Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 13, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Bone Biologics Corp | |
Entity Central Index Key | 1,419,554 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 38,088,488 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash | $ 4,221,188 | $ 1,115,109 |
Prepaid expenses | 99,622 | 85,998 |
Prepaid expenses - Related Party | 300,838 | 339,931 |
Total current assets | 4,621,648 | 1,541,038 |
Property and equipment, net | 362 | 5,804 |
Total assets | 4,622,010 | 1,546,842 |
Current liabilities | ||
Accounts payable and accrued expenses | 484,014 | 322,078 |
Shares to be issued | 1,823,077 | 1,823,077 |
Total current liabilities | 2,307,091 | 2,145,155 |
Note payable, net of debt discount of $3,672,790 and $1,917,248, respectively | 5,327,210 | 5,082,752 |
Total liabilities | $ 7,634,301 | $ 7,227,907 |
Commitments and Contingencies | ||
Stockholders' deficit | ||
Preferred Stock, $0.001 par value per share; 20,000,000 shares authorized; none issued or outstanding at March 31, 2016 and December 31, 2015 | ||
Common stock, $0.001 par value per share; 100,000,000 shares authorized; 38,082,488 and 32,211,956 shares issued and outstanding at March 31, 2016 and December 31, 2015, respectively | $ 38,083 | $ 32,212 |
Additional paid-in capital | 29,842,370 | 20,201,567 |
Accumulated deficit | (32,892,744) | (25,914,844) |
Total stockholders' deficit | (3,012,291) | (5,681,065) |
Total liabilities and stockholders' deficit | $ 4,622,010 | $ 1,546,842 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Debt discount of note payable | $ 3,672,790 | $ 1,917,248 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 38,082,488 | 32,211,956 |
Common stock, shares outstanding | 38,082,488 | 32,211,956 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Revenues | ||
Cost of revenues | ||
Gross profit | ||
Operating expenses | ||
Research and development | $ 4,678,201 | $ 188,288 |
General and administrative | 1,882,026 | 735,132 |
Total operating expenses | 6,560,227 | 923,420 |
Loss from operations | (6,560,227) | $ (923,420) |
Other expenses | ||
Loss on disposal of assets | (4,862) | |
Interest expense, net | (411,209) | $ (716,799) |
Total other expenses | (416,071) | (716,799) |
Loss before provision for income taxes | (6,976,298) | (1,640,219) |
Provision for income taxes | 1,600 | 1,600 |
Net loss | $ (6,977,898) | $ (1,641,819) |
Weighted average shares outstanding - basic and diluted | 34,686,926 | 24,269,047 |
Loss per share - basic and diluted | $ (0.20) | $ (0.07) |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Operating activities | ||
Net loss | $ (6,977,898) | $ (1,641,819) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | $ 580 | 571 |
Accrued interest expense | 76,694 | |
Amortization of prepaid expenses - related party | $ 39,093 | 61,188 |
Debt discount amortization | 174,147 | 119,542 |
Debt issuance costs amortization | 70,311 | 414,917 |
Stock-based compensation | 924,586 | 68,706 |
Warrants issued to consultants | 2,939,823 | $ 324,532 |
Interest expense deducted from loan proceeds | 1,889 | |
Loss on disposal of assets | 4,862 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | (1,625) | $ 417 |
Accounts payable and accrued expenses | 297,200 | 83,438 |
Net cash (used in) operating activities | $ (2,527,032) | (491,814) |
Investing activities | ||
Purchase of property and equipment | (504) | |
Net cash provided by (used in) investing activities | $ (504) | |
Financing activities | ||
Proceeds from exercise of warrants | $ 1,250,000 | |
Proceeds from issuance of common stock | 2,500,000 | |
Proceeds from issuance of notes payable | 1,883,111 | |
Net cash provided by (used in) financing activities | 5,633,111 | |
Net increase (decrease) in cash | 3,106,079 | $ (492,318) |
Cash, beginning of period | 1,115,109 | 2,661,396 |
Cash, end of period | 4,221,188 | 2,169,078 |
Supplemental non-cash information | ||
Interest paid | 166,931 | 106,250 |
Taxes paid | $ 1,600 | $ 1,600 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | 1. The Company Bone Biologics Corporation (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, by and among the Company, its wholly-owned subsidiary, Bone Biologics Acquisition Corp., a Delaware corporation (Merger Sub), and Bone Biologics, Inc. Merger Sub merged with and into Bone Biologics Inc., with Bone Biologics 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 Corporation 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. In connection with the merger, the 5,000,000 outstanding shares of common stock of the Company, par value $0.001 per share (Common Stock), 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 Companys 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). We are a biotechnology company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein, known as 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 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 Companys 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 Companys 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. Going Concern and Liquidity The Company has no significant operating history and, since inception to March 31, 2016, has generated a net loss of approximately $32.9 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 $7.2 million. The accompanying consolidated financial statements for the three months ended March 31, 2016 have been prepared assuming the Company will continue as a going concern. In connection with the certain letter agreement (See Note 5), 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 Companys 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. Reclassification As further reflected in Note 6 to the condensed consolidated financial statements, we adopted Accounting Standards Update (ASU) 2015-03, Interest - Imputation of Interest (Subtopic 835-30),: Simplifying the Presentation of Debt Issuance Costs As presented December 31, 2015 Reclassification As adjusted December 31, 2015 Deferred financing fees $ 873,274 $ (873,274 ) $ - Prepaid Expenses Related Party $ - $ 339,931 $ 339,931 Note payable $ 5,616,095 $ (533,343 ) $ 5,082,752 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies The unaudited interim condensed consolidated financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2015. The results of the three month period ended March 31, 2016 are not necessarily indicative of the results to be expected for the full year ending December 31, 2016. Basis of Presentation The accompanying condensed consolidated financial statements and related notes included activities of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). Use of Estimates The preparation of the accompanying condensed 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 and income tax valuation allowances. Actual results could differ from those estimates. Fair Value of Financial Instruments The Companys consolidated financial instruments are accounts payable and notes payable. The recorded values of 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 three months ended March 31, 2016. 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 5 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. The Company 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 Companys 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. Prepaid expenses related party Prepaid expenses related party represent the fair value of warrants issued to AFH Holding & Advisory, LLC (AFH), a shareholder, for services pursuant to certain letter agreement dated May 4, 2014 (Note 5). Prepaid costs will be amortized as the required services are performed. As of March 31, 2015 and December 31, 2015 prepaid expenses related party totaled $300,838 and 339,931, respectively. 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. Federal insurance coverage is $250,000 per depositor at each financial institution. A substantial majority of the Companys cash balances exceed federally insured limits. Debt Issuance Costs Debt issuance costs represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Debt issuance costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective interest method, while debt issuance costs from equity financings are netted against the gross proceeds received from the equity financings. Stock Based Compensation ASC 718, Compensation Stock Compensation 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 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 March 31, 2016 and December 31, 2015. The Companys policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of March 31, 2016 and December 31, 2015. Loss per Common Share The Company utilizes FASB ASC Topic No. 260, Earnings per Share 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 March 31, 2016 and 2015: March 31, 2016 2015 Warrants 10,451,740 7,722,501 Stock options 11,749,318 757,977 Convertible promissory notes 5,696,203 6,988,354 27,897,261 15,468,832 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 September 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. In April 2015, the FASB issued ASU 2015-3, Interest - Imputation of Interest (Subtopic 835-30), In March 2016, the FASB issued authoritative guidance under ASU 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. Property and Equipment Property and equipment consist of the following at: March 31, 2016 December 31, 2015 Furniture and equipment $ 503 $ 9,786 Less accumulated depreciation (141 ) (3,982 ) $ 362 $ 5,804 Depreciation expense for the three months ended March 31, 2016 and 2015 was $580 and $571, respectively. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 4. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: March 31, 2016 December 31, 2015 Accounts payable $ 282,613 $ 186,814 Accrued Bonuses 85,500 135,264 Severance payable 115,000 - Payroll liabilities 901 - $ 484,014 $ 322,078 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 5. Commitments and Contingencies Letter Agreement In August 2012, Bone Biologics, Inc., along with its then majority owner and debt holder, Musculoskeletal Transplant Foundation (MTF), entered into a letter agreement (the AFH/MTF Agreement) 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 AFH/MTF Agreement was amended and restated, and on May 7, 2014, the AFH/MTF Agreement was again amended and restated. Among other things, the Amended and Restated letter agreement dated May 7, 2014 (the Amended AFH/MTF Agreement) provides that AFH will use its best efforts to assist the Company in procuring an investment bank to facilitate a financing of between $8 - 10 million. UCLA Exclusive License Agreement On March 15, 2006, the Company entered into an exclusive license agreement (the Initial Agreement) with the Regents of the University of California Los Angeles (UCLA). The Initial Agreement has been amended through nine sets of amendments (as so amended, the The UCLA License Agreement). The UCLA License Agreement provides us with an exclusive license to several of UCLA patents covering, among other things, enhanced NELL-1 bone mineralization. The grant of the UCLA License Agreement is subject to any license obligations to the U.S. government, and the term of the license lasts until the last-to-expire UCLA patent licensed under the UCLA License Agreement expires. Under the UCLA License Agreement, we are permitted to make, have made, use, sell, offer for sale and import any products covered by the UCLA License Agreement patents in a certain Field of Use which is currently defined as special function by local administration and expressly excludes osteoporosis and cartilage indications or systemic administration in all indications. Currently the parties are negotiating in good faith the terms pursuant to which UCLA will grant an option to exclusively license UCLA Patent Rights in the osteoporosis indication. After December 22, 2016, we may notify UCLA of our interest in requesting an expansion of the Field of Use to include additional available indications, including cartilage indications or systemic administration in the Field of Use. The parties will engage in good faith discussions of such requests. We have agreed to pay an annual maintenance fee to UCLA of $10,000 as well as to pay certain royalties to UCLA under the UCLA License Agreement at the rate of 3.0% of net sales of licensed products. We must pay the royalties to UCLA on a quarterly basis. Upon a first commercial sale, we also must pay between $50,000 and $250,000, depending on the calendar year which is after the first commercial sale. If we are required to pay any third party any royalties as a result of us making use of UCLA patents, then we may reduce the royalty owed to UCLA by 0.333% for every percentage point paid to a third party. If we grant sublicense rights to a third party to use the UCLA patent, then we will pay to UCLA 10% to 20% of the sublicensing income we receive from such sublicense. We are obligated to make the following milestone payments to UCLA for each Licensed Product or Licensed Method: ● $100,000 upon enrollment of the first subject in a Feasibility Study; ● $250,000 upon enrollment of the first subject in a Pivotal Study: ● $500,000 upon Pre-Market Approval of a Licensed Product or Licensed Method; and ● $1,000,000 upon the First Commercial Sale of a Licensed Product or Licensed Method. We are also obligated to pay UCLA a cash milestone payment within thirty (30) days of a Liquidity Event (including a Change of Control Transaction and a payment election by UCLA exercisable after December 22, 2016, such payment to equal the greater of: ● $500,000; or ● 2% of all proceeds in connection with a Change of Control Transaction. We are obligated to diligently proceed with developing and commercializing licensed products under UCLA patents set forth in the UCLA License Agreement. UCLA has the right to either terminate the license or reduce the license to a non-exclusive license if we do not meet certain diligence milestone deadlines set forth in the UCLA License Agreement. We must reimburse or pre-pay UCLA for patent prosecution and maintenance costs incurred during the term of the UCLA License Agreement. We have the right to bring infringement actions against third party infringers of the UCLA License Agreement, UCLA may join voluntarily, at its own expense, or, at our expense, be joined involuntarily to the action. We are required to indemnify UCLA against any third party claims arising out of our exercise of the rights under the UCLA License Agreement or any sublicense. Contingencies The Company is subject to claims and assessments from time to time in the ordinary course of business. The Companys management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Companys 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 Companys 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 Companys 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
Notes Payable | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | 6. 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 Companys statements of operations. The Company concluded that there is no beneficial conversion feature as of the date of issuance of the convertible notes. First Secured Convertible Note and Warrant On October 24, 2014, the Company issued a convertible promissory note in the amount of $5,000,000 to Hankey Capital, LLC (Hankey Capital). The Convertible Note matures on October 24, 2017 and bears interest at an annual rate of interest of the prime rate 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 its sole discretion, to convert the Convertible Note into shares of the Companys Common Stock, at a conversion rate equal to the greater of (i) $1.58 per share or (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 lending. 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 Companys 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 will 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 will 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 3.0% of the original principal amount of the loan ($150,000) to Hankey Capital. 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 was amended as of February 10, 2016 to extend the expiration date to October 24, 2019. The Note and Warrant contain provisions limiting the exercise/conversion thereof. Second Secured Convertible Note and Warrant On May 4, 2015, the Company issued a convertible promissory note in the amount of $2,000,000 to Hankey Capital. The 2nd Convertible Note matures on May 4, 2018 and bears interest at an annual rate of interest of the prime rate 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 its sole discretion, to convert the Convertible Note into shares of the Companys Common Stock, at a conversion rate equal to the greater of (i) $1.58 per share or (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 number of shares in the Collateral shall be adjusted on a yearly basis. The Convertible Note is further secured by collateral assignments of all the Companys 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 the collateral shares shall be returned return and cancelled. Hankey Capital shall also return the collateral shares under the same terms in case of partial or full conversion of the Convertible Note. In connection with the Convertible Note, on May 4, 2015 the Company issued 2,531,646 common shares as collateral. The Company paid a commitment fee in the amount of $60,000 (3% of the original principal amount of the loan) to Hankey Capital. On May 4, 2015, the Company also issued a warrant to Hankey Capital for 1,898,734 shares of Common Stock at an exercise price per share of $1.58. The Warrant was amended as of February 10, 2016 to extend the expiration date to May 4, 2020. The Note and Warrant contain provisions limiting the exercise/conversion thereof. Third Convertible Secured Term Note and Warrant On February 24, 2016, the Company issued a convertible promissory note in the amount of $2,000,000 to Hankey Capital. The Convertible Note matures on February 23, 2019 (the Maturity Date) and bears interest at an annual rate of interest at 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 its sole discretion, to convert the Convertible Note into shares of the Companys common stock (the Conversion Shares), at a conversion rate equal to $1.58 per share. 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 number of Collateral Shares will be adjusted on a yearly basis. The Convertible Note is further secured by all of the Companys personal property, including collateral assignments of all the Companys license agreements and the Option Agreement. The principal amount of the loan is prepayable in whole or in part at any time, without premium or penalty. Upon any voluntary partial prepayment of outstanding principal, Hankey Capital will 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 will be returned and cancelled. Hankey Capital will also return Collateral Shares under the same terms in case of partial or full conversion of the Convertible Note. In connection with the Convertible Note, on February 24, 2016 the Company issued 2,531,646 common shares as collateral, paid a commitment fee in the amount of $40,000 (2% of the original principal amount of the Loan) and a warrant to Hankey Capital for 1,463,415 shares of Common Stock at an exercise price per share of $2.05. The Warrant will expire on February 23, 2021. The Note and Warrant contain provisions limiting the exercise/conversion thereof. In connection with the financing with Hankey Capital, Hankey Capital exercised warrants to purchase an aggregate of 791,139 shares resulting in gross proceeds to the Company of $1,250,000, and the parties agreed to extend the maturity date of the first two convertible secured notes to December 31, 2019 and fix the conversion rate to $1.58. The Company also agreed to extend the term of all outstanding warrants to five years from issuance. The total debt discount costs related to our outstanding debt for the three months ended March 31, 2016 and 2015, was $174,147 and $119,542, respectively. These costs were amortized to interest expense. The unamortized debt discount at March 31, 2016 was $3,092,226. The cost is expected to be recognized over a period of 3.75 years. The unamortized debt discount at December 31, 2015 was $1,383,905. The total debt issuance costs related to our outstanding debt for the three months ended March 31, 2016 and 2015, was $70,311 and $414,917, respectively. These costs were amortized to interest expense. The unamortized debt issuance costs at March 31, 2016 was $580,564. The cost is expected to be recognized over a period of 3.75 years. The unamortized debt issuance costs at December 31, 2015 was $533,343. Note Type Issue Date Maturity Date Interest Rate March 31, 2016 December 31, 2015 (as adjusted) First Secured Convertible Note 10/24/14 12/31/19 8.5 % 5,000,000 5,000,000 Second Secured Convertible Note 5/4/15 12/31/19 8.5 % 2,000,000 2,000,000 Third Secured Convertible Note 2/24/16 2/23/19 8.5 % 2,000,000 - 9,000,000 7,000,000 Less: Debt discount 3,092,226 1,383,905 Less: Debt issuance costs 580,564 533,343 Net Notes payable $ 5,327,210 $ 5,082,752 |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | 7. Stockholders Equity Preferred Stock The Companys 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 Companys amended and restated certificate of incorporation authorizes the Company to issue a total of 100,000,000 shares of common stock. As of March 31, 2016 and December 31, 2015, the Company had an aggregate of 38,082,488 shares and 32,211,956 shares of common stock outstanding, respectively. In connection with the Secured Convertible Notes to Hankey Capital, the Company issued 11,392,406 common shares as collateral. (See Note 6) 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. Common Stock Warrants As of March 31, 2016, the Company had outstanding unexercised Common Stock Warrants as follows: Date Issued Exercise Price Number of Shares Expiration date 2006 $ 0.17 60,920 October 31, 2016 2009 $ 0.44 118,383 March 16, 2019 2010 $ 0.44 254,997 February 4, 2020 April 2013 $ 1.00 50,000 April 28, 2020 September 2013 $ 1.00 50,000 September 4, 2020 September 2013 $ 1.00 25,000 September 20, 2020 November 2013 $ 1.00 75,000 November 14, 2020 July 2014 $ 1.50 166,667 May 30, 2018 July 2014 $ 1.50 166,667 September 30, 2018 July 2014 $ 1.00 500,000 September 30, 2018 July 2014 $ 1.00 46,667 July 2, 2018 July 2014 $ 0.00 12,625 July 10, 2018 September 2014 $ 1.62 625,000 August 31, 2021 September 2014 $ 1.00 699,671 September 18, 2021 September 2014 $ 1.00 89,588 September 29, 2021 October 2014 $ 1.00 126,582 October 23, 2017 October 2014 $ 1.58 3,164,558 October 23, 2019 February 2015 $ 1.58 699,037 February 14, 2018 May 2015 $ 1.58 1,898,734 May 4, 2020 October 2015 $ 1.58 158,229 October 27, 2018 February 2016 $ 2.05 1,463,415 February 23, 2021 Total warrants at March 31, 2016 10,451,740 3.94 years An aggregate of 791,139 common stock warrants were exercised during the three months ended March 31, 2016. No common stock warrants expired during the three months ended March 31, 2016. No common stock warrants were exercised or expired during the three months ended March 31, 2015. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 8. Stock-based Compensation 2015 Equity Incentive Plan The Company has 14,000,000 shares of Common Stock authorized and reserved for issuance under our 2015 Equity Incentive Plan for option awards. This reserve may be increased by the Board each year 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 2015 Equity Incentive 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 2015 Equity Incentive Plan which expire, are repurchased or are cancelled or forfeited will again become available for issuance under our 2015 Equity Incentive 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 2015 Equity Incentive Plan. Awards may be granted under our 2015 Equity Incentive 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 2015 Equity Incentive Plan will be administered by our compensation committee. Subject to the provisions of our 2015 Equity Incentive 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 2015 Equity Incentive Plan and awards granted under our 2015 Equity Incentive Plan. During the three months ended March 31, 2016 and 2015, the Company had stock-based compensation expenses of $943,417 and $68,706, respectively, related to issuances to the Companys employees and directors, included in our reported net loss. During the three months ended March 31, 2016 and 2015, the Company had stock-based compensation expenses of $2,939,823 and $-0-, respectively, related to issuances to consultants. A summary of stock option activity for the three months ended March 31, 2016, is presented below: Number Weighted of Shares Average Weighted Remaining Exercise Average Aggregate Subject to Exercise Options Price Life (Years) Value Outstanding as of January 1, 2015 757,977 $ 1.59 10.00 Granted 2015 5,536,249 1.59 10.00 - Forfeited 2015 - - - - Exercised 2015 - - - - Outstanding as of January 1, 2016 6,294,226 $ 1.59 10.00 - Granted 2016 5,455,092 1.59 9.95 - Forfeited 2016 - - - - Exercised 2016 - - - - Outstanding as of March 31, 2016 11,749,318 $ 1.59 9.98 - Date Issued Exercise Price Number of Shares Expiration date September 2014 $ 1.59 583,059 December 27, 2025 November 2014 $ 1.59 174,918 December 27, 2025 August 2015 $ 1.59 3,121,787 December 27, 2025 September 2015 $ 1.59 300,000 December 27, 2025 November 2015 $ 1.59 1,224,640 December 27, 2025 December 2015 $ 1.59 889,822 December 27, 2025 January 2016 $ 1.59 5,401,092 January 9, 2026 March 2016 $ 2.05 54,000 February 24, 2021 Total options at March 31, 2016 11,749,318 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value ( i.e. There were 5,455,092 and -0- options issued during the three months ended March 31, 2016 and 2015, respectively. 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 Companys 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 three months ended March 31, 2016 are as follows: March 31, 2016 Risk free interest rate 1.38% - 2.13% Expected life (in years) 2.5 - 5 Expected Volatility 116.26%-122.65% Expected dividend yield 0% A summary of the changes in the Companys non-vested options during the three months ended March 31, 2016, is as follows: Number of Non-vested Options Weighted Average Fair Value at Grant Date Intrinsic Value Non-vested at January 1, 2015 501,469 $ 0.73 - Granted in 2015 5,536,249 $ 1.29 - Vested in year ended December 31, 2015 (881,008 ) $ 0.73 - Non-vested at January 1, 2016 5,156,710 $ 1.29 - Granted in 2016 5,455,092 $ 3.95 - Vested in 2016 (318,547 ) $ 1.37 - Non-vested at March 31, 2016 10,293,255 $ 3.02 - Exercisable at March 31, 2016 1,456,063 $ 1.31 - Outstanding at March 31, 2016 11,749,318 $ 1.59 - As of March 31, 2016, total unrecognized compensation cost related to unvested stock options was $26,223,363. The cost is expected to be recognized over a weighted average period of 3.47 years. 2016 2017 2018 2019 2020 2021 $ 10,788,252 $ 8,001,868 $ 4,570,141 $ 2,283,564 $ 557,544 $ 21,994 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 9. Income Taxes The Companys effective tax rate is 0% for income tax for the three months ended March 31, 2016 and the Company expects that its effective tax rate for the full year 2016 will be 0%. 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 the states of New Jersey and California. The Company is not currently subject to any income tax examinations. Since the Companys inception, the Company had incurred losses from operations, which generally allows all tax years to remain open. Uncertain Tax Positions The Company recognizes the 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 | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. Related Party Transactions AFH Holding & Advisory LLC The Company and MTF entered into a letter agreement with AFH Holdings & Advisory, LLC (AFH) dated May 7, 2014 (the AFH/MTF Agreement). Amir Heshmatpour is the controlling party of AFH and an affiliate and board observer of the Company. The AFH Agreement contemplated among other things (a) the sale of Notes in the principal amount of $50,000 and warrants to purchase common stock, and (b) certain assistance to be provided by AFH in connection with the Merger, the subsequent quotation of the Companys common stock, procuring private funding and a possible initial public offering. In consideration of AFHs advisory services, the Company granted to AFH certain anti-dilution protection arising from future issuances of the Companys common stock. The Company granted to each of AFH and MTF the right to appoint three members of the Board and to the original founding scientists and then minority shareholders the right to appoint one member with each of MTF and AFH having the right to appoint one individual with observer status with respect to the Board. The Company also granted to AFH the right to act as advisor to the Company on all financings for a period of two years. The AFH/MTF Agreement also granted to AFH and MTF restricted shares equal to 2.5% of the fully diluted shares of the Company (the Milestone Shares) at the time of completion of certain milestone targets. The milestone targets were not met and pursuant to separate side letter agreements dated August 11, 2015, the Company agreed to issue to each of AFH and MTF 867,163 shares in exchange for forfeiture of any claims to receive any Milestone Shares. On October 28, 2015, the Company agreed (i) to issue to AFH 915,614 shares of common stock of the Company and warrants to purchase 158,229 shares of common stock and (ii) to make a payment of $275,000. The warrants have an exercise price of $1.58. The shares and warrants were issued and the payment was made to AFH as payment for advisory services rendered to the Company. Pursuant to a letter agreement dated February 10, 2016, the Company agreed to issue a total of 1,260,255 shares of common stock of the Company to AFH. The Letter Agreement was entered into in connection with the AFH/MTF Agreement under which AFH and its affiliated entities, individuals or assignees (AFH Group) were entitled to 10% of the outstanding shares of common stock of the Company on a fully diluted basis (the Share Adjustment) after giving effect to an anticipated private placement of between $8,000,000 and $10,000,000 (the PIPE). In the Letter Agreement, the Company recognized that, at the time the AFH/MTF Agreement was entered into, it was not anticipated that certain events in addition to the PIPE would dilute directly or indirectly the interest of AFH Group as stockholders of the Company, including the Ninth Amendment to the UCLA License Agreement and the issuance of the Companys Common Shares pursuant to the Professional Services Agreement with each of Dr. Chia Soo, Dr. Ben Wu, and Dr. Eric Ting discussed below. Accordingly, the Company agreed to issue the 1,260,255 shares in connection with the Share Adjustment. In addition to the shares and warrants issued for services, AFH received cash totaling $325,000 for services during the three months ended March 31, 2016. Amir Heshmatpour is the controlling party of AFH and an affiliate and board observer of the Company. Musculoskeletal Transplant Foundation (MTF) On August 11, 2015 the Company entered into the Letter Agreement, by and between, Bone Biologics Corporation and MTF to amend the Side Letter Agreement, dated September 7, 2014 (the Letter Agreement), by and among Bone Biologics Corporation (formerly known as Bone Biologics, Inc., the Company), Musculoskeletal Transplant Foundation (MTF) and AFH. Pursuant to the Letter Agreement, AFH and MTF are each entitled to receive shares of the Company equal to and not to exceed 2.5% of the fully diluted shares of the Company at the time of the completion of the Milestone Targets (Milestone Shares). The Milestone Targets have not been reached, and in consideration for the support and cooperation of MTF in trying to reach the Milestone Targets and the closing of certain financings, including the conversion of debt by MTF in order to facilitate certain financings, the Company hereby authorizes the issuance of Company Common Shares to MTF in the amount of 2.5% of the fully diluted shares, Eight Hundred Sixty Seven Thousand One Hundred Sixty-Three (867,163) Common Shares, of the Company as of the date hereof. The Company recognized $1,370,118 as general and administrative expense. On February 22, 2016, the Company entered into a share purchase agreement with MTF, pursuant to which MTF purchased from the Company an aggregate of 731,707 shares of common stock of the Company at a price per share equal to $2.05. On February 24, 2016 the Company entered into an Option Agreement for the Distribution and Supply of Sygnal demineralized bone matrix (Sygnal) with MTF pursuant to which: a. MTF grants to the Company the exclusive right and option (the Option) to distribute Sygnal upon the critical terms as described in the Option Agreement (the Option Rights). The Company will exercise the Option, if at all, by providing written notice to MTF of its intent to do so. During the term of the Option, MTF will not enter into any agreements with any third parties which include the transfer by MTF of the Option Rights. b. Upon the exercising of the Option, the Company will grant to MTF 700,000 shares of common stock in the Company. c. Within 30 days of exercising the Option, MTF will provide the Company with a written proposal of a Definitive Agreement that includes, inter alia, the Critical Terms and those other commercially reasonable terms as agreed upon by the parties. The parties will fully negotiate in good faith all of the terms of the Definitive Agreement, and any ancillary agreements thereto consistent with the Critical Terms. d. In the event the Company does not exercise the Option within the Term of the Option Agreement, MTF will be free to enter into any other agreement relating to the Option Rights as it deems appropriate without liability to the Company. Sygnal is a bone void filler contouring allograft bone that has the inorganic mineral removed, leaving behind the organic collagen matrix. Bruce Stroever, our Chairman of the Board, is the President and Chief Executive Officer of MTF. Founders The Company entered into a Letter Agreement effective October 2, 2015, with each of Dr. Chia Soo (who currently serves as a director of the Company and is a director nominee), Dr. Eric Kang Ting and Dr. Ben Wu (who currently serves as a director of the Company and is a director nominee) (collectively, the Founders). The Founders were three of the original shareholders of the Company. Pursuant to the Letter Agreement, the Founders agrees to deliver to the Company all past work product and past data related to NELL-1 (the Data) for use by the Company in its sole discretion, within the applicable licensing rights granted under the UCLA license and in exchange the Company agreed to the future issuance of an aggregate of 1,153,846 shares of the Companys common stock. The Shares are to be equally distributed between the Founders upon the earlier of (i) the third anniversary of the Agreement and (ii) the occurrence of a Liquidity Event (as defined in the Letter Agreement). The Letter Agreement also provides the Shares with certain piggyback registration rights upon the occurrence of an equity financing by the Company. The Letter Agreement related to past work product and past data and therefore will be expensed as research and development costs upon the effective date and recorded a liability to issue shares. The Letter Agreement related to past work product and past data and therefore was expensed as research and development costs in 2015 and recorded as shares to be issued. Founders Professional Services Agreement Effective January 8, 2016, the Company entered into separate Professional Services Agreements with each of the Founders. Pursuant to each of the Agreements, each Founder has agreed to provide certain services to the Company, including providing strategic advice and strategic introductions to the Companys management team as well as specific services set forth on an Exhibit to each Agreement. The Agreements are substantially identical. In consideration for the services to be rendered under the applicable Agreement, each Founder is granted 10-year stock options (the Options) to purchase 1,800,364 shares of the Companys common stock corresponding to 4% of the Companys outstanding common stock, on a fully diluted basis, at an exercise price of $1.59 per share. The shares subject to the Options will vest 25% on each of the first, second and third anniversary of the effective date and 12.5% on each of the fourth and fifth anniversary of the effective date. The options fully vest on a change of control of the Company, if the Company terminates the Agreement without cause or the Founder terminates the Agreement with cause. Additionally, beginning January 1, 2017, the Company will pay each Founder an annual consulting fee of $200,000 in cash or, at the option of the Company, in shares of its common stock valued as provided in the Agreement. Dr. Soo and Dr. Wu are directors of the Company, and Dr. Ting is on the Companys Scientific Advisory Board. Each of the Advisors were involved in the founding of the Company. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events On April 7, 2016, the Company entered into a consulting agreement with AFH pursuant to which the Company engaged AFH for an initial term of three months to provide certain consulting services to the Company effective April 5, 2016. Under the consulting agreement, AFH is to receive an up-front retainer of $100,000 and $33,333.33 per month for three months. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements and related notes included activities of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP). |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed 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 and income tax valuation allowances. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Companys consolidated financial instruments are accounts payable and notes payable. The recorded values of 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 three months ended March 31, 2016. |
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 5 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. The Company 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 Companys 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. |
Prepaid expenses - related party | Prepaid expenses related party Prepaid expenses related party represent the fair value of warrants issued to AFH Holding & Advisory, LLC (AFH), a shareholder, for services pursuant to certain letter agreement dated May 4, 2014 (Note 5). Prepaid costs will be amortized as the required services are performed. As of March 31, 2015 and December 31, 2015 prepaid expenses related party totaled $300,838 and 339,931, respectively. |
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. Federal insurance coverage is $250,000 per depositor at each financial institution. A substantial majority of the Companys cash balances exceed federally insured limits. |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Debt issuance costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective interest method, while debt issuance costs from equity financings are netted against the gross proceeds received from the equity financings. |
Stock Based Compensation | Stock Based Compensation ASC 718, Compensation Stock Compensation 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 |
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 March 31, 2016 and December 31, 2015. The Companys policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of March 31, 2016 and December 31, 2015. |
Loss per Common Share | Loss per Common Share The Company utilizes FASB ASC Topic No. 260, Earnings per Share 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 March 31, 2016 and 2015: March 31, 2016 2015 Warrants 10,451,740 7,722,501 Stock options 11,749,318 757,977 Convertible promissory notes 5,696,203 6,988,354 27,897,261 15,468,832 |
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 September 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. In April 2015, the FASB issued ASU 2015-3, Interest - Imputation of Interest (Subtopic 835-30), In March 2016, the FASB issued authoritative guidance under ASU 2016-09, Compensation-Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting |
The Company (Tables)
The Company (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Reclassified Unamortized Debt Issuance Costs Associated with Our Secured Convertible Notes | We have reclassified unamortized debt issuance costs associated with our secured convertible notes in our previously reported Consolidated Balance Sheet as of December 31, 2015 as follows: As presented December 31, 2015 Reclassification As adjusted December 31, 2015 Deferred financing fees $ 873,274 $ (873,274 ) $ - Prepaid Expenses Related Party $ - $ 339,931 $ 339,931 Note payable $ 5,616,095 $ (533,343 ) $ 5,082,752 |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
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 March 31, 2016 and 2015: March 31, 2016 2015 Warrants 10,451,740 7,722,501 Stock options 11,749,318 757,977 Convertible promissory notes 5,696,203 6,988,354 27,897,261 15,468,832 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consist of the following at: March 31, 2016 December 31, 2015 Furniture and equipment $ 503 $ 9,786 Less accumulated depreciation (141 ) (3,982 ) $ 362 $ 5,804 |
Accounts Payable and Accrued 21
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: March 31, 2016 December 31, 2015 Accounts payable $ 282,613 $ 186,814 Accrued Bonuses 85,500 135,264 Severance payable 115,000 - Payroll liabilities 901 - $ 484,014 $ 322,078 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Notes Payable Tables | |
Schedule of Notes Payable | Note Type Issue Date Maturity Date Interest Rate March 31, 2016 December 31, 2015 (as adjusted) First Secured Convertible Note 10/24/14 12/31/19 8.5 % 5,000,000 5,000,000 Second Secured Convertible Note 5/4/15 12/31/19 8.5 % 2,000,000 2,000,000 Third Secured Convertible Note 2/24/16 2/23/19 8.5 % 2,000,000 - 9,000,000 7,000,000 Less: Debt discount 3,092,226 1,383,905 Less: Debt issuance costs 580,564 533,343 Net Notes payable $ 5,327,210 $ 5,082,752 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of Outstanding Unexercised Common Stock Warrants | As of March 31, 2016, the Company had outstanding unexercised Common Stock Warrants as follows: Date Issued Exercise Price Number of Shares Expiration date 2006 $ 0.17 60,920 October 31, 2016 2009 $ 0.44 118,383 March 16, 2019 2010 $ 0.44 254,997 February 4, 2020 April 2013 $ 1.00 50,000 April 28, 2020 September 2013 $ 1.00 50,000 September 4, 2020 September 2013 $ 1.00 25,000 September 20, 2020 November 2013 $ 1.00 75,000 November 14, 2020 July 2014 $ 1.50 166,667 May 30, 2018 July 2014 $ 1.50 166,667 September 30, 2018 July 2014 $ 1.00 500,000 September 30, 2018 July 2014 $ 1.00 46,667 July 2, 2018 July 2014 $ 0.00 12,625 July 10, 2018 September 2014 $ 1.62 625,000 August 31, 2021 September 2014 $ 1.00 699,671 September 18, 2021 September 2014 $ 1.00 89,588 September 29, 2021 October 2014 $ 1.00 126,582 October 23, 2017 October 2014 $ 1.58 3,164,558 October 23, 2019 February 2015 $ 1.58 699,037 February 14, 2018 May 2015 $ 1.58 1,898,734 May 4, 2020 October 2015 $ 1.58 158,229 October 27, 2018 February 2016 $ 2.05 1,463,415 February 23, 2021 Total warrants at March 31, 2016 10,451,740 3.94 years |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of stock option activity for the three months ended March 31, 2016, is presented below: Number Weighted of Shares Average Weighted Remaining Exercise Average Aggregate Subject to Exercise Options Price Life (Years) Value Outstanding as of January 1, 2015 757,977 $ 1.59 10.00 Granted 2015 5,536,249 1.59 10.00 - Forfeited 2015 - - - - Exercised 2015 - - - - Outstanding as of January 1, 2016 6,294,226 $ 1.59 10.00 - Granted 2016 5,455,092 1.59 9.95 - Forfeited 2016 - - - - Exercised 2016 - - - - Outstanding as of March 31, 2016 11,749,318 $ 1.59 9.98 - |
Schedule of Stock Option | Date Issued Exercise Price Number of Shares Expiration date September 2014 $ 1.59 583,059 December 27, 2025 November 2014 $ 1.59 174,918 December 27, 2025 August 2015 $ 1.59 3,121,787 December 27, 2025 September 2015 $ 1.59 300,000 December 27, 2025 November 2015 $ 1.59 1,224,640 December 27, 2025 December 2015 $ 1.59 889,822 December 27, 2025 January 2016 $ 1.59 5,401,092 January 9, 2026 March 2016 $ 2.05 54,000 February 24, 2021 Total options at March 31, 2016 11,749,318 |
Schedule of Assumptions Using Black-Scholes Option Pricing Model | The Company utilized the Black-Scholes option pricing model. The assumptions used for the three months ended March 31, 2016 are as follows: March 31, 2016 Risk free interest rate 1.38% - 2.13% Expected life (in years) 2.5 - 5 Expected Volatility 116.26%-122.65% Expected dividend yield 0% |
Schedule of Non-Vested Options | A summary of the changes in the Companys non-vested options during the three months ended March 31, 2016, is as follows: Number of Non-vested Options Weighted Average Fair Value at Grant Date Intrinsic Value Non-vested at January 1, 2015 501,469 $ 0.73 - Granted in 2015 5,536,249 $ 1.29 - Vested in year ended December 31, 2015 (881,008 ) $ 0.73 - Non-vested at January 1, 2016 5,156,710 $ 1.29 - Granted in 2016 5,455,092 $ 3.95 - Vested in 2016 (318,547 ) $ 1.37 - Non-vested at March 31, 2016 10,293,255 $ 3.02 - Exercisable at March 31, 2016 1,456,063 $ 1.31 - Outstanding at March 31, 2016 11,749,318 $ 1.59 - |
Schedule of Unrecognized Compensation Cost Related to Unvested Stock Options | As of March 31, 2016, total unrecognized compensation cost related to unvested stock options was $26,223,363. The cost is expected to be recognized over a weighted average period of 3.47 years. 2016 2017 2018 2019 2020 2021 $ 10,788,252 $ 8,001,868 $ 4,570,141 $ 2,283,564 $ 557,544 $ 21,994 |
The Company (Details Narrative)
The Company (Details Narrative) - USD ($) | 3 Months Ended | 145 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Jan. 08, 2016 | Dec. 31, 2015 | Oct. 28, 2015 | |
Common stock outstanding shares | 5,000,000 | 5,000,000 | ||||
Common stock issued and outstanding per share | $ 0.001 | $ 0.001 | $ 0.001 | |||
Common stock remaining shares were cancelled | 3,853,600 | 3,853,600 | ||||
Number of outstanding warrants issuable shares | 1,800,364 | 158,229 | ||||
Net income loss | $ (6,977,898) | $ (1,641,819) | $ 32,900,000 | |||
Estimated operating expenditure for next twelve months | $ 7,200,000 | $ 7,200,000 | ||||
Bone Biologics Inc [Member] | ||||||
Common stock issued and outstanding per share | $ 0.0001 | $ 0.0001 | ||||
Common stock converted combined number of share | 19,897,587 | |||||
Number of outstanding warrants issuable shares | 2,151,926 | 2,151,926 | ||||
Number of shares issuable upon the conversion of debt | 5,648,658 |
The Company - Schedule of Recla
The Company - Schedule of Reclassified Unamortized Debt Issuance Costs Associated with Our Secured Convertible Notes (Details) | Dec. 31, 2015USD ($) |
Deferred financing fees | $ (873,274) |
Prepaid Expenses - Related Party | 339,931 |
Note payable | (533,343) |
As Presented December 31, 2015 [Member] | |
Deferred financing fees | $ 873,274 |
Prepaid Expenses - Related Party | |
Note payable | $ 5,616,095 |
As Adjusted December 31, 2015 [Member] | |
Deferred financing fees | |
Prepaid Expenses - Related Party | $ 339,931 |
Note payable | $ 5,082,752 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Prepaid expenses - Related Party | $ 300,838 | $ 339,931 |
Debt issuance costs | 580,564 | |
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 Accoun28
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 27,897,261 | 15,468,832 |
Warrants [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 10,451,740 | 7,722,501 |
Stock Options [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 11,749,318 | 757,977 |
Convertible Promissory Notes [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 5,696,203 | 6,988,354 |
Property and Equipment (Details
Property and Equipment (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 580 | $ 571 |
Loss on disposal of assets | $ 4,862 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Abstract] | ||
Furniture and equipment | $ 503 | $ 9,786 |
Less accumulated depreciation | (141) | (3,982) |
Furniture and equipment, Net | $ 362 | $ 5,804 |
Accounts Payable and Accrued 31
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 282,613 | $ 186,814 |
Accrued Bonuses | 85,500 | $ 135,264 |
Severance payable | 115,000 | |
Payroll liabilities | 901 | |
Total Accounts Payable and Accrued Expenses | $ 484,014 | $ 322,078 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | May. 07, 2014 | |
License Agreement [Member] | ||
Payment of UCLA annual maintenance fee | $ 10,000 | |
Percentage of commercial sale of the licensed product equal to net sales | 3.00% | |
License Agreement [Member] | UCLA [Member] | ||
Percentage of commercial sale of the licensed product equal to net sales | 0.333% | |
License Agreement [Member] | UCLA [Member] | After December 22, 2016 [Member] | ||
License commitment fee | $ 500,000 | |
Percentage of amount raised in private placement | 2.00% | |
Minimum [Member] | License Agreement [Member] | UCLA [Member] | ||
Percentage of commercial sale of the licensed product equal to net sales | 10.00% | |
Maximum [Member] | License Agreement [Member] | UCLA [Member] | ||
Percentage of commercial sale of the licensed product equal to net sales | 20.00% | |
First Subject In Feasibility Study [Member] | License Agreement [Member] | UCLA [Member] | ||
License commitment fee | $ 100,000 | |
First Subject In Pivotal Study [Member] | License Agreement [Member] | UCLA [Member] | ||
License commitment fee | 250,000 | |
Pre-Market Approval Of Licensed Product Or Licensed Method [Member] | License Agreement [Member] | UCLA [Member] | ||
License commitment fee | 500,000 | |
First Commercial Sale Of Licensed Product Or Licensed Method [Member] | License Agreement [Member] | UCLA [Member] | ||
License commitment fee | 1,000,000 | |
AFH [Member] | Minimum [Member] | ||
Debt financing | $ 800,000 | |
AFH [Member] | Maximum [Member] | ||
Debt financing | $ 1,000,000 | |
First Commerical Sale [Member] | License Agreement [Member] | ||
Annual minimum royalty for life of the patent rights | 50,000 | |
After First Commerical Sale [Member] | License Agreement [Member] | ||
Annual minimum royalty for life of the patent rights | $ 250,000 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) | Feb. 24, 2016 | May. 04, 2015 | Oct. 24, 2014 | Mar. 31, 2016 | Mar. 31, 2015 | Jan. 08, 2016 | Dec. 31, 2015 | Oct. 28, 2015 |
Warrant to purchase shares of common stock | 1,800,364 | 158,229 | ||||||
Warrant exercise price | $ 1.59 | |||||||
Debt discount amortization | $ 174,147 | $ 119,542 | ||||||
Amortization over period | 3 years 9 months | |||||||
Unamortized debt discount | $ 3,092,226 | $ 1,383,905 | ||||||
Third Convertible Secured Term Note and Warrant [Member] | ||||||||
Debt discount amortization | $ 70,311 | 414,917 | ||||||
Amortization over period | 3 years 9 months | |||||||
Unamortized debt discount | $ 580,564 | $ 533,343 | ||||||
Hankey Capital, LLC [Member] | ||||||||
Warrant to purchase shares of common stock | 3,955,697 | |||||||
Warrant exercise price | $ 1.58 | |||||||
Warrant expiration date | Oct. 24, 2019 | |||||||
Hankey Capital, LLC [Member] | Second Warrant [Member] | ||||||||
Warrant to purchase shares of common stock | 1,898,734 | |||||||
Warrant exercise price | $ 1.58 | |||||||
Warrant expiration date | May 4, 2020 | |||||||
Hankey Capital, LLC [Member] | Third Warrant [Member] | ||||||||
Debt instrument conversation price per share | $ 1.58 | |||||||
Warrant to purchase shares of common stock | 1,463,415 | 791,139 | ||||||
Warrant exercise price | $ 2.05 | |||||||
Warrant expiration date | Feb. 23, 2021 | Dec. 31, 2019 | ||||||
Gross proceeds from warrant issued | $ 1,250,000 | |||||||
Hankey Capital, LLC [Member] | Second Secured Convertible Note And Warrant [Member] | ||||||||
Convertible promissory note amount | $ 2,000,000 | |||||||
Debt maturity date | May 4, 2018 | |||||||
Debt instrument interest rate | 8.50% | |||||||
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 | 2,531,646 | |||||||
Loan commitment fee amount | $ 60,000 | |||||||
Percentage of commitment fee paid | 3.00% | |||||||
Hankey Capital, LLC [Member] | Second Secured Convertible Note And Warrant [Member] | Maximum [Member] | ||||||||
Debt instrument conversation price per share | $ 1.58 | |||||||
Loan for collateral value ratio percentage | 50.00% | |||||||
Hankey Capital, LLC [Member] | Second Secured Convertible Note And Warrant [Member] | Prime Rate [Member] | ||||||||
Debt instrument interest rate | 4.00% | |||||||
Hankey Capital, LLC [Member] | Third Convertible Secured Term Note and Warrant [Member] | ||||||||
Convertible promissory note amount | $ 2,000,000 | |||||||
Debt maturity date | Feb. 23, 2019 | |||||||
Debt instrument interest rate | 8.50% | |||||||
Percentage of average daily price of common stock measured | 50.00% | |||||||
Number of common stock shares issued for lending | 2,531,646 | |||||||
Loan commitment fee amount | $ 40,000 | |||||||
Percentage of commitment fee paid | 2.00% | |||||||
Hankey Capital, LLC [Member] | Third Convertible Secured Term Note and Warrant [Member] | Maximum [Member] | ||||||||
Loan for collateral value ratio percentage | 50.00% | |||||||
Hankey Capital, LLC [Member] | Third Convertible Secured Term Note and Warrant [Member] | Prime Rate [Member] | ||||||||
Debt instrument interest rate | 4.00% | |||||||
Debt instrument conversation price per share | $ 1.58 | |||||||
Hankey Capital, LLC [Member] | Convertible Note [Member] | ||||||||
Convertible promissory note amount | $ 5,000,000 | |||||||
Debt maturity date | Oct. 24, 2017 | |||||||
Debt instrument interest rate | 8.50% | |||||||
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 | |||||||
Loan commitment fee amount | $ 150,000 | |||||||
Percentage of commitment fee paid | 3.00% | |||||||
Hankey Capital, LLC [Member] | Convertible Note [Member] | Maximum [Member] | ||||||||
Debt instrument conversation price per share | $ 1.58 | |||||||
Loan for collateral value ratio percentage | 50.00% | |||||||
Hankey Capital, LLC [Member] | Convertible Note [Member] | Prime Rate [Member] | ||||||||
Debt instrument interest rate | 4.00% |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Secured Convertible Note | $ 9,000,000 | |
Less: Debt discount | 3,092,226 | $ 1,383,905 |
Less: Debt issuance costs | 580,564 | |
Net Notes payable | $ 5,327,210 | 5,082,752 |
As Adjusted December 31, 2015 [Member] | ||
Secured Convertible Note | 7,000,000 | |
Less: Debt discount | 1,383,905 | |
Less: Debt issuance costs | 533,343 | |
Net Notes payable | 5,082,752 | |
First Secured Convertible Note [Member] | ||
Issue Date | Oct. 24, 2014 | |
Maturity Date | Dec. 31, 2019 | |
Interest Rate | 850.00% | |
Secured Convertible Note | $ 5,000,000 | |
First Secured Convertible Note [Member] | As Adjusted December 31, 2015 [Member] | ||
Secured Convertible Note | 5,000,000 | |
Second Secured Convertible Note [Member] | ||
Issue Date | May 4, 2015 | |
Maturity Date | Dec. 31, 2019 | |
Interest Rate | 850.00% | |
Secured Convertible Note | $ 2,000,000 | |
Second Secured Convertible Note [Member] | As Adjusted December 31, 2015 [Member] | ||
Secured Convertible Note | $ 2,000,000 | |
Third Secured Convertible Note [Member] | ||
Issue Date | Feb. 24, 2016 | |
Maturity Date | Feb. 23, 2019 | |
Interest Rate | 850.00% | |
Secured Convertible Note | $ 2,000,000 | |
Third Secured Convertible Note [Member] | As Adjusted December 31, 2015 [Member] | ||
Secured Convertible Note |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
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 | 38,082,488 | 32,211,956 | |
Common stock warrants exercised | 791,139 | ||
Common stock warrants expired | 0 | ||
Common stock warrants exercised or expired during period | $ 0 | ||
Hankey Capital, LLC [Member] | |||
Common shares issued for collateral on loan, shares | 11,392,406 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Outstanding Unexercised Common Stock Warrants (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Number of Shares | 11,749,318 | |
Unexercised Common Stock Warrants [Member] | ||
Number of Shares | 10,451,740 | |
Warrant expiration term | 3 years 11 months 9 days | |
2006 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 0.17 | |
Number of Shares | 60,920 | |
Warrants expiration date | Oct. 31, 2016 | |
2009 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 0.44 | |
Number of Shares | 118,383 | |
Warrants expiration date | Mar. 16, 2019 | |
2010 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 0.44 | |
Number of Shares | 254,997 | |
Warrants expiration date | Feb. 4, 2020 | |
April 2013 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 50,000 | |
Warrants expiration date | Apr. 28, 2020 | |
September 2013 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 50,000 | |
Warrants expiration date | Sep. 4, 2020 | |
September 2013 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 25,000 | |
Warrants expiration date | Sep. 20, 2020 | |
November 2013 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 75,000 | |
Warrants expiration date | Nov. 14, 2020 | |
July 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1.50 | |
Number of Shares | 166,667 | |
Warrants expiration date | May 30, 2018 | |
July 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1.50 | |
Number of Shares | 166,667 | |
Warrants expiration date | Sep. 30, 2018 | |
July 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 500,000 | |
Warrants expiration date | Sep. 30, 2018 | |
July 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 46,667 | |
Warrants expiration date | Jul. 2, 2018 | |
July 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 0 | |
Number of Shares | 12,625 | |
Warrants expiration date | Jul. 10, 2018 | |
September 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1.62 | |
Number of Shares | 625,000 | |
Warrants expiration date | Aug. 31, 2021 | |
September 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 699,671 | |
Warrants expiration date | Sep. 18, 2021 | |
September 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 89,588 | |
Warrants expiration date | Sep. 29, 2021 | |
October 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1 | |
Number of Shares | 126,582 | |
Warrants expiration date | Oct. 23, 2017 | |
October 2014 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1.58 | |
Number of Shares | 3,164,558 | |
Warrants expiration date | Oct. 23, 2017 | |
February 2015 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1.58 | |
Number of Shares | 699,037 | |
Warrants expiration date | Feb. 14, 2018 | |
May 2015 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1.58 | |
Number of Shares | 1,898,734 | |
Warrants expiration date | May 4, 2020 | |
October 2015 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 1.58 | |
Number of Shares | 158,229 | |
Warrants expiration date | Oct. 27, 2018 | |
February 2016 [Member] | Unexercised Common Stock Warrants [Member] | ||
Exercise price | $ 2.05 | |
Number of Shares | 1,463,415 | |
Warrants expiration date | Feb. 23, 2021 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Stock-based compensation expense | $ 924,586 | $ 68,706 | |
Number options, granted | 5,455,092 | 0 | 5,536,249 |
Unrecognized compensation cost related to unvested stock options | $ 26,223,363 | ||
Compensation, expected to be recognized over a weighted average period | 3 years 5 months 19 days | ||
Employees And Directors [Member] | |||
Stock-based compensation expense | $ 943,417 | $ 68,706 | |
Consultants [Member] | |||
Stock-based compensation expense | $ 2,939,823 | $ 0 | |
2015 Stock Option Plan [Member] | |||
Shares authorized and reserved for issuance | 14,000,000 | ||
Percentage of stock issued and outstanding | 5.00% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Shares Remaining Options Outstanding, Beginning balance | 6,294,226 | 757,977 | 757,977 |
Number of Shares Remaining Options, Granted | 5,455,092 | 0 | 5,536,249 |
Number of Shares Remaining Options, Forfeited | |||
Number of Shares Remaining Options, Exercised | |||
Number of Shares Remaining Options Outstanding, Ending balance | 11,749,318 | 6,294,226 | |
Weighted Average Exercise Price, Outstanding, Beginning | $ 1.59 | $ 1.59 | $ 1.59 |
Weighted Average Exercise Price, Granted | $ 1.59 | $ 1.59 | |
Weighted Average Exercise Price, Forfeited | |||
Weighted Average Exercise Price, Exercised | |||
Weighted Average Exercise Price, Outstanding, Ending | $ 1.59 | $ 1.59 | |
Weighted Average Life (Years), Outstanding, Beginning | 10 years | 10 years | |
Weighted Average Life (Years), Granted | 9 years 11 months 12 days | 10 years | |
Weighted Average Life (Years), Outstanding. Ending | 9 years 11 months 23 days | 10 years | |
Intrinsic Value, Outstanding Beginning | |||
Intrinsic Value, Outstanding Ending |
Stock-Based Compensation - Sc39
Stock-Based Compensation - Schedule of Stock Option (Details) | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Stock option | 11,749,318 |
September 2014 [Member] | |
Exercise price | $ / shares | $ 1.59 |
Stock option | 583,059 |
Expiration date | Dec. 27, 2025 |
November 2014 [Member] | |
Exercise price | $ / shares | $ 1.59 |
Stock option | 174,918 |
Expiration date | Dec. 27, 2025 |
August 2015 [Member] | |
Exercise price | $ / shares | $ 1.59 |
Stock option | 3,121,787 |
Expiration date | Dec. 27, 2025 |
September 2015 [Member] | |
Exercise price | $ / shares | $ 1.59 |
Stock option | 300,000 |
Expiration date | Dec. 27, 2025 |
November 2015 [Member] | |
Exercise price | $ / shares | $ 1.59 |
Stock option | 1,224,640 |
Expiration date | Dec. 27, 2025 |
December 2015 [Member] | |
Exercise price | $ / shares | $ 1.59 |
Stock option | 889,822 |
Expiration date | Dec. 27, 2025 |
January 2016 [Member] | |
Exercise price | $ / shares | $ 1.59 |
Stock option | 5,401,092 |
Expiration date | Jan. 9, 2026 |
March 2016 [Member] | |
Exercise price | $ / shares | $ 2.05 |
Stock option | 54,000 |
Expiration date | Feb. 24, 2021 |
Stock-Based Compensation - Sc40
Stock-Based Compensation - Schedule of Assumptions Using Black-Scholes Option Pricing Model (Details) | 3 Months Ended |
Mar. 31, 2016 | |
Risk free interest rate, minimum | 1.38% |
Risk free interest rate, maximum | 2.13% |
Expected life (in years) | 3 years 5 months 19 days |
Expected Volatility, minimum | 116.26% |
Expected Volatility, maximum | 122.65% |
Expected dividend yield | 0.00% |
Minimum [Member] | |
Expected life (in years) | 2 years 6 months |
Maximum [Member] | |
Expected life (in years) | 5 years |
Stock-Based Compensation - Sc41
Stock-Based Compensation - Schedule of Non-Vested Options (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Non-vested Options, Beginning Balance | 5,156,710 | 501,469 | 501,469 |
Number of Non-vested Options, Granted | 5,455,092 | 0 | 5,536,249 |
Number of Non-vested Options, Vested | (318,547) | (881,008) | |
Number of Non-vested Options, Ending Balance | 10,293,255 | 5,156,710 | |
Number of Non-vested Options, Exercisable | 1,456,063 | ||
Number of Non-vested Options, Outstanding | 11,749,318 | ||
Weighted Average Fair Value at Grant Date, Beginning Balance | $ 1.29 | $ 0.73 | $ 0.73 |
Weighted Average Fair Value at Grant Date, Granted | 3.95 | 1.29 | |
Weighted Average Fair Value at Grant Date, Vested | 1.37 | 0.73 | |
Weighted Average Fair Value at Grant Date, Ending Balance | 3.02 | $ 1.29 | |
Weighted Average Fair Value at Grant Date, Exercisable | 1.31 | ||
Weighted Average Fair Value at Grant Date, Outstanding | $ 1.59 | ||
Intrinsic Value, Outstanding, Beginning Balance | |||
Intrinsic Value, Outstanding, Ending Balance |
Stock-Based Compensation - Sc42
Stock-Based Compensation - Schedule of Unrecognized Compensation Cost Related to Unvested Stock Options (Details) | Mar. 31, 2016USD ($) |
2016 [Member] | |
Unrecognized compensation cost related to unvested stock options | $ 10,788,252 |
2017 [Member] | |
Unrecognized compensation cost related to unvested stock options | 8,001,868 |
2018 [Member] | |
Unrecognized compensation cost related to unvested stock options | 4,570,141 |
2019 [Member] | |
Unrecognized compensation cost related to unvested stock options | 2,283,564 |
2020 [Member] | |
Unrecognized compensation cost related to unvested stock options | 557,544 |
2021 [Member] | |
Unrecognized compensation cost related to unvested stock options | $ 21,994 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Effective tax rate | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Feb. 10, 2016 | Oct. 28, 2015 | Aug. 11, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Feb. 24, 2016 | Feb. 22, 2016 | Jan. 08, 2016 | Oct. 02, 2015 |
Maximum percentage of warrants purchase of fully diluted shares of common stock outstanding | 4.00% | |||||||||
Warrant to purchase shares of common stock | 158,229 | 1,800,364 | ||||||||
Warrant exercise price per share | $ 1.59 | |||||||||
General and administrative expense | $ 1,882,026 | $ 735,132 | ||||||||
First Anniversary [Member] | ||||||||||
Percentage of option vest | 25.00% | |||||||||
Second Anniversary [Member] | ||||||||||
Percentage of option vest | 25.00% | |||||||||
Third Anniversary [Member] | ||||||||||
Percentage of option vest | 25.00% | |||||||||
Fourth Anniversary [Member] | ||||||||||
Percentage of option vest | 12.50% | |||||||||
Fifth Anniversary [Member] | ||||||||||
Percentage of option vest | 12.50% | |||||||||
January 1, 2017 [Member] | ||||||||||
Consulting fees for related party | $ 200,000 | |||||||||
AFH [Member] | ||||||||||
Notes principal amount | $ 50,000 | |||||||||
Maximum percentage of warrants purchase of fully diluted shares of common stock outstanding | 10.00% | 2.50% | ||||||||
Warrant to purchase shares of common stock | 1,260,255 | 915,614 | 867,163 | |||||||
Fair value of warrants value | $ 275,000 | |||||||||
Warrant exercise price per share | $ 1.58 | |||||||||
Number of shares issued in connection with adjustment | 1,260,255 | |||||||||
Number of shares issued for services, value | $ 325,000 | |||||||||
AFH [Member] | PIPE [Member] | Minimum [Member] | ||||||||||
Fair value of warrants value | $ 8,000,000 | |||||||||
AFH [Member] | PIPE [Member] | Maximum [Member] | ||||||||||
Fair value of warrants value | $ 10,000,000 | |||||||||
MTF [Member] | ||||||||||
Maximum percentage of warrants purchase of fully diluted shares of common stock outstanding | 2.50% | |||||||||
Warrant to purchase shares of common stock | 867,163 | 700,000 | 731,707 | 1,153,846 | ||||||
Warrant exercise price per share | $ 2.05 | |||||||||
General and administrative expense | $ 1,370,118 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] - AFH [Member] | Apr. 07, 2016USD ($) |
Minimum [Member] | |
Up-front retainer received | $ 100,000 |
Maximum [Member] | |
Up-front retainer received | $ 33,334 |