Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 04, 2015 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | RITTER PHARMACEUTICALS INC | |
Entity Central Index Key | 1,460,702 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 7,792,433 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2015 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash | $ 19,658,994 | $ 2,747,248 |
Prepaid expenses | 42,079 | 57,115 |
Total current assets | 19,701,073 | 2,804,363 |
Other assets | 10,331 | 10,331 |
Deferred offering costs | 143,454 | |
Property and equipment, net | 4,566 | 5,172 |
Total Assets | 19,715,970 | 2,963,320 |
Current liabilities | ||
Accounts payable | 1,389,443 | 1,083,597 |
Accrued expenses | 972,992 | 168,635 |
Other liablities | 1,022 | 2,518 |
Total current liabilities | 2,363,457 | 1,254,750 |
Stockholders' equity (deficit) | ||
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding as of June 30, 2015; 8,887,500 shares authorized, issued and outstanding as of December 31, 2014 | 8,888 | |
Common stock, $0.001 par value; 25,000,000 shares authorized, 7,788,028 shares issued and outstanding as of June 30, 2015; 50,000,000 shares authorized, 465,378 shares issued and outstanding as of December 31, 2014 | 7,788 | 465 |
Additional paid-in capital | 39,124,630 | 3,399,924 |
Accumulated deficit | (21,779,905) | (17,904,319) |
Total stockholders' equity (deficit) | 17,352,513 | (14,495,042) |
Total Liabilities and Stockholders' Equity (Deficit) | $ 19,715,970 | 2,963,320 |
Preferred stock subject to redemption | ||
Current liabilities | ||
Preferred stock subject to redemption, $0.001 par value, no shares authorized, issued and outstanding as of June 30, 2015; 16,378,646 shares authorized, 13,399,668 shares issued and outstanding as of December 31, 2014 | $ 16,203,612 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parentheticals) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 8,887,500 |
Preferred stock, shares issued | 8,887,500 | |
Preferred stock, shares outstanding | 8,887,500 | |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 25,000,000 | 50,000,000 |
Common stock, shares Issued | 7,788,028 | 465,378 |
Common stock, shares outstanding | 7,788,028 | 465,378 |
Preferred stock subject to redemption | ||
Preferred stock subject to redemption, par value (in dollars per share) | $ 0.001 | |
Preferred stock subject to redemption, shares authorized | 16,378,646 | |
Preferred stock subject to redemption, shares issued | 13,399,668 | |
Preferred stock subject to redemption, shares outstanding | 13,399,668 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Operating costs and expenses: | ||||
Research and development | $ 47,977 | $ 6,315 | $ 79,555 | $ 11,416 |
Patent costs | 50,148 | 27,382 | 112,423 | 64,164 |
General and administrative | 2,001,706 | 352,431 | 3,304,152 | 597,087 |
Total operating costs and expenses | 2,099,831 | 386,128 | 3,496,130 | 672,667 |
Operating loss | (2,099,831) | (386,128) | (3,496,130) | (672,667) |
Other income (expense): | ||||
Interest income (expense), net | 2,101 | (4,944) | 4,305 | (4,739) |
Other income | 7,091 | |||
Total other income (expense) | 2,101 | (4,944) | 11,396 | (4,739) |
Net loss | (2,097,730) | (391,072) | (3,484,734) | (677,406) |
Cumulative preferred stock dividends | 178,286 | 147,337 | 327,569 | 294,785 |
Accretion of discount on Series C preferred stock | 31,465 | 63,283 | ||
Net loss applicable to common stockholders | $ (2,307,481) | $ (538,409) | $ (3,875,586) | $ (972,191) |
Net loss per common share - basic and diluted (in dollars per share) | $ (4.18) | $ (1.18) | $ (7.62) | $ (2.14) |
Weighted average common shares outstanding - basic and diluted (in shares) | 551,912 | 456,408 | 508,645 | 453,901 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities | ||
Net loss | $ (3,484,734) | $ (677,406) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 606 | 2,534 |
Stock based compensation | 1,680,247 | 91,916 |
Accretion of debt discount | 1,822 | |
Changes in operating assets and liabilities: | ||
Prepaid expenses | 15,036 | (41,061) |
Other assets | 5,033 | |
Accounts payable | 305,846 | 32,454 |
Accrued expenses | 590,796 | 1,012 |
Other liabilities | (1,676) | (773) |
Net cash used in operating activities | (893,879) | (584,469) |
Cash flows from investing activities | ||
Purchase of property and equipment | (1,166) | |
Net cash used in investing activities | (1,166) | |
Cash flows from financing activities | ||
Commissions and issuance costs of initial public offering | (2,194,375) | |
Proceeds from issuance of shares upon closing of initial public offering | 20,000,000 | |
Proceeds of borrowing under notes payable | 375,000 | |
Net cash provided by financing activities | 17,805,625 | 375,000 |
Net increase (decrease) in cash | 16,911,746 | (210,635) |
Cash at beginning of period | 2,747,248 | 448,226 |
Cash at end of period | 19,658,994 | 237,591 |
Non-cash financing activities: | ||
Accrual of commissions and issuance costs of the initial public offering | 213,561 | |
Deferred offering costs reclassified to additional paid-in capital | 665,603 | |
Common stock subject to repurchase | 180 | |
Cumulative preferred stock dividends | 327,569 | $ 294,785 |
Accretion of discount on Series C preferred stock | $ 63,283 | |
Cash paid for interest | ||
Cash paid for taxes | ||
Conversion of Preferred Stock to Common Stock | ||
Non-cash financing activities: | ||
Conversion of all oustanding preferred stock, redeemable preferred stock into common stock | $ 8,888 | |
Conversion of Redeemable Preferred Stock to Common Stock | ||
Non-cash financing activities: | ||
Conversion of all oustanding preferred stock, redeemable preferred stock into common stock | $ 16,594,464 |
ORGANIZATION AND PRINCIPAL ACTI
ORGANIZATION AND PRINCIPAL ACTIVITIES | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND PRINCIPAL ACTIVITIES | NOTE 1 — ORGANIZATION AND PRINCIPAL ACTIVITIES Ritter Pharmaceuticals, Inc. (“Ritter” or the “Company”) is a Delaware corporation headquartered in Los Angeles, California. The Company was formed as a Nevada limited liability company on March 29, 2004 under the name Ritter Natural Sciences, LLC, and converted into a Delaware corporation on September 16, 2008. Ritter Pharmaceuticals, Inc. develops novel therapeutic products that modulate the human gut microbiome to treat gastrointestinal diseases. The Company is advancing human gut health research by exploring metabolic capacity of the gut microbiota and translating the functionality of prebiotic-based therapeutics into applications intended to have a meaningful impact on a patient’s health. The Company’s lead compound, RP-G28 is currently under development for the treatment of lactose intolerance. RP-G28 has the potential to become the first FDA-approved drug for the treatment of lactose intolerance, a debilitating disease that affects over 1 billion people worldwide. On June 24, 2015, the Company’s registration statement on Form S-1 (File No. 333-202924) relating to its initial public offering of its common stock was declared effective by the Securities and Exchange Commission (“SEC”). The shares began trading on the NASDAQ Capital Market on June 24, 2015. The initial public offering closed on June 29, 2015, and 4,000,000 shares of common stock were sold at an initial public offering price of $5.00 per share, for aggregate gross proceeds to the Company of $20 million. The Company paid to the underwriters underwriting discounts and commissions of approximately $1.6 million in connection with the offering. In addition, the Company incurred expenses of approximately $1 million in connection with the offering. Thus, the net offering proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, were approximately $17.4 million. |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 6 Months Ended |
Jun. 30, 2015 | |
Basis of presentation [Abstract] | |
BASIS OF PRESENTATION | NOTE 2 — BASIS OF PRESENTATION The accompanying financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include all adjustments necessary for the fair presentation of the Company’s financial position for the periods presented. All common share amounts and per share amounts have been adjusted to reflect a 1-for-7.15 reverse stock split of the Company’s common stock effected on June 17, 2015. The accompanying interim period unaudited condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the SEC regarding interim financial reporting. The condensed balance sheet as of June 30, 2015, the condensed statements of operations for the three and six months ended June 30, 2015 and 2014, and the condensed statements of cash flows for the six months ended June 30, 2015 and 2014, are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of its financial position, operating results and cash flows for the periods presented. The condensed balance sheet at December 31, 2014 has been derived from audited financial statements included in Form S-1 filed on June 19, 2015 with the SEC and declared effective on June 24, 2015. The results for the three and six months ended June 30, 2015 are not necessarily indicative of the results expected for the full fiscal year or any other period. The accompanying interim period unaudited condensed financial statements and related financial information included in this Quarterly Report on Form 10-Q should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Form S-1, filed with the SEC on June 19, 2015. The Company currently operates in one business segment focusing on the development and commercialization of RP-G28. The Company is not organized by market and is managed and operated as one business. A single management team reports to the chief operating decision maker, the Chief Executive Officer, who comprehensively manages the entire business. The Company does not currently operate any separate lines of business or separate business entities. Liquidity At June 30, 2015, after consummation of the Company’s initial public offering, the Company had working capital of approximately $17.3 million, an accumulated deficit of approximately $21.8 million, and cash of approximately $19.7 million. The Company has not generated any product revenues and has not achieved profitable operations. There is no assurance that profitable operations will ever be achieved, and, if achieved, could be sustained on a continuing basis. In addition, development activities, clinical and pre-clinical testing, and commercialization of the Company’s products will require significant additional financing. The Company believes that its existing cash will be sufficient to enable the Company to continue as a going concern for at least the next twelve months. However, the Company will need to secure additional funding in the future, from one or more equity or debt financings, collaborations, or other sources, in order to carry out all of its planned research and development activities. If the Company is unable to obtain additional financing or generate license or product revenue, the lack of liquidity could have a material adverse effect on the Company’s future prospects. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company’s significant accounting policies are disclosed in the audited financial statements for the year ended December 31, 2014 included in the Company’s Form S-1 filed on June 19, 2015 with the SEC. Since the date of such financial statements, there have been no changes to the Company’s significant accounting policies, other than those detailed below. Deferred Offering Costs Deferred offering costs, which primarily consist of direct, incremental banking, legal and accounting fees relating to a planned public offering of the Company’s common stock, are capitalized within long term assets. The deferred offering costs were reclassified to additional paid-in capital upon the consummation of the offering on June 29, 2015. Net Loss Per Share The Company determines basic loss per share and diluted loss per share in accordance with the provisions of ASC 260, “ Earnings per Share All common share amounts and per share amounts have been adjusted to reflect a 1-for-7.15 reverse stock split of the Company’s common stock effected on June 17, 2015. Recent Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40) — Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT | NOTE 4 – PROPERTY AND EQUIPMENT Property and equipment consists of the following: June 30, December 31, Estimated Life 2015 2014 Computers and equipment 5 years $ 5,487 $ 5,487 Furniture and fixtures 7 years 4,270 4,270 Total property and equipment 9,757 9,757 Accumulated depreciation (5,191 ) (4,585 ) Total property and equipment, net of accumulated depreciation $ 4,566 $ 5,172 Depreciation expense of approximately $300 and $1,300 was recognized for the three months ended June 30, 2015 and 2014, respectively, and approximately $600 and $2,500 for the six months ended June 30, 2015 and 2014, respectively and is classified in general and administrative expense in the accompanying Unaudited Condensed Statements of Operations. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 5 — COMMITMENTS AND CONTINGENCIES Employment Agreements Michael Step On December 2, 2014, the Company entered into a letter agreement (the “Step Letter Agreement”), with Michael Step, the Company’s current Chief Executive Officer, setting forth the terms of his employment. The Step Letter Agreement provides that Michael Step is entitled to an annual base salary of $360,000 and a total of three grants of options to purchase the Company’s common stock. The first two options entitle Michael Step to purchase 646,537 and 73,777 of the Company’s shares, respectively, for an exercise price of $5.86 per share. Each of these options is immediately exercisable in full as of the date of the grant, with 44/48 ths th The third option became exercisable upon the closing of the Company’s initial public offering on June 29, 2015. Pursuant to the terms of the agreement, the option is exercisable for a total of 103,025 shares of the Company’s common stock, which, together with the shares subject to the first option, represent 7.5% of the shares of common stock deemed to be outstanding at June 29, 2015 on a fully-diluted basis after giving effect to the number of shares subject to the third option. Seventy-five percent (75%) of the shares subject to the third option are subject to a right of repurchase by the Company upon termination of Michael Step’s employment for any reason. This right of repurchase will lapse with respect to 1/36 th Under the terms of the agreement, Michael Step will be entitled to receive certain payments in the event his employment is terminated under certain scenarios. Andrew Ritter and Ira Ritter On September 25, 2013, the Company’s Board of Directors approved the Executive Compensation Plan (the “Compensation Plan”), which was later amended in June 2015, setting forth the compensation to be paid to Andrew Ritter and Ira Ritter, the Company’s current President and also the Company’s former Chief Executive Officer, and Chief Strategic Officer (“CSO”), respectively, for their contributions to the Company. Pursuant to the amended terms of the Compensation Plan, effective June 29, 2015, the President’s salary increased to $310,000 per year and the CSO’s salary is $295,000 per year. The President will also be entitled to receive up to $180,000 payable over a three year period for tuition reimbursement. As of June 30, 2015, the Company accrued $121,000 in tuition reimbursement for the President and recognized such amount in general and administrative expenses in our Unaudited Condensed Statements of Operations in the three and six month periods ending June 30, 2015. Under the terms of the agreement, both the President and the CSO will be entitled to receive certain payments in the event their employment is terminated under certain scenarios. Each executive received options to purchase up to 48,951 shares of the Company’s common stock (each referred to in this section as “Executive Options”) pursuant to the 2008 Stock Plan, which will vest based on specific performance conditions, described below. Cash Bonus and Executive Options Performance Conditions Pursuant to the amended terms of the Compensation Plan, the Company will review bonus opportunities annually for the President and the CSO based on achievement of specific performance as determined by the Company. The initial target bonus opportunities are 40% and 35% of the base salary for the President and the CSO, respectively. In addition, each covered executive is also entitled to the following cash payments and vests in Executive Options upon the satisfaction of the events described below: · FDA Meeting Bonus Opportunities · Clinical Trial Funding Commitment Bonus Opportunities · Fundraising Bonus Opportunities · License Event Bonus Opportunities o A graduated cash bonus equal to (i) 5% of the Initial Period License Payment (as defined below) up to $5,000,000; (ii) 4% of the Initial Period License Payment in excess of $5,000,000 up to $10,000,000; and (iii) 3% of the Initial Period License Payment in excess of $10,000,000. In addition, upon the Company’s receipt of an Initial Period License Payment of more than $2,000,000, 35% of 45,454 shares of their Executive Options will vest and become exercisable, with the balance of the 45,454 shares vesting in 36 monthly installments beginning on the last day of the following month. o A cash bonus equal to 3% of any Annual Excess Milestone Payments (as defined below); provided, however that no such bonus may be paid at any time the Company has less than $1,000,000 in available cash. In addition, upon the Company’s receipt of an Annual Excess Milestone Payment, 35% of 6,993 shares of their Executive Options will vest and become exercisable, with the balance of the 6,993 shares vesting in 36 monthly installments beginning on the last day of the following month. Notwithstanding any of the vesting provisions set forth above, the total potential number of Executive Options that may vest will not exceed 48,951 and the Executive Options will automatically terminate for any options for which a vesting date or performance condition has not been met by September 25, 2015. For purposes of the Compensation Plan, the term “ Initial Period License Payment Initial Period Annual Excess Milestone Payments Post-Closing Milestones The Compensation Plan provides that in the event that the Company enters into more than one License Event with respect to a single product candidate (i.e., for a separate field of use), then the proceeds of any such additional License Event will be included with the proceeds of the original License Event for purposes of meeting any of the financial thresholds set forth above. Under the terms of the Compensation Plan, receipt by the Company of more than one bona fide Under the terms of the Compensation Plan, each executive is entitled to receive certain payments in the event their employment is terminated under certain scenarios. On December 2, 2014, pursuant to the 2008 stock plan, the Company granted an aggregate of 453,413 options to the President and the CSO to purchase the Company’s common stock listed as follows: (i) 20,979 fully vested options with an exercise price of $5.86; and (ii) 432,434 options which vest 25% upon the first anniversary of the vesting commencement date with the remaining options vesting monthly in equal amounts over 36 months with an exercise price equal to $5.86 for the first 152,347 options covered thereby, $9.30 for the next 140,044 options covered thereby, and $13.23 for the remaining balance. In addition, all non-employee directors will each be initially entitled to receive an option to acquire 1,398 shares of the Company’s common stock, which will vest annually over a three-year term from the grant date, and annually thereafter be entitled to receive an option to acquire 979 shares of the Company’s common stock, each of which will vest one year from the grant date. As of June 30, 2015, no stock based compensation or cash compensation has been granted to the directors under this program. Leases The Company leases office and storage space for its headquarters in California pursuant to a two-year agreement ending September 30, 2015 which calls for a minimum monthly rent of approximately $5,000 and an annual increase of 3%. Rent expense, recognized on a straight-line basis, was approximately $15,000 for each of the three months ended June 30, 2015 and 2014. In July 2015, the Company entered into a new five-year lease agreement for new corporate office space, projected to be effective October 1, 2015, which calls for a minimum lease payment of approximately $107,000 annually. Legal The Company is not currently involved in any legal matters arising in the normal course of business. From time to time, the Company could become involved in disputes and various litigation matters that arise in the normal course of business. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters. Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict. Because of such uncertainties, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation. |
STOCKHOLDERS' DEFICIT AND PREFE
STOCKHOLDERS' DEFICIT AND PREFERRED STOCK SUBJECT TO REDEMPTION | 6 Months Ended |
Jun. 30, 2015 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' DEFICIT AND PREFERRED STOCK SUBJECT TO REDEMPTION | NOTE 6 — STOCKHOLDERS’ EQUITY (DEFICIT) AND PREFERRED STOCK SUBJECT TO REDEMPTION Common Stock As of December 31, 2014, the Company was authorized to issue 50,000,000 shares of common stock with a par value of $0.001 per share. The Company amended and restated its Certificate of Incorporation in June 2015 (“the Amended Certificate”) and reduced the authorized shares of the Company’s common stock to 25,000,000 with a par value of $0.001 per share. Effective June 17, 2015, all common share amounts and per share amounts have been adjusted to reflect a 1-for-7.15 reverse stock split. Preferred Stock The Company’s Board of Directors is authorized, subject to any limitations prescribed by law, to provide for the issuance of the authorized shares of preferred stock in series and to establish the number of shares to be included in each such series, and to fix the designation, powers, preferences and rights of the shares of each such series and any qualifications, limitations or restrictions thereon. Pursuant to the Amended Certificate, as of June 30, 2015, the Company is authorized to issue 5,000,000 shares of preferred stock, $0.001 par value per share. Prior to the Amended Certificate and as of December 31, 2014, the Company was authorized to issue 7,200,000 shares, 1,687,500 shares, 4,220,464 shares, 7,658,182 shares, and 4,500,000 shares of Series A-1, Series A-2, Series A-3, Series B, and Series C preferred stock, respectively, with a par value of $0.001 per share. Upon the closing of the Company’s initial public offering, all outstanding shares of convertible preferred stock and preferred stock subject to redemption were converted into an aggregate of 3,322,650 shares of common stock. The following provides material terms and certain historical information regarding the · Redemption. At any time after five years following the date of the initial issuance of the Series A-3, Series B, or Series C preferred stock, as applicable, and at the option of the holders of a majority of the then outstanding shares of Series A-3, Series B, and Series C preferred stock, voting together as a single class, the Company was required to redeem any outstanding shares that have not been converted by paying cash in an amount per share equal to the liquidation preference of $0.62 and $1.30 for the Series A-3 and Series C preferred stock, respectively, and $1.19 per share, plus any accrued but unpaid dividends, for the Series B preferred stock. Given the holders’ redemption option, the Series A-3, Series B, and Series C preferred stock is classified as preferred stock subject to redemption in the accompanying Condensed Balance Sheets. · Dividends. The holders of outstanding shares of preferred stock were entitled to receive dividends, when, as and if declared by the Company’s Board of Directors. The annual dividend rate was $0.00556 per share for the Series A-1 preferred stock, $0.032 per share for the Series A-2 preferred stock, $0.04957 per share for the Series A-3 preferred stock, $0.09524 per share for the Series B preferred stock, and $0.104 for Series C preferred stock (subject to adjustment). The right to receive dividends on shares of Series B preferred stock was cumulative and the dividends accrue to holders of Series B preferred stock whether or not dividends are declared or paid in a calendar year. Undeclared dividends in arrears for the Series B preferred stock was approximately $2 million and $1.7 million as of June 30, 2015 and December 31, 2014, respectively. The right to receive dividends on shares of Series A and Series C preferred stock was not cumulative and no right to such dividends accrued to holders of Series A or Series C preferred stock. · Liquidations. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary, Series B and Series C preferred stockholders receive an amount per share equal to the sum of the original purchase price of $1.19 plus all cumulative but unpaid dividends for Series B, and $1.30 for Series C. If upon the liquidation, the available assets are insufficient to permit payments to Series B and Series C holders, the entire assets legally available will be distributed in a pro rata basis among the holders in proportion to the full amounts they would otherwise be entitled to receive. Upon the completion of the distribution to the holders of the Series B and Series C preferred stock, the holders of the Series A preferred stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Company to the holders of all other capital stock by reason of their ownership of such stock, an amount per share equal to the sum of the original issue price per share of $0.07, $0.4, and $0.62 for Series A-1, Series A-2, and Series A-3 preferred stock, respectively, plus any accrued but unpaid dividends on the preferred stock. Any remaining assets are distributed pro rata among the preferred and common shareholders. Stock Transactions Initial Public Offering On June 29, 2015, the Company closed its initial public offering, selling 4,000,000 shares of the Company’s common stock at an initial public offering price of $5.00 per share, for aggregate gross proceeds to the Company of $20 million. The Company paid to the underwriters underwriting discounts and commissions of approximately $1.6 million in connection with the offering, and approximately $1 million of other expenses in connection with the offering. Effectively prior to the closing of the initial public offering, the Company converted all of its outstanding shares of Series A-1, Series A-2, Series A-3, Series B, and Series C preferred into an aggregate of 3,322,650 shares of the Company’s common stock. Series C Financing In December 2014, the Company issued an aggregate of 2,369,228 shares of Series C preferred stock, which was later converted into an aggregate of 331,358 shares of the Company’s common stock, and warrants to purchase an aggregate of 331,358 shares of the Company’s common stock (the “Warrants”), for aggregate gross proceeds of $3,081,893 (the “Series C Financing”). Each Warrant has a term of seven (7) years and provides for the holder to purchase one share of the Company’s common stock at a purchase price of $9.30 per share of common stock. The Warrants are indexed to the Company’s own stock and classified within stockholders’ equity pursuant to ASC 815-40. The gross proceeds were allocated to the Series C preferred stock and Warrants on a relative fair value basis, resulting in a value of $7.83 for the Series C preferred stock. The allocation of proceeds to the Warrants creates a discount of $1.47 in the initial carrying value of the Series C preferred stock, which was recognized as accretion, similar to preferred stock dividends, over the five-year period prior to optional redemption by the holders. In connection with the Series C Financing, all of the 2014 Notes were converted into shares of Series C preferred stock and Warrants as follows: · $535,000 unpaid principal plus accrued interest of $18,342 on convertible notes converted into shares of Series C preferred stock, which was later converted into 79,374 shares of the Company’s common stock, and 79,374 Warrants · $70,000 unpaid principal plus accrued interest of $537 on note payable extinguished and converted into shares of Series C preferred stock, which was later converted into 7,589 shares of the Company’s common stock and 7,589 Warrants Notes with an unpaid principal balance of $535,000 were converted into shares of Series C preferred stock and warrants to purchase shares of common stock at 75% of the price paid by other purchasers of the Series C Financing. The Company recognized additional interest expense of $184,445 upon conversion, calculated as the fair value of incremental shares and warrants received by the holders compared to converting the outstanding debt and accrued interest at 100% of the price paid by purchasers of the Series C Financing. The note with an unpaid principal balance of $70,000 was exchanged for shares of Series C preferred stock and warrants to purchase shares of common stock at a price per share equal to the price per share paid by purchasers of the Series C Financing. As such, there was no gain recognized or loss incurred upon extinguishment of the note in 2014. Prepaid Forward Sale of Preferred Stock On November 30, 2010, the Company concurrently entered into a Research and Development Agreement & License (“R&D Agreement”) and a Put and Call Option Agreement (“Put/Call”) with two commonly controlled entities, Kolu Pohaku Technologies, LLC (“KPT”) and Kolu Pohaku Management, LLC (“KPM”). The agreement was subsequently amended on July 6, 2011, September 30, 2011, February 6, 2012 and November 4, 2013 to increase the funding received by the Company. Research and Development Agreement & License The R&D Agreement between the Company and KPM and KPT, a Qualified High Technology Business within the meaning of Hawaii Revised Statutes, called for KPT to make a series of payments to the Company totaling $1,750,000 in exchange for the Company performing research and development activities in Hawaii for the benefit of KPT (referred to herein as the KP Research). The KP Research consisted of the initial phase of research, including the conduct of Phase II clinical trials in Hawaii for RP-G28. Pursuant to the terms of the R&D Agreement, the Company maintained ownership of the results of the Company’s ongoing research related to RP-G28, but KPT maintained ownership of the results of the KP Research. Inventions, developments and improvements arising out of the KP Research were owned by KPT. Under the terms of the R&D Agreement, the Company would bear any costs involved in obtaining patents for any inventions, developments or improvements resulting from the Research Project. In exchange for the irrevocable, perpetual, exclusive, worldwide right and license to the results of the KP Research, as they are generated under this R&D Agreement, the Company agreed to pay a quarterly royalty payment to KPT of $32,000 commencing March 31, 2015 and continuing through December 31, 2035 or until such time as the KPM Option (as described below) was exercised. On March 26, 2015, the Company exercised the right to put the KPM Option and issued 1,469,994 shares of Series B preferred stock to KPM, resulting in the full satisfaction of the Company’s obligation to make royalty payments to KPT. Put and Call Option Agreement Pursuant to the terms of the KPM Option Agreement, the Company had the right to put 1,469,994 shares of the Company’s Series B Preferred Stock (“Series B”) to KPM and KPM has the option to call the same amount of shares of Series B from the Company at any time after December 31, 2014. The number of shares was determined by dividing the $1,750,000 of payments made by KPT to the Company under the R&D Agreement by the Series B original issue price of $1.19. Exercise of the Put/Call results in full satisfaction of the Company’s obligation to make royalty payments to KPT under the R&D Agreement and KPT’s right, title and interest in the research conducted pursuant to the R&D Agreement becomes the property of the Company. On March 26, 2015, the Company exercised the right to put the KPM Option and issued 1,469,994 shares of Series B preferred stock to KPM, or the KPM Shares. Pursuant to the terms of the KPM Option Agreement, this resulted in the full satisfaction of the Company’s obligation to make royalty payments to KPT under the R&D Agreement and also resulted in the termination of the R&D Agreement and all of KPT’s right, title and interest in and to the KP Research, which rights now belong to the Company. The R&D Agreement and the Put/Call have been recognized on a combined basis, pursuant to ASC 815-10-15-9, as a fully prepaid forward sale contract on the Company’s Series B preferred stock. The fully prepaid forward sale contract is a hybrid instrument comprising (1) a debt host instrument and (2) an embedded forward sale contract, requiring the Company to issue 1,469,994 shares of the Company’s Series B for no further consideration. Payments received by the Company, totaling $1,750,000, are recognized as preferred stock subject to redemption in the Condensed Balance Sheet as of December 31, 2014. The Company converted these shares into an aggregate of 205,593 shares of the Company’s common stock upon the closing of the IPO. |
WARRANTS
WARRANTS | 6 Months Ended |
Jun. 30, 2015 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS | NOTE 7 — WARRANTS As described in Note 6, in 2014, the Company issued seven-year warrants (“the Warrants”) to investors for the purchase of 418,321 shares of the Company’s common stock at an exercise price of $9.30 per share. The Company analyzed the Warrants in accordance with ASC Topic 815 to determine whether the Warrants meet the definition of a derivative and, if so, whether the Warrants meet the scope exception that provides for equity classification of derivative instruments issued or held by the reporting entity that are both (1) indexed to its own stock and (2) classified in stockholders’ equity. The Company concluded these Warrants should be classified as equity since they contain no provisions, which would require recognition as a liability. The following represents a summary of the warrants outstanding at June 30, 2015 and changes during the period then ended: Weighted Average Warrants Exercise Price Outstanding at December 31, 2014 418,321 $ 9.30 Granted - - Exercised/Expired/ Forfeited - - Outstanding at June 30, 2015 418,321 $ 9.30 Exercisable at June 30, 2015 418,321 $ 9.30 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 8 — STOCK-BASED COMPENSATION Terms of the Company’s share-based compensation are governed by the Company’s 2015 Stock Plan, 2009 Stock Plan and 2008 Stock Plan (collectively the “Plans”.) The Plans permit the Company to grant non-statutory stock options, incentive stock options and stock purchase rights to the Company’s employees, outside directors and consultants; however, incentive stock options may only be granted to the Company’s employees. Beginning June 29, 2015, no awards may be granted under the 2009 Stock Plan or 2008 Stock Plan. As of June 30, 2015, the maximum aggregate number of shares of common stock that may be issued is 328,289 under the 2015 Stock Plan. The exercise price for each option 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 nonstatutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the Plans shall vest as determined by the Board of Directors but shall not exceed a ten-year period. Options Issued to Directors and Employees as Compensation Pursuant to the terms of the Plans, from inception to December 31, 2013, the Company has issued options to purchase an aggregate of 206,172 shares to its executive officers and employees of the Company. Of these, 26,163 options were forfeited and 180,009 options remain outstanding as of December 31, 2013. No additional options were granted or forfeited during the six months ended June 30, 2014. The exercise prices of these option grants, as determined by the Company’s Board of Directors, range from $0.79 to $1.27 per share, and a portion of these vest subject to certain performance conditions described in Note 5. The Company’s management initially assessed the likelihood of the performance conditions for the options granted to its executive officers to be probable of achievement. In April 2015, certain performance conditions providing for options to purchase an aggregate of 41,958 shares of the Company’s common stock were no longer considered to be probable of achievement by September 25, 2015. In December 2014, the Company granted additional non-qualified 10-year term options to its executive officers to purchase an aggregate of 1,729,766 shares of the Company’s common stock. Also in 2014, an aggregate of 41,958 options expired and 13,985 options were exercised. The exercise prices of these option grants, as determined by the Company’s Board of Directors, range from $5.86 to $13.23 per share. No additional options were granted in the six month period ended June 30, 2015. As of June 30, 2015, 1,853,831 options remain outstanding. The Company recognized stock based compensation expense for these services within general and administrative expense in the accompanying Unaudited Condensed Statements of Operations of approximately $1.7 million and $88,000 for the six months ended June 30, 2015 and 2014, respectively, and approximately $880,000 and $87,000 for the three months ended June 30, 2015 and 2014, respectively. As of June 30, 2015, there was approximately $2.9 million of total unrecognized compensation cost related to non-vested share-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 1.6 years. Options Issued to Nonemployees for Services Received From inception to June 30, 2015, the Company has issued options to its consultants to purchase an aggregate of 106,573 shares of the Company’s common stock under the Plans. Of these, 69,580 options were forfeited or exercised, and 36,993 options remain outstanding as of June 30, 2015. The exercise prices of the outstanding options, as determined by the Company’s Board of Directors, range from $0.72 to $1.14 per share. These outstanding options, with the exception of an option to purchase an aggregate of 7,271 shares granted to a consultant, vest 25% upon the first anniversary of the vesting commencement date with the remaining options vesting monthly in equal amounts over 36 months. In March 2011, the Company granted an option to a consultant to purchase an aggregate of 7,271 shares with an exercise price of $1.00 which vests 25% on the date of grant with the remaining options vesting monthly in equal amounts over 36 months. The Company recognized stock based compensation expense for these services of approximately $700 and $3,500 for the six months ended June 30, 2015 and 2014, respectively, and approximately $600 and $4,000 for the three months ended June 30, 2015 and 2014, respectively, within research and development expense in the accompanying Unaudited Condensed Statements of Operations. Options Valuation The Company calculates the fair value of stock-based compensation awards granted to employees and nonemployees using the Black-Scholes option-pricing method. If the Company determines that other methods are more reasonable, or other methods for calculating these assumptions are prescribed by regulators, the fair value calculated for the Company’s stock options could change significantly. Higher volatility and longer expected lives would result in an increase to stock-based compensation expense to non-employees determined at the date of grant. Stock-based compensation expense to non-employees affects the Company’s general and administrative expenses and research and development expenses. The Black-Scholes option-pricing model requires the use of highly subjective and complex assumptions, which determine the fair value of stock-based awards. The assumptions used in the Black-Scholes option-pricing method for the three months and six months ended June 30, 2015 and 2014 are set forth below: Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Expected dividend yield 0.00% 0.00% 0.00% 0.00% Expected stock-price volatility 65.06% - 67.08% 55.32% - 62.09% 51.45% - 67.08% 55.32% - 62.09% Risk-free interest rate 1.79% - 2.07% 1.54% - 2.67% 0.77% - 2.07% 1.49% - 3.04% Term of options 10 10 10 10 Stock price $5.86 $1.17 $5.86 $1.17 · Expected dividend. · Expected volatility. · Risk-free interest rate. · Expected term. In addition to the assumptions used in the Black-Scholes option-pricing model, the Company also estimates a forfeiture rate to calculate the stock-based compensation for the Company’s equity awards. The Company will continue to use judgment in evaluating the expected volatility, expected terms and forfeiture rates utilized for the Company’s stock-based compensation calculations on a prospective basis. Significant factors, assumptions and methodologies used in determining the estimated fair value of the Company’s common stock The Company is also required to estimate the fair value of the common stock underlying the Company’s stock-based awards when performing the fair value calculations using the Black-Scholes option-pricing model. The Company’s Board of Directors, with the assistance of management, determined the fair value of the Company’s common stock on each grant date. Option grants are based on the estimated fair value of the Company’s common stock on the date of grant, which is determined by taking into account several factors, including the following: · the prices at which the Company sold the Company’s convertible preferred stock and the rights, preferences, and privileges of the convertible preferred stock relative to those of the Company’s common stock, including the liquidation preferences of the convertible preferred stock; · important developments in the Company’s operations; · the Company’s actual operating results and financial performance; · conditions in the Company’s industry and the economy in general; · stock price performance of comparable public companies; · the estimated likelihood of achieving a liquidity event, such as an IPO or an acquisition of the Company, given prevailing market conditions; and · the illiquidity of the common stock underlying stock options. The table below presents the prices received from sales to third parties of the Company’s common stock and various classes of the Company’s preferred stock from inception to date: Year Share Class Price per Share 2005 Common Stock (a) $1.79 2006 Series A-2 Preferred Stock (a)(b) $0.40 2008 - 2009 Series A-3 Preferred Stock (b) $0.62 2010 - 2013 Series B Preferred Stock (b) $1.19 2014 Series C Preferred Stock (b) $1.30 2015 Common Stock $5.00 (a) After giving effect to the Company’s conversion from a LLC to a corporation. (b) Shares of preferred stock were converted into an aggregate of 3,322,650 shares of the Company’s common stock effective June 29, 2015, after giving effect to the 1-for-7.15 reverse stock of shares of the Company’s common stock effective June 17, 2015. For options issued from inception to November 7, 2013, in determining the estimated fair value of the Company’s common stock, the Company’s Board of Directors, with the assistance of management, used the market approach to estimate the enterprise value of the Company in accordance with the American Institute of Certified Public Accountants (“AICPA”) Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation (the “AICPA Guide”) for the three valuation dates of November 7, 2013, July 31, 2012, and December 31, 2010. The Market Approach is one of the three approaches (along with the Income Approach and Asset Approach) used to estimate enterprise and equity value. The market approach employs analysis using comparable companies in determining the value of the entity. Both public and private companies, if publicly available information exists, are considered in the market approach. Two information points commonly available — company valuation and transaction value — are used for their respective methodologies. There are a number of different methods within the Market Approach that may be used: the three main methods utilized are: the Guideline Pubic Companies Method; the Guideline Transactions Method; and the Backsolve Method. Given the early stage of the Company, the Backsolve Method was used to estimate the fair value of the Company’s securities. This method derives an implied market value of invested capital from a transaction involving a company’s own securities. The price of a company’s security that was involved in a recent arms-length transaction is used as a reference point in an allocation of value. The Company first raised additional capital through the sales of the Company’s LLC units. These units later converted into common shares and preferred shares upon the Company’s conversion to a corporation. Subsequent to the Company’s corporation conversion, the Company raised additional capital through the sales of the Company’s Series A-1, Series A-2, Series A-3, Series B, and Series C preferred shares at the price of $0.07, $0.40, $0.62, $1.19, and $1.30, respectively. The Company valued LLC units and common stock (after converting to a corporation) from inception through 2009 by reference to the Company’s sales of units and/or common stock & preferred stock over the period. Beginning in 2010, the Company valued the Company’s common stock using the Backsolve Method. The Backsolve Method requires considering the rights and preferences of each class of equity and solving for the total market value of invested capital that is consistent with a recent transaction in the Company’s own securities, considering the rights and preferences of each class of equity. However, management has decided that the liquidation preferences between the Company’s preferred shares and common shares are immaterial for a pre-revenue company. Per the AICPA Guide, the Backsolve Method is generally the most reliable indicator of value of early-stage enterprises with no product revenue or cash flow, if relevant and reliable transactions have occurred in the Company’s equity securities. This methodology is also prescribed by the AICPA when a valuation is conducted in close proximity to the date of a financing transaction, and when other methodologies are deemed less reliable. The stage of development of the Company’s compound was reflected in the Company’s selection of the term and volatility estimates used in the analysis. The estimate of the term considers the Company’s existing cash runway and the time to the next potential financing or liquidity event, while the volatility estimate reflects the relative riskiness of the Company’s equity securities (or asset base) relative to the general stock market. Management estimated the implied market value of invested capital of the Company by backsolving for the purchase price of the Company’s preferred shares for one common share through the option-pricing method. The premise of this method is that the transaction implied a market price for a share which in turn implied values for the other classes of equity based on relative claims on equity value, such as liquidation preferences and conversion rights. The application of the backsolve method considering the Company’s capital structure yielded a total market value of invested capital of approximately $15.5 million, $14.4 million, and $8.9 million, of which approximately $819,000, $870,000, and $670,000 were allocated to the total value of common stock as of the Company’s three valuation dates of November 7, 2013, July 31, 2012, and December 31, 2010, respectively. On the three valuation dates of November 7, 2013, July 31, 2012, and December 31, 2010, after estimating the market value of invested capital, the Company allocated it to the various equity classes comprising the subject company’s capitalization table. This process ultimately results in creating a final estimate of value for the subject company’s underlying equity interests. While there are many different value allocation methods, these various methods can be grouped into three general categories as defined by the AICPA Guide, one of which is the Option-Pricing Method (OPM). The Company used the OPM to allocate market value of invested capital to the various equity classes and debt comprising the Company’s capitalization structure. The Company chose the OPM over other acceptable methods due to the complex capital structure, the uncertainty related to market conditions, and the lack of visibility on an imminent exit event. Under the OPM, each equity class is modeled as a call option with a distinct claim on the equity of the Company. The option’s exercise price is based on the Company’s total equity value available for each participating equity holder. The characteristics of each equity class determine the equity class’ claim on the total equity value. By constructing a series of options in which the exercise price is set at incremental levels of value, which correspond to the equity value necessary for each level of equity to participate, the Company determined the incremental option value of each series. When multiplied by the percentage of ownership of each equity class participating under that series, the result is the incremental value allocated to each class under that series. The OPM relies on the Black-Scholes option-pricing model to value the call options on the Company’s invested capital. The following inputs were applied in the Black-Scholes calculations of the OPM: Valuation Date November 7, 2013 July 31, 2012 December 31, 2010 Volatility 58.00% 61.00% 61.00% Risk-free interest rate 0.55% 0.57% 2.01% Maturity (years) 3 4 5 Discounts ranging from 35.8% to 40% were applied for lack of control and lack of marketability for the common stock. The calculation resulted in a fair value for the common stock of $1.17, $1.19, and $1.03 per share as of the Company’s three valuation dates of November 7, 2013, July 31, 2012, and December 31, 2010, respectively. For options issued in 2014, given the Company’s distinct possible exit scenarios of an initial public offering, the Company used the probability weighted expected return method (PWERM) to estimate the fair value of the Company’s common equity. Under this method, an analysis of future values of a company is performed for several likely liquidity scenarios. The value of the common stock is determined for each scenario at the time of each future liquidity event and discounted back to the present using a risk-adjusted discount rate. The present values of the common stock under each scenario are then weighted based on the probability of each scenario occurring to determine the value for the common stock. The Company’s management determined the probability weighting of potential liquidity events to be 45% for an initial public offering and 55% for other scenarios, which represents all other likely outcomes for the Company. Management estimated the implied market value of invested capital of the Company by backsolving for the purchase price of the Company’s preferred shares for one common share through the use of OPM. The application of the backsolve method considering the Company’s capital structure yielded a total market value of invested capital of approximately $25.2 million, of which approximately $1.4 million was allocated to the total value of common stock as of the Company’s valuation date of October 31, 2014. Given the lack of marketability for the common stock, the Company applied a discount of 21.4% for using the average strike put option approach. This resulted in a probability weighted common share value, after adjustment, of $5.86 per share as of valuation date of October 31, 2014. Stock-based Compensation Summary Tables Information regarding the Company’s stock option grants to the Company’s employees and non-employees, along with the estimated fair value per share of the underlying common stock, for stock options granted since 2005 is summarized as follows: Number of Common Exercise Price Estimated Fair Value Shares Underlying per Common per Share of Intrinsic Value Grant Date Options Granted Share Common Stock Option 2005 58,321 $0.07 $1.79 $1.72 2009 60,559 $0.72 - $0.79 $4.43 $3.71 - $3.64 2011 33,846 $1.00 $1.00 $0.00 2012 60,019 $1.14 $1.14 $0.00 2013 100,000 $1.14 - $1.30 $1.14 $0.00 2014 1,626,740 $5.86- $13.23 $5.86 $0.00 The following represents a summary of the options granted to employees and non-employees outstanding at June 30, 2015 and changes during the period then ended: Options Weighted Average Exercise Price Outstanding at December 31, 2014 1,788,717 $ 7.059 Granted 103,025 5.863 Exercised/ Expired/ Forfeited (918 ) (1.158 ) Outstanding at June 30, 2015 1,890,824 $ 7.062 Exercisable at June 30, 2015 298,437 $ 4.563 Expected to be vested 1,592,387 $ 4.563 |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 6 Months Ended |
Jun. 30, 2015 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 9 — RELATED PARTY TRANSACTIONS A director of the Company is a managing director of Javelin Venture Partners GP, LLC, the general partner of Javelin Venture Partners GP, L.P., which held a significant investment in the Company’s Series A-1, Series A-2, Series A-3, Series B, and Series C preferred stock that was converted to common stock prior to the Company’s initial public offering. Prior to and during his employment with the Company, Mr. Ira Ritter served as CEO of Andela Group Inc., (“Andela”) a company he founded in 1987, which is involved in corporate management, strategic and financial consulting. The Company incurred no expenses for services received from Andela during the three months and six months ended June 30, 2015, and approximately $49,000 and $99,000, respectively, during the three months and six months ended June 30, 2014, all of which were classified in general and administrative expenses in the Unaudited Condensed Statements of Operations. Other than disclosed, the Company has not entered into or been a participant in any transaction in which a related party had or will have a direct or indirect material interest. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 — SUBSEQUENT EVENTS On July 9, 2015, the Company entered into a lease with Century Park, a California limited partnership, pursuant to which Ritter will lease approximately 2,780 square feet of office space in Los Angeles, California. The lease provides for a term of sixty-one (61) months, commencing on the later of October 1, 2015 or the date of substantial completion of certain tenant improvements provided for under the lease. The Company will pay no rent for the first month of the term and base rent of $9,174 per month for months 2 through 13 of the term, with increasing base rent for each twelve month period thereafter under the term of the lease to a maximum of $10,325.42 per month for months 50 through 61. The base rent payments do not include the Company’s proportionate share of any operating expenses, including real estate taxes. The Company has the option to extend the term of the lease for one five-year term, provided that the rent would be subject to market adjustment at the beginning of the renewal term. Effective July 24, 2015, the Company entered into an amended Clinical Supply and Cooperation Agreement (the “Amended Supply Agreement”) with Ricerche Sperimentali Montale SpA (“Ricerche”) and Inalco SpA (collectively, “RSM”). The Amended Supply Agreement amends certain terms of the Clinical Supply and Cooperation Agreement, dated December 16, 2009, amended on September 25, 2010 (the “Existing Supply Agreement”). Under the Existing Supply Agreement, RSM granted Ritter an exclusive worldwide option in a specified field and territory to assignment of all right, title and interest to a purified Galacto-oligosaccharides product (“Improved GOS”), the composition of matter of the Improved GOS and any information relating to the Improved GOS, including certain specified technical information and other intellectual property rights (the “Improved GOS IP”). Pursuant to the amended terms, the Company may exercise the option by paying RSM $800,000 within ten days after the effective date of the Amended Supply Agreement. The Company exercised the option on July 30, 2015 and RSM is transferring the Improved GOS IP to the Company. Under the terms of the existing agreement, if a further option payment due in the future is not made, the Company may be required to return the Improved GOS IP to RSM. The Amended Supply Agreement also provides that the Company must pay RSM $400,000 within 10 days following FDA approval of a new drug application for the first product owned or controlled by the Company using Improved GOS as its active pharmaceutical ingredient. In addition, the Company agreed to purchase 350 kilos of Improved GOS for the sum of $250 per kilo for clinical supply of Improved GOS instead of $2,000 per kilo as under the Existing Supply Agreement. In consideration for RSM entering into the Amended Supply Agreement, the Company will issue 100,000 shares of the Company’s common stock, par value $0.001 per share (the “Shares”), to RSM. The Shares are to be issued within 90 days of the effective date of the Amended Supply Agreement pursuant to a stock purchase agreement to be negotiated by the parties in good faith. The stock purchase agreement is to include a lock-up agreement by RSM in favor of the Company pursuant to which RSM will not be able to sell the Shares for a period ending on the earlier of (i) the public release by the Company of the final results of its Phase 2b/3 clinical trial of RP-G28 and (ii) the filing of its Form 10-Q with the Securities and Exchange Commission for the fiscal quarter in which the Company receives the results of its Phase 2b/3 clinical trial of RP-G28. The Company has not issued the shares to RSM as of August , 2015. |
SUMMARY OF SIGNIFICANT ACCOUN16
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs, which primarily consist of direct, incremental banking, legal and accounting fees relating to a planned public offering of the Company’s common stock, are capitalized within long term assets. The deferred offering costs were reclassified to additional paid-in capital upon the consummation of the offering on June 29, 2015. |
Net Loss Per Share | Net Loss Per Share The Company determines basic loss per share and diluted loss per share in accordance with the provisions of ASC 260, “ Earnings per Share All common share amounts and per share amounts have been adjusted to reflect a 1-for-7.15 reverse stock split of the Company’s common stock effected on June 17, 2015. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2014, the FASB issued ASU No. 2014-15, Presentation of Financial Statements — Going Concern (Subtopic 205-40) — Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule Property and equipment | June 30, December 31, Estimated Life 2015 2014 Computers and equipment 5 years $ 5,487 $ 5,487 Furniture and fixtures 7 years 4,270 4,270 Total property and equipment 9,757 9,757 Accumulated depreciation (5,191 ) (4,585 ) Total property and equipment, net of accumulated depreciation $ 4,566 $ 5,172 |
WARRANTS (Tables)
WARRANTS (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule summary of the warrants | Weighted Average Warrants Exercise Price Outstanding at December 31, 2014 418,321 $ 9.30 Granted - - Exercised/Expired/ Forfeited - - Outstanding at June 30, 2015 418,321 $ 9.30 Exercisable at June 30, 2015 418,321 $ 9.30 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule assumptions used in the Black-Scholes option-pricing method | Three months ended June 30, Six months ended June 30, 2015 2014 2015 2014 Expected dividend yield 0.00% 0.00% 0.00% 0.00% Expected stock-price volatility 65.06% - 67.08% 55.32% - 62.09% 51.45% - 67.08% 55.32% - 62.09% Risk-free interest rate 1.79% - 2.07% 1.54% - 2.67% 0.77% - 2.07% 1.49% - 3.04% Term of options 10 10 10 10 Stock price $5.86 $1.17 $5.86 $1.17 |
Schedule the prices received from sales to third parties | Year Share Class Price per Share 2005 Common Stock (a) $1.79 2006 Series A-2 Preferred Stock (a)(b) $0.40 2008 - 2009 Series A-3 Preferred Stock (b) $0.62 2010 - 2013 Series B Preferred Stock (b) $1.19 2014 Series C Preferred Stock (b) $1.30 2015 Common Stock $5.00 (a) After giving effect to the Company’s conversion from a LLC to a corporation. (b) Shares of preferred stock were converted into an aggregate of 3,322,650 shares of the Company’s common stock effective June 29, 2015, after giving effect to the 1-for-7.15 reverse stock of shares of the Company’s common stock effective June 17, 2015. |
Schedule inputs were applied in the Black-Scholes calculations of the OPM | Valuation Date November 7, 2013 July 31, 2012 December 31, 2010 Volatility 58.00% 61.00% 61.00% Risk-free interest rate 0.55% 0.57% 2.01% Maturity (years) 3 4 5 |
Schedule regarding the Company's stock option grants to the Company's employees and non-employees | Number of Common Exercise Price Estimated Fair Value Shares Underlying per Common per Share of Intrinsic Value Grant Date Options Granted Share Common Stock Option 2005 58,321 $0.07 $1.79 $1.72 2009 60,559 $0.72 - $0.79 $4.43 $3.71 - $3.64 2011 33,846 $1.00 $1.00 $0.00 2012 60,019 $1.14 $1.14 $0.00 2013 100,000 $1.14 - $1.30 $1.14 $0.00 2014 1,626,740 $5.86- $13.23 $5.86 $0.00 |
Schedule represents a summary of the options granted to employees and non-employees | Options Weighted Average Exercise Price Outstanding at December 31, 2014 1,788,717 $ 7.059 Granted 103,025 5.863 Exercised/ Expired/ Forfeited (918 ) (1.158 ) Outstanding at June 30, 2015 1,890,824 $ 7.062 Exercisable at June 30, 2015 298,437 $ 4.563 Expected to be vested 1,592,387 $ 4.563 |
ORGANIZATION AND PRINCIPAL AC20
ORGANIZATION AND PRINCIPAL ACTIVITIES (Detail Textuals) - USD ($) | 1 Months Ended | 6 Months Ended |
Jun. 29, 2015 | Jun. 30, 2015 | |
Organization And Principal Activities [Line Items] | ||
Offering expenses | $ 2,194,375 | |
Initial Public Offering | ||
Organization And Principal Activities [Line Items] | ||
Number of common shares sold | 4,000,000 | |
Shares of common stock sold, per share (in dollars per share) | $ 5 | |
Aggregate gross proceeds from sale of common stock | $ 20,000,000 | |
Underwriting discounts and commissions | 1,600,000 | |
Offering expenses | 1,000,000 | |
Net offering proceeds | $ 17,400,000 |
BASIS OF PRESENTATION (Detail T
BASIS OF PRESENTATION (Detail Textuals) | 1 Months Ended | ||||
Jun. 17, 2015Segment | Jun. 30, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 30, 2014USD ($) | Dec. 31, 2013USD ($) | |
Basis of presentation [Abstract] | |||||
Stock Split, Conversion Ratio | 7.15 | ||||
Number of operating business segment | Segment | 1 | ||||
Working capital | $ 17,300,000 | ||||
Accumulated deficit | (21,779,905) | $ (17,904,319) | |||
Cash | $ 19,658,994 | $ 2,747,248 | $ 237,591 | $ 448,226 |
SUMMARY OF SIGNIFICANT ACCOUN22
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Detail Textuals) | 1 Months Ended |
Jun. 17, 2015 | |
Accounting Policies [Abstract] | |
Stock Split, Conversion Ratio | 7.15 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 9,757 | $ 9,757 |
Accumulated depreciation | (5,191) | (4,585) |
Total property and equipment, net of accumulated depreciation | $ 4,566 | 5,172 |
Computers and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 5 years | |
Total property and equipment | $ 5,487 | 5,487 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Estimated Life | 7 years | |
Total property and equipment | $ 4,270 | $ 4,270 |
PROPERTY AND EQUIPMENT(Detail T
PROPERTY AND EQUIPMENT(Detail Textuals) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 606 | $ 2,534 | ||
General and administrative expense | ||||
Property, Plant and Equipment [Line Items] | ||||
Depreciation expense | $ 300 | $ 1,300 | $ 600 | $ 2,500 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Detail Textuals) | Dec. 02, 2014USD ($)Option$ / sharesshares | Jun. 29, 2015USD ($)shares | Jun. 30, 2015USD ($)$ / shares | Sep. 30, 2013shares |
Commitments And Contingencies [Line Items] | ||||
Granted | $ / shares | $ 5.863 | |||
Andrew Ritter | Executive Compensation Plan | ||||
Commitments And Contingencies [Line Items] | ||||
Annual base salary | $ 310,000 | |||
Tuition reimbursement, amount authorized | $ 180,000 | |||
Tuition reimbursement, payable period | 3 years | |||
Bonus percentage of salary | 40.00% | |||
Andrew Ritter | Executive Compensation Plan | General and administrative expense | ||||
Commitments And Contingencies [Line Items] | ||||
Accrued tuition reimbursement | $ 121,000 | |||
Andrew Ritter | Stock Options | 2008 Stock Plan | ||||
Commitments And Contingencies [Line Items] | ||||
Number of shares called by options | shares | 48,951 | |||
Ira Ritter | Executive Compensation Plan | ||||
Commitments And Contingencies [Line Items] | ||||
Annual base salary | $ 295,000 | |||
Bonus percentage of salary | 35.00% | |||
Ira Ritter | Stock Options | 2008 Stock Plan | ||||
Commitments And Contingencies [Line Items] | ||||
Number of shares called by options | shares | 48,951 | |||
Step Letter Agreement | Michael Step | ||||
Commitments And Contingencies [Line Items] | ||||
Annual base salary | $ 360,000 | |||
Number of option granted | Option | 3 | |||
Step Letter Agreement | Michael Step | Stock Options | ||||
Commitments And Contingencies [Line Items] | ||||
Number of shares called by options | shares | 646,537 | |||
Granted | $ / shares | $ 5.86 | |||
Percentage of shares subject to right of repurchase | 91.60% | |||
Description of right to repurchase lapse | 1/44th of the total number of shares subject to the right of repurchase | |||
Step Letter Agreement | Michael Step | Stock Option 2 | ||||
Commitments And Contingencies [Line Items] | ||||
Number of shares called by options | shares | 73,777 | |||
Granted | $ / shares | $ 5.86 | |||
Percentage of shares subject to right of repurchase | 91.60% | |||
Description of right to repurchase lapse | 1/44th of the total number of shares subject to the right of repurchase | |||
Step Letter Agreement | Michael Step | Stock Option 3 | ||||
Commitments And Contingencies [Line Items] | ||||
Number of shares called by options | shares | 103,025 | |||
Percentage shares of common stock deemed to be outstanding | 7.50% | |||
Percentage of shares subject to right of repurchase | 75.00% | |||
Description of right to repurchase lapse | 1/36th of the total number of shares subject to the right of repurchase |
COMMITMENTS AND CONTINGENCIES26
COMMITMENTS AND CONTINGENCIES (Detail Textuals 1) - USD ($) | Dec. 02, 2014 | Jun. 29, 2015 | Apr. 30, 2013 | Jul. 17, 2012 | Jun. 30, 2015 | Jun. 30, 2015 | Jul. 31, 2015 | Sep. 30, 2013 | Sep. 25, 2013 |
Commitments And Contingencies [Line Items] | |||||||||
Granted | 103,025 | ||||||||
Initial Public Offering | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Net offering proceeds | $ 17,400,000 | ||||||||
FDA Meeting Bonus Opportunities | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Cash bonus | $ 10,000 | ||||||||
FDA Meeting Bonus Opportunities | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Cash bonus | $ 10,000 | ||||||||
Clinical Trial Funding Commitment Bonus Opportunities | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Cash bonus | 75,000 | ||||||||
Clinical Trial Funding Commitment Bonus Opportunities | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Cash bonus | 75,000 | ||||||||
Clinical Trial Funding Commitment Bonus Opportunities | General and administrative expense | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Accrued bonus to executive | $ 75,000 | $ 75,000 | |||||||
Clinical Trial Funding Commitment Bonus Opportunities | General and administrative expense | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Accrued bonus to executive | 75,000 | 75,000 | |||||||
Clinical Trial Funding Commitment Bonus Opportunities | Minimum | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Minimum cash available limit | $ 2,000,000 | ||||||||
Fundraising Bonus Opportunities | General and administrative expense | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Accrued bonus to executive | 150,000 | 150,000 | |||||||
Fundraising Bonus Opportunities | General and administrative expense | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Accrued bonus to executive | $ 150,000 | $ 150,000 | |||||||
Fundraising Bonus Opportunities | Performance milestone condition one | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Cash bonus | $ 50,000 | ||||||||
Minimum actual deployment of funds by third party | 2,000,000 | ||||||||
Fundraising Bonus Opportunities | Performance milestone condition one | Minimum | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Minimum cash available limit | 2,000,000 | ||||||||
Fundraising Bonus Opportunities | Performance milestone condition two | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Minimum actual deployment of funds by third party | 10,000,000 | ||||||||
Fundraising Bonus Opportunities | Performance milestone condition two | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Cash bonus | 150,000 | ||||||||
Fundraising Bonus Opportunities | Performance milestone condition two | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Cash bonus | 150,000 | ||||||||
Fundraising Bonus Opportunities | Performance milestone condition two | Minimum | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Minimum cash available limit | $ 2,000,000 | ||||||||
Executive Options | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Granted | 453,413 | ||||||||
Executive Options | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Granted | 453,413 | ||||||||
Executive Options | FDA Meeting Bonus Opportunities | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Number of stock options expected to vest | 1,136 | 2,360 | |||||||
Executive Options | FDA Meeting Bonus Opportunities | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Number of stock options expected to vest | 1,136 | 2,360 | |||||||
Executive Options | Clinical Trial Funding Commitment Bonus Opportunities | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Stock options to vest ratably on a monthly basis | 6,818 | ||||||||
Percentage of option vest | 35.00% | ||||||||
Granted | 10,489 | ||||||||
Vesting period of options | 36 months | ||||||||
Executive Options | Clinical Trial Funding Commitment Bonus Opportunities | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Number of stock options expected to vest | 3,671 | ||||||||
Executive Options | Clinical Trial Funding Commitment Bonus Opportunities | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Number of stock options expected to vest | 3,671 | ||||||||
Executive Options | Fundraising Bonus Opportunities | Initial Public Offering | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Net offering proceeds | $ 17,400,000 | ||||||||
Executive Options | Fundraising Bonus Opportunities | Subsequent Event | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Number of stock options expected to vest | 9,091 | ||||||||
Executive Options | Fundraising Bonus Opportunities | Performance milestone condition one | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Percentage of option vest | 35.00% | ||||||||
Granted | 6,993 | ||||||||
Maximum aggregate number of shares of common stock authorized to issue | 6,993 | ||||||||
Vesting period of options | 36 months | ||||||||
Executive Options | Fundraising Bonus Opportunities | Performance milestone condition two | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Percentage of option vest | 35.00% | ||||||||
Granted | 13,986 | ||||||||
Maximum aggregate number of shares of common stock authorized to issue | 13,986 | ||||||||
Vesting period of options | 36 months | ||||||||
Executive Options | Fundraising Bonus Opportunities | Performance milestone condition two | Andrew Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Number of stock options expected to vest | 4,895 | ||||||||
Executive Options | Fundraising Bonus Opportunities | Performance milestone condition two | Ira Ritter | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Number of stock options expected to vest | 4,895 |
COMMITMENTS AND CONTINGENCIES27
COMMITMENTS AND CONTINGENCIES (Detail Textuals 2) - USD ($) | Dec. 02, 2014 | Jun. 30, 2015 |
Commitments And Contingencies [Line Items] | ||
Number of Common Shares Underlying Options Granted | 103,025 | |
Executive Options | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Number of Common Shares Underlying Options Granted | 453,413 | |
Executive Options | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Number of Common Shares Underlying Options Granted | 453,413 | |
License Event Bonus Opportunities | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Minimum actual deployment of funds by third party | $ 2,000,000 | |
Percentage of annual excess milestone payments | 3.00% | |
License Event Bonus Opportunities | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Minimum actual deployment of funds by third party | $ 2,000,000 | |
Percentage of annual excess milestone payments | 3.00% | |
License Event Bonus Opportunities | Minimum | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Receipt of Initial period license payment | $ 2,000,000 | |
Minimum cash available limit | 1,000,000 | |
License Event Bonus Opportunities | Minimum | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Receipt of Initial period license payment | 2,000,000 | |
Minimum cash available limit | $ 1,000,000 | |
License Event Bonus Opportunities | Executive Options | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of option vest | 35.00% | |
Number of Common Shares Underlying Options Granted | 6,993 | |
Maximum aggregate number of shares of common stock authorized to issue | 6,993 | |
Vesting period of options | 36 months | |
License Event Bonus Opportunities | Executive Options | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of option vest | 35.00% | |
Number of Common Shares Underlying Options Granted | 6,993 | |
Maximum aggregate number of shares of common stock authorized to issue | 6,993 | |
Vesting period of options | 36 months | |
License Event Bonus Opportunities | Executive Options | Graduated Cash Bonus | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of option vest | 35.00% | |
Number of Common Shares Underlying Options Granted | 45,454 | |
Maximum aggregate number of shares of common stock authorized to issue | 45,454 | |
Vesting period of options | 36 months | |
License Event Bonus Opportunities | Executive Options | Graduated Cash Bonus | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of option vest | 35.00% | |
Number of Common Shares Underlying Options Granted | 45,454 | |
Maximum aggregate number of shares of common stock authorized to issue | 45,454 | |
Vesting period of options | 36 months | |
License Event Bonus Opportunities | Performance milestone condition one | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of initial period license payment | 5.00% | |
Initial period license payment | $ 5,000,000 | |
License Event Bonus Opportunities | Performance milestone condition one | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of initial period license payment | 5.00% | |
Initial period license payment | $ 5,000,000 | |
License Event Bonus Opportunities | Performance milestone condition two | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of initial period license payment | 4.00% | |
License Event Bonus Opportunities | Performance milestone condition two | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of initial period license payment | 4.00% | |
License Event Bonus Opportunities | Performance milestone condition two | Minimum | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Initial period license payment | $ 5,000,000 | |
License Event Bonus Opportunities | Performance milestone condition two | Minimum | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Initial period license payment | 5,000,000 | |
License Event Bonus Opportunities | Performance milestone condition two | Maximum | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Initial period license payment | 10,000,000 | |
License Event Bonus Opportunities | Performance milestone condition two | Maximum | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Initial period license payment | $ 10,000,000 | |
License Event Bonus Opportunities | Performance milestone condition three | Andrew Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of initial period license payment | 3.00% | |
Initial period license payment | $ 10,000,000 | |
License Event Bonus Opportunities | Performance milestone condition three | Ira Ritter | ||
Commitments And Contingencies [Line Items] | ||
Percentage of initial period license payment | 3.00% | |
Initial period license payment | $ 10,000,000 |
COMMITMENTS AND CONTINGENCIES28
COMMITMENTS AND CONTINGENCIES (Detail Textuals 3) - USD ($) | Dec. 02, 2014 | Jun. 30, 2015 | Dec. 31, 2014 |
Commitments And Contingencies [Line Items] | |||
Initial period | 24 months | ||
Additional cash bonus earned as Clinical Trial and Fundraising Bonus or a License Event Bonus | 10.00% | ||
Number of options granted | 103,025 | ||
Exercise price of fully vested options (in dollars per share) | $ 4.563 | ||
Number of options outstanding | 1,890,824 | 1,788,717 | |
Exercise price per share of options | $ 7.062 | $ 7.059 | |
Minimum | |||
Commitments And Contingencies [Line Items] | |||
Annual excess milestone payments | $ 2,000,000 | ||
Executive Options | Andrew Ritter and Ira Ritter | |||
Commitments And Contingencies [Line Items] | |||
Number of fully vested options | 20,979 | ||
Exercise price of fully vested options (in dollars per share) | $ 5.86 | ||
Number of options outstanding | 432,434 | ||
Vesting percentage of option | 25.00% | ||
Options vesting period | 36 months | ||
Executive Options | Andrew Ritter and Ira Ritter | Share-based Compensation Award, Tranche One | |||
Commitments And Contingencies [Line Items] | |||
Number of fully vested options | 152,347 | ||
Exercise price of fully vested options (in dollars per share) | $ 5.86 | ||
Executive Options | Andrew Ritter and Ira Ritter | Share-based Compensation Award, Tranche Two | |||
Commitments And Contingencies [Line Items] | |||
Number of fully vested options | 140,044 | ||
Exercise price of fully vested options (in dollars per share) | $ 9.30 | ||
Executive Options | Andrew Ritter and Ira Ritter | Share-based Compensation Award, Tranche Three | |||
Commitments And Contingencies [Line Items] | |||
Exercise price of fully vested options (in dollars per share) | $ 13.23 | ||
Executive Options | Non-employee directors | Three years vesting period | |||
Commitments And Contingencies [Line Items] | |||
Number of options granted | 1,398 | ||
Options vesting period | 3 years | ||
Executive Options | Non-employee directors | One year vesting period | |||
Commitments And Contingencies [Line Items] | |||
Number of options granted | 979 | ||
Options vesting period | 1 year | ||
Executive Options | Andrew Ritter | |||
Commitments And Contingencies [Line Items] | |||
Number of options granted | 453,413 | ||
Executive Options | Ira Ritter | |||
Commitments And Contingencies [Line Items] | |||
Number of options granted | 453,413 |
COMMITMENTS AND CONTINGENCIES29
COMMITMENTS AND CONTINGENCIES (Detail Textuals 4) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Commitments And Contingencies [Line Items] | |||||
Period of lease agreement | 2 years | ||||
Minimum monthly rent | $ 5,000 | ||||
Percentage of increase in annual rent | 3.00% | ||||
Subsequent Event | |||||
Commitments And Contingencies [Line Items] | |||||
Period of lease agreement | 5 years | ||||
Minimum annual rent | $ 107,000 | ||||
General and administrative expense | |||||
Commitments And Contingencies [Line Items] | |||||
Rent expenses incurred | $ 15,000 | $ 15,000 | $ 30,000 | $ 30,000 |
STOCKHOLDERS' DEFICIT AND PRE30
STOCKHOLDERS' DEFICIT AND PREFERRED STOCK SUBJECT TO REDEMPTION (Detail Textuals) | 1 Months Ended | ||
Jun. 17, 2015 | Jun. 30, 2015$ / sharesshares | Dec. 31, 2014$ / sharesshares | |
Stockholders' Equity Note [Abstract] | |||
Common stock, shares authorized | 25,000,000 | 50,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |
Reverse stock split | 7.15 |
STOCKHOLDERS' DEFICIT AND PRE31
STOCKHOLDERS' DEFICIT AND PREFERRED STOCK SUBJECT TO REDEMPTION (Detail Textuals 1) - USD ($) $ / shares in Units, $ in Millions | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 5,000,000 | 8,887,500 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Number of preferred stock and preferred stock subject to redemption converted into common stock (in shares) | 3,322,650 | |
Series A-1 Preferred stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 7,200,000 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, Annual dividend rate, per share | $ 0.00556 | |
Original issue price per share, per share | 0.07 | |
Series A-2 Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 1,687,500 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, Annual dividend rate, per share | 0.032 | |
Original issue price per share, per share | 0.40 | |
Series A-3 Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 4,220,464 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Liquidation preference, per share | 0.62 | |
Preferred stock, Annual dividend rate, per share | 0.04957 | |
Original issue price per share, per share | 0.62 | |
Series B Preferred Stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 7,658,182 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Liquidation preference, per share | 1.19 | |
Preferred stock, Annual dividend rate, per share | $ 0.09524 | |
Preferred stock, undeclared dividends in arrears (in dollars) | $ 2 | $ 1.7 |
Original issue price per share, per share | $ 1.19 | |
Purchase price, per share | 1.19 | |
Series C preferred stock | ||
Class of Stock [Line Items] | ||
Preferred stock, shares authorized (in shares) | 4,500,000 | |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Liquidation preference, per share | 1.30 | |
Preferred stock, Annual dividend rate, per share | 0.104 | |
Original issue price per share, per share | 1.30 | |
Purchase price, per share | $ 1.30 |
STOCKHOLDERS' DEFICIT AND PRE32
STOCKHOLDERS' DEFICIT AND PREFERRED STOCK SUBJECT TO REDEMPTION (Detail Textuals 2) - USD ($) | 1 Months Ended | 6 Months Ended |
Jun. 29, 2015 | Jun. 30, 2015 | |
Class of Stock [Line Items] | ||
Offering expenses | $ 2,194,375 | |
Number of preferred stock and preferred stock subject to redemption converted into common stock (in shares) | 3,322,650 | |
Initial Public Offering | ||
Class of Stock [Line Items] | ||
Number of common shares sold | 4,000,000 | |
Shares of common stock sold, per share (in dollars per share) | $ 5 | |
Aggregate gross proceeds from sale of common stock | $ 20,000,000 | |
Underwriting discounts and commissions | 1,600,000 | |
Offering expenses | $ 1,000,000 |
STOCKHOLDERS' DEFICIT AND PRE33
STOCKHOLDERS' DEFICIT AND PREFERRED STOCK SUBJECT TO REDEMPTION (Detail Textuals 3) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2015 | Dec. 31, 2014 | |
Convertible Notes Payable | Two Thousand Fourteen Notes | ||
Class of Stock [Line Items] | ||
Unpaid principal on convertible notes | $ 535,000 | |
Accrued interest on convertible notes | 18,342 | |
Convertible Notes Payable | Two Thousand Fourteen Notes One | ||
Class of Stock [Line Items] | ||
Unpaid principal on convertible notes | 70,000 | |
Accrued interest on convertible notes | $ 537 | |
Warrants | ||
Class of Stock [Line Items] | ||
Term of warrants issued | 7 years | |
Exercise price of warrants | $ 9.30 | |
Warrants | Two Thousand Fourteen Notes | ||
Class of Stock [Line Items] | ||
Convertible notes converted into Warrants | 79,374 | |
Warrants | Two Thousand Fourteen Notes One | ||
Class of Stock [Line Items] | ||
Convertible notes converted into Warrants | 7,589 | |
Common Stock | ||
Class of Stock [Line Items] | ||
Warrants to purchase an aggregate of common stock | 331,358 | |
Common Stock | Two Thousand Fourteen Notes | ||
Class of Stock [Line Items] | ||
Convertible notes converted into Shares | 79,374 | |
Common Stock | Two Thousand Fourteen Notes One | ||
Class of Stock [Line Items] | ||
Convertible notes converted into Shares | 7,589 | |
Series C preferred stock | ||
Class of Stock [Line Items] | ||
Agreegate number of shares issued | 2,369,228 | |
Gross proceeds of preferred stock | $ 3,081,893 | |
Fair value per share (in dollars per share) | $ 7.83 | |
Discount on initial carrying value (in dollars per share) | $ 1.47 | |
Series C preferred stock | Two Thousand Fourteen Notes | ||
Class of Stock [Line Items] | ||
Convertible notes converted into Shares | 567,529 | |
Series C preferred stock | Two Thousand Fourteen Notes One | ||
Class of Stock [Line Items] | ||
Convertible notes converted into Shares | 54,259 | |
Series C preferred stock | Convertible Notes Payable | ||
Class of Stock [Line Items] | ||
Unpaid principal balance | $ 535,000 | |
Percentage of price per share | 75.00% | |
Additional interest expense | $ 184,445 | |
Percentage of convertible debt and accrued interest | 100.00% | |
Note unpaid principal balance | $ 70,000 |
STOCKHOLDERS' DEFICIT AND PRE34
STOCKHOLDERS' DEFICIT AND PREFERRED STOCK SUBJECT TO REDEMPTION (Detail Textuals 4) - USD ($) | 1 Months Ended | 6 Months Ended | |
Mar. 26, 2015 | Nov. 30, 2010 | Jun. 30, 2015 | |
Research and Development Agreement & License | Kolu Pohaku Technologies, LLC | |||
Stockholders Deficit And Preferred Stock Subject To Redemption [Line Items] | |||
Payments received for performing research and development activities | $ 1,750,000 | ||
Payment of quarterly royalty | 32,000 | ||
Research and Development Agreement & License | Kolu Pohaku Management, LLC | Series B Preferred Stock | |||
Stockholders Deficit And Preferred Stock Subject To Redemption [Line Items] | |||
Shares issued | 1,469,994 | ||
Put and Call Option Agreement | |||
Stockholders Deficit And Preferred Stock Subject To Redemption [Line Items] | |||
Aggregate converted shares of the common stock upon the closing of the IPO | 205,593 | ||
Put and Call Option Agreement | Kolu Pohaku Technologies, LLC | Series B Preferred Stock | |||
Stockholders Deficit And Preferred Stock Subject To Redemption [Line Items] | |||
Payments received for performing research and development activities | $ 1,750,000 | ||
Put and Call Option Agreement | Kolu Pohaku Management, LLC | Series B Preferred Stock | |||
Stockholders Deficit And Preferred Stock Subject To Redemption [Line Items] | |||
Shares issued | 1,469,994 | ||
Preferred stock original issue price | $ 1.19 |
WARRANTS (Details)
WARRANTS (Details) - Jun. 30, 2015 - Seven-year warrants - $ / shares | Total |
Warrants | |
Outstanding at December 31, 2014 | 418,321 |
Granted | |
Exercised/Expired/ Forfeited | |
Outstanding at June 30, 2015 | 418,321 |
Exercisable at June 30, 2015 | 418,321 |
Weighted Average Exercise Price | |
Outstanding at December 31, 2014 | $ 9.30 |
Granted | |
Exercised/Expired/ Forfeited | |
Outstanding at June 30, 2015 | $ 9.30 |
Exercisable at June 30, 2015 | $ 9.30 |
WARRANTS (Detail Textuals)
WARRANTS (Detail Textuals) - Seven-year warrants - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Class of Warrant or Right [Line Items] | ||
Number of common stock called by warrants | 418,321 | |
Exercise price of warrants | $ 9.30 | $ 9.30 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - $ / shares | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Oct. 31, 2014 | Nov. 07, 2013 | Jul. 31, 2012 | Dec. 31, 2010 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Expected stock-price volatility, Minimum | 65.06% | 55.32% | 51.45% | 55.32% | ||||
Expected stock-price volatility, Maximum | 67.08% | 62.09% | 67.08% | 62.09% | ||||
Risk-free interest rate, Minimum | 1.79% | 1.54% | 0.77% | 1.49% | ||||
Risk-free interest rate, Maximum | 2.07% | 2.67% | 2.07% | 3.04% | ||||
Term of options | 10 months | 10 months | 10 months | 10 months | ||||
Common stock value per share | $ 5.86 | $ 1.17 | $ 5.86 | $ 1.17 | $ 5.86 | $ 1.17 | $ 1.19 | $ 1.03 |
STOCK-BASED COMPENSATION (Det38
STOCK-BASED COMPENSATION (Details 1) | Jun. 30, 2015$ / shares | |
Common Stock | 2005 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | [1] | $ 1.79 |
Series A-2 Preferred Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | 0.40 | |
Series A-2 Preferred Stock | 2006 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | [1],[2] | 0.40 |
Series A-3 Preferred Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | 0.62 | |
Series A-3 Preferred Stock | 2008 - 2009 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | [2] | 0.62 |
Series B Preferred Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | 1.19 | |
Series B Preferred Stock | 2010 - 2013 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | [2] | 1.19 |
Series C preferred stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | 1.30 | |
Series C preferred stock | 2014 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Sale of stock, price per share | [2] | $ 1.30 |
[1] | After giving effect to the Company's conversion from a LLC to a corporation. | |
[2] | Shares of preferred stock were converted into an aggregate of 3,322,676 shares of the Company's common stock effective June 29, 2015, after giving effect to the 1-for-7.15 reverse stock of shares of the Company's common stock effective June 17, 2015. |
STOCK-BASED COMPENSATION (Paren
STOCK-BASED COMPENSATION (Parentheticals) (Details 1) - shares | 1 Months Ended | |
Jun. 17, 2015 | Jun. 30, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Preferred Stock, Conversion Basis | 1-for-7.15 | |
Number of common shares issued upon conversion of preferred stock | 3,322,650 |
STOCK-BASED COMPENSATION (Det40
STOCK-BASED COMPENSATION (Details 2) | Nov. 07, 2013 | Jul. 31, 2012 | Dec. 31, 2010 |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Volatility | 58.00% | 61.00% | 61.00% |
Risk-free interest rate | 0.55% | 0.57% | 2.01% |
Maturity (years) | 3 years | 4 years | 5 years |
STOCK-BASED COMPENSATION (Det41
STOCK-BASED COMPENSATION (Details 3) - 6 months ended Jun. 30, 2015 - $ / shares | Total |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Number of Common Shares Underlying Options Granted | 103,025 |
Exercise Price per Common Share | $ 5.863 |
Stock Options | Grant year 2005 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Number of Common Shares Underlying Options Granted | 58,321 |
Exercise Price per Common Share | $ 0.07 |
Estimated Fair Value per Share of Common Stock | 1.79 |
Intrinsic Value Option | $ 1.72 |
Stock Options | Grant year 2009 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Number of Common Shares Underlying Options Granted | 60,559 |
Estimated Fair Value per Share of Common Stock | $ 4.43 |
Stock Options | Grant year 2009 | Minimum | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Exercise Price per Common Share | 0.72 |
Intrinsic Value Option | 3.71 |
Stock Options | Grant year 2009 | Maximum | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Exercise Price per Common Share | 0.79 |
Intrinsic Value Option | $ 3.64 |
Stock Options | Grant year 2011 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Number of Common Shares Underlying Options Granted | 33,846 |
Exercise Price per Common Share | $ 1 |
Estimated Fair Value per Share of Common Stock | 1 |
Intrinsic Value Option | $ 0 |
Stock Options | Grant year 2012 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Number of Common Shares Underlying Options Granted | 60,019 |
Exercise Price per Common Share | $ 1.14 |
Estimated Fair Value per Share of Common Stock | 1.14 |
Intrinsic Value Option | $ 0 |
Stock Options | Grant year 2013 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Number of Common Shares Underlying Options Granted | 100,000 |
Estimated Fair Value per Share of Common Stock | $ 1.14 |
Intrinsic Value Option | 0 |
Stock Options | Grant year 2013 | Minimum | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Exercise Price per Common Share | 1.14 |
Stock Options | Grant year 2013 | Maximum | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Exercise Price per Common Share | $ 1.30 |
Stock Options | Grant year 2014 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Number of Common Shares Underlying Options Granted | 1,626,740 |
Estimated Fair Value per Share of Common Stock | $ 5.86 |
Intrinsic Value Option | 0 |
Stock Options | Grant year 2014 | Minimum | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Exercise Price per Common Share | 5.86 |
Stock Options | Grant year 2014 | Maximum | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | |
Exercise Price per Common Share | $ 13.23 |
STOCK-BASED COMPENSATION (Det42
STOCK-BASED COMPENSATION (Details 4) - $ / shares | 6 Months Ended |
Jun. 30, 2015 | |
Number of Options | |
Outstanding at December 31, 2014 | 1,788,717 |
Granted | 103,025 |
Exercised/ Expired/ Forfeited | (918) |
Outstanding at June 30, 2015 | 1,890,824 |
Exercisable at June 30, 2015 | 298,437 |
Expected to be vested | 1,592,387 |
Weighted Average Exercise Price | |
Outstanding at December 31, 2014 | $ 7.059 |
Granted | 5.863 |
Exercised/ Expired/ Forfeited | (1.158) |
Outstanding at June 30, 2015 | 7.062 |
Exercisable at June 30, 2015 | 4.563 |
Expected to be vested | $ 4.563 |
STOCK-BASED COMPENSATION (Det43
STOCK-BASED COMPENSATION (Detail Textuals) - Jun. 30, 2015 - 2015 Stock Plan - shares | Total |
Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Maximum aggregate number of shares of common stock authorized to issue | 328,289 |
Description of exercise price for stock options | The exercise price for each option 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 nonstatutory stock option, no less than 100% of the fair market value per share on the date of grant. The options awarded under the Plans shall vest as determined by the Board of Directors but shall not exceed a ten-year period. |
Stock Options | Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period of options | 10 years |
Incentive stock option | Employee - 10% stockholder | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Threshold percentage of fair market value per share on grant date as exercise price of options | 110.00% |
Incentive stock option | Other employee | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Threshold percentage of fair market value per share on grant date as exercise price of options | 100.00% |
Nonstatutory stock option | Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Threshold percentage of fair market value per share on grant date as exercise price of options | 100.00% |
STOCK-BASED COMPENSATION (Det44
STOCK-BASED COMPENSATION (Detail Textuals 1) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 108 Months Ended | |||
Apr. 30, 2015 | Dec. 31, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options granted | 103,025 | ||||||
Number of options outstanding | 1,788,717 | 1,890,824 | 1,890,824 | ||||
Options granted, exercise price per share | $ 5.863 | ||||||
Stock based compensation expense | $ 1,680,247 | $ 91,916 | |||||
Stock Options | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Unrecognized compensation cost of nonvested stock awards | $ 2,900,000 | $ 2,900,000 | |||||
Weighted average period of compensation cost expected to be recognized | 1 year 7 months 6 days | ||||||
Stock Options | Executive officers and employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options granted | 206,172 | ||||||
Number of options forfeited | 26,163 | ||||||
Number of options outstanding | 180,009 | ||||||
Options to purchase an aggregate common stock no longer considered to be probable of achievement by September 25, 2015 | (41,958) | ||||||
Stock Options | Executive officers and employees | General and administrative expense | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Stock based compensation expense | $ 880,000 | $ 87,000 | $ 1,700,000 | $ 88,000 | |||
Stock Options | Executive Officers | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of options granted | 1,729,766 | ||||||
Number of options outstanding | 1,853,831 | 1,853,831 | |||||
Term of employee share base compensation arrangement | 10 years | ||||||
Number of options expired | 41,958 | ||||||
Number of options exercised | 13,985 | ||||||
Stock Options | Minimum | Executive officers and employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, exercise price per share | $ 0.79 | ||||||
Stock Options | Minimum | Executive Officers | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, exercise price per share | $ 5.86 | ||||||
Stock Options | Maximum | Executive officers and employees | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, exercise price per share | $ 1.27 | ||||||
Stock Options | Maximum | Executive Officers | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Options granted, exercise price per share | $ 13.23 |
STOCK-BASED COMPENSATION (Det45
STOCK-BASED COMPENSATION (Detail Textuals 2) - USD ($) | 3 Months Ended | 6 Months Ended | 126 Months Ended | |||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Dec. 31, 2014 | |
Share-based Goods and Nonemployee Services Transaction [Line Items] | ||||||
Number of options granted | 103,025 | |||||
Number of options outstanding | 1,890,824 | 1,890,824 | 1,890,824 | 1,788,717 | ||
Exercise price of outstanding options | $ 7.062 | $ 7.062 | $ 7.062 | $ 7.059 | ||
Stock Options | Consultants | ||||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | ||||||
Number of options granted | 106,573 | |||||
Number of options subject to alternate vesting schedule | 7,271 | |||||
Number of options forfeited or exercised | 69,580 | |||||
Number of options outstanding | 36,993 | 36,993 | 36,993 | |||
Remaining options vesting monthly in equal amounts, period | 36 months | |||||
Stock Options | Consultants | Research and development expense | ||||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | ||||||
Nonemployee stock based compensation expense | $ 600 | $ 4,000 | $ 700 | $ 3,500 | ||
Stock Options | Consultants | First anniversary of the vesting commencement date | ||||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | ||||||
Vesting percentage of option | 25.00% | |||||
Stock Options | Consultants | Minimum | ||||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | ||||||
Exercise price of outstanding options | $ 0.72 | $ 0.72 | $ 0.72 | |||
Stock Options | Consultants | Maximum | ||||||
Share-based Goods and Nonemployee Services Transaction [Line Items] | ||||||
Exercise price of outstanding options | $ 1.14 | $ 1.14 | $ 1.14 |
STOCK-BASED COMPENSATION (Det46
STOCK-BASED COMPENSATION (Detail Textuals 3) - USD ($) | Nov. 07, 2013 | Oct. 31, 2014 | Jul. 31, 2012 | Dec. 31, 2010 | Jun. 30, 2015 | Jun. 30, 2014 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Capital structure yielded total market value of invested capital | $ 15,500,000 | $ 25,200,000 | $ 14,400,000 | $ 8,900,000 | ||
Total value of common stock | $ 819,000 | $ 1,400,000 | $ 870,000 | $ 670,000 | ||
Stock value per share | $ 1.17 | $ 5.86 | $ 1.19 | $ 1.03 | $ 5.86 | $ 1.17 |
Average strike put option approach | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Discounts for lack of control and lack of marketability | 21.40% | |||||
Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Discounts for lack of control and lack of marketability | 35.80% | 35.80% | 35.80% | |||
Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Discounts for lack of control and lack of marketability | 40.00% | 40.00% | 40.00% | |||
Series A-1 Preferred stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock Price per Share | 0.07 | |||||
Stock value per share | 0.07 | |||||
Series A-2 Preferred Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock Price per Share | 0.40 | |||||
Stock value per share | 0.40 | |||||
Series A-3 Preferred Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock Price per Share | 0.62 | |||||
Stock value per share | 0.62 | |||||
Series B Preferred Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock Price per Share | 1.19 | |||||
Series C preferred stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock Price per Share | $ 1.30 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Detail Textuals) - Jun. 30, 2015 - USD ($) | Total | Total |
Andela Group Inc | Corporate management, strategic and financial consulting | General and administrative expense | ||
Related Party Transaction [Line Items] | ||
Related party transaction expense | $ 49,000 | $ 99,000 |
SUBSEQUENT EVENTS (Detail Textu
SUBSEQUENT EVENTS (Detail Textuals) | Oct. 01, 2015USD ($)ft² | Jul. 31, 2015USD ($) | Jul. 30, 2015USD ($)kg$ / kg | Jul. 24, 2015$ / sharesshares | Jun. 30, 2015$ / shares | Dec. 31, 2014$ / shares |
Subsequent Event [Line Items] | ||||||
Period of lease agreement | 2 years | |||||
Common shares issued, par value per share (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Period of lease agreement | 5 years | |||||
Base rent per month for months 2 through 13 of term | $ 107,000 | |||||
Subsequent Event | Century Park | ||||||
Subsequent Event [Line Items] | ||||||
Area of lease | ft² | 2,780 | |||||
Period of lease agreement | 61 months | |||||
Base rent per month for months 2 through 13 of term | $ 9,174 | |||||
Term of option to extend lease | 5 months | |||||
Subsequent Event | Century Park | Maximum | ||||||
Subsequent Event [Line Items] | ||||||
Maximum rent per month for months 50 through 61 | $ 10,325.42 | |||||
Subsequent Event | RSM | Amended Supply Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Number of common shares issued | shares | 100,000 | |||||
Common shares issued, par value per share (in dollars per share) | $ / shares | $ 0.001 | |||||
Subsequent Event | RSM | Amended Supply Agreement | Improved GOS | ||||||
Subsequent Event [Line Items] | ||||||
Payment for GOS IP | $ 800,000 | |||||
Payment required following FDA approval to RSM | $ 400,000 | |||||
GOS kilograms | kg | 350 | |||||
GOS price per kilo (in dollars per kilo) | $ / kg | 250 | |||||
GOS price per kilo under existing supply agreement (in dollars per kilo) | $ / kg | 2,000 |