Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 05, 2017 | |
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 | Mar. 31, 2017 | |
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 | 35,619,846 | |
Trading Symbol | HTBX | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets | ||
Cash and cash equivalents | $ 11,129,932 | $ 7,842,667 |
Accounts receivable | 2,008 | 82,305 |
Prepaid expenses and other current assets | 279,892 | 338,049 |
Total Current Assets | 11,411,832 | 8,263,021 |
Property and Equipment, net | 332,034 | 359,592 |
Other Assets | ||
Restricted cash | 101,176 | 101,171 |
Deposits | 69,798 | 69,798 |
Related party receivable | 103,017 | 103,017 |
Total Other Assets | 273,991 | 273,986 |
Total Assets | 12,017,857 | 8,896,599 |
Current Liabilities | ||
Accounts payable | 734,306 | 290,058 |
Accrued expenses and other liabilities | 754,219 | 1,305,173 |
Total Current Liabilities | 1,488,525 | 1,595,231 |
Long Term Liabilities | ||
Other long term liabilities | 421,514 | 461,434 |
Total Liabilities | 1,910,039 | 2,056,665 |
Commitments and Contingencies | ||
Stockholders' Equity | ||
Common stock, $.0002 par value; 50,000,000 shares authorized, 34,288,790 and 26,204,390 shares issued and outstanding at March 31, 2017 (unaudited) and December 31, 2016, respectively | 6,539 | 4,926 |
Additional paid-in capital | 72,441,915 | 65,868,541 |
Accumulated deficit | (60,194,592) | (57,004,655) |
Accumulated other comprehensive loss | (138,606) | (72,231) |
Total Stockholders' Equity - Heat Biologics, Inc. | 12,115,256 | 8,796,581 |
Non-Controlling Interest | (2,007,438) | (1,956,647) |
Total Stockholders' Equity | 10,107,818 | 6,839,934 |
Total Liabilities and Stockholders' Equity | $ 12,017,857 | $ 8,896,599 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
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 | 34,288,790 | 26,204,390 |
Common stock, shares outstanding | 34,288,790 | 26,204,390 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue: | ||
Licensing Revenue | $ 24,240 | |
Operating expenses: | ||
Research and development | 1,812,901 | 3,658,008 |
General and administrative | 1,527,015 | 1,031,158 |
Total operating expenses | 3,339,916 | 4,689,166 |
Loss from operations | (3,315,676) | (4,689,166) |
Non-operating income (expenses) | ||
Interest income | 5,221 | 11,101 |
Other income, net | 69,727 | 79,701 |
Interest expense | (136,122) | |
Total non-operating income (expenses), net | 74,948 | (45,320) |
Net loss | (3,240,728) | (4,734,486) |
Net loss - non-controlling interest | (50,791) | (174,883) |
Net loss attributable to Heat Biologics, Inc. | $ (3,189,937) | $ (4,559,603) |
Net loss per share attributable to Heat Biologics, Inc.-basic and diluted | $ (0.12) | $ (0.50) |
Weighted-average number of common shares used in net loss per share attributable to common stockholders-basic and diluted | 26,957,620 | 9,124,641 |
Other comprehensive loss: | ||
Net loss | $ (3,240,728) | $ (4,734,486) |
Unrealized loss on foreign currency translation | (66,375) | (75,807) |
Total other comprehensive loss | (3,307,103) | (4,810,293) |
Comprehensive loss attributable to non-controlling interest | (50,791) | (174,883) |
Comprehensive loss | $ (3,256,312) | $ (4,635,410) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - 3 months ended Mar. 31, 2017 - USD ($) | Common Stock [Member] | APIC [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Non-Controlling Interest [Member] | Total |
Balance at Dec. 31, 2016 | $ 4,926 | $ 65,868,541 | $ (57,004,655) | $ (72,231) | $ (1,956,647) | $ 6,839,934 |
Public offering, 5,750,000 shares, net of underwriters discounts | 1,150 | 4,181,850 | 4,183,000 | |||
Issuance of common stock, 2,196,727 shares | 439 | 2,357,040 | 2,357,479 | |||
Stock issuance costs | (214,237) | (214,237) | ||||
Stock-based compensation | 24 | 248,721 | 248,745 | |||
Other comprehensive loss | (66,375) | (66,375) | ||||
Net loss | (3,189,937) | (50,791) | (3,240,729) | |||
Balance at Mar. 31, 2017 | $ 6,539 | $ 72,441,915 | $ (60,194,592) | $ (138,606) | $ (2,007,438) | $ 10,107,818 |
Consolidated Statements of Sto6
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares | Mar. 28, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Stockholders' Equity [Abstract] | |||
Public offering, shares | 5,000,000 | 5,750,000 | |
Issuance of common stock, shares | 2,196,727 | 4,791,377 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities | ||
Net loss | $ (3,240,728) | $ (4,734,486) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 33,113 | 32,361 |
Amortization of deferred financing costs and debt issuance costs | 25,740 | |
Amortization of held to maturity investment premium | 28,009 | |
Stock-based compensation | 248,745 | 211,717 |
Increase (decrease) in cash arising from changes in assets and liabilities: | ||
Accounts receivable | 80,555 | |
Prepaid expenses, restricted cash and other current assets | 61,606 | 231,553 |
Accounts payable | 442,007 | (494,277) |
Accrued expenses and other liabilities | (551,369) | (352,563) |
Other long term liabilities | (39,920) | 109,420 |
Net Cash Used in Operating Activities | (2,965,991) | (4,942,526) |
Cash Flows from Investing Activities | ||
Proceeds from maturities of short-term investments | 4,801,837 | |
Purchase of property and equipment | (5,555) | (30,995) |
Net Cash (Used in) Provided by Investing Activities | (5,555) | 4,770,842 |
Cash Flows from Financing Activities | ||
Proceeds from public offering, net of underwriting discounts | 4,183,000 | 6,287,250 |
Proceeds from issuance of common stock, net of commission | 2,357,479 | |
Stock issuance costs | (214,237) | (190,768) |
Payments on long term debt | (806,562) | |
Net Cash Provided by Financing Activities | 6,326,242 | 5,289,920 |
Effect of exchange rate changes on cash and cash equivalents | (67,431) | (82,501) |
Net Increase in Cash and Cash Equivalents | 3,287,265 | 5,035,735 |
Cash and Cash Equivalents - Beginning of Period | 7,842,667 | 4,939,955 |
Cash and Cash Equivalents - End of Period | 11,129,932 | 9,975,690 |
Supplemental Disclosure for Cash Flow Information | ||
Interest paid | $ 110,377 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | 1. Basis of Presentation and 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 months ended March 31, 2017 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2017. The consolidated financial statements as of and for the three months ended March 31, 2017 and 2016 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of December 31, 2016 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, 2016 filed with the SEC on March 31, 2017 (the 2016 Annual Report). The accompanying consolidated financial statements as of and for the three months ended March 31, 2017 and 2016 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, Heat Biologics Australia Pty Ltd., and Zolovax Inc. 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. 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 loss, which is a component of accumulated other comprehensive loss in stockholders equity. All significant intercompany accounts and transactions have been eliminated in consolidation. At December 31, 2016 and March 31, 2017, Heat 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 $60.2 million as of March 31, 2017 and a net loss of approximately $3.2 million for the quarter ended March 31, 2017, 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 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 (including through the at-the-market Issuance Sales Agreement (the FBR Sales Agreement) that it entered into with FBR Capital Markets & Co. (FBR) in August 2016, debt financings, partnerships, collaborations and other funding transactions. There can be no assurance that the Company will be able to meet the requirements for use of the FBR Sales Agreement or to complete any such transactions on acceptable terms or otherwise. In March 2017, the Company entered into a stock purchase agreement with Pelican Therapeutics, Inc. (Pelican) a related party, to acquire an 80% controlling interest in Pelican. On April 28, 2017 the acquisition was completed. Pelican has been awarded a $15.2 million grant to fund preclinical and some clinical activities from the Cancer Prevention and Research Institute of Texas (CPRIT). The CPRIT grant is subject to customary CPRIT funding conditions. The Company believes the acquisition aligns its strategic focus and strengthens its position in the T cell activation arena. 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. Significant Accounting Policies The significant accounting policies used in preparation of these interim financial statements are disclosed in the Company's Form 10-K, and have not changed significantly since such filing. Recently Issued Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-01, Business Combinations (Topic 805) In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation Topic 718 Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). the tax effects of stock compensation will be recognized as income tax expense or benefit to the Companys income statement and the tax effects of exercised or vested awards will be treated as discrete items in the reporting period in which they occur. Along with other income tax cash flows, excess tax benefits will be classified as operating activities, and cash paid by the Company when directly withholding shares for tax withholding purposes will be classified as financing activities. The Company has elected to continue to account for forfeitures when they occur. The adoption of ASU 2016-09 did not have a material impact to the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
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, related party receivable, accounts payable and accrued expenses and other payables approximate fair value due to their short maturities. 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. |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 3. 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: March 31, 2017 December 31, Furniture and fixtures $ 55,883 $ 55,883 Computers 36,217 38,903 Lab equipment 594,721 587,366 Total 686,821 682,152 Accumulated depreciation (354,787 ) (322,560 ) Property and equipment, net $ 332,034 $ 359,592 Depreciation expense was $33,113 and $32,361 for the three months ended March 31, 2017 and 2016, respectively. |
Accrued Expenses and other paya
Accrued Expenses and other payables | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Accrued Expenses and other payables | 4. Accrued Expenses and other payables Accrued expenses and other payables consist of the following: March 31, December 31, Accrued clinical trial expenses $ 633,419 $ 580,218 Compensation and related benefits 36,926 642,532 Deferred rent 38,874 42,423 Patent fees 45,000 40,000 $ 754,219 $ 1,305,173 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based Compensation [Abstract] | |
Stock-Based Compensation | 5. Stock-Based Compensation Common Stock Warrants In connection with the March 23, 2016 public offering the Company issued warrants to purchase 6,825,000 shares of common stock with an exercise price of $1.00 per share and expire five years from the issuance date. 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 and 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 ten years from the issuance date. During the three months ended March 31, 2017 and 2016 no warrants were exercised. As of March 31, 2017 the Company has outstanding warrants to purchase 2,961,571 shares of common stock issuable at $1.00 per share; warrants to purchase 125,000 shares of common stock issuable at $12.50 per share; and warrants to purchase 17,392 shares of common stock issuable at $0.48 per share. 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 three months ended March 31, 2017: Shares Weighted Average Exercise Price Outstanding, December 31, 2016 1,136,753 $ 3.93 Granted 1,032,000 $ 0.87 Forfeited (14,688 ) $ 5.53 Outstanding, March 31, 2017 2,154,065 $ 2.45 The weighted average grant-date fair value of stock options granted during the three months ended March 31, 2017 was $0.60. 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 three months ended March 31, 2017: Dividend yield 0.0 % Expected volatility 76.35 % Risk-free interest rate 1.93 % Expected lives (years) 6.25 The risk-free interest rate is based on U.S. Treasury interest rates at the time of the grant whose term 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 did not have any 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 forfeiture rate was considered to be none as the options vest on a monthly basis. The Company recognized $121,725 and $210,434 in stock-based compensation expense for the three months ended March 31, 2017 and 2016, respectively for the Companys stock option awards. The following table summarizes information about stock options outstanding at March 31, 2017: Options Outstanding Options Vested and Exercisable Balance as of 3/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 3/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,154,065 8.6 $2.45 803,403 7.1 $4.42 As of March 31, 2017, the unrecognized stock-based compensation expense related to unvested stock options was $1,646,338, which is expected to be recognized over a weighted average period of approximately 18.4 months. Restricted Stock The Company recognized $116,520 and $0 in stock-based compensation expense for employees related to restricted stock awards during the three months ended March 31, 2017 and 2016, respectively. The Company recognized $10,500 and $1,283 in share-based compen sation expense related to issuance of shares of restricted stock to non-employees (i.e., consultants) in exchange for services during the three months ended March 31, 2017 and 2016, respectively. As of March 31, 2017 there were 503,500 restricted stock awards granted to employees, of which 377,625 were unvested. Total stock-based compensation expense, including restricted stock and stock options was $248,745 and $211,717 for the three months ended March 31, 2017 and 2016, respectively. |
Financing
Financing | 3 Months Ended |
Mar. 31, 2017 | |
Financing | |
Financing | 6. Financing The Company may sell shares of its common stock through FBR by any method permitted that is deemed an at the market offering as defined in Rule 415 under the Securities Act of 1933, as amended (the Securities Act), including sales made directly on or through the NASDAQ Capital Market, the existing trading market for the Companys common stock, sales made to or through a market maker other than on an exchange or otherwise, in negotiated transactions at market prices, and/or any other method permitted by law. Sales of shares of common stock are made pursuant to the Companys effective shelf registration statement on Form S-3 (File No. 333-199274) filed with the U.S. Securities and Exchange Commission (SEC), the base prospectus, dated October 23, 2014, filed as part of such registration statement and the prospectus supplement, dated August 15, 2016. FBR is entitled to compensation at a fixed commission rate up to 3.0% of the gross proceeds per share sold through it as sales agent under the sales agreement. Beginning in August 2016 and through December 31, 2016, the Company sold 4,791,377 shares of common stock under the FBR Sales Agreement resulting in net proceeds of approximately $6.8 million. As of March 31, 2017, the Company has sold an additional 2,196,727 shares of common stock under the Sales Agreement resulting in net proceeds of approximately $2.2 million after FBRs commission and other expenses. Public Offering On March 28, 2017, the Company sold pursuant to the terms of an Underwriting Agreement (the Underwriting Agreement) that it entered into on March 23, 2017 with Aegis Capital Corp. (Aegis), as representative of the several underwriters named therein (the Underwriters), 5,000,000 shares of the Companys common stock, and 750,000 additional shares of the common stock to cover over-allotments at an offering price of $0.80 per share (the Offering). The net proceeds to the Company from the Offering were approximately $4.1 million, after deducting underwriting discounts, commissions, and other third party offering expenses. 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. |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 7. Net Loss Per Share Basic and diluted net loss per common share is calculated by dividing net loss applicable 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 March 31, 2017 2016 Net loss $ (3,240,728 ) $ (4,734,486 ) Net loss: Non-controlling interest (50,791 ) (174,883 ) Net loss attributable to Heat Biologics, Inc. $ (3,189,937 ) $ (4,559,603 ) Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc.basic and diluted 26,957,620 9,124,641 Net loss per share attributable to Heat Biologics, Inc.basic and diluted $ (0.12 ) $ (0.50 ) The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: For the Three Months Ended March 31, 2017 2016 Outstanding stock options 2,154,065 1,574,484 Outstanding restricted stock units 125,875 Outstanding common stock warrants 3,103,963 6,967,382 |
Income Tax
Income Tax | 3 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 8. 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 , the Company reflects in the accompanying unaudited condensed consolidated financial statements the benefit of positions taken in a previously filed tax return or expected to be taken in a future tax return only when it is considered more-likely-than-not that the position taken will be sustained by a taxing authority. As of March 31, 2017 and December 31, 2016, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Companys effective income tax rate associated with these items. The Companys policy for recording interest and penalties relating to uncertain income tax positions is to record them as a component of income tax expense in the accompanying statements of operations and comprehensive loss. As of March 31, 2017 and December 31, 2016, the Company had no such accruals. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events Acquisitions On March 7, 2017, the Company entered into a Stock Purchase Agreement (the Purchase Agreement) with Pelican Therapeutics, Inc., a related party, and certain stockholders in Pelican (the Majority Pelican Stockholders) to purchase outstanding capital stock of Pelican (the Acquisition). Pelican is a biotechnology company focused on the development and commercialization of monoclonal antibody and fusion protein-based therapies that are designed to activate the immune system. Under the Purchase Agreement, it was a condition to closing that holders of at least 80% of the outstanding capital stock of Pelican on a fully diluted basis participate in the Acquisition. On April 28, 2017 the acquisition was completed in which Heat acquired 80% of Pelican common stock. Settlement On April 11, 2017, the Company entered into a settlement agreement and mutual release with a former independent consultant. In agreeing to the settlement, the Company agreed to pay $290,000 to resolve the matter in which the Company paid in full as of May 1, 2017. |
Basis of Presentation and Sig17
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of presentation and Principles of Consolidation | 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 months ended March 31, 2017 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2017. The consolidated financial statements as of and for the three months ended March 31, 2017 and 2016 included in this Quarterly Report on Form 10-Q are unaudited. The balance sheet as of December 31, 2016 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, 2016 filed with the SEC on March 31, 2017 (the 2016 Annual Report). The accompanying consolidated financial statements as of and for the three months ended March 31, 2017 and 2016 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, Heat Biologics Australia Pty Ltd., and Zolovax Inc. 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. 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 loss, which is a component of accumulated other comprehensive loss in stockholders equity. All significant intercompany accounts and transactions have been eliminated in consolidation. At December 31, 2016 and March 31, 2017, Heat 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 $60.2 million as of March 31, 2017 and a net loss of approximately $3.2 million for the quarter ended March 31, 2017, 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 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 (including through the at-the-market Issuance Sales Agreement (the FBR Sales Agreement) that it entered into with FBR Capital Markets & Co. (FBR) in August 2016, revised February 2017, debt financings, partnerships, collaborations and other funding transactions. There can be no assurance that the Company will be able to meet the requirements for use of the FBR Sales Agreement or to complete any such transactions on acceptable terms or otherwise. In March 2017, the Company entered into a stock purchase agreement with Pelican Therapeutics, Inc. (Pelican) to acquire an 80% controlling interest in Pelican. Pelican has been awarded a $15.2 million grant to fund preclinical and some clinical activities from the Cancer Prevention and Research Institute of Texas (CPRIT). The CPRIT grant is subject to customary CPRIT funding conditions. The Company believes the acquisition aligns its strategic focus and strengthens its position in the T cell activation arena. 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. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-01, Business Combinations (Topic 805) In March 2016, the FASB issued ASU No. 2016-09, Compensation-Stock Compensation Topic 718 Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). the tax effects of stock compensation will be recognized as income tax expense or benefit to the Companys income statement and the tax effects of exercised or vested awards will be treated as discrete items in the reporting period in which they occur. Along with other income tax cash flows, excess tax benefits will be classified as operating activities, and cash paid by the Company when directly withholding shares for tax withholding purposes will be classified as financing activities. The Company has elected to continue to account for forfeitures when they occur. The adoption of ASU 2016-09 did not have a material impact to the Company’s consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | March 31, 2017 December 31, Furniture and fixtures $ 55,883 $ 55,883 Computers 36,217 38,903 Lab equipment 594,721 587,366 Total 686,821 682,152 Accumulated depreciation (354,787 ) (322,560 ) Property and equipment, net $ 332,034 $ 359,592 |
Accrued Expenses and other pa19
Accrued Expenses and other payables (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of Accrued Expenses and other payables | March 31, December 31, Accrued clinical trial expenses $ 633,419 $ 580,218 Compensation and related benefits 36,926 642,532 Deferred rent 38,874 42,423 Patent fees 45,000 40,000 $ 754,219 $ 1,305,173 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based Compensation Tables | |
Schedule of Stock Option Activity | Shares Weighted Average Exercise Price Outstanding, December 31, 2016 1,136,753 $ 3.93 Granted 1,032,000 $ 0.87 Forfeited (14,688 ) $ 5.53 Outstanding, March 31, 2017 2,154,065 $ 2.45 |
Schedule of Stock Option Valuation Assumptions | Dividend yield 0.0 % Expected volatility 76.35 % Risk-free interest rate 1.93 % Expected lives (years) 6.25 |
Schedule of Options Outstanding, Vested and Exercisable | Options Outstanding Options Vested and Exercisable Balance as of 3/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price Balance as of 3/31/2017 Weighted Average Remaining Contractual Life (Years) Weighted Average Exercise Price 2,154,065 8.6 $2.45 803,403 7.1 $4.42 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of Net Loss Per Share | Three Months Ended March 31, 2017 2016 Net loss $ (3,240,728 ) $ (4,734,486 ) Net loss: Non-controlling interest (50,791 ) (174,883 ) Net loss attributable to Heat Biologics, Inc. $ (3,189,937 ) $ (4,559,603 ) Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc.basic and diluted 26,957,620 9,124,641 Net loss per share attributable to Heat Biologics, Inc.basic and diluted $ (0.12 ) $ (0.50 ) |
Schedule of Potentially Dilutive Securities | For the Three Months Ended March 31, 2017 2016 Outstanding stock options 2,154,065 1,574,484 Outstanding restricted stock units 125,875 Outstanding common stock warrants 3,103,963 6,967,382 |
Basis of Presentation and Sig22
Basis of Presentation and Significant Accounting Policies (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 07, 2017 | Dec. 31, 2016 | |
Noncontrolling Interest [Line Items] | ||||
Accumulated deficit | $ 60,194,592 | $ 57,004,655 | ||
Net loss | 3,189,937 | $ 4,559,603 | ||
Pelican Therapeutics, Inc. [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of voting interests sold to Company | 80.00% | |||
Grant received for preclinical activities from CPRIT | $ 15,200,000 | |||
Heat Biologics I, Inc. [Member] | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership interest in subsidiary | 92.50% | 92.50% |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Total | $ 686,821 | $ 682,152 | |
Accumulated depreciation | (354,787) | (322,560) | |
Property and equipment, net | 332,034 | 359,592 | |
Depreciation expense | $ 33,113 | $ 32,361 | |
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 | 36,217 | 38,903 | |
Lab equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Total | $ 594,721 | $ 587,366 |
Accrued Expenses and other pa24
Accrued Expenses and other payables (Schedule of Accrued Expenses) (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued Liabilities, Current [Abstract] | ||
Accrued clinical trial expenses | $ 633,419 | $ 580,218 |
Compensation and related benefits | 36,926 | 642,532 |
Deferred rent | 38,874 | 42,423 |
Patent fees | 45,000 | 40,000 |
Accrued expenses | $ 754,219 | $ 1,305,173 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) - USD ($) | Jul. 23, 2013 | Mar. 10, 2011 | Mar. 23, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Class of Stock [Line Items] | ||||||
Stock based compensation | $ 248,745 | $ 211,717 | ||||
Price per share | $ 12.50 | $ 0.48 | $ 1 | |||
Warrants, expiry period | 5 years | 5 years | ||||
Common stock issued for conversion of warrants | 125,000 | 6,825,000 | ||||
Expiration period | 10 years | |||||
Weighted average grant-date fair value of stock options granted | $ 0.60 | |||||
Unrecognized stock-based compensation expense | $ 1,646,338 | |||||
Unrecognized stock-based compensation expense, recognition period | 18 months 12 days | |||||
Stock awards granted | 2,154,065 | 1,136,753 | ||||
Employees [Member] | ||||||
Class of Stock [Line Items] | ||||||
Shares reserved for issuance to employees | 377,625 | 0 | ||||
Warrants to purchase common stock at $1.00 per share [Member] | ||||||
Class of Stock [Line Items] | ||||||
Price per share | $ 1 | |||||
Number of shares callable by warrants | 2,961,571 | |||||
Warrants to purchase shares of common stock issuable at $12.50 per share [Member] | ||||||
Class of Stock [Line Items] | ||||||
Price per share | $ 12.50 | |||||
Number of shares callable by warrants | 125,000 | |||||
Warrants to purchase shares of common stock issuable at $0.48 per share [Member] | ||||||
Class of Stock [Line Items] | ||||||
Price per share | $ 0.48 | |||||
Number of shares callable by warrants | 17,392 | |||||
Restricted Stock [Member] | Employees [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock based compensation | $ 116,520 | $ 0 | ||||
Stock awards granted | 503,500 | |||||
Unvested stock awards | 377,625 | |||||
Restricted Stock [Member] | Non Employees [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock based compensation | $ 10,500 | 1,283 | ||||
Stock options [Member] | ||||||
Class of Stock [Line Items] | ||||||
Stock based compensation | $ 121,725 | $ 210,434 |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule of Stock Option Activity) (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Shares | |
Outstanding, beginning balance | shares | 1,136,753 |
Granted | shares | 1,032,000 |
Forfeited | shares | (14,688) |
Outstanding, ending balance | shares | 2,154,065 |
Weighted Average Exercise Price | |
Outstanding, beginning balance | $ / shares | $ 3.93 |
Granted | $ / shares | 0.87 |
Forfeited | $ / shares | 5.53 |
Outstanding, ending balance | $ / shares | $ 2.45 |
Stock-Based Compensation (Sch27
Stock-Based Compensation (Schedule of Stock Option Valuation Assumptions) (Details) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Dividend yield | 0.00% |
Expected volatility | 76.35% |
Risk-free interest rate | 1.93% |
Expected lives (years) | 6 years 3 months |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Outstandng Stock Options) (Details) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Options Outstanding | |
Balance | shares | 2,154,065 |
Weighted Average Remaining Contractual Life (Years) | 8 years 7 months 6 days |
Weighted Average Exercise Price | $ / shares | $ 2.45 |
Options Vested and Exercisable | |
Balance | shares | 803,403 |
Weighted Average Remaining Contractual Life (Years) | 7 years 1 month 6 days |
Weighted Average Exercise Price | $ / shares | $ 4.42 |
Financing (Details)
Financing (Details) - USD ($) | Mar. 28, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Commission rate for FBR | 3.00% | |||
Issuance of common stock, value | $ 2,357,479 | |||
Issuance of common stock, shares | 2,196,727 | 4,791,377 | ||
Shares issued under public offering | 5,000,000 | 5,750,000 | ||
Offering price per share | $ 0.80 | |||
Proceeds from public offering | $ 4,100,000 | $ 2,357,479 | $ 6,800,000 | |
Over-Allotment Option [Member] | ||||
Shares issued under public offering | 750,000 |
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 | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (3,240,728) | $ (4,734,486) |
Net loss: Non-controlling interest | (50,791) | (174,883) |
Net loss attributable to Heat Biologics, Inc. | $ (3,189,937) | $ (4,559,603) |
Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc. - basic and diluted | 26,957,620 | 9,124,641 |
Net loss per share attributable to Heat Biologics, Inc. - basic and diluted | $ (0.12) | $ (0.50) |
Net Loss Per Share (Schedule 31
Net Loss Per Share (Schedule of Antidilutive Securities) (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 2,154,065 | 1,574,484 |
Restricted stock units [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 125,875 | |
Common stock warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 3,103,963 | 6,967,382 |
Income Tax (Narrative) (Details
Income Tax (Narrative) (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Unrecognized income tax benefits | $ 0 | $ 0 |
Income tax expense accrued | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Apr. 11, 2017 | Mar. 15, 2017 | Mar. 07, 2017 |
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Amount of settlement agreement | $ 290,000 | ||
Minimum [Member] | |||
Subsequent Event [Line Items] | |||
Closing bid price for NASDAQ | $ 1 | ||
Pelican Therapeutics, Inc. [Member] | |||
Subsequent Event [Line Items] | |||
Percentage of voting interests to be sold to Company | 80.00% |