Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Document And Entity Information | |||
Entity Registrant Name | Inspyr Therapeutics, Inc. | ||
Entity Central Index Key | 0001421204 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Transition Period | false | ||
Entity Shell Company | false | ||
Entity Interactive Data Current | Yes | ||
Entity Incorporation State Country Code | DE | ||
Entity File Number | 000-55331 | ||
Entity Public Float | $ 166,389 | ||
Entity Common Stock, Shares Outstanding | 150,000,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 4 | $ 10 |
Restricted cash | 327 | |
Prepaid expenses | 5 | |
Total current assets | 331 | 15 |
Office and lab equipment, net of accumulated depreciation of $5 and $2 | 2 | 4 |
Intangible assets, net of accumulated amortization of $179 and $162 | 33 | 50 |
Total assets | 366 | 69 |
Current liabilities: | ||
Accounts payable | 2,085 | 1,968 |
Accrued expenses | 1,814 | 1,539 |
Convertible debentures, net of unamortized discount of $281 and $227 | 2,600 | 2,476 |
Derivative liability | 2,134 | 2,934 |
Total current liabilities | 8,633 | 8,917 |
Total liabilities | 8,633 | 8,917 |
Commitments and contingencies (Note 8) | ||
Stockholders' deficit: | ||
Convertible preferred stock, par value $.0001 per share; 30,000,000 shares authorized, 495 and 495 shares issued and outstanding, respectively | ||
Common stock, par value $.0001 per share; 150,000,000 shares authorized, 84,563,929 and 10,888,929 shares issued and outstanding, respectively | 8 | 1 |
Additional paid-in capital | 51,471 | 50,885 |
Accumulated deficit | (59,746) | (59,734) |
Total stockholders' deficit | (8,267) | (8,848) |
Total liabilities and stockholders' deficit | $ 366 | $ 69 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Office and lab equipment, accumulated depreciation | $ 5 | $ 2 |
Intangible assets, accumulated amortization | 179 | 162 |
Net of unamortized discount of, convertible debentures | $ 281 | $ 227 |
Convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 30,000,000 | 30,000,000 |
Convertible preferred stock, shares issued | 495 | 495 |
Convertible preferred stock, shares outstanding | 495 | 495 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 84,563,929 | 10,888,929 |
Common stock, shares outstanding | 84,563,929 | 10,888,929 |
Consolidated Statements of Loss
Consolidated Statements of Losses - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating expenses: | ||
Research and development | $ 208 | $ 1,695 |
General and administrative | 516 | 1,665 |
Impairment of goodwill | 2,159 | |
Impairment of equipment | 332 | |
Total operating expenses | 724 | 5,851 |
Loss from operations | (724) | (5,851) |
Other income (expense): | ||
Gain (loss) on change in fair value of derivative liability | 1,052 | (103) |
Gain on conversion of debt | 210 | 88 |
Interest (expense), net | (550) | (5,234) |
Loss before provision for income taxes | (12) | (11,100) |
Provision for income taxes | ||
Net loss | (12) | (11,100) |
Deemed dividend | (196) | (2,204) |
Net loss attributable to common shareholders | $ (208) | $ (13,304) |
Net loss per common share, basic and diluted | $ (0.01) | $ (2.74) |
Weighted average shares outstanding | 23,242,710 | 4,855,784 |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Deficit - USD ($) $ in Thousands | Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at beginning at Dec. 31, 2016 | $ 47,746 | $ (48,634) | $ (888) | ||
Balance at beginning (in shares) at Dec. 31, 2016 | 2,828 | 1,398,832 | |||
Stock-based compensation | 202 | 202 | |||
Conversion of preferred stock to common stock | |||||
Conversion of preferred stock to common stock (in shares) | (118) | 223,585 | |||
Preferred stock exchanged for convertible notes payable | |||||
Preferred stock exchanged for convertible notes payable (in shares) | (2,505) | ||||
Conversion of notes | 155 | 155 | |||
Conversion of notes (in shares) | 2,144,340 | ||||
Common stock issued for acquisition | $ 1 | 2,492 | 2,493 | ||
Common stock issued for acquisition (in shares) | 7,122,172 | ||||
Sale of preferred stock and warrants | 285 | 285 | |||
Sale of preferred stock and warrants (in shares) | 285 | ||||
Preferred stock and warrants issued for services | 5 | 5 | |||
Preferred stock and warrants issued for services (in shares) | 5 | ||||
Net loss | (11,100) | (11,100) | |||
Balance at ending at Dec. 31, 2017 | $ 1 | 50,885 | (59,734) | (8,848) | |
Balance at ending (in shares) at Dec. 31, 2017 | 495 | 10,888,929 | |||
Stock-based compensation | 90 | 90 | |||
Conversion of notes | $ 7 | 496 | 503 | ||
Conversion of notes (in shares) | 73,675,000 | ||||
Net loss | (12) | (12) | |||
Balance at ending at Dec. 31, 2018 | $ 8 | $ 51,471 | $ (59,746) | $ (8,267) | |
Balance at ending (in shares) at Dec. 31, 2018 | 495 | 84,563,929 |
Consolidated Statement of Sto_2
Consolidated Statement of Stockholders' Deficit (Parenthetical) | Dec. 31, 2017$ / shares |
Statement of Stockholders' Equity [Abstract] | |
Share price (in dollars per share) | $ 1 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (12) | $ (11,100) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 19 | 40 |
Stock-based compensation | 90 | 207 |
(Gain) loss on change in fair value of derivative liability | (1,052) | 103 |
Gain on conversion of debt | (210) | (88) |
Amortization of debt discount | 486 | 93 |
Finance cost | 64 | 5,137 |
Impairment of goodwill | 2,159 | |
Impairment of equipment | 332 | |
Decrease in operating assets: | ||
Prepaid expenses and other assets | 4 | 114 |
Increase in operating liabilities: | ||
Accounts payable and accrued expenses | 407 | 1,911 |
Cash used in operating activities | (204) | (1,092) |
Cash flows from investing activities: | ||
Cash from acquisition | 23 | |
Acquisition of office equipment | (3) | |
Cash provided by investing activities | 20 | |
Cash flows from financing activities: | ||
Proceeds from convertible notes | 525 | 250 |
Proceeds from sale of stock and warrants | 285 | |
Cash provided by financing activities | 525 | 535 |
Net increase (decrease) in cash and restricted cash | 321 | (537) |
Cash and restricted cash, beginning of year | 10 | 547 |
Cash and restricted cash, end of year | $ 331 | $ 10 |
Background
Background | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BACKGROUND | NOTE 1 – BACKGROUND Inspyr Therapeutics, Inc. ("we", "us", "our company", "our", "Inspyr" or the "Company") was formed under the laws of the State of Delaware in November 2003, and has its principal office in Westlake Village, California. We are an early-stage, pre-revenue, pharmaceutical company focused on the discovery and development of prodrug cancer therapeutics for the treatment of solid tumors, including brain, liver, prostate and other cancers. We plan to develop a series of therapies based on our target-activated prodrug technology platform. We are a clinical-stage, pre-revenue, pharmaceutical company primarily focused on the development of therapeutics for the treatment of diseases. Through our acquisition of Lewis and Clark Pharmaceuticals, Inc., we currently are focusing on a pipeline of small molecule adenosine receptor modulators. The adenosine receptor modulators include A 2B 2A 2B 2A During February 2018, due to a lack of capital, we curtailed our business operations. In the event that we are able to raise sufficient capital, our major focus would be to: (i) further characterization, in conjunction with Ridgeway Therapeutics, of anti-cancer activity of the current pipeline of A 2B 2A 2B 2A 2B 2A 2B 2A Our ability to execute our business plan is dependent on the amount and timing of cash, if any, that we are able to raise. During February of 2018, we curtailed our operations due to our lack of cash. During July 2018, we were able to raise approximately $500,000 through the sale of debt securities and we raised $25,000 in December 2018 through the sale of notes. We are currently using such funds to attempt to become current in our SEC reporting requirements, pay outstanding invoices to our independent registered accounting firm, and other outstanding obligations, the payment of which we believe to be vital to our future operations. Should we fail to further raise sufficient funds to execute our business plan, our priority would be to maintain our intellectual property portfolio and continue, to the best of our ability, our public company reporting requirements. |
Management's Plans to Continue
Management's Plans to Continue as a Going Concern | 12 Months Ended |
Dec. 31, 2018 | |
Management Plans to Continue as Going Concern [Abstract] | |
MANAGEMENT'S PLANS TO CONTINUE AS A GOING CONCERN | NOTE 2 – MANAGEMENT'S PLANS TO CONTINUE AS A GOING CONCERN Basis of Presentation The opinion of our independent registered accounting firm on our financial statements contains explanatory going concern language. We have prepared our financial statements on the basis that we will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have incurred losses since inception and have an accumulated deficit of $60 million as of December 31, 2018. We anticipate incurring additional losses for the foreseeable future until such time, if ever, that we can generate significant sales from our therapeutic product candidates which are currently in development or we enter into cash flow positive business development transactions. To date, we have generated no sales or revenues, have incurred significant losses and expect to incur significant additional losses as we advance mipsagargin through clinical studies. Consequently, our operations are subject to all the risks inherent in the establishment of a pre-revenue business enterprise as well as those risks associated with a company engaged in the research and development of pharmaceutical compounds. Our cash and restricted cash balances at December 31, 2018 was approximately $331,000, representing 90.4% of our total assets. Based on our current expected level of operating expenditures, we expect to be able to fund our operations into the third quarter of 2019. We curtailed operations in February 2018. We will require additional cash to fund and continue our operations beyond that point. This period could be shortened if there are any unanticipated increases in planned spending on development programs or other unforeseen events. We anticipate raising additional funds through collaborative arrangements, licensing agreements, public or private sales of debt or equity securities, or some combination thereof. There is no assurance that any such arrangement will be entered into or that financing will be available when needed in order to allow us to continue our operations, or if available, on terms favorable or acceptable to us. We raised approximately $500,000 in July 2018 and $25,000 in December 2018, which we expect will enable us to bring our required annual and quarterly filings current, which will enable us to seek additional financing. In the event additional financing is not obtained, we may pursue cost cutting measures as well as explore the sale of selected assets to generate additional funds. If we are required to significantly reduce operating expenses and delay, reduce the scope of, or eliminate any of our development programs or clinical trials, these events could have a material adverse effect on: our business, results of operations, and financial condition. These factors raise significant doubt about our ability to continue as a going concern. The financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. Our auditors' report issued in connection with our December 31, 2018 financial statements expressed an opinion that our capital resources as of the date of their audit report were not sufficient to sustain operations or complete our planned activities for the upcoming year unless we raised additional funds. Accordingly, our current cash level raises substantial doubt about our ability to continue as a going concern past the third quarter of 2019. If we do not obtain additional funds by such time, we may no longer be able to continue as a going concern and will cease operation which means that our shareholders will lose their entire investment. |
Summary of Critical Accounting
Summary of Critical Accounting Policies and Use of Estimates | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES | NOTE 3 – SUMMARY OF CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Significant estimates include the fair value of derivative instruments, stock-based compensation, recognition of clinical trial costs and other accrued liabilities. Actual results may differ from those estimates. Research and Development Research and development costs are charged to expense as incurred. Our research and development expenses consist primarily of expenditures for toxicology and other studies, manufacturing, clinical trials, compensation and consulting costs. We incurred research and development expenses of $0.2 million and $1.7 million for the years ended December 31, 2018 and 2017, respectively. Cash Equivalents For purposes of the statements of cash flows, we consider all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents. We maintain our cash in bank deposit accounts which, at times, may exceed applicable government mandate insurance limits. We have not experienced any losses in our accounts. We did not have any cash equivalents at December 31, 2018 or 2017. Restricted Cash Restricted cash consists of funds held in trust for the Company. The use of these funds is restricted to: (i) the payment of professional fees in connection with bringing the Company's filings current, and (ii) the payment of vendors associated with the issuance and trading of the Company's securities, such as transfer agent fees and fees payable to the OTCQB and FINRA. Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may exceed applicable government mandated insurance limits. Cash and restricted cash was $0.3 million and $0.01 million at December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, there was no cash over the federally insured limit. Intangible Assets Intangible assets consist of licensed technology, patents, and patent applications (see Note 5). The assets associated with licensed technology are recorded at cost and are being amortized on the straight line basis over their estimated useful lives of twelve to seventeen years. Office and Lab Equipment Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on the straight line basis over the estimated useful lives of the assets of three to seven years. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to expense. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its equipment for impairment. Due to the suspension of business activity in February 2018, the Company determined that the office and lab equipment acquired pursuant to the Lewis & Clark, Pharmaceuticals, Inc. acquisition had become fully impaired as of December 31, 2017. Accordingly, we recorded an impairment charge of $0.3 million during the year ended December 31, 2017. Depreciation expense was approximately $2,000 and $23,000 for the years ended December 31, 2018 and 2017, respectively. Loss per Share Basic loss per share is calculated by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. The following potentially dilutive securities have been excluded from the computations of weighted average shares outstanding as of December 31, 2018 and 2017, as they would be anti-dilutive: Year Ended December 31, 2018 2017 Shares underlying options outstanding 323,514 356,280 Shares underlying warrants outstanding 2,512,930 3,045,740 Shares underlying convertible notes outstanding 828,337,812 135,122,128 Shares underlying convertible preferred stock outstanding 26,395,624 18,324,050 857,569,880 156,848,198 Derivative Liability The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company's balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company values its derivative liabilities using the Black-Scholes option valuation model. The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations. Goodwill Our goodwill consists of the excess purchase price paid in business combinations over the fair value of assets acquired. Goodwill is considered to have an indefinite life. The Company has decided to perform its annual goodwill and impairment assessment on December 31st of each year. The Company employs the non-amortization approach to account for goodwill. Under the non-amortization approach, goodwill is not amortized into the results of operations, but instead is reviewed annually or more frequently if events or changes in circumstances indicate that the asset might be impaired, to assess whether the fair value exceeds the carrying value. When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company's products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company's reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to a two-step impairment testing methodology using the income approach (discounted cash flow method). In the first step of the two-step testing methodology, we compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows. If the carrying value of a reporting unit exceeds its fair value, we then complete the second step of the impairment test to determine the amount of impairment to be recognized. In the second step, we estimate an implied fair value of the reporting unit's goodwill by allocating the fair value of the reporting unit to 100% of the assets and liabilities other than goodwill (including any unrecognized intangible assets). If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference in that period. When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. Due to the suspension of business activity in February 2018, the Company determined that the goodwill assigned to the Lewis & Clark, Pharmaceuticals, Inc. acquisition had become fully impaired as of December 31, 2017. Accordingly, we recorded a goodwill impairment charge of $2.2 million during the year ended December 31, 2017. Fair Value of Financial Instruments Our short-term financial instruments, including cash, accounts payable and other liabilities, consist primarily of instruments with maturities of three months or less when acquired. We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. The derivative liability consists of our convertible notes with a variable conversion feature. The Company uses the Black-Scholes option-pricing model to value its derivative liability which incorporate the Company's stock price, volatility, U.S. risk-free interest rate, dividend rate, and estimated life. Fair Value Measurements The U.S. GAAP Valuation Hierarchy establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company has recorded a derivative liability for its convertible notes with a variable conversion feature as of December 31, 2018. The tables below summarize the fair values of our financial liabilities as of December 31, 2018 (in thousands): Fair Value at Fair Value Measurement Using 2018 Level 1 Level 2 Level 3 Derivative liability $ 2,134 $ — $ — $ 2,134 The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands): Year ended December 31, 2018 2017 Balance at beginning of year $ 2,934 $ — Additions to derivative instruments 604 2,952 Reclassification on conversion (352 ) (121 ) Loss (gain) on change in fair value of derivative liability (1,052 ) 103 Balance at end of period $ 2,134 $ 2,934 Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible. Stock-Based Compensation We measure the cost of employee services received in exchange for equity awards based on the grant-date fair value of the awards. All awards under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee is required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to non-employees is determined in accordance with the fair value of the consideration received or the fair value of the equity instruments issued, whichever is a more reliable measurement. Compensation expense for awards granted to non-employees is re-measured on each accounting period. Determining the appropriate fair value of stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based compensation and the volatility of our stock price. We use the Black-Scholes option-pricing model to value our stock option awards which incorporates our stock price, volatility, U.S. risk-free interest rate, dividend rate, and estimated life. Effect of ASU No. 2017-11 on Previously Issued Financial Statements In July 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part 1 – Accounting for Certain Financial Instruments with Down Round Features and Part 2 – Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with Scope Exception ("ASU No. 2017-11"). Part 1 of ASU No. 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are provisions in certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of ASU No. 2017-11 addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has early adopted the guidance under ASU 2017-11 for the year end December 31, 2017. Recent Accounting Pronouncements With the exception of those discussed below, there have not been any recent changes in accounting pronouncements and Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board (FASB) during the year ended December 31, 2018 that are of significance or potential significance to the Company. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. 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. The Company does not expect any impact from the adoption of this standard on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU No. 2017-04"). ASU No. 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. A public business entity that is a SEC filer should adopt the amendments of ASU No. 2017-04 for its annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect any impact from the adoption of this standard on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, "Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting", which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. If an award is not probable of vesting at the time a change is made, the new guidance clarifies that no new measurement date will be required if there is no change to the fair value, vesting conditions, and classification. This ASU will be applied prospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The adoption of this standard did not have a material impact on its consolidated financial statements. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
SUPPLEMENTAL CASH FLOW INFORMATION | NOTE 4 – SUPPLEMENTAL CASH FLOW INFORMATION The following table contains additional information for the periods reported (in thousands). Year Ended December 31, 2018 2017 Non-cash financial activities: Common stock issued on conversion of notes payable and derivative liability $ 503 $ 155 Debentures converted to common stock 361 122 Derivative liability extinguished upon conversion of notes payable 352 121 Derivative liability issued 604 2,952 Net assets and liabilities recognized with the acquisition of Lewis and Clark Pharmaceuticals, Inc. — 2,493 Accounts payable paid through issuance of debentures 15 70 Debentures issued to retire preferred stock — 2,505 Preferred stock and warrants issued for fees — 5 There was no cash paid for interest and income taxes for the years ended December 31, 2018 and 2017. |
Intellectual Property
Intellectual Property | 12 Months Ended |
Dec. 31, 2018 | |
Intellectual Property Abstract | |
INTELLECTUAL PROPERTY | NOTE 5 – INTELLECTUAL PROPERTY We solely own or have exclusive licenses to all of our patents and patent applications. Between 2008 and 2011, we entered into license and assignment agreements with Johns Hopkins University (JHU), the University of Copenhagen (UC) and certain co-inventors (Assignee Co-Founders), in which we paid $212,000 in cash and common stock. As a result of these payments and pursuant to the agreements, we acquired worldwide, exclusive, fully paid up rights in know-how, pre-clinical data, development data and certain patent portfolios that relate to, and form the basis of, our technology. Under these agreements, we are not required to make any other future payments, including fees or other reimbursements, milestones, or royalties, to JHU, UC, or the Assignee Co-Founders. Amortization expense recorded during the years ended December 31, 2018 and 2017 was approximately $17,000 for both years. Amortization expense is estimated to be approximately $17,000 for each one of the next two fiscal years. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
ACCRUED EXPENSES | NOTE 6 – ACCRUED EXPENSES Accrued expenses consist of the following (in thousands): December 31, 2018 2017 Accrued compensation and benefits $ 1,326 $ 1,154 Accrued research and development 188 144 Accrued other 300 241 Total accrued expenses $ 1,814 $ 1,539 |
Derivative Liability
Derivative Liability | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | NOTE 7 – DERIVATIVE LIABILITY We account for equity-linked financial instruments, such as our convertible preferred stock, convertible debentures and our common stock warrants as either equity instruments or derivative liabilities depending on the specific terms of the respective agreement. Equity-linked financial instruments are accounted for as derivative liabilities, in accordance with ASC Topic 815 – Derivatives and Hedging, if the instrument allows for cash settlement or issuance of a variable number of shares. We classify derivative liabilities on the balance sheet at fair value, and changes in fair value during the periods presented in the statement of operations, which is revalued at each balance sheet date subsequent to the initial issuance of the stock warrant. In September 2017, July 2018 and December 2018, we issued convertible debentures and notes which contain a variable conversion feature, anti-dilution protection and other conversion price adjustment provisions. As a result, the Company assessed its outstanding equity-linked financial instruments and concluded that the convertible notes are subject to derivative accounting. The fair value of the conversion feature is classified as a liability in the financial statements, with the change in fair value during the periods presented recorded in the statement of operations. During the years ended December 31, 2018 and 2017, we recorded a gain of approximately $1.1 million and a loss of approximately $0.1 million, respectively, related to the change in fair value of the derivative liabilities during the periods. For purpose of determining the fair market value of the derivative liability, the Company used Black Scholes option valuation model. The significant assumptions used in the Black Scholes valuations of the derivatives at December 31, 2018 are as follows: 2018 Volatility 204 % Expected term (years) 8 months Risk-free interest rate 2.59 % Dividend yield None As of December 31, 2018 and 2017, the derivative liability recognized in the financial statements was approximately $2.1 million and $2.9 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 8 – COMMITMENTS AND CONTINGENCIES Operating Leases Inspyr currently does not have any ongoing leases for office space. It has availability to office space on an as needed basis. Its employees work on a remote basis. Rent expense for office space amounted to approximately $0 and $52,000 for the years ended December 31, 2018 and 2017, respectively. Employment Agreements We employ our Chief Executive Officer pursuant to a written employment agreement. The employment agreement contains severance provisions and indemnification clauses. The indemnification agreement provides for the indemnification and defense of the executive officer, in the event of litigation, to the fullest extent permitted by law. On February 28, 2017, Russell Richerson, PhD, resigned as chief operating officer of the Company, effective immediately. Dr. Richerson entered into a separation release of claims agreement ("Separation Agreement") pursuant to which the Company: (i) issued Dr. Richerson a warrant to purchase 76,726 shares of Common Stock with an exercise price of $0.75 per share and a term of three and a half (3.5) years, (ii) agreed to make the vested portion of any options held by Dr. Richerson, exercisable at any time during their remaining term regardless of any termination provisions contained in the applicable equity compensation plans pursuant to which such awards were made (collectively, the "Awards") and (iii) agreed to reduce the exercise prices of such Awards to $0.75 per share for the duration of their respective terms. In consideration of the foregoing, Dr. Richerson agreed to release the Company from any and all claims, including any rights or obligations as contained in his prior employment agreement, as amended. Severance provisions are not applicable to any other executive officer employment agreements until such time as they have each been employed for at least 6 months and the Company has raised $25 million in gross proceeds from capital raising transactions. Severance provisions pursuant to a termination within 12 months of a Sale Event occurring are not applicable as of December 31, 2018, as no Sale Event has occurred prior to such date. Legal Matters On March 16, 2016, Dr. Craig Dionne provided us his notice of termination as the company's Chief Executive Officer and Chief Financial Officer. Dr. Dionne's notice of termination states that such termination was for "Good Reason" as a result of a material change in his authority, functions, duties and responsibilities as chief executive officer. In the event that termination was for "Good Reason", Dr. Dionne would be entitled to certain severance payments as well as other benefits. The notice of termination, in additional to requesting such severance, also requests the payment of Dr. Dionne's annual and long term bonus for 2014 and 2015. While the Company disputes that the termination was for "Good Reason," as well as the amount of the bonuses due Dr. Dionne, if any, at this time the Company is unable to predict the financial outcome of this matter, and any views formed as to the viability of these claims or the financial liability which could result may change from time to time as the matter proceeds through its course. The Company is uncertain whether any litigation may result from the foregoing and the outcome of any such litigation is uncertain. The Company is subject at times to other legal proceedings and claims, which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its financial position, results of operations or liquidity. |
Capital Stock and Stockholders'
Capital Stock and Stockholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STOCK AND STOCKHOLDER'S EQUITY | NOTE 9 – CAPITAL STOCK AND STOCKHOLDERS' EQUITY Preferred Stock During December 2018, we designated 5,000 shares of preferred stock as Series D 0% Convertible Preferred Stock (the "Preferred Stock"). Each share of Preferred Stock shall have a par value of $0.0001 per share and a stated value equal to $1.00 (the "Stated Value"). With respect to a vote of stockholders to approve a reverse split of the Common Stock to occur no later than December 31, 2019, only, each share of Series D Preferred Stock held by a Holder, as such, shall be entitled to the whole number of votes equal to 30,001 shares of Common Stock. On any matter presented to the stockholders of the Corporation for their action or consideration at any meeting of stockholders of the Corporation (or by written consent of stockholders in lieu of meeting), each holder of outstanding shares of Preferred Stock shall be entitled to cast the number of votes equal to the number of whole shares of Common Stock into which the shares of Preferred Stock held by such holder are convertible as of the record date for determining stockholders entitled to vote on such matter. Except as provided by law or by the other provisions of the certificate of incorporation, holders of the Preferred Stock shall vote together with the holders of Common Stock as a single class. Each share of Preferred Stock shall be convertible, at any time and from time to time from and after the Original Issue Date at the option of the Holder thereof, into that number of shares of Common Stock (subject to the limitations set forth in Section 6(d)) determined by dividing the Stated Value of such share of Preferred Stock by the Conversion Price. The Conversion Price is $0.005 per share. In December 2015, we issued 1,853 shares of our Series A 0% Convertible Preferred Stock, with a stated value of $1,000 per share and the common shares are issuable pursuant to conversion of the preferred stock at a conversion price of $4.50 per share, subject to a 9.99% beneficial ownership limitation and subject to adjustment pursuant to stock splits and dividends, and subject to adjustment pursuant to anti-dilution protection for subsequent equity sales for a period of 18 months from the effective date of the registration statement. In December 2016, we issued 1,000 shares of our Series B 0% Convertible Preferred Stock, with a stated value of $1,000 per share and the common shares are issuable pursuant to conversion of the preferred stock at a conversion price of $0.75 per share, subject to beneficial ownership limitations and subject to adjustment pursuant to stock splits and dividends, and subject to adjustment pursuant to anti-dilution protection for subsequent equity sales and other conversion price adjustments. In March and April, 2017, we sold 290.43148 shares of Series C 0% Convertible Preferred Stock. The Series C Preferred Stock has a stated value of $1,000 and is immediately convertible into 387,251 shares of the Company's common stock, subject to certain beneficial ownership limitations, at a conversion price equal to $0.75, subject to adjustment. The Conversion Price is subject to certain reset adjustments including the date of any future amendment to the Company's certificate of incorporation with respect to a reverse stock split. The Series C Preferred Stock has anti-dilution protection until such the twelve (12) month anniversary of the issuance of the Series C Preferred Stock. On September 12, 2017 we entered into an exchange agreement ("Exchange Agreement") with certain holders (the "Investors") of our Series A 0% Convertible Preferred Stock ("Series A Shares") and Series B 0% Convertible Preferred Stock ("Series B Shares"). Pursuant to the terms of the Exchange Agreement, we issued to the investors approximately $2.5 million in principal amount of senior convertible debentures in exchange for 1,614.8125 Series A Shares with a stated value of approximately $1.6 million and 890 Series B Shares with a stated value of approximately $0.9 million (collectively, the "Exchange"). In connection with the Exchange, such Series A Shares and Series B Shares have been cancelled and terminated. During 2017, 79.5 shares of Series A Preferred Stock and 39 shares of Series B Preferred Stock were converted into a total of 223,585 shares of common stock. As of December 31, 2018 and 2017, there were outstanding 133.81245 shares of Series A Preferred Stock, 71 shares of Series B Preferred Stock, and 290.43148 shares of Series C Preferred Stock. As a result of recent equity financings and conversions of debentures, the conversion prices of our Series A Preferred Stock has been reduced to $0.53 per share at December 31, 2018, the conversion price of 200 shares of our Series C preferred stock has been reduced to $0.02 per share at December 31, 2018, and our Series B Preferred Stock and 90.43418 shares of our Series C preferred stock has been reduced to $0.01 per share at December 31, 2018. Equity Financings March 2017 Offering In March, 2017, we sold $200,000 of the Company's securities consisting of 200 shares of Series C 0% Convertible Preferred Stock and an aggregate of 800,019 common stock purchase warrants as described below. The Series C Preferred Stock has a stated value of $1,000 and is immediately convertible into 266,673 shares of the Company's common stock, subject to certain beneficial ownership limitations, at a conversion price equal to $0.75, subject to adjustment. The Conversion Price is subject to certain reset adjustments including the date of any future amendment to the Company's certificate of incorporation with respect to a reverse stock split. The Series C Preferred Stock has anti-dilution protection until the twelve month anniversary of the issuance of the Series C Preferred Stock. The Investors also received an aggregate of approximately: (i) 266,673 Series M common stock purchase warrants ("Series M Warrants"), (ii) 266,673 Series N common stock purchase warrants ("Series N Warrants") and (iii) 266,673 Series O common stock purchase warrants ("Series O Warrants") (collectively, the "Warrants"). The Series M Warrants have an exercise price of $0.90 per share, subject to adjustment, and a term of five (5) years from the date of issuance, the Series N Warrants have an exercise price of $0.75 per share, subject to adjustment, and a term of six (6) months from the date of issuance and the Series O warrants have an exercise price of $0.75, subject to adjustment, and a term of twelve (12) months from the date of issuance. The Warrants are immediately exercisable and separately transferable from the Series C Preferred Stock. In the event that the shares underlying the Warrants are not subject to a registration statement at the time of exercise, the Warrants may be exercised on a cashless basis after 6 months from the issuance date. The Warrants also contain provisions providing for an adjustment in the underlying number of shares and exercise price in the event of stock splits or dividends and fundamental transactions. Additionally, the Warrants contain anti-dilution protection until the twelve (12) month anniversary of the issuance date. April 2017 Offering In April, 2017, we sold $90,431 of the Company's securities consisting of 90.43148 shares of Series C 0% Convertible Preferred Stock and an aggregate of 361,734 common stock purchase warrants as described below. The Series C Preferred Stock has a stated value of $1,000 and is immediately convertible into 120,578 shares of the Company's common stock, subject to certain beneficial ownership limitations, at a conversion price equal to $0.75, subject to adjustment. The Conversion Price is subject to certain reset adjustments including the date of any future amendment to the Company's certificate of incorporation with respect to a reverse stock split. The Series C Preferred Stock has anti-dilution protection until the twelve month anniversary of the issuance of the Series C Preferred Stock. The Investors also received an aggregate of approximately: (i) 120,578 Series M common stock purchase warrants ("Series M Warrants"), (ii) 120,578 Series N common stock purchase warrants ("Series N Warrants") and (iii) 120,578 Series O common stock purchase warrants ("Series O Warrants") (collectively, the "Warrants"). The Series M Warrants have an exercise price of $0.90 per share, subject to adjustment, and a term of five (5) years from the date of issuance, the Series N Warrants have an exercise price of $0.75 per share, subject to adjustment, and a term of six (6) months from the date of issuance and the Series O warrants have an exercise price of $0.75, subject to adjustment, and a term of twelve (12) months from the date of issuance. The Warrants are immediately exercisable and separately transferable from the Series C Preferred Stock. In the event that the shares underlying the Warrants are not subject to a registration statement at the time of exercise, the Warrants may be exercised on a cashless basis after 6 months from the issuance date. The Warrants also contain provisions providing for an adjustment in the underlying number of shares and exercise price in the event of stock splits or dividends and fundamental transactions. Additionally, the Warrants contain anti-dilution protection until the twelve (12) month anniversary of the issuance date. Conversion and exercise price resets As a result of recent equity financings and conversions of debentures, the conversion prices of our Series A Preferred Stock has been reduced to $0.53 per share at December 31, 2018, the conversion price of 200 shares of our Series C preferred stock has been reduced to $0.02 per share at December 31, 2018, and our Series B Preferred Stock and 90.43148 shares of our Series C preferred stock has been reduced to $0.01 per share at December 31, 2018. The exercise prices of the warrants issued in conjunction with the Series B and Series C preferred stock have also been reduced to $0.02 and $0.01 per share, respectively, at December 31, 2018. As a result of the reductions of the conversion prices of our preferred stock and warrants, we have recorded deemed dividends of approximately $196,000 and $2,204,000 during the years ended December 31, 2018 and 2017, respectively. Common Stock During the year ended December 31, 2018, we issued a total of 73,675,000 shares of common stock, valued at $503,308, upon the conversion of $361,255 principal amount of our convertible debentures. During 2017, we issued a total of 223,585 shares of common stock upon the conversion of 79.5 shares of Series A Preferred Stock and 39 shares of Series B Preferred Stock. During 2017, we issued a total of 2,144,340 shares of common stock, valued at $155,153, upon the conversion of $122,370 principal amount of our convertible debentures. Effective July 31, 2017 we issued 7,122,172 shares of common stock to acquire 100% of the capital stock of Lewis & Clark, Pharmaceuticals, Inc., a Virginia Corporation, pursuant to the terms of a share exchange agreement dated July 31, 2017. |
Stock Options
Stock Options | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 10 – STOCK OPTIONS Deferred Compensation Plan In July of 2011, we adopted Executive Deferred Compensation Plan (the Deferred Plan). The Deferred Plan is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the Code). The Deferred Plan is intended to be an unfunded "top hat" plan which is maintained primarily to provide deferred compensation benefits for a select group of our "management or highly compensated employees" within the meaning of Sections 201, 301, and 401 of the Employee Retirement Income Security Act of 1974, as amended (ERISA), and to therefore be exempt from the provisions of Parts 2, 3, and 4 of Title I of ERISA. The Deferred Plan is intended to help build a supplemental source of savings and retirement income through pre-tax deferrals of eligible compensation, which may include cash, option and stock bonus awards, discretionary cash, option and stock awards and/or any other payments which may be designated by the Deferred Plan administrator, as eligible, for deferral under the Deferred Plan from time to time. As administered, the Deferred Plan is used to defer compensation of stock awards granted under our other equity compensation plans and does not by its terms approve any grants or awards. Inspyr's Compensation Plans The Company's 2007 Equity Compensation Plan (2007 Plan), 2009 Executive Compensation Plan (2009 Plan), 2017 Equity Compensation Plan (2017 Plan), and the Inducement Award Stock Option Plan (Inducement Plan) (together, the Plans) provide for the awarding of stock grants, nonqualified and incentive stock options, restricted stock units, performance units or other stock-based awards to officers, directors, employees and consultants of the Company. The purpose of the Plans is to advance the interests of Inspyr and our stockholders by attracting, retaining and rewarding persons performing services for us and to motivate such persons to contribute to our growth and profitability. Our Plans are administered by a committee of non-employee directors (the Committee). The Committee determines: who shall be granted awards; the vesting periods; the exercise price; and any other terms deemed appropriate for any award. Our 2007 Plan is administered by our board or any of its committees. The purposes of the 2007 Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants, and to promote the success of our business. The issuance of awards under our 2007 Plan is at the discretion of the administrator, which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Under our 2007 Plan, we may grant stock options, restricted stock, stock appreciation rights, restricted stock units, performance units, performance shares and other stock based awards. Our 2007 Plan authorizes the issuance of up to 50,000 shares of common stock for the foregoing awards per fiscal year with an aggregate of 200,000 shares of common stock available for issuance under the 2007 Plan. As of December 31, 2018, we have granted awards under the 2007 Plan equal to approximately 180,699 shares of our common stock, and 111,963 shares have been cancelled or forfeited. Accordingly, there are 131,264 shares of common stock available for future awards under the 2007 Plan. In the event of a change in control, awards under the 2007 Plan will become fully vested unless such awards are assumed or substituted by the successor corporation. Our 2009 Plan, as amended is administered by our Board or any of its committees. The purpose of our 2009 Plan is to advance the interests of the Company and our stockholders by attracting, retaining and rewarding persons performing services for us and to motivate such persons to contribute to our growth and profitability. The issuance of awards under our 2009 Plan is at the discretion of the administrator, which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Under our 2009 Plan, we may grant stock options, restricted stock, stock appreciation rights, restricted stock units, performance units, performance shares and other stock-based awards. As of December 31, 2018, our 2009 Plan authorizes the issuance of up to 200,000 shares of our common stock for the foregoing awards, and we have granted awards under the plan equal to approximately 164,868 common shares, and 115,782 shares have been cancelled or forfeited. Accordingly, there are 150,914 shares of common stock available for future awards under the 2009 Plan. Our Inducement Plan is administered by our board or our compensation committee. The Plan is intended to be used in connection with the recruiting and inducement of senior management and employees. The issuance of wards under the Inducement Plan is at the discretion of the administrator which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. The Company did not seek approval of the Plan by our stockholders. Pursuant to the Inducement Plan, the Company may grant stock options for up to a total of 300,000 shares of common stock to new employees of the Company. As of December 31, 2018, 211,360 grants have been made pursuant to the Plan. Our 2017 Plan is administered by our Board or any of its committees. The purpose of our 2017 Plan is to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to employees, directors and consultants, and to promote the success of the Company's business. The issuance of awards under our 2017 Plan is at the discretion of the administrator, which has the authority to determine the persons to whom any awards shall be granted and the terms, conditions and restrictions applicable to any award. Under our 2017 Plan, we may grant stock options, restricted stock, stock appreciation rights, restricted stock units, performance units, performance shares and other stock-based awards. As of December 31, 2018, our 2017 Plan authorizes the issuance of up to 2,000,000 shares of our common stock for the foregoing awards, and we have not granted any awards under the plan. Accordingly, there are 2,000,000 shares of common stock available for future awards under the 2017 Plan. The Company has recorded aggregate stock-based compensation expense related to the issuance of stock option awards in the following line items in the accompanying consolidated statement of losses (in thousands): Years Ended December 31, 2018 2017 Research and development $ 62 $ 127 General and administrative 28 75 Total stock-based compensation expense $ 90 $ 202 During the year ended December 31, 2018, we accelerated the vesting of all unvested employee options. As of December 31, 2018, there was no unrecognized compensation cost related to non-vested stock options. The following table summarizes stock option activity for the years ended December 31, 2018 and 2017: Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2016 268,876 $ 24.1504 Granted 104,747 $ 0.54 Forfeited (17,343 ) $ 41.54 Outstanding at December 31, 2017 356,280 $ 7.45 4.4 $ — Granted — $ — Forfeited (32,766 ) $ 18.99 Outstanding at December 31, 2018 323,514 $ 6.28 3.8 $ — Exercisable at December 31, 2018 323,514 $ 6.28 3.8 $ — During 2017, the Company issued options to purchase 104,747 shares of common stock to employees, and non-employee directors under the Plans. The weighted-average fair value of the options granted to employees and non-employee directors during 2017 was estimated at $0.59 per share on the date of grant. The following table summarizes weighted-average assumptions using the Black-Scholes option-pricing model used on the date of the grants issued for the year ended December 31, 2017: 2017 Volatility 128.5 % Expected term (years) 3.2 Risk-free interest rate 1.41 % Dividend yield None No options were exercised during the years ended December 31, 2018 and 2017. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants | |
WARRANTS | NOTE 11 – WARRANTS On February 28, 2017, Russell Richerson, PhD, resigned as chief operating officer of the Company, effective immediately. Dr. Richerson entered into a separation release of claims agreement ("Separation Agreement") pursuant to which we issued Dr. Richerson a warrant to purchase 76,726 shares of Common Stock with an exercise price of $0.75 per share and a term of 3.5 years. In connection with the sale of our Series C Preferred Stock in March and April 2017, we issued an aggregate of: (i) 387,251 Series M common stock purchase warrants ("Series M Warrants"), (ii) 387,251Series N common stock purchase warrants ("Series N Warrants") and (iii) 387,251 Series O common stock purchase warrants ("Series O Warrants") (collectively, the "Warrants"). The Series M Warrants have an exercise price of $0.90 per share, subject to adjustment, and a term of five (5) years from the date of issuance, the Series N Warrants have an exercise price of $0.75 per share, subject to adjustment, and a term of six (6) months from the date of issuance and the Series O warrants have an exercise price of $0.75, subject to adjustment, and a term of twelve (12) months from the date of issuance. The Warrants are immediately exercisable and separately transferable from the Series C Preferred Stock. In the event that the shares underlying the Warrants are not subject to a registration statement at the time of exercise, the Warrants may be exercised on a cashless basis after 6 months from the issuance date. The Warrants also contain provisions providing for an adjustment in the underlying number of shares and exercise price in the event of stock splits or dividends and fundamental transactions. Additionally, the Warrants contain anti-dilution protection until the twelve (12) month anniversary of the issuance date. Transactions involving our warrants are summarized as follows: Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2016 5,203,436 $ 4.56 Granted 1,238,479 $ 0.08 Forfeited (3,396,175 ) $ 1.43 Outstanding at December 31, 2017 3,045,740 $ 5.39 3.1 $ - Granted — $ — Forfeited (532,810 ) $ 15.87 Outstanding at December 31, 2018 2,512,930 $ 3.16 2.7 $ - Exercisable at December 31, 2018 2,512,930 $ 3.16 2.7 $ - No warrants were exercised during the years ended December 31, 2018 and 2017. As a result of recent equity financings and conversions of debentures, the exercise prices of the warrants issued in conjunction with our Series B and Series C preferred stock have also been reduced to $0.02 and $0.01 per share, respectively, at December 31, 2018. The following table summarizes outstanding common stock purchase warrants as of December 31, 2018: Number of Weighted- Expiration Issued to consultants 102,213 $ 7.09 February 2019 through August 2023 Issued pursuant to 2014 financings 96,412 $ 34.50 June 2019 Issued pursuant to 2015 financings 460,384 $ 8.40 July 2020 through December 2020 Issued pursuant to 2016 financings 1,466,670 $ 0.01 December 2021 Issued pursuant to 2017 financings 387,251 $ 0.02 March 2022 through April 2022 2,512,930 |
Convertible Debentures and Note
Convertible Debentures and Notes | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBENTURES AND NOTES | NOTE 12 – CONVERTIBLE DEBENTURES AND NOTES On December 13, 2018 we issued an aggregate of $25,000 in convertible promissory notes ("Notes") for cash proceeds of $25,000. The Notes will mature on the earlier of (i) June 30, 2019 or (ii) such time as we raise capital in exchange for the sale of securities ("Maturity Date") and bear interest at 10% per year, payable on the Maturity Date. Pursuant to the terms of the Notes, the Notes may be converted into shares of common stock upon an Event of Default (as such term is defined in the Notes) or upon the Maturity Date at the election of the holder at a price per share equal to 75% of the lowest trade price of our common stock on the trading day immediately prior to the date such exchange is exercised by the holder. On July 3, 2018, we entered into securities purchase agreements ("Securities Purchase Agreement") with certain institutional investors (the "Investors"). Pursuant to the Securities Purchase Agreement, we sold an aggregate of $515,000 of senior convertible debentures ("Debentures") consisting of $500,000 in cash and the cancellation of $15,000 of obligations of the Company (the "Offering"). Pursuant to the terms of the Securities Purchase Agreement, we will issue $515,000 in principal amount of Debentures. The Debentures (i) are non-interest bearing, (ii) have a maturity date one (1) year from the date of issuance and (iii) are convertible into shares of our common stock at the election of the Investor at any time, subject to a beneficial ownership limitation of 4.99% which may be increased to 9.99% by the Investor upon 61 days' notice. The Debentures will have a conversion price equal to the lesser of (i) $0.33 and (ii) 85% of the lesser of (a) the volume weighted average price on the trading day immediately preceding a conversion date and (b) the volume weighted average price on a conversion date. The Debentures also contain provisions providing for an adjustment in the event of stock splits or dividends, and fundamental transactions. The Investors will also have the right to participate in subsequent rights offerings and pro rata distributions. Additionally, the Debentures contain anti-dilution protection in the event of subsequent equity sales at a price that is lower than the then applicable conversion price until such time that the Debentures are no longer outstanding. Additionally, the Company has the option to redeem some or all of the Debentures for cash upon notice of twenty (20) trading days provided certain conditions are met by the Company as more fully described in the Debentures. The maturity date of the debentures has been extended to September 30, 2019 (see Note 15). Furthermore, without the approval of the Investors holding at least 67% of the then outstanding principal amount of the Debentures, the Company may not (i) amend its charter documents in any manner that adversely affects the rights of any Investor, (ii) repay or repurchase or acquire shares of its Common Stock, (iii) repay, repurchase, or acquire certain indebtedness, or (iv) pay cash dividends or distributions on any equity securities of the Company. The Company is also required under the Securities Purchase Agreement to hold a shareholder meeting by January 3, 2019 in order to increase the number of authorized shares of Common Stock of the Company such that there are sufficient shares of Common Stock available for issuance underlying the Debentures upon their conversion in full. The Company is also obligated under the Securities Purchase Agreement to pay Investors, as partial liquidated damages, a fee of 2.0% of each Investor's initial principal amount of such Investor's Debenture in cash upon our failure to have current public information available beginning six (6) months after the issuance date of the Debentures. The Investors were additionally given a right of participation in future offerings for a period of up to eighteen (18) months from the date on which the shares underlying the Debentures are registered. The Securities Purchase Agreement also prohibits us from issuing any common stock, subject to certain exemptions, for a period of 60 days following the closing of the Offering, without the written approval of the Investors owning at least 50.1% of the securities issued in the Offering. Additionally, until the twelve month anniversary of the registration of the shares underlying the Debentures, we are prohibited from entering into any agreement to effect any issuance of common stock in a variable rate transaction. On September 12, 2017 we entered into an exchange agreement ("Exchange Agreement") with certain holders (the "Investors") of our Series A 0% Convertible Preferred Stock ("Series A Shares") and Series B 0% Convertible Preferred Stock ("Series B Shares"). Pursuant to the terms of the Exchange Agreement, we issued to the investors approximately $2.5 million in principal amount of senior convertible debentures ("Debentures") in exchange for 1,614.8125 Series A Shares with a stated value of approximately $1.6 million and 890 Series B Shares with a stated value of approximately $0.9 million. On September 12, 2017, we sold an aggregate of $320,000 of our Debentures. The sale consisted of $250,000 in cash and the cancellation of $70,000 of obligations of the Company. The Debentures to be issued to the Investors (i) are non-interest bearing, (ii) have a maturity date of September 12, 2018 and (iii) are convertible into shares of common stock ("Common Stock") of the Company at the election of the Investor at any time, subject to a beneficial ownership limitation of 4.99% which may be increased to 9.99% by the Investor upon 61 days' notice. The Debentures will have a conversion price equal to the lesser of (i) $0.33 and (ii) 85% of the lesser of (a) the volume weighted average price on the trading day immediately preceding a conversion date and (b) the volume weighted average price on a conversion date. The maturity date of the debentures has been extended to September 30, 2019 (see Note 15). The Debentures also contain provisions providing for an adjustment in the event of stock splits or dividends, and fundamental transactions. The Investors will also have the right to participate in subsequent rights offerings and pro rata distributions. Additionally, the Debentures contain anti-dilution protection in the event of subsequent equity sales at a price that is lower than the then applicable conversion price until such time that the Debentures are no longer outstanding. Additionally, the Company has the option to redeem some or all of the Debentures for cash upon notice of twenty (20) trading days provided certain conditions are met by the Company as more fully described in the Debentures. Furthermore, without the approval of the Investors holding at least 67% of the then outstanding principal amount of the Debentures, the Company may not (i) amend its charter documents in any manner that adversely affects the rights of any Investor, (ii) repay or repurchase or acquire shares of its Common Stock, (iii) repay, repurchase, or acquire certain indebtedness, or (iv) pay cash dividends or distributions on any equity securities of the Company. The Company is also obligated pay Investors, as partial liquidated damages, a fee of 2.0% of each Investor's initial principal amount of such Investor's Debenture in cash upon our failure to have current public information available. This requirement has been waived by the Investors through September 30, 2019 (see Note 15). In connection with the Offering, the Investors also entered in a registration rights agreement ("Registration Rights Agreement"). Pursuant to the Registration Rights Agreement, the Company agreed to file a registration statement with the Securities and Exchange Commission ("the Commission") within 45 days from the date of the Registration Rights Agreement to register the resale of 100% of the shares of Common Stock underlying the Debentures and to maintain the effectiveness thereunder. The Company also agreed to have the registration statement declared effective within 75 days from the date of the Registration Rights Agreement and keep the registration statement continuously effective until the earlier of (i) the date after which all of the securities to be registered thereunder have been sold, or (ii) the date on which all the securities to be registered thereunder may be sold without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 under the Securities Act of 1933, as amended. We are also obligated to pay the Investors, as partial liquidated damages, a fee of 1.5% of each Investor's subscription amount per month in cash upon the occurrence of certain events, including our failure to file and / or have the registration statement declared effective within the time periods provided. This requirement has been waived by the Investors through September 30, 2019 (see Note 15). The Investors were additionally given a right of participation in future offerings for a period of up to eighteen months from the date in which the shares underlying the Debentures are registered as contemplated in the Registration Rights Agreement. The Securities Purchase Agreement also prohibits the Company from issuing any Common Stock, subject to certain exemptions, for a period of 60 days following the closing of the Offering, without the written approval of the Investors owning at least 50.1% of the securities issued in the Offering. Additionally, until the twelve (12) month anniversary of such effectiveness of the registration statement as contemplated in the Registration Rights Agreement, the Company is prohibited from entering into any agreement to effect any issuance of Common Stock in a variable rate transaction. |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
ACQUISITION | NOTE 13 – ACQUISITION On July 31, 2017, we acquired 100% of the capital stock of Lewis & Clark, Pharmaceuticals, Inc., a Virginia Corporation ("L&C"), pursuant to the terms of a share exchange agreement ("Agreement") dated July 31, 2017 ("Closing Date"), by and among, the Company, L&C, certain principals of L&C (the "Principals") and all of the existing shareholders of L&C ("Shareholders"). As consideration for the acquisition of L&C, the Company agreed to issue an aggregate of 7,122,172 shares of the Company's common stock ("Payment Shares") to the Shareholders, accounting for, subsequent to the closing of the transaction, the Shareholders owning 50% of the issue and outstanding capital stock of the Company (including common shares issuable upon conversion of the Company's outstanding preferred stock). The shares issued for the acquisition of L&C have been valued at $2,492,760. The Principals have agreed to establish escrow accounts with respect to an aggregate of 973,251 of the Payment Shares pursuant to a share escrow agreement ("Escrow Agreement") in order to satisfy certain indemnification obligations to the extent such may arise under the Agreement for the benefit of the Company, its shareholders, and its personnel. The Agreement contains certain customary indemnification provisions with respect to the Company one on hand and L&C and the Principals, on the other hand. Additionally, pursuant to the Agreement, all Shareholders that receive at least 5% of the Payment Shares (at least 356,109 shares) (including any shares held in escrow) agree to vote such shares in accordance with the recommendation of the Company's board of directors ("Board") with respect to any matter to be voted upon by shareholders of the Company for a period of eighteen (18) months from the Closing Date. Furthermore, each Shareholder agrees that for a period of eighteen (18) months from the Closing Date, it will not sell or transfer any of the Payment Shares it receives pursuant to the Agreement, except that if a Shareholder is employed by the Company, it may sell up to five percent (5%) of Payment Shares it receives on each ninety (90) day period following the one (1) year anniversary of the Closing Date. The allocation of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values is as follows (in thousands): Cash $ 23 Prepaid expenses 3 Equipment 353 Goodwill 2,159 Total assets acquired 2,538 Accounts payable and other liabilities (45 ) Total $ 2,493 Due to the suspension of business activity in February 2018, the Company determined that the goodwill assigned to the Lewis & Clark, Pharmaceuticals, Inc. acquisition had become fully impaired as of December 31, 2017. Accordingly, we recorded a goodwill impairment charge of $2.2 million during the year ended December 31, 2017. The Company also determined that the office and lab equipment acquired pursuant to the Lewis & Clark, Pharmaceuticals, Inc. acquisition had become fully impaired as of December 31, 2017. Accordingly, we recorded an impairment charge of $0.3 million during the year ended December 31, 2017. Pro forma results The following tables set forth the unaudited pro forma results of the Company as if the acquisition of L&C had taken place on the first day of the periods presented. These combined results are not necessarily indicative of the results that may have been achieved had the companies been combined as of January 1, 2017, the first day of the periods presented. 2017 Revenue $ — Net loss attributable to common shareholders (13,842 ) Net loss per share (1.54 ) The amounts of revenue and loss of L&C since the acquisition date included in the consolidated statement of operations for the year ended December 31, 2017 are approximately $0 and ($2,813,000), respectively, including goodwill impairment of approximately $2,159,000. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 — INCOME TAXES On December 22, 2017, the Tax Cuts and Jobs Act (the "Act"), a tax reform bill, was enacted. The Act, among other items, reduces the current federal income tax rate to 21% from 35%. The rate reduction is effective January 1, 2018, and is permanent. The Act has caused the Company's deferred income taxes to be revalued. As changes in tax laws or rates are enacted, deferred tax assets and liabilities are adjusted through income tax expense. Pursuant to the guidance within SEC Staff Accounting Bulletin No. 118 ("SAB 118"), as of December 31, 2017, the Company recognized the provisional effects of the enactment of the Act for which measurement could be reasonably estimated. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred tax assets did not have a material impact on any period presented. The ultimate impact of the Act may differ from these estimates due to the Company's continued analysis or further regulatory guidance that may be issued as a result of the Act. As a result of the reduction of the federal corporate income tax rate, the Company reduced the value of its net deferred tax asset by approximately $6.1 million which was recorded as a corresponding reduction to the valuation allowance during the fourth quarter of 2017. The Company had, subject to limitation, $40.3 million of net operating loss carryforwards at December 31, 2018, which will expire at various dates through 2037. In addition, the Company has research and development tax credits of approximately $458,000 at December 31, 2018 available to offset future taxable income, which will expire from 2028 through 2037. We have provided a 100% valuation allowance for the deferred tax benefits resulting from the net operating loss carryover and our tax credits due to our lack of earnings history. In addressing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences are deductible. The valuation allowance increased by approximately $178,000 and $832,000 for the years ended December 31, 2018 and 2017, respectively. Significant components of deferred tax assets and liabilities are as follows (in thousands): 2018 2017 Deferred tax assets: Net operating loss carryover $ 8,597 $ 8,468 Stock-based compensation 1,920 1,920 Accrued compensation 334 288 Other 30 27 Tax credits 458 458 Total deferred tax assets 11,339 11,161 Less: valuation allowance (11,339 ) (11,161 ) Net deferred tax assets $ — $ — The actual tax benefit differs from the expected tax benefit for the years ended December 31, 2018 and 2017 (computed by applying the U.S. Federal Corporate tax rate of 34% to income before taxes) are as follows: 2018 2017 Statutory federal income tax rate (21.0 )% (34.0 )% State income taxes, net of federal benefits (7.0 )% (5.8 )% Non-deductible items (1,418.0 )% 28.5 % Valuation allowance 1,446.0 % 11.3 % Effective income tax rate — % — % The Company's tax returns for the previous three years remain open for audit by the respective tax jurisdictions. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15 – SUBSEQUENT EVENTS During January 2019, we issued a total of 65,436,071 shares of common stock upon the conversion of $204,221 principal amount of our convertible debentures. During January 2019, we issued 5,000 shares of Series D Convertible Preferred Stock for proceeds of $5,000. Effective July 5, 2019, Sabby Healthcare Master Fund, Ltd and Sabby Volatility Warrant Master Fund, Ltd. waived certain events of default under debentures issued in our July 2018 debenture offering and September 2017 debenture offering (collectively, the "Debenture Offerings") and extended the maturity date of such debentures until September 30, 2019 in exchange for the issuance of $154,000 in new debentures with substantially the same terms as those issued in our Debenture Offerings. On July 15, 2019, Christopher Lowe resigned as our chief executive officer, chief financial officer, president, and as a member of the Board. On July 26, 2019, we appointed Michael Cain as our interim chief executive officer, chief financial officer, president, and as a member of the Board. |
Summary of Critical Accountin_2
Summary of Critical Accounting Policies and Use of Estimates (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures. Significant estimates include the fair value of derivative instruments, stock-based compensation, recognition of clinical trial costs and other accrued liabilities. Actual results may differ from those estimates. |
Research and Development | Research and Development Research and development costs are charged to expense as incurred. Our research and development expenses consist primarily of expenditures for toxicology and other studies, manufacturing, clinical trials, compensation and consulting costs. We incurred research and development expenses of $0.2 million and $1.7 million for the years ended December 31, 2018 and 2017, respectively. |
Cash Equivalents | Cash Equivalents For purposes of the statements of cash flows, we consider all highly liquid debt instruments purchased with a maturity date of three months or less to be cash equivalents. We maintain our cash in bank deposit accounts which, at times, may exceed applicable government mandate insurance limits. We have not experienced any losses in our accounts. We did not have any cash equivalents at December 31, 2018 or 2017. |
Restricted Cash | Restricted Cash Restricted cash consists of funds held in trust for the Company. The use of these funds is restricted to: (i) the payment of professional fees in connection with bringing the Company's filings current, and (ii) the payment of vendors associated with the issuance and trading of the Company's securities, such as transfer agent fees and fees payable to the OTCQB and FINRA. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments and related items, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and cash equivalents. The Company places its cash and temporary cash investments with credit quality institutions. At times, such investments may exceed applicable government mandated insurance limits. Cash and restricted cash was $0.3 million and $0.01 million at December 31, 2018 and 2017, respectively. As of December 31, 2018 and 2017, there was no cash over the federally insured limit. |
Intangible Assets | Intangible Assets Intangible assets consist of licensed technology, patents, and patent applications (see Note 5). The assets associated with licensed technology are recorded at cost and are being amortized on the straight line basis over their estimated useful lives of twelve to seventeen years. |
Office and Lab Equipment | Office and Lab Equipment Equipment is stated at cost less accumulated depreciation. Depreciation is calculated on the straight line basis over the estimated useful lives of the assets of three to seven years. Expenditures for repair and maintenance which do not materially extend the useful lives of property and equipment are charged to expense. When property or equipment is sold or otherwise disposed of, the cost and related accumulated depreciation are removed from the respective accounts with the resulting gain or loss reflected in operations. Management periodically reviews the carrying value of its equipment for impairment. Due to the suspension of business activity in February 2018, the Company determined that the office and lab equipment acquired pursuant to the Lewis & Clark, Pharmaceuticals, Inc. acquisition had become fully impaired as of December 31, 2017. Accordingly, we recorded an impairment charge of $0.3 million during the year ended December 31, 2017. Depreciation expense was approximately $2,000 and $23,000 for the years ended December 31, 2018 and 2017, respectively. |
Loss per Share | Loss per Share Basic loss per share is calculated by dividing net loss and net loss attributable to common shareholders by the weighted average number of common shares outstanding for the period. Basic and diluted loss per share are the same, in that any potential common stock equivalents would have the effect of being anti-dilutive in the computation of net loss per share. The following potentially dilutive securities have been excluded from the computations of weighted average shares outstanding as of December 31, 2018 and 2017, as they would be anti-dilutive: Year Ended December 31, 2018 2017 Shares underlying options outstanding 323,514 356,280 Shares underlying warrants outstanding 2,512,930 3,045,740 Shares underlying convertible notes outstanding 828,337,812 135,122,128 Shares underlying convertible preferred stock outstanding 26,395,624 18,324,050 857,569,880 156,848,198 |
Derivative Liability | Derivative Liability The Company has financial instruments that are considered derivatives or contain embedded features subject to derivative accounting. Embedded derivatives are valued separately from the host instrument and are recognized as derivative liabilities in the Company's balance sheet. The Company measures these instruments at their estimated fair value and recognizes changes in their estimated fair value in results of operations during the period of change. The Company values its derivative liabilities using the Black-Scholes option valuation model. The resulting liability is valued at each reporting date and the change in the liability is reflected as change in derivative liability in the statement of operations. |
Goodwill | Goodwill Our goodwill consists of the excess purchase price paid in business combinations over the fair value of assets acquired. Goodwill is considered to have an indefinite life. The Company has decided to perform its annual goodwill and impairment assessment on December 31st of each year. The Company employs the non-amortization approach to account for goodwill. Under the non-amortization approach, goodwill is not amortized into the results of operations, but instead is reviewed annually or more frequently if events or changes in circumstances indicate that the asset might be impaired, to assess whether the fair value exceeds the carrying value. When evaluating the potential impairment of goodwill, we first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company's products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company's reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to a two-step impairment testing methodology using the income approach (discounted cash flow method). In the first step of the two-step testing methodology, we compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows. If the carrying value of a reporting unit exceeds its fair value, we then complete the second step of the impairment test to determine the amount of impairment to be recognized. In the second step, we estimate an implied fair value of the reporting unit's goodwill by allocating the fair value of the reporting unit to 100% of the assets and liabilities other than goodwill (including any unrecognized intangible assets). If the carrying value of a reporting unit's goodwill exceeds its implied fair value, the Company records an impairment loss equal to the difference in that period. When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results. Due to the suspension of business activity in February 2018, the Company determined that the goodwill assigned to the Lewis & Clark, Pharmaceuticals, Inc. acquisition had become fully impaired as of December 31, 2017. Accordingly, we recorded a goodwill impairment charge of $2.2 million during the year ended December 31, 2017. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Our short-term financial instruments, including cash, accounts payable and other liabilities, consist primarily of instruments with maturities of three months or less when acquired. We believe that the fair values of our current assets and current liabilities approximate their reported carrying amounts. The derivative liability consists of our convertible notes with a variable conversion feature. The Company uses the Black-Scholes option-pricing model to value its derivative liability which incorporate the Company's stock price, volatility, U.S. risk-free interest rate, dividend rate, and estimated life. |
Fair Value Measurements | Fair Value Measurements The U.S. GAAP Valuation Hierarchy establishes a valuation hierarchy for disclosure of the inputs to valuation used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on our own assumptions used to measure assets and liabilities at fair value. A financial asset or liability's classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The Company has recorded a derivative liability for its convertible notes with a variable conversion feature as of December 31, 2018. The tables below summarize the fair values of our financial liabilities as of December 31, 2018 (in thousands): Fair Value at Fair Value Measurement Using 2018 Level 1 Level 2 Level 3 Derivative liability $ 2,134 $ — $ — $ 2,134 The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands): Year ended December 31, 2018 2017 Balance at beginning of year $ 2,934 $ — Additions to derivative instruments 604 2,952 Reclassification on conversion (352 ) (121 ) Loss (gain) on change in fair value of derivative liability (1,052 ) 103 Balance at end of period $ 2,134 $ 2,934 |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period that includes the enactment date. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which the related temporary difference becomes deductible. |
Stock-Based Compensation | Stock-Based Compensation We measure the cost of employee services received in exchange for equity awards based on the grant-date fair value of the awards. All awards under our stock-based compensation programs are accounted for at fair value and that cost is recognized over the period during which an employee is required to provide service in exchange for the award (the vesting period). Compensation expense for options granted to non-employees is determined in accordance with the fair value of the consideration received or the fair value of the equity instruments issued, whichever is a more reliable measurement. Compensation expense for awards granted to non-employees is re-measured on each accounting period. Determining the appropriate fair value of stock-based compensation requires the input of subjective assumptions, including the expected life of the stock-based compensation and the volatility of our stock price. We use the Black-Scholes option-pricing model to value our stock option awards which incorporates our stock price, volatility, U.S. risk-free interest rate, dividend rate, and estimated life. |
Effect of ASU No. 2017-11 on Previously Issued Financial Statements | Effect of ASU No. 2017-11 on Previously Issued Financial Statements In July 2017, the Financial Accounting Standards Board ("FASB") issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815): Part 1 – Accounting for Certain Financial Instruments with Down Round Features and Part 2 – Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with Scope Exception ("ASU No. 2017-11"). Part 1 of ASU No. 2017-11 addresses the complexity of accounting for certain financial instruments with down round features. Down round features are provisions in certain equity-linked instruments (or embedded features) that result in the strike price being reduced on the basis of the pricing of future equity offerings. Current accounting guidance creates cost and complexity for entities that issue financial instruments (such as warrants and convertible instruments) with down round features that require fair value measurement of the entire instrument or conversion option. Part II of ASU No. 2017-11 addresses the difficulty of navigating Topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification®. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. For public business entities, the amendments in Part I of this update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company has early adopted the guidance under ASU 2017-11 for the year end December 31, 2017. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements With the exception of those discussed below, there have not been any recent changes in accounting pronouncements and Accounting Standards Update (ASU) issued by the Financial Accounting Standards Board (FASB) during the year ended December 31, 2018 that are of significance or potential significance to the Company. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases. The new standard establishes a right-of-use (ROU) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. 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. The Company does not expect any impact from the adoption of this standard on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment ("ASU No. 2017-04"). ASU No. 2017-04 simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. A public business entity that is a SEC filer should adopt the amendments of ASU No. 2017-04 for its annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The Company does not expect any impact from the adoption of this standard on its consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, "Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting", which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. If an award is not probable of vesting at the time a change is made, the new guidance clarifies that no new measurement date will be required if there is no change to the fair value, vesting conditions, and classification. This ASU will be applied prospectively and is effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. The adoption of this standard did not have a material impact on its consolidated financial statements. |
Summary of Critical Accountin_3
Summary of Critical Accounting Policies and Use of Estimates (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of weighted average shares outstanding | Year Ended December 31, 2018 2017 Shares underlying options outstanding 323,514 356,280 Shares underlying warrants outstanding 2,512,930 3,045,740 Shares underlying convertible notes outstanding 828,337,812 135,122,128 Shares underlying convertible preferred stock outstanding 26,395,624 18,324,050 857,569,880 156,848,198 |
Schedule of fair values of financial liabilities | Fair Value at Fair Value Measurement Using 2018 Level 1 Level 2 Level 3 Derivative liability $ 2,134 $ — $ — $ 2,134 |
Schedule of fair value of derivative liability on recurring basis | Year ended December 31, 2018 2017 Balance at beginning of year $ 2,934 $ — Additions to derivative instruments 604 2,952 Reclassification on conversion (352 ) (121 ) Loss (gain) on change in fair value of derivative liability (1,052 ) 103 Balance at end of period $ 2,134 $ 2,934 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of additional information of cash flow | Year Ended December 31, 2018 2017 Non-cash financial activities: Common stock issued on conversion of notes payable and derivative liability $ 503 $ 155 Debentures converted to common stock 361 122 Derivative liability extinguished upon conversion of notes payable 352 121 Derivative liability issued 604 2,952 Net assets and liabilities recognized with the acquisition of Lewis and Clark Pharmaceuticals, Inc. — 2,493 Accounts payable paid through issuance of debentures 15 70 Debentures issued to retire preferred stock — 2,505 Preferred stock and warrants issued for fees — 5 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued expenses | December 31, 2018 2017 Accrued compensation and benefits $ 1,326 $ 1,154 Accrued research and development 188 144 Accrued other 300 241 Total accrued expenses $ 1,814 $ 1,539 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of black scholes valuations of derivatives | 2018 Volatility 204 % Expected term (years) 8 months Risk-free interest rate 2.59 % Dividend yield None |
Stock Options (Tables)
Stock Options (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | Years Ended December 31, 2018 2017 Research and development $ 62 $ 127 General and administrative 28 75 Total stock-based compensation expense $ 90 $ 202 |
Schedule of stock option activity | Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2016 268,876 $ 24.1504 Granted 104,747 $ 0.54 Forfeited (17,343 ) $ 41.54 Outstanding at December 31, 2017 356,280 $ 7.45 4.4 $ — Granted — $ — Forfeited (32,766 ) $ 18.99 Outstanding at December 31, 2018 323,514 $ 6.28 3.8 $ — Exercisable at December 31, 2018 323,514 $ 6.28 3.8 $ — |
Schedule of weighted-average assumptions | 2017 Volatility 128.5 % Expected term (years) 3.2 Risk-free interest rate 1.41 % Dividend yield None |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Warrants | |
Schedule of transactions involving of warrants | Number of Weighted- Weighted- Aggregate Outstanding at December 31, 2016 5,203,436 $ 4.56 Granted 1,238,479 $ 0.08 Forfeited (3,396,175 ) $ 1.43 Outstanding at December 31, 2017 3,045,740 $ 5.39 3.1 $ - Granted — $ — Forfeited (532,810 ) $ 15.87 Outstanding at December 31, 2018 2,512,930 $ 3.16 2.7 $ - Exercisable at December 31, 2018 2,512,930 $ 3.16 2.7 $ - |
Schedule of outstanding warrants to purchase common stock | Number of Weighted- Expiration Issued to consultants 102,213 $ 7.09 February 2019 through August 2023 Issued pursuant to 2014 financings 96,412 $ 34.50 June 2019 Issued pursuant to 2015 financings 460,384 $ 8.40 July 2020 through December 2020 Issued pursuant to 2016 financings 1,466,670 $ 0.01 December 2021 Issued pursuant to 2017 financings 387,251 $ 0.02 March 2022 through April 2022 2,512,930 |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of final accounting | Cash $ 23 Prepaid expenses 3 Equipment 353 Goodwill 2,159 Total assets acquired 2,538 Accounts payable and other liabilities (45 ) Total $ 2,493 |
Schedule of pro forma result of acquisition | 2017 Revenue $ — Net loss attributable to common shareholders (13,842 ) Net loss per share (1.54 ) |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Weighted-average exercise price [Roll Forward] | |
Schedule of deferred tax assets and liabilities | 2018 2017 Deferred tax assets: Net operating loss carryover $ 8,597 $ 8,468 Stock-based compensation 1,920 1,920 Accrued compensation 334 288 Other 30 27 Tax credits 458 458 Total deferred tax assets 11,339 11,161 Less: valuation allowance (11,339 ) (11,161 ) Net deferred tax assets $ — $ — |
Schedule of actual tax benefit differs from the expected tax benefit | 2018 2017 Statutory federal income tax rate (21.0 )% (34.0 )% State income taxes, net of federal benefits (7.0 )% (5.8 )% Non-deductible items (1,418.0 )% 28.5 % Valuation allowance 1,446.0 % 11.3 % Effective income tax rate — % — % |
Background (Details)
Background (Details) $ in Thousands | 1 Months Ended |
Jul. 31, 2018USD ($) | |
Background (Textual) | |
Proceeds from sale of debt securities | $ 500 |
Proceeds from sale of notes | $ 25 |
Management's Plans to Continu_2
Management's Plans to Continue as a Going Concern (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Jul. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Management's Plans to Continue as a Going Concern (Textual) | ||||
Accumulated deficit | $ (59,746) | $ (59,734) | ||
Cash and cash equivalents and restricted cash balances | $ 331 | $ 10 | $ 547 | |
Percentage of total assets | 90.40% | |||
Amount raised | $ 25 | $ 500 |
Summary of Critical Accountin_4
Summary of Critical Accounting Policies and Use of Estimates (Details) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Shares underlying, outstanding | 857,569,880 | 156,848,198 |
Shares underlying warrants outstanding [Member] | ||
Shares underlying, outstanding | 2,512,930 | 3,045,740 |
Shares underlying convertible preferred stock outstanding [Member] | ||
Shares underlying, outstanding | 26,395,624 | 18,324,050 |
Shares underlying convertible notes outstanding [Member] | ||
Shares underlying, outstanding | 828,337,812 | 135,122,128 |
Shares underlying options outstanding [Member] | ||
Shares underlying, outstanding | 323,514 | 356,280 |
Summary of Critical Accountin_5
Summary of Critical Accounting Policies and Use of Estimates (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Derivative liability | $ 2,100 | $ 2,900 |
Level 1 [Member] | ||
Derivative liability | ||
Level 2 [Member] | ||
Derivative liability | ||
Level 3 [Member] | ||
Derivative liability | $ 2,134 |
Summary of Critical Accountin_6
Summary of Critical Accounting Policies and Use of Estimates (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Balance at beginning of year | $ 2,934 | |
Additions to derivative instruments | 604 | 2,952 |
Reclassification on conversion | (352) | (121) |
Loss (gain) on change in fair value of derivative liability | (1,052) | 103 |
Balance at end of period | $ 2,134 | $ 2,934 |
Summary of Critical Accountin_7
Summary of Critical Accounting Policies and Use of Estimates (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Summary of Critical Accounting Policies and Use of Estimates (Textual) | ||
Research and development | $ 208 | $ 1,695 |
Cash and restricted cash | 300 | 10 |
Impairment charge | 332 | |
Depreciation expense | $ 2 | 23 |
Goodwill impairment charge | $ 2,200 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Non-cash financial activities: | ||
Common stock issued on conversion of notes payable and derivative liability | $ 503 | $ 155 |
Debentures converted to common stock | 361 | 122 |
Derivative liability extinguished upon conversion of notes payable | 352 | 121 |
Derivative liability issued | 604 | 2,952 |
Net assets and liabilities recognized with the acquisition of Lewis and Clark Pharmaceuticals, Inc. | 2,493 | |
Accounts payable paid through issuance of debentures | 15 | 70 |
Debentures issued to retire preferred stock | 2,505 | |
Preferred stock and warrants issued for fees | $ 5 |
Intellectual Property (Details)
Intellectual Property (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Intellectual Property (Textual) | ||
Payments in cash and common stock | $ 212 | |
Amortization expense | 17 | $ 17 |
Amortization expense estimated for two fiscal years | $ 17 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation and benefits | $ 1,326 | $ 1,154 |
Accrued research and development | 188 | 144 |
Accrued other | 300 | 241 |
Total accrued expenses | $ 1,814 | $ 1,539 |
Derivative Liability (Details)
Derivative Liability (Details) | Dec. 31, 2018 |
Volatility [Member] | |
Derivative liability measurement input | 204.00% |
Expected term (years) [Member] | |
Derivative liability term | 8 months |
Risk-free interest rate [Member] | |
Derivative liability measurement input | 2.59% |
Dividend yield [Member] | |
Derivative liability measurement input |
Derivative Liability (Details T
Derivative Liability (Details Textual) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Liability (Textual) | ||
Gain (loss) on change in fair value of the derivative liability | $ 1,100 | $ (100) |
Derivative Liability | $ 2,100 | $ 2,900 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Feb. 28, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments and Contingencies (Textual) | |||
Rent expenses | $ 0 | $ 52,000 | |
Exercise price | |||
Gross proceeds from capital raising transactions | $ 25,000,000 | ||
Dr. Richerson [Member] | Separation Agreement [Member] | |||
Commitments and Contingencies (Textual) | |||
Warrants issued to purchase common stock | 76,726 | ||
Exercise price | $ 0.75 | ||
Option excersice price | $ 0.75 | ||
Warrant expiration period | 3 years 6 months |
Capital Stock and Stockholder_2
Capital Stock and Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 12, 2017 | Jul. 31, 2017 | Apr. 30, 2017 | Mar. 31, 2017 | Apr. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2015 | Sep. 30, 2018 | Jan. 31, 2018 | Sep. 30, 2017 | Dec. 31, 2016 |
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Principal amount of senior convertible debentures | $ 361,255 | |||||||||||
Class of warrant or right, exercise price of warrants or rights | ||||||||||||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | ||||||||||
Amount of conversion convertible debentures | ||||||||||||
Preferred stock, outstanding | 495 | 495 | 495 | |||||||||
Reverse stock split, Description | Each share of Series D Preferred Stock held by a Holder, as such, shall be entitled to the whole number of votes equal to 30,001 shares of Common Stock. | |||||||||||
Conversion price | $ 0.005 | $ 0.0001 | ||||||||||
Lewis & Clark Pharmaceuticals, Inc. [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Stock issued during period, shares | 7,122,172 | |||||||||||
Percentage of shares acquired | 100.00% | |||||||||||
Convertible Preferred Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Amount of conversion convertible debentures | ||||||||||||
Number of conversion convertible debentures (in shares) | (118) | |||||||||||
Common Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Amount of conversion convertible debentures | ||||||||||||
Number of conversion convertible debentures (in shares) | 223,585 | |||||||||||
Warrant [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Number of common shares purchased | 361,734 | 800,019 | 361,734 | |||||||||
Convertible Debentures [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Value of number of shares issued | $ 155,153 | |||||||||||
Number of shares converted | 2,144,340 | |||||||||||
Amount of debentures converted | $ 122,370 | |||||||||||
Exchange Agreement [Member] | Investors [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Principal amount of senior convertible debentures | $ 25,000 | |||||||||||
Share Exchange Agreement [Member] | Lewis & Clark Pharmaceuticals, Inc. [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Percentage of shares acquired | 100.00% | |||||||||||
Series A Shares [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Conversion price | $ 0.53 | |||||||||||
Number of shares issued upon conversion | 79.5 | |||||||||||
Preferred stock, outstanding | 133.81245 | 133.81245 | ||||||||||
Series A Shares [Member] | Exchange Agreement [Member] | Series A Convertible Preferred Stock [Member] | Investors [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Number of shares converted | 1,614.8125 | |||||||||||
Amount of debentures converted | $ 1,600,000 | |||||||||||
Series B Shares [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Reduction in conversion price (in dollars per share) | $ 0.02 | |||||||||||
Number of shares issued upon conversion | 90.43418 | 39 | ||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.02 | |||||||||||
Preferred stock, outstanding | 71 | 71 | ||||||||||
Series B Shares [Member] | Exchange Agreement [Member] | Series B 0% Convertible Preferred Stock [Member] | Investors [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Value of number of shares issued | $ 900,000 | |||||||||||
Number of shares converted | 890 | |||||||||||
Series C Preferred Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Reduction in conversion price (in dollars per share) | $ 0.01 | |||||||||||
Number of shares issued upon conversion | 200 | |||||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.01 | |||||||||||
Preferred stock, outstanding | 290.43148 | 290.43148 | ||||||||||
Series A 0% Convertible Preferred Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Stock issued during period, shares | 1,000 | 1,853 | ||||||||||
Beneficial ownership limitation percentage | 9.99% | |||||||||||
Preferred stock, stated value | $ 1,000 | |||||||||||
Conversion price | $ 4.50 | |||||||||||
Subsequent equity sales period | 18 months | |||||||||||
Number of preferred shares converted to common stock | 79.5 | |||||||||||
Series B 0% Convertible Preferred Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Number of shares issued upon conversion | 1,000 | |||||||||||
Preferred stock, stated value | $ 1,000 | |||||||||||
Conversion price | $ 0.75 | |||||||||||
Number of preferred shares converted to common stock | 39 | |||||||||||
Series C 0% Convertible Preferred Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Stock issued during period, shares | 90.43418 | 200 | 290.43148 | |||||||||
Value of number of shares issued | $ 90,431 | $ 200 | ||||||||||
Conversion price | $ 0.75 | $ 0.75 | ||||||||||
Number of shares issued upon conversion | 387,251 | 266,673 | 387,251 | |||||||||
Number of common shares purchased | 120,578 | 120,578 | ||||||||||
Preferred stock, par value | $ 1,000 | $ 1,000 | ||||||||||
Preferred stock, stated value | $ 1,000 | $ 1,000 | $ 1,000 | |||||||||
Common Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Stock issued during period, shares | 73,675,000 | 223,585 | ||||||||||
Value of number of shares issued | $ 503,308 | |||||||||||
Preferred Stock And Warrants [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Deemed dividend | $ 196 | $ 2,204 | ||||||||||
Series D 0% Convertible Preferred Stock [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Stock issued during period, shares | 5,000 | |||||||||||
Preferred stock, par value | $ 0.0001 | |||||||||||
Preferred stock, stated value | $ 1 | |||||||||||
Series M Common Stock Purchase Warrants [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Number of common shares purchased | 120,578 | 266,673 | 120,578 | |||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.90 | $ 0.90 | $ 0.90 | |||||||||
Warrant expiration period | 5 years | 5 years | ||||||||||
Series N Common Stock Purchase Warrants [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Number of common shares purchased | 120,578 | 266,673 | 120,578 | |||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.75 | $ 0.75 | $ 0.75 | |||||||||
Warrant expiration period | 6 months | 6 months | ||||||||||
Series O Common Stock Purchase Warrants [Member] | ||||||||||||
Capital Stock and Stockholders' Equity (Textual) | ||||||||||||
Number of common shares purchased | 120,578 | 266,673 | 120,578 | |||||||||
Class of warrant or right, exercise price of warrants or rights | $ 0.75 | $ 0.75 | $ 0.75 | |||||||||
Warrant expiration period | 12 months | 12 months |
Stock Options (Details)
Stock Options (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Total stock-based compensation expense | $ 90 | $ 202 |
Research and development [Member] | ||
Total stock-based compensation expense | 62 | 127 |
General and administrative [Member] | ||
Total stock-based compensation expense | $ 28 | $ 75 |
Stock Options (Details 1)
Stock Options (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares | ||
Outstanding at beginning | 356,280 | 268,876 |
Granted | 104,747 | |
Forfeited | (32,766) | (17,343) |
Outstanding at ending | 323,514 | 356,280 |
Exercisable at ending | 323,514 | |
Weighted-average exercise price | ||
Outstanding at beginning | $ 7.45 | $ 24.1504 |
Granted | 0.54 | |
Forfeited | 18.09 | 41.54 |
Outstanding at ending | 6.28 | $ 7.45 |
Exercisable at ending | $ 6.28 | |
Weighted-average remaining contractual term | ||
Outstanding at ending | 3 years 9 months 18 days | 4 years 4 months 24 days |
Exercisable at ending | 3 years 9 months 18 days | |
Aggregate intrinsic value | ||
Outstanding at ending | ||
Exercisable at ending |
Stock Options (Details 2)
Stock Options (Details 2) | 12 Months Ended |
Dec. 31, 2018 | |
Expiration period for tax credit | |
Volatility | 128.50% |
Expected term (years) | 3 years 2 months 12 days |
Risk-free interest rate | 1.41% |
Dividend yield |
Stock Options (Details Textual)
Stock Options (Details Textual) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Number of shares granted | 104,747 | |
Number of shares forfited | 32,766 | 17,343 |
2007 Executive Compensation Plan [Member] | ||
Maximum annual grants | 50,000 | |
Number of award authorized | 200,000 | |
2007 Executive Compensation Plan [Member] | Common Stock [Member] | ||
Number of shares granted | 180,699 | |
Number of shares forfited | 111,963 | |
Number of shares available for future issuence | 131,264 | |
2009 Executive Compensation Plan [Member] | ||
Number of award authorized | 200,000 | |
Number of shares granted | 164,868 | |
Number of shares forfited | 115,782 | |
Number of shares available for future issuence | 150,914 | |
Inducement Award Stock Option Plan [Member] | ||
Number of award authorized | 300,000 | |
Number of shares granted | 211,360 | |
2017 Equity Compensation Plan [Member] | ||
Number of award authorized | 2,000,000 | |
Number of shares available for future issuence | 2,000,000 | |
Employee Stock Option [Member] | Employees, And Non-Employee Directors [Member] | ||
Maximum grants under plan | 104,747 | |
Weighted Average fair value of the options granted | $ 0.59 |
Warrants (Details)
Warrants (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted-average remaining contractual term | ||
Exercisable at ending | 3 years 9 months 18 days | |
Aggregate intrinsic value | ||
Outstanding at ending | ||
Exercisable at ending | ||
Warrant [Member] | ||
Number of shares | ||
Outstanding at beginning | 3,045,740 | 5,203,436 |
Granted | 1,238,479 | |
Forfeited | 532,810 | (3,396,175) |
Outstanding at ending | 2,512,930 | 3,045,740 |
Exercisable at ending | 2,512,930 | |
Weighted-average exercise price | ||
Outstanding at beginning | $ 5.39 | $ 4.56 |
Granted | 0.08 | |
Forfeited | 15.87 | 1.43 |
Outstanding at ending | 3.16 | $ 5.39 |
Exercisable at ending | $ 3.16 | |
Weighted-average remaining contractual term | ||
Outstanding at ending | 2 years 8 months 12 days | 3 years 1 month 6 days |
Exercisable at ending | 2 years 8 months 12 days | |
Aggregate intrinsic value | ||
Outstanding at ending | ||
Exercisable at ending |
Warrants (Details 1)
Warrants (Details 1) - $ / shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted Average Exercise price | ||
Warrant [Member] | ||
Number of shares | 2,512,930 | |
Consultant [Member] | Warrant [Member] | ||
Number of shares | 102,213 | |
Weighted Average Exercise price | $ 7.09 | |
Expiration date begenning | 2019-02 | |
Expiration date ending | 2023-08 | |
Financing 2014 [Member] | Warrant [Member] | ||
Number of shares | 96,412 | |
Weighted Average Exercise price | $ 34.50 | |
Expiration date ending | 2019-06 | |
Financing 2015 [Member] | Warrant [Member] | ||
Number of shares | 460,384 | |
Weighted Average Exercise price | $ 8.40 | |
Expiration date begenning | 2020-07 | |
Expiration date ending | 2020-12 | |
Financing 2016 [Member] | Warrant [Member] | ||
Number of shares | 1,466,670 | |
Weighted Average Exercise price | $ 0.01 | |
Expiration date ending | 2021-12 | |
Financings 2017 [Member] | Warrant [Member] | ||
Number of shares | 387,251 | |
Weighted Average Exercise price | $ 0.02 | |
Expiration date begenning | 2023-03 | |
Expiration date ending | 2022-04 |
Warrants (Details Textual)
Warrants (Details Textual) - $ / shares | Feb. 28, 2017 | Apr. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Exercise price | |||||
Series O Common Stock Purchase Warrants [Member] | |||||
Number of common shares purchased | 387,251 | 387,251 | |||
Warrant expiration period | 12 months | 12 months | |||
Exercise price | $ 0.75 | $ 0.75 | |||
Series M Common Stock Purchase Warrants [Member] | |||||
Number of common shares purchased | 387,251 | 387,251 | |||
Warrant expiration period | 5 years | 5 years | |||
Exercise price | $ 0.75 | $ 0.75 | |||
Series N Common Stock Purchase Warrants [Member] | |||||
Number of common shares purchased | 387,451 | 387,451 | |||
Warrant expiration period | 6 months | 6 months | |||
Exercise price | $ 0.75 | $ 0.75 | |||
Series B Preferred Stock [Member] | |||||
Exercise price | 0.02 | ||||
Series C Preferred Stock [Member] | |||||
Exercise price | $ 0.01 | ||||
Dr. Richerson [Member] | Separation Agreement [Member] | |||||
Warrants issued to purchase common stock | 76,726 | ||||
Warrant expiration period | 3 years 6 months | ||||
Exercise price | $ 0.75 |
Convertible Debentures and No_2
Convertible Debentures and Notes (Details) - USD ($) $ / shares in Units, $ in Thousands | Jul. 03, 2018 | Sep. 12, 2017 | Apr. 30, 2017 | Mar. 31, 2017 | Apr. 30, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 31, 2018 |
Convertible Debentures and Notes (Textual) | ||||||||
Principal amount of senior convertible debentures | $ 361,255 | |||||||
Conversion price | $ 0.005 | $ 0.0001 | ||||||
Securities purchase agreements, description | Pursuant to the Securities Purchase Agreement, we sold an aggregate of $515,000 of senior convertible debentures ("Debentures") consisting of $500,000 in cash and the cancellation of $15,000 of obligations of the Company (the "Offering"). Pursuant to the terms of the Securities Purchase Agreement, we will issue $515,000 in principal amount of Debentures. | |||||||
Debentures, description | (i) are non-interest bearing, (ii) have a maturity date one (1) year from the date of issuance and (iii) are convertible into shares of our common stock at the election of the Investor at any time, subject to a beneficial ownership limitation of 4.99% which may be increased to 9.99% by the Investor upon 61 days' notice. The Debentures will have a conversion price equal to the lesser of (i) $0.33 and (ii) 85% of the lesser of (a) the volume weighted average price on the trading day immediately preceding a conversion date and (b) the volume weighted average price on a conversion date. | |||||||
Investors holding, description | Investors holding at least 67% of the then outstanding principal amount of the Debentures, the Company may not (i) amend its charter documents in any manner that adversely affects the rights of any Investor, (ii) repay or repurchase or acquire shares of its Common Stock, (iii) repay, repurchase, or acquire certain indebtedness, or (iv) pay cash dividends or distributions on any equity securities of the Company. The Company is also required under the Securities Purchase Agreement to hold a shareholder meeting by January 3, 2019 in order to increase the number of authorized shares of Common Stock of the Company such that there are sufficient shares of Common Stock available for issuance underlying the Debentures upon their conversion in full. The Company is also obligated under the Securities Purchase Agreement to pay Investors, as partial liquidated damages, a fee of 2.0% of each Investor's initial principal amount of such Investor's Debenture in cash upon our failure to have current public information available beginning six (6) months after the issuance date of the Debentures. | |||||||
Ownership percentage | 50.10% | |||||||
Description of convertible promissory notes | we issued an aggregate of $25,000 in convertible promissory notes (“Notes”) for cash proceeds of $25,000. The Notes will mature on the earlier of (i) June 30, 2019 or (ii) such time as we raise capital in exchange for the sale of securities (“Maturity Date”) and bear interest at 10% per year, payable on the Maturity Date. Pursuant to the terms of the Notes, the Notes may be converted into shares of common stock upon an Event of Default (as such term is defined in the Notes) or upon the Maturity Date at the election of the holder at a price per share equal to 75% of the lowest trade price of our common stock on the trading day immediately prior to the date such exchange is exercised by the holder. | |||||||
Convertible debentures [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Conversion price | $ 0.33 | |||||||
Exchange Agreement [Member] | Investors [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Principal amount of senior convertible debentures | $ 25,000 | |||||||
Exchange Agreement [Member] | Convertible debentures [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Payment or cancellation debt | 70 | |||||||
Proceeds from debt | 320 | |||||||
Received cash from debt | $ 250 | |||||||
Maturity date | Sep. 12, 2018 | |||||||
Discreiption of convertible debentures | The Debentures to be issued to the Investors (i) are non-interest bearing, (ii) have a maturity date of September 12, 2018 and (iii) are convertible into shares of common stock (“Common Stock”) of the Company at the election of the Investor at any time, subject to a beneficial ownership limitation of 4.99% which may be increased to 9.99% by the Investor upon 61 days’ notice. The Debentures will have a conversion price equal to the lesser of (i) $0.33 and (ii) 85% of the lesser of (a) the volume weighted average price on the trading day immediately preceding a conversion date and (b) the volume weighted average price on a conversion date. | |||||||
Percentage of outstanding debentures | 67.00% | |||||||
Percentage of partial liquidated damages fee for each investor | 2.00% | |||||||
Registration Rights Agreement [Member] | Convertible debentures [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Percentage of partial liquidated damages fee for each investor | 1.50% | |||||||
Percentage of securities issued investors | 50.10% | |||||||
Common Stock [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Common stock,issued | 73,675,000 | 223,585 | ||||||
Common stock,value | $ 503,308 | |||||||
Series A Preferred Stock [Member] | Exchange Agreement [Member] | SeriesAConvertiblePreferredStockMember | Investors [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Number of shares converted | 1,614.8125 | |||||||
Amount of shares converted | $ 1,600,000 | |||||||
Series B Preferred Stock [Member] | Exchange Agreement [Member] | Series B 0% Convertible Preferred Stock [Member] | Investors [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Common stock,value | $ 900,000 | |||||||
Number of shares converted | 890 | |||||||
Series C 0% Convertible Preferred Stock [Member] | ||||||||
Convertible Debentures and Notes (Textual) | ||||||||
Common stock,issued | 90.43418 | 200 | 290.43148 | |||||
Common stock,value | $ 90,431 | $ 200 |
Acquisition (Details)
Acquisition (Details) - Lewis & Clark Pharmaceuticals, Inc. [Member] - Share Exchange Agreement [Member] $ in Thousands | Jul. 31, 2017USD ($) |
Cash | $ 23 |
Prepaid expenses | 3 |
Equipment | 353 |
Goodwill | 2,159 |
Total assets acquired | 2,538 |
Accounts payable and other liabilities | (45) |
Total | $ 2,493 |
Acquisition (Details 1)
Acquisition (Details 1) - Lewis & Clark Pharmaceuticals, Inc. [Member] - Share Exchange Agreement [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / shares | |
Revenue | |
Net loss attributable to common shareholders | $ (13,842) |
Net loss per share | $ / shares | $ (1.54) |
Acquisition (Details Textual)
Acquisition (Details Textual) - USD ($) $ in Thousands | Jul. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Acquisition (Textual) | |||
Goodwill impairment charge | $ 2,159 | ||
Asset impairment charge | 332 | ||
Lewis & Clark Pharmaceuticals, Inc. [Member] | |||
Acquisition (Textual) | |||
Percentage of ownership acquired | 100.00% | ||
Value of revenue and loss | 0 | ||
Value of revenue and loss | (2,813) | ||
Goodwill impairment charge | 2,200 | ||
Lewis & Clark Pharmaceuticals, Inc. [Member] | Escrow Agreement [Member] | |||
Acquisition (Textual) | |||
Number of shares held in escrow account | 973,251 | ||
Lewis & Clark Pharmaceuticals, Inc. [Member] | Share Exchange Agreement [Member] | |||
Acquisition (Textual) | |||
Percentage of ownership acquired | 100.00% | ||
Number of shars issued upon acquistion (Purchase consideration) | 7,122,172 | ||
Number of shares issued upon acquistion, value (Purchase consideration) | $ 2,492,760 | ||
Number of shares received by shareholders (5% of the payment shares) | 356,109 | ||
Goodwill | $ 2,159 | ||
Lewis & Clark Pharmaceuticals, Inc. [Member] | Office And Lab Equipment [Member] | |||
Acquisition (Textual) | |||
Asset impairment charge | $ 300 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryover | $ 8,597 | $ 8,468 |
Stock-based compensation | 1,920 | 1,920 |
Accrued compensation | 334 | 288 |
Other | 30 | 27 |
Tax credits | 458 | 458 |
Total deferred tax assets | 11,339 | 11,161 |
Less: valuation allowance | (11,339) | (11,161) |
Net deferred tax assets |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | (21.00%) | (34.00%) |
State income taxes, net of federal benefit | (7.00%) | (5.80%) |
Non-deductible items | (1418.00%) | 28.50% |
Valuation allowance | 1446.00% | 11.30% |
Effective income tax rate |
Income Taxes (Details Textual)
Income Taxes (Details Textual) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
Dec. 22, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Net operating loss carryforwards | $ 40,300 | |||
Expiration period | expire at various dates through 2037. | |||
Research and development tax credits | $ 458 | $ 458 | $ 458 | |
Expiration period for tax credit | expire from 2028 through 2037. | |||
Increased in valuation allowance | $ 178 | $ 832 | ||
Federal income tax rate | 21.00% | 34.00% | ||
Previously federal income tax rate | 35.00% | |||
Deferred tax asset, net | $ 6,100 | |||
Description of Tax Cuts and Jobs Act | The Tax Cuts and Jobs Act (the "Act"), a tax reform bill, was enacted. The Act, among other items, reduces the current federal income tax rate to 21% from 35%. The rate reduction is effective January 1, 2018, and is permanent. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Jul. 05, 2019 | Jan. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsequent Events (Textual) | ||||
Number of common shares issued | 84,563,929 | 10,888,929 | ||
Subsequent Event [Member] | ||||
Subsequent Events (Textual) | ||||
Number of common shares issued | 65,436,071 | |||
Amount of debentures converted | $ 204,221 | |||
Shares issued | 5,000 | |||
Proceeds from convertible preferred stock | $ 5,000 | |||
Subsequent event, description | Effective July 5, 2019, Sabby Healthcare Master Fund, Ltd and Sabby Volatility Warrant Master Fund, Ltd. waived certain events of default under debentures issued in our July 2018 debenture offering and September 2017 debenture offering (collectively, the “Debenture Offerings”) and extended the maturity date of such debentures until September 30, 2019 in exchange for the issuance of $154,000 in new debentures with substantially the same terms as those issued in our Debenture Offerings. |