Document and Entity Information
Document and Entity Information | 3 Months Ended |
Mar. 31, 2017 | |
Document And Entity Information [Abstract] | |
Document Type | S-1/A |
Amendment Flag | true |
Amendment Description | Amendment No. 1 to FORM S-1 |
Document Period End Date | Mar. 31, 2017 |
Entity Registrant Name | Aerpio Pharmaceuticals, Inc. |
Entity Central Index Key | 1,422,142 |
Entity Filer Category | Smaller Reporting Company |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | |||
Cash and cash equivalents | $ 35,139,109 | $ 1,609,694 | $ 5,144,211 |
Short-term investments | 50,000 | 50,000 | 50,000 |
Accounts receivable | 32,453 | 4,157 | 118,516 |
Prepaid research and development contracts | 297,158 | 353,434 | 266,327 |
Other current assets | 602,488 | 209,038 | 386,549 |
Total current assets | 36,121,208 | 2,226,323 | 5,965,603 |
Furniture and equipment, net | 138,147 | 149,595 | 105,971 |
Deposits | 20,960 | 20,960 | 20,960 |
Total assets | 36,280,315 | 2,396,878 | 6,092,534 |
Current liabilities: | |||
Accounts payable and accrued expenses | 2,970,048 | 2,470,970 | 2,159,874 |
Convertible notes | 12,386,647 | ||
Total current liabilities | 2,970,048 | 14,857,617 | 2,159,874 |
Commitments and contingencies | |||
Redeemable convertible preferred stock | 73,757,890 | 70,487,415 | |
Stockholders' equity (deficit): | |||
Common stock, value | 2,705 | 124 | 115 |
Additional paid-in capital | 125,465,315 | ||
Accumulated deficit | (92,157,753) | (86,218,753) | (66,554,870) |
Total stockholders' equity (deficit) | 33,310,267 | (86,218,629) | (66,554,755) |
Total liabilities, redeemable convertible preferred stock, and stockholders' equity (deficit) | $ 36,280,315 | 2,396,878 | 6,092,534 |
Series A Redeemable Convertible Preferred Stock [Member] | |||
Current liabilities: | |||
Redeemable convertible preferred stock | 7,016,515 | 7,119,204 | |
Series A1 Redeemable Convertible Preferred Stock [Member] | |||
Current liabilities: | |||
Redeemable convertible preferred stock | 40,897,311 | 39,016,008 | |
Series A2 Redeemable Convertible Preferred Stock [Member] | |||
Current liabilities: | |||
Redeemable convertible preferred stock | $ 25,844,064 | $ 24,352,203 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 17,440,436 | 17,140,478 |
Common stock, shares issued | 27,049,555 | 1,240,925 | 1,157,251 |
Common stock, shares outstanding | 27,049,555 | 1,240,925 | 1,157,251 |
Series A Redeemable Convertible Preferred Stock [Member] | |||
Redeemable convertible preferred stock, shares authorized | 1,326,147 | 1,326,147 | |
Redeemable convertible preferred stock, shares issued | 1,239,338 | 1,326,145 | |
Redeemable convertible preferred stock, shares outstanding | 1,239,338 | 1,326,145 | |
Series A1 Redeemable Convertible Preferred Stock [Member] | |||
Redeemable convertible preferred stock, shares authorized | 8,368,247 | 8,368,247 | |
Redeemable convertible preferred stock, shares issued | 8,289,663 | 8,368,230 | |
Redeemable convertible preferred stock, shares outstanding | 8,289,663 | 8,368,230 | |
Series A2 Redeemable Convertible Preferred Stock [Member] | |||
Redeemable convertible preferred stock, shares authorized | 4,660,573 | 4,489,169 | |
Redeemable convertible preferred stock, shares issued | 4,486,015 | 4,489,160 | |
Redeemable convertible preferred stock, shares outstanding | 4,486,015 | 4,489,160 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating expenses: | ||||
Research and development | $ 2,255,584 | $ 2,989,558 | $ 11,367,590 | $ 11,625,404 |
General and administrative | 2,504,001 | 1,215,885 | 5,265,995 | 5,861,151 |
Total operating expenses | 4,759,585 | 4,205,443 | 16,633,585 | 17,486,555 |
Loss from operations | (4,759,585) | (4,205,443) | (16,633,585) | (17,486,555) |
Grant income | 35,657 | 8,670 | 131,281 | 369,688 |
Interest (expense) income, net | (271,775) | 1,078 | (482,204) | 19,622 |
Other income, net | 997 | 997 | 27,022 | |
Total other (expense) income | (236,118) | 10,745 | (349,926) | 416,332 |
Net loss and comprehensive loss | (4,995,703) | (4,194,698) | (16,983,511) | (17,070,223) |
Reconciliation to net loss attributable to common stockholders: | ||||
Net loss and comprehensive loss | (4,995,703) | (4,194,698) | (16,983,511) | (17,070,223) |
Extinguishment of preferred stock | 224,224 | |||
Accretion of preferred stock to redemption value | (943,297) | (1,015,371) | (4,152,801) | (348,436) |
Net Loss attributable to common stockholders | $ (5,939,000) | $ (5,210,069) | $ (20,912,088) | $ (17,418,659) |
Net loss per share attributable to common stockholders, basic and diluted | $ (1.06) | $ (7.07) | $ (24.52) | $ (31.14) |
Weighted average number of common shares used in computing net loss per share attributable to common stockholders, basic and diluted | 5,605,151 | 737,016 | 852,665 | 559,419 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Stockholders Equity (Deficit) - USD ($) | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Series A Redeemable Convertible Preferred Stock [Member] | Series A1 Redeemable Convertible Preferred Stock [Member] | Series A2 Redeemable Convertible Preferred Stock [Member] | Redeemable Convertible Preferred Stock |
Redeemable convertible preferred stock, Balance at Dec. 31, 2014 | $ 70,138,979 | $ 6,754,096 | $ 40,180,140 | $ 23,204,743 | ||||
Redeemable convertible preferred stock, Balance, Shares at Dec. 31, 2014 | 1,326,145 | 8,368,230 | 4,489,160 | |||||
Redeemable convertible preferred stock, Adjustment of redeemable convertible preferred stock to redemption value | 348,436 | $ 365,108 | $ (1,164,132) | $ 1,147,460 | ||||
Redeemable convertible preferred stock, Balance at Dec. 31, 2015 | 70,487,415 | $ 7,119,204 | $ 39,016,008 | $ 24,352,203 | ||||
Redeemable convertible preferred stock, Balance, Shares at Dec. 31, 2015 | 1,326,145 | 8,368,230 | 4,489,160 | |||||
Balance at Dec. 31, 2014 | (49,608,942) | $ 115 | $ 49,609,057 | |||||
Balance, Shares at Dec. 31, 2014 | 1,153,235 | |||||||
Adjustment of redeemable convertible preferred stock to redemption value | (348,436) | $ (472,846) | 124,410 | |||||
Exercise of stock options | 3,000 | 3,000 | ||||||
Exercise of stock options, shares | 4,016 | |||||||
Share-based compensation expense | 469,846 | 469,846 | ||||||
Net loss | (17,070,223) | (17,070,223) | ||||||
Balance at Dec. 31, 2015 | (66,554,755) | $ 115 | (66,554,870) | |||||
Balance, Shares at Dec. 31, 2015 | 1,157,251 | |||||||
Redeemable convertible preferred stock, Adjustment of redeemable convertible preferred stock to redemption value | 4,152,801 | $ 379,777 | $ 2,263,804 | $ 1,509,220 | ||||
Redeemable convertible preferred stock, Conversion of preferred stock | (658,102) | $ (324,774) | $ (333,328) | |||||
Redeemable convertible preferred stock, Conversion of preferred stock, Shares | (57,877) | (68,191) | ||||||
Redeemable convertible preferred stock, Extinguishment of preferred stock | (224,224) | $ (157,692) | $ (49,173) | $ (17,359) | ||||
Redeemable convertible preferred stock, Extinguishment of preferred stock, shares | (28,930) | (10,376) | (3,145) | |||||
Redeemable convertible preferred stock, Balance at Dec. 31, 2016 | 73,757,890 | $ 7,016,515 | $ 40,897,311 | $ 25,844,064 | $ 73,757,890 | |||
Redeemable convertible preferred stock, Balance, Shares at Dec. 31, 2016 | 1,239,338 | 8,289,663 | 4,486,015 | 14,015,016 | ||||
Adjustment of redeemable convertible preferred stock to redemption value | (4,152,801) | (1,273,631) | (2,879,170) | |||||
Conversion of preferred stock | 658,102 | $ 6 | 658,096 | |||||
Conversion of preferred stock, shares | 61,803 | |||||||
Extinguishment of preferred stock | 224,224 | 25,426 | 198,798 | |||||
Conversion of convertible notes and accrued interest | 82,818 | 82,818 | ||||||
Exercise of stock options | $ 18,968 | $ 3 | 18,965 | |||||
Exercise of stock options, shares | 21,870 | 21,871 | ||||||
Share-based compensation expense | $ 488,326 | 488,326 | ||||||
Net loss | (16,983,511) | (16,983,511) | ||||||
Balance at Dec. 31, 2016 | (86,218,629) | $ 124 | (86,218,753) | |||||
Balance, Shares at Dec. 31, 2016 | 1,240,925 | |||||||
Redeemable convertible preferred stock, Adjustment of redeemable convertible preferred stock to redemption value | $ 943,297 | |||||||
Redeemable convertible preferred stock, Conversion of preferred stock | $ (74,701,187) | |||||||
Redeemable convertible preferred stock, Conversion of preferred stock, Shares | (14,015,016) | |||||||
Adjustment of redeemable convertible preferred stock to redemption value | (943,297) | (943,297) | ||||||
Conversion of preferred stock | 74,701,187 | $ 1,402 | 74,699,785 | |||||
Conversion of preferred stock, shares | 14,015,016 | |||||||
Conversion of convertible notes and accrued interest | 13,447,934 | $ 274 | 13,447,660 | |||||
Conversion of convertible notes and accrued interest, Shares | 2,744,059 | |||||||
Share exchange in connection with Merger | $ 100 | (100) | ||||||
Share exchange in connection with Merger, Shares | 1,000,000 | |||||||
Issuance of common stock, net of issuance costs | 37,163,390 | $ 805 | 37,162,585 | |||||
Issuance of common stock, net of issuance costs, Shares | 8,049,555 | |||||||
Share-based compensation expense | 155,385 | 155,385 | ||||||
Net loss | (4,995,703) | (4,995,703) | ||||||
Balance at Mar. 31, 2017 | $ 33,310,267 | $ 2,705 | $ 125,465,315 | $ (92,157,753) | ||||
Balance, Shares at Mar. 31, 2017 | 27,049,555 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating activities: | ||||
Net loss | $ (4,995,703) | $ (4,194,698) | $ (16,983,511) | $ (17,070,223) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation | 13,656 | 16,485 | 69,673 | 57,977 |
Stock-based compensation | 155,385 | 125,215 | 488,326 | 469,846 |
Amortization of debt issuance costs | 75,561 | 188,686 | ||
Interest expense related to convertible note conversion | 204,929 | 2,823 | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | (28,296) | 63,457 | 114,359 | (60,566) |
Prepaid expenses and current other assets | (337,174) | 214,040 | 90,404 | (210,106) |
Accounts payable and other current liabilities | 982,521 | (97,626) | ||
Accounts payable and accrued expenses | 311,096 | (1,071,610) | ||
Net cash used in operating activities | (3,929,121) | (3,873,127) | (15,718,144) | (17,884,682) |
Investing activities: | ||||
Purchase of furniture and equipment | (2,208) | (110,449) | (113,297) | (41,037) |
Net cash used in investing activities | (2,208) | (110,449) | (113,297) | (41,037) |
Financing activities: | ||||
Proceeds from exercise of stock options | 18,968 | 3,000 | ||
Proceeds from issuances of convertible notes | 297,354 | 12,542,203 | ||
Proceeds from sale of common stock | 40,247,775 | |||
Cash paid for debt issuance costs | (264,247) | |||
Cash paid in connection with the sale of common stock | (3,084,385) | |||
Net cash provided by financing activities | 37,460,744 | 12,296,924 | 3,000 | |
Net increase (decrease) in cash and cash equivalents | 33,529,415 | (3,983,576) | (3,534,517) | (17,922,719) |
Cash and cash equivalents at beginning of year | 1,609,694 | 5,144,211 | 5,144,211 | 23,066,930 |
Cash and cash equivalents, end of year | 35,139,109 | 1,160,635 | 1,609,694 | 5,144,211 |
Non-cash financing activities | ||||
Conversion of preferred stock into common stock | 74,701,187 | |||
Conversion of notes and accrued interest into common stock | 13,447,934 | |||
Accretion of preferred stock to redemption value | $ 943,297 | $ 1,015,371 | 4,152,801 | $ 348,436 |
Extinguishment of preferred stock | $ (224,224) |
Nature of Organization and Oper
Nature of Organization and Operations | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Nature of Organization and Operations | 1. Nature of Organization and Operations Aerpio Pharmaceuticals, Inc. (the “Company”) was incorporated as Zeta Acquisition Corp. II (“Zeta”) in the State of Delaware on November 16, 2007. Prior to the Merger, (as defined below), Zeta was a “shell company” (as defined in Rule 12b-2 On March 3, 2017, the Company’s Board of Directors, and on March 10, 2017, the Company’s pre-Merger On March 15, 2017, Zeta changed its name to Aerpio Pharmaceuticals, Inc. and its wholly-owned subsidiary, Aerpio Acquisition Corp., a corporation formed in the State of Delaware on March 3, 2017, merged with and into Aerpio Therapeutics, Inc., (“Aerpio”), (the “Merger”), a corporation incorporated on November 17, 2011 in the State of Delaware. Pursuant to the Merger, Aerpio remained as the surviving corporation and became the Company’s wholly-owned subsidiary. At the effective time of the Merger, the shares of the Aerpio’s (i) common stock issued and outstanding immediately prior to the closing of the Merger (including restricted common stock, whether vested or unvested, issued under the Aerpio’s 2011 Equity Incentive Plan), and (ii) redeemable convertible preferred stock issued and outstanding immediately prior to the closing of the Merger, were converted into shares of the Company’s common stock. In addition, immediately prior to the Merger, the outstanding amounts under certain Senior Secured Convertible Promissory Notes issued by Aerpio to its pre-Merger As a result of the Merger, the Company acquired the business of Aerpio and will continue the existing business operations of Aerpio as a public reporting company under the name Aerpio Pharmaceuticals, Inc. Immediately after the Merger, on March 15, 2017, Aerpio converted into a Delaware limited liability company (the “Conversion”). Immediately following the Conversion, the pre-Merger The Merger was treated as a recapitalization and reverse acquisition for financial reporting purposes. The Company is the legal acquirer of Aerpio in the transaction. However, Aerpio is considered the acquiring company for accounting purposes since (i) former Aerpio stockholders own in excess of 50% of the combined enterprise on a fully diluted basis immediately following the Merger and Offering, and (ii) all members of the Company’s executive management and Board of Directors are from Aerpio. In accordance with “reverse merger” or “reverse acquisition” accounting treatment, the unaudited condensed consolidated interim financial statements for the period ended March 31, 2017 include the accounts of the Company and its wholly owned subsidiary, Aerpio Therapeutics, LLC. The comparative historical financial statements for periods ended prior to the date of the Merger are the historical financial statements of Aerpio. Consequently, the assets and liabilities and the historical operations that are reflected in these condensed consolidated financial statements of the company are those of Aerpio, which were recorded at their historical cost basis. Unless otherwise indicated, all share and per share figures reflect the exchange of each 2.3336572 shares of Aerpio capital stock, convertible notes and share based awards, then outstanding, for 1 share of the Company’s common stock at the effective time of the Merger. The Company is a biopharmaceutical company focused on advancing first-in-class AKB-9778, tie-2 Tie-2 In addition, the Company has two pipeline programs. AKB-4924 ARP-1536, non-human AKB-4924 APR-1536 The Company’s operations to date have been limited to organizing and staffing the Company, business planning, raising capital, acquiring and developing its technology, identifying potential product candidates, and undertaking preclinical and clinical studies. The Company has not generated any revenues to date, nor is there any assurance of any future revenues. The Company’s product candidates are subject to long development cycles, and there is no assurance the Company will be able to successfully develop, obtain regulatory approval for, or market its product candidates. The Company is subject to a number of risks similar to other life science companies in the current stage of its life cycle, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of any of the Company’s products that are approved, and protection of proprietary technology. If the Company does not successfully commercialize any of its products or mitigate any of these other risks, it will be unable to generate revenue or achieve profitability. | 1. Nature of Organization and Operations Merger and Offering Aerpio Pharmaceuticals, Inc. (the “Company”) was incorporated as Zeta Acquisition Corp. II (“Zeta”) in the State of Delaware on November 16, 2007. Prior to the Merger, (as defined below), Zeta was a “shell company” (as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended). On March 3, 2017, the Company’s Board of Directors, and on March 10, 2017, the Company’s pre-Merger (as defined below) stockholders, approved an amended and restated certificate of incorporation, which, among other things, increased authorized capital stock from 100,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share, to 300,000,000 shares of common stock, par value $0.0001 per share, and 10,000,000 shares of preferred stock, par value $0.0001 per share. On March 15, 2017, Zeta changed its name to Aerpio Pharmaceuticals, Inc. and its wholly-owned subsidiary, Aerpio Acquisition Corp., a corporation formed in the State of Delaware on March 3, 2017, merged with and into Aerpio Therapeutics, Inc., (“Aerpio”), (the “Merger”), a corporation incorporated on November 17, 2011 in the State of Delaware. Aerpio was initially capitalized in December 2011 in a spinout transaction from Akebia Therapeutics, Inc. (Akebia) to enable more rapid development of its compounds. Pursuant to the Merger, Aerpio remained as the surviving corporation and became the Company’s wholly-owned subsidiary. At the effective time of the Merger, the shares of the Aerpio’s (i) common stock issued and outstanding immediately prior to the closing of the Merger (including restricted common stock, whether vested or unvested, issued under the Aerpio’s 2011 Equity Incentive Plan), and (ii) redeemable convertible preferred stock issued and outstanding immediately prior to the closing of the Merger, were converted into shares of the Company’s common stock. In addition, immediately prior to the Merger, the outstanding amounts under certain Senior Secured Convertible Promissory Notes issued by Aerpio to its pre-Merger noteholders were converted into shares of Aerpio’s preferred stock, which were then converted to shares of Aerpio’s common stock and subsequently were converted into shares of the Company’s common stock, together with the other shares of the Aerpio’s common stock described above. In addition, pursuant to the Merger Agreement options to purchase shares of the Aerpio’s common stock issued and outstanding immediately prior to the closing of the Merger were assumed and converted into options to purchase shares of the Company’s common stock. All the outstanding capital stock of Aerpio was converted into shares of the Company’s common stock on a 2.3336572:1 basis. As a result of the Merger, the Company acquired the business of Aerpio and will continue the existing business operations of Aerpio as a public reporting company under the name Aerpio Pharmaceuticals, Inc. Immediately after the Merger, on March 15, 2017, Aerpio converted into a Delaware limited liability company (the “Conversion”). Immediately following the Conversion, the pre-Merger stockholders of Zeta surrendered for cancellation 4,000,000 of the 5,000,000 shares of the outstanding common stock of Zeta, (the “Share Cancellation”). Following the Share Cancellation, on March 15, 2017, the Company closed a private placement offering (the “Offering”) of 8,049,555 shares of the Company’s common stock, at a purchase price of $5.00 per share, for net proceeds of approximately $37.2 million and the issuance of warrants with a term of three years, to purchase 317,562 shares of the Company’s common stock at an exercise price of $5.00 per share. The Merger was treated as a recapitalization and reverse acquisition for financial reporting purposes. The Company is the legal acquirer of Aerpio in the transaction. However, Aerpio is considered the acquiring company for accounting purposes since (i) former Aerpio stockholders own in excess of 50% of the combined enterprise on a fully diluted basis immediately following the Merger and Offering, and (ii) all members of the Company’s executive management and Board of Directors are from Aerpio. In accordance with “reverse merger” or “reverse acquisition” accounting treatment, the consolidated financial statements as of and for each of the years ended December 31, 2016 and 2015 are the historical financial statements of Aerpio. Consequently, the assets and liabilities and the historical operations that are reflected in these consolidated financial statements are those of Aerpio, which were recorded at their historical cost basis. Unless otherwise indicated, all share and per share figures reflect the exchange of each 2.3336572 shares of Aerpio capital stock, convertible notes and share based awards, then outstanding, for 1 share of the Company’s common stock at the effective time of the Merger. Operations Background The Company is a biopharmaceutical company focused on advancing first-in-class treatments for ocular disease. The Company’s lead product candidate, AKB-9778, a small molecule activator of the tie-2 pathway, is being developed for the treatment of diabetic retinopathy (“DR”). Tie-2 signaling is essential for regulating blood vessel development and the stability of mature vessels. The Company has completed a Phase 2a clinical trial in diabetic macular edema (“DME”), a swelling of the retina that is a common cause of vision loss in patients with DR and intends to initiate a twelve month, double blind Phase 2b clinical trial in patients with DR who have not developed more serious complications such as DME or proliferative diabetic retinopathy. The DR clinical trial will be initiated in the second quarter of 2017. In addition, the Company has two pipeline programs. AKB-4924 is a drug candidate for the treatment of inflammatory bowel disease and ARP-1536, humanized monoclonal antibody is a drug candidate for ocular disease. Humanized antibodies are antibodies from non-human species whose protein sequences have been modified to increase their similarity to antibodies produced naturally in humans. The Company completed a Phase 1a clinical trial in healthy volunteers for AKB-4924 and APR-1536 is currently in preclinical development. Further development on the pipeline programs is subject to receiving additional funding, which the Company may seek through collaborations with potential strategic and commercial partners. The Company’s operations to date have been limited to organizing and staffing the Company, business planning, raising capital, acquiring and developing its technology, identifying potential product candidates, and undertaking preclinical and clinical studies. The Company has not generated any revenues to date, nor is there any assurance of any future revenues. The Company’s product candidates are subject to long development cycles, and there is no assurance the Company will be able to successfully develop, obtain regulatory approval for, or market its product candidates. The Company is subject to a number of risks similar to other life science companies in the current stage of its life cycle, including, but not limited to, the need to obtain adequate additional funding, possible failure of preclinical testing or clinical trials, the need to obtain marketing approval for its product candidates, competitors developing new technological innovations, the need to successfully commercialize and gain market acceptance of any of the Company’s products that are approved, and protection of proprietary technology. If the Company does not successfully commercialize any of its products or mitigate any of these other risks, it will be unable to generate revenue or achieve profitability. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Securities and Exchange Commission (SEC) regulations and include all of the information and disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP” or “GAAP”) for interim financial reporting, and, in the opinion of management include all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for each period presented. All adjustments are of a normal and recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Aerpio Pharmaceuticals, Inc. and related footnotes for the year ended December 31, 2016, included in the Company’s Registration Statement on Form S-1. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics. All the assets and operations of the Company’s sole operating segment are located in the United States of America. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: fair value of the Company’s common stock and other equity instruments, accrued expenses, and income taxes. The Company utilizes significant estimates and assumptions in determining the fair value of its common stock and other equity instruments. The Company granted stock options at exercise prices not less than the fair value of its common stock, as determined by the Board of Directors contemporaneously at the date such grants were made. The Board of Directors has determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event, such as a public offering or sale of the Company. Historically, the Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation The Company’s results can also be affected by economic, political, legislative, regulatory, and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims, or proceedings. Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits, and funds invested in short-term investments with remaining maturities of three months or less at the time of purchase. The Company may maintain balances with its banks in excess of federally insured limits. Short-Term Investments Time deposits with remaining maturities of greater than three months but less than one year at the time of purchase are classified as short-term investments in the accompanying balance sheets. Grant Income Grant income is recognized as earned based on contract work performed. Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel, and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants; (iii) the cost of acquiring, developing, and manufacturing clinical study materials; (iv) facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and laboratory and other supplies; and (v) costs associated with preclinical activities and regulatory operations. The Company enters into consulting, research, and other agreements with commercial firms, researchers, universities, and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project, or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 740, Income Taxes The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of March 31, 2017, and December 31, 2016, the Company does not have any significant uncertain tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense. Net Loss per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, convertible notes payable, stock options to purchase common stock, warrants, and unvested restricted stock awards are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share were the same for all periods presented. For all periods presented, all share and per share amounts have been retrospectively adjusted to reflect the exchange of each 2.3336572 shares of Aerpio capital stock and share based awards then outstanding, for 1 share of the Company’s common stock at the effective time of the Merger. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation Due to the lack of a public market for the trading of the Company’s common stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment non-employees. Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. Awards to non-employees Fair Value of Financial Instruments The Company’s financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The Company values cash equivalents using quoted market prices. The valuation technique used to measure the fair value of short-term investments was based on net asset values corroborated with observable market data. The fair value of accounts receivable and accounts payable approximate the carrying value because of their short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy in the three months ended March 31, 2017 or March 31, 2016. The assets of the Company measured on a recurring basis as of March 31, 2017 and December 31, 2016 basis are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total March 31, 2017 Assets: Cash and cash equivalents $ 35,139,109 $ — $ — $ 35,139,109 Short-term investments — 50,000 — 50,000 Total assets $ 35,139,109 $ 50,000 $ — $ 35,189,109 December 31, 2016 Assets: Cash and cash equivalents $ 1,609,694 $ — $ — $ 1,609,694 Short-term investments — 50,000 — 50,000 $ 1,609,694 $ 50,000 $ — $ 1,659,694 Concentrations of Credit Risk and Off-Balance Cash and cash equivalents and short-term investments are the only financial instruments that potentially subject the Company to concentrations of credit risk. At March 31, 2017 and December 31, 2016, all the Company’s cash was deposited in accounts at two principal financial institutions. The Company maintains its cash and cash equivalents and short-term investments with a high-quality, accredited financial institution and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of property, plant, and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). Research and Development Costs Research and development costs are expensed as incurred. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In March 2016, the FASB issued ASU 2016-09, In February 2016, the FASB issued ASU 2016-02, Leases right-of-use | 2. Summary of Significant Accounting Policies Basis of Presentation The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and stated in U.S. dollars. Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics in vascular disorders of the eye. All of the assets and operations of the Company’s sole operating segment are located in the United States of America. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: fair value of the Company’s common stock and other equity instruments, accrued expenses, and income taxes. The Company utilizes significant estimates and assumptions in determining the fair value of its common stock and other equity instruments. The Company granted stock options at exercise prices not less than the fair value of its common stock, as determined by the Board of Directors contemporaneously at the date such grants were made. The Board of Directors has determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event, such as a public offering or sale of the Company. The Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation The Company’s results can also be affected by economic, political, legislative, regulatory, and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims, or proceedings. Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits, and funds invested in short-term investments with remaining maturities of three months or less at the time of purchase. The Company may maintain balances with its banks in excess of federally insured limits. Short-Term Investments Time deposits with remaining maturities of greater than three months but less than one year at the time of purchase are classified as short-term investments in the accompanying balance sheets. Grant Income Grant income is recognized as earned based on contract work performed. Grant income also includes qualifying therapeutic credits from the U.S. Treasury related to discovery projects. Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel, and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants; (iii) the cost of acquiring, developing, and manufacturing clinical study materials; (iv) facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and laboratory and other supplies; and (v) costs associated with preclinical activities and regulatory operations. The Company enters into consulting, research, and other agreements with commercial firms, researchers, universities, and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project, or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2016 and 2015, the Company does not have any significant uncertain tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense. Net Loss per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, stock options to purchase common stock, and restricted stock awards are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share were the same for all periods presented. For all periods presented, all share and per share amounts have been retrospectively adjusted to reflect the exchange of each 2.3336572 shares of Aerpio capital stock and share based awards then outstanding, for 1 share of the Company’s common stock at the effective time of the Merger. Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation Due to the lack of a public market for the trading of the Company’s Common Stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. Awards to non-employees are adjusted through share-based compensation expense as the award vests to reflect the current fair value of such awards and are expensed using an accelerated attribution model. Fair Value of Financial Instruments The Company’s financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The Company values cash equivalents using quoted market prices. The valuation technique used to measure the fair value of short-term investments was based on net asset values corroborated with observable market data. The fair value of accounts receivable and accounts payable approximate the carrying value because of their short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy in 2016 or 2015. Based on the fair value hierarchy, assets measured or disclosed at fair value on a recurring basis are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2016 Assets: Cash and cash equivalents $ 1,609,694 $ — $ — $ 1,609,694 Short-term investments — 50,000 — 50,000 Total assets $ 1,609,694 $ 50,000 $ — $ 1,659,694 December 31, 2015 Assets: Cash and cash equivalents $ 5,144,211 $ — $ — $ 5,144,211 Short-term investments — 50,000 — 50,000 $ 5,144,211 $ 50,000 $ — $ 5,194,211 Concentrations of Credit Risk and Off-Balance Sheet Risk Cash and cash equivalents and short-term investments are the only financial instruments that potentially subject the Company to concentrations of credit risk. At December 31, 2016 and 2015, all of the Company’s cash was deposited in accounts at two principal financial institutions. The Company maintains its cash and cash equivalents and short-term investments with a high-quality, accredited financial institution and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, if any. Comprehensive loss equaled net loss for all periods presented. Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of property, plant, and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). Research and Development Costs Research and development costs are expensed as incurred. Reclassifications Certain prior year balances in the balance sheet have been reclassified to conform to the current year presentation. The reclassifications were not material to the financial statements. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes |
Related-Party Arrangements
Related-Party Arrangements | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | ||
Related-Party Arrangements | 3. Related-Party Arrangements Aerpio was initially capitalized in December 2011 in a spinout transaction from Akebia Therapeutics, Inc. (Akebia) to enable more rapid development of its compounds. In connection with the spinout of Aerpio from Akebia, the companies entered into shared services agreements. Under the terms of the shared services agreements, Akebia and Aerpio obtained from and provided to each other certain services, as outlined below. These agreements were expired at December 31, 2016. Below is a summary of the activities included in the statements of operations and comprehensive loss: Three Months Ended March 31, Activity Financial Statement Caption 2017 2016 Akebia related employee costs Research and development operating expenses $ — $ 12,923 Facility-related reimbursement Other income, net — 997 | 3. Related-Party Arrangements On December 22, 2011, in connection with the spinout of the Company from Akebia, the Company’s former parent company, Akebia assigned certain assets and liabilities to the Company. In connection with the spinout of Aerpio from Akebia, the companies entered into shared services agreements. Under the terms of the shared services agreements, Akebia and Aerpio obtain from and provide to each other certain services, as outlined below. These agreements are cancelable upon mutual agreement or a sale of either company. Below is a summary of the activities included in the statements of operations and comprehensive loss: Year Ended Activity Financial Statement Caption 2016 2015 Payments to Akebia for employee costs Research and development operating expenses $ 31,246 $ 263,501 Payments from Akebia for facility-related charges and employee costs Other income, net 997 27,022 A summary of Akebia receivables and payables included in the accompanying balance sheets are as follow: December 31 Activity Financial Statement Caption 2016 2015 Amounts receivable from Akebia Accounts receivable $ — $ 997 Amounts payable to Akebia Accounts payable — 15,173 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Payables and Accruals [Abstract] | ||
Accounts Payable and Accrued Expenses | 4. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are as follows: March 31, December 31, Accounts payable $ 1,871,662 $ 1,135,608 Professional fees 300,356 200,468 Accrued bonus 125,576 — Accrued interest — 483,442 Accrued vacation 106,199 52,835 Accrued project costs 510,828 541,158 Other 55,427 57,459 Total accounts payable and accrued expenses $ 2,970,048 $ 2,470,970 | 5. Accounts Payable and Accrued Expenses Accounts payable and accrued expenses are as follows: December 31 2016 2015 Accounts payable $ 1,135,608 $ 890,610 Professional fees 200,468 126,722 Accrued bonus — 380,020 Accrued interest 483,442 — Accrued vacation 52,835 56,796 Accrued project costs 541,158 696,158 Other 57,459 9,568 Total accounts payable and accrued expenses $ 2,470,970 $ 2,159,874 |
Notes Payable to Investors
Notes Payable to Investors | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Debt Disclosure [Abstract] | ||
Notes Payable to Investors | 5. Notes Payable to Investors In March 2016, Aerpio entered into a senior secured convertible note financing (the “Convertible Notes” or the “Convertible Note Financing”) totaling approximately $9,000,000, with certain preferred investors of Aerpio. All preferred investors were invited to participate in the Convertible Notes Financing. At March 31, 2017 and December 31, 2016 the unamortized debt issuance costs related to Convertible Note financings was $0 and $75,561. In connection with the Convertible Note Financing, Aerpio’s Articles of Incorporation were amended such that any Aerpio preferred that did not participate in the Aerpio Convertible Note Financing would have their respective shares of Aerpio preferred stock automatically converted into Aerpio common stock using a 3-to-1 The Convertible Note Financing had two separate closings of approximately $4,500,000 each on April 14, 2016 and July 15, 2016. Certain Aerpio preferred stockholders chose not to participate in the Aerpio Convertible Note Financing and their respective Aerpio preferred stock was converted into shares of Aerpio common stock in April 2016 in accordance with the terms of the Articles of Incorporation. Aerpio treated this as an extinguishment of its preferred stock. The Convertible Notes accrued interest at 8% per annum, compounded annually. The Company incurred $138,312 of costs in association with the issuance of the Convertible Notes that was amortized over the seven-month expected life of the Convertible Notes, from the date of execution (March 31, 2016). The Convertible Notes were also subject to mandatory prepayment upon the occurrence of certain events, such as a liquidation, dissolution, or the sale of Aerpio. In addition, and prior to maturity, the Convertible Notes were automatically convertible into shares of Aerpio capital stock upon the occurrence of a sale of Aerpio’s capital stock in a single transaction resulting in gross proceeds to Aerpio of $30,000,000 (hereinafter referred to as an “Investor Sale”). The type and class of Aerpio capital stock of to be issued to the holder of each Convertible Note upon conversion would have been identical to the type and class of Aerpio capital stock issued in the Investor Sale. The holder of each Convertible Note was entitled to a number of shares of Aerpio capital determined by dividing (i) the outstanding principal amount of the Convertible Note plus any unpaid accrued interest by (ii) an amount equal to the price per share of Aerpio capital stock paid by the purchasers of such shares in connection with the Investor Sale. The Convertible Notes were secured by a first priority perfected security interest in all of the Aerpio’s assets. In October 2016 and February 2017, Aerpio executed an additional senior secured Convertible Note financings (the “Additional Convertible Notes” or the “Additional Convertible Note Financings”) totaling approximately $3,500,000 and $300,000 respectively, with certain preferred investors of Aerpio. The terms of the Additional Convertible Notes are identical to the Convertible Notes and are treated as extensions of the original Convertible Note Financing. The Company incurred $125,935 of costs associated with these transactions, which were amortized to the maturity date of March 31, 2017. In connection with the Additional Convertible Note Financings, the Convertible Notes were amended and their respective maturity dates were extended from October 31, 2016 to March 31, 2017. The amendments are accounted for as a modification for accounting purposes. In connection with the Merger (Note 1) the Convertible Notes and accrued interest were converted into the Company’s common stock. | 6. Notes Payable to Investors In March 2016, Aerpio entered into a senior secured convertible note financing (the Convertible Notes or Convertible Note Financing) totaling $9,000,000, with certain preferred investors of Aerpio. All preferred investors were invited to participate in the Convertible Notes Financing. In connection with the Convertible Note Financing, Aerpio’s Articles of Incorporation were amended such that any Aerpio preferred stockholder that did not participate in the Convertible Note Financing would have their respective shares of Aerpio preferred stock automatically converted into Aerpio’s common stock using a 3-to-1 conversion ratio and such Aerpio preferred stockholders would lose the right to representation on Aerpio’s Board of Directors and other preferred rights. The Convertible Note Financing had two separate closings of $4,500,000 each on April 14, 2016 and July 15, 2016. Certain Aerpio Preferred Stockholders chose not to participate in the Convertible Note Financing and their respective Aerpio preferred stock was converted into shares of Aerpio’s common stock in April 2016 in accordance with the terms of Aerpio’s Articles of Incorporation. Aerpio treated this as an extinguishment of its preferred stock. The Convertible Notes accrue interest at 8% per annum, compounded annually. Aerpio incurred $138,312 of costs in association with the issuance of the Convertible Notes that was amortized over the seven month expected life of the Convertible Notes from the date of issuance (October 31, 2016). The Convertible Notes are also subject to mandatory prepayment upon the occurrence of certain events, such as a liquidation, dissolution, or sale of Aerpio. In addition and prior to maturity, the Convertible Notes are automatically convertible into shares of capital stock of Aerpio upon the occurrence of a sale of Aerpio’s capital stock in a single transaction resulting in gross proceeds to Aerpio of $30,000,000 (hereinafter referred to as an “Investor Sale”). The type and class of capital stock of Aerpio to be issued to the holder of each Convertible Note upon conversion shall be identical to the type and class of the Aerpio capital stock issued in the Investor Sale. The holder of each Convertible Note will be entitled to a number of shares of capital determined by dividing (i) the outstanding principal amount of the Convertible Note plus any unpaid accrued interest by (ii) an amount equal to the price per share of Aerpio capital stock paid by the purchasers of such shares in connection with the Investor Sale. The Convertible Notes are secured by a first priority perfected security interest in all of Aerpio’s assets. In October 2016, Aerpio executed an additional senior secured Convertible Note financing (the October Convertible Notes or October Convertible Note Financing) totaling $3,500,000 with a certain preferred investors of Aerpio. The terms of the October Convertible Notes are identical to the Convertible Notes and are treated as an extension of the original Convertible Note Financing. Aerpio incurred $125,935 of costs associated with this transaction which will be amortized to the maturity date of March 31, 2017. In connection with the October Convertible Note Financing, the Convertible Notes were amended and their respective maturity dates were extended from October 31, 2016 to March 31, 2017. The amendments are accounted for as a modification for accounting purposes. |
Common Stock
Common Stock | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||
Common Stock | 6. Common Stock As of March 31, 2017, and December 31, 2016, the Company had 300,000,000 and 17,440,436 shares, respectively, of authorized common stock with par value of $0.0001 per share. On March 15, 2017, in connection with the Merger, (Note 1) all the outstanding redeemable convertible preferred stock, was converted into 14,015,016 shares of the Company’s common stock and the Convertible Notes, both principal and accrued interest, were converted into 2,744,059 shares of the Company’s common stock. The common stock has the following characteristics. Voting The holders of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders and written actions in lieu of meetings. Dividends The holders of common stock are entitled to receive dividends, if and when declared by the Board of Directors. Since the Company’s inception, no dividends have been declared or paid to the holders of common stock. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up Lock-up In connection with the Merger, each of the Company’s executive officers, directors, stockholders holding substantially all of the shares of common stock issued in exchange for shares held in Aerpio immediately prior to the Merger, certain other stockholders, and certain key employees, (the “Restricted Holders”), holding at the closing date of the Merger (the “Closing Date”) an aggregate of approximately 18.9 million shares of common stock, entered into lock-up “Lock-Up “Lock-Up”). In addition, each Restricted Holder and any stockholders holding or beneficially owning 1% or more of our common stock after giving effect to the Merger, agreed, for a period of 12 months following the Closing Date, that it will not, directly or indirectly, effect or agree to effect any short sale (as defined in Rule 200 under Regulation SHO of the Exchange Act), whether or not against the box, establish any “put equivalent position” (as defined in Rule 16a-1(h) pre-borrow Anti-dilution protection Investors in the Offering have anti-dilution protection with respect to the shares of the Company’s common stock sold in the Offering such that if within six (6) months after the initial closing of the Offering the Company issues additional shares of common stock or common stock equivalents (subject to certain exceptions), for consideration per share less than the Offering Price, or the Lower Price, each such investor will be entitled to receive from the Company additional shares of common stock in an amount such that, when added to the number of shares of common stock initially purchased by such investor and still held of record and beneficially owned by such investor at the time of the dilutive issuance, or the Held Shares, will equal the number of shares of common stock that such investor’s Offering subscription amount for the Held Shares would have purchased at the Lower Price. Either (i) holders of a majority of the then-held Held Shares or (ii) a representative of the holders of the then-held Held Shares, which representative shall be appointed by three (3) investors who then hold the largest number of Held Shares, may waive the anti-dilution rights of all Offering investors with respect to a particular issuance by the Company. These anti-dilution rights were determined not to be a freestanding financial instrument and do not meet the definition of a derivative. Accordingly, the anti-dilution rights are embedded into the shares of the Company’s common stock and do not require separate accounting at March 31, 2017. Warrants to Purchase Common Stock At March 31, 2017, the Company had warrants outstanding for the purchase of 317,562 shares of the Company’s common stock at an exercise price of $5.00 per share. The warrants have a three-year term and expire on March 15, 2020. The Warrants were issued in connection with the Offering. At the expiration date of the warrant, if the fair value of the Company’s common stock exceeds the exercise price, the warrant will be automatically exercised and the exercise price will be fulfilled through the net share settlement provisions. The number of shares and the exercise price shall be adjusted for standard ant-dilution | 8. Common Stock As of December 31, 2016, Aerpio had 17,440,436 shares of authorized Aerpio common stock with par value of $0.0001 per share. All share and per share amounts are on an as converted basis to reflect the effect of the Merger. The voting, dividend, and liquidation rights of the holders of Aerpio common stock are subject to and qualified by the rights, powers, and preferences of the holders of Preferred Stock. The Aerpio common stock has the following characteristics prior to the Merger. Voting The holders of Aerpio common stock are entitled to one vote for each share of Aerpio common stock held at all meetings of stockholders and written actions in lieu of meetings. Notwithstanding the foregoing, except as otherwise required by law, holders of Aerpio common stock shall not be entitled to vote on any amendment to the certificate of incorporation that relates solely to the terms of one or more outstanding series of Preferred Stock or pursuant to General Corporation Law. Dividends The holders of Aerpio common stock are entitled to receive dividends, if and when declared by the Aerpio Board of Directors. Aerpio may not declare or pay any cash dividends to the holders of Aerpio common stock unless, in addition to obtaining any necessary consents, dividends are paid on each series of Preferred Stock in accordance with their respective terms. Since Aerpio’s inception, no dividends have been declared or paid to the holders of Aerpio common stock. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of Aerpio, the holders of Aerpio common stock are entitled to share ratably in Aerpio’s assets available for distribution to stockholders after payment to the holders of Preferred Stock of their liquidation preferences have been satisfied. Common Stock Reserved for Future Issuance As of December 31, 2016, Aerpio has reserved the following shares of Aerpio common stock for future issuance: Conversion of Series A Preferred Stock 1,239,338 Conversion of Series A1 Preferred Stock 8,289,663 Conversion of Series A2 Preferred Stock 4,486,015 Conversion of unvested restricted stock awards 241,096 Exercise of options to purchase Aerpio common stock 927,593 Total 15,183,705 |
Preferred Stock
Preferred Stock | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Equity [Abstract] | ||
Preferred Stock | 7. Preferred Stock At March 31, 2017, the Company had 10,000,000 shares of preferred stock, par value $0.0001 per share, in authorized capital. No preferred stock was issued and outstanding at March 31, 2017. In connection with the Merger (Note 1), all the Aerpio redeemable convertible preferred stock issued and outstanding prior to the Merger was converted into shares of the Company’s common stock. At December 31, 2016, Aerpio’s redeemable convertible preferred stock consisted of the following: • Series A redeemable convertible preferred stock: 1,326,147 shares authorized and 1,239,338 shares issued and outstanding; • Series A1 redeemable convertible preferred stock: 8,368,247 shares authorized and 8,289,663 shares issued and outstanding; and • Series A2 redeemable convertible preferred stock: 4,660,573 shares authorized and 4,486,015 shares issued and outstanding. All share and per share amounts are on an as converted basis to reflect the effect of the Merger. The rights, preferences, and privileges of the redeemable convertible preferred stock issued and outstanding prior to the Merger were as follows: Voting The holders of redeemable convertible preferred stock were entitled to the number of votes equal to the number of whole shares of Aerpio common stock into which the shares of redeemable convertible preferred stock were convertible. Except as provided by law or otherwise, the holders of redeemable convertible preferred stock voted together with the holders of Aerpio common stock as a single class. Certain significant actions required approval by at least 50% of the holders of redeemable convertible preferred stock voting as a single class on an as converted basis. Such significant actions include significant asset transfers, acquisitions, liquidation, amendments to the certificate of incorporation, new indebtedness, repurchase of common stock, changes in the authorized numbers of directors constituting the Board of Directors, and the declaration of dividends. The holders of shares of redeemable convertible preferred stock were entitled to elect six members of Aerpio’s Board of Directors, which was subject to reduction to not less than four directors under certain circumstances. The holders of Aerpio common stock (including any holders of all shares of redeemable convertible preferred stock on an as converted basis) were entitled to elect two members of Aerpio’s Board of Directors, which was subject to reduction to one director under certain circumstances. Dividends Dividends were payable, if permitted by law, in accordance with redeemable convertible preferred stock terms or when and if declared by Aerpio Board of Directors. Prior to the issuance of Series A2 Preferred Stock, dividends on Series A Preferred Stock and Series A1 Preferred Stock were cumulative and accrued daily at a rate of 6% per annum whether or not declared. As part of the Series A2 Preferred Stock issuance, the dividend provisions for Series A Preferred Stock and Series A1 Preferred Stock were retrospectively amended to be noncumulative with the cumulative provision to begin after the Series A2 Preferred Stock issuance date at a rate of 6% per annum. This amendment did not significantly affect the nature of the Series A Preferred Stock and Series A1 Preferred Stock or their fair value. Accordingly, the amendment was treated as a modification for accounting purposes. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up In the event the assets of Aerpio available for distribution to stockholders were insufficient to pay the full amount to which the holder was entitled, the holders of Series A2 Preferred Stock and Series A1 Preferred Stock would share ratably any assets available for distribution in proportion to their relative original investment amounts. Any remaining assets of Aerpio would be distributed ratably among the holders of Series A Preferred Stock based upon aggregate applicable dividends accrued on Series A Preferred Stock not previously paid. After the payment of all preferential amounts required to be paid to the holders of redeemable convertible preferred stock, the remaining assets available for distribution would be distributed among the holders of redeemable convertible preferred stock and Aerpio common stock based on the pro rata number of shares held by each holder, treating such securities as if they had been converted to Aerpio common stock immediately prior to such dissolution, liquidation, or winding-up Conversion Each share of redeemable convertible preferred stock was convertible at the option of the holder, at any time and from time to time, into fully paid and non-assessable Each share of redeemable convertible preferred stock was automatically convertible into fully paid and non-assessable as-converted Aerpio evaluated each series of its redeemable convertible preferred stock and determined that each individual series is considered an equity host under ASC Topic 815, Derivatives and Hedging. In making this determination, Aerpio’s analysis followed the whole instrument approach, which compares an individual feature against the entire redeemable convertible preferred stock instrument that includes that feature. Aerpio’s analysis was based on a consideration of the economic characteristics and risks of each series of redeemable convertible preferred stock. More specifically, Aerpio evaluated all the stated and implied substantive terms and features, including: (i) whether the redeemable convertible preferred stock included redemption features, (ii) how and when any redemption features could be exercised, (iii) whether the holders of redeemable convertible preferred stock were entitled to dividends, (iv) the voting rights of the redeemable convertible preferred stock, and (v) the existence and nature of any conversion rights. Aerpio concluded that as the redeemable convertible preferred stock represents an equity host, the conversion feature included in all series of redeemable convertible preferred stock is clearly and closely related to the associated host instrument. Accordingly, the conversion feature of all series of redeemable convertible preferred stock was not considered an embedded derivative that required bifurcation. Aerpio accounted for potentially beneficial conversion features under ASC Topic 470-20, In March 2016, in connection with the Convertible Note Financing described more fully in Note 5, Aerpio’s Articles of Incorporation were amended such that any preferred stockholder that did not participate in the Convertible Note Financing would have their respective shares of redeemable convertible preferred stock automatically converted into Aerpio common stock using a 3-to-1 Redemption The redeemable convertible preferred stock was redeemable on or after July 31, 2017, upon a request by more than 50% of the holders of redeemable convertible preferred stock then outstanding, payable in three annual installments commencing not more than 60 days following receipt by notice at a price equal to the greater of (i) the applicable original purchase price and dividends accrued but unpaid (Applicable Accrued Value), which is equal to its liquidation preference, or (ii) the redeemable convertible preferred stock fair value per share. Due to this redemption option, the redeemable convertible preferred stock was recorded in the mezzanine equity and subject to subsequent measurement under the guidance provided under ASC 480-10-S99. | 7. Redeemable Convertible Preferred Stock All share and per share amounts are on an as converted basis to reflect the effect of the Merger. The rights, preferences, and privileges of the redeemable convertible preferred stock issued and outstanding prior to the Merger follows. On December 23, 2011, Aerpio issued 1,326,147 shares of $.00001 par value of Series A Redeemable Convertible Preferred Stock (Series A Preferred Stock) to Akebia’s stockholders in exchange for the assignment of certain development programs and related intellectual property, assets, and liabilities as part of the spinout from Akebia (see Note 3). The Company’s Series A Preferred Stock and common stock were distributed to Akebia’s stockholders as a distribution on the basis of 0.4285120 share of Aerpio’s Series A Preferred Stock for every 35 shares of Akebia’s Series A Preferred Stock, 0.4285120 share of Aerpio’s Series A Preferred Stock for every 100 shares of Akebia’s Series B Preferred Stock, and 0.4285120 share of Aerpio’s Common Stock for every 175 shares of Akebia’s Common Stock. On August 28, 2012, Aerpio issued 2,520,658 shares of $.00001 par value of Series A1 Redeemable Convertible Preferred Stock (Series A1 Preferred Stock) at $3.97 per share for gross proceeds of $10,000,000, less issuance costs of $210,638, for net proceeds to Aerpio of $9,789,362. In connection with the financing, Aerpio exchanged its then outstanding convertible promissory notes and accrued interest into 1,562,469 shares of Series A1 Preferred Stock. The exchange was pursuant to the contractual provisions of the promissory notes and was accounted for as an extinguishment and share-settled redemption. In August and November 2013, Aerpio issued 2,016,526 and 2,268,594 shares, respectively, of Series A1 Preferred Stock at $3.97 for gross proceeds of $8,000,000 and $9,000,000, respectively, and incurred total issuance costs of $94,326. On April 22, 2014, Aerpio issued 4,489,169 shares of $.00001 par value Series A2 Redeemable Convertible Preferred Stock (Series A2 Preferred Stock) at $4.90 per share for total gross proceeds of $22,000,000. Aerpio incurred issuance costs of $168,648 for net proceeds to Aerpio of $21,831,352. In March 2016, in connection with the Convertible Note Financing described more fully in Note 6, Aerpio’s Articles of Incorporation were amended such that any Aerpio Preferred Stockholder that did not participate in the Convertible Note Financing would have their respective shares of Aerpio Preferred Stock automatically converted into Aerpio common stock using a 3-to-1 conversion ratio and such Aerpio Preferred Stockholders would lose the right to representation on Aerpio’s Board of Directors and other preferred rights. The amendment did not represent an increase in value to the Aerpio preferred stockholders and was treated as a modification to the Aerpio Preferred Stock for accounting purposes. Certain shares of redeemable convertible preferred stock held by Aerpio’s Preferred Stockholders that elected to not participate in the Convertible Note Financing were converted to shares in Aerpio’s common stock. The rights, preferences, and privileges of Aerpio’s Preferred Stock are as follows: Voting The holders of Aerpio’s Preferred Stock are entitled to the number of votes equal to the number of whole shares of Aerpio common stock into which the shares of Aerpio Preferred Stock are convertible. Except as provided by law or otherwise, the holders of Aerpio’s Preferred Stock vote together with the holders of Aerpio’s common stock as a single class. Certain significant actions must be approved by at least 50% of the holders of Aerpio’s Preferred Stock voting as a single class on an as converted basis. Such significant actions include significant asset transfers, acquisitions, liquidation, amendments to the certificate of incorporation, new indebtedness, repurchase of Aerpio common stock, changes in the authorized numbers of directors constituting the Aerpio Board of Directors, and the declaration of dividends. The holders of shares of Aerpio’s Preferred Stock are entitled to elect six members of Aerpio’s Board of Directors, which is subject to reduction to not less than four directors under certain circumstances. The holders of shares of Aerpio common stock (including any holders of all shares of Aerpio Preferred Stock on an as converted basis) are entitled to elect two members of Aerpio’s Board of Directors, which is subject to reduction to one director under certain circumstances. Dividends Dividends are payable, if permitted by law, in accordance with Preferred Stock terms or when and if declared by Aerpio’s Board of Directors. Prior to the issuance of Series A2 Preferred Stock, dividends on Series A Preferred Stock and Series A1 Preferred Stock were cumulative and accrued daily at a rate of 6% per annum whether or not declared. As part of the Series A2 Preferred Stock issuance, the dividend provisions for Series A Preferred Stock and Series A1 Preferred Stock were retrospectively amended to be noncumulative with the cumulative provision to begin after the Series A2 Preferred Stock issuance date at a rate of 6% per annum. This amendment did not significantly affect the nature of the Series A Preferred Stock and Series A1 Preferred Stock or their fair value. Accordingly, the amendment was treated as a modification for accounting purposes. Liquidation In the event of any voluntary or involuntary liquidation, dissolution, or winding-up of Aerpio, or upon the occurrence of a Deemed Liquidation Event, as defined, at the election of more than 50% of the holders of Series A2 Preferred Stock and Series A1 Preferred Stock, those holders are entitled to be paid, in preference to the holders of Series A Preferred Stock and Aerpio common stock, out of the assets of Aerpio available for distribution at $4.90 per share for Series A2 Preferred Stock and $3.97 per share for Series A1 Preferred Stock, plus any accrued but unpaid dividends. After the holders of Series A1 Preferred Stock and Series A2 Preferred Stock are satisfied, the holders of Series A Preferred Stock are paid at $4.27 per share, plus any accrued but unpaid dividends before any payment is made to the holders of Aerpio common stock. In the event the assets of Aerpio available for distribution to stockholders are insufficient to pay the full amount to which the holder are entitled, the holders of Series A2 Preferred Stock and Series A1 Preferred Stock will share ratably any assets available for distribution in proportion to their relative original investment amounts. Any remaining assets of Aerpio will be distributed ratably among the holders of Series A Preferred Stock based upon aggregate applicable dividends accrued on Series A Preferred Stock not previously paid. After the payment of all preferential amounts required to be paid to the holders of Preferred Stock, the remaining assets available for distribution will be distributed among the holders of Preferred Stock and Aerpio common stock based on the pro rata number of shares held by each holder, treating such securities as if they had been converted to Aerpio common stock immediately prior to such dissolution, liquidation, or winding-up of Aerpio . Conversion Each share of Preferred Stock is convertible at the option of the holder, at any time and from time to time, into fully paid and non-assessable shares of Aerpio common stock. The initial conversion ratio is one share of Preferred Stock for one share of the Aerpio’s common stock. The applicable conversion rate is subject to future adjustments upon the occurrence of certain events. Each share of Preferred Stock is automatically convertible into fully paid and non-assessable shares of Aerpio common stock at the then-applicable conversion ratio, as defined, upon either: (i) the closing of the sale of shares of the Aerpio’s common stock to the public in an underwritten public offering at a price of $14.70 resulting in at least $40,000,000 of gross proceeds to Aerpio, or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of more than 50% of the then outstanding shares of Preferred Stock on an as-converted basis. Aerpio evaluated each series of its Preferred Stock and determined that each individual series is considered an equity host under ASC Topic 815, Derivatives and Hedging. Aerpio accounts for potentially beneficial conversion features under ASC Topic 470-20, Debt with Conversion and Other Options Redemption Preferred Stock are redeemable on or after July 31, 2017, upon a request by more than 50% of the holders of Preferred Stock then outstanding, payable in three annual installments commencing not more than 60 days following receipt by notice at a price equal to the greater of (i) the applicable original purchase price and dividends accrued but unpaid (Applicable Accrued Value), which is equal to its liquidation preference, or (ii) the Preferred Stock fair value per share. Due to this redemption option, the Preferred Stock is are recorded in mezzanine equity and subject to subsequent measurement under the guidance provided under ASC 480-10-S99. In accordance with that guidance, Aerpio has elected to recognize changes in redemption value immediately as they occur through adjustments to the carrying amounts of the instruments at the end of each reporting period. As of December 31, 2016 and 2015, the redemption values of all series of Preferred Stock were equal to their respective Applicable Accrued Value. The fair values of Preferred Stock are based upon a hybrid of the probability-weighted expected returns method and an option pricing model (OPM), which is a nonrecurring Level 3 fair value measurement within the fair value hierarchy. Under this hybrid model, share value is based on the probability weighted value of Aerpio in an a potential public trading scenario, in which the Preferred Stock converts to Aerpio common stock, and a second scenario in which equity value is allocated using the OPM. For the public trading scenario, Aerpio used the guideline public company method under the market approach. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Stock-Based Compensation | 8. Stock-Based Compensation Pursuant to the Merger (Note 1), the Company assumed each option to purchase Aerpio common stock that remained outstanding under the Aerpio Therapeutics, Inc. 2011 Equity Incentive Plan (the “Plan”), whether vested or unvested, and converted it into an option to purchase such number of shares of the Company’s common stock equal to the number of shares of Aerpio common stock subject to the option immediately prior to the Merger, divided by the applicable Merger exchange rate of 2.3336572, with any fraction rounded down to the nearest whole number. The exercise price per share of each assumed option is equal to the exercise price of the Aerpio option prior to the assumption, multiplied by the applicable Merger exchange rate of 2.3336572, rounded up to the nearest whole cent. The terms of the 2011 Plan continue to govern the options covering an aggregate of 924,706 shares of the Company’s common stock at March 31, 2017 and December 31, 2016, subject to awards assumed by the Company, except that all references in the 2011 Plan to Aerpio, will now be the Company. In addition, each unvested share of Aerpio restricted common stock issued under the 2011 Plan that was outstanding immediately prior to the effective time of the Merger, was converted by virtue of the Merger into restricted common stock of the Company, equal to the number of shares of Aerpio common stock subject to the unvested shares of Aerpio restricted common stock immediately prior to the Merger divided by the applicable Merger exchange rate of 2.3336572, with any fraction rounded down to the nearest whole number. In March 2017, the Company’s Board of Directors adopted, and the stockholders approved, the 2017 Stock Option and Incentive Plan (the “2017 Plan”), that became effective in April 2017. The 2017 Plan provides for the issuance of incentive awards up to 4,600,000 shares of common stock to officers, employees, consultants and directors, less the number of shares subject to issued and outstanding awards under the 2011 Plan that were assumed in the Merger. The 2017 Plan also provides that the number of shares reserved for issuance thereunder will be increased annually on the first day of each year beginning in 2018 by four percent (4%) of the shares of our common stock outstanding on the last day of the immediately preceding year or such smaller increase as determined by our board of directors. No awards were granted under the 2017 Plan as of March 31, 2017. Stock Options The options granted generally vest over 48 months. For employees with less than one year’s service, options vest in installments of 25% at the one-year The following table summarizes the stock option activity during the three-months ended March 31, 2017: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2017 927,592 $ 1.70 7.48 $ 1,030,217 Granted — $ — Exercised — $ — Expired/cancelled (2,886 ) $ 2.11 Outstanding, March 31, 2017 924,706 $ 1.70 7.24 $ 3,056,035 Expected to vest, March 31, 2017 265,647 $ 1.81 8.45 $ 848,613 Options exercisable, March 31, 2017 659,059 $ 1.65 6.75 $ 2,207,422 Aggregate intrinsic value represents the estimated fair value of the Company’s common stock at the end of the period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. Compensation expense for stock options was $81,120 and $42,816 for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, there was $264,823 of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 2.1 years. Restricted Stock Shares of restricted stock generally have similar vesting terms as stock options. A summary of the Company’s restricted stock activity and related information during the three months ended March 31, 2017 is as follows: Shares Weighted Average Grant Date Fair Value Nonvested, January 1, 2017 241,096 $ 1.91 Granted — — Vested (39,455 ) $ 1.79 Forfeited (5,222 ) $ 2.20 Nonvested, March 31, 2017 196,419 $ 1.93 The Company recognized compensation expense for restricted stock of $74,265 and $82,399 for the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017, there was $366,970 of unrecognized compensation cost related to these restricted stock grants, which is expected to be recognized over a weighted average period of 1.4 years. Compensation Expense Summary The Company has recognized the following compensation cost related to employee and non-employee Three Months Ended March 31, 2017 2016 Research and development $ 115,302 $ 81,733 General and administrative 40,083 43,482 Total $ 155,385 $ 125,215 | 9. Stock-Based Compensation On November 17, 2011, Aerpio established the Aerpio Therapeutics, Inc. 2011 Equity Incentive Plan (the Plan). The Plan allows for the grant of either incentive stock options or non-qualified stock options to purchase Common Stock, stock bonuses, or restricted stock awards for management and certain persons performing services for the Company. As of December 31, 2016, a total of 5,860,874 shares of Aerpio common stock were authorized for issuance in accordance with the provisions of the Plan. Stock Options The options granted generally vest over 48 months. For employees with less than one year’s service, options vest in installments of 25% at the one-year anniversary and thereafter in 36 equal monthly installments beginning in the 13 month after the initial Vesting Commencement Date (as defined), subject to the employee’s continuous service with the Company. Options granted to other employees vest in 48 equal monthly installments after the initial Vesting Commencement Date, subject to the employee’s continuous service with the Company. The options generally expire ten years after the date of grant. The fair value of these options granted is recognized as an expense over the requisite service period. The fair value of each stock option award granted during the year ended December 31, 2016 and 2015 respectively, was estimated on the grant date using the Black-Scholes option pricing model using the following weighted average assumptions: Year Ended December 31 2016 2015 Expected term (years) 6.00 6.00 Risk-free interest rate 1.39 % 1.97 % Expected volatility 61.00 % 78.00 % Expected dividend yield — — The determination of the fair value of stock option awards on the date of grant using the Black-Scholes option pricing model is affected by the estimated fair value of Aerpio’s common stock price, as well as a number of subjective variables. The Company engaged an independent valuation firm to assist management in estimating the fair value of Aerpio’s common stock to be used for purposes of estimating the fair value of options to purchase shares of Aerpio’s common stock. The Company estimates the expected term of options granted utilizing the simplified method. As there has been no public market for Aerpio’s common stock, Aerpio has determined the volatility assumption for options granted based on data from a peer group of companies that issued options with substantially similar terms. The expected volatility of options granted has been determined using the average of the historical volatility measures of this peer group of companies for a period equal to the expected life of the option. The risk-free interest rate is based on the rate applicable to U.S. Treasury zero-coupon issues, with remaining maturities commensurate with the expected term of the options granted in effect on the date of grant. The Company has not paid, and does not anticipate paying, cash dividends on shares of Aerpio common stock; therefore, the expected dividend yield is assumed to be zero in the option valuation model. The following table summarizes the stock option activity during 2016: Shares Weighted Weighted Aggregate Outstanding, January 1, 2016 907,485 $ 1.66 $ 135,711 Granted 50,228 1.80 Exercised (21,870 ) 0.87 Expired/cancelled (8,251 ) 1.24 Outstanding, December 31, 2016 927,592 $ 1.70 7.48 $ 1,030,217 Expected to vest, December 31, 2016 312,547 $ 1.82 8.60 $ 308,767 Options exercisable, December 31, 2016 615,045 $ 1.63 6.92 $ 721,451 Aggregate intrinsic value represents the estimated fair value of Aerpio’s common stock at the end of the period in excess of the weighted average exercise price multiplied by the number of options outstanding or exercisable. The aggregate intrinsic value of options exercisable at December 31, 2015 was $116,924. The weighted average grant date fair value of stock options granted during the years ended December 31, 2016 was $1.22. Stock options exercised during 2016 and 2015 had an intrinsic value of $20,335 and $5,813 respectively. Compensation expense for stock options was $180,399 and $125,926 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, there was $293,796 of unrecognized compensation cost related to stock options, which is expected to be recognized over a weighted average period of 2.4 years. Restricted Stock Shares of restricted stock generally have similar vesting terms as stock options. A summary of the Company’s restricted stock activity and related information during 2016 is as follows: Shares Weighted Nonvested, January 1, 2016 444,199 $ 1.69 Granted — — Vested (203,103 ) 1.54 Forfeited — — Nonvested, December 31, 2016 241,096 $ 1.91 The Company recognized compensation expense for restricted stock of $307,927 and $343,919 for the years ended December 31, 2016 and 2015, respectively. As of December 31, 2016, there was $447,617 of unrecognized compensation cost related to these restricted stock grants, which is expected to be recognized over a weighted average period of 1.7 years. Compensation Expense Summary The Company has recognized the following compensation cost related to employee and non-employee stock-based compensation activity: Year Ended December 31 2016 2015 Research and development $ 317,644 $ 295,304 General and administrative 170,682 174,542 Total $ 488,326 $ 469,846 |
Income Taxes
Income Taxes | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Income Taxes | 9. Income Taxes The Company did not record a current or deferred income tax expense of benefit for the three months ended March 31, 2017 and 2016, due to the Company’s net losses and increases in its deferred tax asset valuation allowance. | 10. Income Taxes There was no current or deferred income tax expense or benefit for the years ended December 31, 2016 and 2015, due to the Company’s net losses and increases in its deferred tax asset valuation allowance. The components of loss before income taxes and a reconciliation of the statutory federal income tax with the provision for income taxes are as follows: Year Ended December 31 2016 2015 Federal tax at statutory rate 34.00 % 34.00 % State and local tax at statutory rates 0.83 0.83 Research and development credits 3.77 4.06 Change in valuation allowance (37.28 ) (38.26 ) Other (1.32 ) (0.63 ) Effective tax rate 0.00 % 0.00 % The Company’s income tax provision was computed based on the federal statutory rate and the average state statutory rates, net of the related federal benefit. Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income and for tax carryforwards. Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 23,146,178 $ 17,427,880 Accrued expenses 18,400 143,295 Stock-based compensation 96,570 — Research and development credits 2,670,688 2,031,211 Other 20,784 19,565 Total deferred tax assets 25,952,620 19,621,951 Deferred tax liabilities: Stock-based compensation — 2,803 Fixed assets 8,434 9,220 Total deferred tax liabilities 8,434 12,023 Net deferred tax assets before valuation allowance 25,944,186 19,609,928 Less valuation allowance (25,944,186 ) (19,609,928 ) Net deferred tax asset $ — $ — When realization of the deferred tax asset is more likely than not to occur, the benefit related to the deductible temporary differences attributable to operations is recognized as a reduction of income tax expense. Valuation allowances are provided against deferred tax assets when, based on all available evidence, it is considered more likely than not that some portion or all of the recorded deferred tax assets will not be realized in future periods. The Company cannot be certain that future taxable income will be sufficient to realize its deferred tax assets, and accordingly, a full valuation allowance has been provided on its net deferred tax assets. The valuation allowance increased $6,334,258 in 2016 and $6,530,455 in 2015 primarily as a result of an increase in the net operating loss (NOL) and research and development credits carryforwards. The Company continues to monitor the need for a valuation allowance based on the profitability of its future operations. At December 31, 2016, the Company has approximately $66,464,259 of federal NOL carryforwards and approximately $66,464,259 of state NOL carryforwards that expire at various dates through 2034 and 2019, respectively. At December 31, 2016, the Company had approximately $2,670,688 of federal research and development credit carryforwards that expire at various dates through 2034. Under the provisions of the Internal Revenue Code, NOL and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards may be subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders by more than 50% over a three-year period, as defined in Sections 382 and 383 of the Internal Revenue Code and similar state provisions. The amount of the annual limitation is determined based on the value of the Company immediately before the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company has not completed a study to assess whether a change of control has occurred or whether there have been multiple changes of control since the date of the Company’s formation due to the significant complexity and cost associated with such study and that there could be additional changes in control in the future. As a result, the Company is unable to estimate the effect of these limitations, if any, on the Company’s ability to utilize NOL and tax credit carryforwards in the future. The Company has not yet conducted a study to document whether its research activities may qualify for the research and development tax credit. Such a study may result in an adjustment to the Company’s research and development credit carryforwards; however, until a study is completed and any adjustment is known, no amounts are being presented as an uncertain tax position. A full valuation allowance has been provided against the Company’s research and development credit and, if an adjustment is required, this adjustment would be offset by an adjustment to the deferred tax asset established for the research and development credit carryforwards and the valuation allowance. As of December 31, 2016 and 2015, the Company had no accrued uncertain tax positions or associated interest or penalties and no amounts have been recognized in the Company’s statements of operations and comprehensive loss. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The tax years since inception remain open and subject to examination by federal and state taxing authorities. |
Net Loss per Share
Net Loss per Share | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net Loss per Share | 10. Net Loss per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented: Three Months Ended March 31, 2017 2016 Net loss and comprehensive loss $ (4,995,703 ) $ (4,194,698 ) Accretion of preferred stock to redemption value (943,297 ) (1,015,371 ) Net loss attributable to common stockholders $ (5,939,000 ) $ (5,210,069 ) Net loss per share attributable to common stockholders, basic and diluted $ (1.06 ) $ (7.07 ) Weighted average common shares used in computing net loss per share attributable to common stockholders, basic and diluted 5,605,151 737,016 The following weighted average common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect: March 31, 2017 2016 Convertible preferred stock (if converted) — 14,183,564 Options to purchase common stock 924,706 907,485 Unvested restricted stock 196,419 241,096 Warrants to purchase common stock 317,562 — | 11. Net Loss per Share The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented: Year Ended December 31 2016 2015 Net loss and comprehensive loss $ (16,983,511 ) $ (17,070,223 ) Extinguishment of preferred stock 224,224 — Accretion of preferred stock to redemption value (4,152,801 ) (348,436 ) Net loss attributable to common stockholders $ (20,912,088 ) $ (17,418,659 ) Net loss per share attributable to common stockholders, basic and diluted $ (24.52 ) $ (31.14 ) Weighted average common shares used in computing net loss per share attributable to common stockholders, basic and diluted 852,665 559,419 The following weighted average common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect: December 31 2016 2015 Convertible preferred stock (if converted) 14,015,016 14,183,535 Options to purchase Aerpio common stock 615,045 424,160 Convertible notes (if converted) 2,641,602 — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | 11. Commitments and Contingencies The Company contracts with various organizations to conduct research and development activities. In addition, the Company is a party to a lease covering 7,580 square feet of space in Cincinnati, Ohio that expires in June 2018. Total rent expense for all operating leases was $51,289 and $45,180 for the three months ended March 31, 2017 and 2016, respectively. The lease agreement contains free rent, escalating rent payments and reimbursement for tenant improvements that amounted to $46,390 in the three months ended March 31, 2016. Rent expense is recorded on the straight-line basis over the initial term with the differences between rent expense and rent payments recorded as deferred rent. As of March 31, 2017, the Company had deferred rent of $47,948, which is included in accrued expenses in the accompanying condensed consolidated balance sheet. As of March 31, 2017, non-cancelable 2017 2018 2019 and Thereafter Total Operating leases $ 104,440 $ 52,978 $ — $ 157,418 All other operating commitments 2,761,501 — — 2,761,501 Total commitments $ 2,865,941 $ 52,978 $ — $ 2,918,919 | 12. Commitments and Contingencies The Company contracts with various organizations to conduct research and development activities. In addition, the Company is a party to a lease covering 7,580 square feet of space in Cincinnati, Ohio that expires in June 2018. Total rent expense for all operating leases in 2016 and 2015 was $214,595 and $160,221 respectively. The lease agreement contains free rent, escalating rent payments and reimbursement for tenant improvements that amounted to $46,390 in fiscal 2016. Rent expense is recorded on the straight-line basis over the initial terms with the differences between rent expense and rent payments recorded as deferred rent. As of December 31, 2016 and 2015, the Company had deferred rent of $49,209 and $8,486, respectively, which is included in accrued expenses in the accompanying balance sheets. As of December 31, 2016, non-cancelable future minimum lease payments under the existing operating lease were $157,418. In addition, as of December 31, 2016, future payments related to other operating commitments arising from contracts related to research and development activities were $2,761,501 due in 2017. 2017 2018 2019 and Total Operating leases $ 104,440 $ 52,978 $ — $ 157,418 All other operating commitments 2,761,501 — — 2,761,501 Total commitments $ 2,865,941 $ 52,978 $ — $ 2,918,919 |
Employee Stock Purchase Plan
Employee Stock Purchase Plan | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Employee Stock Purchase Plan | 12. Employee Stock Purchase Plan In March 2017, the Board of Directors adopted and the stockholders approved, the Employee Stock Purchase Plan (the “ESPP”), that became effective in April 2017. The ESPP provides for the issuance of up to 300,000 shares of the Company’s common stock for the purchases made under the ESPP. The ESPP also provides that the number of shares reserved for issuance thereunder will be increased annually on the first day of each year beginning in 2018 by one percent (1%) of the shares of the Company’s common stock outstanding on the last day of the immediately preceding year or such smaller increase as determined by the Company’s Board of Directors. The Board of Directors has not yet determined the timing for the offering periods under the ESPP. |
Furniture and Equipment
Furniture and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Furniture and Equipment | 4. Furniture and Equipment Furniture and equipment and accumulated depreciation balances are as follows: December 31 2016 2015 Furniture $ 156,928 $ 143,435 Computers 111,446 107,160 Equipment 141,067 81,418 Leasehold improvements 35,869 — Total furniture and equipment 445,310 332,013 Accumulated depreciation (295,715 ) (226,042 ) Furniture and equipment, net $ 149,595 $ 105,971 |
Employee Retirement Plan
Employee Retirement Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Retirement Plan | 13. Employee Retirement Plan The Company created Aerpio’s 401(k) plan in 2015. Before then, the Company’s employees participated in Akebia’s 401(k) plan (Akebia Plan). In accordance with both Plans, all employees who have attained the age of 21 are eligible to participate in the Plan as of the first Entry Date, as defined, following the employment date. Each employee can contribute a percentage of compensation up to a maximum of the statutory limits per year. Company contributions are discretionary, and no contributions were made during 2016 and 2015. |
Employee Bonus Plan
Employee Bonus Plan | 12 Months Ended |
Dec. 31, 2016 | |
Compensation Related Costs [Abstract] | |
Employee Bonus Plan | 14. Employee Bonus Plan During 2012, the Company established a non-calendar year bonus plan for certain employees of the Company based on the achievement of certain milestones. The amount of bonus accrued at December 31, 2015, was $380,020, which was paid in 2016. No bonus was accrued at December 31, 2016. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 15. Subsequent Events In February 2017, Aerpio executed a term sheet for a senior secured convertible note financing (the February Convertible Notes or February Convertible Note Financing) totaling $297,355, with certain preferred investor of Aerpio. The terms of the February Convertible Notes are identical to the Convertible Notes. Merger and Offering On March 15, 2017, the Company completed the Merger and Offering as further described in Note 1 to the consolidated financial statements. As a result of the Offering, the conditions that raised substantial doubt about whether the Company will continue as a going concern have been alleviated. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Basis of Presentation | Basis of Presentation The unaudited condensed consolidated financial statements have been prepared in accordance with U.S. Securities and Exchange Commission (SEC) regulations and include all of the information and disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP” or “GAAP”) for interim financial reporting, and, in the opinion of management include all adjustments necessary for a fair presentation of the results of operations, financial position and cash flows for each period presented. All adjustments are of a normal and recurring nature. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of Aerpio Pharmaceuticals, Inc. and related footnotes for the year ended December 31, 2016, included in the Company’s Registration Statement on Form S-1. | Basis of Presentation The Company’s financial statements are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and stated in U.S. dollars. |
Segment Information | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics. All the assets and operations of the Company’s sole operating segment are located in the United States of America. | Segment Information Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company views its operations and manages its business in one operating segment, which is the business of developing and commercializing proprietary therapeutics in vascular disorders of the eye. All of the assets and operations of the Company’s sole operating segment are located in the United States of America. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these consolidated financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: fair value of the Company’s common stock and other equity instruments, accrued expenses, and income taxes. The Company utilizes significant estimates and assumptions in determining the fair value of its common stock and other equity instruments. The Company granted stock options at exercise prices not less than the fair value of its common stock, as determined by the Board of Directors contemporaneously at the date such grants were made. The Board of Directors has determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event, such as a public offering or sale of the Company. Historically, the Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation The Company’s results can also be affected by economic, political, legislative, regulatory, and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims, or proceedings. | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from those estimates. Management considers many factors in selecting appropriate financial accounting policies and controls and in developing the estimates and assumptions that are used in the preparation of these financial statements. Management must apply significant judgment in this process. In addition, other factors may affect estimates, including expected business and operational changes, sensitivity and volatility associated with the assumptions used in developing estimates, and whether historical trends are expected to be representative of future trends. The estimation process often may yield a range of potentially reasonable estimates of the ultimate future outcomes, and management must select an amount that falls within that range of reasonable estimates. Estimates are used in the following areas, among others: fair value of the Company’s common stock and other equity instruments, accrued expenses, and income taxes. The Company utilizes significant estimates and assumptions in determining the fair value of its common stock and other equity instruments. The Company granted stock options at exercise prices not less than the fair value of its common stock, as determined by the Board of Directors contemporaneously at the date such grants were made. The Board of Directors has determined the estimated fair value of the Company’s common stock based on a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector and the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company’s common stock at the time, and the likelihood of achieving a liquidity event, such as a public offering or sale of the Company. The Company utilized various valuation methodologies in accordance with the framework of the American Institute of Certified Public Accountants Technical Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation The Company’s results can also be affected by economic, political, legislative, regulatory, and legal actions. Economic conditions, such as recessionary trends, inflation, interest and monetary exchange rates, government fiscal policies, and changes in the prices of research studies, can have a significant effect on operations. While the Company maintains reserves for anticipated liabilities and carries various levels of insurance, the Company could be affected by civil, criminal, regulatory or administrative actions, claims, or proceedings. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits, and funds invested in short-term investments with remaining maturities of three months or less at the time of purchase. The Company may maintain balances with its banks in excess of federally insured limits. | Cash and Cash Equivalents Cash and cash equivalents consist of all cash on hand, deposits, and funds invested in short-term investments with remaining maturities of three months or less at the time of purchase. The Company may maintain balances with its banks in excess of federally insured limits. |
Short-Term Investments | Short-Term Investments Time deposits with remaining maturities of greater than three months but less than one year at the time of purchase are classified as short-term investments in the accompanying balance sheets. | Short-Term Investments Time deposits with remaining maturities of greater than three months but less than one year at the time of purchase are classified as short-term investments in the accompanying balance sheets. |
Grant Income | Grant Income Grant income is recognized as earned based on contract work performed. | Grant Income Grant income is recognized as earned based on contract work performed. Grant income also includes qualifying therapeutic credits from the U.S. Treasury related to discovery projects. |
Research and Development Costs | Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel, and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants; (iii) the cost of acquiring, developing, and manufacturing clinical study materials; (iv) facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and laboratory and other supplies; and (v) costs associated with preclinical activities and regulatory operations. The Company enters into consulting, research, and other agreements with commercial firms, researchers, universities, and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project, or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. Research and Development Costs Research and development costs are expensed as incurred. | Research and Development Costs Research and development costs are expensed as incurred. |
Patents | Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. | Patents Costs incurred in connection with the application for and issuances of patents are expensed as incurred. |
Income Taxes | Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (ASC) Topic 740, Income Taxes The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of March 31, 2017, and December 31, 2016, the Company does not have any significant uncertain tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense. | Income Taxes Income taxes are recorded in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 740, Income Taxes The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that some or all of the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. As of December 31, 2016 and 2015, the Company does not have any significant uncertain tax positions. If incurred, the Company would classify interest and penalties on uncertain tax positions as income tax expense. |
Net Loss per Share | Net Loss per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by adjusting the weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, convertible notes payable, stock options to purchase common stock, warrants, and unvested restricted stock awards are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share were the same for all periods presented. For all periods presented, all share and per share amounts have been retrospectively adjusted to reflect the exchange of each 2.3336572 shares of Aerpio capital stock and share based awards then outstanding, for 1 share of the Company’s common stock at the effective time of the Merger. | Net Loss per Share The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by adjusting weighted average shares outstanding for the dilutive effect of common stock equivalents outstanding for the period, determined using the treasury stock method. For purposes of this calculation, convertible preferred stock, stock options to purchase common stock, and restricted stock awards are considered to be common stock equivalents but have been excluded from the calculation of diluted net loss per share attributable to common stockholders as their effect is anti-dilutive for all periods presented. Therefore, basic and diluted net loss per share were the same for all periods presented. For all periods presented, all share and per share amounts have been retrospectively adjusted to reflect the exchange of each 2.3336572 shares of Aerpio capital stock and share based awards then outstanding, for 1 share of the Company’s common stock at the effective time of the Merger. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation Due to the lack of a public market for the trading of the Company’s common stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment non-employees. Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. Awards to non-employees | Stock-Based Compensation The Company accounts for its stock-based compensation awards in accordance with FASB ASC Topic 718, Compensation—Stock Compensation Due to the lack of a public market for the trading of the Company’s Common Stock and a lack of company-specific historical and implied volatility data, the Company has based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. The computation of expected volatility is based on the historical volatility of a representative group of companies with similar characteristics to the Company, including stage of product development and life science industry focus. The Company believes the group selected has sufficient similar economic and industry characteristics and includes companies that are most representative of the Company. The Company uses the simplified method as prescribed by the Securities and Exchange Commission Staff Accounting Bulletin No. 107, Share-Based Payment Compensation expense related to awards to employees is calculated on a straight-line basis by recognizing the grant date fair value over the associated service period of the award, which is generally the vesting term. Awards to non-employees are adjusted through share-based compensation expense as the award vests to reflect the current fair value of such awards and are expensed using an accelerated attribution model. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The Company values cash equivalents using quoted market prices. The valuation technique used to measure the fair value of short-term investments was based on net asset values corroborated with observable market data. The fair value of accounts receivable and accounts payable approximate the carrying value because of their short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy in the three months ended March 31, 2017 or March 31, 2016. The assets of the Company measured on a recurring basis as of March 31, 2017 and December 31, 2016 basis are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total March 31, 2017 Assets: Cash and cash equivalents $ 35,139,109 $ — $ — $ 35,139,109 Short-term investments — 50,000 — 50,000 Total assets $ 35,139,109 $ 50,000 $ — $ 35,189,109 December 31, 2016 Assets: Cash and cash equivalents $ 1,609,694 $ — $ — $ 1,609,694 Short-term investments — 50,000 — 50,000 $ 1,609,694 $ 50,000 $ — $ 1,659,694 | Fair Value of Financial Instruments The Company’s financial instruments consist of cash equivalents, short-term investments, accounts receivable, and accounts payable. The Company values cash equivalents using quoted market prices. The valuation technique used to measure the fair value of short-term investments was based on net asset values corroborated with observable market data. The fair value of accounts receivable and accounts payable approximate the carrying value because of their short-term nature. The Company is required to disclose information on all assets and liabilities reported at fair value that enables an assessment of the inputs used in determining the reported fair values. FASB ASC Topic 820, Fair Value Measurements and Disclosures Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy applies only to the valuation inputs used in determining the reported fair value of the investments and is not a measure of the investment credit quality. The three levels of the fair value hierarchy are described below: • Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date • Level 2—Valuations based on quoted prices for similar assets or liabilities in markets that are not active or for which all significant inputs are observable, either directly or indirectly • Level 3—Valuations that require inputs that reflect the Company’s own assumptions that are both significant to the fair value measurement and unobservable To the extent that a valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. There were no transfers within the fair value hierarchy in 2016 or 2015. Based on the fair value hierarchy, assets measured or disclosed at fair value on a recurring basis are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2016 Assets: Cash and cash equivalents $ 1,609,694 $ — $ — $ 1,609,694 Short-term investments — 50,000 — 50,000 Total assets $ 1,609,694 $ 50,000 $ — $ 1,659,694 December 31, 2015 Assets: Cash and cash equivalents $ 5,144,211 $ — $ — $ 5,144,211 Short-term investments — 50,000 — 50,000 $ 5,144,211 $ 50,000 $ — $ 5,194,211 |
Concentrations of Credit Risk and Off-Balance Sheet Risk | Concentrations of Credit Risk and Off-Balance Cash and cash equivalents and short-term investments are the only financial instruments that potentially subject the Company to concentrations of credit risk. At March 31, 2017 and December 31, 2016, all the Company’s cash was deposited in accounts at two principal financial institutions. The Company maintains its cash and cash equivalents and short-term investments with a high-quality, accredited financial institution and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance | Concentrations of Credit Risk and Off-Balance Sheet Risk Cash and cash equivalents and short-term investments are the only financial instruments that potentially subject the Company to concentrations of credit risk. At December 31, 2016 and 2015, all of the Company’s cash was deposited in accounts at two principal financial institutions. The Company maintains its cash and cash equivalents and short-term investments with a high-quality, accredited financial institution and, accordingly, such funds are subject to minimal credit risk. The Company has no significant off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts, or other hedging arrangements. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, if any. Comprehensive loss equaled net loss for all periods presented. |
Furniture and Equipment | Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of property, plant, and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). | Furniture and Equipment Furniture and equipment is stated at cost, less accumulated depreciation. Furniture and equipment is depreciated using the straight-line method over the estimated useful lives of the assets, generally three to seven years. Such costs are periodically reviewed for recoverability when impairment indicators are present. Such indicators include, among other factors, operating losses, unused capacity, market value declines, and technological obsolescence. Recorded values of asset groups of property, plant, and equipment that are not expected to be recovered through undiscounted future net cash flows are written down to current fair value, which generally is determined from estimated discounted future net cash flows (assets held for use) or net realizable value (assets held for sale). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In March 2016, the FASB issued ASU 2016-09, In February 2016, the FASB issued ASU 2016-02, Leases right-of-use | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. In March 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-09, Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes |
Research and Development | Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expense consists of (i) employee-related expenses, including salaries, benefits, travel, and stock-based compensation expense; (ii) external research and development expenses incurred under arrangements with third parties, such as contract research organizations and consultants; (iii) the cost of acquiring, developing, and manufacturing clinical study materials; (iv) facilities and other expenses, which include direct and allocated expenses for rent and maintenance of facilities and laboratory and other supplies; and (v) costs associated with preclinical activities and regulatory operations. The Company enters into consulting, research, and other agreements with commercial firms, researchers, universities, and others for the provision of goods and services. Under such agreements, the Company may pay for services on a monthly, quarterly, project, or other basis. Such arrangements are generally cancellable upon reasonable notice and payment of costs incurred. Costs are considered incurred based on an evaluation of the progress to completion of specific tasks under each contract using information and data provided to the Company by its clinical sites and vendors. These costs consist of direct and indirect costs associated with specific projects, as well as fees paid to various entities that perform certain research on behalf of the Company. | |
Reclassifications | Reclassifications Certain prior year balances in the balance sheet have been reclassified to conform to the current year presentation. The reclassifications were not material to the financial statements. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Schedule of Assets Measured on Recurring Basis | The assets of the Company measured on a recurring basis as of March 31, 2017 and December 31, 2016 basis are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total March 31, 2017 Assets: Cash and cash equivalents $ 35,139,109 $ — $ — $ 35,139,109 Short-term investments — 50,000 — 50,000 Total assets $ 35,139,109 $ 50,000 $ — $ 35,189,109 December 31, 2016 Assets: Cash and cash equivalents $ 1,609,694 $ — $ — $ 1,609,694 Short-term investments — 50,000 — 50,000 $ 1,609,694 $ 50,000 $ — $ 1,659,694 | Based on the fair value hierarchy, assets measured or disclosed at fair value on a recurring basis are summarized below: Fair Value Measurements Using Level 1 Level 2 Level 3 Total December 31, 2016 Assets: Cash and cash equivalents $ 1,609,694 $ — $ — $ 1,609,694 Short-term investments — 50,000 — 50,000 Total assets $ 1,609,694 $ 50,000 $ — $ 1,659,694 December 31, 2015 Assets: Cash and cash equivalents $ 5,144,211 $ — $ — $ 5,144,211 Short-term investments — 50,000 — 50,000 $ 5,144,211 $ 50,000 $ — $ 5,194,211 |
Related-Party Arrangements (Tab
Related-Party Arrangements (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Akebia [Member] | ||
Summary of activities included in statements of operations and comprehensive loss | Below is a summary of the activities included in the statements of operations and comprehensive loss: Three Months Ended March 31, Activity Financial Statement Caption 2017 2016 Akebia related employee costs Research and development operating expenses $ — $ 12,923 Facility-related reimbursement Other income, net — 997 | Below is a summary of the activities included in the statements of operations and comprehensive loss: Year Ended Activity Financial Statement Caption 2016 2015 Payments to Akebia for employee costs Research and development operating expenses $ 31,246 $ 263,501 Payments from Akebia for facility-related charges and employee costs Other income, net 997 27,022 A summary of Akebia receivables and payables included in the accompanying balance sheets are as follow: December 31 Activity Financial Statement Caption 2016 2015 Amounts receivable from Akebia Accounts receivable $ — $ 997 Amounts payable to Akebia Accounts payable — 15,173 |
Accounts Payable and Accrued 26
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Payables and Accruals [Abstract] | ||
Schedule of Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses are as follows: March 31, December 31, Accounts payable $ 1,871,662 $ 1,135,608 Professional fees 300,356 200,468 Accrued bonus 125,576 — Accrued interest — 483,442 Accrued vacation 106,199 52,835 Accrued project costs 510,828 541,158 Other 55,427 57,459 Total accounts payable and accrued expenses $ 2,970,048 $ 2,470,970 | Accounts payable and accrued expenses are as follows: December 31 2016 2015 Accounts payable $ 1,135,608 $ 890,610 Professional fees 200,468 126,722 Accrued bonus — 380,020 Accrued interest 483,442 — Accrued vacation 52,835 56,796 Accrued project costs 541,158 696,158 Other 57,459 9,568 Total accounts payable and accrued expenses $ 2,470,970 $ 2,159,874 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Summary of stock option activity | The following table summarizes the stock option activity during the three-months ended March 31, 2017: Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, January 1, 2017 927,592 $ 1.70 7.48 $ 1,030,217 Granted — $ — Exercised — $ — Expired/cancelled (2,886 ) $ 2.11 Outstanding, March 31, 2017 924,706 $ 1.70 7.24 $ 3,056,035 Expected to vest, March 31, 2017 265,647 $ 1.81 8.45 $ 848,613 Options exercisable, March 31, 2017 659,059 $ 1.65 6.75 $ 2,207,422 | The following table summarizes the stock option activity during 2016: Shares Weighted Weighted Aggregate Outstanding, January 1, 2016 907,485 $ 1.66 $ 135,711 Granted 50,228 1.80 Exercised (21,870 ) 0.87 Expired/cancelled (8,251 ) 1.24 Outstanding, December 31, 2016 927,592 $ 1.70 7.48 $ 1,030,217 Expected to vest, December 31, 2016 312,547 $ 1.82 8.60 $ 308,767 Options exercisable, December 31, 2016 615,045 $ 1.63 6.92 $ 721,451 |
Summary of restricted stock activity | A summary of the Company’s restricted stock activity and related information during the three months ended March 31, 2017 is as follows: Shares Weighted Average Grant Date Fair Value Nonvested, January 1, 2017 241,096 $ 1.91 Granted — — Vested (39,455 ) $ 1.79 Forfeited (5,222 ) $ 2.20 Nonvested, March 31, 2017 196,419 $ 1.93 | A summary of the Company’s restricted stock activity and related information during 2016 is as follows: Shares Weighted Nonvested, January 1, 2016 444,199 $ 1.69 Granted — — Vested (203,103 ) 1.54 Forfeited — — Nonvested, December 31, 2016 241,096 $ 1.91 |
Summary of recognized compensation cost related to employee and non-employee stock-based compensation activity | The Company has recognized the following compensation cost related to employee and non-employee Three Months Ended March 31, 2017 2016 Research and development $ 115,302 $ 81,733 General and administrative 40,083 43,482 Total $ 155,385 $ 125,215 | The Company has recognized the following compensation cost related to employee and non-employee stock-based compensation activity: Year Ended December 31 2016 2015 Research and development $ 317,644 $ 295,304 General and administrative 170,682 174,542 Total $ 488,326 $ 469,846 |
Summary of Grant date Using the Black-Scholes Option Pricing Model Using at Weighted Average Assumptions | The fair value of each stock option award granted during the year ended December 31, 2016 and 2015 respectively, was estimated on the grant date using the Black-Scholes option pricing model using the following weighted average assumptions: Year Ended December 31 2016 2015 Expected term (years) 6.00 6.00 Risk-free interest rate 1.39 % 1.97 % Expected volatility 61.00 % 78.00 % Expected dividend yield — — |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Schedule of Company's Basic and Diluted Net Loss Per Share | The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented: Three Months Ended March 31, 2017 2016 Net loss and comprehensive loss $ (4,995,703 ) $ (4,194,698 ) Accretion of preferred stock to redemption value (943,297 ) (1,015,371 ) Net loss attributable to common stockholders $ (5,939,000 ) $ (5,210,069 ) Net loss per share attributable to common stockholders, basic and diluted $ (1.06 ) $ (7.07 ) Weighted average common shares used in computing net loss per share attributable to common stockholders, basic and diluted 5,605,151 737,016 | The following table sets forth the computation of the Company’s basic and diluted net loss per share for the periods presented: Year Ended December 31 2016 2015 Net loss and comprehensive loss $ (16,983,511 ) $ (17,070,223 ) Extinguishment of preferred stock 224,224 — Accretion of preferred stock to redemption value (4,152,801 ) (348,436 ) Net loss attributable to common stockholders $ (20,912,088 ) $ (17,418,659 ) Net loss per share attributable to common stockholders, basic and diluted $ (24.52 ) $ (31.14 ) Weighted average common shares used in computing net loss per share attributable to common stockholders, basic and diluted 852,665 559,419 |
Schedule of weighted average common stock equivalents excluded from calculation of diluted net loss per share | The following weighted average common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect: March 31, 2017 2016 Convertible preferred stock (if converted) — 14,183,564 Options to purchase common stock 924,706 907,485 Unvested restricted stock 196,419 241,096 Warrants to purchase common stock 317,562 — | The following weighted average common stock equivalents were excluded from the calculation of diluted net loss per share for the periods presented because including them would have had an anti-dilutive effect: December 31 2016 2015 Convertible preferred stock (if converted) 14,015,016 14,183,535 Options to purchase Aerpio common stock 615,045 424,160 Convertible notes (if converted) 2,641,602 — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Schedule of operating leases and commitments | 2017 2018 2019 and Thereafter Total Operating leases $ 104,440 $ 52,978 $ — $ 157,418 All other operating commitments 2,761,501 — — 2,761,501 Total commitments $ 2,865,941 $ 52,978 $ — $ 2,918,919 | 2017 2018 2019 and Total Operating leases $ 104,440 $ 52,978 $ — $ 157,418 All other operating commitments 2,761,501 — — 2,761,501 Total commitments $ 2,865,941 $ 52,978 $ — $ 2,918,919 |
Furniture and Equipment (Tables
Furniture and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Furniture and Equipment | Furniture and equipment and accumulated depreciation balances are as follows: December 31 2016 2015 Furniture $ 156,928 $ 143,435 Computers 111,446 107,160 Equipment 141,067 81,418 Leasehold improvements 35,869 — Total furniture and equipment 445,310 332,013 Accumulated depreciation (295,715 ) (226,042 ) Furniture and equipment, net $ 149,595 $ 105,971 |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Summary of Shares Common Stock for Future Issuance | As of December 31, 2016, Aerpio has reserved the following shares of Aerpio common stock for future issuance: Conversion of Series A Preferred Stock 1,239,338 Conversion of Series A1 Preferred Stock 8,289,663 Conversion of Series A2 Preferred Stock 4,486,015 Conversion of unvested restricted stock awards 241,096 Exercise of options to purchase Aerpio common stock 927,593 Total 15,183,705 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Federal Statutory Income Tax Rate | The components of loss before income taxes and a reconciliation of the statutory federal income tax with the provision for income taxes are as follows: Year Ended December 31 2016 2015 Federal tax at statutory rate 34.00 % 34.00 % State and local tax at statutory rates 0.83 0.83 Research and development credits 3.77 4.06 Change in valuation allowance (37.28 ) (38.26 ) Other (1.32 ) (0.63 ) Effective tax rate 0.00 % 0.00 % |
Significant Components of Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows: December 31 2016 2015 Deferred tax assets: Net operating loss carryforwards $ 23,146,178 $ 17,427,880 Accrued expenses 18,400 143,295 Stock-based compensation 96,570 — Research and development credits 2,670,688 2,031,211 Other 20,784 19,565 Total deferred tax assets 25,952,620 19,621,951 Deferred tax liabilities: Stock-based compensation — 2,803 Fixed assets 8,434 9,220 Total deferred tax liabilities 8,434 12,023 Net deferred tax assets before valuation allowance 25,944,186 19,609,928 Less valuation allowance (25,944,186 ) (19,609,928 ) Net deferred tax asset $ — $ — |
Nature of Organization and Op33
Nature of Organization and Operations - Additional Information (Detail) | Mar. 15, 2017USD ($)$ / sharesshares | Mar. 31, 2017USD ($)$ / sharesshares | Mar. 14, 2017shares | Mar. 10, 2017$ / sharesshares | Mar. 03, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | Dec. 31, 2015$ / sharesshares |
Class Of Stock [Line Items] | |||||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 100,000,000 | 17,440,436 | 17,140,478 | ||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Capital stock conversion basis ratio | 2.3336572 | ||||||
Common stock, shares outstanding | 27,049,555 | 1,240,925 | 1,157,251 | ||||
Common stock issued to private placement, price per share | $ / shares | $ 14.70 | ||||||
Net proceeds of common stock issued to private placement | $ | $ 37,163,390 | ||||||
Warrants issued to purchase common stock, exercise price | $ / shares | $ 5 | ||||||
Minimum [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Percentage of Interest owned in the combined enterprise | 50.00% | ||||||
Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock issued to private placement | 8,049,555 | ||||||
Net proceeds of common stock issued to private placement | $ | $ 805 | ||||||
ZETA ACQUISITION CORP. II [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Number of shares surrendered for cancellation | 4,000,000 | ||||||
Common stock, shares outstanding | 5,000,000 | ||||||
Issuance of warrants term | 3 years | ||||||
Number of warrants issued to purchase common stock | 317,562 | ||||||
Warrants issued to purchase common stock, exercise price | $ / shares | $ 5 | ||||||
ZETA ACQUISITION CORP. II [Member] | Common Stock [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Common stock issued to private placement | 8,049,555 | ||||||
Common stock issued to private placement, price per share | $ / shares | $ 5 | ||||||
Net proceeds of common stock issued to private placement | $ | $ 37,200,000 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Additional Information (Detail) | Mar. 15, 2017 | Mar. 31, 2017USD ($)InstitutionSegment | Dec. 31, 2016USD ($)InstitutionSegment |
Summary Of Significant Accounting Policies [Line Items] | |||
Number of operating segment | Segment | 1 | 1 | |
Significant uncertain tax positions | $ 0 | $ 0 | |
Capital stock conversion basis ratio | 2.3336572 | ||
Number of principal financial institutions in cash deposit | Institution | 2 | 2 | |
Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 3 years | ||
Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 7 years | ||
Accounting Standards Update 2015-03 [Member] | Convertible Notes [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Effect of adoption of new ASU | $ (75,561) | ||
Furniture and Equipment [Member] | Minimum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 3 years | ||
Furniture and Equipment [Member] | Maximum [Member] | |||
Summary Of Significant Accounting Policies [Line Items] | |||
Furniture and equipment estimated useful lives | 7 years |
Summary of Significant Accoun35
Summary of Significant Accounting Policies (Detail) - Fair Value, Measurements, Recurring [Member] - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Assets: | |||
Cash and cash equivalents | $ 35,139,109 | $ 1,609,694 | $ 5,144,211 |
Short-term investments | 50,000 | 50,000 | 50,000 |
Total assets | 35,189,109 | 1,659,694 | 5,194,211 |
Level 1 [Member] | |||
Assets: | |||
Cash and cash equivalents | 35,139,109 | 1,609,694 | 5,144,211 |
Total assets | 35,139,109 | 1,609,694 | 5,144,211 |
Level 2 [Member] | |||
Assets: | |||
Short-term investments | 50,000 | 50,000 | 50,000 |
Total assets | $ 50,000 | $ 50,000 | $ 50,000 |
Related-Party Arrangements (Det
Related-Party Arrangements (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | ||||
Research and development | $ 2,255,584 | $ 2,989,558 | $ 11,367,590 | $ 11,625,404 |
Other income, net | 997 | 997 | 27,022 | |
Akebia [Member] | Employee Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Research and development | 12,923 | 31,246 | 263,501 | |
Akebia [Member] | Facility Related Reimbursement [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other income, net | $ 997 | $ 997 | $ 27,022 |
Accounts Payable and Accrued 37
Accounts Payable and Accrued Expenses (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | |||
Accounts payable | $ 1,871,662 | $ 1,135,608 | $ 890,610 |
Professional fees | 300,356 | 200,468 | 126,722 |
Accrued bonus | 125,576 | 0 | 380,020 |
Accrued interest | 483,442 | ||
Accrued vacation | 106,199 | 52,835 | 56,796 |
Accrued project costs | 510,828 | 541,158 | 696,158 |
Other | 55,427 | 57,459 | 9,568 |
Total accounts payable and accrued expenses | $ 2,970,048 | $ 2,470,970 | $ 2,159,874 |
Notes Payable to Investors - Ad
Notes Payable to Investors - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
Feb. 28, 2017USD ($) | Oct. 31, 2016USD ($) | Mar. 31, 2016USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Jul. 15, 2016USD ($) | Apr. 14, 2016USD ($) | |
Debt Instrument [Line Items] | |||||||
Proceeds from sale of capital stock | $ 40,247,775 | ||||||
Convertible Note Financing [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Convertible notes payable | $ 9,000,000 | $ 4,500,000 | $ 4,500,000 | ||||
Conversion description | In connection with the Convertible Note Financing, Aerpio’s Articles of Incorporation were amended such that any Aerpio preferred that did not participate in the Aerpio Convertible Note Financing would have their respective shares of Aerpio preferred stock automatically converted into Aerpio common stock using a 3-to-1 conversion ratio and such preferred stockholders would lose the right to representation on the Aerpio Board of Directors and other preferred rights | In connection with the Convertible Note Financing, Aerpio’s Articles of Incorporation were amended such that any Aerpio preferred stockholder that did not participate in the Convertible Note Financing would have their respective shares of Aerpio preferred stock automatically converted into Aerpio’s common stock using a 3-to-1 conversion ratio and such Aerpio preferred stockholders would lose the right to representation on Aerpio’s Board of Directors and other preferred rights. | |||||
Unamortized debt issuance costs | $ 0 | $ 75,561 | |||||
Conversion ratio | 0.33 | 0.33 | |||||
Convertible Notes accrue interest rate per annum | 8.00% | 8.00% | |||||
Debt issuance cost | $ 138,312 | $ 138,312 | |||||
Amortization period | 7 months | 7 months | |||||
Maturity date | Mar. 31, 2016 | Oct. 31, 2016 | |||||
Gross proceeds from sale of capital stock | $ 30,000,000 | ||||||
Convertible Note Financing [Member] | Investor Sale [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Proceeds from sale of capital stock | $ 30,000,000 | ||||||
Additional Convertible Note Financings [Member] | |||||||
Debt Instrument [Line Items] | |||||||
Convertible notes payable | $ 300,000 | $ 3,500,000 | |||||
Debt issuance cost | $ 125,935 | $ 125,935 | |||||
Maturity date | Mar. 31, 2017 | Mar. 31, 2017 |
Common Stock - Additional Infor
Common Stock - Additional Information (Detail) - USD ($) | Mar. 31, 2017 | Mar. 15, 2017 | Mar. 31, 2017 | Mar. 10, 2017 | Mar. 03, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Class Of Stock [Line Items] | |||||||
Common stock, shares authorized | 300,000,000 | 300,000,000 | 300,000,000 | 100,000,000 | 17,440,436 | 17,140,478 | |
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Dividends common stock declared or paid | $ 0 | ||||||
Number of shares of common stock in lock-up agreements | 18,900,000 | 18,900,000 | |||||
Restricted period for shares of common stock in lock-up agreements | 9 months | ||||||
Restricted percentage of common stock for holders of 915,000 shares | 80.00% | ||||||
Number of shares of common stockholders with 80% restriction | 915,000 | 915,000 | |||||
Period agreed by common stockholder not to effect short sale after merger | 12 months | ||||||
Warrants outstanding | 317,562 | 317,562 | |||||
Warrants exercise price per share | $ 5 | $ 5 | |||||
Warrants term | 3 years | ||||||
Warrants expiration date | Mar. 15, 2020 | ||||||
Minimum [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Percentage of common stockholder agreed not to effect short sale after merger | 1.00% | ||||||
Convertible Note Financing [Member] | |||||||
Class Of Stock [Line Items] | |||||||
Conversion of convertible notes and accrued interest, Shares | 2,744,059 | ||||||
Redeemable Convertible Preferred Stock | |||||||
Class Of Stock [Line Items] | |||||||
Conversion of preferred stock, shares | 14,015,016 |
Preferred Stock - Additional In
Preferred Stock - Additional Information (Detail) | 1 Months Ended | 3 Months Ended | |||
Mar. 31, 2016 | Mar. 31, 2017USD ($)DirectorInstallment$ / sharesshares | Mar. 10, 2017$ / sharesshares | Mar. 03, 2017$ / sharesshares | Dec. 31, 2016shares | |
Temporary Equity [Line Items] | |||||
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||
Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares issued | 0 | ||||
Preferred stock, shares outstanding | 0 | ||||
Redeemable convertible preferred stock, voting rights | The holders of redeemable convertible preferred stock were entitled to the number of votes equal to the number of whole shares of Aerpio common stock into which the shares of redeemable convertible preferred stock were convertible. Except as provided by law or otherwise, the holders of redeemable convertible preferred stock voted together with the holders of Aerpio common stock as a single class. Certain significant actions required approval by at least 50% of the holders of redeemable convertible preferred stock voting as a single class on an as converted basis. | ||||
Redeemable convertible preferred stock conversion percentage | 300.00% | 100.00% | |||
Redeemable convertible preferred stock redemption date | Jul. 31, 2017 | ||||
Minimum [Member] | |||||
Temporary Equity [Line Items] | |||||
Percentage of redeemable convertible preferred stock voting rights | 50.00% | ||||
Proceeds from Issuance Initial Public Offering | $ | $ 40,000,000 | ||||
Series A Redeemable Convertible Preferred Stock [Member] | |||||
Temporary Equity [Line Items] | |||||
Redeemable convertible preferred stock, shares authorized | 1,326,147 | ||||
Redeemable convertible preferred stock, shares issued | 1,239,338 | ||||
Redeemable convertible preferred, shares outstanding | 1,239,338 | ||||
Redeemable convertible preferred stock distribution to be paid | $ / shares | $ 4.27 | ||||
Series A1 Redeemable Convertible Preferred Stock [Member] | |||||
Temporary Equity [Line Items] | |||||
Redeemable convertible preferred stock, shares authorized | 8,368,247 | ||||
Redeemable convertible preferred stock, shares issued | 8,289,663 | ||||
Redeemable convertible preferred, shares outstanding | 8,289,663 | ||||
Redeemable convertible preferred stock distribution to be paid | $ / shares | $ 3.97 | ||||
Series A2 Redeemable Convertible Preferred Stock [Member] | |||||
Temporary Equity [Line Items] | |||||
Redeemable convertible preferred stock, shares authorized | 4,660,573 | ||||
Redeemable convertible preferred stock, shares issued | 4,486,015 | ||||
Redeemable convertible preferred, shares outstanding | 4,486,015 | ||||
Redeemable convertible preferred stock, dividend rate, percentage | 6.00% | ||||
Redeemable convertible preferred stock distribution to be paid | $ / shares | $ 4.90 | ||||
Redeemable Convertible Preferred Stock | |||||
Temporary Equity [Line Items] | |||||
Redeemable convertible preferred, shares outstanding | 14,015,016 | ||||
Number of board of directors appointed by redeemable convertible preferred shares holders | Director | 6 | ||||
Number of board of directors appointed by common shares holders | Director | 2 | ||||
Number of board of directors appointed by common shares holders under certain circumstances | Director | 1 | ||||
Share Price | $ / shares | $ 14.70 | ||||
Number of installments payable | Installment | 3 | ||||
Annual installment payable commencing period | 60 days | ||||
Redeemable Convertible Preferred Stock | Minimum [Member] | |||||
Temporary Equity [Line Items] | |||||
Redeemable convertible preferred stock conversion basis percentage | 50.00% | ||||
Redeemable Convertible Preferred Stock | Maximum [Member] | |||||
Temporary Equity [Line Items] | |||||
Number of board of directors appointed by redeemable convertible preferred shares holders under certain circumstances | Director | 4 | ||||
Series A Redeemable Convertible Preferred Stock and Series A1 Redeemable Convertible Preferred Stock [Member] | |||||
Temporary Equity [Line Items] | |||||
Redeemable convertible preferred stock, dividend rate, percentage | 6.00% |
Stock Based Compensation - Addi
Stock Based Compensation - Additional Information (Detail) | Mar. 15, 2017 | Mar. 31, 2017USD ($)shares | Mar. 31, 2016USD ($)shares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)shares |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Merger exchange rate | 2.3336572 | ||||
Aggregate number of common stock | 924,706 | 927,592 | 907,485 | ||
Common stock shares available for issuance | 15,183,705 | ||||
Number of awards granted | 50,228 | ||||
Unrecognized compensation cost related to stock options | $ | $ 264,823 | $ 293,796 | |||
Aggregate intrinsic value of options exercisable | $ | $ 116,924 | ||||
Weighted average grant date fair value of stock options granted | $ / shares | $ 1.22 | ||||
Stock options exercised intrinsic value | $ | $ 20,335 | $ 5,813 | |||
2011 Equity Incentive Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Merger exchange rate | 2.3336572 | ||||
Aggregate number of common stock | 924,706 | 924,706 | |||
2017 Stock Option and Incentive Plan [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Common stock shares available for issuance | 4,600,000 | ||||
Percentage applied to the outstanding shares as annual increase in number of shares authorized for issuance | 4.00% | ||||
Number of awards granted | 0 | ||||
Equity Incentive Plan [Member] | Common Stock [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Share-based compensation, number of shares authorized | 5,860,874 | ||||
Stock Option [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Number of awards granted | 0 | 0 | |||
Vesting period | 48 months | 48 months | |||
Term of options to be granted | 10 years | 10 years | |||
Compensation expense for stock options | $ | $ 81,120 | $ 42,816 | |||
Weighted average period expected to be recognized | 2 years 1 month 6 days | 2 years 4 months 24 days | |||
Expected dividend yield | 0.00% | 0.00% | |||
Compensation expense for stock options | $ | $ 180,399 | $ 125,926 | |||
Stock Option [Member] | One-year Anniversary [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Vesting percentage | 25.00% | 25.00% | |||
Restricted Stock [Member] | |||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||
Compensation expense for stock options | $ | $ 74,265 | $ 82,399 | $ 307,927 | $ 343,919 | |
Weighted average period expected to be recognized | 1 year 4 months 24 days | 1 year 8 months 12 days | |||
Unrecognized compensation cost related to restricted stock grants | $ | $ 366,970 | $ 447,617 |
Summary of Stock Option Activit
Summary of Stock Option Activity (Detail) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options Outstanding, Weighted Average Exercise Price, and Additional Disclosures [Abstract] | ||
Shares, Outstanding at beginning balance | 927,592 | 907,485 |
Shares, Granted | 50,228 | |
Shares, Exercised | (21,870) | |
Shares, Expired/cancelled | (2,886) | (8,251) |
Shares, Outstanding at ending balance | 924,706 | 927,592 |
Shares, Expected to vest | 265,647 | 312,547 |
Shares, Options exercisable | 659,059 | 615,045 |
Weighted Average Exercise Price, Outstanding at beginning balance | $ 1.70 | $ 1.66 |
Weighted average exercise price, Granted | 1.80 | |
Weighted average exercise price, Exercised | 0.87 | |
Weighted Average Exercise Price, Expired/cancelled | 2.11 | 1.24 |
Weighted Average Exercise Price, Outstanding at ending balance | 1.70 | 1.70 |
Weighted Average Exercise Price, Expected to vest | 1.81 | 1.82 |
Weighted Average Exercise Price, Options exercisable | $ 1.65 | $ 1.63 |
Weighted average remaining contractual term, outstanding | 7 years 2 months 27 days | 7 years 5 months 23 days |
Weighted average remaining contractual term, expected to vest | 8 years 5 months 12 days | 8 years 7 months 6 days |
Weighted average remaining contractual term, options exercisable | 6 years 9 months | 6 years 11 months 1 day |
Aggregate intrinsic value, outstanding beginning balance | $ 1,030,217 | $ 135,711 |
Aggregate intrinsic value, outstanding ending balance | 3,056,035 | 1,030,217 |
Aggregate intrinsic value, expected to vest | 848,613 | 308,767 |
Aggregate Intrinsic Value, Options exercisable | $ 2,207,422 | $ 721,451 |
Stock-based compensation - Rest
Stock-based compensation - Restricted Stock (Detail) - Restricted Stock [Member] - $ / shares | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares, Nonvested beginning balance | 241,096 | 444,199 |
Shares, Granted | 0 | |
Shares, Vested | (39,455) | (203,103) |
Shares, Forfeited | (5,222) | |
Shares, Nonvested ending balance | 196,419 | 241,096 |
Nonvested Weighted Average Grant Date Fair Value balance at beginning of period | $ 1.91 | $ 1.69 |
Weighted Average Grant Date Fair Value, Granted | 0 | |
Weighted Average Grant Date Fair Value, Vested | 1.79 | 1.54 |
Weighted Average Grant Date Fair Value, Forfeited | 2.20 | |
Nonvested Weighted Average Grant Date Fair Value balance at end of period | $ 1.93 | $ 1.91 |
Compensation Cost Related to Em
Compensation Cost Related to Employee and Non-employee Stock-based Compensation Activity (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 155,385 | $ 125,215 | $ 488,326 | $ 469,846 |
Research and development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | 115,302 | 81,733 | 317,644 | 295,304 |
General and administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Stock-based compensation expense | $ 40,083 | $ 43,482 | $ 170,682 | $ 174,542 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||||
Current income tax expense or benefit | $ 0 | $ 0 | $ 0 | $ 0 |
Deferred income tax expense or benefit | $ 0 | $ 0 | 0 | 0 |
Increase (decrease) Valuation allowance | 6,334,258 | 6,530,455 | ||
Accrued uncertain tax positions | 0 | $ 0 | ||
Federal [Member] | ||||
Income Tax Disclosure [Abstract] | ||||
Operating loss carryforwards | $ 66,464,259 | |||
Operating loss carryforwards, expiration date | Expire at various dates through 2034 | |||
State [Member] | ||||
Income Tax Disclosure [Abstract] | ||||
Operating loss carryforwards | $ 66,464,259 | |||
Operating loss carryforwards, expiration date | Expire at various dates through 2019 | |||
Research and Development [Member] | Federal [Member] | ||||
Income Tax Disclosure [Abstract] | ||||
Tax credit carryforwards | $ 2,670,688 | |||
Tax credit carryforwards, expiration date | Expire at various dates through 2034 |
Net Loss Per Share (Detail)
Net Loss Per Share (Detail) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||||
Net loss and comprehensive loss | $ (4,995,703) | $ (4,194,698) | $ (16,983,511) | $ (17,070,223) |
Extinguishment of preferred stock | 224,224 | |||
Accretion of preferred stock to redemption value | (943,297) | (1,015,371) | (4,152,801) | (348,436) |
Net loss attributable to common stockholders | $ (5,939,000) | $ (5,210,069) | $ (20,912,088) | $ (17,418,659) |
Net loss per share attributable to common stockholders, basic and diluted | $ (1.06) | $ (7.07) | $ (24.52) | $ (31.14) |
Weighted average number of common shares used in computing net loss per share attributable to common stockholders, basic and diluted | 5,605,151 | 737,016 | 852,665 | 559,419 |
Schedule of Weighted Average Co
Schedule of Weighted Average Common Stock Equivalents were Excluded from Calculation of Diluted Net Loss per Share (Detail) - Weighted Average [Member] - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Stock Option [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 924,706 | 907,485 | 615,045 | 424,160 |
Restricted Stock [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 196,419 | 241,096 | ||
Warrants to Purchase Common Stock [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 317,562 | |||
Convertible Notes [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 2,641,602 | |||
Convertible Preferred Stock (If Converted) [Member] | ||||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||||
Total amount of anti-dilutive securities excluded from computation of earnings per share | 14,183,564 | 14,015,016 | 14,183,535 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2017USD ($)ft² | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($)ft² | Dec. 31, 2015USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Area of lease property | ft² | 7,580 | 7,580 | ||
Lease expiration date | Jun. 30, 2018 | Jun. 30, 2018 | ||
Total operating leases rent expense | $ 51,289 | $ 45,180 | $ 214,595 | $ 160,221 |
Lease agreement allowances for tenant improvements | $ 46,390 | 46,390 | ||
Deferred rent included in accrued expenses | 47,948 | 49,209 | $ 8,486 | |
Non-cancelable future minimum lease payments | $ 131,684 | 157,418 | ||
Future payments related to other operating commitments | $ 2,761,501 |
Commitments and Contingencies49
Commitments and Contingencies (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating leases, 2017 | $ 104,440 | |
Operating leases, 2018 | 52,978 | |
Operating leases, Total | $ 131,684 | 157,418 |
All other operating commitments, 2017 | 2,761,501 | |
All other operating commitments, Total | 2,761,501 | |
Total commitments, 2017 | 2,865,941 | |
Total commitments, 2018 | 52,978 | |
Total commitments, Total | $ 2,918,919 |
Employee Stock Purchase Plan -
Employee Stock Purchase Plan - Additional Information (Detail) - Common Stock [Member] - Employee Stock Purchase Plan [Member] | 1 Months Ended |
Mar. 31, 2017shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Maximum number of shares provided for issuance | 300,000 |
Percentage of annual increase in number of shares reserved for issuance | 1.00% |
Summary of Related Party Transa
Summary of Related Party Transaction Activities Included in the Balance Sheets (Detail) - Akebia [Member] | Dec. 31, 2015USD ($) |
Related Party Transaction [Line Items] | |
Amounts receivable from Akebia | $ 997 |
Amounts payable to Akebia | $ 15,173 |
Furniture and Equipment - Summa
Furniture and Equipment - Summary of Components of Furniture and Equipment (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Property, Plant and Equipment [Line Items] | |||
Furniture and equipment | $ 445,310 | $ 332,013 | |
Accumulated depreciation | (295,715) | (226,042) | |
Furniture and equipment, net | $ 138,147 | 149,595 | 105,971 |
Furniture [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Furniture and equipment | 156,928 | 143,435 | |
Computers [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Furniture and equipment | 111,446 | 107,160 | |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Furniture and equipment | 141,067 | $ 81,418 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Furniture and equipment | $ 35,869 |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock - Additional Information (Detail) - USD ($) | Apr. 22, 2014 | Aug. 28, 2012 | Mar. 31, 2016 | Nov. 30, 2013 | Aug. 31, 2013 | Aug. 28, 2012 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 23, 2011 |
Temporary Equity [Line Items] | ||||||||||
Conversion of Preferred Stock | 3-to-1 | The initial conversion ratio is one share of Preferred Stock for one share of the Aerpio’s common stock. | ||||||||
Stock issued, issuance price | $ 14.70 | |||||||||
Preferred Stock, Voting Rights | Preferred Stock are entitled to the number of votes equal to the number of whole shares of Aerpio common stock into which the shares of Aerpio Preferred Stock are convertible. Except as provided by law or otherwise, the holders of Aerpio’s Preferred Stock vote together with the holders of Aerpio’s common stock as a single class. Certain significant actions must be approved by at least 50% of the holders of Aerpio’s Preferred Stock voting as a single class on an as converted basis. | |||||||||
Preferred stock terms of conversion | (i) the closing of the sale of shares of the Aerpio’s common stock to the public in an underwritten public offering at a price of $14.70 resulting in at least $40,000,000 of gross proceeds to Aerpio, or (ii) the date and time, or the occurrence of an event, specified by vote or written consent of the holders of more than 50% of the then outstanding shares of Preferred Stock on an as-converted basis. | |||||||||
Proceeds from issuance of common stock | $ 40,247,775 | |||||||||
Akebia [Member] | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Conversion of Preferred Stock | 0.4285120 share of Aerpio’s Series A Preferred Stock for every 35 shares of Akebia’s Series A Preferred Stock, 0.4285120 share of Aerpio’s Series A Preferred Stock for every 100 shares of Akebia’s Series B Preferred Stock | |||||||||
Conversion of Preferred Stock | 0.4285120 share of Aerpio’s Common Stock for every 175 shares of Akebia’s Common Stock | |||||||||
Minimum [Member] | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 40,000,000 | |||||||||
Series A2 Redeemable Convertible Preferred Stock [Member] | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Redeemable convertible preferred stock, shares issued | 4,486,015 | 4,489,160 | ||||||||
Redeemable convertible preferred stock, par value | $ 0.00001 | |||||||||
Stock issued, issuance price | $ 4.90 | |||||||||
Gross proceeds from issuance of redeemable convertible Preferred Stock | $ 22,000,000 | |||||||||
Issuance cost of redeemable convertible Preferred Stock | 168,648 | |||||||||
Net proceeds from issuance of redeemable Convertible Preferred Stock | $ 21,831,352 | |||||||||
Redeemable convertible preferred stock, shares issued | 4,489,169 | 4,660,573 | 4,489,169 | |||||||
Preferred stock, dividend rate, percentage | 6.00% | |||||||||
Preferred stock, liquidation preference per share | $ 4.90 | |||||||||
Series A Redeemable Convertible Preferred Stock [Member] | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Redeemable convertible preferred stock, shares issued | 1,239,338 | 1,326,145 | 1,326,147 | |||||||
Redeemable convertible preferred stock, par value | $ 0.00001 | |||||||||
Redeemable convertible preferred stock, shares issued | 1,326,147 | 1,326,147 | ||||||||
Preferred stock, liquidation preference per share | $ 4.27 | |||||||||
Series A1 Redeemable Convertible Preferred Stock [Member] | ||||||||||
Temporary Equity [Line Items] | ||||||||||
Redeemable convertible preferred stock, shares issued | 2,520,658 | 2,268,594 | 2,016,526 | 2,520,658 | 8,289,663 | 8,368,230 | ||||
Redeemable convertible preferred stock, par value | $ 0.00001 | $ 0.00001 | ||||||||
Stock issued, issuance price | $ 3.97 | $ 3.97 | $ 3.97 | $ 3.97 | ||||||
Gross proceeds from issuance of redeemable convertible Preferred Stock | $ 10,000,000 | $ 9,000,000 | $ 8,000,000 | |||||||
Issuance cost of redeemable convertible Preferred Stock | 210,638 | $ 94,326 | ||||||||
Net proceeds from issuance of redeemable Convertible Preferred Stock | $ 9,789,362 | |||||||||
Debt conversion, preferred stock issued | 1,562,469 | |||||||||
Redeemable convertible preferred stock, shares issued | 8,368,247 | 8,368,247 | ||||||||
Preferred stock, dividend rate, percentage | 6.00% | |||||||||
Preferred stock, liquidation preference per share | $ 3.97 |
Common Stock Reserved for Futur
Common Stock Reserved for Future issuance (Detail) | Dec. 31, 2016shares |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 15,183,705 |
Series A Convertible Preferred Units [Member] | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 1,239,338 |
Series A1 Redeemable Convertible Preferred Stock [Member] | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 8,289,663 |
Series A2 Redeemable Convertible Preferred Stock [Member] | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 4,486,015 |
Unvested Restricted Stock Awards [Member] | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 241,096 |
Options To Purchase Common Stock [Member] | |
Class Of Stock [Line Items] | |
Common stock reserved for future issuance | 927,593 |
Stock Option Award Granted Usin
Stock Option Award Granted Using Black Scholes Option Pricing Model (Detail) - Stock Option [Member] | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (years) | 6 years | 6 years |
Risk-free interest rate | 1.39% | 1.97% |
Expected volatility | 61.00% | 78.00% |
Expected dividend yield | 0.00% | 0.00% |
Loss Before Income Tax and Reco
Loss Before Income Tax and Reconciliation of Statutory Federal Income Tax (Detail) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Federal tax at statutory rate | 34.00% | 34.00% |
State and local tax at statutory rates | 0.83% | 0.83% |
Research and development credits | 3.77% | 4.06% |
Change in valuation allowance | (37.28%) | (38.26%) |
Other | (1.32%) | (0.63%) |
Effective tax rate | 0.00% | 0.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Detail) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 23,146,178 | $ 17,427,880 |
Accrued expenses | 18,400 | 143,295 |
Stock-based compensation | 96,570 | |
Research and development credits | 2,670,688 | 2,031,211 |
Other | 20,784 | 19,565 |
Total deferred tax assets | 25,952,620 | 19,621,951 |
Deferred tax liabilities: | ||
Stock-based compensation | 2,803 | |
Fixed assets | 8,434 | 9,220 |
Total deferred tax liabilities | 8,434 | 12,023 |
Net deferred tax assets before valuation allowance | 25,944,186 | 19,609,928 |
Less valuation allowance | (25,944,186) | (19,609,928) |
Net deferred tax asset | $ 0 | $ 0 |
Employee Retirement Plan - Addi
Employee Retirement Plan - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | ||
Contributions made under Plan | $ 0 | $ 0 |
Employee Bonus Plan - Additiona
Employee Bonus Plan - Additional Information (Detail) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Compensation Arrangements [Abstract] | |||
Amount of bonus accrued | $ 125,576 | $ 0 | $ 380,020 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Feb. 28, 2017USD ($) |
Senior secured convertible note [Member] | February Convertible Notes [Member] | |
Subsequent Event [Line Items] | |
Debt instrument amount | $ 297,355 |