Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2020 | Aug. 07, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | Qualigen Therapeutics, Inc. | |
Entity Central Index Key | 0001460702 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --03-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 21,028,837 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Current assets | ||
Cash and cash equivalents | $ 2,306,422 | $ 153,121 |
Restricted cash | 75,696 | |
Accounts receivable, net | 282,170 | 417,122 |
Accounts receivable - related party, net | 55,292 | 290,180 |
Inventory, net | 640,260 | 660,138 |
Prepaid expenses and other current assets | 2,318,057 | 98,385 |
Total current assets | 5,677,897 | 1,618,946 |
Right-of-use asset | 535,194 | |
Property and equipment, net | 1,547,380 | 1,447,514 |
Equipment held for lease, net | 45,411 | 64,005 |
Intangible assets, net | 855,132 | 571,270 |
Other assets | 18,279 | 18,279 |
Total Assets | 8,679,293 | 3,720,014 |
Current liabilities | ||
Accounts payable | 892,182 | 879,264 |
Accrued expenses and other current liabilities | 1,315,899 | 1,243,764 |
Notes payable, current portion | 1,106,518 | 1,913,255 |
Deferred revenue, current portion | 69,571 | 105,416 |
Deferred revenue - related party | 271,206 | 271,206 |
Due to related party | 1,144,513 | 926,385 |
Lease liability | 239,549 | |
Warrant liabilities | 16,201,400 | |
Total current liabilities | 21,240,838 | 5,339,290 |
Notes payable, net of current portion | 218,832 | 305,805 |
Lease liability, net of current portion | 368,785 | |
Deferred revenue, net of current portion | 3,594 | 2,689 |
Total liabilities | 21,832,049 | 5,647,784 |
Stockholders' deficit | ||
Common stock, post-merger $0.001 par value; 225,000,000 shares authorized; 13,588,258 shares issued and outstanding as of June 30, 2020 and pre-merger $0.01 par value; 40,000,000 shares authorized; 5,602,214 shares issued and outstanding as of March 31, 2020 | 13,588 | 56,026 |
Additional paid-in capital | 52,713,683 | 45,161,599 |
Accumulated deficit | (65,880,031) | (47,301,126) |
Total stockholders' deficit | (13,152,756) | (1,927,770) |
Total Liabilities and Stockholders' Deficit | 8,679,293 | 3,720,014 |
Series A Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock, value | 24,129 | |
Total stockholders' deficit | 24,129 | |
Series B Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock, value | 77,077 | |
Total stockholders' deficit | 77,077 | |
Series C Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock, value | 33,007 | |
Total stockholders' deficit | 33,007 | |
Series D Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock, value | 15,083 | |
Total stockholders' deficit | 15,083 | |
Series D-1 Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock, value | 6,435 | |
Total stockholders' deficit | 6,435 | |
Series Alpha Preferred Stock [Member] | ||
Stockholders' deficit | ||
Preferred stock, value | 4 | |
Total stockholders' deficit | $ 4 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Mar. 31, 2020 |
Series A Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,500,000 | 2,500,000 |
Preferred stock, shares issued | 0 | 2,412,887 |
Preferred stock, shares outstanding | 0 | 2,412,887 |
Series B Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 9,000,000 | 9,000,000 |
Preferred stock, shares issued | 0 | 7,707,736 |
Preferred stock, shares outstanding | 0 | 7,707,736 |
Series C Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,500,000 | 5,500,000 |
Preferred stock, shares issued | 0 | 3,300,715 |
Preferred stock, shares outstanding | 0 | 3,300,715 |
Series D Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 2,151,816 | 2,151,816 |
Preferred stock, shares issued | 0 | 1,508,305 |
Preferred stock, shares outstanding | 0 | 1,508,305 |
Series D-1 Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 848,184 | 848,184 |
Preferred stock, shares issued | 0 | 643,511 |
Preferred stock, shares outstanding | 0 | 643,511 |
Series Alpha Preferred Stock [Member] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 7,000 | 7,000 |
Preferred stock, shares issued | 4,620 | 0 |
Preferred stock, shares outstanding | 4,620 | 0 |
Post Merger Common Stock [Member] | ||
Common stock, par value | $ 0.001 | |
Common stock, shares authorized | 225,000,000 | |
Common stock, shares issued | 13,588,258 | |
Common stock, shares outstanding | 13,588,258 | |
Pre Merger Common Stock [Member] | ||
Common stock, par value | $ 0.01 | |
Common stock, shares authorized | 40,000,000 | |
Common stock, shares issued | 5,602,214 | |
Common stock, shares outstanding | 5,602,214 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES | ||
Total revenues | $ 904,067 | $ 1,510,835 |
EXPENSES | ||
Cost of product sales | 355,427 | 316,513 |
Cost of product sales-related party | 452,495 | 661,267 |
General and administrative | 1,979,614 | 269,017 |
Research and development | 597,345 | 147,641 |
Research and development-related party | 539,425 | |
Sales and marketing | 88,844 | 102,394 |
Total expenses | 3,473,725 | 2,036,257 |
LOSS FROM OPERATIONS | (2,569,658) | (525,422) |
OTHER EXPENSE (INCOME), NET | ||
Change in fair value of warrant liabilities | 16,201,400 | |
Interest expense, net | 57,364 | 69,985 |
Other income, net | (250,114) | (992) |
Total other expense (income), net | 16,008,650 | 68,993 |
LOSS BEFORE PROVISION FOR INCOME TAXES | (18,578,308) | (594,415) |
PROVISION FOR INCOME TAXES | 597 | 150 |
NET LOSS | $ (18,578,905) | $ (594,565) |
Net loss per common share, basic and diluted | $ (2.12) | $ (0.11) |
Weighted-average number of shares outstanding, basic and diluted | 8,746,250 | 5,602,214 |
Net Product Sales [Member] | ||
REVENUES | ||
Total revenues | $ 484,423 | $ 560,651 |
Net Product Sales-Related Party [Member] | ||
REVENUES | ||
Total revenues | $ 419,644 | $ 950,184 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited) - USD ($) | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] | Series D Convertible Preferred Stock [Member] | Series D-1 Convertible Preferred Stock [Member] | Series Alpha Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Mar. 31, 2019 | $ 24,129 | $ 77,077 | $ 33,007 | $ 15,083 | $ 6,435 | $ 56,026 | $ 45,153,733 | $ (45,513,614) | $ (148,124) | |
Balance, shares at Mar. 31, 2019 | 2,412,887 | 7,707,736 | 3,300,715 | 1,508,305 | 643,511 | 5,602,214 | ||||
Stock-based compensation | ||||||||||
Fair value of warrants issued to advisor upon closing of private placement | ||||||||||
Net loss | (594,565) | (594,565) | ||||||||
Balance at Jun. 30, 2019 | $ 24,129 | $ 77,077 | $ 33,007 | $ 15,083 | $ 6,435 | $ 56,026 | 45,153,733 | (46,108,179) | (742,689) | |
Balance, shares at Jun. 30, 2019 | 2,412,887 | 7,707,736 | 3,300,715 | 1,508,305 | 643,511 | 5,602,214 | ||||
Balance at Mar. 31, 2020 | $ 24,129 | $ 77,077 | $ 33,007 | $ 15,083 | $ 6,435 | $ 56,026 | 45,161,599 | (47,301,126) | (1,927,770) | |
Balance, shares at Mar. 31, 2020 | 2,412,887 | 7,707,736 | 3,300,715 | 1,508,305 | 643,511 | 5,602,214 | ||||
Stock-based compensation | 358,625 | 358,625 | ||||||||
Issuance of common stock for conversion of preferred stock | $ (24,129) | $ (77,077) | $ (33,007) | $ (15,083) | $ (6,435) | $ (1) | $ 7,042 | 148,690 | ||
Issuance of common stock for conversion of preferred stock, shares | (2,412,887) | (7,707,736) | (3,300,715) | (1,508,305) | (643,511) | (740) | 7,042,660 | |||
Issuance of common stock for conversion of notes payable and accrued interest | $ 1,775 | 1,582,633 | 1,584,408 | |||||||
Issuance of common stock for conversion of notes payable and accrued interest, shares | 1,775,096 | |||||||||
Issuance of Series Alpha preferred shares upon closing of private placement | $ 5 | 4,009,995 | 4,010,000 | |||||||
Issuance of Series Alpha preferred shares upon closing of private placement, shares | 5,010 | |||||||||
Effect of reverse recapitalization | $ (52,519) | 863,405 | 810,886 | |||||||
Effect of reverse recapitalization, shares | (2,095,826) | |||||||||
Issuance of Series Alpha preferred stock for conversion of notes payable | 350,000 | 350,000 | ||||||||
Issuance of Series Alpha preferred stock for conversion of notes payable, shares | 350 | |||||||||
Shares and warrants issued to advisor upon closing of private placement | $ 1,217 | 1,103,891 | 1,105,108 | |||||||
Shares and warrants issued to advisor upon closing of private placement, shares | 1,217,147 | |||||||||
Fair value of shares issued to advisor upon closing of private placement | (902,250) | (902,250) | ||||||||
Fair value of warrants issued to advisor upon closing of private placement | (202,858) | (202,858) | ||||||||
Stock issued for professional services | $ 47 | 239,953 | 240,000 | |||||||
Stock issued for professional services, shares | 46,967 | |||||||||
Net loss | (18,578,905) | (18,578,905) | ||||||||
Balance at Jun. 30, 2020 | $ 4 | $ 13,588 | $ 52,713,683 | $ (65,880,031) | $ (13,152,756) | |||||
Balance, shares at Jun. 30, 2020 | 4,620 | 13,588,258 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (18,578,905) | $ (594,565) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 32,565 | 57,891 |
Amortization of debt issuance costs | 11,849 | |
Amortization of right-of-use assets | 50,318 | |
Accounts receivable reserves and allowances | (27,282) | |
Inventory reserves | (23,132) | 24,081 |
Stock-based compensation | 358,625 | |
Change in fair value of warrant liabilities | 16,201,400 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 162,234 | 167,476 |
Accounts receivable - related party | 234,888 | (335,478) |
Inventory and equipment held for lease | 43,010 | (1,349) |
Prepaid expenses and other assets | (1,020,339) | (37,038) |
Accounts payable | 12,918 | 216,589 |
Accrued expenses and other current liabilities | 235,495 | (81,425) |
Due to related party | 218,128 | 392,353 |
Lease liability | (54,776) | |
Deferred revenue | (34,940) | (34,951) |
Net cash used in operating activities | (2,189,793) | (214,567) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (108,699) | |
Payments for patents and licenses | (289,000) | (72,817) |
Net cash used in investing activities | (397,699) | (72,817) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of Series Alpha preferred shares upon closing of private placement | 4,010,000 | |
Net proceeds from the issuance of notes payable | 1,392,463 | 257,654 |
Payments on capital lease obligations | (7,625) | |
Principal payments on notes payable | (585,974) | (16,585) |
Net cash provided by financing activities | 4,816,489 | 233,444 |
Net change in cash, cash equivalents and restricted cash | 2,228,997 | (53,940) |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - beginning of period | 153,121 | 125,123 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH - end of period | 2,382,118 | 71,183 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||
Cash paid for: Interest | 12,145 | 24,051 |
Cash paid for: Taxes | 597 | 3,343 |
NONCASH FINANCING AND INVESTING ACTIVITIES: | ||
Issuance of common stock for professional services | 240,000 | |
Issuance of common stock for conversion of debt | 1,350,198 | |
Issuance of common stock for conversion of accrued interest | 234,210 | |
Issuance of common stock for conversion of preferred stock | 148,690 | |
Issuance of preferred stock for conversion of debt | 350,000 | |
Fair value of shares issued to advisor upon closing of private placement | 902,250 | |
Fair value of warrants issued to advisor upon closing of private placement | 202,858 | |
Effect of reverse recapitalization | 810,886 | |
Right-of-use assets obtained in exchange for lease liabilities | 585,512 | |
Lease liabilities arising from obtaining right-of-use assets | 663,110 | |
Net transfers to inventory from equipment held for lease | $ 103,112 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization Qualigen, Inc., the predecessor of and now a subsidiary of Qualigen Therapeutics, Inc., was incorporated in Minnesota in 1996 to design, develop, manufacture and sell point-of-care quantitative immunoassay diagnostic products for use in physician offices and other point-of-care settings worldwide. Qualigen, Inc. was reincorporated in Delaware in 1999. Qualigen Therapeutics, Inc. (the “Company”) operates in one business segment. In May 2020, Qualigen, Inc. completed a reverse recapitalization transaction with Ritter Pharmaceuticals, Inc. (“Ritter”) and Ritter was renamed Qualigen Therapeutics, Inc., recognized as a reverse recapitalization. All shares of Qualigen, Inc.’s capital stock were exchanged for Qualigen Therapeutics’ capital stocks in the merger. Ritter/Qualigen Therapeutics common stock, which was previously traded on the Nasdaq Capital Market under the ticker symbol “RTTR,” commenced trading on the Nasdaq Capital Market, on a post-reverse stock split adjusted basis, under the ticker symbol “QLGN” on May 26, 2020. Qualigen, Inc. was determined to be the accounting acquirer in a reverse recapitalization based upon the terms of the merger and other factors. All references to financial figures of “the Company” presented in the accompanying condensed consolidated financial statements and in these Notes as of March 31, 2020 and for the three-months period ended June 30, 2019 are those of Qualigen, Inc. Basis of Presentation The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In management’s opinion, the accompanying statements reflect adjustments necessary to present fairly the financial position, results of operations, and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the footnotes. The condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended March 31, 2020 included on Form 8-K/A, as filed with the SEC on June 29, 2020. The accompanying condensed balance sheet at March 31, 2020 has been derived from the audited balance sheet at March 31, 2020 contained in the above referenced Form 8-K/A. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. Accounting Estimates Management uses estimates and assumptions in preparing its condensed consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant estimates relate to amortization and depreciation, deferred revenue, inventory reserves, allowances for doubtful accounts and returns, and warranty costs. Actual results could vary from the estimates that were used. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an initial maturity of 90 days or less and money market funds to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposits which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risks on cash and cash equivalents. Restricted Cash Restricted cash includes funds that are held in a bank account that are restricted as to withdrawal until certain conditions are met pursuant to Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Company’s condensed consolidated statements of cash flows for the three months ended June 30, 2020 and 2019: June 30, 2020 June 30, 2019 Cash and cash equivalents $ 2,306,422 $ 71,183 Restricted cash 75,696 — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 2,382,118 $ 71,183 Inventory, Net Inventory is recorded at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. The Company reviews the components of its inventory on a periodic basis for excess or obsolete inventory, and records specific reserves for identified items. Long-Lived Assets The Company assesses potential impairments to its long-lived assets when there is evidence that events or changes in circumstances indicate that assets may not be recoverable. An impairment loss would be recognized when the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets. The amount of impairment loss, if any, will generally be measured as the difference between the net book value of the assets and their estimated fair values. During the three months ended June 30, 2020 and year ended March 31, 2020, no such impairment losses have been recorded. Accounts Receivable, Net The Company grants credit to domestic physicians, clinics, and distributors. The Company performs ongoing credit evaluations of its customers and generally requires no collateral. Customers can purchase certain products through a financing agreement that the Company has with an outside leasing company. Under the agreement, the leasing company evaluates the credit worthiness of the customer. Upon acceptance of the product by the customer, the leasing company remits payment to the Company at a discount. This financing arrangement is without recourse to the Company. The Company provides an allowance for doubtful accounts and returns equal to the estimated uncollectible amounts or expected returns. The Company’s estimates are based on historical collections and returns and a review of the current status of trade accounts receivable. Accounts receivable is comprised of the following at: June 30, 2020 March 31, 2020 Accounts Receivable $ 335,993 $ 443,663 Less Allowance (53,823 ) (26,541 ) $ 282,170 $ 417,122 Research and Development The Company expenses research and development costs as incurred. Advertising Costs The Company expenses advertising costs as incurred. Advertising expense was approximately $9,000 and $1,000, respectively, for the three months ended June 30, 2020 and 2019. Shipping and Handling Costs The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound and outbound freight are generally recorded in cost of sales which totaled approximately $26,000 and $27,000, respectively, for the three months ended June 30, 2020 and 2019. Other shipping and handling costs included in general and administrative, research and development, and sales and marketing expenses totaled approximately $4,000 and $1,000 for the three months ended June 30, 2020 and 2019, respectively. Revenue from Contracts with Customers Effective April 1, 2020, the Company adopted Accounting Standard Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation The Company places its medical diagnostic equipment, FastPack System analyzers and accessories, at customer sites under loan agreements as well as generating revenue from direct sales to customers and sells disposable products for use with the equipment. In instances where the equipment is loaned to the customer, the customer is required to make minimum purchases of disposable products. The Company generates revenue from selling disposable products used with the FastPack System. Disposable products include reagent packs which are diagnostic tests for Total PSA, testosterone, thyroid disorders, pregnancy, and Vitamin D. The Company provides the disposable products and equipment in exchange for consideration, which occurs when a customer submits a purchase order and the Company provides disposable products and equipment at the agreed upon prices in the invoice. Generally, customers purchase disposable products using separate purchase orders after the equipment has been provided to the customer. The delivery of the equipment represents a separate performance obligation and is completed upon receipt of the equipment by the customer. The delivery of each individual reagent pack represents a separate performance obligation because the reagent packs are standardized, are not interrelated in any way, and the customer can benefit from each reagent pack without any other product. The Company’s contracts for equipment and disposable products only include fixed consideration. There are no discounts, rebates, returns or other forms of variable consideration. Customers are generally required to pay within 30 days. The delivery of the equipment and the delivery of disposable products are performance obligations satisfied at a point in time. The performance obligation arising from the delivery of the equipment is satisfied upon the delivery of the equipment to the customer. The disposable products are shipped Free on Board (“FOB”) shipping point. For disposable products that are shipped FOB shipping point, the customer has the significant risks and rewards of ownership and legal title to the assets when the disposable products leave the Company’s shipping facilities, thus the customer obtains control and revenue is recognized at that point in time. The Company has elected the practical expedient and accounting policy election to account for the shipping and handling as activities to fulfill the promise to transfer the disposable products and not as a separate performance obligation. The Company’s contracts with customers generally have an expected duration of one year or less, and therefore the Company has elected the practical expedient in ASC 606 to not disclose information about its remaining performance obligations. Any incremental costs to obtain contracts are recorded as selling, general and administrative expense as incurred due to the short duration of the Company’s contracts. Contract balances The timing of the Company’s revenue recognition may differ from the timing of payment by the Company’s customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Prior to the adoption of ASC 606, the Company accounted for its revenue arrangements under ASC 605, Revenue Recognition Revenues from product sales which included both the Company’s proprietary diagnostic equipment (“analyzer”) and various immunoassay products (“reagents”) were generally recognized upon shipment, as no significant continuing performance obligations remained post shipment. Cash payments received in advance were classified as deferred revenue and recorded as a liability. The Company was generally not contractually obligated to accept returns, except for defective products. Revenue was recorded net of an allowance for estimated returns. Multiple element arrangements included contracts that combined both the Company’s analyzer and a customer’s future reagent purchases under a single contract. In some sales contracts, the Company provided analyzers at no charge to customers. Title to the analyzer was maintained by the Company and the analyzer was returned by the customer to the Company at the end of the purchase agreement. During the three months ended June 30, 2020 and 2019, product sales are stated net of an allowance for estimated returns of approximately $31,000 and $45,000, respectively. Deferred Revenue Prior to the adoption of ASC 606, payments received in advance from customers pursuant to certain collaborative research license agreements, deposits against future product sales, multiple element arrangements and extended warranties are recorded as a current or non-current deferred revenue liability based on the time from the balance sheet date to the future date of revenue recognition. Research and Licenses Prior to the adoption of ASC 606, the Company recognized research revenue over the term of various agreements, as negotiated contracted amounts are earned or reimbursable costs are incurred related to those agreements. Negotiated contracted amounts are earned in relative proportion to the performance required under the applicable contracts. Nonrefundable license fees are recognized over the related performance period or at the time that the Company has satisfied all performance obligations. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. During the three months ended June 30, 2020 and 2019, the Company did not recognize any collaborative research revenue. Operating Leases Effective April 1, 2020, the Company adopted ASU No. 2018-11, Leases (Topic 842) (“Topic 842”) Targeted Improvements The Company’s leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use (“ROU”) asset related to the lease. These are amortized through the ROU asset as reductions of expense over the lease term. The Company’s office/manufacturing/warehouse/laboratory lease agreement does not contain any material residual value guarantees or material restrictive covenants. The Company has no lease agreements with lease and non-lease components. Related to the adoption of Topic 842, the Company’s policy elections were as follows: ● The Company has availed itself of this practical expedient for under U.S. GAAP, along with the other practical expedients such as grandfathering lease classifications, and treatment of indirect costs; ● The Company has elected to exclude short-term leases having initial terms of 12 months or less, if any; ● The Company has elected not to separate non-lease components from its leases to account for them separately; ● The Company has elected not to avail itself of the practical expedient of using hindsight to determine the lease term; and ● The Company has elected the alternative transition option, by recognizing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption (as of April 1, 2020, however, the adoption of the Topic 842 did not have an effect on retained earnings). Property and Equipment, Net Property and equipment are stated at cost and are presented net of accumulated depreciation. Depreciation is provided for on a straight-line basis over the estimated useful lives of the related assets as follows: Machinery and equipment 5 years Computer equipment 3 years Molds and tooling 5 years Office furniture and equipment 5 years Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or their estimated useful lives. The Company occasionally designs and builds its own machinery. The costs of these projects, which includes the cost of construction and other direct costs attributable to the construction, are capitalized as construction in progress. No provision for depreciation is made on construction in progress until the relevant assets are completed and placed in service. The Company’s policy is to evaluate the remaining lives and recoverability of long-term assets on at least an annual basis or when conditions are present that indicate impairment. Intangible Assets, Net Intangibles consist of patent-related costs and costs for license agreements. Management reviews the carrying value of intangible assets that are being amortized on an annual basis or sooner when there is evidence that events or changes in circumstances may indicate that impairment exists. The Company considers relevant cash flow and profitability information, including estimated future operating results, trends and other available information, in assessing whether the carrying value of intangible assets being amortized can be recovered. If the Company determines that the carrying value of intangible assets will not be recovered from the undiscounted future cash flows expected to result from the use and eventual disposition of the underlying assets, the Company considers the carrying value of such intangible assets as impaired and reduces them by a charge to operations in the amount of the impairment. Costs related to acquiring patents are capitalized and amortized over their estimated useful lives, which is generally 5 to 17 years, using the straight-line method. Amortization of patents commences once final approval of the patent has been obtained. Patent costs are charged to operations if it is determined that the patent will not be obtained. The cost of the patents of approximately $739,000 and $715,000 at June 30, 2020 and March 31, 2020, respectively, are stated net of accumulated amortization of approximately $297,000 and $293,000, respectively. Amortization of patents charged to operations for the three months ended June 30, 2020 and 2019 were approximately $3,000 for each period. Total future estimated amortization of patent costs for the five succeeding years is approximately $10,000 for the year ending March 31, 2021, approximately $14,000 for each of the years ending March 31, 2022 through 2023, approximately $13,000 for year 2024, approximately $9,000 for year 2025 and approximately $382,000 thereafter. The cost of the licenses of approximately $810,000 and $544,000 at June 30, 2020 and March 31, 2020 are stated net of accumulated amortization of approximately $396,000 and $395,000, respectively. Amortization of licenses charged to operations for each of the three month periods ended June 30, 2020 and 2019 was approximately $2,000. Total future estimated amortization of license costs is approximately $5,000 for the year ending March 31, 2021, approximately $7,000 for each of the years ending March 31, 2022 through 2023 and approximately $3,000 for year 2024, $0 for year 2025 and approximately $390,000 thereafter. Derivative Financial Instruments and Warrant Liabilities The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the Condensed Consolidated Statements of Operations. Depending on the features of the derivative financial instrument, the Company uses either the Black-Scholes option-pricing model or a Monte Carlo simulation to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period (See Note 7). Fair value measurements ● Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date; ● Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active; and ● Level 3 - Inputs that are unobservable. Fair Value of Financial Instruments Financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and debt are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. Stock-Based Compensation Stock-based compensation cost for equity awards granted to employees and non-employees is measured at the grant date based on the calculated fair value of the award using the Black-Scholes option-pricing model, and is recognized as an expense, under the straight-line method, over the requisite service period (generally the vesting period of the equity grant). If we determine that other methods are more reasonable, or other methods for calculating these assumptions are prescribed by regulators, the fair value calculated for our stock options could change significantly. Higher volatility and longer expected lives would result in an increase to stock-based compensation expense to employees and non-employees determined at the date of grant. Income Taxes Deferred income taxes are recognized for temporary differences in the basis of assets and liabilities for financial statement and income tax reporting that arise due to net operating loss carry forwards, research and development credit carry forwards and from using different methods and periods to calculate depreciation and amortization, allowance for doubtful accounts, accrued vacation, research and development expenses, and state taxes. A provision has been made for income taxes due on taxable income and for the deferred taxes on the temporary differences. The components of the deferred tax asset and liability are individually classified as current and noncurrent based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Realization of the deferred income tax asset is dependent on generating sufficient taxable income in future years. Sales and Excise Taxes Sales and other taxes collected from customers and subsequently remitted to government authorities are recorded as accounts receivable with corresponding tax payable. These balances are removed from the balance sheet as cash is collected from customers and remitted to the tax authority. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, enacted in March 2010, required medical device manufacturers to pay an excise tax of 2.3% on the sales price of medical devices sold in the United States beginning in January 2013. The Further Consolidated Appropriations Act, 2020 H.R. 1865 (Pub.L.116-94), signed into law on December 20, 2019, has repealed the medical device excise tax previously imposed by Internal Revenue Code section 4191. Prior to the repeal, the tax was on a 4-year moratorium. As a result of the repeal and the prior moratorium, sales of taxable medical devices after December 31, 2015, are not subject to the tax. Accordingly, for the three months ended June 30, 2020 and 2019, the Company did not incur any medical device excise tax expenses. Warranty Costs The Company’s warranty policy generally provides for one year of coverage against defects and nonperformance within published specifications for sold analyzers and for the term of the contract for equipment held for lease. The Company accrues for estimated warranty costs in the period in which the revenue is recognized based on historical data and the Company’s best estimates of analyzer failure rates and costs to repair. Accrued warranty liabilities were approximately $29,000 and $35,000, respectively, at June 30, 2020 and March 31, 2020 and are included in accrued expenses and other current liabilities on the balance sheets. Warranty costs were approximately $31,000 and $28,000 for the three months ended June 30, 2020 and 2019, respectively, and are included in cost of product sales in the statements of operations. Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) Targeted Improvements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”) Other accounting standard updates are either not applicable to the Company or are not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Liquidity
Liquidity | 3 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | NOTE 2 — LIQUIDITY The Company has suffered recurring losses from operations and has a net working capital deficit and an accumulated deficit at June 30, 2020, and the Company continued to incur losses subsequent to the balance sheet date. The Company’s reverse recapitalization transaction with Ritter Pharmaceuticals, Inc. (“Ritter”) closed in May 2020 together with an associated new equity capital raise of approximately $4.0 million, and approximately $1.9 million in convertible notes payable were converted into shares of the Company’s capital stock. In July and August 2020, the Company raised an additional $18.0 million through two Securities Purchase Agreements with a single institutional investor (see Note 13). Planned future research and development activities, capital expenditures, clinical and pre-clinical testing, and commercialization activities of the Company’s products will require significant additional financing. Additional financing may not be available on acceptable terms or at all. There is no assurance that profitable operations will ever be achieved, or if achieved, could be sustained on a continuing basis. |
Inventory, Net
Inventory, Net | 3 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory, Net | NOTE 3 — INVENTORY, NET Inventory, net consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Raw materials $ 437,728 $ 457,425 Work in process 167,849 117,729 Finished goods 34,683 84,984 $ 640,260 $ 660,138 |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 4 — PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Machinery and equipment $ 2,355,165 $ 2,355,165 Construction in progress–equipment 1,480,400 1,376,000 Computer equipment 424,851 420,552 Leasehold improvements 307,539 307,539 Molds and tooling 260,002 260,002 Office furniture and equipment 136,275 136,275 4,964,232 4,855,533 Less Accumulated depreciation (3,416,852 ) (3,408,019 ) $ 1,547,380 $ 1,447,514 Depreciation expense relating to property and equipment was approximately $9,000 and $17,000 for the three months ended June 30, 2020 and 2019, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | NOTE 5 — ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES Accrued expenses and other current liabilities consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Bonus $ 362,500 $ — Vacation 226,881 160,024 Royalties 1,008 26,099 Research and development 105,064 288,184 Legal 82,019 151,357 Accounting 166,965 126,543 Deferred rent — 77,597 Warranty costs 29,165 30,119 Payroll 96,501 35,052 Patent and license fees 134,025 51,007 Sales and use taxes 21,590 16,755 Income taxes 8,100 8,100 Interest 689 247,569 Other 81,392 25,358 $ 1,315,899 $ 1,243,764 |
Notes Payable
Notes Payable | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | NOTE 6 — NOTES PAYABLE Notes payable consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Insurance Financing Agreement with a finance company, monthly payments of $119,943 including interest of 4.54% per annum; secured by an insurance policy; due January 2021 $ 827,039 $ — An unsecured promissory note with a bank, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act 449,050 — A Factoring and Security Agreement for up to $2,000,000 with a bank, interest at Prime plus 2% of the amount of advances outstanding and a factoring fee of 0.01% per day of the face amount of each invoice for each calendar day that a factored invoice is outstanding 22,912 489,051 Equipment Financing Agreement with a bank, monthly payments of $720 including imputed interest at 6.95% per annum; secured by laboratory equipment; due October 2022 18,554 20,370 Equipment Financing Agreement with a bank, monthly payments of $596 including imputed interest at 6.590% per annum; secured by manufacturing equipment; due July 2021 7,795 9,441 An unsecured convertible note with an investor including interest at 10% per annum; due September 2019, which was extended by the noteholder until May 2020 — 1,000,000 A series of unsecured convertible bridge notes with investors, including interest of 8% per annum; due between June 2020 and February 2021 — 410,000 A series of unsecured convertible bridge notes with investors, including interest of 8% per annum; due between January and February 2022 — 290,198 1,325,350 2,219,060 Less current portion, net of debt issuance costs (1,106,518 ) (1,913,255 ) Notes Payable, net of current portion $ 218,832 $ 305,805 Future maturities of notes payable are as follows as of June 30, 2020: Year Ending March 31, Amount 2021 (nine months) $ 1,106,518 2022 215,994 2023 2,838 Total balance $ 1,325,350 |
Warrant Liabilities
Warrant Liabilities | 3 Months Ended |
Jun. 30, 2020 | |
Warrant Liabilities | |
Warrant Liabilities | NOTE 7 – WARRANT LIABILITIES In 2004, the Company issued warrants to various investors and brokers for the purchase of Series C preferred stock in connection with a private placement (the “Series C Warrants”). The Series C Warrants were subsequently extended and, upon closing of the reverse recapitalization transaction with Ritter, exchanged for warrants to purchase common stock of the Company, pursuant to the Series C Warrant terms as adjusted. The Series C Warrants were classified as liabilities, but had minimal fair value prior to the merger with Ritter. In exchange for the Series C Warrants, upon closing of the merger with Ritter, the holders received warrants to purchase an aggregate of 4,713,490 shares of the Company’s common stock at $0.72 per share, subject to adjustment. As of June 30, 2020, the warrants have remaining terms ranging from 3.1 to 5.3 years. The warrants were determined to be liability-classified pursuant to the guidance in ASC 480 and ASC 815-40, resulting from inclusion of a leveraged ratchet provision for subsequent dilutive issuances. The following table summarizes the warrant activity for the year ended June 30, 2020: Common Stock Warrants Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Average Remaining Life (Years) Total outstanding – March 31, 2020 — $ — Series C preferred stock warrants exchanged for common stock warrants upon reverse recapitalization 4,713,490 0.72 Forfeited — — Expired — — Granted — — Total outstanding – June 30, 2020 4,713,490 $ 0.72 Exercisable 4,713,490 $ 0.72 $ 0.72 3.82 Non-Exercisable — $ — $ — — The following table summarizes the warrant activity for the year ended June 30, 2019: Series C Preferred Stock Warrants Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Average Remaining Life (Years) Total outstanding – March 31, 2019 2,197,442 $ 2.23 Forfeited (2,000 ) 2.25 Expired — — Granted — — Total outstanding – June 30, 2019 2,195,442 $ 2.23 Exercisable 2,187,322 $ 2.23 $ 1.83 – $2.70 4.61 Non-Exercisable 8,120 $ 2.25 $2.25 7.24 The following table presents the Company’s fair value hierarchy for its warrant liabilities measured at fair value on a recurring basis as of June 30, 2020: Quoted Market Significant Prices for Other Significant Identical Observable Unobservable Assets Inputs Inputs Warrant liabilities (Level 1) (Level 2) (Level 3) Total Balance as of June 30, 2020 $ - $ - $ 16,201,400 $ 16,201,400 The following table is a reconciliation for those items measured at fair value on a recurring basis using Level 3 inputs during the three months ended June 30, 2020: Warrant liabilities As of June 30, 2020 Balance, beginning of period $ — Fair value at issuance date — Change in fair value included in the statement of comprehensive loss 16,201,400 Balance, end of period $ 16,201,400 The value of the warrant liabilities based on a valuation received from an independent valuation firm was determined using a Monte-Carlo simulation. The value as of the dates set forth in the table above, was based on upon following assumptions: June 30, 2020 Stock price $ 3.97 Risk-free interest rate 0.17% — 0.32 % Expected volatility (peer group) 81.00% — 87.00 % Expected life (in years) 3.10 — 5.27 Expected dividend yield 0.00 % Number outstanding 4,713,490 Warrant liabilities (current), end of period $ 16,201,400 |
Lease Obligations
Lease Obligations | 3 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Lease Obligations | NOTE 8 — LEASE OBLIGATIONS The tables below show the initial measurement of the operating lease right-of-use assets and liabilities as of April 1, 2020 and the balances as of June 30, 2020, including the changes during the periods: Operating lease right-of-use assets Operating lease right-of-use-assets obtained in exchange for lease obligation at April 1, 2020: $ 585,513 Less amortization of operating lease right-of-use assets (50,319 ) Operating lease right-of-use assets at June 30, 2020 $ 535,194 Operating lease liabilities Lease liabilities arising from obtaining right-of-use assets at April 1, 2020: $663,110 Less principal payments on operating lease liabilities (54,776 ) Lease liabilities at June 30, 2020 608,334 Less non-current portion 368,785 Current portion at June 30, 2020 $ 239,549 As of June 30, 2020, the Company’s operating leases have a weighted-average remaining lease term of 2.3 years and a weighted-average discount rate of 8.9%. Total lease expense was approximately $86,000 and $84,000, respectively, for the three month periods ended June 30, 2020 and 2019. Lease expense was recorded in cost of product sales, general and administrative expenses, research and development and sales and marketing expenses. |
Commitments
Commitments | 3 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | NOTE 9 — COMMITMENTS The Company leases its facilities under a long-term operating lease agreement expiring in October 2022. The agreement generally requires the payment of utilities, real estate taxes, insurance, and repairs. Rent expense was approximately $65,000 for the three month periods ended June 30, 2020 and 2019. As of June 30, 2020, future minimum payments during the next five fiscal years and thereafter are as follows: Year Ending March 31, Amount 2021 (nine months) $ 212,906 2022 290,492 2023 173,315 Total 676,713 Less present value discount (68,379 ) Operating lease liabilities $ 608,334 |
Research and License Agreements
Research and License Agreements | 3 Months Ended |
Jun. 30, 2020 | |
Research And License Agreements | |
Research and License Agreements | NOTE 10 — RESEARCH AND LICENSE AGREEMENTS In June and August 2018, the Company entered into license and sponsored research agreements with the University of Louisville Research Foundation (“ULRF”) for a novel molecular-based compound that has shown promise as an anticancer drug. Under the agreements, the Company will take over development, regulatory approval and commercialization of the compound from ULRF and is responsible for maintenance of the related intellectual property portfolio. In return, ULRF received a $50,000 convertible promissory note in payment of an upfront license fee and the Company will reimburse ULRF for sponsored research expenses of up to $348,000 and prior patent costs of up to $200,000. In addition, the Company has agreed to pay ULRF (i) royalties, on patent-covered net sales associated with the commercialization of anti-nucleolin agent-conjugated nanoparticles, of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000), until expiration of the last to expire of the licensed patents, (ii) 30% to 50% of any non-royalty sublicensee income received (50% for sublicenses granted in the first two years of the ULRF license agreement, 40% for sublicenses granted in the third or fourth years of the ULRF license agreement, and 30% for sublicenses granted in the fifth year of the ULRF license agreement or thereafter), (iii) reimbursements for costs associated with the preparation, filing, prosecution and maintenance of licensed patents, incurred prior to June 2018, and (iv) payments ranging from $100,000 to $5,000,000 upon the achievement of certain regulatory and commercial milestones. Milestone payments for the first therapeutic indication would be $100,000 for first dosing in a Phase 1 clinical trial, $200,000 for first dosing in a Phase 2 clinical trial, $350,000 for first dosing in a Phase 3 clinical trial, $500,000 for regulatory marketing approval and $5,000,000 upon achieving a cumulative $500,000,000 of Licensed Product sales; the Company would also pay another $500,000 milestone payment for any additional regulatory marketing approval for each additional therapeutic (or diagnostic) indication. The Company also must pay ULRF shortfall payments if the total amounts actually paid with respect to royalties and non-royalty sublicensee income for any year is less than the applicable annual minimum (ranging from $10,000 to $50,000) for such year. Sponsored research expenses related to these agreements for the three months ended June 30, 2020 and 2019 were approximately $2,000 and $33,000 and are recorded in research and development expenses in the statements of operations. In December 2018, the Company entered into a license agreement with Advanced Cancer Therapeutics, LLC (“ACT”), granting the Company exclusive rights to develop and commercialize a novel aptamer-based anticancer technology. In return, ACT received a $25,000 convertible promissory note in payment of an upfront license fee. In addition, the Company has agreed to pay ACT (i) royalties, on net sales associated with the commercialization of ACT-GRO-777/AS1411, of 2% (only if patent-covered and only on net sales above a cumulative $3,000,000) or 1% (if not patent-covered, but only on net sales above a cumulative $3,000,000), until the 15th anniversary of the ACT license agreement and (ii) milestone payments of $100,000 for the Company raising a cumulative total of $2,000,000 in new equity financing after the date of the ACT license agreement, $100,000 upon any first AS1411-based licensed product receiving the CE Mark or similar FDA status, and $500,000 upon cumulative worldwide AS1411-based licensed product net sales reaching $3,000,000. In May 2020, the $100,000 milestone payment for the Company raising a cumulative total of $2,000,000 in new equity financing was triggered. This amount is included in intangible assets and accrued expenses as of June 30, 2020. In March 2019, the Company entered into a sponsored research agreement and an option for a license agreement with ULRF for development of several small-molecule RAS Inhibitor drug candidates. Under the terms of this agreement, the Company will reimburse ULRF for sponsored research expenses of up to $693,000 for this program from April 2019 through September 2020. Sponsored research expenses related to this agreement for the three months ended June 30, 2020 and 2019 were approximately $139,000 and $20,000 and are recorded in research and development expenses in the statements of operations. In June 2020, the Company entered into an exclusive license agreement with ULRF for its intellectual property in the use of AS1411 as a treatment for COVID-19. Under the agreement, the Company will take over development, regulatory approval and commercialization of the compound (for such use) from ULRF and is responsible for maintenance of the related intellectual property portfolio. In return, ULRF will receive a $20,000 upfront license fee. In addition, the Company will execute a sponsored research agreement with ULRF supporting at least $250,000 in research by December 31, 2020. In addition, the Company has agreed to pay ULRF (i) royalties, on patent-covered net sales associated with the commercialization, of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000), until expiration of the licensed patent, and 2.5% (on net sales for any sales not covered by Licensed Patents), (ii) 30% to 50% of any non-royalty sublicensee income received (50% for sublicenses granted in the first two years of the ULRF license agreement, 40% for sublicenses granted in the third or fourth years of the ULRF license agreement, and 30% for sublicenses granted in the fifth year of the ULRF license agreement or thereafter), (iii) reimbursements for costs associated with the preparation, filing, prosecution and maintenance of licensed patents, incurred prior to June 2020, and (iv) payments ranging from $50,000 to $5,000,000 upon the achievement of certain regulatory and commercial milestones. Milestone payments for the first therapeutic indication would be $50,000 for first dosing in a Phase 1 clinical trial, $100,000 for first dosing in a Phase 2 clinical trial, $150,000 for first dosing in a Phase 3 clinical trial, $300,000 for regulatory marketing approval and $5,000,000 upon achieving a cumulative $500,000,000 of Licensed Product sales. The Company also must pay ULRF shortfall payments if the total amounts actually paid with respect to royalties and non-royalty sublicensee income for any year is less than the applicable annual minimum (ranging from $5,000 to $50,000) for such year. During the year ended March 31, 2018, the Company extended a strategic partnership entered into in May 2016 with Sekisui Diagnostics, LLC (“Sekisui”) until May 2022. In exchange for up to $7.2 million in future product development financing payments over the term of the agreement, the Company has appointed Sekisui as its commercial partner and exclusive worldwide distributor with the exception of certain customer accounts retained by Qualigen. The agreement contains an exclusivity period and right of first refusal for a potential acquisition of the Company by Sekisui. For the three months ended June 30, 2020 and 2019, there was no collaborative research revenue, and product sales of approximately $420,000 and $950,000 related to this agreement, respectively. |
Stockholders' Deficit
Stockholders' Deficit | 3 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Stockholders' Deficit | NOTE 11 — STOCKHOLDERS’ DEFICIT As of June 30, 2020, the Company had two classes of capital stock: common stock and Series Alpha convertible preferred stock. As of March 31, 2020, the Company had two classes of capital stock with one being divided into five series: common stock and preferred stock (Series A convertible preferred stock, Series B convertible preferred stock, Series C convertible preferred stock, Series D convertible preferred stock and Series D-1 convertible preferred stock). Common Stock Holders of common stock generally vote as a class with the holders of the preferred stock and are entitled to one vote for each share held. Subject to the rights of the holders of the preferred stock to receive preferential dividends, the holders of common stock are entitled to receive dividends when and if declared by the Board of Directors. Following payment of the liquidation preference of the preferred stock, as of March 31, 2020 any remaining assets would be distributed ratably among the holders of the common stock and, on an as-if-converted basis, the holders of Series C convertible preferred stock, Series D convertible preferred stock and Series D-1 convertible preferred stock) upon liquidation, dissolution or winding up of the affairs of the Company. Following payment of the liquidation preference of the preferred stock, as of June 30, 2020 any remaining assets would be distributed ratably among the holders of the common stock and, on an as-if-converted basis, the holders of Series Alpha convertible preferred stock upon liquidation, dissolution or winding up of the affairs of the Company. The holders of common stock have no preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions. At June 30, 2020, the Company has reserved 16,465,518 shares of authorized but unissued common stock for possible future issuance. At June 30, 2020, shares were reserved in connection with the following: Exercise of issued and future grants of stock options 3,674,624 Exercise of stock warrants 6,543,205 Conversion of Series Alpha preferred stock 6,247,689 Total 16,465,518 Series A, B, C, D, D-1 Convertible Preferred Stock At March 31, 2020, there were 2,412,887, 7,707,736, 3,300,715, 1,508,305, 643,511 shares of Series A, B, C, D, D-1 convertible preferred stock outstanding respectively. All shares of Series A, B, C, D, D-1 convertible preferred stock were converted into common stock at the time of the May 2020 reverse recapitalization transaction. Stock Options and Warrants The Company recognizes all compensatory share-based payments as compensation expense over the service period, which is generally the vesting period. There was approximately $359,000 and $0 of compensation costs related to outstanding options and warrants for the three months ended June 30, 2020 and 2019, respectively. In April 2020, the Company adopted the 2020 Stock Incentive Plan (the “2020 Plan”) which provides for the granting of incentive or nonstatutory common stock options to qualified employees, officers, directors, consultants and other service providers. At June 30, 2020 and 2019 there were 3,579,500 and 0 outstanding options respectively under the 2020 Plan and there were 477,657 and 0 options available respectively for future grant. The Company has also granted equity classified warrants (originally exercisable to purchase Series C convertible preferred stock, and now instead exercisable to purchase common stock) to service providers, as compensation for services. In addition, the Company has granted warrants for purposes other than compensation for services. The following represents a summary of the options granted to employees and non-employees that are outstanding at June 30, 2020, and changes during the period then ended: Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Total outstanding – March 31, 2020 — $ — Legacy Ritter options 95,124 92.80 $ 5.75—$1,465.75 1.87 Granted 3,579,500 5.10 $ 4.97—$5.13 9.94 Expired — — Forfeited — — Total outstanding – June 30, 2020 3,674,624 $ 7.37 $ 4.97—$1,465.75 9.73 Exercisable (vested) 110,124 $ 80.84 $ 4.97—$1,465.75 2.97 Non-Exercisable (non-vested) 3,564,500 $ 5.10 $ 4.97—$5.13 9.94 There was approximately $0.4 million and $0 of compensation costs related to outstanding options for the three months ended June 30, 2020 and 2019, respectively. As of June 30, 2020, there was approximately $14.1 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 2.94 years. No stock options were exercised during the three months ended June 30, 2020. The exercise price for an option issued under the 2020 Plan is determined by the Board of Directors, but will be (i) in the case of an incentive stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair market value per share on the date of grant; or (B) granted to any other employee, no less than 100% of the fair market value per share on the date of grant; and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the 2020 Plan will vest as determined by the Board of Directors but will not exceed a ten-year period. The weighted average grant date fair value per share of options granted during the three months ended June 30, 2020 was $5.10. Fair Value of Equity Awards The Company utilizes the Black-Scholes option pricing model to value awards under its Plans. Key valuation assumptions include: ● Expected dividend yield. ● Expected stock-price volatility. ● Risk-free interest rate. ● Expected term. The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows: For the three months ended June 30, 2020 Expected dividend yield 0.00 % Expected stock-price volatility 102 % Risk-free interest rate 0.33% — 0.59 % Expected average term of options 6.0 Stock price $ 4.97 — 5.13 The Company recorded share-based compensation expense and classified it in the condensed consolidated statements of operations as follows: For the three months ended June 30, 2020 2019 General and administrative $ 272,978 $ — Research and development 85,647 — Total $ 358,625 $ — Compensatory Warrants In the three months ended June 30, 2020, in connection with the $4.0 million equity capital raise as part of the May 2020 reverse recapitalization transaction, the Company issued common stock warrants to an advisor and its designees for the purchase of 811,431 shares of the Company’s common stock at an exercise price of $1.11 per share. The issuance of these warrants did not result in expense on the Company’s statements of operations. In addition, various service providers hold compensatory warrants issued in 2017 and earlier for the purchase of 668,024 shares of Company common stock at a weighted exercise price of $2.34 per share. No compensatory warrants were issued in the three month ended June 30, 2019. The following table summarizes the compensatory warrant activity for the three months ended June 30, 2020: Common Stock Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Total outstanding – March 31, 2020 — $ — Series C preferred stock warrants exchanged for common stock warrants upon reverse recapitalization 668,024 2.34 Legacy Ritter warrants — — Granted 811,431 1.11 Expired — — Forfeited — — Total outstanding – June 30, 2020 1,479,455 $ 1.67 Exercisable 660,832 $ 2.34 $2.07 —$2.54 3.82 Non-Exercisable 818,623 $ 1.12 $1.11 —$2.54 4.91 Noncompensatory Equity Classified Warrants In the three months ended June 30, 2020, as a commitment fee, the Company issued noncompensatory equity classified warrants to an investor for the purchase of 270,478 shares of Company common stock at an exercise price of $1.11 per share. No noncompensatory equity classified warrants were issued in the three months ended June 30, 2019. The following table summarizes the noncompensatory equity classified warrant activity for the three months ended June 30, 2020: Common Stock Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Total outstanding – March 31, 2020 — $ — Legacy Ritter warrants 81,455 54.04 Granted 270,478 1.11 Expired (1,673 ) 1,562.50 Forfeited — — Total outstanding – June 30, 2020 350,260 $ 1.08 Exercisable 350,260 $ 5.96 $1.11 – $2,325.00 4.31 Non-Exercisable — $ — — — There were no compensation costs related to outstanding warrants for the three months ended June 30, 2020 and 2019. As of June 30, 2020 and 2019, there was approximately $0 and $11,000 of unrecognized compensation cost related to nonvested warrants, respectively. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 12 — RELATED PARTY TRANSACTIONS In October 2017, Sekisui purchased all outstanding shares of Series D and Series D-1 preferred stock from Gen-Probe Incorporated. As such, Sekisui became a related party as of October 2017. These Series D and Series D-1 preferred stock shares were converted into 1,980,233 shares of the Company’s common stock in connection with the reverse recapitalization transaction in May 2020. The following are transactions made between the Company and Sekisui as of and for the three months ended June 30, 2020 and 2019. ● The Company sells products and provides collaborative research & development (“R&D”) services to Sekisui. As of June 30, 2020 and March 31, 2020, the Company had a receivable from Sekisui of approximately $55,000 and $290,000, respectively. The Company recorded product sales of approximately $420,000 and $950,000 for the three months ended June 30, 2020 and 2019, respectively. In May 2019 the Company and Sekisui terminated the R&D portion of their distribution and development agreement. There was no collaborative R&D revenue from Sekisui for the three months ended June 30, 2020 and 2019. The Company had cost of product sales relating to Sekisui of approximately $452,000 and $661,000, respectively, and R&D expenses relating to Sekisui of approximately $0 and $539,000, respectively, for the three months ended June 30, 2020 and 2019. ● As of June 30, 2020 and March 31, 2020, the Company had approximately $1.1 million and $0.9 million, respectively, classified as due to related party (Sekisui) on the accompanying balance sheets. The Company satisfied the financial obligation by payment in full on July 21, 2020. ● As of June 30, 2020 and March 31, 2020, the Company had approximately $271,000 of deferred revenue from Sekisui classified as deferred revenue on the accompanying balance sheets. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 13 — SUBSEQUENT EVENTS On July 1, 2020, an aggregate of 1,554 shares of Series Alpha preferred stock were converted into 2,101,495 shares of the Company’s common stock. On July 10, 2020, the Company closed a Securities Purchase Agreement (dated July 8, 2020) with a single institutional investor for the purchase and sale for $8.0 million for (i) 1,140,570 shares of Qualigen common stock, (ii) 780,198 pre-funded warrants (i.e., warrants to purchase shares of Qualigen common stock, for which the exercise price is almost entirely prepaid) and (iii) 1,920,768 two-year warrants to purchase shares of Qualigen common stock for an exercise price of $5.25 per share. Both sets of warrants included a 9.99% beneficial-ownership blocker provision. The 780,198 pre-funded warrants were then exercised on July 21 and 22, 2020. On July 17, 2020, the Company entered into a license agreement with ULRF for RAS Inhibitor compounds. On July 21, 2020, the Company paid Sekisui approximately $1.0 million to fully satisfy the Company’s R&D-related financial obligations to Sekisui. On July 23, 2020, 444 shares of Series Alpha preferred stock were converted into 600,427 shares of the Company’s common stock. On July 27, 2020, 444 shares of Series Alpha preferred stock were converted into 600,427 shares of the Company’s common stock. On July 29, 2020, 370 shares of Series Alpha preferred stock were converted into 500,356 shares of the Company’s common stock. On August 4, 2020, the Company closed a Securities Purchase Agreement (dated August 2, 2020) with a single institutional investor for the purchase and sale for $10.0 million for (i) 1,717,106 shares of Qualigen common stock, and (ii) 1,287,829 two-year warrants to purchase shares of Qualigen common stock for an exercise price of $6.00 per share. The warrants included a 9.99% beneficial-ownership blocker provision. Risks Related to COVID-19 Pandemic On March 11, 2020, the World Health Organization declared COVID-19 a pandemic. The COVID-19 pandemic is affecting the United States and global economies and may affect the Company’s operations and those of third parties on which the Company relies. While the potential economic impact brought by, and the duration of, the COVID-19 pandemic are difficult to assess or predict, the impact of the COVID-19 pandemic on the global financial markets may reduce the Company’s ability to access capital, which could negatively impact the Company’s short-term and long-term liquidity. The ultimate impact of the COVID-19 pandemic is highly uncertain and subject to change. The Company does not yet know the full extent of potential delays or impacts on its business, financing or other activities or on healthcare systems or the global economy as a whole. However, these effects could have a material impact on the Company’s liquidity, capital resources, operations and business and those of the third parties on which the Company relies. For example, the Company believes the COVID-19 pandemic was a primary cause of the Company’s decline in diagnostic product sales in the first quarter of fiscal 2021. Deferral of patients’ non-emergency visits to the facilities of the Company’s physician-office, clinic and small-hospital users sharply reduced their use of the Company’s tests and their need to place further orders. This phenomenon is expected to continue for the duration of the pandemic, although the degree of it will probably vary depending on progress toward suppressing the pandemic, lockdowns and similar responses, and personal and societal behavior changes arising from psychological factors. |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization | Organization Qualigen, Inc., the predecessor of and now a subsidiary of Qualigen Therapeutics, Inc., was incorporated in Minnesota in 1996 to design, develop, manufacture and sell point-of-care quantitative immunoassay diagnostic products for use in physician offices and other point-of-care settings worldwide. Qualigen, Inc. was reincorporated in Delaware in 1999. Qualigen Therapeutics, Inc. (the “Company”) operates in one business segment. In May 2020, Qualigen, Inc. completed a reverse recapitalization transaction with Ritter Pharmaceuticals, Inc. (“Ritter”) and Ritter was renamed Qualigen Therapeutics, Inc., recognized as a reverse recapitalization. All shares of Qualigen, Inc.’s capital stock were exchanged for Qualigen Therapeutics’ capital stocks in the merger. Ritter/Qualigen Therapeutics common stock, which was previously traded on the Nasdaq Capital Market under the ticker symbol “RTTR,” commenced trading on the Nasdaq Capital Market, on a post-reverse stock split adjusted basis, under the ticker symbol “QLGN” on May 26, 2020. Qualigen, Inc. was determined to be the accounting acquirer in a reverse recapitalization based upon the terms of the merger and other factors. All references to financial figures of “the Company” presented in the accompanying condensed consolidated financial statements and in these Notes as of March 31, 2020 and for the three-months period ended June 30, 2019 are those of Qualigen, Inc. |
Basis of Presentation | Basis of Presentation The Company’s unaudited interim condensed consolidated financial statements included herein have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X and the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. In management’s opinion, the accompanying statements reflect adjustments necessary to present fairly the financial position, results of operations, and cash flows for those periods indicated, and contain adequate disclosure to make the information presented not misleading. Adjustments included herein are of a normal, recurring nature unless otherwise disclosed in the footnotes. The condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended March 31, 2020 included on Form 8-K/A, as filed with the SEC on June 29, 2020. The accompanying condensed balance sheet at March 31, 2020 has been derived from the audited balance sheet at March 31, 2020 contained in the above referenced Form 8-K/A. Results of operations for interim periods are not necessarily indicative of the results of operations for a full year. |
Accounting Estimates | Accounting Estimates Management uses estimates and assumptions in preparing its condensed consolidated financial statements in accordance with U.S. GAAP. Those estimates and assumptions affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. The most significant estimates relate to amortization and depreciation, deferred revenue, inventory reserves, allowances for doubtful accounts and returns, and warranty costs. Actual results could vary from the estimates that were used. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an initial maturity of 90 days or less and money market funds to be cash equivalents. The Company maintains its cash and cash equivalents in bank deposits which at times may exceed federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risks on cash and cash equivalents. |
Restricted Cash | Restricted Cash Restricted cash includes funds that are held in a bank account that are restricted as to withdrawal until certain conditions are met pursuant to Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Company’s condensed consolidated statements of cash flows for the three months ended June 30, 2020 and 2019: June 30, 2020 June 30, 2019 Cash and cash equivalents $ 2,306,422 $ 71,183 Restricted cash 75,696 — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 2,382,118 $ 71,183 |
Inventory, Net | Inventory, Net Inventory is recorded at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method. The Company reviews the components of its inventory on a periodic basis for excess or obsolete inventory, and records specific reserves for identified items. |
Long-Lived Assets | Long-Lived Assets The Company assesses potential impairments to its long-lived assets when there is evidence that events or changes in circumstances indicate that assets may not be recoverable. An impairment loss would be recognized when the sum of the expected future undiscounted cash flows is less than the carrying amount of the assets. The amount of impairment loss, if any, will generally be measured as the difference between the net book value of the assets and their estimated fair values. During the three months ended June 30, 2020 and year ended March 31, 2020, no such impairment losses have been recorded. |
Accounts Receivable, Net | Accounts Receivable, Net The Company grants credit to domestic physicians, clinics, and distributors. The Company performs ongoing credit evaluations of its customers and generally requires no collateral. Customers can purchase certain products through a financing agreement that the Company has with an outside leasing company. Under the agreement, the leasing company evaluates the credit worthiness of the customer. Upon acceptance of the product by the customer, the leasing company remits payment to the Company at a discount. This financing arrangement is without recourse to the Company. The Company provides an allowance for doubtful accounts and returns equal to the estimated uncollectible amounts or expected returns. The Company’s estimates are based on historical collections and returns and a review of the current status of trade accounts receivable. Accounts receivable is comprised of the following at: June 30, 2020 March 31, 2020 Accounts Receivable $ 335,993 $ 443,663 Less Allowance (53,823 ) (26,541 ) $ 282,170 $ 417,122 |
Research and Development | Research and Development The Company expenses research and development costs as incurred. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising expense was approximately $9,000 and $1,000, respectively, for the three months ended June 30, 2020 and 2019. |
Shipping and Handling Costs | Shipping and Handling Costs The Company includes shipping and handling fees billed to customers in net sales. Shipping and handling costs associated with inbound and outbound freight are generally recorded in cost of sales which totaled approximately $26,000 and $27,000, respectively, for the three months ended June 30, 2020 and 2019. Other shipping and handling costs included in general and administrative, research and development, and sales and marketing expenses totaled approximately $4,000 and $1,000 for the three months ended June 30, 2020 and 2019, respectively. |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Effective April 1, 2020, the Company adopted Accounting Standard Codification (“ASC”) Topic 606 (“ASC 606”), Revenue from Contracts with Customers The core principle of the new revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize revenue when the company satisfies a performance obligation The Company places its medical diagnostic equipment, FastPack System analyzers and accessories, at customer sites under loan agreements as well as generating revenue from direct sales to customers and sells disposable products for use with the equipment. In instances where the equipment is loaned to the customer, the customer is required to make minimum purchases of disposable products. The Company generates revenue from selling disposable products used with the FastPack System. Disposable products include reagent packs which are diagnostic tests for Total PSA, testosterone, thyroid disorders, pregnancy, and Vitamin D. The Company provides the disposable products and equipment in exchange for consideration, which occurs when a customer submits a purchase order and the Company provides disposable products and equipment at the agreed upon prices in the invoice. Generally, customers purchase disposable products using separate purchase orders after the equipment has been provided to the customer. The delivery of the equipment represents a separate performance obligation and is completed upon receipt of the equipment by the customer. The delivery of each individual reagent pack represents a separate performance obligation because the reagent packs are standardized, are not interrelated in any way, and the customer can benefit from each reagent pack without any other product. The Company’s contracts for equipment and disposable products only include fixed consideration. There are no discounts, rebates, returns or other forms of variable consideration. Customers are generally required to pay within 30 days. The delivery of the equipment and the delivery of disposable products are performance obligations satisfied at a point in time. The performance obligation arising from the delivery of the equipment is satisfied upon the delivery of the equipment to the customer. The disposable products are shipped Free on Board (“FOB”) shipping point. For disposable products that are shipped FOB shipping point, the customer has the significant risks and rewards of ownership and legal title to the assets when the disposable products leave the Company’s shipping facilities, thus the customer obtains control and revenue is recognized at that point in time. The Company has elected the practical expedient and accounting policy election to account for the shipping and handling as activities to fulfill the promise to transfer the disposable products and not as a separate performance obligation. The Company’s contracts with customers generally have an expected duration of one year or less, and therefore the Company has elected the practical expedient in ASC 606 to not disclose information about its remaining performance obligations. Any incremental costs to obtain contracts are recorded as selling, general and administrative expense as incurred due to the short duration of the Company’s contracts. Contract balances The timing of the Company’s revenue recognition may differ from the timing of payment by the Company’s customers. The Company records a receivable when revenue is recognized prior to payment and there is an unconditional right to payment. Alternatively, when payment precedes the provision of the related services, the Company records deferred revenue until the performance obligations are satisfied. Prior to the adoption of ASC 606, the Company accounted for its revenue arrangements under ASC 605, Revenue Recognition Revenues from product sales which included both the Company’s proprietary diagnostic equipment (“analyzer”) and various immunoassay products (“reagents”) were generally recognized upon shipment, as no significant continuing performance obligations remained post shipment. Cash payments received in advance were classified as deferred revenue and recorded as a liability. The Company was generally not contractually obligated to accept returns, except for defective products. Revenue was recorded net of an allowance for estimated returns. Multiple element arrangements included contracts that combined both the Company’s analyzer and a customer’s future reagent purchases under a single contract. In some sales contracts, the Company provided analyzers at no charge to customers. Title to the analyzer was maintained by the Company and the analyzer was returned by the customer to the Company at the end of the purchase agreement. During the three months ended June 30, 2020 and 2019, product sales are stated net of an allowance for estimated returns of approximately $31,000 and $45,000, respectively. |
Deferred Revenue | Deferred Revenue Prior to the adoption of ASC 606, payments received in advance from customers pursuant to certain collaborative research license agreements, deposits against future product sales, multiple element arrangements and extended warranties are recorded as a current or non-current deferred revenue liability based on the time from the balance sheet date to the future date of revenue recognition. |
Research and Licenses | Research and Licenses Prior to the adoption of ASC 606, the Company recognized research revenue over the term of various agreements, as negotiated contracted amounts are earned or reimbursable costs are incurred related to those agreements. Negotiated contracted amounts are earned in relative proportion to the performance required under the applicable contracts. Nonrefundable license fees are recognized over the related performance period or at the time that the Company has satisfied all performance obligations. Any amounts received prior to satisfying these revenue recognition criteria are recorded as deferred revenue. During the three months ended June 30, 2020 and 2019, the Company did not recognize any collaborative research revenue. |
Operating Leases | Operating Leases Effective April 1, 2020, the Company adopted ASU No. 2018-11, Leases (Topic 842) (“Topic 842”) Targeted Improvements The Company’s leases typically contain rent escalations over the lease term. The Company recognizes expense for these leases on a straight-line basis over the lease term. Additionally, tenant incentives used to fund leasehold improvements are recognized when earned and reduce the Company’s right-of-use (“ROU”) asset related to the lease. These are amortized through the ROU asset as reductions of expense over the lease term. The Company’s office/manufacturing/warehouse/laboratory lease agreement does not contain any material residual value guarantees or material restrictive covenants. The Company has no lease agreements with lease and non-lease components. Related to the adoption of Topic 842, the Company’s policy elections were as follows: ● The Company has availed itself of this practical expedient for under U.S. GAAP, along with the other practical expedients such as grandfathering lease classifications, and treatment of indirect costs; ● The Company has elected to exclude short-term leases having initial terms of 12 months or less, if any; ● The Company has elected not to separate non-lease components from its leases to account for them separately; ● The Company has elected not to avail itself of the practical expedient of using hindsight to determine the lease term; and ● The Company has elected the alternative transition option, by recognizing a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption (as of April 1, 2020, however, the adoption of the Topic 842 did not have an effect on retained earnings). |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost and are presented net of accumulated depreciation. Depreciation is provided for on a straight-line basis over the estimated useful lives of the related assets as follows: Machinery and equipment 5 years Computer equipment 3 years Molds and tooling 5 years Office furniture and equipment 5 years Leasehold improvements are amortized on a straight-line basis over the shorter of the lease term or their estimated useful lives. The Company occasionally designs and builds its own machinery. The costs of these projects, which includes the cost of construction and other direct costs attributable to the construction, are capitalized as construction in progress. No provision for depreciation is made on construction in progress until the relevant assets are completed and placed in service. The Company’s policy is to evaluate the remaining lives and recoverability of long-term assets on at least an annual basis or when conditions are present that indicate impairment. |
Intangible Assets, Net | Intangible Assets, Net Intangibles consist of patent-related costs and costs for license agreements. Management reviews the carrying value of intangible assets that are being amortized on an annual basis or sooner when there is evidence that events or changes in circumstances may indicate that impairment exists. The Company considers relevant cash flow and profitability information, including estimated future operating results, trends and other available information, in assessing whether the carrying value of intangible assets being amortized can be recovered. If the Company determines that the carrying value of intangible assets will not be recovered from the undiscounted future cash flows expected to result from the use and eventual disposition of the underlying assets, the Company considers the carrying value of such intangible assets as impaired and reduces them by a charge to operations in the amount of the impairment. Costs related to acquiring patents are capitalized and amortized over their estimated useful lives, which is generally 5 to 17 years, using the straight-line method. Amortization of patents commences once final approval of the patent has been obtained. Patent costs are charged to operations if it is determined that the patent will not be obtained. The cost of the patents of approximately $739,000 and $715,000 at June 30, 2020 and March 31, 2020, respectively, are stated net of accumulated amortization of approximately $297,000 and $293,000, respectively. Amortization of patents charged to operations for the three months ended June 30, 2020 and 2019 were approximately $3,000 for each period. Total future estimated amortization of patent costs for the five succeeding years is approximately $10,000 for the year ending March 31, 2021, approximately $14,000 for each of the years ending March 31, 2022 through 2023, approximately $13,000 for year 2024, approximately $9,000 for year 2025 and approximately $382,000 thereafter. The cost of the licenses of approximately $810,000 and $544,000 at June 30, 2020 and March 31, 2020 are stated net of accumulated amortization of approximately $396,000 and $395,000, respectively. Amortization of licenses charged to operations for each of the three month periods ended June 30, 2020 and 2019 was approximately $2,000. Total future estimated amortization of license costs is approximately $5,000 for the year ending March 31, 2021, approximately $7,000 for each of the years ending March 31, 2022 through 2023 and approximately $3,000 for year 2024, $0 for year 2025 and approximately $390,000 thereafter. |
Derivative Financial Instruments and Warrant Liabilities | Derivative Financial Instruments and Warrant Liabilities The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the Condensed Consolidated Statements of Operations. Depending on the features of the derivative financial instrument, the Company uses either the Black-Scholes option-pricing model or a Monte Carlo simulation to value the derivative instruments at inception and subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period (See Note 7). |
Fair Value Measurements | Fair value measurements ● Level 1 - Inputs that reflect unadjusted quoted prices in active markets for identical assets or liabilities that we have the ability to access at the measurement date; ● Level 2 - Inputs other than quoted prices that are observable for the assets or liability either directly or indirectly, including inputs in markets that are not considered to be active; and ● Level 3 - Inputs that are unobservable. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Financial instruments, which include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and debt are carried at cost, which management believes approximates fair value due to the short-term nature of these instruments. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation cost for equity awards granted to employees and non-employees is measured at the grant date based on the calculated fair value of the award using the Black-Scholes option-pricing model, and is recognized as an expense, under the straight-line method, over the requisite service period (generally the vesting period of the equity grant). If we determine that other methods are more reasonable, or other methods for calculating these assumptions are prescribed by regulators, the fair value calculated for our stock options could change significantly. Higher volatility and longer expected lives would result in an increase to stock-based compensation expense to employees and non-employees determined at the date of grant. |
Income Taxes | Income Taxes Deferred income taxes are recognized for temporary differences in the basis of assets and liabilities for financial statement and income tax reporting that arise due to net operating loss carry forwards, research and development credit carry forwards and from using different methods and periods to calculate depreciation and amortization, allowance for doubtful accounts, accrued vacation, research and development expenses, and state taxes. A provision has been made for income taxes due on taxable income and for the deferred taxes on the temporary differences. The components of the deferred tax asset and liability are individually classified as current and noncurrent based on their characteristics. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Realization of the deferred income tax asset is dependent on generating sufficient taxable income in future years. |
Sales and Excise Taxes | Sales and Excise Taxes Sales and other taxes collected from customers and subsequently remitted to government authorities are recorded as accounts receivable with corresponding tax payable. These balances are removed from the balance sheet as cash is collected from customers and remitted to the tax authority. The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act, enacted in March 2010, required medical device manufacturers to pay an excise tax of 2.3% on the sales price of medical devices sold in the United States beginning in January 2013. The Further Consolidated Appropriations Act, 2020 H.R. 1865 (Pub.L.116-94), signed into law on December 20, 2019, has repealed the medical device excise tax previously imposed by Internal Revenue Code section 4191. Prior to the repeal, the tax was on a 4-year moratorium. As a result of the repeal and the prior moratorium, sales of taxable medical devices after December 31, 2015, are not subject to the tax. Accordingly, for the three months ended June 30, 2020 and 2019, the Company did not incur any medical device excise tax expenses. |
Warranty Costs | Warranty Costs The Company’s warranty policy generally provides for one year of coverage against defects and nonperformance within published specifications for sold analyzers and for the term of the contract for equipment held for lease. The Company accrues for estimated warranty costs in the period in which the revenue is recognized based on historical data and the Company’s best estimates of analyzer failure rates and costs to repair. Accrued warranty liabilities were approximately $29,000 and $35,000, respectively, at June 30, 2020 and March 31, 2020 and are included in accrued expenses and other current liabilities on the balance sheets. Warranty costs were approximately $31,000 and $28,000 for the three months ended June 30, 2020 and 2019, respectively, and are included in cost of product sales in the statements of operations. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, “ Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842) Targeted Improvements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (“Topic 606”) Other accounting standard updates are either not applicable to the Company or are not expected to have a material impact on the Company’s condensed consolidated financial statements. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported on the Company’s condensed consolidated statements of cash flows for the three months ended June 30, 2020 and 2019: June 30, 2020 June 30, 2019 Cash and cash equivalents $ 2,306,422 $ 71,183 Restricted cash 75,696 — Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 2,382,118 $ 71,183 |
Schedule of Accounts Receivable | Accounts receivable is comprised of the following at: June 30, 2020 March 31, 2020 Accounts Receivable $ 335,993 $ 443,663 Less Allowance (53,823 ) (26,541 ) $ 282,170 $ 417,122 |
Schedule of Useful Lives of Property and Equipment | Depreciation is provided for on a straight-line basis over the estimated useful lives of the related assets as follows: Machinery and equipment 5 years Computer equipment 3 years Molds and tooling 5 years Office furniture and equipment 5 years |
Inventory, Net (Tables)
Inventory, Net (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory, net consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Raw materials $ 437,728 $ 457,425 Work in process 167,849 117,729 Finished goods 34,683 84,984 $ 640,260 $ 660,138 |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Machinery and equipment $ 2,355,165 $ 2,355,165 Construction in progress–equipment 1,480,400 1,376,000 Computer equipment 424,851 420,552 Leasehold improvements 307,539 307,539 Molds and tooling 260,002 260,002 Office furniture and equipment 136,275 136,275 4,964,232 4,855,533 Less Accumulated depreciation (3,416,852 ) (3,408,019 ) $ 1,547,380 $ 1,447,514 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Bonus $ 362,500 $ — Vacation 226,881 160,024 Royalties 1,008 26,099 Research and development 105,064 288,184 Legal 82,019 151,357 Accounting 166,965 126,543 Deferred rent — 77,597 Warranty costs 29,165 30,119 Payroll 96,501 35,052 Patent and license fees 134,025 51,007 Sales and use taxes 21,590 16,755 Income taxes 8,100 8,100 Interest 689 247,569 Other 81,392 25,358 $ 1,315,899 $ 1,243,764 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable | Notes payable consisted of the following at June 30, 2020 and March 31, 2020: June 30, 2020 March 31, 2020 Insurance Financing Agreement with a finance company, monthly payments of $119,943 including interest of 4.54% per annum; secured by an insurance policy; due January 2021 $ 827,039 $ — An unsecured promissory note with a bank, pursuant to the Paycheck Protection Program under the Coronavirus Aid, Relief, and Economic Security Act 449,050 — A Factoring and Security Agreement for up to $2,000,000 with a bank, interest at Prime plus 2% of the amount of advances outstanding and a factoring fee of 0.01% per day of the face amount of each invoice for each calendar day that a factored invoice is outstanding 22,912 489,051 Equipment Financing Agreement with a bank, monthly payments of $720 including imputed interest at 6.95% per annum; secured by laboratory equipment; due October 2022 18,554 20,370 Equipment Financing Agreement with a bank, monthly payments of $596 including imputed interest at 6.590% per annum; secured by manufacturing equipment; due July 2021 7,795 9,441 An unsecured convertible note with an investor including interest at 10% per annum; due September 2019, which was extended by the noteholder until May 2020 — 1,000,000 A series of unsecured convertible bridge notes with investors, including interest of 8% per annum; due between June 2020 and February 2021 — 410,000 A series of unsecured convertible bridge notes with investors, including interest of 8% per annum; due between January and February 2022 — 290,198 1,325,350 2,219,060 Less current portion, net of debt issuance costs (1,106,518 ) (1,913,255 ) Notes Payable, net of current portion $ 218,832 $ 305,805 |
Schedule of Future Maturities of Notes Payable | Future maturities of notes payable are as follows as of June 30, 2020: Year Ending March 31, Amount 2021 (nine months) $ 1,106,518 2022 215,994 2023 2,838 Total balance $ 1,325,350 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Warrant Liabilities | |
Schedule of Warrants Activity | The following table summarizes the warrant activity for the year ended June 30, 2020: Common Stock Warrants Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Average Remaining Life (Years) Total outstanding – March 31, 2020 — $ — Series C preferred stock warrants exchanged for common stock warrants upon reverse recapitalization 4,713,490 0.72 Forfeited — — Expired — — Granted — — Total outstanding – June 30, 2020 4,713,490 $ 0.72 Exercisable 4,713,490 $ 0.72 $ 0.72 3.82 Non-Exercisable — $ — $ — — The following table summarizes the warrant activity for the year ended June 30, 2019: Series C Preferred Stock Warrants Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Average Remaining Life (Years) Total outstanding – March 31, 2019 2,197,442 $ 2.23 Forfeited (2,000 ) 2.25 Expired — — Granted — — Total outstanding – June 30, 2019 2,195,442 $ 2.23 Exercisable 2,187,322 $ 2.23 $ 1.83 – $2.70 4.61 Non-Exercisable 8,120 $ 2.25 $2.25 7.24 |
Schedule of Fair Value Hierarchy for Warrant Liabilities | The following table presents the Company’s fair value hierarchy for its warrant liabilities measured at fair value on a recurring basis as of June 30, 2020: Quoted Market Significant Prices for Other Significant Identical Observable Unobservable Assets Inputs Inputs Warrant liabilities (Level 1) (Level 2) (Level 3) Total Balance as of June 30, 2020 $ - $ - $ 16,201,400 $ 16,201,400 |
Schedule of Fair Value of Warrant Liabilities | The following table is a reconciliation for those items measured at fair value on a recurring basis using Level 3 inputs during the three months ended June 30, 2020: Warrant liabilities As of June 30, 2020 Balance, beginning of period $ — Fair value at issuance date — Change in fair value included in the statement of comprehensive loss 16,201,400 Balance, end of period $ 16,201,400 |
Schedule of Assumptions of Warrant Liabilities | The value as of the dates set forth in the table above, was based on upon following assumptions: June 30, 2020 Stock price $ 3.97 Risk-free interest rate 0.17% — 0.32 % Expected volatility (peer group) 81.00% — 87.00 % Expected life (in years) 3.10 — 5.27 Expected dividend yield 0.00 % Number outstanding 4,713,490 Warrant liabilities (current), end of period $ 16,201,400 |
Lease Obligations (Tables)
Lease Obligations (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Operating Lease Right of Use Assets and Liabilities | The tables below show the initial measurement of the operating lease right-of-use assets and liabilities as of April 1, 2020 and the balances as of June 30, 2020, including the changes during the periods: Operating lease right-of-use assets Operating lease right-of-use-assets obtained in exchange for lease obligation at April 1, 2020: $ 585,513 Less amortization of operating lease right-of-use assets (50,319 ) Operating lease right-of-use assets at June 30, 2020 $ 535,194 Operating lease liabilities Lease liabilities arising from obtaining right-of-use assets at April 1, 2020: $663,110 Less principal payments on operating lease liabilities (54,776 ) Lease liabilities at June 30, 2020 608,334 Less non-current portion 368,785 Current portion at June 30, 2020 $ 239,549 |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Lease Payments Under Operating Lease Liabilities | As of June 30, 2020, future minimum payments during the next five fiscal years and thereafter are as follows: Year Ending March 31, Amount 2021 (nine months) $ 212,906 2022 290,492 2023 173,315 Total 676,713 Less present value discount (68,379 ) Operating lease liabilities $ 608,334 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 3 Months Ended |
Jun. 30, 2020 | |
Schedule of Reserved Shares | At June 30, 2020, shares were reserved in connection with the following: Exercise of issued and future grants of stock options 3,674,624 Exercise of stock warrants 6,543,205 Conversion of Series Alpha preferred stock 6,247,689 Total 16,465,518 |
Summary of Stock Option Activity | The following represents a summary of the options granted to employees and non-employees that are outstanding at June 30, 2020, and changes during the period then ended: Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Total outstanding – March 31, 2020 — $ — Legacy Ritter options 95,124 92.80 $ 5.75—$1,465.75 1.87 Granted 3,579,500 5.10 $ 4.97—$5.13 9.94 Expired — — Forfeited — — Total outstanding – June 30, 2020 3,674,624 $ 7.37 $ 4.97—$1,465.75 9.73 Exercisable (vested) 110,124 $ 80.84 $ 4.97—$1,465.75 2.97 Non-Exercisable (non-vested) 3,564,500 $ 5.10 $ 4.97—$5.13 9.94 |
Schedule of Assumptions Used in Black-Scholes Option-Pricing Method | The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted for the periods presented were as follows: For the three months ended June 30, 2020 Expected dividend yield 0.00 % Expected stock-price volatility 102 % Risk-free interest rate 0.33% — 0.59 % Expected average term of options 6.0 Stock price $ 4.97 — 5.13 |
Schedule of Share-based Compensation Expense | The Company recorded share-based compensation expense and classified it in the condensed consolidated statements of operations as follows: For the three months ended June 30, 2020 2019 General and administrative $ 272,978 $ — Research and development 85,647 — Total $ 358,625 $ — |
Compensatory Warrant Activity [Member] | |
Summary of Warrant Activity | The following table summarizes the compensatory warrant activity for the three months ended June 30, 2020: Common Stock Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Total outstanding – March 31, 2020 — $ — Series C preferred stock warrants exchanged for common stock warrants upon reverse recapitalization 668,024 2.34 Legacy Ritter warrants — — Granted 811,431 1.11 Expired — — Forfeited — — Total outstanding – June 30, 2020 1,479,455 $ 1.67 Exercisable 660,832 $ 2.34 $2.07 —$2.54 3.82 Non-Exercisable 818,623 $ 1.12 $1.11 —$2.54 4.91 |
Non-Compensatory Warrant Activity [Member] | |
Summary of Warrant Activity | The following table summarizes the noncompensatory equity classified warrant activity for the three months ended June 30, 2020: Common Stock Shares Weighted– Average Exercise Price Range of Exercise Price Weighted– Total outstanding – March 31, 2020 — $ — Legacy Ritter warrants 81,455 54.04 Granted 270,478 1.11 Expired (1,673 ) 1,562.50 Forfeited — — Total outstanding – June 30, 2020 350,260 $ 1.08 Exercisable 350,260 $ 5.96 $1.11 – $2,325.00 4.31 Non-Exercisable — $ — — — |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Mar. 31, 2010 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | |
Long-lived assets impairment losses | ||||
Advertising expense | 9,000 | $ 1,000 | ||
Shipping and handling costs | 26,000 | 27,000 | ||
Estimated returns net of allowances | 31,000 | 45,000 | ||
Sales and excise tax percentage | 2.30% | |||
Warrant [Member] | ||||
Accrued warranty liabilities | 29,000 | 35,000 | ||
Warranty costs | $ 28,000 | $ 31,000 | ||
Patents [Member] | ||||
Estimated useful lives | 5 years | 17 years | ||
Cost of patents | $ 739,000 | 715,000 | ||
Accumulated amortization | 297,000 | 293,000 | ||
Amortization of patents | 3,000 | $ 3,000 | ||
Patents [Member] | March 2021 [Member] | ||||
Amortization of patents | 10,000 | |||
Patents [Member] | March 2022 [Member] | ||||
Amortization of patents | 14,000 | |||
Patents [Member] | March 2023 [Member] | ||||
Amortization of patents | 14,000 | |||
Patents [Member] | March 2024 [Member] | ||||
Amortization of patents | 13,000 | |||
Patents [Member] | March 2025 [Member] | ||||
Amortization of patents | 9,000 | |||
Patents [Member] | Thereafter [Member] | ||||
Amortization of patents | 382,000 | |||
License [Member] | ||||
Cost of patents | 810,000 | 544,000 | ||
Accumulated amortization | 396,000 | $ 394,000 | ||
Amortization of patents | 2,000 | 2,000 | ||
License [Member] | March 2021 [Member] | ||||
Amortization of patents | 5,000 | |||
License [Member] | March 2022 [Member] | ||||
Amortization of patents | 7,000 | |||
License [Member] | March 2023 [Member] | ||||
Amortization of patents | 7,000 | |||
License [Member] | March 2024 [Member] | ||||
Amortization of patents | 3,000 | |||
License [Member] | March 2025 [Member] | ||||
Amortization of patents | 0 | |||
License [Member] | Thereafter [Member] | ||||
Amortization of patents | 390,000 | |||
General and Administrative Expense [Member] | ||||
Shipping and handling costs | $ 4,000 | $ 1,000 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2019 | Mar. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 2,306,422 | $ 153,121 | $ 71,183 | |
Restricted cash | 75,696 | |||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 2,382,118 | $ 153,121 | $ 71,183 | $ 125,123 |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Schedule of Accounts Receivable (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accounts Receivable | $ 335,993 | $ 443,663 |
Less Allowance | (53,823) | (26,541) |
Accounts receivable, net | $ 282,170 | $ 417,122 |
Organization and Summary of S_7
Organization and Summary of Significant Accounting Policies - Schedule of Useful Lives of Property and Equipment (Details) | 6 Months Ended |
Jun. 30, 2020 | |
Machinery and Equipment [Member] | |
Property and equipment, useful life | 5 years |
Computer Equipment [Member] | |
Property and equipment, useful life | 3 years |
Molds and Tooling [Member] | |
Property and equipment, useful life | 5 years |
Office Furniture and Equipment [Member] | |
Property and equipment, useful life | 5 years |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) | 1 Months Ended | |||
May 31, 2020 | Aug. 31, 2020 | Jul. 31, 2020 | Jun. 30, 2020 | |
New equity capital raise | $ 4,000,000 | |||
Convertible notes payable | $ 1,900,000 | |||
Securities Purchase Agreement [Member] | Investor [Member] | Subsequent Event [Member] | ||||
Convertible notes payable | $ 18,000,000 | $ 18,000,000 |
Inventory, Net - Schedule of In
Inventory, Net - Schedule of Inventory (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 437,728 | $ 457,425 |
Work in process | 167,849 | 117,729 |
Finished goods | 34,683 | 84,984 |
Inventory net | $ 640,260 | $ 660,138 |
Property and Equipment, Net (De
Property and Equipment, Net (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 9,000 | $ 17,000 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 4,964,232 | $ 4,855,533 |
Less Accumulated depreciation | (3,416,852) | (3,408,019) |
Property and equipment, net | 1,547,380 | 1,447,514 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2,355,165 | 2,355,165 |
Construction in Progress Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 1,480,400 | 1,376,000 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 424,851 | 420,552 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 307,539 | 307,539 |
Molds and Tooling [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 260,002 | 260,002 |
Office Furniture and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 136,275 | $ 136,275 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Payables and Accruals [Abstract] | ||
Bonus | $ 362,500 | |
Vacation | 226,881 | 160,024 |
Royalties | 1,008 | 26,099 |
Research and development | 105,064 | 288,184 |
Legal | 82,019 | 151,357 |
Accounting | 166,965 | 126,543 |
Deferred rent | 77,597 | |
Warranty costs | 29,165 | 30,119 |
Payroll | 96,501 | 35,052 |
Patent and license fees | 134,025 | 51,007 |
Sales and use taxes | 21,590 | 16,755 |
Income taxes | 8,100 | 8,100 |
Interest | 689 | 247,569 |
Other | 81,392 | 25,358 |
Accrued expenses and other current liabilities | $ 1,315,899 | $ 1,243,764 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Long term debt | $ 1,325,350 | $ 2,219,060 |
Less current portion, net of debt issuance costs | (1,106,518) | (1,913,255) |
Notes Payable, net of current portion | 218,832 | 305,805 |
Unsecured Convertible Note [Member] | Investor [Member] | ||
Long term debt | 1,000,000 | |
Unsecured Convertible Bridge Notes [Member] | Investor [Member] | ||
Long term debt | 410,000 | |
Unsecured Convertible Bridge Notes One [Member] | Investor [Member] | ||
Long term debt | 290,198 | |
Bank [Member] | Unsecured Promissory Note [Member] | ||
Long term debt | 449,050 | |
Insurance Financing Agreement [Member] | Finance Company [Member] | ||
Long term debt | 827,039 | |
Factoring and Security Agreement [Member] | Bank [Member] | ||
Long term debt | 22,912 | 489,051 |
Equipment Financing Agreement [Member] | Bank [Member] | ||
Long term debt | 18,554 | 20,370 |
Equipment Financing Agreement One [Member] | Bank [Member] | ||
Long term debt | $ 7,795 | $ 9,441 |
Notes Payable - Schedule of N_2
Notes Payable - Schedule of Notes Payable (Details) (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Mar. 31, 2020 | |
Unsecured Convertible Note [Member] | Investor [Member] | ||
Debt interest rate | 10.00% | |
Debt instrument maturity date description | due September 2019 | |
Unsecured Convertible Bridge Notes [Member] | Investor [Member] | ||
Debt interest rate | 8.00% | |
Debt instrument maturity date description | due between June 2020 and February 2021 | |
Unsecured Convertible Bridge Notes One [Member] | Investor [Member] | ||
Debt interest rate | 8.00% | |
Debt instrument maturity date description | due between January and February 2022 | |
Insurance Financing Agreement [Member] | Finance Company [Member] | ||
Debt monthly payments | $ 119,943 | |
Debt interest rate | 4.54% | |
Debt instrument maturity date description | due January 2021 | |
Factoring and Security Agreement [Member] | Bank [Member] | ||
Debt interest rate | 2.00% | 2.00% |
Debt instrument, face amount | $ 2,000,000 | $ 2,000,000 |
Percentage of factoring fee | 0.01% | 0.01% |
Equipment Financing Agreement [Member] | Bank [Member] | ||
Debt monthly payments | $ 720 | $ 720 |
Debt interest rate | 6.95% | 6.95% |
Debt instrument maturity date description | due October 2022 | due October 2022 |
Equipment Financing Agreement One [Member] | Bank [Member] | ||
Debt monthly payments | $ 596 | $ 596 |
Debt interest rate | 6.59% | 6.59% |
Debt instrument maturity date description | due July 2021 | due July 2021 |
Notes Payable - Schedule of Fut
Notes Payable - Schedule of Future Maturities of Notes Payable (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Debt Disclosure [Abstract] | ||
2021 (nine months) | $ 1,106,518 | |
2022 | 215,994 | |
2023 | 2,838 | |
Total balance | $ 1,325,350 | $ 2,219,060 |
Warrant Liabilities (Details Na
Warrant Liabilities (Details Narrative) - Series C Warrants [Member] | Jun. 30, 2020$ / sharesshares |
Warrants to purchase common stock | shares | 4,713,490 |
Warrants exercise | $ / shares | $ 0.72 |
Minimum [Member] | |
Warrants term | 3 years 1 month 6 days |
Maximum [Member] | |
Warrants term | 5 years 3 months 19 days |
Warrant Liabilities - Schedule
Warrant Liabilities - Schedule of Warrants Activity (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Common Stock Warrants [Member] | ||
Number of Shares, Warrants Outstanding Beginning | ||
Number of Shares, Warrants Series C preferred stock warrants exchanged for common stock warrants upon reverse merger | $ 4,713,490 | |
Number of Shares, Warrants Forfeited | ||
Number of Shares, Warrants Expired | ||
Number of Shares, Warrants Granted | ||
Number of Shares, Warrants Outstanding Ending | 4,713,490 | |
Number of Shares, Warrants Exercisable | 4,713,490 | |
Number of shares, warrants non-exercisable | ||
Weighted Average Exercise Price Per Share Warrants Outstanding Beginning | ||
Weighted Average Exercise Price Per Share Warrants Series C Preferred Stock Warrants Exchanged For Common Stock Warrants Upon Reverse Merger | 0.72 | |
Weighted Average Exercise Price Per Share Warrants Forfeited | ||
Weighted Average Exercise Price Per Share Warrants Expired | ||
Weighted Average Exercise Price Per Share Warrants Granted | ||
Weighted Average Exercise Price Per Share Warrants Outstanding Ending | 0.72 | |
Weighted Average Exercise Price Per Share Exercisable | 0.72 | |
Weighted Average Exercise Price Per Share Non-Exercisable | ||
Range of Exercise Price, Exercisable | 0.72 | |
Range of Exercise Price, Non-Exercisable | ||
Weighted Average Remaining Life (Years) Exercisable | 3 years 9 months 25 days | |
Weighted Average Remaining Life (Years) Non-Exercisable | 0 years | |
Series C Preferred Stock Warrants [Member] | ||
Number of Shares, Warrants Outstanding Beginning | 2,197,442 | |
Number of Shares, Warrants Forfeited | (2,000) | |
Number of Shares, Warrants Expired | ||
Number of Shares, Warrants Granted | ||
Number of Shares, Warrants Outstanding Ending | 2,195,442 | |
Number of Shares, Warrants Exercisable | 2,187,322 | |
Number of shares, warrants non-exercisable | 8,120 | |
Weighted Average Exercise Price Per Share Warrants Outstanding Beginning | $ 2.23 | |
Weighted Average Exercise Price Per Share Warrants Forfeited | 2.25 | |
Weighted Average Exercise Price Per Share Warrants Expired | ||
Weighted Average Exercise Price Per Share Warrants Granted | ||
Weighted Average Exercise Price Per Share Warrants Outstanding Ending | 2.23 | |
Weighted Average Exercise Price Per Share Exercisable | 2.23 | |
Weighted Average Exercise Price Per Share Non-Exercisable | 2.25 | |
Range of Exercise Price, Non-Exercisable | $ 2.25 | |
Weighted Average Remaining Life (Years) Exercisable | 4 years 7 months 10 days | |
Weighted Average Remaining Life (Years) Non-Exercisable | 7 years 2 months 27 days | |
Series C Preferred Stock Warrants [Member] | Minimum [Member] | ||
Range of Exercise Price, Exercisable | $ 1.83 | |
Series C Preferred Stock Warrants [Member] | Maximum [Member] | ||
Range of Exercise Price, Exercisable | $ 2.70 |
Warrant Liabilities - Schedul_2
Warrant Liabilities - Schedule of Fair Value Hierarchy for Warrant Liabilities (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Balance as of June 30, 2020 | $ 16,201,400 | |
Level 1 [Member] | ||
Balance as of June 30, 2020 | ||
Level 2 [Member] | ||
Balance as of June 30, 2020 | ||
Level 3 [Member] | ||
Balance as of June 30, 2020 | $ 16,201,400 |
Warrant Liabilities - Schedul_3
Warrant Liabilities - Schedule of Fair Value of Warrant Liabilities (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Warrant Liabilities | ||
Balance, beginning of period | ||
Fair value at issuance date | ||
Change in fair value of warrant liabilities | 16,201,400 | |
Balance, end of period | $ 16,201,400 |
Warrant Liabilities - Schedul_4
Warrant Liabilities - Schedule of Assumptions of Warrant Liabilities (Details) | 3 Months Ended | |
Jun. 30, 2020USD ($)Integer$ / shares | Jun. 30, 2019USD ($) | |
Number outstanding | $ 4,713,490 | |
Warrant liabilities (current), end of period | $ 16,201,400 | |
Stock Price [Member] | ||
Share price | $ / shares | $ 3.97 | |
Risk-Free Interest Rate [Member] | Minimum [Member] | ||
Fair value assumptions, measurement input, percentages | 0.17 | |
Risk-Free Interest Rate [Member] | Maximum [Member] | ||
Fair value assumptions, measurement input, percentages | 0.32 | |
Expected Volatility (peer group) [Member] | Minimum [Member] | ||
Fair value assumptions, measurement input, percentages | 81 | |
Expected Volatility (peer group) [Member] | Maximum [Member] | ||
Fair value assumptions, measurement input, percentages | 87 | |
Expected Life (Years) [Member] | Minimum [Member] | ||
Fair value assumptions, measurement input, term | 3 years 1 month 6 days | |
Expected Life (Years) [Member] | Maximum [Member] | ||
Fair value assumptions, measurement input, term | 5 years 3 months 8 days | |
Expected Dividends Yield [Member] | ||
Fair value assumptions, measurement input, percentages | Integer | 0 |
Lease Obligations (Details Narr
Lease Obligations (Details Narrative) - USD ($) | 2 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Leases [Abstract] | ||
Weighted-average remaining lease term | 2 years 3 months 19 days | |
Discount rate operating lease | 8.90% | |
Lease expense | $ 86,000 | $ 8,400 |
Lease Obligations - Schedule of
Lease Obligations - Schedule of Operating Lease Right of Use Assets and Liabilities (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Leases [Abstract] | ||
Operating lease right-of-use-assets obtained in exchange for lease obligation at April 1, 2020: | $ 585,513 | |
Less amortization of operating lease right-of-use assets | 585,513 | |
Operating lease right-of-use assets at June 30, 2020 | 535,194 | |
Lease liabilities arising from obtaining right-of-use assets at April 1, 2020: | 663,110 | |
Less principal payments on operating lease liabilities | (54,776) | |
Lease liabilities at June 30, 2020 | 608,334 | |
Less non-current portion | 368,785 | |
Current portion at June 30, 2020 | $ 239,549 |
Commitments (Details Narrative)
Commitments (Details Narrative) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Rent expense | $ 65,000 | $ 65,000 |
Long-term Operating Lease Agreement [Member] | ||
Lease agreement term expiration, description | The Company leases its facilities under a long-term operating lease agreement expiring in October 2022. |
Commitments - Schedule of Futur
Commitments - Schedule of Future Minimum Lease Payments Under Operating Lease Liabilities (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2020 |
Accounting Policies [Abstract] | ||
2021 (nine months) | $ 212,906 | |
2022 | 290,492 | |
2023 | 173,315 | |
Total | 676,713 | |
Less present value discount | (68,379) | |
Operating lease liabilities | $ 608,334 | $ 663,110 |
Research and License Agreemen_2
Research and License Agreements (Details Narrative) - USD ($) | Dec. 31, 2020 | May 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | Aug. 31, 2018 | Jun. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2018 |
Research and development | $ 597,345 | $ 147,641 | |||||||
Product Sales [Member] | |||||||||
Licensed product sales, revenue | 420,000 | 950,000 | |||||||
University of Louisville Research Foundation [Member] | Minimum [Member] | Royalties and Non-Royalty Sublicensee Income [Member] | |||||||||
Shortfall payments | 5,000 | ||||||||
University of Louisville Research Foundation [Member] | Maximum [Member] | Royalties and Non-Royalty Sublicensee Income [Member] | |||||||||
Shortfall payments | 50,000 | ||||||||
Sekisui Diagnostics, LLC [Member] | May 2016 [Member] | |||||||||
Financing payments for product development | $ 7,200,000 | ||||||||
License and Sponsored Research Agreements [Member] | |||||||||
Research and development | 2,000 | 33,000 | |||||||
License and Sponsored Research Agreements [Member] | University of Louisville Research Foundation [Member] | |||||||||
Payment of convertible promissory note | $ 50,000 | $ 50,000 | |||||||
Reimbursement of research expenses | 348,000 | 348,000 | |||||||
Reimbursement patent cost | $ 200,000 | $ 200,000 | |||||||
Agreement term payment, description | In addition, the Company has agreed to pay ULRF (i) royalties, on patent-covered net sales associated with the commercialization of anti-nucleolin agent-conjugated nanoparticles of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000), until expiration of the last to expire of the licensed patents, (ii) 30% to 50% of any non-royalty sublicensee income received (50% for sublicenses granted in the first two years of the ULRF license agreement, 40% for sublicenses granted in the third or fourth years of the ULRF license agreement, and 30% for sublicenses granted in the fifth year of the ULRF license agreement or thereafter) | In addition, the Company has agreed to pay ULRF (i) royalties, on patent-covered net sales associated with the commercialization of anti-nucleolin agent-conjugated nanoparticles of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000), until expiration of the last to expire of the licensed patents, (ii) 30% to 50% of any non-royalty sublicensee income received (50% for sublicenses granted in the first two years of the ULRF license agreement, 40% for sublicenses granted in the third or fourth years of the ULRF license agreement, and 30% for sublicenses granted in the fifth year of the ULRF license agreement or thereafter) | |||||||
Licensed product sales, revenue | $ 500,000,000 | $ 500,000,000 | |||||||
Milestone payment for marketing expenses | 500,000 | 500,000 | |||||||
License and Sponsored Research Agreements [Member] | University of Louisville Research Foundation [Member] | Licensed Product Sales [Member] | |||||||||
Regulatory marketing approval, expenses | 500,000 | 500,000 | |||||||
License and Sponsored Research Agreements [Member] | University of Louisville Research Foundation [Member] | Phase 1 Clinical Trial [Member] | |||||||||
Milestone payment | 100,000 | 100,000 | |||||||
License and Sponsored Research Agreements [Member] | University of Louisville Research Foundation [Member] | Phase 2 Clinical Trial [Member] | |||||||||
Milestone payment | 200,000 | 200,000 | |||||||
License and Sponsored Research Agreements [Member] | University of Louisville Research Foundation [Member] | Phase 3 Clinical Trial [Member] | |||||||||
Milestone payment | 350,000 | 350,000 | |||||||
License and Sponsored Research Agreements [Member] | University of Louisville Research Foundation [Member] | Minimum [Member] | |||||||||
Milestone payment | 100,000 | 100,000 | |||||||
Shortfall payments | 10,000 | 10,000 | |||||||
License and Sponsored Research Agreements [Member] | University of Louisville Research Foundation [Member] | Maximum [Member] | |||||||||
Milestone payment | 5,000,000 | 5,000,000 | |||||||
Shortfall payments | $ 50,000 | $ 50,000 | |||||||
License Agreement [Member] | University of Louisville Research Foundation [Member] | |||||||||
Upfront license fee | $ 20,000 | ||||||||
ULRF license agreement description | In addition, the Company has agreed to pay ULRF (i) royalties, on patent-covered net sales associated with the commercialization, of 4% (on net sales up to a cumulative $250,000,000) or 5% (on net sales above a cumulative $250,000,000), until expiration of the licensed patent, and 2.5% (on net sales for any sales not covered by Licensed Patents), (ii) 30% to 50% of any non-royalty sublicensee income received (50% for sublicenses granted in the first two years of the ULRF license agreement, 40% for sublicenses granted in the third or fourth years of the ULRF license agreement, and 30% for sublicenses granted in the fifth year of the ULRF license agreement or thereafter), (iii) reimbursements for costs associated with the preparation, filing, prosecution and maintenance of licensed patents, incurred prior to June 2020, and (iv) payments ranging from $50,000 to $5,000,000 upon the achievement of certain regulatory and commercial milestones. Milestone payments for the first therapeutic indication would be $50,000 for first dosing in a Phase 1 clinical trial, $100,000 for first dosing in a Phase 2 clinical trial, $150,000 for first dosing in a Phase 3 clinical trial, $300,000 for regulatory marketing approval and $5,000,000 upon achieving a cumulative $500,000,000 of Licensed Product sales. | ||||||||
License Agreement [Member] | University of Louisville Research Foundation [Member] | Subsequent Event [Member] | |||||||||
Research and development | $ 250,000 | ||||||||
License Agreement [Member] | Advanced Cancer Therapeutics [Member] | |||||||||
Proceeds from convertible promissory note | $ 25,000 | ||||||||
Agreement description | Royalties, on net sales associated with the commercialization of ACT-GRO-777/AS1411, of 2% (only if patent-covered and only on net sales above a cumulative $3,000,000) or 1% (if not patent-covered, but only on net sales above a cumulative $3,000,000), until the 15th anniversary of the ACT license agreement and (ii) milestone payments of $100,000 for the Company raising a cumulative total of $2,000,000 in new equity financing after the date of the ACT license agreement, $100,000 upon any first AS1411-based licensed product receiving the CE Mark or similar FDA status, and $500,000 upon cumulative worldwide AS1411-based licensed product net sales reaching $3,000,000 | ||||||||
Milestone payment | $ 100,000 | ||||||||
Cumulative amount | $ 2,000,000 | ||||||||
Sponsored Research and License Agreement [Member] | |||||||||
Sponsored research expense | $ 139,000 | $ 20,000 | |||||||
Sponsored Research and License Agreement [Member] | University of Louisville Research Foundation [Member] | |||||||||
Research and development | $ 693,000 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) | 3 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | Dec. 31, 2017 | |
Shares of authorized but unissued common stock | 16,465,518 | |||
Stock based compensation expense | $ 358,625 | |||
Compensatory Warrants [Member] | ||||
Equity capital raise | $ 4,000,000 | |||
Purchase of stock warrants | 811,431 | 668,024 | ||
Warrant exercise price | $ 1.11 | $ 2.34 | ||
Noncompensatory Equity Classified Warrants [Member] | ||||
Purchase of stock warrants | 270,478 | |||
Warrant exercise price | $ 1.11 | |||
Warrants [Member] | ||||
Stock based compensation expense | ||||
Unrecognized compensation cost | 0 | 11,000 | ||
Stock Options and Warrants [Member] | ||||
Stock based compensation expense | 359,000 | $ 0 | ||
Unrecognized compensation cost | $ 14,100,000 | |||
Weighted average period term | 2 years 11 months 8 days | |||
Stock options exercised | ||||
Stock option granted exercise price | $ 5.10 | |||
Stock Options and Warrants [Member] | 2020 Stock Incentive Plan [Member] | ||||
Stock options outstanding shares | 400,000 | 0 | ||
Stock options shares future grant | 477,657 | 0 | ||
Stock options description | The exercise price for an option issued under the 2020 Plan is determined by the Board of Directors, but will be (i) in the case of an incentive stock option (A) granted to an employee who, at the time of grant of such option, is a 10% stockholder, no less than 110% of the fair market value per share on the date of grant; or (B) granted to any other employee, no less than 100% of the fair market value per share on the date of grant; and (ii) in the case of a non-statutory stock option, no less than 100% of the fair market value per share on the date of grant. | |||
Series A Preferred Stock [Member] | ||||
Preferred stock, shares outstanding | 0 | 2,412,887 | ||
Series B Preferred Stock [Member] | ||||
Preferred stock, shares outstanding | 0 | 7,707,736 | ||
Series C Preferred Stock [Member] | ||||
Preferred stock, shares outstanding | 0 | 3,300,715 | ||
Series D Preferred Stock [Member] | ||||
Preferred stock, shares outstanding | 0 | 1,508,305 | ||
Series D-1 Preferred Stock [Member] | ||||
Preferred stock, shares outstanding | 0 | 643,511 |
Stockholders' Deficit - Schedul
Stockholders' Deficit - Schedule of Reserved Shares (Details) | Jun. 30, 2020shares |
Total | 16,465,518 |
Exercise of Issued and Future Grants of Stock Options [Member] | |
Total | 3,674,624 |
Exercise of Stock Warrants [Member] | |
Total | 6,543,205 |
Series Alpha Preferred Stock [Member] | |
Total | 6,247,689 |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Stock Option Activity (Details) - Employees and Non-employees [Member] | 3 Months Ended |
Jun. 30, 2020$ / sharesshares | |
Number of Shares, Options Outstanding, Beginning | shares | |
Number of Shares, Options Legacy Ritter options | shares | 95,124 |
Number of Shares, Options Granted | shares | 3,579,500 |
Number of Shares, Options Expired | shares | |
Number of Shares, Options Forfeited | shares | |
Number of Shares, Options Outstanding at Ending | shares | 3,674,624 |
Number of Shares, Options Exercisable (vested) | shares | 110,124 |
Number of Shares, Options Non-Exercisable (non-vested) | shares | 3,564,500 |
Weighted Average Exercise Price, Outstanding, Beginning | |
Weighted Average Exercise Price, Options Assumed in reverse merger | 92.80 |
Weighted Average Exercise Price, Options Granted | 5.10 |
Weighted Average Exercise Price, Options Expired | |
Weighted Average Exercise Price, Options Forfeited | |
Weighted Average Exercise Price, Outstanding at Ending | 7.37 |
Weighted Average Exercise Price, Options Exercisable (vested) | 80.84 |
Weighted Average Exercise Price, Options Non-Exercisable (non-vested) | $ 5.10 |
Weighted- Average Remaining Contractual Life (in Years), Outstanding, Beginning | 1 year 10 months 14 days |
Weighted- Average Remaining Contractual Life (in Years), Options Assumed in reverse merger | 9 years 11 months 8 days |
Weighted- Average Remaining Contractual Life (in Years), Outstanding at Ending | 9 years 8 months 23 days |
Weighted- Average Remaining Contractual Life (in Years), Options Exercisable (vested) | 2 years 11 months 19 days |
Weighted- Average Remaining Contractual Life (in Years), Options Non-exercisable (non-vested) | 9 years 11 months 8 days |
Minimum [Member] | |
Range of Exercise price, Options Assumed in reverse merger | $ 5.75 |
Range of Exercise price, Options Granted | 4.97 |
Range of Exercise price, Options Expired | |
Range of Exercise price, Options Forfeited | |
Range of Exercise price, Options Outstanding | 4.97 |
Range of Exercise price, Options Exercisable (vested) | 4.97 |
Range of Exercise price, Options Non-Exercisable (non-vested) | 4.97 |
Maximum [Member] | |
Range of Exercise price, Options Assumed in reverse merger | 1,465.75 |
Range of Exercise price, Options Granted | 5.13 |
Range of Exercise price, Options Expired | |
Range of Exercise price, Options Forfeited | |
Range of Exercise price, Options Outstanding | 1,465.75 |
Range of Exercise price, Options Exercisable (vested) | 1,465.75 |
Range of Exercise price, Options Non-Exercisable (non-vested) | $ 5.13 |
Stockholders' Deficit - Sched_2
Stockholders' Deficit - Schedule of Assumptions Used in Black-Scholes Option-Pricing Method (Details) | 3 Months Ended |
Jun. 30, 2020$ / shares | |
Expected dividend yield | 0.00% |
Expected stock-price volatility | 102.00% |
Risk-free interest rate, minimum | 0.33% |
Risk-free interest rate, maximum | 0.59% |
Expected average term of options | 6 years |
Minimum [Member] | |
Stock price | $ 4.97 |
Maximum [Member] | |
Stock price | $ 5.13 |
Stockholders' Deficit - Sched_3
Stockholders' Deficit - Schedule of Share-based Compensation Expense (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Total | $ 358,625 | |
General and Administrative Expense [Member] | ||
Total | 272,978 | |
Research and Development Expense [Member] | ||
Total | $ 85,647 |
Stockholders' Deficit - Summa_2
Stockholders' Deficit - Summary of Warrant Activity (Details) | 3 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
Compensatory Warrant Activity [Member] | |
Number of Shares, Warrants Outstanding Beginning | shares | |
Number of Shares, Warrants Series C Preferred Stock Warrants Exchanged for Common Stock Warrants Upon Reverse Recapitalization | $ | $ 668,024 |
Number of Shares, Warrants Legacy Ritter warrants | shares | |
Number of Shares, Warrants Granted | shares | 811,431 |
Number of Shares, Warrants Expired | shares | |
Number of Shares, Warrants Forfeited | shares | |
Number of Shares, Warrants Outstanding Ending | shares | 1,479,455 |
Number of Shares, Warrants Exercisable | shares | 660,832 |
Number of shares, warrants non-exercisable | shares | 660,832 |
Weighted Average Exercise Price Per Share Warrants Outstanding Beginning | |
Weighted Average Exercise Price Per Share Warrants Series C Preferred Stock Warrant Exchanged For Common Stock Warrant Upon Reverse Recapitalization | 2.34 |
Weighted Average Exercise Price Per Share Warrants Legacy Ritter warrants | |
Weighted Average Exercise Price Per Share Warrants Granted | 1.11 |
Weighted Average Exercise Price Per Share Warrants Outstanding Ending | 1.67 |
Weighted Average Exercise Price Per Share Exercisable | 2.34 |
Weighted Average Exercise Price Per Share Non-Exercisable | $ 1.12 |
Weighted Average Remaining Life (Years) Exercisable | 3 years 9 months 25 days |
Weighted Average Remaining Life (Years) Non-Exercisable | 4 years 10 months 28 days |
Compensatory Warrant Activity [Member] | Minimum [Member] | |
Range of Exercise Price, Exercisable | $ 2.07 |
Range of Exercise Price, Non-Exercisable | 1.11 |
Compensatory Warrant Activity [Member] | Maximum [Member] | |
Range of Exercise Price, Exercisable | 2.54 |
Range of Exercise Price, Non-Exercisable | $ 2.54 |
Non-Compensatory Warrant Activity [Member] | |
Number of Shares, Warrants Outstanding Beginning | shares | |
Number of Shares, Warrants Legacy Ritter warrants | shares | 81,455 |
Number of Shares, Warrants Granted | shares | 270,478 |
Number of Shares, Warrants Expired | shares | (1,673) |
Number of Shares, Warrants Forfeited | shares | |
Number of Shares, Warrants Outstanding Ending | shares | 350,260 |
Number of Shares, Warrants Exercisable | shares | 350,260 |
Number of shares, warrants non-exercisable | shares | |
Weighted Average Exercise Price Per Share Warrants Outstanding Beginning | |
Weighted Average Exercise Price Per Share Warrants Legacy Ritter warrants | 54.04 |
Weighted Average Exercise Price Per Share Warrants Granted | 1.11 |
Weighted Average Exercise Price Per Share Warrants Expired | 1,562.50 |
Weighted Average Exercise Price Per Share Warrants Forfeited | |
Weighted Average Exercise Price Per Share Warrants Outstanding Ending | 1.08 |
Weighted Average Exercise Price Per Share Exercisable | 5.96 |
Weighted Average Exercise Price Per Share Non-Exercisable | |
Range of Exercise Price, Non-Exercisable | |
Weighted Average Remaining Life (Years) Exercisable | 4 years 3 months 22 days |
Weighted Average Remaining Life (Years) Non-Exercisable | 0 years |
Non-Compensatory Warrant Activity [Member] | Minimum [Member] | |
Range of Exercise Price, Exercisable | $ 1.11 |
Non-Compensatory Warrant Activity [Member] | Maximum [Member] | |
Range of Exercise Price, Exercisable | $ 2,325 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 1 Months Ended | 3 Months Ended | ||
May 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Mar. 31, 2020 | |
Cost of product sales | $ 355,427 | $ 316,513 | ||
Research and development | 597,345 | 147,641 | ||
Due to related party | 1,144,513 | $ 926,385 | ||
Sekisui [Member] | ||||
Receivable amount | 55,000 | 290,000 | ||
Product sales | 420,000 | 950,000 | ||
Cost of product sales | 452,000 | 661,000 | ||
Research and development | 0 | $ 539,000 | ||
Due to related party | 1,100,000 | 900,000 | ||
Deferred revenue | $ 271,000 | $ 271,000 | ||
Series D and Series D-1 Preferred Stock [Member] | ||||
Conversion of preferred stock | 1,980,233 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Aug. 04, 2020 | Jul. 29, 2020 | Jul. 27, 2020 | Jul. 23, 2020 | Jul. 21, 2020 | Jul. 10, 2020 | Jul. 02, 2020 | Jun. 30, 2020 |
Common Stock [Member] | ||||||||
Number of shares conversion of common stock | 1,775,096 | |||||||
Subsequent Event [Member] | Sekisui [Member] | ||||||||
Paid to related party | $ 1,000,000 | |||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Two-year Warrants [Member] | ||||||||
Purchase of stock warrants | 1,287,829 | 1,920,768 | ||||||
Warrant exercise price | $ 6 | $ 5.25 | ||||||
Subsequent Event [Member] | Securities Purchase Agreement [Member] | Single Institutional Investor [Member] | ||||||||
Sale of stock | $ 10,000,000 | $ 8,000,000 | ||||||
Beneficial-ownership percentage | 9.99% | 9.99% | ||||||
Subsequent Event [Member] | Common Stock [Member] | ||||||||
Number of shares conversion of common stock | 500,356 | 600,427 | 600,427 | 2,101,495 | ||||
Subsequent Event [Member] | Common Stock [Member] | Securities Purchase Agreement [Member] | ||||||||
Number of shares common stock | 1,717,106 | 1,140,570 | ||||||
Subsequent Event [Member] | Pre-funded Warrants [Member] | Securities Purchase Agreement [Member] | ||||||||
Purchase of stock warrants | 780,198 | |||||||
Subsequent Event [Member] | Series Alpha Preferred Stock [Member] | ||||||||
Number of shares conversion of common stock | 444 | 370 | 444 | 444 | 1,554 |