Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Cover [Abstract] | ||
Entity Registrant Name | PDS Biotechnology Corp | |
Entity Central Index Key | 0001472091 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Address, State or Province | NJ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 22,261,619 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 | |
Current assets: | |||
Cash and cash equivalents | $ 33,468,935 | $ 12,161,739 | |
Prepaid expenses and other | 373,395 | 2,308,462 | |
Total current assets | 33,842,330 | 14,470,201 | |
Property and equipment, net | 9,345 | 21,051 | |
Operating lease right-to-use asset | 593,580 | 0 | |
Total assets | 34,445,255 | 14,491,252 | |
Current liabilities: | |||
Accounts payable | 1,559,591 | 1,197,720 | |
Accrued expenses | 1,222,773 | 1,097,640 | |
Restructuring reserve | [1] | 0 | 498,185 |
Operating lease obligation - short term | 116,240 | 0 | |
Total current liabilities | 2,898,604 | 2,793,545 | |
Noncurrent liability: | |||
Operating lease obligation - long term | 521,692 | 0 | |
STOCKHOLDERS' EQUITY | |||
Common stock, $0.00033 par value, 75,000,000 shares authorized at September 30, 2020 and December 31, 2019, 22,261,619 shares and 5,281,237 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively | 7,346 | 1,742 | |
Additional paid-in capital | 70,775,892 | 40,633,670 | |
Accumulated deficit | (39,758,279) | (28,937,705) | |
Total stockholders' equity | 31,024,959 | 11,697,707 | |
Total liabilities and stockholders' equity | $ 34,445,255 | $ 14,491,252 | |
[1] | Restructuring reserve relates to the severance costs incurred by Edge prior to the Merger and assumed by the Company as part of the purchase accounting, but not yet paid. The severance costs continue through September 2020. For the nine months ended September 30, 2020, the Company paid $498,185 in restructuring costs which was previously accrued. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
STOCKHOLDERS' EQUITY | ||
Common stock, par value (in dollars per share) | $ 0.00033 | $ 0.00033 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares issued (in shares) | 22,261,619 | 5,281,237 |
Common stock shares outstanding (in shares) | 22,261,619 | 5,281,237 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating expenses: | ||||
Research and development expenses | $ 2,060,815 | $ 1,834,371 | $ 5,446,718 | $ 4,751,308 |
General and administrative expenses | 1,846,214 | 3,068,581 | 5,428,098 | 9,358,429 |
Lease termination costs | 0 | 944,445 | 0 | 944,445 |
Total operating expenses | 3,907,029 | 5,847,397 | 10,874,816 | 15,054,182 |
Loss from operations | (3,907,029) | (5,847,397) | (10,874,816) | (15,054,182) |
Other income (expense): | ||||
Gain on bargain purchase upon merger | 0 | 0 | 0 | 11,939,331 |
Interest income | 1,207 | 95,787 | 54,242 | 294,694 |
Interest expense | 0 | 0 | 0 | (606) |
Net loss | (3,905,822) | (5,751,610) | (10,820,574) | (2,820,763) |
Comprehensive loss | $ (3,905,822) | $ (5,751,610) | $ (10,820,574) | $ (2,820,763) |
Per share information: | ||||
Net loss per share, basic and diluted (in dollars per share) | $ (0.21) | $ (1.10) | $ (0.73) | $ (0.60) |
Weighted average common shares outstanding basic and diluted (in shares) | 18,961,619 | 5,246,829 | 14,892,764 | 4,729,153 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2018 | $ 1,128 | $ 19,311,529 | $ (21,013,174) | $ (1,700,517) |
Balance (in shares) at Dec. 31, 2018 | 3,417,187 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 2,893,658 | 0 | 2,893,658 |
Issuance of common stock, net of issuance costs | $ 16 | 749,984 | 0 | 750,000 |
Issuance of common stock, net of issuance costs (in shares) | 48,930 | |||
Issuance of common stock for antidilution | $ 32 | (32) | 0 | 0 |
Issuance of common stock for antidilution (in shares) | 97,960 | |||
Issuance of common stock for convertible debt | $ 3 | 32,950 | 0 | 32,953 |
Issuance of common stock for convertible debt (in shares) | 9,683 | |||
Issuance of common stock from 401K match | $ 2 | 29,702 | 0 | 29,704 |
Issuance of common stock from 401K match (in shares) | 5,258 | |||
Issuance of common stock from equity transaction | $ 33 | 603,891 | 0 | 603,924 |
Issuance of common stock from equity transaction (in shares) | 100,654 | |||
Equity from merger transaction | $ 528 | 15,793,110 | 0 | 15,793,638 |
Equity from merger transaction (in shares) | 1,599,178 | |||
Net loss | $ 0 | 0 | (2,820,763) | (2,820,763) |
Balance at Sep. 30, 2019 | $ 1,742 | 39,414,792 | (23,833,937) | 15,582,597 |
Balance (in shares) at Sep. 30, 2019 | 5,278,850 | |||
Balance at Jun. 30, 2019 | $ 1,709 | 38,686,233 | (18,082,327) | 20,605,615 |
Balance (in shares) at Jun. 30, 2019 | 5,177,487 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 120,207 | 0 | 120,207 |
Issuance of common stock from 401K match | $ 0 | 4,461 | 0 | 4,461 |
Issuance of common stock from 401K match (in shares) | 709 | |||
Issuance of common stock from equity transaction | $ 33 | 603,891 | 0 | 603,924 |
Issuance of common stock from equity transaction (in shares) | 100,654 | |||
Net loss | $ 0 | 0 | (5,751,610) | (5,751,610) |
Balance at Sep. 30, 2019 | $ 1,742 | 39,414,792 | (23,833,937) | 15,582,597 |
Balance (in shares) at Sep. 30, 2019 | 5,278,850 | |||
Balance at Dec. 31, 2019 | $ 1,742 | 40,633,670 | (28,937,705) | 11,697,707 |
Balance (in shares) at Dec. 31, 2019 | 5,281,237 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 300,898 | 0 | 300,898 |
Issuance of common stock, net of issuance costs | $ 5,581 | 29,750,921 | 0 | 29,756,502 |
Issuance of common stock, net of issuance costs (in shares) | 16,900,000 | |||
Issuance of common stock for warrant exercise | $ 22 | 70,437 | 0 | 70,459 |
Issuance of common stock for warrant exercise (in shares) | 65,240 | |||
Issuance of common stock from 401K match | $ 1 | 19,966 | 0 | 19,967 |
Issuance of common stock from 401K match (in shares) | 15,142 | |||
Net loss | $ 0 | 0 | (10,820,574) | (10,820,574) |
Balance at Sep. 30, 2020 | $ 7,346 | 70,775,892 | (39,758,279) | 31,024,959 |
Balance (in shares) at Sep. 30, 2020 | 22,261,619 | |||
Balance at Jun. 30, 2020 | $ 5,064 | 52,861,882 | (35,852,457) | 17,014,489 |
Balance (in shares) at Jun. 30, 2020 | 15,361,619 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 129,792 | 0 | 129,792 |
Issuance of common stock, net of issuance costs | $ 2,282 | 17,784,218 | 0 | 17,786,500 |
Issuance of common stock, net of issuance costs (in shares) | 6,900,000 | |||
Issuance of common stock from 401K match | $ 0 | 0 | 0 | 0 |
Issuance of common stock from 401K match (in shares) | 0 | |||
Net loss | $ 0 | 0 | (3,905,822) | (3,905,822) |
Balance at Sep. 30, 2020 | $ 7,346 | $ 70,775,892 | $ (39,758,279) | $ 31,024,959 |
Balance (in shares) at Sep. 30, 2020 | 22,261,619 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash flows from operating activities: | |||||
Net loss | $ (3,905,822) | $ (5,751,610) | $ (10,820,574) | $ (2,820,763) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||
Stock-based compensation expense | 300,898 | 2,893,658 | |||
Stock-based consulting expense | 0 | 603,924 | |||
Stock-based 401K company common match | 19,967 | 29,705 | |||
Depreciation expense | 11,706 | 93,814 | |||
Operating lease expense | 106,949 | 0 | |||
Loss on disposal of fixed assets related to lease termination | 0 | 310,951 | |||
Bargain purchase gain from merger | 0 | 0 | 0 | (11,939,331) | |
Changes in assets and liabilities: | |||||
Prepaid expenses and other assets | 1,935,067 | 1,908,520 | |||
Accounts payable | 361,871 | (1,521,516) | |||
Accrued expenses | 125,133 | (900,622) | |||
Restructuring reserve | (498,185) | (1,211,939) | |||
Cash payments for expenses: | |||||
Payments made for operating lease | (62,597) | 0 | |||
Net cash used in operating activities | (8,519,765) | (12,553,599) | |||
Cash flows from investing activities: | |||||
Cash received in reverse merger transaction | 0 | 29,106,512 | |||
Net cash provided by investing activities | 0 | 29,106,512 | |||
Cash flows from financing activities: | |||||
Proceeds from exercise of warrants | 70,459 | 0 | |||
Proceeds from issuance of common stock, net of issuance costs | 29,756,502 | 750,000 | |||
Net cash provided by financing activities | 29,826,961 | 750,000 | |||
Net increase in cash and cash equivalents | 21,307,196 | 17,302,913 | |||
Cash and cash equivalents at beginning of period | 12,161,739 | 103,695 | $ 103,695 | ||
Cash and cash equivalents at end of period | $ 33,468,935 | $ 17,406,608 | 33,468,935 | 17,406,608 | $ 12,161,739 |
Cash paid for: | |||||
Interest | 0 | 606 | |||
Supplemental cash flow information: | |||||
Conversion of convertible notes and accrued interest into common stock | 0 | 32,953 | |||
Consideration in connection with reverse merger transaction | $ 0 | $ 15,793,638 |
Nature of Operations
Nature of Operations | 9 Months Ended |
Sep. 30, 2020 | |
Nature of Operations [Abstract] | |
Nature of Operations | Note 1 – Nature of Operations PDS Biotechnology Corporation, a Delaware corporation (the “Company,” “PDS,” or the “combined company”), PDS is a clinical-stage immunotherapy company developing a growing pipeline of cancer immunotherapies and infectious disease vaccines designed to overcome the well-established limitations of current immunotherapy technologies. PDS owns Versamune ® ® in vivo, From the Company’s inception, it has devoted substantially all of its efforts to drug development, business planning, engaging regulatory, manufacturing and other technical consultants, acquiring operating assets, planning and executing clinical trials and raising capital. On March 15, 2019, the Company, then operating as Edge Therapeutics, Inc. (“Edge”), completed its reverse merger with privately held PDS Biotechnology Corporation (“Private PDS”), pursuant to and in accordance with the terms of the Agreement and Plan of Merger (the “Merger Agreement”), dated as of November 23, 2018, as amended on January 24, 2019, by and among the Company, Echos Merger Sub, a wholly-owned subsidiary of the Company (“Merger Sub”), and Private PDS, whereby Private PDS merged with and into Merger Sub, with Private PDS surviving as the Company’s wholly-owned subsidiary (the “Merger”). For accounting purposes, the Merger was treated as a “reverse acquisition” under generally accepted accounting principles in the United States (“U.S. GAAP”) and Private PDS is considered the accounting acquirer. Accordingly, upon consummation of the Merger, the historical financial statements of Private PDS became the Company’s historical financial statements, and the historical financial statements of Private PDS are included in the comparative prior periods. See “Note 4 – Reverse Merger” for more information on the Merger. As part of the Merger, the Company acquired all of Edge’s assets relating to current and future research and development. In December 2019, a novel (new) coronavirus known as SARS-CoV-2 was first detected in Wuhan, Hubei Province, People’s Republic of China, causing outbreaks of the coronavirus disease, known as COVID-19, that has now spread globally. On January 30, 2020 the World Health Organization (WHO) declared COVID-19 a public health emergency. The Secretary of Health and Human Services declared a public health emergency on January 31, 2020, under section 319 of the Public Health Service Act (42 U.S.C. 247d), in response to the COVID-19 outbreak. On March 11, 2020, the WHO declared COVID-19 a pandemic. The full impact of the COVID-19 pandemic is unknown and rapidly evolving. The COVID-19 pandemic has and could continue to negatively affect the Company’s liquidity and operations. To date, two of the three recently initiated PDS0101 clinical trials have been delayed, specifically as a result of the adverse impact the COVID-19 pandemic has had on clinical trial operations for cancer indications in the United States. Even though both of these studies have since been initiated despite the pandemic challenges, the evolving COVID-19 pandemic has also impacted the pace of enrollment in clinical trials and we may be affected by similar delays as patients may avoid or may not be able to travel to healthcare facilities and physicians’ offices unless due to a health emergency and clinical trial staff can no longer get to the clinic. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies (A) Unaudited interim financial statements: The interim balance sheet at September 30, 2020, the statements of operations and comprehensive loss and changes in stockholders’ equity (deficit) for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019 are unaudited. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of its financial information. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other future annual or interim period. The balance sheet as of December 31, 2019 included herein was derived from the audited condensed consolidated financial statements as of that date. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019, filed by the Company with the SEC in its Annual Report on Form 10-K on March 27, 2020. (B) Use of estimates: The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of expenses at the date of the consolidated financial statements and during the reporting periods, and to disclose contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates. (C) Significant risks and uncertainties: The Company’s operations are subject to a number of factors that may affect its operating results and financial condition. Such factors include, but are not limited to: the clinical and regulatory development of its products, the Company’s ability to preserve its cash resources, the Company’s review of strategic alternatives, the Company’s ability to add product candidates to its pipeline, the Company’s intellectual property, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products if approved for sale, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, the Company’s ability to raise capital, and the effects of health epidemics, pandemics, or outbreaks of infectious diseases, including the recent COVID-19 pandemic. The Company currently has no commercially approved products. As such, there can be no assurance that the Company’s future research and development programs will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting its intellectual property. (D) Business acquisition: The Company’s condensed consolidated financial statements include the operations of an acquired business after the completion of the acquisition. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of IPR&D be recorded on the balance sheet. Transaction costs are expensed as incurred. The Company measures certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, we use fair value in the initial recognition of net assets acquired in a business combination and when measuring impairment losses. We estimate fair value using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of non-financial assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer. When estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following techniques: ● Income approach, which is based on the present value of a future stream of net cash flows. ● Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. ● Cost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence. Our fair value methodologies depend on the following types of inputs: ● Quoted prices for identical assets or liabilities in active markets (Level 1 inputs). ● Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs). ● Unobservable inputs that reflect estimates and assumptions (Level 3 inputs). (E) Cash equivalents and concentration of cash balance: The Company considers all highly liquid securities with a maturity weighted average of less than three months to be cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits. (F) Research and development: Costs incurred in connection with research and development activities are expensed as incurred. These costs include licensing fees to use certain technology in the Company’s research and development projects as well as fees paid to consultants and entities that perform certain research and testing on behalf of the Company. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data, such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred (G) Patent costs: The Company expenses patent costs as incurred and classifies such costs as general and administrative expenses in the accompanying statements of operations and comprehensive loss. (H) Intangible asset and impairment: As part of the reverse merger transaction on March 15, 2019, the Company acquired an in-process research and development (“IPR&D”) intangible asset valued at $2,974,000 using a discounted cash flow method. In determining the value of IPR&D, management considers, among other factors, the stage of completion of the project, the technological feasibility of the project, whether the project have an alternative future use, and the estimated residual cash flows that could be generated from the various projects and technologies over their respective projected economic lives. The discount rate used is determined at the time of acquisition and includes a rate of return which accounts for the time value of money, as well as risk factors reflecting the economic risk that the projected cash flows may not be realized. The Company reviews all of its long-lived assets for impairment indicators throughout the year. The Company performs impairment testing for indefinite-lived intangible assets annually and for all other long-lived assets whenever impairment indicators are present. When necessary, the Company records charges for impairments of long-lived assets for the amount by which the fair value is less than the carrying value of these assets. (I) Stock-based compensation: The Company accounts for its stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, directors and non-employees to be recognized as expense in the condensed statements of operations and comprehensive loss based on their grant date fair values. The Company estimates the fair value of options granted using the Black-Scholes option pricing model for stock option grants to both employees and non-employees. This model requires the following assumptions: (1) the expected volatility of our stock is based on volatilities of a peer group of similar companies in the biotechnology industry whose share prices are publicly available, (2) the expected term of the award is based on the simplified method, which is the midpoint between the requisite service period and the contractual term of the option, as we have a limited history of being a public company from March 15, 2019 (the date of the Merger) to develop reasonable expectations about future exercise patterns and employment duration for our options, (3) the risk-free interest rate based on U.S. Treasury notes with a term approximating the expected life of the option and (4) expected dividend yield of 0, since we have never paid cash dividends and have no present intention to pay cash dividends. The Company expenses the fair value of its stock-based compensation awards to employees, directors and non-employees on a straight-line basis over the requisite service period, which is generally the vesting period. The Company recognizes forfeitures as they occur. (J) Net income (loss) per common share: Basic and diluted net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted average common shares outstanding during the period. For all periods presented, the common shares underlying the preferred stock, common stock options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted loss per common share are the same. The potentially dilutive securities excluded from the determination of diluted loss per share as their effect is antidilutive, are as follows: As of September 30, 2020 2019 Stock options to purchase Common Stock 1,639,753 1,405,902 Warrants to purchase Common Stock 197,518 262,758 Total 1,837,271 1,668,660 (K) Accounting standards adopted: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the new lease standard, as of January 1, 2019, using the optional transition method under which comparative financial information will not be restated and continue to apply the provisions of the previous lease standard in its annual disclosures for the comparative periods. In addition, the new lease standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. Furthermore, the Company did not have any leases impacted by ASC 842 on the adoption date. As part of the purchase price allocation from the reverse merger, the Company recorded a Right of Use asset and Liability of $1.4 million for office space located in Berkeley Heights, New Jersey. The lease for property in Berkeley Heights was subsequently terminated. As of March 5, 2020 the Company entered into a new sub lease for office space at Florham Park commencing May 1, 2020. See note 6 for details. The new lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize right-of-use (“ROU”) assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (office building). The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. Variable lease costs such as operating costs and property taxes are expensed as incurred. As of September 30, 2020, there is an active lease accounted for under ASC 842. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies disclosure requirements related to fair value measurement. On January 1, 2020, the Company adopted ASU 2018-07 and there was no impact to its financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) (“ASU 2018-15”). ASU 2018-15 reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). On January 1, 2020, the Company adopted ASU 2018-07 and there was no impact to its financial statements |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2020 | |
Liquidity [Abstract] | |
Liquidity | Note 3 – Liquidity As of September 30, 2020, the Company had $33.5 million of cash and cash equivalents, primarily provided by $29.1 million of pre-existing cash on Edge’s balance sheets that the Company obtained as a result of the Merger and net proceeds of $29.8 million from the sale of our common stock. The Company’s primary uses of cash are to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when the Company pays these expenses, as reflected in the change to the Company’s outstanding accounts payable and accrued expenses. In July 2019, the Company entered into a common stock purchase agreement, or the Aspire Purchase Agreement, with Aspire Capital, which provides that, upon the terms and subject to the conditions and limitations set forth therein, at the Company’s discretion, Aspire Capital is committed to purchase up to an aggregate of $20.0 million of shares of the Company’s common stock (the “Purchased Shares”), over the 30-month term of the Aspire Purchase Agreement. The Company may sell an aggregate of 1,034,979 shares of its common stock (which represented 19.99% of the Company’s outstanding shares of common stock on the date of the Aspire Purchase Agreement) without stockholder approval. The Company may sell additional shares of its common stock above the 19.99% limit provided that (i) it obtains stockholder approval or (ii) stockholder approval has not been obtained at any time the 1,034,979 share limitation is reached and at all times thereafter the average price paid for all shares issued under the Aspire Purchase Agreement, is equal to or greater than $5.76, which was the consolidated closing bid price of the Company’s common stock on July 26, 2019. On July 29, 2019, the Company issued 100,654 shares of our common stock to Aspire Capital, as consideration for entering into the Aspire Purchase Agreement. As of September 30, 2020 no shares have been sold to Aspire. In February 2020, the Company completed an underwritten public offering, in which we sold 10,000,000 shares of common stock at a public offering price of $1.30 per share. The shares sold included 769,230 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. The Company received gross proceeds of approximately $13 million and net proceeds of approximately $11.9 million after deducting underwriting discounts and commissions. In July 2020, the Company filed a shelf registration statement (the “2020 Shelf Registration Statement”), with the SEC, for the issuance of common stock, preferred stock, warrants, rights, debt securities and units (collectively, the “Shelf Securities”), up to an aggregate amount of $100 million. The 2020 Shelf Registration Statement was declared effective on July 31, 2020. On August 13, 2020, the Company sold 6,900,000 shares of its common stock at a public offering price of $2.75 per share pursuant to the 2020 Shelf Registration Statement, which includes 900,000 shares issued upon the exercise by the underwriter of its option to purchase additional shares at the public offering price, minus underwriting discounts and commissions. The Company received gross proceeds of approximately $19.0 million and net proceeds of approximately $17.1 million, after deducting underwriting discounts and offering expenses. Approximately $81,000,000 of Shelf Securities remain available for future sale under the 2020 Shelf Registration Statement. Our primary uses of cash are to fund operating expenses, primarily research and development expenditures. Cash used to fund operating expenses is impacted by the timing of when we pay these expenses, as reflected in the change in our outstanding accounts payable and accrued expenses. The Company evaluated whether there are any conditions and events, considered in the aggregate, that raise substantial doubt about its ability to continue as a going concern within one year beyond the filing of this Quarterly Report on Form 10-Q. The Company’s budgeted cash requirements in 2020 and beyond include expenses related to continuing development and clinical studies. Based on the Company’s available cash resources and cash flow projections as of the date the consolidated financial statements were available for issuance, the Company believes there are sufficient funds to continue operations and research and development programs for at least 12 months from the date of this report. Until the Company can generate significant cash from its operations, the Company expects to continue to fund its operations with its available financial resources. These financial resources may not be adequate to sustain its operations. The Company plans to continue to fund its operations and capital funding needs through equity and/or debt financings. However, the Company cannot be certain that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its existing stockholders. The Company may also enter into government funding programs and consider selectively partnering for clinical development and commercialization. The sale of additional equity would result in additional dilution to its stockholders. Incurring debt financing would result in debt service obligations, and the instruments governing such debt could provide for operating and financing covenants that would restrict the Company’s operations. If the Company is unable to raise additional capital in sufficient amounts or on acceptable terms, it may be required to delay, limit, reduce, or terminate its product development or future commercialization efforts or grant rights to develop and market immunotherapies that the Company would otherwise prefer to develop and market itself. Any of these actions could harm the Company’s business, results of operations and prospects. Failure to obtain adequate financing also may adversely affect the Company’s ability to operate as a going concern. |
Reverse Merger
Reverse Merger | 9 Months Ended |
Sep. 30, 2020 | |
Reverse Merger [Abstract] | |
Reverse Merger | Note 4 – Reverse Merger On March 15, 2019, the Company (then operating as Edge), Merger Sub and Private PDS completed the Merger in accordance with the Plan of Merger and Reorganization, dated as of November 23, 2018, as amended on January 24, 2019, pursuant to and in accordance with which Merger Sub merged with and into Private PDS, with Private PDS surviving as the Company’s wholly-owned subsidiary. Immediately following completion of the Merger, the Company effected the Reverse Stock Split at a ratio of one new share for every twenty shares of its common stock then-outstanding, and changed its corporate name from Edge Therapeutics, Inc. to PDS Biotechnology Corporation, and Private PDS, now the Company’s wholly-owned subsidiary, changed its name to PDS Operating Corporation. The Merger is intended to qualify for federal income tax purposes as a tax-free reorganization under the provisions of Section 368(a) of the Internal Revenue Code of 1986, as amended. In connection with the Merger, each share of Private PDS’s common stock outstanding immediately prior to the Merger was converted into 0.3262 shares (on a post-Reverse Stock Split basis) of the Company’s common stock. As a result, the Company issued 3,573,760 shares of its common stock to the stockholders of Private PDS in exchange for all of the outstanding shares of common stock of Private PDS. For accounting purposes, Private PDS is considered to be the accounting acquirer in the Merger because Private PDS’s stockholders owned approximately 70% of PDS’s common stock immediately following the closing of the Merger. As the accounting acquirer, Private PDS’s assets and liabilities continue to be recorded at their historical carrying amounts and the historical operations that will be reflected in the Company’s financial statements will be those of Private PDS. All references in the unaudited interim condensed consolidated financial statements to the number of shares and per share amounts of the Company’s common stock have been retroactively restated to reflect completion of the Merger and the Reverse Stock Split. Purchase Price Pursuant to the Merger Agreement, Edge issued to Private PDS’s stockholders a number of shares of Edge’s common stock representing approximately 70% of the outstanding shares of common stock of the combined company. The purchase price, which represents the consideration transferred to Edge’s stockholders in the Merger is calculated based on the number of shares of common stock of the combined company that Edge’s stockholders owned as of the closing of the Merger on March 15, 2019, which consists of the following: Number of shares of the combined company to be owned by Edge security holders (1) 1,600,166 Multiplied by the price per share of Edge's common stock as of March 15, 2019 $ 9.87 Purchase price (in thousands) $ 15,794 (1) The amount includes 1,576,916 shares of Edge’s common stock outstanding as of March 15, 2019 plus 23,250 stock options of Edge that were in the money and vested immediately upon closing of the Merger. At the closing of the Merger, 753 of in-the-money options and 235 fractional shares paid out in cash to shareholders were not issued as common stock, resulting in 1,599,178 common shares issued. Final Purchase Price Allocation The Company completed its analysis of the allocation of the purchase price in the fourth quarter of 2019. The purchase price was allocated to the net assets acquired of Edge based upon their preliminary estimated fair values as of March 15, 2019. The in-process research and development asset (“IPR&D”) that is recognized relates to Edge’s NEWTON 2 clinical trial for EG-1962 that has not reached technological feasibility. The Company was actively looking to license out EG-1962 and had preliminary discussions with third parties who were actively looking at the data of EG-1962 during the prior year. Accordingly, the IPR&D was initially capitalized as an indefinite-lived intangible asset and tested for impairment at least annually until it is determined that there is no future economic benefit from EG-1962. As a result of capitalizing the IPR&D, the Company initially recognized an indefinite life deferred tax liability. During the three months ended June 30, 2019, two adjustments were made to the preliminary allocation. The first was for $275,000 relating to an offer to purchase equipment that was given a value of $0 in the preliminary allocation. The second was for $65,551 relating to Edge’s bonus plan that was effective prior to the date of acquisition. During the three months ended December 31, 2019 two additional adjustments were made to the preliminary valuation. The first was for an increase of $1,751,000 relating to the IPR&D in which the Company finalized the valuation of the IPR&D and as a result recognized an additional deferred tax liability of $224,513. The second was for a write-off relating to a transition service arrangement that was effective prior to the date of the acquisition for $131,250. In accordance with ASC 805, Business Combinations any the excess of the fair value of the acquired net assets over the purchase price has been recognized as a bargain purchase gain in the consolidated statement of operations and comprehensive loss. The Company has reassessed whether all the assets acquired, and the liabilities assumed have been identified and recognized in the purchase price allocation. The final allocation of the purchase price to the net assets of Edge, based on the fair values as of March 15, 2019, is as follows: Cash and cash equivalents $ 29,106,513 Prepaid expense and other assets 1,585,482 Right to use asset 1,384,810 Intangible assets-IPR&D 2,974,000 Total identifiable assets acquired 35,050,805 Accounts payable, accrued expenses, other liabilities (4,595,934 ) Lease liability (945,152 ) Deferred tax liability (381,513 ) Total liabilities assumed (5,922,599 ) Net identifiable assets acquired 29,128,206 Bargain purchase gain (1) (13,334,568 ) Purchase price $ 15,793,638 (1) Due to the aforementioned purchase price adjustments subsequent to March 31, 2019, the preliminary estimate of the bargain purchase gain was adjusted from $11,729,882 and finalized for the year ended December 31, 2019 at $13,334,568. The fair value of the IPR&D was determined using the discounted cash flow method based on probability- adjusted cash flow success scenarios to develop EG-1962 into a commercial product, estimating the revenue and costs. The rates utilized to discount the net cash flows to the present value are commensurate with the stage of development of the projects and uncertainties in the economic estimates used in the projections. During the three months ended December 31, 2019, the Company determined that the intangible asset related to Edge’s NEWTON 2 clinical trial for EG-1962 was impaired due to significantly reduced activity in the data room and a lack of new interest from third parties to purchase or license the product. Further the Company does not have the internal resources to pursue EG-1962 as an internal development project and has stated publicly that it had intended to find a partner to fund and run the EG-1962 program. The drop off in interest from third parties and the lack of any new inbound interest has made this an extremely low probability of success. As a result for the year ended December 31, 2019, the Company recorded an impairment charge - IPR&D of $2,974,000 for the estimated value of the IPR&D asset of $2,974,000 in its consolidated statement of operations and comprehensive loss. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Note 5 – Fair Value of Financial Instruments There were no transfers among Levels 1, 2, or 3 during 2020 or 2019. Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets (Level 1) Quoted Prices in Inactive Markets (Level 2) Significant Unobservable Inputs (Level 3) As of September 30, 2020: (unaudited) Cash and cash equivalents $ 33,468,935 $ 33,468,935 $ – $ – As of December 31, 2019: Cash and cash equivalents $ 12,161,739 $ 12,161,739 $ – $ – |
Leases
Leases | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Leases | Note 6 – Leases On July 8, 2019, the Company entered into a lease termination agreement for its office space located at 300 Connell Drive, Suite 4000, Berkeley Heights, NJ 07922 effective August 31, 2019 (the “Lease Termination Agreement”). Pursuant to the Lease Termination Agreement, the Company was required to pay 50 percent of the remaining lease payments of $665,802 over three installments on September 1, 2019, December 1, 2019, and March 1, 2020, which was recorded as lease termination costs in the third quarter of 2019. On August 31, 2019, the right-of-use asset of $1.2 million and operating lease liability of $1.2 million was written off. Leasehold improvements amounting to approximately $0.3 million were also written off and are included in lease termination costs. The Company entered into a temporary month-to-month lease as of September 1, 2019 for office space located at 830 Morris Turnpike, Short Hills, NJ 07078 until the Company entered into a new lease for permanent office space. This lease was terminated on May 31, 2020. Effective March 5, 2020, the Company entered into a sublease for approximately 11,200 square feet of office space located at 25B Vreeland Road, Florham Park, NJ. The sublease commenced on May 1, 2020 and will continue for a term of forty (40) months with an option to renew through October 31, 2027. Upon inception of the lease, the Company recognized approximately $0.7 million of a ROU asset and operating lease liabilities. The discount rate used to measure the operating lease liability as of May 1, 2020 was 9.15%. Throughout the period described above the Company has maintained, and continues to maintain, a month-to-month lease for its research facilities at the Princeton Innovation Center BioLabs located at 303A College Road E, Princeton NJ, 08540. Nine Months Ended September 30, 2020 Cash paid for amounts included in measurement of lease liabilities: Operating cash outflows for operating lease $ 62,597 Right-of use asset obtained in exchange for new operating lease liability $ 593,580 Remaining lease term - operating lease liability 35.0 Discount rate - operating lease 9.15 % Reported as of September 30, 2020 Current portion of operating lease liability $ 116,240 Operating leases, net of current portion 521,692 Total $ 637,932 |
Accrued Expenses and Restructur
Accrued Expenses and Restructuring Reserve | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses and Restructuring Reserve [Abstract] | |
Accrued Expenses and Restructuring Reserve | Note 7 – Accrued Expenses and Restructuring Reserve Accrued expenses and other liabilities consist of the following: As of September 30, 2020 As of December 31, 2019 Accrued research and development costs $ 15,415 $ 16,415 Accrued professional fees 101,470 256,062 Accrued compensation 1,105,888 603,229 Accrued rent – 221,934 Total $ 1,222,773 $ 1,097,640 Restructuring Reserve As of September 30, 2020 As of December 31, 2019 Restructuring reserve (1) $ - $ 498,185 Total $ - $ 498,185 (1) Restructuring reserve relates to the severance costs incurred by Edge prior to the Merger and assumed by the Company as part of the purchase accounting, but not yet paid. The severance costs continue through September 2020. For the nine months ended September 30, 2020, the Company paid $498,185 in restructuring costs which was previously accrued. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 8 – Stock-Based Compensation The Company has four equity compensation plans: the 2009 Amended Stock Option Plan, the 2010 Equity Incentive Plan, the 2014 Equity Incentive Plan and the 2018 Stock Incentive Plan (the “Plans”). Originally, the Company was able to grant up to 27,410 of Common Stock as both incentive stock options (“ISOs”) and nonqualified stock options (“NQs”) under the 2010 Equity Incentive Plan. In 2013, the Company’s stockholders approved an increase to 63,957 shares authorized for issuance under the 2010 Equity Incentive Plan. In 2014, the Board of Directors of the Company (the “Board”) approved an increase to 67,520 shares authorized for issuance under the 2010 Equity Incentive Plan In 2014, the Company’s stockholders approved the 2014 Equity Incentive Plan pursuant to which the Company may grant up to 91,367 shares as ISOs, NQs and restricted stock units (“RSUs”), subject to increases as hereafter described (the “Plan Limit”). In addition, on January 1, 2015 and each January 1 thereafter prior to the termination of the 2014 Equity Incentive Plan, pursuant to the terms of the 2014 Equity Incentive Plan, the Plan Limit was and shall be increased by the lesser of (x) 4% of the number of shares of Common Stock outstanding as of the immediately preceding December 31 and (y) such lesser number as the Board of Directors may determine in its discretion. On January 1, 2016, 2017, 2018 and 2019 the Plan Limit was increased to 152,366 shares, 210,203 shares, 271,941 shares and 323,529 shares, respectively. In March 2019, the Plan was amended and restated which removed the annual increase component and was limited to 826,292 shares. In 2018, the Company’s stockholders approved the 2018 Stock Incentive Plan pursuant to which the Company may grant up to 558,071 shares as Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Deferred Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based Awards. Pursuant to the terms of the Plans, ISOs have a term of ten years from the date of grant or such shorter term as may be provided in the option agreement. Unless specified otherwise in an individual option agreement, ISOs generally vest over a four year term and NQs generally vest over a one to five year terms. Unless terminated by the Board, the Plans shall continue to remain effective for a term of ten years or until such time as no further awards may be granted and all awards granted under the Plans are no longer outstanding. As of September 30, 2020 there were 190,799 shares available for grant under the 2018 Stock Incentive Plan. On June 17, 2019, the Board adopted the 2019 Inducement Plan. The 2019 Inducement Plan provides for the grant of non-qualified stock options. The 2019 Inducement Plan was recommended for approval by the Compensation Committee of the Board and subsequently approved and adopted by the Board without stockholder approval pursuant to Rule 5635(c)(4) of the Nasdaq Listing Rules. The Board has reserved 200,000 shares of the Company’s common stock for issuance pursuant to non-qualified stock options granted under the 2019 Inducement Plan, and the 2019 Inducement Plan will be administered by the Compensation Committee of the Board. In accordance with Rule 5635(c)(4) of the Nasdaq Listing Rules, non-qualified stock options under the 2019 Inducement Plan may only be made to an employee who has not previously been an employee or member of the Board (or any parent or subsidiary of the Company), or following a bona fide period of non-employment by the Company (or a parent or subsidiary of the Company), if he or she is granted such non-qualified stock options in connection with his or her commencement of employment with the Company or a subsidiary and such grant is an inducement material to his or her entering into employment with the Company or such subsidiary. As of September 30, 2020, there were 121,500 shares available for grant under the 2019 Inducement Plan. The Company’s stock-based compensation expense related to stock options was recognized in operating expense as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (unaudited) (unaudited) Stock-Based Compensation Research and development $ 61,557 $ 49,748 $ 168,083 $ 499,835 General and administrative 68,235 70,458 132,815 2,393,823 Total $ 129,792 $ 120,206 $ 300,898 $ 2,893,658 The fair value of options granted during the three and nine months ended September 30, 2020 and the three and nine months ended September 30, 2019 was estimated using the Black-Scholes option valuation model utilizing the following assumptions. There were no options granted during the three months ended September 30, 2020. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Weighted Average Weighted Average Weighted Average Weighted Average (unaudited) (unaudited) Volatility – 92.22 % 97.00 % 89.88 % Risk-Free Interest Rate – 1.49 % 0.38 % 2.33 % Expected Term in Years – 6.08 6.07 6.14 Dividend Rate – – – – Fair Value of Option on Grant Date $ – $ 3.50 $ 1.10 $ 5.30 The following table summarizes the number of options outstanding and the weighted average exercise price: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Options outstanding at December 31, 2019 1,421,797 $ 15.95 Granted 319,907 1.43 Exercised – – Forfeited (84,227 ) 41.34 Expired (17,724 ) 4.69 Options outstanding at September 30, 2020 1,639,753 $ 11.94 6.92 $ 287,063 Vested and expected to vest at September 30, 2020 1,639,753 $ 11.94 6.92 $ 287,063 Exercisable at September 30, 2020 1,066,601 $ 16.54 5.65 $ – At September 30, 2020 there was approximately $1,424,897 of unamortized stock option compensation expense, which is expected to be recognized over a remaining average vesting period of 3.15 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes [Abstract] | |
Income Taxes | Note 9 – Income Taxes In assessing the realizability of the net deferred tax assets, the Company considers all relevant positive and negative evidence to determine whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. The Company expects to have a loss for 2020 and there will be no current income tax expense. Additionally, there was a full valuation allowance against the net deferred tax assets as of September 30, 2020 and December 31, 2019. As such, the Company recorded no income tax benefit due to realization uncertainties. The Company’s U.S. statutory rate is 21%. The primary factor impacting the effective tax rate for the three and nine months ended September 30, 2020 is the anticipated full year operating loss which will require full valuation allowances against any associated net deferred tax assets. Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax provisions taken on their income tax returns. The Company has analyzed its tax positions and has concluded that as of September 30, 2020, there were no uncertain positions. The Company’s U.S. federal and state net operating losses have occurred since its inception and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities. The Company did not have any unrecognized tax benefits and has not accrued any interest or penalties for the three and nine months ended September 30, 2020 and for the year ended December 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 10 – Commitments and Contingencies Employment Matters The Company has entered into employment agreements or offer letters with each of its executive officers. The employment agreements generally provide for, among other things, salary, bonus and severance payments. The employment agreements generally provide for between 12 months and 24 months of severance benefits to be paid to an executive (as well as certain potential bonus, COBRA and equity award benefits), subject to the effectiveness of a general release of claims, if the executive terminates his or her employment for good reason or if the Company terminates the executive’s employment without cause. Such severance payments may be provided for as long as 24 months in connection with a termination following a change of control. The continued provision of severance benefits is conditioned on each executive’s compliance with the terms of the Company’s confidentiality and invention and assignment agreement as well as his or her release of claims. Rent For month-to-month arrangements not impacted by the adoption of ASC 842, rent for the three and nine months ended September 30, 2020 was $35,700 and $140,678 compared to the three and nine months ended September 30, 2019 of $38,365 and $58,665. |
Retirement Plan
Retirement Plan | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Plan [Abstract] | |
Retirement Plan | Note 11 – Retirement Plan The Company has a 401(k) defined contribution plan as a benefit for all employees and permits voluntary contributions by employees subject to IRS-imposed limitations. Employer 401K contributions for the three and nine months ended September 30, 2020 was $19,967 compared to the three and nine months ended September 30, 2019 of $29,704. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Unaudited Interim Financial Statements | (A) Unaudited interim financial statements: The interim balance sheet at September 30, 2020, the statements of operations and comprehensive loss and changes in stockholders’ equity (deficit) for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019 are unaudited. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, in accordance with the requirements of the Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted. These condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments that are necessary for a fair statement of its financial information. The results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of the results to be expected for the year ending December 31, 2020 or for any other future annual or interim period. The balance sheet as of December 31, 2019 included herein was derived from the audited condensed consolidated financial statements as of that date. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2019, filed by the Company with the SEC in its Annual Report on Form 10-K on March 27, 2020. |
Use of Estimates | (B) Use of estimates: The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of expenses at the date of the consolidated financial statements and during the reporting periods, and to disclose contingent assets and liabilities at the date of the consolidated financial statements. Actual results could differ from those estimates. |
Significant Risks and Uncertainties | (C) Significant risks and uncertainties: The Company’s operations are subject to a number of factors that may affect its operating results and financial condition. Such factors include, but are not limited to: the clinical and regulatory development of its products, the Company’s ability to preserve its cash resources, the Company’s review of strategic alternatives, the Company’s ability to add product candidates to its pipeline, the Company’s intellectual property, competition from products manufactured and sold or being developed by other companies, the price of, and demand for, Company products if approved for sale, the Company’s ability to negotiate favorable licensing or other manufacturing and marketing agreements for its products, the Company’s ability to raise capital, and the effects of health epidemics, pandemics, or outbreaks of infectious diseases, including the recent COVID-19 pandemic. The Company currently has no commercially approved products. As such, there can be no assurance that the Company’s future research and development programs will be successfully commercialized. Developing and commercializing a product requires significant time and capital and is subject to regulatory review and approval as well as competition from other biotechnology and pharmaceutical companies. The Company operates in an environment of rapid change and is dependent upon the continued services of its employees and consultants and obtaining and protecting its intellectual property. |
Business Acquisition | (D) Business acquisition: The Company’s condensed consolidated financial statements include the operations of an acquired business after the completion of the acquisition. We account for acquired businesses using the acquisition method of accounting, which requires, among other things, that most assets acquired and liabilities assumed be recognized at their estimated fair values as of the acquisition date and that the fair value of IPR&D be recorded on the balance sheet. Transaction costs are expensed as incurred. The Company measures certain assets and liabilities at fair value, either upon initial recognition or for subsequent accounting or reporting. For example, we use fair value in the initial recognition of net assets acquired in a business combination and when measuring impairment losses. We estimate fair value using an exit price approach, which requires, among other things, that we determine the price that would be received to sell an asset or paid to transfer a liability in an orderly market. The determination of an exit price is considered from the perspective of market participants, considering the highest and best use of non-financial assets and, for liabilities, assuming that the risk of non-performance will be the same before and after the transfer. When estimating fair value, depending on the nature and complexity of the asset or liability, we may use one or all of the following techniques: ● Income approach, which is based on the present value of a future stream of net cash flows. ● Market approach, which is based on market prices and other information from market transactions involving identical or comparable assets or liabilities. ● Cost approach, which is based on the cost to acquire or construct comparable assets, less an allowance for functional and/or economic obsolescence. Our fair value methodologies depend on the following types of inputs: ● Quoted prices for identical assets or liabilities in active markets (Level 1 inputs). ● Quoted prices for similar assets or liabilities in active markets, or quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are directly or indirectly observable, or inputs that are derived principally from, or corroborated by, observable market data by correlation or other means (Level 2 inputs). ● Unobservable inputs that reflect estimates and assumptions (Level 3 inputs). |
Cash Equivalents and Concentration of Cash Balance | (E) Cash equivalents and concentration of cash balance: The Company considers all highly liquid securities with a maturity weighted average of less than three months to be cash equivalents. The Company’s cash and cash equivalents in bank deposit accounts, at times, may exceed federally insured limits. |
Research and Development | (F) Research and development: Costs incurred in connection with research and development activities are expensed as incurred. These costs include licensing fees to use certain technology in the Company’s research and development projects as well as fees paid to consultants and entities that perform certain research and testing on behalf of the Company. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data, such as patient enrollment, clinical site activations or information provided by vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred |
Patent Costs | (G) Patent costs: The Company expenses patent costs as incurred and classifies such costs as general and administrative expenses in the accompanying statements of operations and comprehensive loss. |
Intangible Asset and Impairment | (H) Intangible asset and impairment: As part of the reverse merger transaction on March 15, 2019, the Company acquired an in-process research and development (“IPR&D”) intangible asset valued at $2,974,000 using a discounted cash flow method. In determining the value of IPR&D, management considers, among other factors, the stage of completion of the project, the technological feasibility of the project, whether the project have an alternative future use, and the estimated residual cash flows that could be generated from the various projects and technologies over their respective projected economic lives. The discount rate used is determined at the time of acquisition and includes a rate of return which accounts for the time value of money, as well as risk factors reflecting the economic risk that the projected cash flows may not be realized. The Company reviews all of its long-lived assets for impairment indicators throughout the year. The Company performs impairment testing for indefinite-lived intangible assets annually and for all other long-lived assets whenever impairment indicators are present. When necessary, the Company records charges for impairments of long-lived assets for the amount by which the fair value is less than the carrying value of these assets. |
Stock-Based Compensation | (I) Stock-based compensation: The Company accounts for its stock-based compensation in accordance with ASC Topic 718, Compensation—Stock Compensation (“ASC 718”). ASC 718 requires all stock-based payments to employees, directors and non-employees to be recognized as expense in the condensed statements of operations and comprehensive loss based on their grant date fair values. The Company estimates the fair value of options granted using the Black-Scholes option pricing model for stock option grants to both employees and non-employees. This model requires the following assumptions: (1) the expected volatility of our stock is based on volatilities of a peer group of similar companies in the biotechnology industry whose share prices are publicly available, (2) the expected term of the award is based on the simplified method, which is the midpoint between the requisite service period and the contractual term of the option, as we have a limited history of being a public company from March 15, 2019 (the date of the Merger) to develop reasonable expectations about future exercise patterns and employment duration for our options, (3) the risk-free interest rate based on U.S. Treasury notes with a term approximating the expected life of the option and (4) expected dividend yield of 0, since we have never paid cash dividends and have no present intention to pay cash dividends. The Company expenses the fair value of its stock-based compensation awards to employees, directors and non-employees on a straight-line basis over the requisite service period, which is generally the vesting period. The Company recognizes forfeitures as they occur. |
Net Income (Loss) per Common Share | (J) Net income (loss) per common share: Basic and diluted net loss per common share is determined by dividing net loss attributable to common stockholders by the weighted average common shares outstanding during the period. For all periods presented, the common shares underlying the preferred stock, common stock options and warrants have been excluded from the calculation because their effect would be anti-dilutive. Therefore, the weighted average shares outstanding used to calculate both basic and diluted loss per common share are the same. The potentially dilutive securities excluded from the determination of diluted loss per share as their effect is antidilutive, are as follows: As of September 30, 2020 2019 Stock options to purchase Common Stock 1,639,753 1,405,902 Warrants to purchase Common Stock 197,518 262,758 Total 1,837,271 1,668,660 |
Accounting Standards Adopted | (K) Accounting standards adopted: In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the new lease standard, as of January 1, 2019, using the optional transition method under which comparative financial information will not be restated and continue to apply the provisions of the previous lease standard in its annual disclosures for the comparative periods. In addition, the new lease standard provides a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. Furthermore, the Company did not have any leases impacted by ASC 842 on the adoption date. As part of the purchase price allocation from the reverse merger, the Company recorded a Right of Use asset and Liability of $1.4 million for office space located in Berkeley Heights, New Jersey. The lease for property in Berkeley Heights was subsequently terminated. As of March 5, 2020 the Company entered into a new sub lease for office space at Florham Park commencing May 1, 2020. See note 6 for details. The new lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize right-of-use (“ROU”) assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (office building). The Company determines if an arrangement is a lease at inception. Operating lease ROU assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. Operating lease expense is recognized on a straight-line basis over the lease term, subject to any changes in the lease or expectations regarding the terms. Variable lease costs such as operating costs and property taxes are expensed as incurred. As of September 30, 2020, there is an active lease accounted for under ASC 842. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) (“ASU 2018-13”). ASU 2018-13 modifies disclosure requirements related to fair value measurement. On January 1, 2020, the Company adopted ASU 2018-07 and there was no impact to its financial statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) (“ASU 2018-15”). ASU 2018-15 reduces complexity for the accounting for costs of implementing a cloud computing service arrangement and aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). On January 1, 2020, the Company adopted ASU 2018-07 and there was no impact to its financial statements |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies [Abstract] | |
Antidilutive Securities | The potentially dilutive securities excluded from the determination of diluted loss per share as their effect is antidilutive, are as follows: As of September 30, 2020 2019 Stock options to purchase Common Stock 1,639,753 1,405,902 Warrants to purchase Common Stock 197,518 262,758 Total 1,837,271 1,668,660 |
Reverse Merger (Tables)
Reverse Merger (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Reverse Merger [Abstract] | |
Calculation and Allocation of Final Purchase Price | Pursuant to the Merger Agreement, Edge issued to Private PDS’s stockholders a number of shares of Edge’s common stock representing approximately 70% of the outstanding shares of common stock of the combined company. The purchase price, which represents the consideration transferred to Edge’s stockholders in the Merger is calculated based on the number of shares of common stock of the combined company that Edge’s stockholders owned as of the closing of the Merger on March 15, 2019, which consists of the following: Number of shares of the combined company to be owned by Edge security holders (1) 1,600,166 Multiplied by the price per share of Edge's common stock as of March 15, 2019 $ 9.87 Purchase price (in thousands) $ 15,794 (1) The amount includes 1,576,916 shares of Edge’s common stock outstanding as of March 15, 2019 plus 23,250 stock options of Edge that were in the money and vested immediately upon closing of the Merger. At the closing of the Merger, 753 of in-the-money options and 235 fractional shares paid out in cash to shareholders were not issued as common stock, resulting in 1,599,178 common shares issued. The final allocation of the purchase price to the net assets of Edge, based on the fair values as of March 15, 2019, is as follows: Cash and cash equivalents $ 29,106,513 Prepaid expense and other assets 1,585,482 Right to use asset 1,384,810 Intangible assets-IPR&D 2,974,000 Total identifiable assets acquired 35,050,805 Accounts payable, accrued expenses, other liabilities (4,595,934 ) Lease liability (945,152 ) Deferred tax liability (381,513 ) Total liabilities assumed (5,922,599 ) Net identifiable assets acquired 29,128,206 Bargain purchase gain (1) (13,334,568 ) Purchase price $ 15,793,638 (1) Due to the aforementioned purchase price adjustments subsequent to March 31, 2019, the preliminary estimate of the bargain purchase gain was adjusted from $11,729,882 and finalized for the year ended December 31, 2019 at $13,334,568. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value of Financial Instruments [Abstract] | |
Fair Value of Financial Instruments | Fair Value Measurements at Reporting Date Using Total Quoted Prices in Active Markets (Level 1) Quoted Prices in Inactive Markets (Level 2) Significant Unobservable Inputs (Level 3) As of September 30, 2020: (unaudited) Cash and cash equivalents $ 33,468,935 $ 33,468,935 $ – $ – As of December 31, 2019: Cash and cash equivalents $ 12,161,739 $ 12,161,739 $ – $ – |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Supplemental Cash Flow and Balance Sheet Information Related to Operating Leases | Nine Months Ended September 30, 2020 Cash paid for amounts included in measurement of lease liabilities: Operating cash outflows for operating lease $ 62,597 Right-of use asset obtained in exchange for new operating lease liability $ 593,580 Remaining lease term - operating lease liability 35.0 Discount rate - operating lease 9.15 % Reported as of September 30, 2020 Current portion of operating lease liability $ 116,240 Operating leases, net of current portion 521,692 Total $ 637,932 |
Accrued Expenses and Restruct_2
Accrued Expenses and Restructuring Reserve (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Expenses and Restructuring Reserve [Abstract] | |
Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following: As of September 30, 2020 As of December 31, 2019 Accrued research and development costs $ 15,415 $ 16,415 Accrued professional fees 101,470 256,062 Accrued compensation 1,105,888 603,229 Accrued rent – 221,934 Total $ 1,222,773 $ 1,097,640 |
Restructuring Reserve | Restructuring Reserve As of September 30, 2020 As of December 31, 2019 Restructuring reserve (1) $ - $ 498,185 Total $ - $ 498,185 (1) Restructuring reserve relates to the severance costs incurred by Edge prior to the Merger and assumed by the Company as part of the purchase accounting, but not yet paid. The severance costs continue through September 2020. For the nine months ended September 30, 2020, the Company paid $498,185 in restructuring costs which was previously accrued. |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation Expense Related to Stock Options | The Company’s stock-based compensation expense related to stock options was recognized in operating expense as follows: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 (unaudited) (unaudited) Stock-Based Compensation Research and development $ 61,557 $ 49,748 $ 168,083 $ 499,835 General and administrative 68,235 70,458 132,815 2,393,823 Total $ 129,792 $ 120,206 $ 300,898 $ 2,893,658 |
Assumptions Used to Value Stock Options Granted | The fair value of options granted during the three and nine months ended September 30, 2020 and the three and nine months ended September 30, 2019 was estimated using the Black-Scholes option valuation model utilizing the following assumptions. There were no options granted during the three months ended September 30, 2020. Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Weighted Average Weighted Average Weighted Average Weighted Average (unaudited) (unaudited) Volatility – 92.22 % 97.00 % 89.88 % Risk-Free Interest Rate – 1.49 % 0.38 % 2.33 % Expected Term in Years – 6.08 6.07 6.14 Dividend Rate – – – – Fair Value of Option on Grant Date $ – $ 3.50 $ 1.10 $ 5.30 |
Stock Option Activity | The following table summarizes the number of options outstanding and the weighted average exercise price: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life in Years Aggregate Intrinsic Value Options outstanding at December 31, 2019 1,421,797 $ 15.95 Granted 319,907 1.43 Exercised – – Forfeited (84,227 ) 41.34 Expired (17,724 ) 4.69 Options outstanding at September 30, 2020 1,639,753 $ 11.94 6.92 $ 287,063 Vested and expected to vest at September 30, 2020 1,639,753 $ 11.94 6.92 $ 287,063 Exercisable at September 30, 2020 1,066,601 $ 16.54 5.65 $ – |
Nature of Operations (Details)
Nature of Operations (Details) | Mar. 15, 2019 | Sep. 30, 2020ClinicalTrial |
Nature of Operations [Abstract] | ||
Reverse stock split ratio | 0.05 | |
Number of planned clinical trials delayed | 2 | |
Number of planned clinical trials | 3 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | May 01, 2020 | Dec. 31, 2019 | Aug. 31, 2019 | Mar. 15, 2019 | |
Intangibles [Abstract] | ||||||||
IPR&D asset | $ 2,974,000 | $ 2,974,000 | ||||||
Stock-Based Compensation [Abstract] | ||||||||
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% | ||||
Net Income (Loss) per Common Share [Abstract] | ||||||||
Antidilutive impact to EPS (in shares) | 1,837,271 | 1,668,660 | ||||||
Accounting Standards Adopted [Abstract] | ||||||||
Right-of-use asset | $ 593,580 | $ 593,580 | $ 700,000 | $ 0 | $ 1,200,000 | |||
Lease liability | $ 637,932 | $ 637,932 | $ 700,000 | $ 1,200,000 | ||||
Stock Options to Purchase Common Stock [Member] | ||||||||
Net Income (Loss) per Common Share [Abstract] | ||||||||
Antidilutive impact to EPS (in shares) | 1,639,753 | 1,405,902 | ||||||
Warrants to Purchase Common Stock [Member] | ||||||||
Net Income (Loss) per Common Share [Abstract] | ||||||||
Antidilutive impact to EPS (in shares) | 197,518 | 262,758 | ||||||
ASU 2016-02 [Member] | ||||||||
Accounting Standards Adopted [Abstract] | ||||||||
Right-of-use asset | $ 1,400,000 | |||||||
Lease liability | $ 1,400,000 |
Liquidity (Details)
Liquidity (Details) - USD ($) | Aug. 13, 2020 | Jul. 29, 2019 | Feb. 29, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 22, 2020 | Dec. 31, 2019 | Jul. 31, 2019 | Jul. 26, 2019 |
Liquidity [Abstract] | |||||||||
Cash and cash equivalents | $ 33,468,935 | $ 12,161,739 | |||||||
Net proceeds from sale of common stock | $ 29,800,000 | ||||||||
Term of common stock purchase agreement | 30 months | ||||||||
Percentage of shares of common stock that can be sold without shareholder approval | 19.99% | ||||||||
Share price (in dollars per share) | $ 2.75 | $ 1.30 | $ 5.76 | ||||||
Issuance of common stock from equity transaction (in shares) | 100,654 | ||||||||
Shares sold under common stock purchase agreement (in shares) | 0 | ||||||||
Registered securities in Shelf Registration Statement | $ 100,000,000 | ||||||||
Issuance of common stock (in shares) | 6,900,000 | 10,000,000 | |||||||
Proceeds from issuance of shares | $ 19,000,000 | $ 13,000,000 | $ 29,756,502 | $ 750,000 | |||||
Proceeds from issuance of shares, net of underwriting discounts and commissions | 17,100,000 | $ 11,900,000 | |||||||
Registered securities in Shelf Registration Statement available for future sale | $ 81,000,000 | ||||||||
Over-Allotment Option [Member] | |||||||||
Liquidity [Abstract] | |||||||||
Issuance of common stock (in shares) | 900,000 | 769,230 | |||||||
Maximum [Member] | |||||||||
Liquidity [Abstract] | |||||||||
Common stock to be purchased under common stock purchase agreement | $ 20,000,000 | ||||||||
Shares of common stock that can be sold without shareholder approval (in shares) | 1,034,979 | ||||||||
Edge [Member] | |||||||||
Liquidity [Abstract] | |||||||||
Pre-existing cash | $ 29,106,513 | $ 29,106,513 |
Reverse Merger (Details)
Reverse Merger (Details) | Mar. 15, 2019shares |
Reverse Merger [Abstract] | |
Reverse stock split ratio | 0.05 |
Number of shares issued for each share of common stock in connection with Merger (in shares) | 0.3262 |
Number of shares issued in connection with Merger (in shares) | 3,573,760 |
Percentage of shares owned in the combined company's common stock prior to the Merger | 70.00% |
Reverse Merger, Purchase Price
Reverse Merger, Purchase Price (Details) - USD ($) | Mar. 15, 2019 | Dec. 31, 2019 | Sep. 30, 2020 | Mar. 14, 2019 | |
Purchase Price [Abstract] | |||||
Common stock shares outstanding (in shares) | 5,281,237 | 22,261,619 | |||
In-the-money shares paid out in cash (in shares) | 753 | ||||
Fractional shares paid out in cash (in shares) | 235 | ||||
Shares issued in Merger (in shares) | 1,599,178 | ||||
Edge [Member] | |||||
Purchase Price [Abstract] | |||||
Number of shares of the combined company to be owned by Edge security holders (in shares) | [1] | 1,600,166 | |||
Multiplied by the price per share of Edge's common stock as of March 15, 2019 (in dollars per share) | $ 9.87 | ||||
Purchase price | $ 15,793,638 | $ 15,793,638 | |||
Common stock shares outstanding (in shares) | 1,576,916 | ||||
Number of stock options vested (in shares) | 23,250 | ||||
[1] | The amount includes 1,576,916 shares of Edge's common stock outstanding as of March 15, 2019 plus 23,250 stock options of Edge that were in the money and vested immediately upon closing of the Merger. At the closing of the Merger, 753 of in-the-money options and 235 fractional shares paid out in cash to shareholders were not issued as common stock, resulting in 1,599,178 common shares issued. |
Reverse Merger, Final Purchase
Reverse Merger, Final Purchase Price Allocation (Details) | Mar. 15, 2019USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($)Adjustment | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($)Adjustment | Mar. 31, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Final Purchase Price Allocation [Abstract] | ||||||||||
Bargain purchase gain | $ 0 | $ 0 | $ 0 | $ (11,939,331) | ||||||
Edge [Member] | ||||||||||
Final Purchase Price Allocation [Abstract] | ||||||||||
Number of adjustments made to preliminary valuation | Adjustment | 2 | 2 | ||||||||
Adjustment to preliminary valuation for equipment | $ 275,000 | |||||||||
Equipment | $ 0 | |||||||||
Adjustment to preliminary valuation for bonus plan | $ 65,551 | |||||||||
Adjustment to preliminary valuation for IPR&D | $ 1,751,000 | |||||||||
Adjustment to preliminary valuation for deferred tax liability | 224,513 | |||||||||
Adjustment to preliminary valuation for write-off relating transition service | 131,250 | |||||||||
Cash and cash equivalents | $ 29,106,513 | 29,106,513 | $ 29,106,513 | $ 29,106,513 | ||||||
Prepaid expense and other assets | 1,585,482 | 1,585,482 | ||||||||
Right to use asset | 1,384,810 | 1,384,810 | ||||||||
Intangible assets-IPR&D | 2,974,000 | 2,974,000 | ||||||||
Total identifiable assets acquired | 35,050,805 | 35,050,805 | ||||||||
Accounts payable, accrued expenses, other liabilities | (4,595,934) | (4,595,934) | ||||||||
Lease liability | (945,152) | (945,152) | ||||||||
Deferred tax liability | (381,513) | (381,513) | ||||||||
Total liabilities assumed | (5,922,599) | (5,922,599) | ||||||||
Net identifiable assets acquired | $ 29,128,206 | 29,128,206 | ||||||||
Bargain purchase gain | $ (11,729,882) | (13,334,568) | [1] | |||||||
Purchase price | $ 15,793,638 | $ 15,793,638 | ||||||||
[1] | Due to the aforementioned purchase price adjustments subsequent to March 31, 2019, the preliminary estimate of the bargain purchase gain was adjusted from $11,729,882 and finalized for the year ended December 31, 2019 at $13,334,568. |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value Transfers Between Levels [Abstract] | ||
Transfers from Level 1 to Level 2 | $ 0 | $ 0 |
Transfers from Level 2 to Level 1 | 0 | 0 |
Transfers into Level 3 | 0 | 0 |
Transfers out of Level 3 | 0 | 0 |
Fair Value of Financial Instruments [Abstract] | ||
Cash and cash equivalents | 33,468,935 | 12,161,739 |
Quoted Prices in Active Markets (Level 1) [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Cash and cash equivalents | 33,468,935 | 12,161,739 |
Quoted Prices in Inactive Markets (Level 2) [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Cash and cash equivalents | 0 | 0 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Cash and cash equivalents | $ 0 | $ 0 |
Leases (Details)
Leases (Details) | Aug. 31, 2019USD ($)Installment | Sep. 30, 2020USD ($)ft² | Sep. 30, 2019USD ($) | May 01, 2020USD ($) | Dec. 31, 2019USD ($) |
Leases [Abstract] | |||||
Percentage of remaining payments required to be paid to terminate lease | 50.00% | ||||
Remaining lease payments | $ 665,802 | ||||
Number of installments for remaining lease payment | Installment | 3 | ||||
Right-of-use asset | $ 1,200,000 | $ 593,580 | $ 700,000 | $ 0 | |
Operating lease liability | 1,200,000 | 637,932 | $ 700,000 | ||
Write-off of leasehold improvements related to lease termination | 300,000 | $ 0 | $ (310,951) | ||
Area of office space under sub-lease | ft² | 11,200 | ||||
Term of sub-lease agreement | 40 months | ||||
Discount rate used to measure operating lease liability | 9.15% | ||||
Cash Paid for Amounts Included in Measurement of Lease Liabilities: [Abstract] | |||||
Operating cash outflows for operating lease | $ 62,597 | $ 0 | |||
Right-of use asset obtained in exchange for new operating lease liability | $ 593,580 | ||||
Remaining lease term - operating lease liability | 35 months | ||||
Discount rate - operating lease | 9.15% | ||||
Operating Lease Liability [Abstract] | |||||
Current portion of operating lease liability | $ 116,240 | 0 | |||
Operating leases, net of current portion | 521,692 | $ 0 | |||
Total | $ 1,200,000 | $ 637,932 | $ 700,000 |
Accrued Expenses and Restruct_3
Accrued Expenses and Restructuring Reserve (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | ||
Accrued Expenses and Other Liabilities [Abstract] | |||
Accrued research and development costs | $ 15,415 | $ 16,415 | |
Accrued professional fees | 101,470 | 256,062 | |
Accrued compensation | 1,105,888 | 603,229 | |
Accrued rent | 0 | 221,934 | |
Total | 1,222,773 | 1,097,640 | |
Restructuring Reserve [Abstract] | |||
Restructuring reserve | [1] | 0 | 498,185 |
Total | 0 | $ 498,185 | |
Restructuring expenses paid | $ 498,185 | ||
[1] | Restructuring reserve relates to the severance costs incurred by Edge prior to the Merger and assumed by the Company as part of the purchase accounting, but not yet paid. The severance costs continue through September 2020. For the nine months ended September 30, 2020, the Company paid $498,185 in restructuring costs which was previously accrued. |
Stock-Based Compensation, Equit
Stock-Based Compensation, Equity Compensation Plans (Details) | 9 Months Ended | 12 Months Ended | ||||||||
Sep. 30, 2020Planshares | Dec. 31, 2014shares | Mar. 31, 2019shares | Jan. 02, 2019shares | Dec. 31, 2018shares | Jan. 02, 2018shares | Jan. 02, 2017shares | Jan. 02, 2016shares | Dec. 31, 2013shares | Dec. 31, 2010shares | |
Stock Options [Abstract] | ||||||||||
Number of equity compensation plans | Plan | 4 | |||||||||
The Plans [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Term of plan | 10 years | |||||||||
The Plans [Member] | Incentive Stock Options [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Vesting period | 4 years | |||||||||
The Plans [Member] | Incentive Stock Options [Member] | Maximum [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Term of option | 10 years | |||||||||
The Plans [Member] | Nonqualified Options [Member] | Minimum [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Vesting period | 1 year | |||||||||
The Plans [Member] | Nonqualified Options [Member] | Maximum [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Vesting period | 5 years | |||||||||
2010 Equity Incentive Plan [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Number of shares authorized for issuance (in shares) | 67,520 | 63,957 | 27,410 | |||||||
2014 Equity Incentive Plan [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Number of shares authorized for issuance (in shares) | 91,367 | 826,292 | 323,529 | 271,941 | 210,203 | 152,366 | ||||
Percentage of Common Stock outstanding used to determine annual increase in the plan limit | 4.00% | |||||||||
2018 Equity Incentive Plan [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Number of shares authorized for issuance (in shares) | 558,071 | |||||||||
Shares available for grant (in shares) | 190,799 | |||||||||
2019 Inducement Plan [Member] | ||||||||||
Stock Options [Abstract] | ||||||||||
Shares available for grant (in shares) | 121,500 | |||||||||
Common stock reserved for issuance (in shares) | 200,000 |
Stock-Based Compensation, Stock
Stock-Based Compensation, Stock-Based Compensation Expense Related to Stock Options (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Stock-Based Compensation [Abstract] | ||||
Stock-based compensation expense | $ 129,792 | $ 120,206 | $ 300,898 | $ 2,893,658 |
Research and Development [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Stock-based compensation expense | 61,557 | 49,748 | 168,083 | 499,835 |
General and Administrative [Member] | ||||
Stock-Based Compensation [Abstract] | ||||
Stock-based compensation expense | $ 68,235 | $ 70,458 | $ 132,815 | $ 2,393,823 |
Stock-Based Compensation, Assum
Stock-Based Compensation, Assumptions Used to Value Stock Options Granted (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Assumptions Used in Determining Fair Value of Stock Options Granted [Abstract] | ||||
Volatility | 0.00% | 92.22% | 97.00% | 89.88% |
Risk-free interest rate | 0.00% | 1.49% | 0.38% | 2.33% |
Expected term | 0 years | 6 years 29 days | 6 years 25 days | 6 years 1 month 20 days |
Dividend rate | 0.00% | 0.00% | 0.00% | 0.00% |
Fair value of option on grant date (in dollars per share) | $ 0 | $ 3.50 | $ 1.10 | $ 5.30 |
Stock-Based Compensation, Sto_2
Stock-Based Compensation, Stock Option Activity (Details) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2020USD ($)$ / sharesshares | |
Unamortized Stock Compensation Expense [Abstract] | ||
Unamortized stock compensation expense | $ | $ 1,424,897 | $ 1,424,897 |
Stock Options [Member] | ||
Number of Shares [Roll Forward] | ||
Options outstanding, beginning balance (in shares) | shares | 1,421,797 | |
Granted (in shares) | shares | 0 | 319,907 |
Exercised (in shares) | shares | 0 | |
Forfeited (in shares) | shares | (84,227) | |
Expired (in shares) | shares | (17,724) | |
Options outstanding, ending balance (in shares) | shares | 1,639,753 | 1,639,753 |
Vested and expected to vest (in shares) | shares | 1,639,753 | 1,639,753 |
Exercisable (in shares) | shares | 1,066,601 | 1,066,601 |
Weighted Average Exercise Price [Roll Forward] | ||
Options outstanding, beginning balance (in dollars per share) | $ / shares | $ 15.95 | |
Granted (in dollars per share) | $ / shares | 1.43 | |
Exercised (in dollars per share) | $ / shares | 0 | |
Forfeited (in dollars per share) | $ / shares | 41.34 | |
Expired (in dollars per share) | $ / shares | 4.69 | |
Options outstanding, ending balance (in dollars per share) | $ / shares | $ 11.94 | 11.94 |
Vested and expected to vest (in dollars per share) | $ / shares | 11.94 | 11.94 |
Exercisable (in dollars per share) | $ / shares | $ 16.54 | $ 16.54 |
Weighted Average Remaining Contractual Life and Aggregate Intrinsic Value [Abstract] | ||
Options outstanding, weighted average remaining contractual life | 6 years 11 months 1 day | |
Vested and expected to vest, weighted average remaining contractual life | 6 years 11 months 1 day | |
Exercisable, weighted average remaining contractual life | 5 years 7 months 24 days | |
Options outstanding, aggregate intrinsic value | $ | $ 287,063 | $ 287,063 |
Vested and expected to vest, aggregate intrinsic value | $ | 287,063 | 287,063 |
Exercisable, aggregate intrinsic value | $ | $ 0 | $ 0 |
Unamortized Stock Compensation Expense [Abstract] | ||
Period for recognition | 3 years 1 month 24 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Income Taxes [Abstract] | ||
Current income tax expense | $ 0 | |
Income tax benefit | $ 0 | |
Federal statutory rate | 21.00% | |
Uncertain tax positions | $ 0 | |
Unrecognized tax benefits | 0 | $ 0 |
Accrued interest and penalties | $ 0 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Commitments and Contingencies [Abstract] | ||||
Rent expense | $ 35,700 | $ 38,365 | $ 140,678 | $ 58,665 |
Employment Agreements [Member] | ||||
Commitments and Contingencies [Abstract] | ||||
Term for payment of severance benefits | 24 months | |||
Employment Agreements [Member] | Minimum [Member] | ||||
Commitments and Contingencies [Abstract] | ||||
Term for payment of severance benefits | 12 months | |||
Employment Agreements [Member] | Maximum [Member] | ||||
Commitments and Contingencies [Abstract] | ||||
Term for payment of severance benefits | 24 months |
Retirement Plan (Details)
Retirement Plan (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Retirement Plan [Abstract] | ||||
401(k) employer contribution | $ 19,967 | $ 29,704 | $ 19,967 | $ 29,704 |