Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 25, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Bone Biologics Corp | ||
Entity Central Index Key | 0001419554 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business Flag | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 6,005,238 | ||
Entity Common Stock, Shares Outstanding | 27,938,243 | ||
Trading Symbol | BBLG | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash | $ 955,374 | $ 690,279 |
Prepaid expenses | 85,288 | 105,234 |
Total current assets | 1,040,662 | 795,513 |
Property and equipment, net | 50 | 146 |
Total assets | 1,040,712 | 795,659 |
Current liabilities | ||
Accounts payable and accrued expenses | 197,220 | 720,128 |
Current portion of notes payable - related party | 9,000,000 | |
Deferred compensation | 441,667 | 241,667 |
Total current liabilities | 9,638,887 | 961,795 |
Notes payable - related party, net of debt discount of $0 and $770,313, respectively | 8,229,687 | |
Total liabilities | 9,638,887 | 9,191,482 |
Commitments and Contingencies | ||
Stockholders' deficit | ||
Preferred Stock, $0.001 par value per share; 20,000,000 shares authorized; none issued or outstanding at December 31, 2018 and 2017 | ||
Common stock, $0.001 par value per share; 100,000,000 shares authorized; 26,448,881 and 4,328,080 shares issued and outstanding at December 31, 2018 and 2017, respectively | 26,449 | 4,328 |
Additional paid-in capital | 54,990,797 | 48,961,794 |
Common stock to be issued to related parties; -0- and 115,385 shares at December 31, 2018 and 2017, respectively | 1,823,077 | |
Accumulated deficit | (63,615,421) | (59,185,022) |
Total stockholders' deficit | (8,598,175) | (8,395,823) |
Total liabilities and stockholders' deficit | $ 1,040,712 | $ 795,659 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Debt discount on note payable, noncurrent | $ 0 | $ 770,313 |
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 | 26,448,881 | 4,328,080 |
Common stock, shares outstanding | 26,448,881 | 4,328,080 |
Common stock, shares subscribed but unissued | 0 | 115,385 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | ||
Cost of revenues | ||
Gross profit | ||
Research and development | ||
Trade | 104,490 | 1,415,485 |
Related party (includes Founders stock-based compensation of -0- and ($2,744,749) for the years ended December 31, 2018 and 2017, respectively) | (2,744,749) | |
General and administrative | 2,686,399 | 3,955,856 |
Total operating expenses | 2,790,889 | 2,626,592 |
Loss from operations | (2,790,889) | (2,626,592) |
Other expenses | ||
Interest expense - related party | (1,229,487) | (4,423,380) |
Loss on debt extinguishment - related party | (408,294) | |
Total other expenses | (1,637,781) | (4,423,380) |
Loss before provision for income taxes | (4,428,670) | (7,049,972) |
Provision for income taxes | 1,729 | 1,600 |
Net loss | $ (4,430,399) | $ (7,051,572) |
Weighted average shares outstanding - basic and diluted | 5,025,683 | 3,893,280 |
Loss per share - basic and diluted | $ (0.88) | $ (1.81) |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Stock based compensation | $ 516,638 | $ 1,615,022 |
Founder [Member] | ||
Stock based compensation | $ 0 | $ (2,744,749) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Common Stock to be Issued [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2016 | $ 3,883 | $ 41,942,792 | $ 1,823,077 | $ (52,133,450) | $ (8,363,698) |
Balance, shares at Dec. 31, 2016 | 3,882,861 | ||||
Fair value of vested stock options issued to employees | 1,615,022 | 1,615,022 | |||
Fair value of unvested stock options issued to consultants | 545,700 | 545,700 | |||
Fair value of vested stock options issued to related parties | (2,744,749) | (2,744,749) | |||
Beneficial conversion feature of notes recorded as debt discount | 2,700,000 | 2,700,000 | |||
Issuance of common stock upon exercise of stock options | $ 2 | (2) | |||
Issuance of common stock upon exercise of stock options, shares | 1,538 | 6,855 | |||
Shares issued to related party for cash | $ 23 | 699,977 | $ 700,000 | ||
Shares issued to related party for cash, shares | 23,333 | ||||
Issuance of common stock upon conversion of related party debt and accrued interest | $ 420 | 4,203,054 | $ 4,203,474 | ||
Issuance of common stock upon conversion of related party debt and accrued interest, shares | 420,348 | 420,348 | |||
Net Loss | (7,051,572) | $ (7,051,572) | |||
Balance at Dec. 31, 2017 | $ 4,328 | 48,961,794 | 1,823,077 | (59,185,022) | (8,395,823) |
Balance, shares at Dec. 31, 2017 | 4,328,080 | ||||
Fair value of vested stock options issued to employees | 516,638 | 516,638 | |||
Fair value of unvested stock options issued to consultants | (1,125,080) | $ (1,125,080) | |||
Issuance of common stock upon exercise of stock options, shares | |||||
Shares issued to related party for cash | $ 3,540 | 3,536,114 | $ 3,539,654 | ||
Shares issued to related party for cash, shares | 3,539,654 | ||||
Shares issued for cash | $ 25 | 492,475 | 492,500 | ||
Shares issued for cash, shares | 25,000 | ||||
Fair value of shares issued in settlement of bonus payable | $ 23 | 455,977 | 456,000 | ||
Fair value of shares issued in settlement of bonus payable, shares | 23,146 | ||||
Shares issued to related party upon net settlement of warrants | $ 31 | (31) | |||
Shares issued to related party upon net settlement of warrants, shares | 30,847 | ||||
Shares issued to related party under anti-dilution provision | $ 47 | (47) | |||
Shares issued to related party under anti-dilution provision, shares | 46,667 | ||||
Shares issued upon close of rights offering (including 329,674 shares to related parties) | $ 330 | 329,995 | 330,325 | ||
Shares issued upon close of rights offering (including 329,674 shares to related parties), shares | 330,325 | ||||
Share adjustment for stock split rounding | |||||
Share adjustment for stock split rounding, shares | 81 | ||||
Issuance pursuant founders agreement | $ 115 | 1,822,962 | (1,823,077) | ||
Issuance pursuant founders agreement, shares | 115,385 | ||||
Shares issued to related party for collateral pursuant to outstanding secured convertible note agreements | $ 18,010 | 18,010 | |||
Shares issued to related party for collateral pursuant to outstanding secured convertible note agreements, shares | 18,009,696 | ||||
Net Loss | (4,430,399) | (4,430,399) | |||
Balance at Dec. 31, 2018 | $ 26,449 | $ 54,990,797 | $ (63,615,421) | $ (8,598,175) | |
Balance, shares at Dec. 31, 2018 | 26,448,881 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Deficit (Parenthetical) | 12 Months Ended |
Dec. 31, 2018shares | |
Statement of Stockholders' Equity [Abstract] | |
Shares issued upon close of rights offering, related parties | 329,674 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (4,430,399) | $ (7,051,572) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 96 | 96 |
Debt discount amortization | 340,735 | 3,327,488 |
Debt issuance costs amortization | 21,283 | 39,177 |
Stock-based compensation | 516,638 | 1,615,022 |
Founders' Stock-based compensation | (2,744,749) | |
Options issued to consultants | (1,125,080) | 545,700 |
Loss on debt extinguishment | 408,294 | |
Issuance costs of shares issued to related party for collateral pursuant to outstanding secured convertible note agreements | 18,010 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses and other current assets | 12,447 | (24,711) |
Accounts payable and accrued expenses | (66,908) | 763,453 |
Deferred compensation | 200,000 | 200,000 |
Net cash used in operating activities | (4,104,884) | (3,330,096) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 4,369,979 | 700,000 |
Proceeds from issuance of note payable | 600,000 | 2,700,000 |
Repayment of note payable | (600,000) | |
Net cash provided by financing activities | 4,369,979 | 3,400,000 |
Net increase in cash | 265,095 | 69,904 |
Cash, beginning of year | 690,279 | 620,375 |
Cash, end of year | 955,374 | 690,279 |
Supplemental information | ||
Interest paid - related party | 821,958 | 516,375 |
Income taxes paid | 1,729 | 1,600 |
Supplemental non-cash investing and finance activities: | ||
Beneficial conversion feature of notes payable | 2,700,000 | |
Prepaid offering costs netted against proceeds from issuance of common stock | 7,500 | |
Shares issued in settlement of bonus payable | $ 456,000 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2018 | |
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 Inc. remaining as the surviving corporation in the merger. Upon the consummation of the merger, the separate existence of Merger Sub ceased. On September 22, 2014, the Company officially changed its name to “Bone Biologics 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 September 9, 2004. On July 16, 2018, the Company closed a rights offering in which Hankey Capital purchased 3,539,654 shares of the Company’s Common Stock and executed amendments (the “Amendments”) to the convertible promissory notes (the “Existing Convertible Notes”) payable to Hankey Capital and dated October 24, 2014, May 4, 2015 and February 24, 2016. The Amendments reduced the conversion price of the Existing Convertible Notes from $15.80 per share to $1.00 per share and extended the maturity date of the February 24, 2016 convertible promissory note from February 24, 2019 to December 31, 2019. As a result of the share issuance and Amendments, Hankey Capital and Don Hankey, the Chairman of the Company’s Board of Directors, acquired a majority of the voting common shares issued and outstanding and thus effective control of the Company. We are a medical device company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein, known as NELL-1/DBX®. The NELL-1/DBX® combination product is an osteostimulative recombinant protein that provides target specific control over bone regeneration. The protein, as part of the UCB-1 technology platform, has been licensed exclusively for worldwide applications to us through a technology transfer from UCLA Technology Development Group on behalf of UC Regents (“UCLA TDG”). UCLA TDG and the Company received guidance from the FDA that NELL-1/DBX® will be classified as a combination product with a device lead. We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, which we refer to as the JOBS Act. We would cease to be an emerging growth company upon the earliest of: (i) the last day of the first fiscal year in which our annual gross revenues are $1.07 billion or more; (ii) the end of any fiscal year in which the market value of our common stock held by non-affiliates exceeded $700.0 million as of the end of the second quarter of that fiscal year; or (iii) the date on which we have, during the previous three-year period, issued more than $1.07 billion in non-convertible debt securities. An emerging growth company may take advantage of specified reduced reporting and other burdens that are otherwise applicable generally to public companies. We have elected to take advantage of these reduced disclosure obligations, and may elect to take advantage of other reduced reporting obligations in the future. The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are choosing to irrevocably “opt out” of this provision and, as a result, we will comply with new or revised accounting standards as required when they are adopted. The production and marketing of the Company’s products and its ongoing research and development activities will be subject to extensive regulation by numerous governmental authorities in the United States. Prior to marketing in the United States, any combination product 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. There can be no assurance that the Company will not encounter problems in clinical trials that will cause the Company or the FDA to delay or suspend clinical trials. The Company’s success will depend in part on its ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries. There can be no assurance that patents issued to or licensed by the Company will not be challenged, invalidated, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the Company. Going Concern and Liquidity The Company has no significant operating history and since inception to December 31, 2018 has incurred accumulated losses of approximately $63.6 million. The Company will continue to incur significant expenses for development activities for their lead product NELL-1/DBX®. Operating expenditures for the next twelve months are estimated at $10.3 million. The accompanying consolidated financial statements for the year ended December 31, 2018 have been prepared assuming the Company will continue as a going concern. As reflected in the financial statements, the Company had a stockholders’ deficit of $8,598,175 at December 31, 2018, and incurred a net loss of $4,430,399, and used net cash in operating activities of $4,104,884 during the year ended December 31, 2018. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company will continue to attempt to raise additional debt and/or equity financing to fund future operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company’s needs. If cash resources are insufficient to satisfy the Company’s on-going cash requirements, the Company will be required to scale back or discontinue its product development programs, or obtain funds if available (although there can be no certainties) through strategic alliances that may require the Company to relinquish rights to its technology, substantially reduce or discontinue its operations entirely. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. The Company closed $500,000 of equity financing in March 2018 and $600,000 of debt financing in May 2018. On July 16, 2018, the Company closed a Rights Offering (“Rights Offering”) to existing shareholders and certain related parties and, on July 24, 2018, a private placement with Hankey Capital LLC (“Hankey Capital”) in the aggregate amount of $3,869,979 and secured a credit facility with Hankey Capital for $2,000,000. In the Rights Offering the Company issued 330,325 shares to four shareholders, including 329,674 shares to certain related parties (the “Rights Shares”) and issued 3,539,654 shares to Hankey Capital (the “Hankey Shares”) pursuant to a Securities Purchase Agreement. The proceeds from the sale of the Rights Shares and the Hankey Shares of $3,869,979 were used to repay the promissory note for $600,000 and the remaining proceeds have been and will be used for working capital, protein development, animal testing, regulatory and clinical expenses, as well as for other purposes not presently contemplated herein but which are related directly to growing the Company’s current business, research and development activities. Pursuant to our October 2016 and February 2017 Convertible Notes, which were subsequently converted into shares of common stock on December 31, 2017, the Company may only use the proceeds from the issuance of these Convertible Notes to focus on prioritizing operations on essential research and development activities. Also pursuant to the October 2016 Note Purchase Agreement, the Company’s management has agreed to defer 20% of earned compensation and the Board of Directors has authorized a change in director compensation to defer 50% of the directors’ cash compensation until at least $5,000,000 has been received in cumulative funding from non-current stockholders. For the past several years, we have depended on our relationship with Hankey Capital for working capital to fund our operations, which has been raised in the form of both debt and equity capital. Hankey Capital, directly and indirectly, controls approximately 87% of our issued and outstanding shares of common stock (including collateral shares) and has been issued convertible notes payable with an aggregate principal balance of $9,000,000 at December 31, 2018. We drew down an additional $700,000 of working capital under a $2,000,000 secured credit facility during March 2019. Representatives of Hankey Capital also currently serve as directors of the Company. No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing, or cause substantial dilution for our stockholders, in the case of equity financing. Reverse Stock Split On June 11, 2018 and effective July 24, 2018, the directors of the Company approved a resolution to undertake a reverse split of the common stock of the Company on a basis of 1 new common share for 10 old common share. All references in these financial statements to number of common shares, price per share and weighted average number of shares outstanding prior to the 1 for 10 reverse split have been adjusted to reflect the stock split on a retroactive basis as of the earliest period presented, unless otherwise noted. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements and related notes include activities of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Reclassification Certain amounts totaling $135,697 previously reflected in the prior-period financial statements as research and development expense have been reclassified to general and administrative expense to conform to the presentation in the current-period financial statements. Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Significant estimates include the assumptions used in the accrual for potential liabilities, the valuation of debt and equity instruments, stock options and warrants issued for services, and deferred tax valuation allowances. Actual results could differ from those estimates. Fair Value of Financial Instruments The Company’s consolidated financial instruments are cash, accounts payable and notes payable. The recorded values of cash and accounts payable approximate their values based on their short-term nature. The fair value of convertible notes payable approximate their fair value since the current interest rates and terms on these obligations are the same as prevailing market rates. 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. An “established trading market” for the Company’s common stock does not exist. The fair value of the shares was determined based on the then most recent price per share at which we sold common stock to unrelated parties in a private placement during the periods then ended. During the year ended December 31, 2017, the fair value of shares ranged between $19.70 to $20.05 (post reverse-split). During the period January 1, 2018 through June 30, 2018, the Company utilized $20.00 (post reverse split) per share as the fair value of its common stock for accounting purposes based on one common stock transaction with an investor during March 2018. Subsequently, based on the analysis as described below, management determined that the fair value of the Company’s common stock for accounting purposes was $0.94 per share. The reduction in the fair value of the Company’s common stock from $20.00 per share to $0.94 per share resulted in a reversal of certain stock-based compensation charges related to options held by a consultant recorded during the year and thus a credit balance in certain operating accounts for the year ended December 31, 2018. In drawing its conclusions, management considered various relevant factors, including the work of an independent third party valuation firm engaged to provide a valuation analysis as of July 24, 2018, which indicated a valuation of $0.94 per common share. Management also took into account the recent cash transaction price for the Company’s common stock pursuant to a July 2018 Rights Offering to all common stockholders, which resulted in the sale of common shares to an affiliate of the Company and parties related to such affiliate at a slightly higher price of $1.00 per share. The Company entered into a series of interrelated transactions with such affiliate at the same $1.00 price per share during the year ended December 31, 2018. The July 24, 2018 valuation analysis employed the discounted future value method and utilized financial metrics observed in the marketplace. Management ultimately determined, and the valuation firm concurred, that the discounted future value method was the most appropriate valuation methodology under the circumstances. The utilization of the discounted future value method involved the estimation of a business enterprise value (“BEV”)/revenue multiple, the probability of approval of the Company’s technology, the estimation of the Company’s cost of equity and weighted average cost of capital, the estimation of a required rate of return appropriate for discounting projected revenues to calculate the present value of the business enterprise, and an appropriate discount period. This method involved projecting revenues through 2028 and applying an appropriate BEV/revenue multiple. Research and Development Costs Research and development costs include, but are not limited to, 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 Effective August 18, 2017, the Company entered into an Amended and Restated Exclusive License Agreement (the “Restated License Agreement”) with the UCLA Technology Development Group on behalf of UC Regents (“UCLA TDG”). The Restated License Agreement amends and restates the Exclusive License Agreement, effective March 15, 2006, between the Company and UCLA TDG, as amended by ten amendments. See Note 9 for commitments related to the Exclusive License Agreement. Patent expenses include costs to acquire the license of NELL-1, which was de minimis, 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 general and administrative expenses. Costs associated with licenses acquired to be able to use products from third parties prior to receipt of regulatory approval to market the related products are also expensed. The Company’s licensed technologies may have alternative future uses in that they are enabling (or platform) technologies that can be the basis for multiple products that would each target a specific indication. Costs of acquisition of licenses are expensed. 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 Company’s cash balances exceed federally insured limits. 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 In light of the lack of an “established trading market”, the fair value of the shares was determined based on factors discussed in “Fair Value of Financial Instruments” above. Pursuant to ASU No. 2016-09 – Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, Stock options issued to non-employees and consultants are revalued each reporting period to determine the amount to be recorded in the statement of operations in the respective period. As stock options vest, they are valued on each vesting date and an adjustment is recorded for the difference between the value already recorded and the value on the date of vesting. Forfeitures of the unvested portion of stock option grants are recorded when the underlying event occurs, and are recorded as a reversal of the related expense. An increase in the Company’s stock price during a reporting period will generally result in an increase in the fair value of unvested stock options and thus the related expense, and a decrease in the Company’s stock price during a reporting period will generally result in a decrease in the fair value of unvested stock options and thus the related expense. Accordingly, depending on various factors, the recording of forfeitures and a decrease in the price of the Company’s common stock during a reporting period can result in a credit balance in an operating account in the statement of operations. Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due and deferred taxes resulting from timing differences in recording of transactions for tax purposes and financial reporting purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are received or settled. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. The accounting provisions related to uncertain income tax positions require the Company to determine whether any tax position in all open years meets a more likely than not threshold of being sustained upon examination by the applicable taxing authority. The Company did not have any changes to its liability for uncertain tax positions as at December 31, 2018 and 2017. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of December 31, 2018 and 2017. 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. Collateral Shares The Company accounts for the common shares issued as collateral for convertible promissory notes, whether upon original issuance or upon the required annual adjustment, as debt issuance costs in the form of a loan processing fee, which is determined by reference to the par value of the Company’s common stock, with a corresponding charge to operations when such collateral shares are issued. The collateral shares are subject to significant contractual restrictions limiting their sale or transfer. As these common shares have been issued to and are held by the lender, and are contingently returnable to the Company under certain conditions, such shares are considered as issued and outstanding on the Company’s balance sheet, but are not included in earnings per share calculations for all periods presented. In the event of an uncured event of default, the Company will record a charge to operations to recognize that the collateral shares are no longer owned or controlled by the Company, and such prospective charge to operations would be based on the fair market value of the collateral shares at that time, and which would be classified as a cost of debt capital and recognized as a charge to operations. 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 for the years ended 2018 and 2017, shares of common stock underlying these instruments have been excluded from the computation of loss per common share. The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of December 31, 2018 and 2017: December 31, 2018 2017 Warrants 845,096 1,039,082 Stock options 843,648 839,722 Convertible promissory notes 9,000,000 959,620 10,688,744 2,838,424 New Accounting Standards In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. ASU 2016-02 requires classification of all cash payments within operating activities in the statement of cash flows. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company has not yet evaluated the impact of the adoption of ASU 2016-02 on the Company’s financial statement presentation or disclosures. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” (“ASU 2017-11”). ASU 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company will recognize the value of a down round feature only when it is triggered, and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common stockholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The guidance in ASU 2017-11 can be applied using a full or modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2017-11 on the Company’s financial statement presentation or disclosures. In September 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to nonemployee share-based payment accounting. This ASU simplifies the accounting and reporting for share-based payments issued to nonemployees by expanding the scope of ASC 718, Compensation - Stock Compensation, which currently only includes share-based compensation to employees, to also include share-based payments to nonemployees for goods and services. The standard is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of ASC 606. Management is currently in the process of evaluating the impact of the standard on its consolidated financial statements and disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | 3. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses consist of the following: December 31, 2018 December 31, 2017 Accounts payable $ 125,203 $ 216,903 Accrued bonus - 456,000 Deferred Directors’ fees 72,017 47,225 $ 197,220 $ 720,128 |
Notes Payable - Related Parties
Notes Payable - Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable - Related Parties | 4. Notes Payable - Related Parties Note Type Issue Date Maturity Date Interest Rate December 31, 2018 December 31, 2017 (A) First Secured Convertible Note 10/24/14 12/31/19 9.25 % $ 5,000,000 $ 5,000,000 (A) Second Secured Convertible Note 5/4/15 12/31/19 9.25 % 2,000,000 2,000,000 (B) Third Secured Convertible Note 2/24/16 12/31/19 9.25 % 2,000,000 2,000,000 9,000,000 9,000,000 Less: Debt discount - (724,606 ) Less: Debt issuance costs - (45,707 ) Net Notes payable $ 9,000,000 $ 8,229,687 First and Second Secured Convertible Notes and Warrants (A) On October 24, 2014 and May 4, 2015, the Company issued two convertible promissory notes in the aggregate amount of $7,000,000 to Hankey Capital. Don Hankey, the CEO and Chairman of Hankey Group, is our non-independent Chairman of the Board and a significant shareholder. Bret Hankey, the president of Hankey Capital, is a non-independent board member. The Convertible Notes mature on December 31, 2019 and bear 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 Notes into shares of the Company’s Common Stock, at a conversion rate equal to $1.00 per share. The Company also issued warrants to Hankey Capital for an aggregate of 585,443 shares of Common Stock at an exercise price per share of $15.80 that expire five years from the dates of issuance. In connection with the Convertible Notes, the Company paid commitment fees in the amount of $210,000 (3.0% of the original principal amount of the loans) to Hankey Capital and other aggregate offering costs of $594,550. The aggregate value of the warrants and offering costs totaling $2,891,409 was considered to be a debt discount upon issuance of the notes. Third Convertible Secured Term Note and Warrants (B) On February 24, 2016, the Company issued a convertible promissory note in the amount of $2,000,000 to Hankey Capital. The Third Convertible Note matures on December 31, 2019 (the “Maturity Date”) and bears interest at an annual rate of interest at 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 Company’s common stock (the “Conversion Shares”), at a conversion rate equal to $1.00 per share and issued a warrant to Hankey Capital for 146,342 shares of Common Stock at an exercise price per share of $20.50. The Warrant will expire on February 23, 2021. In connection with the Convertible Note, the Company paid a commitment fee in the amount of $40,000 (2.0% of the original principal amount of the Loan) and other offering costs totaling $77,532. The aggregate value of the warrant, beneficial conversion feature and offering costs of $2,000,000 was considered a debt discount upon issuance of the note. Converted Promissory Notes On October 14, 2016, pursuant to Note Purchase Agreements, the Company issued to each of MTF (Bruce Stroever, our Chairman of the Board, is the President and Chief Executive Officer of MTF) and Hankey Capital convertible promissory notes in the aggregate amount of $1,200,000 (each a “Convertible Note”). The Convertible Note matures on December 31, 2017 (the “Maturity Date”) and bears interest at an annual rate of interest of 8.5% per annum until maturity. Prior to the Maturity Date, each of MTF and Hankey Capital has a right, in its sole discretion, to convert their Convertible Note into shares of the Company’s common stock (the “Conversion Shares”), at a conversion rate equal to $1.00 per share. In addition, if the Convertible Notes are not paid by the Maturity Date, they will be automatically converted in shares of Common Stock at a conversion price of $1.00 per share. Per the terms of the Convertible Notes, these loans and unpaid accrued interest in the aggregate amount of $1,325,800 converted into 1,325,800 shares of common stock on December 31, 2017. On February 10, 2017 and August 18, 2017 pursuant to three note purchase agreements, the Company issued MTF and Hankey Capital convertible promissory notes in the aggregate amount of $2,700,000 (“Convertible Notes”). The Convertible Notes mature on December 31, 2017 (the “Maturity Date”) and bear interest at an annual rate of interest of 8.5% until maturity. Prior to the Maturity Date, each of MTF and Hankey Capital has a right, in its sole discretion, to convert their Convertible Note into shares of the Company’s common stock (the “Conversion Shares”), at a conversion rate equal to $1.00 per share. Also, if the Convertible Notes are not paid by the Maturity Date, they will be automatically converted in shares of Common Stock at a conversion price of $1.00 per share. In the event of a financing resulting in gross proceeds of at least $5,000,000, the holders of the Convertible Notes will be required to convert their Convertible Notes into the same securities issued in such financing at the same price per share. The Convertible Notes are secured by all of the Company’s assets. The Company has granted piggyback registration rights with respect to the Conversion Shares. As of February 10, 2017 and August 18, 2017, the conversion prices of the notes was less than the market price of shares of the Company’s common stock. As such, the Company recognized an aggregate beneficial conversion feature of $2,700,000 which was considered to be a debt discount upon issuance of the notes and will be amortized as interest over the terms of the notes or in full upon the conversion of the notes. Per the terms of the Convertible Notes, these loans and unpaid accrued interest in the aggregate amount of $2,877,673 converted into 2,877,673 shares of common stock on December 31, 2017. Collateral The aggregate Convertible Notes are secured by an aggregate of 19,148,936 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 equal to 50% (the “Collateral”). The number of shares in the Collateral shall be adjusted on a yearly basis. A Collateral adjustment of 18,009,696 shares of Common Stock was issued during the year ended December 31, 2018. The principal amount of the loans are 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 Notes. All of the Company’s personal property further secure the aggregate Convertible Notes, including collateral assignments of all the Company’s license agreements and the MTF Sygnal Option Agreement. Debt Amendments On February 24, 2016, the First and Second Secured Convertible Notes were modified to extend the maturity date to December 31, 2019, fix the conversion price at $15.80 and the warrants were amended to extend their expiration date by two years. The Company determined that the extension of the convertible notes’ maturity dates and the warrants’ expiration dates resulted in a debt extinguishment for accounting purposes since the change in fair value of the warrants as a result of the extension of their expiration dates was more than 10% of the original value of the convertible notes. As such, the Company recorded the notes at their aggregate fair value of $7,000,000. In connection with the financing that closed on July 16, 2018, as discussed in Note 6, the Company and Hankey Capital executed amendments (the “Amendments”) to the First, Second and Third convertible secured term notes (the “Existing Convertible Notes”). The Amendments change Hankey Capital’s conversion price from $15.80 per share to $1.00 per share on a post reverse stock split basis on the Existing Convertible Notes and extends the maturity date of the Third Convertible Note from February 24, 2019 to December 31, 2019. The Amendments became effective on the closing of the rights offering, July 16, 2018. The Company determined that the change in the conversion prices of the Existing Convertible Notes and extension of the Third Convertible Note’s maturity date resulted in debt extinguishments for accounting purposes since the change in fair value of the conversion options was more than 10% of the original value of the Existing Convertible Notes. During the year ended December 31, 2018, the Company recorded a loss on extinguishment of debt totaling $408,294 for the remaining unamortized debt discount and debt issuance costs. The total debt discount amortization related to our outstanding debt for the years ended December 31, 2018 and 2017, was $340,735 and $3,327,448, respectively. The unamortized debt discount at December 31, 2018 was $-0-. The unamortized debt discount at December 31, 2017 was $724,606. During 2018, $383,861 of debt discount was written off as a result of the debt extinguishment. The total debt issuance amortization related to our outstanding debt for the years ended December 31, 2018 and 2017, was $21,283 and $39,177, respectively. The unamortized debt issuance costs at December 31, 2018 was $-0-. The unamortized debt issuance costs at December 31, 2017 was $45,707. During 2018, $24,433 of debt issuance costs were written off as a result of the debt extinguishment. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2018 | |
Credit Facility | |
Credit Facility | 5. Credit Facility On July 24, 2018, the Company and Hankey Capital entered into an agreement under which Hankey Capital will provide a credit facility of $2,000,000 to the Company to be drawn down by the Company upon notice to Hankey Capital. The credit facility is evidenced by a convertible secured note convertible prior to the maturity date at $1.00 per share and due on December 31, 2019. Draws bear 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. At December 31, 2018, the Company had not drawn any funds under the facility. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Deficit | 6. Stockholders’ Deficit Preferred Stock The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 20,000,000 shares of preferred stock. No shares have been issued. Common Stock The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 100,000,000 shares of common stock. As of December 31, 2018 and December 31, 2017, the Company had an aggregate of 26,448,881 and 4,328,080 shares of common stock outstanding, respectively. 2018 In February 2018, 32,289 warrants were exercised on a cashless basis resulting in the issuance of 16,706 shares of common stock. In May 2018, 28,719 warrants were exercised on a cashless basis resulting in the issuance of 14,141 shares of common stock. In February 2018, management was issued 23,146 shares of restricted common stock with a fair value of $456,000 in settlement of bonuses payable. On March 26, 2018, the Company entered into a share purchase agreement pursuant to which an aggregate of 25,000 shares of common stock of the Company were issued at a price per share equal to $20.00 ($2.00 pre-split) for net proceeds of $492,500. In May 2018, the Company closed a private placement offering and in accordance with the terms of the anti-dilution provision of the subscription agreement, which adjusts the shares to the most favored terms of the private placement, with Musculoskeletal Transplant Foundation (“MTF”), issued to MTF 46,667 shares of common stock. In July 2018, the Company closed a Rights Offering, issued 330,325 shares to four shareholders (including an aggregate of 329,674 shares to two related parties), and issued 3,539,654 shares to Hankey Capital pursuant to a Securities Purchase Agreement for aggregate proceeds of $3,869,979. As part of the agreement, the lender also issued to the Company a $2,000,000 credit facility (see Note 4). In September 2018, the Company issued 115,385 shares with a value of $1,823,077 previously reflected as common stock to be issued pursuant to the Founders’ Letter Agreement dated October 2, 2015 (Note 8). In December 2018, the Company issued an aggregate of 18,009,696 shares of common stock pursuant to collateral requirements of the three outstanding secured convertible note agreements (Note 4). 2017 On August 18, 2017, the Company sold to MTF an aggregate of 23,333 shares of common stock of the Company at a price per share equal to $3.00 for total proceeds of $700,000. On August 18, 2017, 1,538 shares of common stock of the Company were issued from the exercise of options on a net exercise basis. On December 31, 2017, 420,348 shares of common stock of the Company were issued upon conversion of $4,203,474 related parties’ debt and accrued interest. Common Stock Warrants A summary of warrant activity for the years ended December 31, 2018 and 2017 are presented below: Number of Weighted Average Weighted Average Subject to Exercise Warrants Price Life (Years) Outstanding as of December 31, 2016 1,039,082 $ 15.20 3.20 Granted – 2017 - - - Forfeited/Expired – 2017 (12,658 ) 15,80 - Exercised – 2017 - - - Outstanding as of December 31, 2017 1,026,424 $ 15.17 2.23 Granted – 2018 - - - Forfeited/Expired – 2018 (120,320 ) - - Exercised – 2018 (61,008 ) 9.74 2.64 Outstanding as of December 31, 2018 845,096 $ 4.94 1.40 As of December 31, 2018, the Company had outstanding vested and unexercised Common Stock Warrants as follows: Date Issued Exercise Price Number of Warrants Expiration date 2009 $ 4.40 11,839 March 16, 2019 2010 $ 4.40 22,659 February 4, 2020 April 2013 $ 10.00 5,000 April 28, 2020 September 2013 $ 10.00 5,000 September 4, 2020 September 2013 $ 10.00 2,500 September 20, 2020 November 2013 $ 10.00 7,500 November 14, 2020 July 2014 $ 10.00 50,000 June 30, 2020 July 2014 $ 10.00 4,667 July 2, 2019 September 2014 $ 16.20 62,500 August 31, 2021 September 2014 $ 10.00 11,800 September 18, 2021 September 2014 $ 10.00 8,959 September 29, 2021 October 2014 $ 15.80 316,456 October 23, 2019 May 2015 $ 15.80 189,874 May 4, 2020 February 2016 $ 20.50 146,342 February 23, 2021 Total outstanding warrants at December 31, 2018 845,096 An aggregate of 61,008 common stock warrants were exercised on a non-cash basis resulting in the issuance of 30,847 common shares and 120,320 warrants expired during the year ended December 31, 2018. No common stock warrants were exercised and 12,658 warrants expired during the year ended December 31, 2017. The intrinsic value of the outstanding warrants on December 31, 2018 is $-0-. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | 7. Stock-based Compensation 2015 Equity Incentive Plan The Company has 1,400,000 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 is 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. A summary of stock option activity for the years ended December 31, 2018 and 2017 are presented below: Number of Weighted Average Exercise Weighted Average Aggregate Intrinsic Subject to Exercise Options Price Life (Years) Value Outstanding as of December 31, 2016 1,265,617 $ 16.20 9.21 $ 4,373,120 Granted – 2017 8,034 20.50 10.00 - Forfeited – 2017 (427,064 ) 16.00 8.54 - Exercised – 2017 (6,855 ) 20.50 8.25 - Outstanding as of December 31, 2017 839,732 $ 16.41 7.55 $ 4,373,120 Granted – 2018 5,222 19.70 10.00 - Forfeited – 2018 (1,306 ) - - - Exercised – 2018 - - - - Outstanding as of December 31, 2018 843,648 $ 16.43 6.56 $ - As of December 31, 2018, the Company had outstanding stock options as follows: Date Issued Exercise Price Number of Options Expiration date September 2014 $ 15.90 58,307 December 27, 2025 November 2014 $ 15.90 17,492 December 27, 2025 August 2015 $ 15.90 312,180 December 27, 2025 September 2015 $ 15.90 20,000 December 27, 2025 November 2015 $ 15.90 122,464 December 27, 2025 December 2015 $ 15.90 80,275 December 27, 2025 January 2016 $ 15.90 127,581 January 9, 2026 March 2016 $ 20.50 5,400 February 24, 2021 May 2016 $ 20.50 80,744 May 26, 2026 September 2016 $ 20.50 9,933 May 31, 2026 January 2017 $ 20.50 5,356 January 1, 2027 January 2018 $ 19.70 3,916 January 1, 2028 Total outstanding options at December 31, 2018 843,648 The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value ( i.e. There were 5,222 options granted with a fair value of $100,000 during the year ended December 31, 2018. There were 8,034 options granted with a fair value of $150,000 during the year ended December 31, 2017. 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 no active public market for the Company’s shares. Accordingly, the fair value of the 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. During the years ended December 31, 2018 and 2017, the Company had stock-based compensation expense of $516,638 and $1,615,022, respectively, related to the vesting of stock options granted to the Company’s employees, directors, and consultants included in our reported net loss. Stock compensation expense for stock options granted to consultants recognized in the statement of operations amounted to $(1,125,080) and $545,700 at December 31, 2018 and 2017, respectively. During the year ended December 31, 2018, 1,306 options forfeited upon the resignation of one of our directors. During the year ended December 31, 2017, there were 412,531 options cancelled in conjunction with the termination of the Founders Professional Services Agreement, 2,678 options were forfeited upon the resignation of one of our directors and 11,855 options expired per the terms of the options. Our policy is to account for forfeitures of the unvested portion of option grants when they occur; therefore, these forfeitures are recorded as a reversal to expense, which can result in a credit balance in the statement of operations. Forfeiture reversals for the years ended December 31, 2018 and 2017 were $13,400 and $2,744,749, respectively. The Company utilized the Black-Scholes option-pricing model. The assumptions used for the years ended December 31, 2018 and 2017 are as follows: December 31, 2018 December 31, 2017 Risk free interest rate 2.302%-2.984 % 1.99%-2.306 % Expected life (in years) 6.24-7.75 5.5-9.0 Expected Volatility 169.33%-175.89 % 135.94%-153.79 % Expected dividend yield 0 % 0 % A summary of the changes in the Company’s non-vested options during the year ended December 31, 2018, is as follows: Number of Non-vested Options Weighted Average Fair Value at Grant Date Non-vested at December 31, 2017 265,304 $ 15.01 Granted in 2018 5,222 $ 19.15 Forfeited – 2018 (1,306 ) $ 19.15 Vested in 2018 (151,759 ) $ 14.10 Non-vested at December 31, 2018 117,464 $ 16.33 Exercisable at December 31, 2018 726,184 $ 14.33 Outstanding at December 31, 2018 843,648 $ 14.61 As of December 31, 2018, total unrecognized compensation cost related to unvested stock options was $22,006. The cost is expected to be recognized over a weighted average period of 1 year. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 8. Income Taxes The provision for income taxes consists of the following: Year Ended December 31, 2018 December 31, 2017 Current: Federal $ - $ - State 1,729 1,600 Total current 1,729 1,600 Deferred: Federal - - State - - Total deferred - - Provision for income taxes $ 1,729 $ 1,600 The components of deferred tax assets and liabilities consist of the following: December 31, 2018 December 31, 2017 Deferred tax assets Net operating losses $ 7,410,000 $ 6,618,000 Accrued expenses 688,000 651,000 R&D credits 534,000 456,000 Stock compensation 8,245,000 8,194,000 Total 16,877,000 15,919,000 Less: Valuation allowance (16,877,000 ) (15,919,000 ) $ - $ - The Company’s federal and state net operating loss carryforwards at December 31, 2018 and 2017 were approximately $28,286,000 and $25,096,000, respectively, and will begin to expire in 2019 if not utilized. The Company reviews its deferred tax assets for realization based upon historical taxable income, prudent and feasible tax planning strategies, the expected timing of the reversals of existing temporary differences and expected future taxable income. The Company has concluded that it is more likely than not that the deferred tax assets will not be realized. Accordingly, the Company has recorded a valuation allowance against the net deferred tax assets in the amount of $16,877,000 at December 31, 2018. The net change in the valuation allowance for the year ended December 31, 2018 was $958,000. The effective tax rate differs from the statutory tax rate principally due to the change in valuation allowance, nondeductible permanent differences, credits, and state income taxes. A reconciliation of the federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2018 and 2017 is as follows: December 31, 2018 December 31, 2017 Statutory federal income tax rate 21.0 % 34.0 % State taxes, net of federal tax benefit 3.0 % 3.8 % Nondeductible permanent items (0.4 )% (0.2 )% Deferred tax rate change (6.2 )% (5.7 )% Research and development credit 1.8 % 0.8 % Change in valuation allowance (19.2 )% (32.7 )% Income tax provision 0.0 % 0.0 % The Company’s effective tax rate is 0% for income tax for the years ended December 31, 2018 and 2017. Based on the weight of available evidence, including cumulative losses since inception and expected future losses, the Company has determined that it is more likely than not that the deferred tax asset amount will not be realized and therefore a valuation allowance has been provided on net deferred tax assets. The Company files tax returns for U.S. Federal and State of California. The Company is not currently subject to any income tax examinations. Since the Company’s inception, the Company had incurred losses from operations, which generally allows all tax years to remain open. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions Hankey Capital LLC (Hankey Capital) Hankey Capital holds certain convertible notes of the Company as discussed in Note 4. Don Hankey, the CEO and Chairman of Hankey Group, is our non-independent Chairman of the Board and a significant shareholder. Bret Hankey, the president of Hankey Capital, is a non-independent board member. The Hankey Group is an affiliate of Hankey Capital. Founders The Company entered into a Letter Agreement dated September 24, 2015, with each of Dr. Chia Soo, Dr. Eric Kang Ting and Dr. Ben Wu (collectively, the “Founders”). The Founders were three of the original shareholders of the Company. Pursuant to the Letter Agreement, the Founders agreed 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 115,385 shares of the Company’s 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) and are currently reported as Shares to be Issued. During the year ended December 31, 2018, 115,385 shares were issued pursuant to the Letter 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 agreed to provide certain services to the Company, including providing strategic advice and strategic introductions to the Company’s 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 was granted a 10-year stock option (the “Options”) to purchase 180,036 shares of the Company’s common stock corresponding to 4% of the Company’s outstanding common stock, on a fully diluted basis, at an exercise price of $15.90 (post reverse split) per share. Additionally, beginning January 1, 2017, the Company was to 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. On June 1, 2016, the Company agreed to issue to each Founder a 10-year stock option to purchase 3,310 shares of the Company’s common stock at an exercise price of $20.50 (post reverse split) per share as an adjustment to amounts due under the Agreements. All options issued to the Founders under the Agreements immediately terminate if the Agreements are terminated for cause. On December 13, 2016, the Company provided written notice to each of the Founders that it was terminating the Agreements for cause, indicating that absent cure of the material breach of the Agreements, termination of the Agreements was to be effective on January 12, 2017. Despite lengthy discussions with the Founders, and multiple extensions of the termination date to accommodate such discussions, the Company was unable to resolve the outstanding issues under the Agreements, and the Company provided notice that the Agreements were terminated, effective as of April 8, 2017. The Founders have disputed the right of the Company to terminate for cause. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies UCLA TDG Exclusive License Agreement Effective August 18, 2017, the Company entered into an Amended and Restated Exclusive License Agreement (the “Restated License Agreement”) with the UCLA Technology Development Group on behalf of UC Regents (“UCLA TDG”). The Restated License Agreement amends and restates the Exclusive License Agreement, effective March 15, 2006, between the Company and UCLA TDG, as amended by ten amendments. Under the terms of the Restated License Agreement, the Regents have continued to grant the Company exclusive rights to develop and commercialize NELL-1 (the “Licensed Product”) for spinal fusion applications. The Licensed Product is a recombinant human protein growth factor that is essential for normal bone development. Following the completion of several key milestones, Bone Biologics has expanded its Field of Use definition beyond spine fusion within the NELL-1 license agreement with UCLA TDG. Consistent with that expansion, Bone Biologics has entered into an exclusive license agreement with UCLA TDG for the worldwide application of the NELL-1 protein for both osteoporosis and trauma through a technology transfer. We have agreed to pay an annual maintenance fee to UCLA TDG of $10,000 as well as to pay certain royalties to UCLA TDG under the Restated License Agreement at the rate of 3.0% of net sales of licensed products. We must pay the royalties to UCLA TDG on a quarterly basis. Upon a first commercial sale, we also must pay between $50,000 and $250,000, depending on the calendar year that 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 TDG patents, then we may reduce the royalty owed to UCLA TDG 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 TDG patent, then we will pay to UCLA TDG 10% to 20% of the sublicensing income we receive from such sublicense. We are obligated to make the following milestone payments to UCLA TDG 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 TDG a cash milestone payment within thirty (30) days of a Liquidity Event (including a Change of Control Transaction and a payment election by UCLA TDG 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. As of December 31, 2018, none of the above milestones has been met. We are obligated to diligently proceed with developing and commercializing licensed products under UCLA patents set forth in the Restated License Agreement. UCLA TDG 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 Restated License Agreement. We must reimburse or pre-pay UCLA TDG for patent prosecution and maintenance costs incurred during the term of the Restated License Agreement. We have the right to bring infringement actions against third party infringers of the Restated License Agreement, UCLA TDG may join voluntarily, at its own expense, or, at our expense, be joined involuntarily to the action. We are required to indemnify UCLA TDG against any third party claims arising out of our exercise of the rights under the Restated License Agreement or any sublicense. Payments to UCLA TDG under the Restated License Agreement for the years ended December 31, 2018 and 2017 were $70,627 and $130,278, respectively. Contingencies The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. In July 2018, AFH Holding & Advisory, LLC, Amir Heshmatpour, Steve Richards, and Bessie (Chia) Soo (“Plaintiffs”) filed a verified shareholder derivative complaint (the “Complaint”) in Massachusetts federal court against Bruce Stroever, John Booth, Stephen LaNeve, Bret Hankey, James Delshad (the “Initial Defendants”), and The Musculoskeletal Transplant Foundation, Inc. (“MTF”), and also named the Company as a nominal defendant. The Complaint alleged claims for violation of Section 14(c) of the Securities Exchange Act of 1934, breach of fiduciary duties, rescission of a reverse stock split, and in the alternative rescissory damages. The Complaint focuses on the financing transaction that the Company completed with Hankey Capital in July 2018. The Initial Defendants and the Company filed motions to dismiss on September 28, 2018. After changing counsel and obtaining several extensions of time, instead of responding to the motions to dismiss, Plaintiffs filed an Amended Complaint (the “Amended Complaint”) on February 8, 2019 as a direct, instead of derivative complaint, and added two additional defendants, Don Hankey and Hankey Capital LLC (the “Added Defendants” and together with the Initial Defendants, MTF and the Company, the “Current Defendants”). The Amended Complaint asserts claims for violation of Section 14(c) of the Securities Exchange Act of 1934, breach of fiduciary duties, aiding and abetting breach of fiduciary duties, rescission of a reverse stock split, and in the alternative rescissory damages. On February 22, 2019, the Company and the Initial Defendants filed a Motion to Dismiss the Amended Complaint. The Initial Defendants have been sued for actions taken in their capacity as directors of the Company. As such, the Company has certain indemnification obligations to the Initial Defendants. The Company and the Initial Defendants intend to vigorously defend against the allegations in the Amended Complaint. Based on the very early stage of the litigation, it is not possible to estimate the amount or range of any possible loss arising from the expenditure of defense fees, a judgment or settlement of the matter. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events On March 19, 2019, the Company drew $700,000 of working capital under a $2,000,000 secured credit facility secured by 1,489,362 collateral shares of Common Stock issued by the Company in the name of Hankey Capital (see Note 4). The credit facility is evidenced by a convertible secured note convertible prior to the maturity date at $1.00 per share and due on December 31, 2019. Draws bear 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. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements and related notes include activities of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
Reclassification | Reclassification Certain amounts totaling $135,697 previously reflected in the prior-period financial statements as research and development expense have been reclassified to general and administrative expense to conform to the presentation in the current-period financial statements. |
Use of Estimates | Use of Estimates The preparation of the accompanying consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Significant estimates include the assumptions used in the accrual for potential liabilities, the valuation of debt and equity instruments, stock options and warrants issued for services, and deferred tax valuation allowances. Actual results could differ from those estimates. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s consolidated financial instruments are cash, accounts payable and notes payable. The recorded values of cash and accounts payable approximate their values based on their short-term nature. The fair value of convertible notes payable approximate their fair value since the current interest rates and terms on these obligations are the same as prevailing market rates. 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. An “established trading market” for the Company’s common stock does not exist. The fair value of the shares was determined based on the then most recent price per share at which we sold common stock to unrelated parties in a private placement during the periods then ended. During the year ended December 31, 2017, the fair value of shares ranged between $19.70 to $20.05 (post reverse-split). During the period January 1, 2018 through June 30, 2018, the Company utilized $20.00 (post reverse split) per share as the fair value of its common stock for accounting purposes based on one common stock transaction with an investor during March 2018. Subsequently, based on the analysis as described below, management determined that the fair value of the Company’s common stock for accounting purposes was $0.94 per share. The reduction in the fair value of the Company’s common stock from $20.00 per share to $0.94 per share resulted in a reversal of certain stock-based compensation charges related to options held by a consultant recorded during the year and thus a credit balance in certain operating accounts for the year ended December 31, 2018. In drawing its conclusions, management considered various relevant factors, including the work of an independent third party valuation firm engaged to provide a valuation analysis as of July 24, 2018, which indicated a valuation of $0.94 per common share. Management also took into account the recent cash transaction price for the Company’s common stock pursuant to a July 2018 Rights Offering to all common stockholders, which resulted in the sale of common shares to an affiliate of the Company and parties related to such affiliate at a slightly higher price of $1.00 per share. The Company entered into a series of interrelated transactions with such affiliate at the same $1.00 price per share during the year ended December 31, 2018. The July 24, 2018 valuation analysis employed the discounted future value method and utilized financial metrics observed in the marketplace. Management ultimately determined, and the valuation firm concurred, that the discounted future value method was the most appropriate valuation methodology under the circumstances. The utilization of the discounted future value method involved the estimation of a business enterprise value (“BEV”)/revenue multiple, the probability of approval of the Company’s technology, the estimation of the Company’s cost of equity and weighted average cost of capital, the estimation of a required rate of return appropriate for discounting projected revenues to calculate the present value of the business enterprise, and an appropriate discount period. This method involved projecting revenues through 2028 and applying an appropriate BEV/revenue multiple. |
Research and Development Costs | Research and Development Costs Research and development costs include, but are not limited to, 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 Effective August 18, 2017, the Company entered into an Amended and Restated Exclusive License Agreement (the “Restated License Agreement”) with the UCLA Technology Development Group on behalf of UC Regents (“UCLA TDG”). The Restated License Agreement amends and restates the Exclusive License Agreement, effective March 15, 2006, between the Company and UCLA TDG, as amended by ten amendments. See Note 9 for commitments related to the Exclusive License Agreement. Patent expenses include costs to acquire the license of NELL-1, which was de minimis, 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 general and administrative expenses. Costs associated with licenses acquired to be able to use products from third parties prior to receipt of regulatory approval to market the related products are also expensed. The Company’s licensed technologies may have alternative future uses in that they are enabling (or platform) technologies that can be the basis for multiple products that would each target a specific indication. Costs of acquisition of licenses are expensed. |
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 Company’s cash balances exceed federally insured limits. |
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 In light of the lack of an “established trading market”, the fair value of the shares was determined based on factors discussed in “Fair Value of Financial Instruments” above. Pursuant to ASU No. 2016-09 – Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, Stock options issued to non-employees and consultants are revalued each reporting period to determine the amount to be recorded in the statement of operations in the respective period. As stock options vest, they are valued on each vesting date and an adjustment is recorded for the difference between the value already recorded and the value on the date of vesting. Forfeitures of the unvested portion of stock option grants are recorded when the underlying event occurs, and are recorded as a reversal of the related expense. An increase in the Company’s stock price during a reporting period will generally result in an increase in the fair value of unvested stock options and thus the related expense, and a decrease in the Company’s stock price during a reporting period will generally result in a decrease in the fair value of unvested stock options and thus the related expense. Accordingly, depending on various factors, the recording of forfeitures and a decrease in the price of the Company’s common stock during a reporting period can result in a credit balance in an operating account in the statement of operations. |
Income Taxes | Income Taxes Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due and deferred taxes resulting from timing differences in recording of transactions for tax purposes and financial reporting purposes. The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are received or settled. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized. The accounting provisions related to uncertain income tax positions require the Company to determine whether any tax position in all open years meets a more likely than not threshold of being sustained upon examination by the applicable taxing authority. The Company did not have any changes to its liability for uncertain tax positions as at December 31, 2018 and 2017. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of December 31, 2018 and 2017. 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. |
Collateral Shares | Collateral Shares The Company accounts for the common shares issued as collateral for convertible promissory notes, whether upon original issuance or upon the required annual adjustment, as debt issuance costs in the form of a loan processing fee, which is determined by reference to the par value of the Company’s common stock, with a corresponding charge to operations when such collateral shares are issued. The collateral shares are subject to significant contractual restrictions limiting their sale or transfer. As these common shares have been issued to and are held by the lender, and are contingently returnable to the Company under certain conditions, such shares are considered as issued and outstanding on the Company’s balance sheet, but are not included in earnings per share calculations for all periods presented. In the event of an uncured event of default, the Company will record a charge to operations to recognize that the collateral shares are no longer owned or controlled by the Company, and such prospective charge to operations would be based on the fair market value of the collateral shares at that time, and which would be classified as a cost of debt capital and recognized as a charge to operations. |
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 for the years ended 2018 and 2017, shares of common stock underlying these instruments have been excluded from the computation of loss per common share. The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of December 31, 2018 and 2017: December 31, 2018 2017 Warrants 845,096 1,039,082 Stock options 843,648 839,722 Convertible promissory notes 9,000,000 959,620 10,688,744 2,838,424 |
New Accounting Standards | New Accounting Standards In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires a lessee to record a right-of-use asset and a corresponding lease liability, initially measured at the present value of the lease payments, on the balance sheet for all leases with terms longer than 12 months, as well as the disclosure of key information about leasing arrangements. ASU 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. ASU 2016-02 requires classification of all cash payments within operating activities in the statement of cash flows. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company has not yet evaluated the impact of the adoption of ASU 2016-02 on the Company’s financial statement presentation or disclosures. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features; (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception” (“ASU 2017-11”). ASU 2017-11 allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be accounted for as derivative liabilities. A company will recognize the value of a down round feature only when it is triggered, and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, an entity will treat the value of the effect of the down round as a dividend and a reduction of income available to common stockholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted. The guidance in ASU 2017-11 can be applied using a full or modified retrospective approach. The Company is currently evaluating the impact of the adoption of ASU 2017-11 on the Company’s financial statement presentation or disclosures. In September 2018, the FASB issued ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to nonemployee share-based payment accounting. This ASU simplifies the accounting and reporting for share-based payments issued to nonemployees by expanding the scope of ASC 718, Compensation - Stock Compensation, which currently only includes share-based compensation to employees, to also include share-based payments to nonemployees for goods and services. The standard is effective for public companies for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted, but no earlier than a company’s adoption date of ASC 606. Management is currently in the process of evaluating the impact of the standard on its consolidated financial statements and disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of December 31, 2018 and 2017: December 31, 2018 2017 Warrants 845,096 1,039,082 Stock options 843,648 839,722 Convertible promissory notes 9,000,000 959,620 10,688,744 2,838,424 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consist of the following: December 31, 2018 December 31, 2017 Accounts payable $ 125,203 $ 216,903 Accrued bonus - 456,000 Deferred Directors’ fees 72,017 47,225 $ 197,220 $ 720,128 |
Notes Payable - Related Parti_2
Notes Payable - Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Note Type Issue Date Maturity Date Interest Rate December 31, 2018 December 31, 2017 (A) First Secured Convertible Note 10/24/14 12/31/19 9.25 % $ 5,000,000 $ 5,000,000 (A) Second Secured Convertible Note 5/4/15 12/31/19 9.25 % 2,000,000 2,000,000 (B) Third Secured Convertible Note 2/24/16 12/31/19 9.25 % 2,000,000 2,000,000 9,000,000 9,000,000 Less: Debt discount - (724,606 ) Less: Debt issuance costs - (45,707 ) Net Notes payable $ 9,000,000 $ 8,229,687 First and Second Secured Convertible Notes and Warrants (A) On October 24, 2014 and May 4, 2015, the Company issued two convertible promissory notes in the aggregate amount of $7,000,000 to Hankey Capital. Don Hankey, the CEO and Chairman of Hankey Group, is our non-independent Chairman of the Board and a significant shareholder. Bret Hankey, the president of Hankey Capital, is a non-independent board member. The Convertible Notes mature on December 31, 2019 and bear 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 Notes into shares of the Company’s Common Stock, at a conversion rate equal to $1.00 per share. The Company also issued warrants to Hankey Capital for an aggregate of 585,443 shares of Common Stock at an exercise price per share of $15.80 that expire five years from the dates of issuance. In connection with the Convertible Notes, the Company paid commitment fees in the amount of $210,000 (3.0% of the original principal amount of the loans) to Hankey Capital and other aggregate offering costs of $594,550. The aggregate value of the warrants and offering costs totaling $2,891,409 was considered to be a debt discount upon issuance of the notes. Third Convertible Secured Term Note and Warrants (B) On February 24, 2016, the Company issued a convertible promissory note in the amount of $2,000,000 to Hankey Capital. The Third Convertible Note matures on December 31, 2019 (the “Maturity Date”) and bears interest at an annual rate of interest at 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 Company’s common stock (the “Conversion Shares”), at a conversion rate equal to $1.00 per share and issued a warrant to Hankey Capital for 146,342 shares of Common Stock at an exercise price per share of $20.50. The Warrant will expire on February 23, 2021. In connection with the Convertible Note, the Company paid a commitment fee in the amount of $40,000 (2.0% of the original principal amount of the Loan) and other offering costs totaling $77,532. The aggregate value of the warrant, beneficial conversion feature and offering costs of $2,000,000 was considered a debt discount upon issuance of the note. |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of Warrant Activity | A summary of warrant activity for the years ended December 31, 2018 and 2017 are presented below: Number of Weighted Average Weighted Average Subject to Exercise Warrants Price Life (Years) Outstanding as of December 31, 2016 1,039,082 $ 15.20 3.20 Granted – 2017 - - - Forfeited/Expired – 2017 (12,658 ) 15,80 - Exercised – 2017 - - - Outstanding as of December 31, 2017 1,026,424 $ 15.17 2.23 Granted – 2018 - - - Forfeited/Expired – 2018 (120,320 ) - - Exercised – 2018 (61,008 ) 9.74 2.64 Outstanding as of December 31, 2018 845,096 $ 4.94 1.40 |
Schedule of Outstanding Vested and Unexercised Common Stock Warrants | As of December 31, 2018, the Company had outstanding vested and unexercised Common Stock Warrants as follows: Date Issued Exercise Price Number of Warrants Expiration date 2009 $ 4.40 11,839 March 16, 2019 2010 $ 4.40 22,659 February 4, 2020 April 2013 $ 10.00 5,000 April 28, 2020 September 2013 $ 10.00 5,000 September 4, 2020 September 2013 $ 10.00 2,500 September 20, 2020 November 2013 $ 10.00 7,500 November 14, 2020 July 2014 $ 10.00 50,000 June 30, 2020 July 2014 $ 10.00 4,667 July 2, 2019 September 2014 $ 16.20 62,500 August 31, 2021 September 2014 $ 10.00 11,800 September 18, 2021 September 2014 $ 10.00 8,959 September 29, 2021 October 2014 $ 15.80 316,456 October 23, 2019 May 2015 $ 15.80 189,874 May 4, 2020 February 2016 $ 20.50 146,342 February 23, 2021 Total outstanding warrants at December 31, 2018 845,096 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock Option Activity | A summary of stock option activity for the years ended December 31, 2018 and 2017 are presented below: Number of Weighted Average Exercise Weighted Average Aggregate Intrinsic Subject to Exercise Options Price Life (Years) Value Outstanding as of December 31, 2016 1,265,617 $ 16.20 9.21 $ 4,373,120 Granted – 2017 8,034 20.50 10.00 - Forfeited – 2017 (427,064 ) 16.00 8.54 - Exercised – 2017 (6,855 ) 20.50 8.25 - Outstanding as of December 31, 2017 839,732 $ 16.41 7.55 $ 4,373,120 Granted – 2018 5,222 19.70 10.00 - Forfeited – 2018 (1,306 ) - - - Exercised – 2018 - - - - Outstanding as of December 31, 2018 843,648 $ 16.43 6.56 $ - |
Schedule of Outstanding Stock Options | As of December 31, 2018, the Company had outstanding stock options as follows: Date Issued Exercise Price Number of Options Expiration date September 2014 $ 15.90 58,307 December 27, 2025 November 2014 $ 15.90 17,492 December 27, 2025 August 2015 $ 15.90 312,180 December 27, 2025 September 2015 $ 15.90 20,000 December 27, 2025 November 2015 $ 15.90 122,464 December 27, 2025 December 2015 $ 15.90 80,275 December 27, 2025 January 2016 $ 15.90 127,581 January 9, 2026 March 2016 $ 20.50 5,400 February 24, 2021 May 2016 $ 20.50 80,744 May 26, 2026 September 2016 $ 20.50 9,933 May 31, 2026 January 2017 $ 20.50 5,356 January 1, 2027 January 2018 $ 19.70 3,916 January 1, 2028 Total outstanding options at December 31, 2018 843,648 |
Schedule of Assumptions Using Black-Scholes Option Pricing Model | The Company utilized the Black-Scholes option-pricing model. The assumptions used for the years ended December 31, 2018 and 2017 are as follows: December 31, 2018 December 31, 2017 Risk free interest rate 2.302%-2.984 % 1.99%-2.306 % Expected life (in years) 6.24-7.75 5.5-9.0 Expected Volatility 169.33%-175.89 % 135.94%-153.79 % Expected dividend yield 0 % 0 % |
Schedule of Non-vested Options | A summary of the changes in the Company’s non-vested options during the year ended December 31, 2018, is as follows: Number of Non-vested Options Weighted Average Fair Value at Grant Date Non-vested at December 31, 2017 265,304 $ 15.01 Granted in 2018 5,222 $ 19.15 Forfeited – 2018 (1,306 ) $ 19.15 Vested in 2018 (151,759 ) $ 14.10 Non-vested at December 31, 2018 117,464 $ 16.33 Exercisable at December 31, 2018 726,184 $ 14.33 Outstanding at December 31, 2018 843,648 $ 14.61 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes consists of the following: Year Ended December 31, 2018 December 31, 2017 Current: Federal $ - $ - State 1,729 1,600 Total current 1,729 1,600 Deferred: Federal - - State - - Total deferred - - Provision for income taxes $ 1,729 $ 1,600 |
Schedule of Deferred Tax Assets and Liabilities | The components of deferred tax assets and liabilities consist of the following: December 31, 2018 December 31, 2017 Deferred tax assets Net operating losses $ 7,410,000 $ 6,618,000 Accrued expenses 688,000 651,000 R&D credits 534,000 456,000 Stock compensation 8,245,000 8,194,000 Total 16,877,000 15,919,000 Less: Valuation allowance (16,877,000 ) (15,919,000 ) $ - $ - |
Schedule of Income Tax Effective Tax Rate | A reconciliation of the federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2018 and 2017 is as follows: December 31, 2018 December 31, 2017 Statutory federal income tax rate 21.0 % 34.0 % State taxes, net of federal tax benefit 3.0 % 3.8 % Nondeductible permanent items (0.4 )% (0.2 )% Deferred tax rate change (6.2 )% (5.7 )% Research and development credit 1.8 % 0.8 % Change in valuation allowance (19.2 )% (32.7 )% Income tax provision 0.0 % 0.0 % |
The Company (Details Narrative)
The Company (Details Narrative) - USD ($) | Jul. 24, 2018 | Jul. 16, 2018 | Jun. 11, 2018 | Feb. 28, 2018 | May 31, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2016 |
Shares purchased in rights offering | 16,706 | 14,141 | |||||||||
Conversion price of convertible notes | $ 1 | ||||||||||
Gross revenue | $ 1,070,000,000 | ||||||||||
Non-convertible debt securities | 1,070,000,000 | 1,070,000,000 | |||||||||
Accumulated losses | (63,615,421) | (59,185,022) | (63,615,421) | ||||||||
Estimated operating expenditure for next twelve months | 10,300,000 | 10,300,000 | |||||||||
Stockholders' deficit | 8,598,175 | 8,395,823 | 8,598,175 | $ 8,363,698 | |||||||
Net loss | (4,430,399) | (7,051,572) | |||||||||
Net cash in operating activities | $ (4,104,884) | $ (3,330,096) | |||||||||
Equity financing amount | $ 500,000 | ||||||||||
Debt financing amount | $ 600,000 | ||||||||||
Shares issued upon close of rights offering, related parties | 329,674 | ||||||||||
Proceeds from sale of right shares | $ 3,869,979 | ||||||||||
Debt instrument principal amount | $ 600,000 | 600,000 | |||||||||
Line of credit facility, maximum limit | $ 2,000,000 | ||||||||||
Common stock, reverse split | 1 for 10 reverse split | ||||||||||
Four Shareholders [Member] | |||||||||||
Shares purchased in rights offering | 330,325 | ||||||||||
Shares issued upon close of rights offering, related parties | 329,674 | ||||||||||
Hankey Capital LLC [Member] | |||||||||||
Shares purchased in rights offering | 3,539,654 | ||||||||||
Aggregate amounts of rights offering | $ 3,869,979 | ||||||||||
Secured credit facility | $ 2,000,000 | ||||||||||
Non-affiliates [Member] | |||||||||||
Market value of common stock | $ 700,000,000 | ||||||||||
October 2016 Purchase Agreement [Member] | |||||||||||
Percentage of defer earned compensation | 20.00% | ||||||||||
October 2016 Purchase Agreement [Member] | Directors [Member] | |||||||||||
Percentage of defer earned compensation | 50.00% | ||||||||||
Cash compensation received | $ 5,000,000 | ||||||||||
Hankey Capital LLC [Member] | |||||||||||
Debt instrument principal amount | $ 9,000,000 | $ 9,000,000 | |||||||||
Ownership percentage | 87.00% | 87.00% | |||||||||
Hankey Capital LLC [Member] | March 2019 [Member] | |||||||||||
Line of credit facility, additional borrowings | $ 700,000 | $ 700,000 | |||||||||
Line of credit facility, maximum limit | $ 2,000,000 | $ 2,000,000 | |||||||||
Existing Convertible Notes [Member] | Extended Maturity [Member] | |||||||||||
Promissory note maturity date | Dec. 31, 2019 | ||||||||||
Existing Convertible Notes [Member] | Hankey Capital LLC [Member] | |||||||||||
Conversion price of convertible notes | $ 15.80 | $ 1 | $ 1 | ||||||||
Promissory note maturity date | Feb. 24, 2016 | ||||||||||
Rights Offering [Member] | Existing Convertible Notes [Member] | Hankey Capital LLC [Member] | |||||||||||
Shares purchased in rights offering | 3,539,654 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 | |
Common stock price per share | $ 0.94 | $ 20 | |
Sale of shares, price per share | $ 1 | ||
Accrued income tax penalties and/or interest | |||
Uncertain tax positions | |||
Interest and/or penalties related to income tax | |||
Depositor [Member] | |||
Federal insurance coverage cost | $ 250,000 | ||
Minimum [Member] | |||
Common stock price per share | $ 19.70 | ||
Maximum [Member] | |||
Common stock price per share | $ 20.05 | ||
July 2018 Rights Offering [Member] | |||
Sale of shares, price per share | $ 1 | ||
Research and Development Expense and General and Administrative Expense [Member] | |||
Prior period reclassification adjustment | $ 135,697 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 10,688,744 | 2,838,424 |
Warrants [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 845,096 | 1,039,082 |
Stock Options [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 843,648 | 839,722 |
Convertible Promissory Notes [Member] | ||
Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 9,000,000 | 959,620 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 125,203 | $ 216,903 |
Accrued bonus | 456,000 | |
Deferred Directors' fees | 72,017 | 47,225 |
Total accounts payable and accrued expenses | $ 197,220 | $ 720,128 |
Notes Payable - Related Parti_3
Notes Payable - Related Parties (Details Narrative) - USD ($) | Jul. 11, 2018 | Aug. 18, 2017 | Feb. 10, 2017 | Oct. 14, 2016 | Feb. 24, 2016 | May 04, 2015 | Oct. 24, 2014 | Dec. 31, 2018 | Dec. 31, 2017 | Jul. 24, 2018 | Jul. 16, 2018 |
Debt instrument conversion price per share | $ 1 | ||||||||||
Debt discount amortization | $ 340,735 | $ 3,327,488 | |||||||||
Debt instrument face amount | 600,000 | ||||||||||
Debt conversion, beneficial conversion feature | $ 2,700,000 | ||||||||||
Shares issued, collateral adjustment | 420,348 | ||||||||||
Loss on extinguishment of debt | (408,294) | ||||||||||
Unamortized debt discount | 724,606 | ||||||||||
Valuation discount written off | 383,861 | ||||||||||
Unamortized debt issuance cost | $ 0 | 45,707 | |||||||||
First Secured Convertible Note [Member] | |||||||||||
Debt maturity date | Dec. 31, 2019 | ||||||||||
Debt instrument interest rate | 9.25% | ||||||||||
Hankey Capital LLC [Member] | Third Warrant [Member] | |||||||||||
Warrant to purchase shares of common stock | 146,342 | ||||||||||
Warrant expiration date | Feb. 23, 2021 | ||||||||||
Hankey Capital LLC [Member] | Third Convertible Secured Term Note and Warrants [Member] | |||||||||||
Convertible promissory note amount | $ 2,000,000 | ||||||||||
Debt maturity date | Dec. 31, 2019 | ||||||||||
Debt instrument conversion price per share | $ 1 | ||||||||||
Warrant exercise price | $ 20.50 | ||||||||||
Loan commitment fee amount | $ 40,000 | ||||||||||
Percentage of commitment fee paid | 2.00% | ||||||||||
Offering costs | $ 77,532 | ||||||||||
Debt discount amortization | $ 2,000,000 | ||||||||||
Hankey Capital LLC [Member] | First, Second and Third Convertible Secured Term Notes [Member] | |||||||||||
Debt discount amortization | $ 21,283 | 39,177 | |||||||||
Debt maturity description | Extend the maturity date of the Third Convertible Note from February 24, 2019 to December 31, 2019 | ||||||||||
Unamortized debt issuance cost | $ 24,433 | ||||||||||
Hankey Capital LLC [Member] | Minimum [Member] | Third Convertible Secured Term Note and Warrants [Member] | |||||||||||
Debt instrument interest rate | 8.50% | ||||||||||
Hankey Capital LLC [Member] | Minimum [Member] | First, Second and Third Convertible Secured Term Notes [Member] | |||||||||||
Debt instrument interest rate | 10.00% | ||||||||||
Debt instrument conversion price per share | $ 1 | ||||||||||
Hankey Capital LLC [Member] | Maximum [Member] | First, Second and Third Convertible Secured Term Notes [Member] | |||||||||||
Debt instrument conversion price per share | $ 15.80 | ||||||||||
Hankey Capital LLC [Member] | Prime Rate [Member] | Third Convertible Secured Term Note and Warrants [Member] | |||||||||||
Debt instrument interest rate | 4.00% | ||||||||||
Hankey Capital LLC and MTF [Member] | Converted Promissory Notes [Member] | |||||||||||
Debt maturity date | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2017 | ||||||||
Debt instrument interest rate | 8.50% | 8.50% | 8.50% | ||||||||
Debt instrument conversion price per share | $ 1 | $ 1 | $ 1 | ||||||||
Debt instrument face amount | $ 2,700,000 | $ 2,700,000 | $ 1,200,000 | ||||||||
Debt instrument, converted amount | $ 1,325,800 | ||||||||||
Debt instrument, shares issued in conversion | 1,325,800 | ||||||||||
Debt conversion, description | In the event of a financing resulting in gross proceeds of at least $5,000,000, the holders of the Convertible Notes will be required to convert their Convertible Notes into the same securities issued in such financing at the same price per share | In the event of a financing resulting in gross proceeds of at least $5,000,000, the holders of the Convertible Notes will be required to convert their Convertible Notes into the same securities issued in such financing at the same price per share | |||||||||
Proceeds from convertible debt | $ 5,000,000 | $ 5,000,000 | |||||||||
Debt conversion, beneficial conversion feature | $ 2,700,000 | $ 2,700,000 | |||||||||
Hankey Capital LLC and MTF [Member] | Converted Promissory Notes 1 [Member] | |||||||||||
Debt instrument, converted amount | $ 2,877,673 | ||||||||||
Debt instrument, shares issued in conversion | 2,877,673 | ||||||||||
Hankey Capital LLC and MTF [Member] | First Secured Convertible Note [Member] | |||||||||||
Number of shares of common stock issued as collateral | 19,148,936 | ||||||||||
Loan for collateral value ratio percentage | 50.00% | ||||||||||
Shares issued, collateral adjustment | 18,009,696 | ||||||||||
First and Second Secured Convertible Notes and Warrant [Member] | Hankey Capital LLC [Member] | |||||||||||
Convertible promissory note amount | $ 7,000,000 | $ 7,000,000 | $ 7,000,000 | ||||||||
Debt maturity date | Dec. 31, 2019 | Dec. 31, 2019 | |||||||||
Debt instrument conversion price per share | $ 15.80 | $ 1 | $ 1 | ||||||||
Warrant to purchase shares of common stock | 585,443 | 585,443 | |||||||||
Warrant exercise price | $ 15.80 | $ 15.80 | |||||||||
Warrant maturity | 2 years | 5 years | 5 years | ||||||||
Loan commitment fee amount | $ 210,000 | $ 210,000 | |||||||||
Percentage of commitment fee paid | 3.00% | 3.00% | |||||||||
Offering costs | $ 594,550 | $ 594,550 | |||||||||
Debt discount amortization | $ 2,891,409 | $ 2,891,409 | |||||||||
Debt conversion, description | The Company determined that the extension of the convertible notes' maturity dates and the warrants' expiration dates resulted in a debt extinguishment for accounting purposes since the change in fair value of the warrants as a result of the extension of their expiration dates was more than 10% of the original value of the convertible notes | ||||||||||
First and Second Secured Convertible Notes and Warrant [Member] | Hankey Capital LLC [Member] | Extended Maturity [Member] | |||||||||||
Debt maturity date | Dec. 31, 2019 | ||||||||||
First and Second Secured Convertible Notes and Warrant [Member] | Hankey Capital LLC [Member] | Minimum [Member] | |||||||||||
Debt instrument interest rate | 8.50% | 8.50% | |||||||||
First and Second Secured Convertible Notes and Warrant [Member] | Hankey Capital LLC [Member] | Prime Rate [Member] | |||||||||||
Debt instrument interest rate | 4.00% | 4.00% |
Notes Payable - Related Parti_4
Notes Payable - Related Parties - Schedule of Notes Payable (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Secured Convertible Note | $ 9,000,000 | $ 9,000,000 |
Less: Debt discount | (724,606) | |
Less: Debt issuance costs | (45,707) | |
Net Notes payable | $ 9,000,000 | 8,229,687 |
First Secured Convertible Note [Member] | ||
Issue Date | Oct. 24, 2014 | |
Maturity Date | Dec. 31, 2019 | |
Interest Rate | 9.25% | |
Secured Convertible Note | $ 5,000,000 | 5,000,000 |
Second Secured Convertible Note [Member] | ||
Issue Date | May 4, 2015 | |
Maturity Date | Dec. 31, 2019 | |
Interest Rate | 9.25% | |
Secured Convertible Note | $ 2,000,000 | 2,000,000 |
Third Secured Convertible Note [Member] | ||
Issue Date | Feb. 24, 2016 | |
Maturity Date | Dec. 31, 2019 | |
Interest Rate | 9.25% | |
Secured Convertible Note | $ 2,000,000 | $ 2,000,000 |
Credit Facility (Details Narrat
Credit Facility (Details Narrative) | Jul. 24, 2018USD ($)$ / shares |
Credit Facility | |
Line of credit facility, amount | $ | $ 2,000,000 |
Conversion price | $ / shares | $ 1 |
Line of credit facility due date | Dec. 31, 2019 |
Credit facility, Interest rate description | Draws bear 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 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | Jul. 24, 2018 | Jul. 16, 2018 | Mar. 26, 2018 | Feb. 28, 2018 | Aug. 18, 2017 | Sep. 30, 2018 | Jul. 31, 2018 | May 31, 2018 | Feb. 28, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2018 |
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 | 26,448,881 | 4,328,080 | ||||||||||
Number of warrants exercised on cashless | 32,289 | 28,719 | 32,289 | |||||||||
Number of common shares issued | 16,706 | 14,141 | ||||||||||
Proceeds from issuance of common stock | $ 4,369,979 | $ 700,000 | ||||||||||
Common stock issued price per share | $ 0.94 | $ 20 | ||||||||||
Line of credit facility, amount | $ 2,000,000 | |||||||||||
Issuance pursuant to certain letter agreement - related party, shares | 115,385 | |||||||||||
Issuance pursuant to certain letter agreement - related party, shares value | $ 1,823,077 | |||||||||||
Shares issued, collateral adjustment | 420,348 | |||||||||||
Sale of common stock, price per share | $ 1 | |||||||||||
Common stock issued for exercise options | 1,538 | 6,855 | ||||||||||
Issuance of common stock upon conversion of related party debt and accrued interest | $ 4,203,474 | |||||||||||
Warrants [Member] | ||||||||||||
Number of warrants exercised on cashless | 61,008 | |||||||||||
Common stock issued for exercise options | 30,847 | |||||||||||
Number of warrants expired | 120,320 | 12,658 | ||||||||||
Intrinsic value of outstanding warrants | $ 0 | |||||||||||
Hankey Capital LLC [Member] | ||||||||||||
Number of common shares issued | 3,539,654 | |||||||||||
Hankey Capital LLC and MTF [Member] | First Secured Convertible Note [Member] | ||||||||||||
Shares issued, collateral adjustment | 18,009,696 | |||||||||||
Four Shareholders [Member] | ||||||||||||
Number of common shares issued | 330,325 | |||||||||||
MTF [Member] | ||||||||||||
Proceeds from issuance of common stock | $ 700,000 | |||||||||||
Sale of common stock, shares | 23,333 | |||||||||||
Sale of common stock, price per share | $ 3 | |||||||||||
Private Placement [Member] | MTF [Member] | ||||||||||||
Number of common shares issued | 46,667 | |||||||||||
Share Purchase Agreement [Member] | ||||||||||||
Number of common shares issued | 25,000 | |||||||||||
Proceeds from issuance of common stock | $ 492,500 | |||||||||||
Common stock issued price per share | $ 20 | |||||||||||
Sale of common stock, pre-split share | $ 2 | |||||||||||
Securities Purchase Agreement [Member] | Two Related Parties [Member] | ||||||||||||
Number of common shares issued | 329,674 | |||||||||||
Securities Purchase Agreement [Member] | Hankey Capital LLC [Member] | ||||||||||||
Number of common shares issued | 3,539,654 | |||||||||||
Proceeds from issuance of common stock | $ 3,869,979 | |||||||||||
Line of credit facility, amount | $ 2,000,000 | |||||||||||
Securities Purchase Agreement [Member] | Four Shareholders [Member] | ||||||||||||
Number of common shares issued | 330,325 | |||||||||||
Restricted Common Stock [Member] | ||||||||||||
Stock issued during settlement of bonuses payable, shares | 23,146 | |||||||||||
Stock issued during settlement of bonuses payable | $ 456,000 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Warrant Activity (Details) - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Warrants Outstanding, Beginning balance | 1,026,424 | 1,039,082 |
Number of Warrants, Granted | ||
Number of Warrants, Forfeited/Expired | (120,320) | (12,658) |
Number of Warrants, Exercised | (61,008) | |
Number of Warrants Outstanding, Ending balance | 845,096 | 1,026,424 |
Weighted Average Exercise Price, Outstanding, Beginning | $ 15.17 | $ 15.20 |
Weighted Average Exercise Price, Granted | ||
Weighted Average Exercise Price, Forfeited/Expired | 15.80 | |
Weighted Average Exercise Price, Exercised | 9.74 | |
Weighted Average Exercise Price, Outstanding, Ending | $ 4.94 | $ 15.17 |
Weighted Average Life (Years), Outstanding, Beginning | 2 years 2 months 23 days | 3 years 2 months 12 days |
Weighted Average Life (Years), Granted | 0 years | 0 years |
Weighted Average Life (Years), Forfeited/Expired | 0 years | 0 years |
Weighted Average Life (Years), Exercised | 2 years 7 months 21 days | 0 years |
Weighted Average Life (Years), Outstanding. Ending | 1 year 4 months 24 days | 2 years 2 months 23 days |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Outstanding Vested and Unexercised Common Stock Warrants (Details) - Unexercised Common Stock Warrants [Member] | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Warrants | 845,096 |
2009 [Member] | |
Exercise Price | $ / shares | $ 4.40 |
Number of Warrants | 11,839 |
Warrants Expiration Date | Mar. 16, 2019 |
2010 [Member] | |
Exercise Price | $ / shares | $ 4.40 |
Number of Warrants | 22,659 |
Warrants Expiration Date | Feb. 4, 2020 |
April 2013 [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 5,000 |
Warrants Expiration Date | Apr. 28, 2020 |
September 2013 [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 5,000 |
Warrants Expiration Date | Sep. 4, 2020 |
September 2013 (1) [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 2,500 |
Warrants Expiration Date | Sep. 20, 2020 |
November 2013 [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 7,500 |
Warrants Expiration Date | Nov. 14, 2020 |
July 2014 (1) [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 50,000 |
Warrants Expiration Date | Jun. 30, 2020 |
July 2014 (2) [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 4,667 |
Warrants Expiration Date | Jul. 2, 2019 |
September 2014 (1) [Member] | |
Exercise Price | $ / shares | $ 16.20 |
Number of Warrants | 62,500 |
Warrants Expiration Date | Aug. 31, 2021 |
September 2014 (2) [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 11,800 |
Warrants Expiration Date | Sep. 18, 2021 |
September 2014 (3) [Member] | |
Exercise Price | $ / shares | $ 10 |
Number of Warrants | 8,959 |
Warrants Expiration Date | Sep. 29, 2021 |
October 2014 [Member] | |
Exercise Price | $ / shares | $ 15.80 |
Number of Warrants | 316,456 |
Warrants Expiration Date | Oct. 23, 2019 |
May 2015 [Member] | |
Exercise Price | $ / shares | $ 15.80 |
Number of Warrants | 189,874 |
Warrants Expiration Date | May 4, 2020 |
February 2016 [Member] | |
Exercise Price | $ / shares | $ 20.50 |
Number of Warrants | 146,342 |
Warrants Expiration Date | Feb. 23, 2021 |
Stock-based Compensation (Detai
Stock-based Compensation (Details Narrative) - USD ($) | Aug. 18, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 |
Number of options exercised | 1,538 | 6,855 | ||
Number of options, granted | 5,222 | 8,034 | ||
Fair value of stock option | $ 100,000 | $ 150,000 | ||
Stock-based compensation expense | $ 516,638 | $ 1,615,022 | ||
Number of options cancelled/forfeited | 1,306 | 427,064 | ||
Number of options forfeited, value | $ 13,400 | $ 2,744,749 | ||
Unrecognized compensation cost related to unvested stock options | $ 22,006 | |||
Compensation, expected to be recognized over a weighted average period | 1 year | |||
Founders Professional Services Agreement Termination [Member] | ||||
Number of options cancelled/forfeited | 412,531 | |||
Consultants [Member] | Employee Stock Option [Member] | ||||
Stock-based compensation expense | $ (1,125,080) | $ 545,700 | ||
Directors [Member] | ||||
Number of options cancelled/forfeited | 1,306 | |||
Directors One [Member] | ||||
Number of options cancelled/forfeited | 2,678 | |||
Number of options expired | 11,855 | |||
2015 Equity Incentive Plan [Member] | ||||
Shares authorized and reserved for issuance | 1,400,000 | |||
Percentage of stock issued and outstanding | 5.00% |
Stock-based Compensation - Sche
Stock-based Compensation - Schedule of Stock Option Activity (Details) - USD ($) | Aug. 18, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Number of Options Outstanding, Beginning balance | 839,732 | 1,265,617 | |
Number of Options, Granted | 5,222 | 8,034 | |
Number of Options, Forfeited | (1,306) | (427,064) | |
Number of Options, Exercised | (1,538) | (6,855) | |
Number of Options Outstanding, Ending balance | 843,648 | 839,732 | |
Weighted Average Exercise Price, Outstanding, Beginning | $ 16.41 | $ 16.20 | |
Weighted Average Exercise Price, Granted | 19.70 | 20.50 | |
Weighted Average Exercise Price, Forfeited | 16 | ||
Weighted Average Exercise Price, Exercised | 20.50 | ||
Weighted Average Exercise Price, Outstanding, Ending | $ 16.43 | $ 16.41 | |
Weighted Average Life (Years), Outstanding, Beginning | 7 years 6 months 18 days | 9 years 2 months 16 days | |
Weighted Average Life (Years), Granted | 10 years | 10 years | |
Weighted Average Life (Years), Forfeited | 0 years | 8 years 6 months 14 days | |
Weighted Average Life (Years), Exercised | 0 years | 8 years 2 months 30 days | |
Weighted Average Life (Years), Outstanding. Ending | 6 years 6 months 21 days | 7 years 6 months 18 days | |
Aggregate Intrinsic Value, Outstanding Beginning | $ 4,373,120 | $ 4,373,120 | |
Aggregate Intrinsic Value, Outstanding Ending | $ 4,373,120 |
Stock-based Compensation - Sc_2
Stock-based Compensation - Schedule of Outstanding Stock Options (Details) | 12 Months Ended |
Dec. 31, 2018$ / sharesshares | |
Number of Options | 843,648 |
September 2014 [Member] | |
Exercise price | $ / shares | $ 15.90 |
Number of Options | 58,307 |
Expiration date | Dec. 27, 2025 |
November 2014 [Member] | |
Exercise price | $ / shares | $ 15.90 |
Number of Options | 17,492 |
Expiration date | Dec. 27, 2025 |
August 2015 [Member] | |
Exercise price | $ / shares | $ 15.90 |
Number of Options | 312,180 |
Expiration date | Dec. 27, 2025 |
September 2015 [Member] | |
Exercise price | $ / shares | $ 15.90 |
Number of Options | 20,000 |
Expiration date | Dec. 27, 2025 |
November 2015 [Member] | |
Exercise price | $ / shares | $ 15.90 |
Number of Options | 122,464 |
Expiration date | Dec. 27, 2025 |
December 2015 [Member] | |
Exercise price | $ / shares | $ 15.90 |
Number of Options | 80,275 |
Expiration date | Dec. 27, 2025 |
January 2016 [Member] | |
Exercise price | $ / shares | $ 15.90 |
Number of Options | 127,581 |
Expiration date | Jan. 9, 2026 |
March 2016 [Member] | |
Exercise price | $ / shares | $ 20.50 |
Number of Options | 5,400 |
Expiration date | Feb. 24, 2021 |
May 2016 [Member] | |
Exercise price | $ / shares | $ 20.50 |
Number of Options | 80,744 |
Expiration date | May 26, 2026 |
September 2016 [Member] | |
Exercise price | $ / shares | $ 20.50 |
Number of Options | 9,933 |
Expiration date | May 31, 2026 |
January 2017 [Member] | |
Exercise price | $ / shares | $ 20.50 |
Number of Options | 5,356 |
Expiration date | Jan. 1, 2027 |
January 2018 [Member] | |
Exercise price | $ / shares | $ 19.70 |
Number of Options | 3,916 |
Expiration date | Jan. 1, 2028 |
Stock-based Compensation - Sc_3
Stock-based Compensation - Schedule of Assumptions Using Black-Scholes Option Pricing Model (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Risk free interest rate, minimum | 2.302% | 1.99% |
Risk free interest rate, maximum | 2.984% | 2.306% |
Expected Volatility, minimum | 169.33% | 135.94% |
Expected Volatility, maximum | 175.89% | 153.79% |
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Expected life (in years) | 6 years 2 months 27 days | 5 years 6 months |
Maximum [Member] | ||
Expected life (in years) | 7 years 9 months | 9 years |
Stock-based Compensation - Sc_4
Stock-based Compensation - Schedule of Non-vested Options (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Number of Non-vested Options, Beginning Balance | 265,304 | |
Number of Non-vested Options, Granted | 5,222 | 8,034 |
Number of Non-vested Options, Forfeited | (1,306) | |
Number of Non-vested Options, Vested | (151,759) | |
Number of Non-vested Options, Ending Balance | 117,464 | 265,304 |
Number of Non-vested Options, Exercisable | 726,184 | |
Number of Non-vested Options, Outstanding | 843,648 | |
Weighted Average Fair Value at Grant Date, Beginning Balance | $ 15.01 | |
Weighted Average Fair Value at Grant Date, Granted | 19.15 | |
Weighted Average Fair Value at Grant Date, Forfeited | 19.15 | |
Weighted Average Fair Value at Grant Date, Vested | 14.10 | |
Weighted Average Fair Value at Grant Date, Ending Balance | 16.33 | $ 15.01 |
Weighted Average Fair Value at Grant Date, Exercisable | 14.33 | |
Weighted Average Fair Value at Grant Date, Outstanding | $ 14.61 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 28,286,000 | $ 25,096,000 |
Deferred tax assets valuation allowance | 16,877,000 | $ 15,919,000 |
Deferred tax asset changes in valuation allowance | $ 958,000 | |
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Current, Federal | ||
Current, State | 1,729 | 1,600 |
Total current | 1,729 | 1,600 |
Deferred, Federal | ||
Deferred, State | ||
Total deferred | ||
Provision for income taxes | $ 1,729 | $ 1,600 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) | Dec. 31, 2018 | Dec. 31, 2017 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets, Net operating losses | $ 7,410,000 | $ 6,618,000 |
Deferred tax assets, Accrued expenses | 688,000 | 651,000 |
Deferred tax assets, R&D credits | 534,000 | 456,000 |
Deferred tax assets, Stock compensation | 8,245,000 | 8,194,000 |
Total | 16,877,000 | 15,919,000 |
Less: Valuation allowance | (16,877,000) | (15,919,000) |
Deferred tax assets |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income Tax Effective Tax Rate (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 21.00% | 34.00% |
State taxes, net of federal tax benefit | 3.00% | 3.80% |
Nondeductible permanent items | (0.40%) | (0.20%) |
Deferred tax rate change | (6.20%) | (5.70%) |
Research and development credit | 1.80% | 0.80% |
Change in valuation allowance | (19.20%) | (32.70%) |
Income tax provision | 0.00% | 0.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Jan. 02, 2017 | Jun. 01, 2016 | Jan. 08, 2016 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 24, 2015 |
Issuance pursuant to certain letter agreement - related party, shares | 115,385 | ||||||
Stock option exercise price per share | $ 19.70 | $ 20.50 | |||||
Letter Agreement [Member] | |||||||
Future issuance of common stock | 115,385 | ||||||
Issuance pursuant to certain letter agreement - related party, shares | 115,385 | ||||||
Separate Professional Services Agreements [Member] | Dr. Chia Soo [Member] | |||||||
Stock option term | 10 years | 10 years | |||||
Option to purchase shares of common stock | 3,310 | 180,036 | |||||
Maximum percentage of option purchase of fully diluted shares of common stock outstanding | 4.00% | ||||||
Stock option exercise price per share | $ 20.50 | $ 15.90 | |||||
Annual consulting fee | $ 200,000 | ||||||
Separate Professional Services Agreements [Member] | Dr. Eric Kang Ting [Member] | |||||||
Stock option term | 10 years | 10 years | |||||
Option to purchase shares of common stock | 3,310 | 180,036 | |||||
Maximum percentage of option purchase of fully diluted shares of common stock outstanding | 4.00% | ||||||
Stock option exercise price per share | $ 20.50 | $ 15.90 | |||||
Annual consulting fee | 200,000 | ||||||
Separate Professional Services Agreements [Member] | Dr. Ben Wu [Member] | |||||||
Stock option term | 10 years | 10 years | |||||
Option to purchase shares of common stock | 3,310 | 180,036 | |||||
Maximum percentage of option purchase of fully diluted shares of common stock outstanding | 4.00% | ||||||
Stock option exercise price per share | $ 20.50 | $ 15.90 | |||||
Annual consulting fee | $ 200,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - License Agreement [Member] - USD ($) | Dec. 22, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Payment of UCLA TDG annual maintenance fee | $ 10,000 | ||
Percentage of commercial sale of the licensed product equal to net sales | 3.00% | ||
UCLA TDG [Member] | |||
License commitment fee | $ 500,000 | $ 70,627 | $ 130,278 |
Percentage of amount raised in private placement | 2.00% | ||
UCLA TDG [Member] | First Subject in Feasibility Study [Member] | |||
License commitment fee | 100,000 | ||
UCLA TDG [Member] | First Subject in Pivotal Study [Member] | |||
License commitment fee | 250,000 | ||
UCLA TDG [Member] | Pre-Market Approval of Licensed Product or Licensed Method [Member] | |||
License commitment fee | 500,000 | ||
UCLA TDG [Member] | First Commercial Sale of Licensed Product or Licensed Method [Member] | |||
License commitment fee | $ 1,000,000 | ||
UCLA TDG [Member] | Minimum [Member] | |||
Percentage of commercial sale of the licensed product equal to net sales | 10.00% | ||
UCLA TDG [Member] | Maximum [Member] | |||
Percentage of commercial sale of the licensed product equal to net sales | 20.00% | ||
First Commercial Sale [Member] | |||
Annual minimum royalty for life of the patent rights | $ 50,000 | ||
After First Commercial Sale [Member] | |||
Annual minimum royalty for life of the patent rights | $ 250,000 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Mar. 19, 2019 | Jul. 24, 2018 |
Line of credit facility, maximum limit | $ 2,000,000 | |
Debt instrument conversion price per share | $ 1 | |
Line of credit facility interest rate description | Draws bear 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 | |
Subsequent Event [Member] | Subsequent Event [Member] | ||
Line of credit facility, additional borrowings | $ 700,000 | |
Line of credit facility, maximum limit | $ 2,000,000 | |
Line of credit facility, collateral number of shares | 1,489,362 | |
Debt instrument conversion price per share | $ 1 | |
Debt maturity date | Dec. 31, 2019 | |
Line of credit facility interest rate description | Draws bear 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 | |
Subsequent Event [Member] | Subsequent Event [Member] | Minimum [Member] | ||
Line of credit facility interest rate | 8.50% | |
Subsequent Event [Member] | Subsequent Event [Member] | Prime Rate Plus [Member] | ||
Line of credit facility interest rate | 400.00% |