Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2016 | Aug. 12, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | HEAT BIOLOGICS, INC. | |
Entity Central Index Key | 1,476,963 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 19,491,018 | |
Trading Symbol | HTBX | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Current Assets | ||
Cash and cash equivalents | $ 7,115,392 | $ 4,939,955 |
Investments, held to maturity (net) | 6,689,643 | |
Prepaid expenses and other current assets | 440,016 | 869,158 |
Total Current Assets | 7,555,408 | 12,498,756 |
Property and Equipment, net | 423,681 | 445,733 |
Other Assets | ||
Restricted cash | 100,039 | 101,151 |
Deposits | 69,798 | 69,798 |
Related party receivable | 85,017 | 58,017 |
Deferred financing costs | 21,600 | |
Total Other Assets | 254,854 | 250,566 |
Total Assets | 8,233,943 | 13,195,055 |
Current Liabilities | ||
Accounts payable | 478,104 | 1,980,676 |
Accrued expenses and other payables | 1,080,176 | 1,846,907 |
Current portion of long term debt | 3,133,958 | 3,133,958 |
Total Current Liabilities | 4,692,238 | 6,961,541 |
Long Term Liabilities | ||
Long term debt, net of discount and current portion | 2,027,399 | 3,589,036 |
Other long term liabilities | 396,765 | 149,748 |
Total Liabilities | 7,116,402 | 10,700,325 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common stock, $0.0002 par value; 50,000,000 shares authorized, 17,524,641 and 8,424,641 shares issued and outstanding at June 30, 2016 (unaudited) and December 31, 2015, respectively | 3,186 | 1,366 |
Additional paid in capital | 54,981,269 | 48,566,451 |
Accumulated deficit | (51,915,528) | (44,430,703) |
Accumulated other comprehensive loss | (113,158) | (86,584) |
Total Stockholders' Equity - Heat Biologics, Inc. | 2,955,769 | 4,050,530 |
Non-Controlling Interest | (1,838,228) | (1,555,800) |
Total Stockholders' Equity | 1,117,541 | 2,494,730 |
Total Liabilities and Stockholders' Equity | $ 8,233,943 | $ 13,195,055 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock, par value per share | $ 0.0002 | $ 0.0002 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 17,524,641 | 8,424,641 |
Common stock, shares outstanding | 17,524,641 | 8,424,641 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Operating expenses: | ||||
Research and development | $ 454,907 | $ 587,240 | $ 955,080 | $ 1,090,791 |
Clinical and regulatory | 1,321,418 | 3,373,758 | 4,479,253 | 5,543,231 |
General and administrative | 1,083,298 | 893,242 | 2,114,456 | 2,202,398 |
Total operating expenses | 2,859,623 | 4,854,240 | 7,548,789 | 8,836,420 |
Loss from operations | (2,859,623) | (4,854,240) | (7,548,789) | (8,836,420) |
Interest income | 7,854 | 20,702 | 18,955 | 29,828 |
Other (expense) income, net | (57,166) | 3,865 | 22,535 | 25,482 |
Interest expense | (123,832) | (73,075) | (259,954) | (148,505) |
Total non-operating (expenses) income, net | (173,144) | (48,508) | (218,464) | (93,195) |
Net loss | (3,032,767) | (4,902,748) | (7,767,253) | (8,929,615) |
Net loss - non-controlling interest | (107,546) | (189,277) | (282,428) | (306,946) |
Net loss attributable to Heat Biologics, Inc. | $ (2,925,221) | $ (4,713,471) | $ (7,484,825) | $ (8,622,669) |
Net loss per share attributable to Heat Biologics, Inc.-basic and diluted | $ (0.17) | $ (0.56) | $ (0.56) | $ (1.13) |
Weighted-average number of common shares used in net loss per share attributable to common stockholders - basic and diluted | 17,524,641 | 8,401,159 | 13,324,641 | 7,612,393 |
Other comprehensive loss: | ||||
Net loss | $ (3,032,767) | $ (4,902,748) | $ (7,767,253) | $ (8,929,615) |
Unrealized gain/(loss) on foreign currency translation | 49,233 | (16,185) | (26,574) | (37,051) |
Total other comprehensive loss | (2,983,534) | (4,918,933) | (7,793,827) | (8,966,666) |
Comprehensive loss attributable to non-controlling interest | (107,546) | (189,277) | (282,428) | (306,946) |
Comprehensive loss | $ (2,875,988) | $ (4,729,656) | $ (7,511,399) | $ (8,659,720) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - 6 months ended Jun. 30, 2016 - USD ($) | Common Stock [Member] | APIC [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Non-Controlling Interest [Member] | Total |
Balance at Dec. 31, 2015 | $ 1,366 | $ 48,566,451 | $ (44,430,703) | $ (86,584) | $ (1,555,800) | $ 2,494,730 |
Public offering, 9,100,000 shares, net of underwriters' discounts | 1,820 | 6,285,430 | 6,287,250 | |||
Stock issuance costs | (212,368) | (212,368) | ||||
Stock-based compensation | 341,756 | 341,756 | ||||
Other comprehensive loss | (26,574) | (26,574) | ||||
Net loss | (7,484,825) | (282,428) | (7,767,253) | |||
Balance at Jun. 30, 2016 | $ 3,186 | $ 54,981,269 | $ (51,915,528) | $ (113,158) | $ (1,838,228) | $ 1,117,541 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity (Parenthetical) | 6 Months Ended |
Jun. 30, 2016shares | |
Statement of Stockholders' Equity [Abstract] | |
Public offering, shares | 9,100,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Cash Flows from Operating Activities | ||
Net loss | $ (7,767,253) | $ (8,929,615) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 65,553 | 53,937 |
Amortization of deferred financing costs and debt issuance costs | 51,489 | 50,074 |
Amortization of held to maturity investment premium | 32,733 | 59,882 |
Stock-based compensation | 341,756 | 786,847 |
Increase (decrease) in cash arising from changes in assets and liabilities: | ||
Prepaid expenses, restricted cash and other current assets | 434,725 | 23,202 |
Deposits | (50,000) | |
Related party receivable | (27,000) | (9,375) |
Accounts payable | (1,523,093) | (569,974) |
Accrued expenses and other payables | (748,775) | 362,523 |
Other long term liabilities | 247,017 | 12,228 |
Net Cash Used in Operating Activities | (8,892,848) | (8,210,271) |
Cash Flows from Investing Activities | ||
Proceeds from maturities of short-term investments | 6,656,910 | 12,967,509 |
Purchases of short term investments | (10,241,275) | |
Purchase of property and equipment | (43,501) | (103,369) |
Net Cash Provided by Investing Activities | 6,613,409 | 2,622,865 |
Cash Flows from Financing Activities | ||
Proceeds from public offering, net of underwriting discounts | 6,287,250 | 11,400,870 |
Stock issuance costs | (190,768) | (302,461) |
Proceeds from long term debt | 2,242,575 | |
Payments on long term debt | (1,613,125) | |
Net Cash Provided by Financing Activities | 4,483,357 | 13,340,984 |
Effect of exchange rate changes on cash and cash equivalents | (28,481) | (16,487) |
Net Increase in Cash and Cash Equivalents | 2,175,437 | 7,737,091 |
Cash and Cash Equivalents - Beginning of Period | 4,939,955 | 3,714,304 |
Cash and Cash Equivalents - End of Period | 7,115,392 | 11,451,395 |
Supplemental Disclosure for Cash Flow Information | ||
Interest paid | $ 208,465 | $ 98,430 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Basis of presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim financial reporting. However, certain information or footnote disclosures normally included in complete financial statements prepared in accordance with U.S. GAAP have been condensed, or omitted, pursuant to the rules and regulations of the Securities and Exchange Commission (the SEC). In the opinion of the Companys management, the unaudited consolidated financial statements in this Quarterly Report on Form 10-Q include all normal and recurring adjustments necessary for the fair statement of the results for the interim periods presented. The results for the three and six months ended June 30, 2016 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2016. The consolidated financial statements as of and for the three and six months ended June 30, 2016 and 2015 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of December 31, 2015 is derived from the audited consolidated financial statements as of that date. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes, together with Managements Discussion and Analysis of Financial Condition and Results of Operations, contained in the Companys Annual Report on Form 10-K for the year ended December 31, 2015 filed with the SEC on February 18, 2016 (the 2015 Annual Report). The accompanying consolidated financial statements as of and for the three and six months ended June 30, 2016 and 2015 include the accounts of Heat Biologics, Inc. and its subsidiaries, Heat Biologics I, Inc. (Heat I), Heat Biologics III, Inc. (Heat III), Heat Biologics IV, Inc. (Heat IV), Heat Biologics GmbH and Heat Biologics Australia Pty Ltd. The functional currency of the entities located outside the United States is the applicable local currency (the foreign entities). Assets and liabilities of the foreign entities are translated at period-end exchange rates. The statement of operations accounts are translated at the average exchange rate during the period. The effects of foreign currency translation adjustments are included in other comprehensive gain/(loss), which is a component of accumulated other comprehensive gain/(loss) in stockholders equity. All significant intercompany accounts and transactions have been eliminated in consolidation. At December 31, 2015 and June 30, 2016, the Company held a 92.5% controlling interest in Heat I and accounts for its less than 100% interest in the consolidated financial statements in accordance with U.S. GAAP. Accordingly, the Company presents non-controlling interests as a component of stockholders equity on its consolidated balance sheets and reports non-controlling interest net loss under the heading net loss non-controlling interest in the consolidated statements of operations and comprehensive loss. The accompanying consolidated financial statements have been prepared on a going concern basis. The Company has an accumulated deficit of approximately $51.9 million as of June 30, 2016 and a net loss of approximately $7.8 million for the six months ended June 30, 2016, and has not generated significant revenue or positive cash flows from operations. These factors raise substantial doubt about the Companys ability to continue as a going concern within one year after the audited financial statements are issued. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might result from the outcome of this uncertainty. To meet its capital needs, the Company is considering multiple alternatives, including, but not limited to, additional equity financings, debt financings, partnerships, collaborations and other funding transactions. There can be no assurance that the Company will be able to complete any such transactions on acceptable terms or otherwise. On April 1, 2016, the Company implemented a cost-savings plan and focused corporate strategy involving reductions in headcount as well as a deferral in a portion of annual base salaries for the Companys leadership team to decrease operating costs. These cost-saving measures are intended to significantly reduce the Companys cost structure and scale the organization appropriately for its current goals. The Company plans to direct its resources primarily to enable the completion of its Phase 2 clinical trial of HS-410 for the treatment of non-muscle invasive bladder cancer (NMIBC) and to advance the current eight patients enrolled in its Phase 1b trial evaluating HS-110 in combination with nivolumab, a Bristol-Myers Squibb PD-1 checkpoint inhibitor, for the treatment of non-small cell lung cancer (NSCLC). The Company has sufficient cash and cash equivalents to fund its clinical trials until the HS-410 Phase 2 data is released. If the Company is unable to obtain the necessary capital required to maintain operations, it will need to pursue a plan to license or sell its assets, seek to be acquired by another entity and/or cease operations. In March 2016, the FASB ASU 2016-09, Compensation-Stock Compensation Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued ASU 2016-02, Leases Leases In January 2016, the FASB issued (ASU) No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities In April 2015, the FASB issued ASU 2015-03, Interest Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2016 | |
Fair Value Of Financial Instruments | |
Fair Value of Financial Instruments | 2. Fair Value of Financial Instruments The carrying amount of certain of the Companys financial instruments, including cash and cash equivalents, restricted cash, accounts payable and accrued expenses and other payables approximate fair value due to their short maturities. The carrying value of debt approximates fair value because the interest rate under the obligation approximates market rates of interest available to the Company for similar instruments. As a basis for determining the fair value of certain of the Companys financial instruments, the Company utilizes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level I Observable inputs such as quoted prices in active markets for identical assets or liabilities. Level II Observable inputs, other than Level I prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level III Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. Assets and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company's assessment of the significance of a particular input to the entire fair value measurement requires management to make judgments and consider factors specific to the asset or liability. The majority of the Company's cash equivalents and investments are classified within Level II of the fair value hierarchy. |
Investments
Investments | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Investments | 3. Investments Investments in certain securities may be classified into three categories: · Held-to-maturity - · Trading securities - · Available-for-sale - The Company reassesses the appropriateness of the classification of its investments at the end of each reporting period. The Company held its debt securities until the securities reached their maturity dates and as of June 30, 2016 the Company no longer holds security debts. As of December 31, 2015 the Company held short term investments which consisted of short-term FDIC insured certificates of deposit, tri-party repurchase agreement (repo) collateralized by U.S. Treasuries and agencies and corporate notes and bonds rated A and above which were carried at amortized cost using the effective interest method. The following table summarizes information about short term investments at June 30, 2016 and December 31, 2015, respectively: Amortized Cost Gross Unrealized (Losses) Estimated Fair Value June 30, 2016 Certificates of deposit, tri-party repurchase agreement, corporate notes and bonds $ $ $ December 31, 2015 Certificates of deposit, tri-party repurchase agreement, corporate notes and bonds $ 6,689,643 $ (4,948 ) $ 6,684,695 |
Property and Equipment
Property and Equipment | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over the estimated useful lives, ranging generally from five to seven years. Expenditures for maintenance and repairs are charged to expense as incurred. Property and equipment consisted of the following: June 30, 2016 December 31, 2015 Furniture and fixtures $ 55,883 $ 55,883 Computers 36,467 40,545 Lab equipment 587,366 541,065 Total 679,716 637,493 Accumulated depreciation (256,035 ) (191,760 ) Property and equipment, net $ 423,681 $ 445,733 Depreciation expense was $65,553 and $53,937 for the six months ended June 30, 2016 and 2015, respectively. |
Accrued Expenses and other paya
Accrued Expenses and other payables | 6 Months Ended |
Jun. 30, 2016 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and other payables | 5. Accrued Expenses and other payables On April 1, 2016, the Board approved a cost-savings plan and focused corporate strategy involving reductions in headcount to decrease operating costs. The Company has recorded $92,500 in accrued expenses for severance payments and expects to make the remaining payments to employees impacted by this workforce reduction in September 2016. Accrued expenses and other payables consist of the following: June 30, 2016 December 31, 2015 Accrued clinical trial expenses $ 785,921 $ 1,192,936 Compensation and related benefits 216,226 561,082 Deferred rent 48,029 52,889 Patent fees 30,000 40,000 $ 1,080,176 $ 1,846,907 |
Debt Issuance Costs
Debt Issuance Costs | 6 Months Ended |
Jun. 30, 2016 | |
Debt Issuance Costs | |
Debt Issuance Costs | 6. Debt Issuance Costs During 2014, the Company recorded $323,021 to debt discount for the initial fair value of the warrant to purchase common stock and $27,500 to deferred financing costs related to third party fees paid in connection with the Square 1 Bank loan, which are amortized on a straight-line basis over the 42 month term of the loan which approximates the effective interest method. During 2015, deferred financing costs increased $7,425 to reflect the fees related to the third tranche of the Square 1 loan, which is further discussed in footnote 7. Total amortization expense for the debt issuance costs was $51,489 and $50,074 during the six months ended June 30, 2016 and 2015, respectively. |
Notes Payable
Notes Payable | 6 Months Ended |
Jun. 30, 2016 | |
Debt Disclosure [Abstract] | |
Notes Payable | 7. Notes Payable Square 1 Bank Loan In August 2014, the Company entered into a secured loan (the Loan) with Square 1 Bank, which loan is held by Pacific Western Bank as successor in interest by merger to Square 1 Bank (the Bank). The Loan provides the Company with a term loan in the aggregate principal amount not to exceed $7.5 million to be used to supplement working capital. The Loan was available to the Company in four tranches: $1.5 million was made available to the Company on August 22, 2014 (Tranche 1 Loan), $1.5 million was made available to the Company upon enrollment of the first patient in its Phase 2 clinical trial for HS-110 on December 30, 2014 (Tranche 2 Loan), $2.25 million was made available to the Company upon the initiation of the Phase 1b trial for lung cancer indication on June 30, 2015 (Tranche 3 Loan), and $2.25 million was made available to the Company upon the Banks receipt of evidence on December 30, 2015 of the full enrollment of our Phase 1/2 clinical trial for HS-410 (Tranche 4 Loan). At December 31, 2015, the Company had drawn down the entire $7.5 million available under the Loan. The Loan accrues interest monthly at an interest rate of 3.05% plus the prime rate, or 6.30% per annum, whichever is greater. The Tranche 1 Loan was payable as interest-only until June 30, 2015 and thereafter is payable in monthly installments of principal plus accrued interest until February 22, 2018. The Tranche 2 Loan was payable as interest-only prior to October 31, 2015 and thereafter is payable in monthly installments of principal plus accrued interest until February 22, 2018. The Tranche 3 Loan was payable as interest-only prior to October 31, 2015 and thereafter is payable in monthly installments of principal plus accrued interest until February 22, 2018. The Tranche 4 Loan is payable in monthly installments of principal plus accrued interest until February 22, 2018. The Company has made $1.6 million and $0 in principal payments for the six month periods ended June 30, 2016 and 2015, respectively. The Company has made $208,466 and $98,430 in interest payments on the outstanding loan for the six-month periods ended June 30, 2016 and 2015, respectively. The agreement with the Bank sets forth various affirmative and negative covenants. The failure of the Company to comply with one or more of the covenants constitutes a default under the Loan. The covenants were amended in February 2016 to include the following: (i) the Company on or before September 30, 2016, having enrolled at least 18 patients in the Companys DURGA (HS-110) clinical trial; (ii) the Company on or before December 31, 2016, having received favorable data readout from the Phase 2 randomized trial arms evaluating the Companys HS-410 product; and (iii) after December 31, 2016, the Bank and the Company setting additional milestone covenants based upon a Board-approved plan of the Company sufficient to fund the operations necessary to achieve such milestones. The Loan also includes covenants regarding financial reporting, limits on the Companys cash burn, incurrence of indebtedness, permitted investments, encumbrances, distributions, investments and mergers and acquisitions. The Loan is also secured by a security interest in all of the Companys personal property, excluding its intellectual property. The Company is in compliance with the covenants of the Loan as of June 30, 2016. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2016 | |
Stock-based Compensation [Abstract] | |
Stock-Based Compensation | 8. Stock-Based Compensation Restricted Stock During the three and six month periods ended June 30, 2016, the Company recognized $1,634 and $2,917 in share-based compensation expense related to issuance of shares of restricted stock to non-employees (i.e., consultants) in exchange for services. During the three and six month periods ended June 30, 2015, the Company recognized $23,700 and $90,000 in share-based compensation expense related to issuance of shares of restricted stock to non-employees (i.e., consultants) in exchange for services. Common Stock Warrants In connection with the March 23, 2016 public offering, the Company issued 9,100,000 shares of common stock and warrants to purchase 6,825,000 shares of common stock. Each share of common stock was sold together with a warrant to purchase 0.75 of a share of common stock. The warrants have an exercise price of $1.00 per share and expire five years from the issuance date. The warrants have been accounted for as equity instruments. The fair value of the common stock warrants as of the issuance date was approximately $2,522,754. In connection with our July 23, 2013 initial public offering, the Company issued warrants to the underwriters for 125,000 shares of common stock issuable at $12.50 per share upon exercise. The warrants expire five years from the issuance date. On March 10, 2011, the Company issued warrants to purchase shares of common stock to third parties in consideration for a private equity placement transaction. The warrants have an exercise price of $0.48 per share and expire 10 years from the issuance date. As of June 30, 2016, we have issued warrants to purchase 6,825,000 shares of common stock issuable at $1.00 per share; warrants to purchase 17,392 shares of common stock issuable at $0.48 per share and warrants to purchase 125,000 shares of common stock issuable at $12.50 per share. Subsequent to June 30, 2016, warrants for 1,966,377 shares of common stock issuable at $1.00 per share have been exercised. These warrants do not meet the criteria required to be classified as liability awards and therefore are treated as equity awards. Stock Options The following is a summary of the stock option activity for the six months ended June 30, 2016: Shares Weighted Average Exercise Price Outstanding, December 31, 2015 1,214,686 $ 4.93 Granted 433,839 $ 2.21 Forfeited (232,522 ) $ 4.01 Outstanding, June 30, 2016 1,416,003 $ 4.25 The weighted average grant-date fair value of stock options granted during the six months ended June 30, 2016 was $1.45. The fair value of each stock option was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for stock options granted during the six months ended June 30, 2016: Dividend yield 0.0 % Expected volatility 73.74 % Risk-free interest rate 1.89 % Expected lives (years) 6.0 The risk-free interest rate is based on U.S. Treasury interest rates at the time of the grant with a term which is consistent with the expected life of the stock options. The Company used an average historical stock price volatility based on an analysis of reported data for a peer group of comparable companies that have issued stock options with substantially similar terms, as the Company has limited trading history for its common stock. Expected term represents the period that the Companys stock option grants are expected to be outstanding. The Company elected to utilize the simplified method to estimate the expected term. Under this approach, the weighted-average expected life is presumed to be the average of the vesting term and the contractual term of the option. Expected dividend yield was considered to be 0% in the option pricing formula since the Company had not paid any dividends and had no plans to do so in the future. The Company recognized $128,405 and $324,396 in share-based option compensation expense for the three months ended June 30, 2016 and 2015, respectively and $338,839 and $696,847 in share-based option compensation expense for the six months ended June 30, 2016 and 2015, respectively for the Companys stock option awards. The following table summarizes information about stock options outstanding at June 30, 2016: Options Outstanding Options Vested and Exercisable Balance as of 6/30/2016 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 6/30/2016 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,416,003 7.4 $4.25 939,747 6.4 $4.67 As of June 30, 2016, the unrecognized stock-based compensation expense related to unvested stock options was $1,627,076, which is expected to be recognized over a weighted average period of approximately 17.9 months. Total stock-based compensation expense, including restricted stock and stock options was $130,039 and $348,026 for the three months ended June 30, 2016 and 2015, respectively and $341,756 and $786,847 for the six months ended June 30, 2016 and 2015, respectively. |
Financing
Financing | 6 Months Ended |
Jun. 30, 2016 | |
Financing | |
Financing | 9. Financing Public Offering On March 23, 2016, the Company closed the issuance and sale of 9,100,000 shares of the Companys common stock and warrants to purchase up to an aggregate of 6,825,000 shares of its common stock, at a combined public offering price of $0.75 per share and related warrant (the Offering). The warrants are exercisable immediately upon issuance, expire five years after the date of issuance and have an exercise price of $1.00 per share. The net proceeds to the Company from the Offering were approximately $6.1 million after deducting underwriting discounts, commissions, and other third party offering expenses. In connection with the Offering, the Company entered into an Underwriting Agreement (the Underwriting Agreement) with Roth Capital Partners, LLC and Aegis Capital Corp., as representatives (the Representatives) of the several underwriters (collectively, the Underwriters). The Underwriting Agreement contains customary representations, warranties, and agreements by the Company, customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended (the Securities Act), other obligations of the parties and termination provisions. Subsequent to June 30, 2016 we have raised approximately $2.0 million from the exercise of 1,966,377 warrants. |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | 10. Net Loss Per Share Basic and diluted net loss per common share is calculated by dividing net loss attributable to Heat Biologics, Inc. by the weighted-average number of common shares outstanding during the period, without consideration for common stock equivalents. The Companys potentially dilutive shares, which include outstanding stock options and warrants, are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following table reconciles net loss to net loss attributable to Heat Biologics, Inc.: Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net loss $ (3,032,767 ) $ (4,902,748 ) $ (7,767,253 ) $ (8,929,615 ) Net loss: Non-controlling interest (107,546 ) (189,277 ) (282,428 ) (306,946 ) Net loss attributable to Heat Biologics, Inc. $ (2,925,221 ) $ (4,713,471 ) $ (7,484,825 ) $ (8,622,669 ) Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc.basic and diluted 17,524,641 8,401,159 13,324,641 7,612,393 Net loss per share attributable to Heat Biologics, Inc.basic and diluted $ (0.17 ) $ (0.56 ) $ (0.56 ) $ (1.13 ) The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: For the Six Months Ended June 30, 2016 2015 Outstanding stock options 1,416,003 1,044,020 Common stock warrants 6,842,392 17,392 Underwriters warrants 125,000 125,000 |
Income Tax
Income Tax | 6 Months Ended |
Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 11. Income Tax Income taxes are accounted for using the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of assets and liabilities and their respective tax bases, operating loss carryforwards, and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. In accordance with FASB ASC 740, Accounting for Income Taxes |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 12. Subsequent Events Subsequent to June 30, 2016 we have raised approximately $2.0 million through exercise of 1,966,377 warrants from our March 23, 2016 offering. |
Investments (Tables)
Investments (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Held-To-Maturity Investments Estimated Fair Value of Investments | Amortized Cost Gross Unrealized (Losses) Estimated Fair Value June 30, 2016 Certificates of deposit, tri-party repurchase agreement, corporate notes and bonds $ $ $ December 31, 2015 Certificates of deposit, tri-party repurchase agreement, corporate notes and bonds $ 6,689,643 $ (4,948 ) $ 6,684,695 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | June 30, 2016 December 31, 2015 Furniture and fixtures $ 55,883 $ 55,883 Computers 36,467 40,545 Lab equipment 587,366 541,065 Total 679,716 637,493 Accumulated depreciation (256,035 ) (191,760 ) Property and equipment, net $ 423,681 $ 445,733 |
Accrued Expenses and other pa22
Accrued Expenses and other payables (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses and other payables | June 30, 2016 December 31, 2015 Accrued clinical trial expenses $ 785,921 $ 1,192,936 Compensation and related benefits 216,226 561,082 Deferred rent 48,029 52,889 Patent fees 30,000 40,000 $ 1,080,176 $ 1,846,907 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Stock-based Compensation Tables | |
Schedule of Stock Option Activity | Shares Weighted Average Exercise Price Outstanding, December 31, 2015 1,214,686 $ 4.93 Granted 433,839 $ 2.21 Forfeited (232,522 ) $ 4.01 Outstanding, June 30, 2016 1,416,003 $ 4.25 |
Schedule of Stock Option Valuation Assumptions | Dividend yield 0.0 % Expected volatility 73.74 % Risk-free interest rate 1.89 % Expected lives (years) 6.0 |
Schedule of Options Outstanding, Vested and Exercisable | Options Outstanding Options Vested and Exercisable Balance as of 6/30/2016 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 6/30/2016 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 1,416,003 7.4 $4.25 939,747 6.4 $4.67 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2016 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Net loss $ (3,032,767 ) $ (4,902,748 ) $ (7,767,253 ) $ (8,929,615 ) Net loss: Non-controlling interest (107,546 ) (189,277 ) (282,428 ) (306,946 ) Net loss attributable to Heat Biologics, Inc. $ (2,925,221 ) $ (4,713,471 ) $ (7,484,825 ) $ (8,622,669 ) Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc.basic and diluted 17,524,641 8,401,159 13,324,641 7,612,393 Net loss per share attributable to Heat Biologics, Inc.basic and diluted $ (0.17 ) $ (0.56 ) $ (0.56 ) $ (1.13 ) |
Schedule of Potentially Dilutive Securities | For the Six Months Ended June 30, 2016 2015 Outstanding stock options 1,416,003 1,044,020 Common stock warrants 6,842,392 17,392 Underwriters warrants 125,000 125,000 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Noncontrolling Interest [Line Items] | |||||
Accumulated deficit | $ (51,915,528) | $ (51,915,528) | $ (44,430,703) | ||
Net loss | (2,925,221) | $ (4,713,471) | (7,484,825) | $ (8,622,669) | |
Reclassification amount | $ 17,364 | $ 17,364 | $ 22,707 | ||
Heat Biologics I, Inc. [Member] | |||||
Noncontrolling Interest [Line Items] | |||||
Ownership interest in subsidiary | 92.50% | 92.50% | 92.50% | ||
Accumulated deficit | $ 51,900,000 | $ 51,900,000 | |||
Net loss | $ 7,800,000 |
Investments (Schedule of Held-T
Investments (Schedule of Held-To-Maturity Investments) (Details) - Certificates of deposit, tri-party repurchase agreement, corporate notes and bonds [Member] - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Schedule of Trading Securities and Other Trading Assets [Line Items] | ||
Amortized Cost | $ 6,689,643 | |
Gross Unrealized (Losses) | (4,948) | |
Estimated Fair Value | $ 6,684,695 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 679,716 | $ 637,493 | |
Accumulated depreciation | (256,035) | (191,760) | |
Property and equipment, net | 423,681 | 445,733 | |
Depreciation expense | $ 65,553 | $ 53,937 | |
Minimum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 5 years | ||
Maximum [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Estimated useful lives | 7 years | ||
Furniture and fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 55,883 | 55,883 | |
Computers [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | 36,467 | 40,545 | |
Lab equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 587,366 | $ 541,065 |
Accrued Expenses and other pa28
Accrued Expenses and other payables (Schedule of Accrued Expenses) (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Accrued Liabilities, Current [Abstract] | ||
Accrued clinical trial expenses | $ 785,921 | $ 1,192,936 |
Compensation and related benefits | 216,226 | 561,082 |
Deferred rent | 48,029 | 52,889 |
Patent fees | 30,000 | 40,000 |
Accrued expenses | 1,080,176 | $ 1,846,907 |
Accrued expenses for severance payments | $ 92,500 |
Debt Issuance Costs (Narrative)
Debt Issuance Costs (Narrative) (Details) - USD ($) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Debt Issuance Costs Narrative Details | ||||
Debt discount | $ 323,021 | |||
Deferred financing costs | $ 27,500 | $ 7,425 | ||
Amortization expense for debt issuance costs | $ 51,489 | $ 50,074 |
Notes Payable (Square 1 Bank Lo
Notes Payable (Square 1 Bank Loan) (Details) - Square 1 Bank [Member] - USD ($) | 1 Months Ended | 6 Months Ended | ||
Aug. 31, 2014 | Jun. 30, 2016 | Jun. 30, 2015 | Dec. 31, 2015 | |
Debt Instrument [Line Items] | ||||
Debt instrument, amount outstanding | $ 7,500,000 | |||
Repayment of principal made during period | $ 1,600,000 | $ 0 | ||
Interest paid during period | $ 208,466 | $ 98,430 | ||
Tranche 1 Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 1,500,000 | |||
Debt instrument, maturity date | Feb. 22, 2018 | |||
Tranche 2 Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 2,250,000 | |||
Debt instrument, maturity date | Feb. 22, 2018 | |||
Tranche 3 Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 2,250,000 | |||
Debt instrument, maturity date | Feb. 22, 2018 | |||
Tranche 4 Loan [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 1,500,000 | |||
Minimum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 3.05% | |||
Maximum [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, face amount | $ 7,500,000 | |||
Debt instrument, interest rate | 6.30% |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) | Mar. 10, 2011 | Aug. 15, 2016 | Jun. 30, 2016 | Mar. 23, 2016 | Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 |
Class of Stock [Line Items] | ||||||||
Shares issued for initial public offering | 9,100,000 | |||||||
Price per share | $ 0.48 | $ 1 | $ 1 | |||||
Offering price | $ 0.75 | |||||||
Warrants, expiry period | 5 years | |||||||
Common stock issued for conversion of warrants | 6,825,000 | |||||||
Stock based compensation | $ 130,039 | $ 348,026 | $ 341,756 | $ 786,847 | ||||
Expiration period | 10 years | |||||||
Weighted average grant-date fair value of stock options granted | $ 1.45 | |||||||
Unrecognized stock-based compensation expense | $ 1,627,076 | 1,627,076 | $ 1,627,076 | |||||
Unrecognized stock-based compensation expense, recognition period | 17 years 10 months 24 days | |||||||
Fair value of warrant equity | $ 2,522,754 | |||||||
Subsequent Event [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Price per share | $ 1 | |||||||
Warrants exercised | 1,966,377 | |||||||
Common Stock Warrant [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Price per share | $ 12.50 | |||||||
Warrants to purchase common stock issuable | 125,000 | |||||||
Restricted Stock [Member] | Non Employees [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock based compensation | 1,634 | 23,700 | $ 2,917 | 90,000 | ||||
Stock options [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Stock based compensation | $ 128,405 | $ 324,396 | $ 338,839 | $ 696,847 | ||||
Warrants to purchase shares of common stock issuable at $1.00 per share [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Price per share | $ 1 | |||||||
Warrants to purchase shares of common stock | 6,825,000 | 6,825,000 | 6,825,000 | |||||
Warrants to purchase shares of common stock issuable at $0.48 per share [Member] | ||||||||
Class of Stock [Line Items] | ||||||||
Price per share | $ 12.50 | |||||||
Warrants to purchase shares of common stock | 17,392 | 17,392 | 17,392 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule of Stock Option Activity) (Details) | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Shares | |
Outstanding, beginning balance | shares | 1,214,686 |
Granted | shares | 433,839 |
Forfeited | shares | (232,522) |
Outstanding, ending balance | shares | 1,416,003 |
Weighted Average Exercise Price | |
Outstanding, beginning balance | $ / shares | $ 4.93 |
Granted | $ / shares | 2.21 |
Forfeited | $ / shares | 4.01 |
Outstanding, ending balance | $ / shares | $ 4.25 |
Stock-Based Compensation (Sch33
Stock-Based Compensation (Schedule of Stock Option Valuation Assumptions) (Details) | 6 Months Ended |
Jun. 30, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Dividend yield | 0.00% |
Expected volatility | 73.74% |
Risk-free interest rate | 1.89% |
Expected lives (years) | 6 years |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Outstandng Stock Options) (Details) | 6 Months Ended |
Jun. 30, 2016$ / sharesshares | |
Options Outstanding | |
Balance | shares | 1,416,003 |
Weighted average remaining contractual life | 7 years 4 months 24 days |
Weighted Average Exercise Price Options Outstanding | $ / shares | $ 4.25 |
Options Vested or Expected to Vest | |
Balance | shares | 939,747 |
Weighted average remaining contractual life | 6 years 4 months 24 days |
Weighted average exercise price Options Vested or Expected to Vest | $ / shares | $ 4.67 |
Financing (Details)
Financing (Details) - USD ($) | 1 Months Ended | 6 Months Ended | |
Aug. 15, 2016 | Mar. 23, 2016 | Jun. 30, 2016 | |
Common stock issued | 9,100,000 | ||
Offering price | $ 0.75 | ||
Warrants, expiry period | 5 years | ||
Net proceeds from offering, , after deducting underwriting discounts, commissions, and other third party offering expenses | $ 6,100,000 | ||
Proceeds from exercise of warrants | $ 2,000,000 | ||
Subsequent Event [Member] | |||
Warrants exercised | 1,966,377 | ||
Proceeds from exercise of warrants | $ 2,000,000 | ||
Over-Allotment Option [Member] | |||
Closed the issuance and sale of company's common stock | 9,100,000 | ||
Common stock issued | 6,825,000 | ||
Offering price | $ 0.75 | ||
Warrants, expiry period | 5 years | ||
Warrants, exercise price | $ 1 |
Net Loss Per Share (Schedule of
Net Loss Per Share (Schedule of Reconciliation of Net Loss to Net Loss Attributable to Heat Biologics, Inc.) (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2016 | Jun. 30, 2015 | Jun. 30, 2016 | Jun. 30, 2015 | |
Earnings Per Share [Abstract] | ||||
Net loss | $ (3,032,767) | $ (4,902,748) | $ (7,767,253) | $ (8,929,615) |
Net loss: Non-controlling interest | (107,546) | (189,277) | (282,428) | (306,946) |
Net loss attributable to Heat Biologics, Inc. | $ (2,925,221) | $ (4,713,471) | $ (7,484,825) | $ (8,622,669) |
Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc. - basic and diluted | 17,524,641 | 8,401,159 | 13,324,641 | 7,612,393 |
Net loss per share attributable to Heat Biologics, Inc. - basic and diluted | $ (0.17) | $ (0.56) | $ (0.56) | $ (1.13) |
Net Loss Per Share (Schedule 37
Net Loss Per Share (Schedule of Antidilutive Securities) (Details) - shares | 6 Months Ended | |
Jun. 30, 2016 | Jun. 30, 2015 | |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 1,416,003 | 1,044,020 |
Common Stock Warrant [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 6,842,392 | 17,392 |
Underwriters warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 125,000 | 125,000 |
Income Tax (Narrative) (Details
Income Tax (Narrative) (Details) - USD ($) | Jun. 30, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Unrecognized income tax benefits | $ 0 | $ 0 |
Income tax expense accrued | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 6 Months Ended |
Aug. 15, 2016 | Jun. 30, 2016 | |
Subsequent Event [Line Items] | ||
Proceeds from exercise of warrants | $ 2,000,000 | |
Subsequent Event [Member] | ||
Subsequent Event [Line Items] | ||
Warrants exercised | 1,966,377 | |
Proceeds from exercise of warrants | $ 2,000,000 |