Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2019 | Aug. 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Inspyr Therapeutics, Inc. | |
Entity Central Index Key | 0001421204 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2019 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2019 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Shell Company | false | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 150,000,000 | |
Entity File Number | 000-55331 | |
Entity Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash | $ 3 | $ 4 |
Restricted cash | 226 | 327 |
Total current assets | 229 | 331 |
Office and lab equipment, net of accumulated depreciation of $6 and $5, respectively | 1 | 2 |
Intangible assets, net of accumulated amortization of $187 and $179, respectively | 25 | 33 |
Total assets | 255 | 366 |
Current liabilities: | ||
Accounts payable | 2,266 | 2,085 |
Accrued expenses | 1,880 | 1,814 |
Convertible debentures, net of unamortized discount of $0 and $281, respectively | 2,677 | 2,600 |
Derivative liability | 2,287 | 2,134 |
Total current liabilities | 9,110 | 8,633 |
Total liabilities | 9,110 | 8,633 |
Commitments and contingencies (See Note 7) | ||
Stockholders' deficit: | ||
Convertible preferred stock, par value $.0001 per share; 30,000,000 shares authorized, 5,495 and 495 shares issued and outstanding, respectively | ||
Common stock, par value $.0001 per share; 150,000,000 shares authorized, 150,000,000 and 84,563,929 shares issued and outstanding, respectively | 15 | 8 |
Additional paid-in capital | 51,789 | 51,471 |
Accumulated deficit | (60,659) | (59,746) |
Total stockholders' deficit | (8,855) | (8,267) |
Total liabilities and stockholders' deficit | $ 255 | $ 366 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Office and lab equipment, accumulated depreciation | $ 6 | $ 5 |
Intangible assets, accumulated amortization | 187 | 179 |
Net of unamortized discount, convertible debentures | $ 0 | $ 281 |
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 | 5,495 | 495 |
Convertible preferred stock, shares outstanding | 5,495 | 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 | 150,000,000 | 84,563,929 |
Common stock, shares outstanding | 150,000,000 | 84,563,929 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Operating expenses: | ||||
Research and development | $ 11 | $ 11 | $ 22 | $ 186 |
General and administrative | 139 | 54 | 340 | 237 |
Total operating expenses | 150 | 65 | 362 | 423 |
Loss from operations | (150) | (65) | (362) | (423) |
Other income (expense): | ||||
(Loss) gain on change in fair value of derivative liability | (547) | 824 | (319) | 983 |
Gain on conversion of debt | 39 | 50 | 62 | |
Interest expense, net | (141) | (80) | (282) | (160) |
(Loss) income before provision for income taxes | (838) | 718 | (913) | 462 |
Provision for income taxes | ||||
Net (loss) income | (838) | 718 | (913) | 462 |
Deemed dividend | (196) | (196) | ||
Net (loss) income attributable to common shareholders | $ (838) | $ 522 | $ (913) | $ 266 |
Net (loss) income per common share, basic | $ (0.01) | $ 0.03 | $ (0.01) | $ 0.02 |
Net (loss) income per common share, diluted | $ (0.01) | $ 0 | $ (0.01) | $ 0 |
Weighted average shares outstanding, basic | 150,000,000 | 15,601,456 | 147,237,804 | 13,663,846 |
Weighted average shares outstanding, diluted | 150,000,000 | 150,000,000 | 147,237,804 | 150,000,000 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands | Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at beginning at Dec. 31, 2017 | $ 1 | $ 50,885 | $ (59,734) | $ (8,848) | |
Balance at beginning (in shares) at Dec. 31, 2017 | 495 | 10,888,929 | |||
Stock-based compensation | 90 | 90 | |||
Conversion of debentures | 56 | 56 | |||
Conversion of debentures (in shares) | 1,445,000 | ||||
Net income (loss) | (256) | (256) | |||
Balance at ending at Mar. 31, 2018 | $ 1 | 51,031 | (59,990) | (8,958) | |
Balance at ending (in shares) at Mar. 31, 2018 | 495 | 12,333,929 | |||
Conversion of debentures | $ 1 | 69 | 70 | ||
Conversion of debentures (in shares) | 4,305,000 | ||||
Net income (loss) | 718 | 718 | |||
Balance at ending at Jun. 30, 2018 | $ 2 | 51,100 | (59,272) | (8,170) | |
Balance at ending (in shares) at Jun. 30, 2018 | 495 | 16,638,929 | |||
Balance at beginning at Dec. 31, 2018 | $ 8 | 51,471 | (59,746) | (8,267) | |
Balance at beginning (in shares) at Dec. 31, 2018 | 495 | 84,563,929 | |||
Sale of preferred stock | 5 | 5 | |||
Sale of preferred stock, shares | 5,000 | ||||
Conversion of debentures | $ 7 | 313 | 320 | ||
Conversion of debentures (in shares) | 65,436,071 | ||||
Net income (loss) | (75) | (75) | |||
Balance at ending at Mar. 31, 2019 | $ 15 | 51,789 | (59,821) | (8,017) | |
Balance at ending (in shares) at Mar. 31, 2019 | 5,495 | 150,000,000 | |||
Net income (loss) | (838) | (838) | |||
Balance at ending at Jun. 30, 2019 | $ 15 | $ 51,789 | $ (60,659) | $ (8,855) | |
Balance at ending (in shares) at Jun. 30, 2019 | 5,495 | 150,000,000 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (913) | $ 462 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Depreciation and amortization | 10 | 10 |
Stock-based compensation | 90 | |
Loss (gain) on change in fair value of derivative liability | 319 | (983) |
Gain on conversion of debt | (50) | (62) |
Amortization of debt discount | 280 | 160 |
Decrease in operating assets: | ||
Prepaid expenses | 4 | |
Increase in operating liabilities: | ||
Accounts payable and accrued expenses | 247 | 313 |
Cash used in operating activities | (107) | (6) |
Cash flows from investing activities: | ||
Cash used in investing activities | ||
Cash flows from financing activities: | ||
Proceeds from sale of preferred stock | 5 | |
Cash provided by financing activities | 5 | |
Net decrease in cash and restricted cash | (102) | (6) |
Cash and restricted cash, beginning of period | 331 | 10 |
Cash and restricted cash, end of period | $ 229 | $ 4 |
Background
Background | 6 Months Ended |
Jun. 30, 2019 | |
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 | 6 Months Ended |
Jun. 30, 2019 | |
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 unaudited condensed consolidated 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 $61 million as of June 30, 2019. 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 cash equivalents and restricted cash balances at June 30, 2019 were approximately $229,000, representing 90% of our total assets. Based on our current expected level of operating expenditures, we expect to be able to fund our operations into the fourth 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 consolidated 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 fourth 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 | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES | NOTE 3 – SUMMARY OF CRITICAL ACCOUNTING POLICIES AND USE OF ESTIMATES Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These interim consolidated financial statements as of and for the three and six months ended June 30, 2019 and 2018 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future period. All references to June 30, 2019 and 2018 in these footnotes are unaudited. These unaudited condensed consolidated financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2018, included in the Company's annual report on Form 10-K filed with the SEC on August 6, 2019. The consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America. Certain items have been reclassified to conform to the current period presentation. 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 approximately $0.01 million and $0.01 million for the three months ended June 30, 2019 and 2018, respectively. We incurred research and development expenses of approximately $0.02 million and $0.2 million for the six months ended June 30, 2019 and 2018, 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. 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. Income (loss) per Share Basic income (loss) per share is calculated by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period. Basic and diluted income (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 income (loss) per share. The following potentially dilutive securities have been excluded from the computations of weighted average shares outstanding as of June 30, 2019 and 2018, as they would be anti-dilutive: Six Months Ended 2019 2018 Shares underlying options outstanding 298,749 334,273 Shares underlying warrants outstanding 2,413,318 2,632,973 Shares underlying convertible notes outstanding 809,513,726 347,553,643 Shares underlying convertible preferred stock outstanding 27,395,624 26,395,624 839,621,417 376,916,513 Three Months Ended Six Net income attributable to common shareholders $ 522 $ 266 Income attributable to convertible debentures (863 ) (1,045 ) Expense attributable to convertible debentures 80 160 Diluted loss attributable to common shareholders $ (261 ) $ (619 ) Basic shares outstanding $ 15,601,456 $ 13,663,846 Convertible instruments 134,398,544 136,336,154 Diluted shares outstanding $ 150,000,000 $ 150,000,000 Diluted loss per share $ (0.00 ) $ (0.00 ) 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. 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 June 30, 2019. The tables below summarize the fair values of our financial liabilities as of June 30, 2019 (in thousands): Fair Value at Fair Value Measurement Using 2019 Level 1 Level 2 Level 3 Derivative liability $ 2,287 $ — $ — $ 2,287 The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands): Six Months Ended 2019 2018 Balance at beginning of year $ 2,134 $ 2,934 Additions to derivative instruments — — Reclassification on conversion (166 ) (93 ) Loss (gain) on change in fair value of derivative liability 319 (983 ) Balance at end of period $ 2,287 $ 1,858 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. 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 six months ended June 30, 2019 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 adoption of this standard did not have any impact on the Company's 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. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 6 Months Ended |
Jun. 30, 2019 | |
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). Six Months Ended 2019 2018 Non-cash financing activities: Common stock issued on conversion of notes payable and derivative liability $ 320 $ 126 Debentures converted to common stock 204 96 Derivative liability extinguished upon conversion of notes payable 166 93 There was no cash paid for interest and income taxes for the six months ended June 30, 2019 and 2018. |
Accrued Expenses
Accrued Expenses | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities, Current [Abstract] | |
ACCRUED EXPENSES | NOTE 5 – ACCRUED EXPENSES Accrued expenses consist of the following (in thousands): June 30, December 31, Accrued compensation and benefits $ 1,326 $ 1,326 Accrued research and development 211 188 Accrued other 343 300 Total accrued expenses $ 1,880 $ 1,814 |
Derivative Liability
Derivative Liability | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE LIABILITY | NOTE 6 – 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. We have issued convertible debentures 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 three months ended June 30, 2019 and 2018, we recorded expense of approximately $0.5 million and gain of approximately $0.8 million, respectively, related to the change in fair value of the derivative liabilities during the periods. During the six months ended June 30, 2019 and 2018, we recorded expense of approximately $0.3 million and gain of approximately $1.0 million, respectively. 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 June 30, 2019 are as follows: 2019 Volatility 239 % Expected term (years) 6 months Risk-free interest rate 2.09 % Dividend yield None As of June 30, 2019 and December 31, 2018, the derivative liability recognized in the financial statements was approximately $2.3 million and $2.1 million, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 7 – 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. There was no rent expense for the six months ended June 30, 2019 and 2018. 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. 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 June 30, 2019, 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' Deficit | 6 Months Ended |
Jun. 30, 2019 | |
Stockholders' Equity Note [Abstract] | |
CAPITAL STOCK AND STOCKHOLDERS' DEFICIT | NOTE 8 – CAPITAL STOCK AND STOCKHOLDERS' DEFICIT Preferred Stock As of June 30, 2019, there were outstanding 133.8 shares of Series A Preferred Stock, 71 shares of Series B Preferred Stock, 290.4 shares of Series C Preferred Stock and 5,000 shares of Series D Preferred Stock. During January 2019, we issued the 5,000 shares of Series D Convertible Preferred Stock for proceeds of $5,000. Common Stock During the six months ended June 30, 2019, we issued a total of 65,436,071 shares of common stock, valued at $319,820, upon the conversion of $204,221 principal amount of our convertible debentures. 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 June 30, 2019, the conversion price of 200 shares of our Series C preferred stock has been reduced to $0.02 per share at June 30, 2019, and our Series B Preferred Stock and 90.4 shares of our Series C preferred stock has been reduced to $0.01 per share at June 30, 2019. 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 June 30, 2019. |
Stock Options
Stock Options | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK OPTIONS | NOTE 9 – STOCK OPTIONS 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 unaudited condensed consolidated statement of operations (in thousands): Six Months Ended 2019 2018 Research and development $ — $ 62 General and administrative — 28 Total stock-based compensation expense $ — $ 90 The following table summarizes stock option activity for the six months ended June 30, 2019: Number of Weighted- Weighted-average Aggregate Outstanding at December 31, 2018 323,514 $ 6.28 Granted — $ — Forfeited (24,765 ) $ 20.98 Outstanding at June 30, 2019 298,749 $ 5.07 3.6 $ — Exercisable at June 30, 2019 298,749 $ 5.07 3.6 $ — No options were exercised during the six months ended June 30, 2019 and 2018. |
Warrants
Warrants | 6 Months Ended |
Jun. 30, 2019 | |
Warrants [Abstract] | |
WARRANTS | NOTE 10 – WARRANTS Transactions involving our warrants are summarized as follows: Number of Weighted- Weighted-average Aggregate Outstanding at December 31, 2018 2,512,930 $ 3.16 Issued — — Expired (99,612 ) $ 36.28 Outstanding at June 30, 2019 2,413,318 $ 1.79 2.3 $ — Exercisable at June 30, 2019 2,413,318 $ 1.79 2.3 $ — No warrants were exercised during the six months ended June 30, 2019 and 2018. 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 June 30, 2019. The following table summarizes outstanding common stock purchase warrants as of June 30, 2019: Number of Weighted- Expiration Issued to consultants 99,013 $ 4.41 August 2019 through August 2023 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 2,413,318 |
Convertible Debentures
Convertible Debentures | 6 Months Ended |
Jun. 30, 2019 | |
Debt Disclosure [Abstract] | |
CONVERTIBLE DEBENTURES | NOTE 11 – CONVERTIBLE DEBENTURES 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 12). 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 12). 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 12). 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 12). 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. During the six months ended June 30, 2019, we issued a total of 65,436,071 shares of common stock, valued at $319,820, upon the conversion of $204,221 principal amount of our convertible debentures. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 13 – SUBSEQUENT EVENTS 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) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements are unaudited. The unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission (the "SEC"). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. These interim consolidated financial statements as of and for the three and six months ended June 30, 2019 and 2018 are unaudited; however, in the opinion of management, such statements include all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented. The results for the three and six months ended June 30, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any future period. All references to June 30, 2019 and 2018 in these footnotes are unaudited. These unaudited condensed consolidated financial statements should be read in conjunction with our audited financial statements and the notes thereto for the year ended December 31, 2018, included in the Company's annual report on Form 10-K filed with the SEC on August 6, 2019. The consolidated balance sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date but do not include all disclosures required by the accounting principles generally accepted in the United States of America. Certain items have been reclassified to conform to the current period presentation. |
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 approximately $0.01 million and $0.01 million for the three months ended June 30, 2019 and 2018, respectively. We incurred research and development expenses of approximately $0.02 million and $0.2 million for the six months ended June 30, 2019 and 2018, 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. |
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. |
Income (loss) per Share | Income (loss) per Share Basic income (loss) per share is calculated by dividing net income (loss) and net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding for the period. Basic and diluted income (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 income (loss) per share. The following potentially dilutive securities have been excluded from the computations of weighted average shares outstanding as of June 30, 2019 and 2018, as they would be anti-dilutive: Six Months Ended 2019 2018 Shares underlying options outstanding 298,749 334,273 Shares underlying warrants outstanding 2,413,318 2,632,973 Shares underlying convertible notes outstanding 809,513,726 347,553,643 Shares underlying convertible preferred stock outstanding 27,395,624 26,395,624 839,621,417 376,916,513 Three Months Ended Six Net income attributable to common shareholders $ 522 $ 266 Income attributable to convertible debentures (863 ) (1,045 ) Expense attributable to convertible debentures 80 160 Diluted loss attributable to common shareholders $ (261 ) $ (619 ) Basic shares outstanding $ 15,601,456 $ 13,663,846 Convertible instruments 134,398,544 136,336,154 Diluted shares outstanding $ 150,000,000 $ 150,000,000 Diluted loss per share $ (0.00 ) $ (0.00 ) |
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. |
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 June 30, 2019. The tables below summarize the fair values of our financial liabilities as of June 30, 2019 (in thousands): Fair Value at Fair Value Measurement Using 2019 Level 1 Level 2 Level 3 Derivative liability $ 2,287 $ — $ — $ 2,287 The reconciliation of the derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows (in thousands): Six Months Ended 2019 2018 Balance at beginning of year $ 2,134 $ 2,934 Additions to derivative instruments — — Reclassification on conversion (166 ) (93 ) Loss (gain) on change in fair value of derivative liability 319 (983 ) Balance at end of period $ 2,287 $ 1,858 |
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. |
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 six months ended June 30, 2019 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 adoption of this standard did not have any impact on the Company's 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. |
Summary of Critical Accountin_3
Summary of Critical Accounting Policies and Use of Estimates (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accounting Policies [Abstract] | |
Schedule of weighted average shares outstanding | Six Months Ended 2019 2018 Shares underlying options outstanding 298,749 334,273 Shares underlying warrants outstanding 2,413,318 2,632,973 Shares underlying convertible notes outstanding 809,513,726 347,553,643 Shares underlying convertible preferred stock outstanding 27,395,624 26,395,624 839,621,417 376,916,513 |
Schedule of earnings per share basic and diluted | Three Months Ended Six Net income attributable to common shareholders $ 522 $ 266 Income attributable to convertible debentures (863 ) (1,045 ) Expense attributable to convertible debentures 80 160 Diluted loss attributable to common shareholders $ (261 ) $ (619 ) Basic shares outstanding $ 15,601,456 $ 13,663,846 Convertible instruments 134,398,544 136,336,154 Diluted shares outstanding $ 150,000,000 $ 150,000,000 Diluted loss per share $ (0.00 ) $ (0.00 ) |
Schedule of fair values of financial liabilities | Fair Value at Fair Value Measurement Using 2019 Level 1 Level 2 Level 3 Derivative liability $ 2,287 $ — $ — $ 2,287 |
Schedule of derivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) | Six Months Ended 2019 2018 Balance at beginning of year $ 2,134 $ 2,934 Additions to derivative instruments — — Reclassification on conversion (166 ) (93 ) Loss (gain) on change in fair value of derivative liability 319 (983 ) Balance at end of period $ 2,287 $ 1,858 |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of additional information of cash flow | Six Months Ended 2019 2018 Non-cash financing activities: Common stock issued on conversion of notes payable and derivative liability $ 320 $ 126 Debentures converted to common stock 204 96 Derivative liability extinguished upon conversion of notes payable 166 93 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued expenses | June 30, December 31, Accrued compensation and benefits $ 1,326 $ 1,326 Accrued research and development 211 188 Accrued other 343 300 Total accrued expenses $ 1,880 $ 1,814 |
Derivative Liability (Tables)
Derivative Liability (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of black scholes valuations of derivatives | 2019 Volatility 239 % Expected term (years) 6 months Risk-free interest rate 2.09 % Dividend yield None |
Stock Options (Tables)
Stock Options (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | Six Months Ended 2019 2018 Research and development $ — $ 62 General and administrative — 28 Total stock-based compensation expense $ — $ 90 |
Schedule of stock option activity | Number of Weighted- Weighted-average Aggregate Outstanding at December 31, 2018 323,514 $ 6.28 Granted — $ — Forfeited (24,765 ) $ 20.98 Outstanding at June 30, 2019 298,749 $ 5.07 3.6 $ — Exercisable at June 30, 2019 298,749 $ 5.07 3.6 $ — |
Warrants (Tables)
Warrants (Tables) | 6 Months Ended |
Jun. 30, 2019 | |
Warrants [Abstract] | |
Schedule of transactions involving of warrants | Number of Weighted- Weighted-average Aggregate Outstanding at December 31, 2018 2,512,930 $ 3.16 Issued — — Expired (99,612 ) $ 36.28 Outstanding at June 30, 2019 2,413,318 $ 1.79 2.3 $ — Exercisable at June 30, 2019 2,413,318 $ 1.79 2.3 $ — |
Schedule of outstanding warrants to purchase common stock | Number of Weighted- Expiration Issued to consultants 99,013 $ 4.41 August 2019 through August 2023 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 2,413,318 |
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 | Jun. 30, 2019 | Dec. 31, 2018 | Jul. 31, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Management's Plans to Continue as a Going Concern (Textual) | |||||
Accumulated deficit | $ (60,659) | $ (59,746) | |||
Cash and cash equivalents and restricted cash balances | $ 229 | 331 | $ 4 | $ 10 | |
Percentage of total assets | 90.00% | ||||
Amount raised | $ 25 | $ 500 |
Summary of Critical Accountin_4
Summary of Critical Accounting Policies and Use of Estimates (Details) - shares | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Shares underlying, outstanding | 839,621,417 | 376,916,513 |
Shares underlying convertible preferred stock outstanding [Member] | ||
Shares underlying, outstanding | 27,395,624 | 26,395,624 |
Shares underlying convertible notes outstanding [Member] | ||
Shares underlying, outstanding | 809,513,726 | 347,553,643 |
Shares underlying warrants outstanding [Member] | ||
Shares underlying, outstanding | 2,413,318 | 2,632,973 |
Shares underlying options outstanding [Member] | ||
Shares underlying, outstanding | 298,749 | 334,273 |
Summary of Critical Accountin_5
Summary of Critical Accounting Policies and Use of Estimates (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||||
Net income attributable to common shareholders | $ (838) | $ 522 | $ (913) | $ 266 |
Income attributable to convertible debentures | (863) | (1,045) | ||
Expense attributable to convertible debentures | 80 | 160 | ||
Diluted loss attributable to common shareholders | $ (261) | $ (619) | ||
Basic shares outstanding | 150,000,000 | 15,601,456 | 147,237,804 | 13,663,846 |
Convertible instruments | 134,398,544 | 136,336,154 | ||
Diluted shares outstanding | 150,000,000 | 150,000,000 | 147,237,804 | 150,000,000 |
Diluted loss per share | $ (0.01) | $ 0 | $ (0.01) | $ 0 |
Summary of Critical Accountin_6
Summary of Critical Accounting Policies and Use of Estimates (Details 2) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Derivative liability | $ 2,287 | $ 2,134 |
Level 1 [Member] | ||
Derivative liability | ||
Level 2 [Member] | ||
Derivative liability | ||
Level 3 [Member] | ||
Derivative liability | $ 2,287 |
Summary of Critical Accountin_7
Summary of Critical Accounting Policies and Use of Estimates (Details 3) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Accounting Policies [Abstract] | ||
Balance at beginning of year | $ 2,134 | $ 2,934 |
Additions to derivative instruments | ||
Reclassification on conversion | (166) | (93) |
Loss (gain) on change in fair value of derivative liability | 319 | (983) |
Balance at end of period | $ 2,287 | $ 1,858 |
Summary of Critical Accountin_8
Summary of Critical Accounting Policies and Use of Estimates (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | |
Summary of Critical Accounting Policies and Use of Estimates (Textual) | ||||
Research and development | $ 11 | $ 11 | $ 22 | $ 186 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Non-cash financing activities: | ||
Common stock issued on conversion of notes payable and derivative liability | $ 320 | $ 126 |
Debentures converted to common stock | 204 | 96 |
Derivative liability extinguished upon conversion of notes payable | $ 166 | $ 93 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Dec. 31, 2018 |
Accrued Liabilities, Current [Abstract] | ||
Accrued compensation and benefits | $ 1,326 | $ 1,326 |
Accrued research and development | 211 | 188 |
Accrued other | 343 | 300 |
Total accrued expenses | $ 1,880 | $ 1,814 |
Derivative Liability (Details)
Derivative Liability (Details) | Jun. 30, 2019 |
Volatility [Member] | |
Derivative liability measurement input | 239.00% |
Dividend yield [Member] | |
Derivative liability measurement input | |
Expected term (years) [Member] | |
Derivative liability term | 6 months |
Risk-free interest rate [Member] | |
Derivative liability measurement input | 2.09% |
Derivative Liability (Details T
Derivative Liability (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2019 | Jun. 30, 2018 | Dec. 31, 2018 | |
Derivative Liability (Textual) | |||||
Gain on change in fair value of the derivative liability | $ 500 | $ 800 | $ 300 | $ 1,000 | |
Derivative Liability | $ 2,300 | $ 2,300 | $ 2,100 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2019USD ($) | |
Commitments and Contingencies (Textual) | |
Gross proceeds from capital raising transactions | $ 25,000 |
Capital Stock and Stockholder_2
Capital Stock and Stockholders' Deficit (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Jan. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | |
Capital Stock and Stockholders' Deficit (Textual) | |||
Principal amount of senior convertible debentures | $ 204,221 | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |
Preferred stock, outstanding | 5,495 | 495 | |
Series B Preferred Stock [Member] | |||
Capital Stock and Stockholders' Deficit (Textual) | |||
Reduction in conversion price (in dollars per share) | $ 0.02 | ||
Number of shares issued upon conversion | 90.4 | ||
Preferred stock, outstanding | 71 | ||
Series C Preferred Stock [Member] | |||
Capital Stock and Stockholders' Deficit (Textual) | |||
Reduction in conversion price (in dollars per share) | $ 0.01 | ||
Number of shares issued upon conversion | 200 | ||
Preferred stock, outstanding | 290.4 | ||
Common Stock [Member] | |||
Capital Stock and Stockholders' Deficit (Textual) | |||
Stock issued during period, shares | 65,436,071 | ||
Value of number of shares issued | $ 319,820 | ||
Series A Preferred Stock [Member] | |||
Capital Stock and Stockholders' Deficit (Textual) | |||
Conversion price (in dollars per share) | $ 0.53 | ||
Preferred stock, outstanding | 133.8 | ||
Series D Preferred Stock [Member] | |||
Capital Stock and Stockholders' Deficit (Textual) | |||
Preferred stock, outstanding | 5,000 | ||
Series D Convertible Preferred Stock [Member] | |||
Capital Stock and Stockholders' Deficit (Textual) | |||
Stock issued during period, shares | 5,000 | ||
Value of number of shares issued | $ 5,000 |
Stock Options (Details)
Stock Options (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2019 | Jun. 30, 2018 | |
Total stock-based compensation expense | $ 90 | |
Research and development [Member] | ||
Total stock-based compensation expense | 62 | |
General and administrative [Member] | ||
Total stock-based compensation expense | $ 28 |
Stock Options (Details 1)
Stock Options (Details 1) - Stock Options [Member] | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Number of shares | |
Outstanding at beginning | shares | 323,514 |
Granted | shares | |
Forfeited | shares | (24,765) |
Outstanding at ending | shares | 298,749 |
Exercisable at ending | shares | 298,749 |
Weighted-average exercise price | |
Outstanding at beginning | $ / shares | $ 6.28 |
Granted | $ / shares | |
Forfeited | $ / shares | 20.98 |
Outstanding at ending | $ / shares | 5.07 |
Exercisable at ending | $ / shares | $ 5.07 |
Weighted-average remaining contractual term (in years) | |
Outstanding at ending | 3 years 7 months 6 days |
Exercisable at ending | 3 years 7 months 6 days |
Aggregate intrinsic value (in thousands) | |
Outstanding at ending | $ | |
Exercisable at ending | $ |
Warrants (Details)
Warrants (Details) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2019USD ($)$ / sharesshares | |
Number of shares | |
Outstanding at beginning | shares | 2,512,930 |
Issued | shares | |
Expired | shares | (99,612) |
Outstanding at ending | shares | 2,413,318 |
Exercisable at ending | shares | 2,413,318 |
Weighted-average exercise price | |
Outstanding at beginning | $ / shares | $ 3.16 |
Issued | $ / shares | |
Expired | $ / shares | 36.28 |
Outstanding at ending | $ / shares | 1.79 |
Exercisable at ending | $ / shares | $ 1.79 |
Weighted-average remaining contractual term | |
Outstanding at ending | 2 years 3 months 19 days |
Exercisable at ending | 2 years 3 months 19 days |
Aggregate intrinsic value | |
Outstanding at ending | $ | |
Exercisable at ending | $ |
Warrants (Details 1)
Warrants (Details 1) - Warrant [Member] | 6 Months Ended |
Jun. 30, 2019$ / sharesshares | |
Number of shares | 2,413,318 |
2015 financings [Member] | |
Number of shares | 460,384 |
Weighted Average Exercise price | $ / shares | $ 8.40 |
Expiration date beginning | 2020-07 |
Expiration date ending | 2020-12 |
2016 financings [Member] | |
Number of shares | 1,466,670 |
Weighted Average Exercise price | $ / shares | $ 0.01 |
Expiration date ending | 2021-12 |
2017 financings [Member] | |
Number of shares | 387,251 |
Weighted Average Exercise price | $ / shares | $ 0.02 |
Expiration date beginning | 2022-03 |
Expiration date ending | 2022-04 |
Consultant [Member] | |
Number of shares | 99,013 |
Weighted Average Exercise price | $ / shares | $ 4.41 |
Expiration date beginning | 2019-08 |
Expiration date ending | 2023-08 |
Warrants (Details Textual)
Warrants (Details Textual) | Jun. 30, 2019$ / shares |
Series B Preferred Stock [Member] | |
Warrants (Details Textual) | |
Exercise price of warrants | $ 0.02 |
Series C Preferred Stock [Member] | |
Warrants (Details Textual) | |
Exercise price of warrants | $ 0.01 |
Convertible Debentures (Details
Convertible Debentures (Details) - USD ($) | Dec. 13, 2018 | Jul. 03, 2018 | Sep. 12, 2017 | Jun. 30, 2019 |
Convertible Debentures (Textual) | ||||
Conversion amount | $ 319,820 | |||
Principal amount of senior convertible debentures | $ 204,221 | |||
Description of convertible 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. | |||
Percentage of outstanding debentures | 67.00% | |||
Percentage of partial liquidated damages fee for each investor | 2.00% | |||
Percentage of securities issued investors | 50.10% | |||
Number of shares converted | 65,436,071 | |||
Investors [Member] | ||||
Convertible Debentures (Textual) | ||||
Percentage of outstanding debentures | 67.00% | |||
Percentage of partial liquidated damages fee for each investor | 2.00% | |||
Series A 0% Convertible Preferred Stock [Member] | ||||
Convertible Debentures (Textual) | ||||
Conversion amount | $ 1,600,000 | |||
Number of shares converted | 1,615 | |||
Series B 0% Convertible Preferred Stock [Member] | ||||
Convertible Debentures (Textual) | ||||
Conversion amount | $ 900,000 | |||
Securities purchase agreement [Member] | ||||
Convertible Debentures (Textual) | ||||
Cash received | $ 500,000 | |||
Principal amount | 515,000 | |||
Principal amount of senior convertible debentures | 515,000 | |||
Cancellation amount | $ 15,000 | |||
Exchange Agreemen [Member] | ||||
Convertible Debentures (Textual) | ||||
Cash received | 250,000 | |||
Principal amount | 320,000 | |||
Cancellation amount | $ 70,000 | |||
Description 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. | |||
Registration Rights Agreement [Member] | ||||
Convertible Debentures (Textual) | ||||
Percentage of partial liquidated damages fee for each investor | 1.50% | |||
Convertible promissory notes [Member] | ||||
Convertible Debentures (Textual) | ||||
Principal amount | $ 25,000 | |||
Proceeds from debt | $ 25,000 | |||
Maturity date | Jun. 30, 2019 | |||
Bear interest rate | 10.00% |
Subsequent Events (Details)
Subsequent Events (Details) | 1 Months Ended |
Jul. 05, 2019 | |
Subsequent Event [Member] | |
Subsequent Events (Textual) | |
Subsequent event, description | 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. |