulting agreement. For the year ended December 31, 2014, the Company recognized $47,500 of expense related to this contract. | |
See Note 6 for related party notes payable to MTF. | |
See Note 12 for related party transactions with AFH |
Transaction_Costs
Transaction Costs | 12 Months Ended |
Dec. 31, 2014 | |
Transaction Costs | |
Transaction Costs | 12. Transaction Costs |
The Company paid (i) AFH $500,000 (the “Shell Cost”) to allow Bone Biologic Inc. stockholders to acquire shares of common stock of the Company and become the majority owners in the aggregate of the Company and to achieve the desired post-merger capitalization of the Company and to (ii) reimbursed AFH Advisory for its advancement of expenses on behalf of the Company related to the Merger and a public offering of $90,000. These Transaction Costs have been recorded as an expense in the accompanying statement of operations in the period in which they were incurred. Additional transaction costs included accounting, legal and other professional services. Other receivables – related party represent a $75,000 receivable from AFH, a shareholder, for fees paid on their behalf for legal services. |
Subsequent_Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events |
On February 29, 2015, the Company terminated its consulting contract with T.O. Medical. As per the contract they were provided a 90 day notice and all warrants issued became fully vested. | |
On February 15, 2015 our agreement with Forefront Capital expired without renewal. | |
The Company has evaluated subsequent events through March 30, 2015, the date which the consolidated financial statements were available to be issued. There were no additional subsequent events noted that would require adjustment to or disclosure in these consolidated financial statements. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Basis of Presentation | Basis of Presentation | ||||||||
The accompanying consolidated financial statements and related notes include activities of the Company, and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). | |||||||||
Use of Estimates | Use of Estimates | ||||||||
The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Significant estimates include warrants, stock options and income tax valuation allowances. Actual results could differ from those estimates. | |||||||||
Principles of Consolidation | Principles of consolidation | ||||||||
The consolidated financial statements include the accounts of the Company (and its wholly-owned subsidiary, Bone Biologics, Inc.). All significant intercompany transactions have been eliminated. | |||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||
The Company’s financial instruments are accounts receivable, accounts payable, and notes payable. The recorded values of accounts receivable and accounts payable approximate their values based on their short term nature. Notes payable are recorded at their issue value or if warrants are attached at their issue value less the value of the warrant. | |||||||||
The Company defines fair value 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 must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable: | |||||||||
Level 1: Quoted prices in active markets for identical assets or liabilities. | |||||||||
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. | |||||||||
Level 3 assumptions: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities resulting from embedded derivatives associated with certain warrants to purchase common stock. | |||||||||
Property and Equipment | Property and Equipment | ||||||||
Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal. | |||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||
The long-lived assets held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was no impairment in the value of long-lived assets during the year ended December 31, 2014. | |||||||||
Research and Development Costs | Research and Development Costs | ||||||||
Research and development costs include, but are not limited to, patents and license expenses, payroll and other personnel expenses, consultants, expenses incurred under agreements with contract research and manufacturing organizations and animal clinical investigative sites and the cost to manufacture clinical trial materials. Costs related to research, design and development of products are charged to research and development expense as incurred. | |||||||||
Patents and Licenses | Patents and Licenses | ||||||||
In March 2006, the Company entered into an exclusive license agreement (“Exclusive License Agreement”), with UCLA for the worldwide application of the Nell-1 protein through a technology transfer. See Note 4 for commitments related to the Exclusive License Agreement. Patent expenses include costs to acquire the license of Nell -1, which was de minimus, and costs to file patent applications related to Nell-1. | |||||||||
Bone expenses the costs incurred to file patent applications, all costs related to abandoned patent applications and maintenance costs, and these costs are included in research and development expenses. Costs associated with licenses acquired to be able to use products from third parties prior to receipt of regulatory approval to market the related products are also expensed. The Company’s licensed technologies may have alternative future uses in that they are enabling (or platform) technologies that can be the basis for multiple products that would each target a specific indication. Costs of acquisition of licenses are expensed. | |||||||||
Deferred Financing and Transaction Costs | Deferred Financing and Transaction Costs | ||||||||
Deferred financing costs represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective interest method, while deferred financing costs from equity financings are netted against the gross proceeds received from the equity financings. | |||||||||
During the year ended December 31, 2014, the Company capitalized deferred financing costs of $401,118 in connection with the Extra Warrants issued to AFH (See Note 4) and $617,018 related to issuance of notes payable. Amortization of deferred financing costs was $60,398 and $-0- for the years ended December 31, 2014 and 2013, respectively. | |||||||||
Other Receivables - Related Party | Other receivables – related party | ||||||||
Other receivables – related party represent a receivable from AFH Holding & Advisory, a shareholder, for fees paid on their behalf for legal services. | |||||||||
Concentration of Credit Risk and Other Risks and Uncertainties | Concentration of Credit Risk and Other Risks and Uncertainties | ||||||||
Cash balances are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. As of January 1, 2013, federal insurance coverage is $250,000 per depositor at each financial institution. A substantial majority of the Company’s cash and cash equivalent bank balances exceed federally insured limits. | |||||||||
Stock Based Compensation | Stock Based Compensation | ||||||||
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period). | |||||||||
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. | |||||||||
Income Taxes | Income Taxes | ||||||||
Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due and deferred taxes resulting from timing differences in recording of transactions for tax purposes and financial reporting purposes. | |||||||||
The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are received or settled. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. | |||||||||
The accounting provisions related to uncertain income tax positions require the Company to determine whether any tax position in all open years meets a more likely than not threshold of being sustained upon examination by the applicable taxing authority. The Company did not have any changes to its liability for uncertain tax positions as at December 31, 2014 and 2013. | |||||||||
The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of December 31, 2014 and 2013. | |||||||||
Loss per Common Share | Loss per Common Share | ||||||||
The Company utilizes FASB ASC Topic No. 260, Earnings per Share. Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted loss per common share reflects the potential dilution that could occur if convertible debentures, options and warrants were to be exercised or converted or otherwise resulted in the issuance of common stock that then shared in the earnings of the entity. | |||||||||
Since the effects of outstanding options, warrants, and the conversion of convertible debt are anti-dilutive in all periods presented, shares of common stock underlying these instruments have been excluded from the computation of loss per common share. | |||||||||
The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of December 31, 2014 and 2013: | |||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Warrants | 7,023,464 | 634,300 | |||||||
Stock options | 757,977 | — | |||||||
Convertible promissory notes | 6,911,659 | 5,095,427 | |||||||
14,693,100 | 5,729,727 | ||||||||
New Accounting Standards | New Accounting Standards | ||||||||
The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its consolidated financial statements. | |||||||||
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the quarter ended June 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915. | |||||||||
In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company currently has no revenues and doesn’t expect any impact of adopting this guidance. | |||||||||
In June 2014, the FASB issued ASU 2014-12, “Compensation - Stock Compensation (Topic 718): Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period.” This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements. | |||||||||
August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40)”, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard for the year ending December 31, 2014. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Accounting Policies [Abstract] | |||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of December 31, 2014 and 2013: | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Warrants | 7,023,464 | 634,300 | |||||||
Stock options | 757,977 | — | |||||||
Convertible promissory notes | 6,911,659 | 5,095,427 | |||||||
14,693,100 | 5,729,727 |
Property_and_Equipment_Tables
Property and Equipment (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Property and Equipment | Property and equipment consist of the following at: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Furniture and equipment | $ | 11,901 | $ | - | |||||
Less accumulated depreciation | (280 | ) | - | ||||||
$ | 11,621 | $ | - |
Accounts_Payable_and_Accrued_E1
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: | ||||||||
31-Dec-14 | 31-Dec-13 | ||||||||
Interest expense | $ | 87,774 | $ | 1,158,465 | |||||
Professional services | 119,776 | 114,849 | |||||||
Patents | - | 85,412 | |||||||
Deferred compensation | - | 90,199 | |||||||
Transaction costs | - | 75,000 | |||||||
Payroll liabilities | 7,839 | 1,679 | |||||||
$ | 215,389 | $ | 1,525,604 |
Notes_Payable_to_Related_Party1
Notes Payable to Related Party (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||
Notes Outstanding (Principal and Interest) Including Unamortized Discount, with Mtf Related Party | Note Type | Issue Date | Maturity | Interest Rate | December 31, 2014 | December 31, 2013 | |||||||||
Date(1) | |||||||||||||||
Convertible Promissory Note | 1/18/08 | 3/31/15 | PRIME + 1 ½% | $ | - | $ | 1,479,654 | ||||||||
Promissory Note | 11/4/08 | 3/31/15 | PRIME + 3% | - | 343,429 | ||||||||||
Promissory Note | 3/17/09 | 3/31/15 | PRIME + 8% | - | 584,745 | ||||||||||
Promissory Note | 8/24/09 | 3/31/15 | LIBOR + 8% | - | 23,193 | ||||||||||
Tranched Promissory Note | 9/30/09 | 3/31/15 | LIBOR + 8% | - | 2,570,126 | ||||||||||
Bridge Note, net of discount | 4/29/13 | 10/14/14 | 12% | - | 94,280 | ||||||||||
New MTF Convertible Promissory Note | 9/19/14 | 3/31/15 | 8.50% | 3,747,102 | |||||||||||
3,747,102 | 5,095,427 | ||||||||||||||
Less: Accrued interest expense | 87,774 | 1,147,610 | |||||||||||||
Notes payable to related party, net of debt discount | $ | 3,659,328 | $ | 3,947,817 | |||||||||||
-1 | As amended. |
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Equity [Abstract] | |||||||
Schedule of Outstanding Unexercised Common Stock Warrants | As of December 31, 2014, the Company had outstanding unexercised common stock warrants as follows: | ||||||
Date Issued | Exercise Price | Number of Shares | |||||
2006 | $0.17 | 60,920 | |||||
2009 | $0.44 | 118,383 | |||||
2010 | $0.44 | 254,997 | |||||
2013 | $1.00 | 200,000 | |||||
2014 | $1.00 - $1.62 | 6,389,164 | |||||
Total warrants at December 31, 2014 | 7,023,464 |
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||
Schedule of Stock Option Activity | A summary of stock option activity for the year ended December 31, 2014, is presented below: | ||||||||||||||||
Number of | Weighted | Weighted | |||||||||||||||
Shares | Average | ||||||||||||||||
Remaining | Exercise | Average | Intrinsic | ||||||||||||||
Subject to Exercise | Options | Price | Life (Years) | Value | |||||||||||||
Outstanding as of January 1, 2014 | - | $ | - | - | - | ||||||||||||
Granted – 2014 | 757,977 | 1 | 7.69 | ||||||||||||||
Forfeited – 2014 | - | $ | - | - | - | ||||||||||||
Exercised – 2014 | - | $ | - | - | - | ||||||||||||
Outstanding as of December 31, 2014 | 757,977 | $ | 1 | 7.69 | - | ||||||||||||
Schedule of Assumptions Using Black-Scholes Option Pricing Model | The Company utilized the Black-Scholes option pricing model. The assumptions used for the year ended December 31, 2014 are as follows: | ||||||||||||||||
31-Dec-14 | |||||||||||||||||
Risk free interest rate | 1.83%-1.84% | ||||||||||||||||
Expected life (in years) | 4.5 to 6 | ||||||||||||||||
Expected Volatility | 96.64%-98.7% | ||||||||||||||||
Expected dividend yield | 0% | ||||||||||||||||
Schedule of Non-Vested Options | A summary of the changes in the Company’s non-vested options during the year ended December 31, 2014, is as follows: | ||||||||||||||||
Number of | Weighted Average | Intrinsic Value | |||||||||||||||
Non-vested Options | Fair Value at | ||||||||||||||||
Grant Date | |||||||||||||||||
Non-vested at January 1, 2014 | - | $ | - | - | |||||||||||||
Vested in year ended December 31, 2014 | 256,508 | $ | 0.73 | - | |||||||||||||
Non-vested at December 31, 2014 | 501,469 | $ | 0.73 | - | |||||||||||||
Exercisable at December 31, 2014 | 256,508 | $ | 0.73 | - | |||||||||||||
Outstanding at December 31, 2014 | 757,977 | $ | 0.73 | - |
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Income Tax Disclosure [Abstract] | |||||||||
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following: | ||||||||
Year Ended December 31, | 2014 | 2013 | |||||||
Current: | |||||||||
Federal | $ | - | $ | - | |||||
State | 1,600 | 800 | |||||||
Total current | 1,600 | 800 | |||||||
Deferred: | |||||||||
Federal | - | - | |||||||
State | - | - | |||||||
Total deferred | - | - | |||||||
Provision for income taxes | $ | 1,600 | $ | 800 | |||||
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities consist of the following: | ||||||||
December 31, | 2014 | 2013 | |||||||
Deferred tax assets | |||||||||
Net operating losses | $ | 2,631,000 | $ | 1,866,000 | |||||
Patents | 326,000 | 560,000 | |||||||
Accrued expenses | 952,000 | 550,000 | |||||||
R&D credits | 85,000 | 57,000 | |||||||
Warrants | 765,000 | 45,000 | |||||||
Total | 4,759,000 | 3,078,000 | |||||||
Less: Valuation allowance | (4,759,000 | ) | (3,078,000 | ) | |||||
$ | - | $ | - |
The_Company_Details_Narrative
The Company (Details Narrative) (USD $) | 12 Months Ended | 130 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | |
Common stock outstanding shares | 5,000,000 | 5,000,000 | |
Common stock remaining shares | 3,853,600 | 3,853,600 | |
Common stock issued and outstanding per share value | $0.00 | $0.00 | $0.00 |
Estimated operating expenditure for next twelve months | $3,600,000 | $3,600,000 | |
Net income loss | -4,424,413 | -1,082,204 | 12,000,000 |
Bone Biologics Inc [Member] | |||
Common stock issued and outstanding per share value | $0.00 | $0.00 | |
Common stock converted combined number of share | 19,897,587 | ||
Number of outstanding warrants issuable shares | 2,151,926 | ||
Number of conversion of debt issuable shares | 5,648,658 | ||
Payment to acquisition of asset value | $590,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details Narrative) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Deferred financing costs | $983,857 | ||
Issuance of notes payable | 617,018 | ||
Debt financing costs amortization | 60,398 | ||
AFH [Member] | |||
Deferred financing costs | 401,118 | ||
Depositor [Member] | |||
Federal insurance coverage cost | $250,000 | ||
Minimum [Member] | |||
Estimated useful lives of property and equipment | 3 years | ||
Maximum [Member] | |||
Estimated useful lives of property and equipment | 7 years |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 14,693,100 | 5,729,727 |
Warrants [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 7,023,464 | 634,300 |
Stock Options [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 757,977 | |
Convertible Promissory Notes [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 6,911,659 | 5,095,427 |
Property_and_Equipment_Details
Property and Equipment (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation | $280 |
Property_and_Equipment_Schedul
Property and Equipment - Schedule of Property and Equipment (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Property and equipment, Net | $11,621 | |
Furniture and Equipment [Member] | ||
Furniture and equipment | 11,901 | |
Less accumulated depreciation | -280 | |
Property and equipment, Net | $11,621 |
Accounts_Payable_and_Accrued_E2
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Payables and Accruals [Abstract] | ||
Interest expense | $87,774 | $1,158,465 |
Professional services | 119,776 | 114,849 |
Patents | 85,412 | |
Deferred compensation | 90,199 | |
Transaction costs | 75,000 | |
Payroll liabilities | 7,839 | 1,679 |
Total Accounts Payable and Accrued Expenses | $215,389 | $1,525,604 |
Commitments_and_Contingencies_
Commitments and Contingencies (Details Narrative) (USD $) | 12 Months Ended | ||||||||
Dec. 31, 2014 | Oct. 31, 2014 | Jul. 31, 2014 | Sep. 30, 2013 | Apr. 30, 2013 | Dec. 31, 2013 | Apr. 29, 2013 | Oct. 31, 2013 | Jun. 05, 2013 | |
Convertible debt | $5,000,000 | $1,000,000 | |||||||
License Agreement [Member] | |||||||||
Percentage of sale of the licensed product equal | 3.00% | ||||||||
Annual minimum royalty for life of the patent rights | 25,000 | ||||||||
Payment of UCLA annual maintenance fee | 10,000 | ||||||||
Food and drug administration marketing approval | 50,000 | ||||||||
Commercial sale amount | 25,000 | ||||||||
License Agreement [Member] | UCLA [Member] | October 22, 2013 [Member] | |||||||||
Payment of UCLA annual maintenance fee | 2,500,000 | ||||||||
Percentage amount raised of private placement | 2.00% | ||||||||
License commitment fee due date | 1-Jul-14 | ||||||||
License Agreement [Member] | UCLA [Member] | October 22, 2013 [Member] | |||||||||
Due from private placements | 100,000 | ||||||||
Phase 1 Clinical Trial [Member] | |||||||||
Notes payable | 25,000 | ||||||||
Phase 3 Clinical Trial [Member] | |||||||||
Notes payable | 50,000 | ||||||||
License commitment fee | 100,000 | ||||||||
PIPE [Member] | Bank [Member] | Minimum [Member] | |||||||||
Public equity transaction in an amount | 8,000,000 | ||||||||
PIPE [Member] | Bank [Member] | Maximum [Member] | |||||||||
Public equity transaction in an amount | 10,000,000 | ||||||||
AFH [Member] | |||||||||
Percentage of over allotment option | 15.00% | ||||||||
Initial public offering amount | 40,000,000 | ||||||||
Payment to acquisition of asset value | 590,000 | ||||||||
AFH [Member] | PIPE [Member] | |||||||||
Percentage of over allotment option | 15.00% | ||||||||
Issuance of warrants to purchase of common stock | 500,000 | ||||||||
Warrants term | 5 years | ||||||||
Investors [Member] | PIPE [Member] | |||||||||
Private financing debt equity | 10,000,000 | ||||||||
Percentage of over allotment option | 15.00% | ||||||||
Bridge Financing [Member] | |||||||||
Principal amount | 250,000 | 300,000 | |||||||
Note accrued interest rate | 12.00% | ||||||||
Percentage of warrants issued to purchase common stock | 50.00% | ||||||||
Original principal amount price per share | $1 | ||||||||
Equity securities issued amount | 2,500,000 | ||||||||
Bridge Financing [Member] | AFH [Member] | |||||||||
Business acquisition purchase price | 50,000 | ||||||||
Bridge Financing [Member] | MTF [Member] | |||||||||
Principal amount | 100,000 | ||||||||
Bridge Financing [Member] | Orthofix, Corp. [Member] | |||||||||
Principal amount | $150,000 | $100,000 |
Notes_Payable_to_Related_Party2
Notes Payable to Related Party (Details Narrative) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||||||||||
Dec. 31, 2014 | Dec. 31, 2013 | 31-May-14 | Sep. 15, 2014 | Sep. 19, 2014 | Apr. 30, 2013 | Jan. 31, 2008 | Nov. 30, 2008 | Mar. 31, 2009 | Aug. 31, 2009 | Sep. 30, 2009 | |||
Notes outstanding (principal and interest) including unamortized discount | 3,747,102 | 5,095,427 | |||||||||||
Accrued interest on the notes payable to related party | 87,774 | 1,147,610 | |||||||||||
Notes payable to related party | 3,659,328 | 3,947,817 | |||||||||||
MTF [Member] | |||||||||||||
Debt instrument amount outstanding | 100,000 | ||||||||||||
Series A and B Convertible Preferred Stock [Member] | |||||||||||||
Conversion of stock, shares issued | 5,829,438 | ||||||||||||
2008 January Convertible Promissory Note [Member] | |||||||||||||
Debt instrument face amount | 1,107,000 | ||||||||||||
Debt conversion, shares issued | 1,533,356 | ||||||||||||
November 2008 Convertible Promissory Note [Member] | |||||||||||||
Debt instrument face amount | 250,000 | ||||||||||||
November 2008 Convertible Promissory Note [Member] | |||||||||||||
Debt instrument face amount | 400,000 | ||||||||||||
August 2009 Convertible Promissory Note [Member] | |||||||||||||
Debt instrument face amount | 16,400 | ||||||||||||
Tranched Promissory Note [Member] | |||||||||||||
Debt instrument face amount | 445,000 | ||||||||||||
Interest Rate, description | LIBOR + 8% | LIBOR + 8% | |||||||||||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] | |||||||||
Debt instrument maximum borrowing amount | 2,090,000 | ||||||||||||
Debt instrument amount outstanding | 2,088,350 | ||||||||||||
2014 Convertible Promissory Note [Member] | |||||||||||||
Debt instrument face amount | 250,000 | ||||||||||||
Interest Rate, description | 7% per annum compounded annually | ||||||||||||
Maturity Date | 15-Jun-15 | ||||||||||||
Warrant to purchase shares of common stock | 166,667 | ||||||||||||
Exercise Price of Warrants | $1.50 | ||||||||||||
Maximum financing limit amount | 1,000,000 | ||||||||||||
Debt discount percentage | 25.00% | ||||||||||||
Warrant term | 4 years | ||||||||||||
2014 Convertible Promissory Note [Member] | Warrant [Member] | |||||||||||||
Warrant purchased, percentage of original principal amount numerator | 50.00% | ||||||||||||
Per share amount issued to participant | 1 | ||||||||||||
Equity financing, minimum aggregate amount | 2,500,000 | ||||||||||||
Convertible Promissory Note [Member] | |||||||||||||
Interest Rate, description | PRIME + 1½% | PRIME + 1½% | |||||||||||
Notes, interest rate | 12.00% | ||||||||||||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] | |||||||||
MTF Short Term 2014 Loan [Member] | |||||||||||||
Interest Rate, description | eight and one-half percent (8.5%) accruing annually | ||||||||||||
Exercise Price of Warrants | $1.62 | ||||||||||||
Debt instrument maximum borrowing amount | 250,000 | ||||||||||||
Debt instrument amount outstanding | 250,000 | ||||||||||||
Warrants included in connection with Notes | 625,000 | ||||||||||||
MTF Convertible Note [Member] | |||||||||||||
Debt instrument face amount | $3,659,328 | ||||||||||||
Percentage of principal, accrued and unpaid interest of note converted into common stock | 50.00% | ||||||||||||
[1] | (1) As amended. |
Notes_Payable_to_Related_Party3
Notes Payable to Related Party - Notes Outstanding (Principal and Interest) Including Unamortized Discount, with MTF Related Party (Details) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | |||
Convertible Promissory Note | $1,479,654 | |||
Promissory Note | 180,690 | |||
Notes payable, Gross | 3,747,102 | 5,095,427 | ||
Less: Accrued interest expense | 87,774 | 1,147,610 | ||
Notes payable to related party, net of debt discount | 3,659,328 | 3,947,817 | ||
Promissory Note One [Member] | ||||
Issue Date | 4-Nov-08 | 4-Nov-08 | ||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] |
Interest Rate | PRIME + 3% | PRIME + 3% | ||
Promissory Note | 343,429 | |||
Promissory Note Two [Member] | ||||
Issue Date | 17-Mar-09 | 17-Mar-09 | ||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] |
Interest Rate | PRIME + 8% | PRIME + 8% | ||
Promissory Note | 584,745 | |||
Promissory Note Three [Member] | ||||
Issue Date | 24-Aug-09 | 24-Aug-09 | ||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] |
Interest Rate | LIBOR + 8% | LIBOR + 8% | ||
Promissory Note | 23,193 | |||
Tranched Promissory Note [Member] | ||||
Issue Date | 30-Sep-09 | 30-Sep-09 | ||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] |
Interest Rate | LIBOR + 8% | LIBOR + 8% | ||
Promissory Note | 2,570,126 | |||
New MTF Convertible Promissory Note [Member] | ||||
Issue Date | 19-Sep-14 | 19-Sep-14 | ||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] |
Interest Rate | 8.50% | 8.50% | ||
Convertible Promissory Note | 3,747,102 | 3,747,102 | ||
Bridge Note Net of Discount [Member] | ||||
Issue Date | 29-Apr-13 | 29-Apr-13 | ||
Maturity Date | 14-Oct-14 | [1] | 14-Oct-14 | [1] |
Interest Rate | 12% | 12% | ||
Promissory Note | $94,280 | |||
Convertible Promissory Note [Member] | ||||
Issue Date | 18-Jan-08 | 18-Jan-08 | ||
Maturity Date | 31-Mar-15 | [1] | 31-Mar-15 | [1] |
Interest Rate | PRIME + 1½% | PRIME + 1½% | ||
[1] | (1) As amended. |
Notes_Payable_Details_Narrativ
Notes Payable (Details Narrative) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2013 | 31-May-14 | Oct. 24, 2014 | Jul. 31, 2014 | Jun. 30, 2013 | Oct. 31, 2013 | Sep. 30, 2013 | |||
Convertible promissory note amount | 1,479,654 | |||||||||
Convertible Promissory Note [Member] | ||||||||||
Debt interest rate | 12.00% | |||||||||
Debt maturity date | 31-Mar-15 | [1] | 31-Mar-15 | [1] | ||||||
2014 Convertible Promissory Note [Member] | ||||||||||
Warrant to purchase shares of common stock | 166,667 | |||||||||
Debt instrument face amount | 250,000 | |||||||||
Warrant exercise price | $1.50 | |||||||||
Debt maturity date | 15-Jun-15 | |||||||||
2014 Convertible Promissory Note [Member] | Warrant [Member] | ||||||||||
Warrant purchased, percentage of original principal amount numerator | 50.00% | |||||||||
Per share amount issued to participant | 1 | |||||||||
Equity financing, minimum aggregate amount | 2,500,000 | |||||||||
Orthofix Subsequent Financing [Member] | ||||||||||
Per share amount issued to participant | 1.5 | |||||||||
Warrant to purchase shares of common stock | 500,000 | |||||||||
Debt instrument face amount | 500,000 | |||||||||
Debt conversion, shares issued | 666,666 | |||||||||
Debt instrument conversation price per share | 0.75 | |||||||||
MTF Short Term 2014 Loan [Member] | ||||||||||
Warrant exercise price | 1.62 | |||||||||
Subsequent Orthofix Convertible Promissory Notes [Member] | ||||||||||
Debt conversion, shares issued | 668,904 | |||||||||
Orthofix Subsequent Financing [Member] | ||||||||||
Warrant to purchase shares of common stock | 166,667 | |||||||||
Warrant exercise price | 1.5 | |||||||||
Orthofix Subsequent Financing [Member] | MTF Short Term 2014 Loan [Member] | ||||||||||
Warrant to purchase shares of common stock | 333,334 | |||||||||
Debt instrument face amount | 250,000 | |||||||||
Warrant exercise price | 1.5 | |||||||||
Orthofix, Corp. [Member] | ||||||||||
Warrant to purchase shares of common stock | 166,667 | |||||||||
Warrant exercise price | $1.50 | |||||||||
Orthofix, Corp. [Member] | April Bridge Financing [Member] | ||||||||||
Short term borrowing | 100,000 | |||||||||
Orthofix, Corp. [Member] | September Bridge Financing [Member] | ||||||||||
Short term borrowing | 150,000 | |||||||||
AFH Acquisition X, Inc [Member] | ||||||||||
Short term borrowing | 50,000 | |||||||||
AFH Advisory [Member] | ||||||||||
Warrant to purchase shares of common stock | 500,000 | |||||||||
Hankey Capital, LLC [Member] | ||||||||||
Warrant to purchase shares of common stock | 3,955,697 | |||||||||
Warrant exercise price | $1.58 | |||||||||
Warrant expiration date | 24-Oct-17 | |||||||||
Hankey Capital, LLC [Member] | Convertible Note [Member] | ||||||||||
Debt instrument conversation price per share | $0.00 | |||||||||
Convertible promissory note amount | 5,000,000 | |||||||||
Debt maturity date | 24-Oct-17 | |||||||||
Percentage of average daily price of common stock measured | 70.00% | |||||||||
Debt instrument common stock price conversation period | 60 days | |||||||||
Loan for collateral value ratio percentage | 50.00% | |||||||||
Number of common stock shares issued for lending | 6,329,114 | |||||||||
Percentage of commitment fee paid | 3.00% | |||||||||
Loan commitment fee amount | $150,000 | |||||||||
Hankey Capital, LLC [Member] | Convertible Note [Member] | Maximum [Member] | ||||||||||
Debt instrument conversation price per share | $1.58 | |||||||||
Hankey Capital, LLC [Member] | Convertible Note [Member] | Prime Rate [Member] | ||||||||||
Debt instrument interest rate, minimum | 4.00% | |||||||||
Debt instrument interest rate, maximum | 8.50% | |||||||||
Forefront [Member] | ||||||||||
Warrant to purchase shares of common stock | 126,582 | |||||||||
[1] | (1) As amended. |
Stockholders_Equity_Details_Na
Stockholders' Equity (Details Narrative) (USD $) | 12 Months Ended | 0 Months Ended | 1 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Sep. 19, 2014 | Jul. 11, 2014 | Jul. 31, 2014 | Oct. 24, 2014 | |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||||
Preferred stock, shares issued | |||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||||
Common stock, shares outstanding | 24,269,047 | 10,928,099 | |||||
Forefront receive compensation | $256,642 | ||||||
Debt issuance costs | 520,487 | ||||||
Cost is expected to recongnized over a weighted average period | 2 years 9 months | ||||||
Debt discount cost related outstanding debt | 437,115 | 67,104 | |||||
Unamortized debt discount | 1,354,806 | 83,263 | |||||
Consultants [Member] | |||||||
Issuance of warrants to purchase of common stock | 89,588 | 12,625 | |||||
Warrant exercise price | $1 | $0 | |||||
Warrant expiration period | 7 years | 7 years | 4 years | ||||
Fair value of warrants | 77,207 | 614,049 | 12,625 | ||||
Expected volatility rate | 108.90% | 113.70% | 100.77% | ||||
Risk free interest rate | 2.20% | 2.29% | 1.28% | ||||
Contractual term | 7 years | 7 years | 4 years | ||||
Dividend yield | 0.00% | 0.00% | 0.00% | ||||
Percentage of warrants to purchase of diluted shares of common stock | 3.00% | ||||||
Issuance of common stock shares of merger | 699,671 | ||||||
Common stock price per share | $1 | ||||||
Warrant vested period | 2 years | ||||||
Percentage of shares into warrant vested and exercisable | 33.33% | ||||||
Stock options description | The warrant will vest over a two-year period from the effective date, with 33.33% of the shares subject to the warrant becoming vested and exercisable on the date that the consulting agreement is executed, 33.33% of the shares subject to the option becoming vested and exercisable on the date that is twelve (12) months after the effective date, and 33.34% of the shares subject to the warrant vesting and becoming exercisable on the date that is twenty four (24) months after the effective date. | ||||||
Unrecognized consulting cost related to unvested warrants | 324,532 | ||||||
Cost is expected to recongnized over a weighted average period | 1 year 9 months | ||||||
MTF Short Term 2014 Loan [Member] | |||||||
Warrant exercise price | $1.62 | ||||||
Fair value of warrants | 520,487 | ||||||
Expected volatility rate | 113.70% | ||||||
Risk free interest rate | 0.01% | ||||||
Issuance of warrant | 625,000 | ||||||
Dividend yield | 0.00% | ||||||
Extra Warrants [Member] | |||||||
Fair value of warrants | 407,917 | ||||||
Expected volatility rate | 109.42% | ||||||
Risk free interest rate | 2.17% | ||||||
Issuance of warrant | 500,000 | ||||||
Warrants expiration date | 2-Feb-20 | ||||||
Contractual term | 5 years | ||||||
Dividend yield | 0.00% | ||||||
Bridge Financings [Member] | |||||||
Issuance of warrants to purchase of common stock | 200,000 | ||||||
Warrant exercise price | $1 | ||||||
Warrant expiration period | 7 years | ||||||
Fair value of warrants | 171,143 | ||||||
Expected volatility rate | 109.00% | ||||||
Risk-free interest rate minimum | 1.10% | ||||||
Risk-free interest rate maximum | 2.11% | ||||||
Orthofix Subsequent Financing [Member] | |||||||
Issuance of warrants to purchase of common stock | 166,667 | ||||||
Warrant exercise price | $1.50 | ||||||
Warrant expiration period | 4 years | ||||||
Fair value of warrants | 116,164 | ||||||
Expected volatility rate | 100.83% | ||||||
Risk free interest rate | 1.66% | ||||||
Orthofix Subsequent Financing [Member] | MTF Short Term 2014 Loan [Member] | |||||||
Issuance of warrants to purchase of common stock | 333,334 | ||||||
Warrant exercise price | $1.50 | ||||||
Secured Term Note and Warrant [Member] | |||||||
Issuance of warrants to purchase of common stock | 3,955,697 | ||||||
Warrant exercise price | $1.58 | ||||||
Fair value of warrants | 1,434,000 | ||||||
Expected volatility rate | 96.77% | ||||||
Risk free interest rate | 0.82% | ||||||
Warrants expiration date | 24-Oct-17 | ||||||
Contractual term | 3 years | ||||||
Dividend yield | 0.00% | ||||||
Hankey Capital, LLC [Member] | |||||||
Common shares issued for collateral on loan, shares | 6,329,114 | ||||||
Issuance of warrants to purchase of common stock | 3,955,697 | ||||||
Warrant exercise price | $1.58 | ||||||
Orthofix, Corp. [Member] | |||||||
Issuance of warrants to purchase of common stock | 166,667 | ||||||
Warrant exercise price | $1.50 | ||||||
Warrant expiration period | 4 years | ||||||
Fair value of warrants | 111,804 | ||||||
Expected volatility rate | 109.00% | ||||||
Risk free interest rate | 0.79% | ||||||
Agent Warrants [Member] | |||||||
Issuance of warrants to purchase of common stock | 46,667 | ||||||
Warrant exercise price | $1 | ||||||
Fair value of warrants | 28,629 | ||||||
Expected volatility rate | 109.10% | ||||||
Risk free interest rate | 0.39% | ||||||
Contractual term | 2 years 6 months | ||||||
Dividend yield | 0.00% | ||||||
Warrant expiration term | 5 years | ||||||
Percentage of advisory warrant received | 2.00% | ||||||
Forefront receive compensation | 2,500,000 | ||||||
Hankey Capital Secured Term Note [Member] | |||||||
Issuance of warrants to purchase of common stock | 126,582 | ||||||
Warrant exercise price | $1 | ||||||
Fair value of warrants | $197,441 | ||||||
Expected volatility rate | 101.05% | ||||||
Risk free interest rate | 1.52% | ||||||
Contractual term | 5 years | ||||||
Dividend yield | 0.00% | ||||||
Warrant expiration term | 5 years |
Stockholders_Equity_Schedule_o
Stockholders' Equity - Schedule of Outstanding Unexercised Common Stock Warrants (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Number of Shares | 757,977 |
Unexercised Common Stock Warrants [Member] | |
Number of Shares | 7,023,464 |
2006 [Member] | Unexercised Common Stock Warrants [Member] | |
Exercise Price | $0.17 |
Number of Shares | 60,920 |
2009 [Member] | Unexercised Common Stock Warrants [Member] | |
Exercise Price | $0.44 |
Number of Shares | 118,383 |
2010 [Member] | Unexercised Common Stock Warrants [Member] | |
Exercise Price | $0.44 |
Number of Shares | 254,997 |
2013 [Member] | Unexercised Common Stock Warrants [Member] | |
Exercise Price | $1 |
Number of Shares | 200,000 |
2014 [Member] | Unexercised Common Stock Warrants [Member] | |
Number of Shares | 6,389,164 |
2014 [Member] | Unexercised Common Stock Warrants [Member] | Minimum [Member] | |
Exercise Price | $1 |
2014 [Member] | Unexercised Common Stock Warrants [Member] | Maximum [Member] | |
Exercise Price | $1.62 |
StockBased_Compensation_Detail
Stock-Based Compensation (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Percentage of stock issued and outstanding | 5.00% | |
Stock-based compensation expense | $256,642 | |
Unrecognized compensation cost related to unvested stock options | 297,148 | |
Weighted average period | 1 year 9 months | |
Employees and Directors [Member] | ||
Stock-based compensation expense | $323,510 | |
2014 Stock Option Plan [Member] | ||
Shares authorized and reserved for issuance | 2,642,898 |
StockBased_Compensation_Schedu
Stock-Based Compensation - Schedule of Stock Option Activity (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Shares Remaining Options Outstanding, Beginning balance | |
Number of Shares Remaining Options, Granted - 2014 | 757,977 |
Number of Shares Remaining Options, Forfeited - 2014 | |
Number of Shares Remaining Options, Exercised - 2014 | |
Number of Shares Remaining Options Outstanding, Ending balance | 757,977 |
Weighted Average Exercise Price, Outstanding, Beginning | |
Weighted Average Exercise Price, Granted - 2014 | $1 |
Weighted Average Exercise Price, Forfeited - 2014 | |
Weighted Average Exercise Price, Exercised - 2014 | |
Weighted Average Exercise Price, Outstanding, Ending | $1 |
Weighted Average Life (Years), Granted | 7 years 8 months 9 days |
Weighted Average Life (Years), Outstanding | 7 years 8 months 9 days |
Intrinsic Value, Share Outstanding | |
Intrinsic Value, Share Ending |
StockBased_Compensation_Schedu1
Stock-Based Compensation - Schedule of Assumptions Using Black-Scholes option pricing model (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Minimum [Member] | |
Weighted average risk free interest rate | 1.83% |
Weighted average life (in years) | 4 years 6 months |
Volatility | 96.64% |
Expected dividend yield | 0.00% |
Maximum [Member] | |
Weighted average risk free interest rate | 1.84% |
Weighted average life (in years) | 6 years |
Volatility | 98.70% |
Expected dividend yield | 0.00% |
StockBased_Compensation_Schedu2
Stock-Based Compensation - Schedule of Non-Vested Options (Details) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Number of Non-vested Options Outstanding, Beginning | |
Number of Non-vested Options, Vested | 256,508 |
Number of Non-vested Options, Ending | 501,469 |
Number of Non-vested Options, Exercisable | 256,508 |
Number of Non-vested Options, Outstanding | 757,977 |
Weighted Average Fair Value at Grant Date, Outstanding, Beginning balance | |
Weighted Average Fair Value at Grant Date, Vested | $0.73 |
Weighted Average Fair Value at Grant Date, Outstanding, Ending balance | $0.73 |
Weighted Average Fair Value at Grant Date, Exercisable | $0.73 |
Weighted Average Fair Value at Grant Date, Outstanding | $0.73 |
Intrinsic Value, Outstanding, Beginning balance | |
Intrinsic Value, Outstanding, Ending balance |
Income_Taxes_Details_Narrative
Income Taxes (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $6,638,000 | $4,681,000 |
Deferred tax assets valuation allowance | 4,759,000 | 3,078,000 |
Deferred tax asset changes in valuation allowance | $1,680,000 | |
Effective tax rate | 0.00% | 0.00% |
Income_Taxes_Schedule_of_Provi
Income Taxes - Schedule of Provision for Income Taxes (Details) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Abstract] | ||
Federal | ||
State | 1,600 | 800 |
Total current | 1,600 | 800 |
Federal | ||
State | ||
Total deferred | ||
Provision for income taxes | $1,600 | $800 |
Income_Taxes_Schedule_of_Defer
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Income Tax Disclosure [Abstract] | ||
Net operating losses | $2,631,000 | $1,866,000 |
Patents | 326,000 | 560,000 |
Accrued expenses | 952,000 | 550,000 |
R&D credits | 85,000 | 57,000 |
Warrants | 765,000 | 45,000 |
Total | 4,759,000 | 3,078,000 |
Less: Valuation allowance | -4,759,000 | -3,078,000 |
Deferred tax assets | $0 | $0 |
Related_Party_Transactions_Det
Related Party Transactions (Details Narrative) (USD $) | 0 Months Ended | 12 Months Ended | |
Sep. 19, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Related Party Transactions [Abstract] | |||
Consulting fees for related party | $178,597 | $120,000 | |
Warrant issued during period for purchase common stock | 699,671 | ||
Research and development consulting services | 320,000 | ||
Deferred for payment until next equity financing | 320,000 | 52,500 | |
Deferred payment included in accrued expenses | 52,500 | 52,500 | |
Related party expense | $47,500 |
Transaction_Costs_Details_Narr
Transaction Costs (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Other receivable - related party | $75,000 | |
AFH Advisory [Member] | ||
Payment of acquisition cost | 500,000 | |
Payments for merger and public offering cost | $90,000 |