Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 23, 2020 | Jun. 28, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2019 | ||
Entity Registrant Name | HEAT BIOLOGICS, INC. | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 23,393,203 | ||
Entity Common Stock, Shares Outstanding | 79,384,021 | ||
Entity Central Index Key | 0001476963 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current Assets | ||
Cash and cash equivalents | $ 9,039,887 | $ 22,154,251 |
Short-term investments | 5,713,922 | 5,570,027 |
Accounts receivable | 34,986 | 28,538 |
Prepaid expenses and other current assets | 420,328 | 961,317 |
Total Current Assets | 15,209,123 | 28,714,133 |
Property and Equipment, net | 559,410 | 643,146 |
Other Assets | ||
In-process R&D | 5,866,000 | 5,866,000 |
Goodwill | 1,452,338 | 2,189,338 |
Operating lease right-of-use asset | 2,287,500 | |
Finance lease right-of-use asset | 187,573 | |
Deposits | 394,637 | 351,220 |
Total Other Assets | 10,188,048 | 8,406,558 |
Total Assets | 25,956,581 | 37,763,837 |
Current Liabilities | ||
Accounts payable | 1,503,342 | 974,619 |
Deferred revenue, current portion | 3,410,319 | 1,032,539 |
Contingent consideration, current portion | 1,579,334 | 1,187,000 |
Operating lease liability, current portion | 216,832 | |
Finance lease liability, current portion | 49,104 | |
Accrued expenses and other liabilities | 1,676,467 | 1,678,051 |
Total Current Liabilities | 8,435,398 | 4,872,209 |
Long Term Liabilities | ||
Other long-term liabilities | 213,724 | |
Deferred tax liability | 361,911 | 316,733 |
Deferred revenue, net of current portion | 200,000 | 200,000 |
Operating lease liability, net of current portion | 1,519,574 | |
Financing lease liability, net of current portion | 142,667 | |
Contingent consideration, net of current portion | 2,139,181 | 1,918,225 |
Total Liabilities | 12,798,731 | 7,520,891 |
Commitments and Contingencies (Note 9 and 13) | ||
Stockholders' Equity | ||
Common stock, $.0002 par value; 100,000,000 shares authorized, 33,785,999 and 32,492,144 shares issued and outstanding at December 31, 2019 and December 31, 2018, respectively | 6,757 | 6,499 |
Additional paid-in capital | 118,173,843 | 114,883,135 |
Accumulated deficit | (104,597,748) | (84,580,180) |
Accumulated other comprehensive loss | (11,250) | (19,904) |
Total Stockholders' Equity - Heat Biologics, Inc. | 13,571,602 | 30,289,550 |
Noncontrolling Interest | (413,752) | (46,604) |
Total Stockholders' Equity | 13,157,850 | 30,242,946 |
Total Liabilities and Stockholders' Equity | $ 25,956,581 | $ 37,763,837 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 20, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Consolidated Balance Sheets | |||
Common stock, par value per share | $ 0.0002 | $ 0.0002 | |
Common stock, shares authorized | 250,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,785,999 | 32,492,144 | |
Common stock, shares outstanding | 33,785,999 | 32,492,144 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue: | ||
Grant and licensing revenue | $ 3,049,104 | $ 5,793,849 |
Operating expenses: | ||
Research and development | 13,013,604 | 16,233,014 |
General and administrative | 9,431,015 | 7,025,212 |
Goodwill impairment loss | 737,000 | |
Change in fair value of contingent consideration | 613,290 | 495,936 |
Total operating expenses | 23,794,909 | 23,754,162 |
Loss from operations | (20,745,805) | (17,960,313) |
Interest income | 431,824 | 265,752 |
Other (expense) income, net | (25,557) | 117,780 |
Total non-operating income | 406,267 | 383,532 |
Net loss before income taxes | (20,339,538) | (17,576,781) |
Income tax (expense) benefit | (45,178) | 985,488 |
Net loss | (20,384,716) | (16,591,293) |
Net loss - non-controlling interest | (367,148) | (857,439) |
Net loss attributable to Heat Biologics, Inc. | $ (20,017,568) | $ (15,733,854) |
Net loss per share attributable to Heat Biologics, Inc.-basic and diluted | $ (0.60) | $ (0.90) |
Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc.-basic and diluted | 33,281,817 | 17,485,461 |
Other comprehensive loss: | ||
Net loss | $ (20,384,716) | $ (16,591,293) |
Unrealized gain on foreign currency translation | 8,654 | 146,121 |
Total other comprehensive loss | (20,376,062) | (16,445,172) |
Comprehensive loss attributable to non-controlling interest | (367,148) | (857,439) |
Comprehensive loss | $ (20,008,914) | $ (15,587,733) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock | APIC | Accumulated Deficit | Accumulated Other Comprehensive Gain (Loss) | Non-Controlling Interest | Total |
Balance at Dec. 31, 2017 | $ 840 | $ 76,382,262 | $ (68,846,326) | $ (166,025) | $ (1,589,842) | $ 5,780,909 |
Public offering, 14,375,000 shares, net of underwriters discounts | 2,875 | 20,697,122 | 20,699,997 | |||
Public offering, 9,200,000 shares, net of underwriters discounts | 1,840 | 13,798,160 | 13,800,000 | |||
Exercise of warrants, 3,054,667 shares | 611 | 4,837,982 | 4,838,593 | |||
Issuance of common stock, 1,566,997 | 314 | 3,909,779 | 3,910,093 | |||
Acquisition of non-controlling interest of Heat I/Pelican | 7 | (2,400,684) | 2,400,677 | |||
Stock issuance costs | (3,130,133) | (3,130,133) | ||||
Stock-based compensation | 12 | 788,647 | 788,659 | |||
Other comprehensive income (loss) | 146,121 | 146,121 | ||||
Net loss | (15,733,854) | (857,439) | (16,591,293) | |||
Balance at Dec. 31, 2018 | 6,499 | 114,883,135 | (84,580,180) | (19,904) | (46,604) | 30,242,946 |
Issuance of common stock, 90,300 shares | 18 | 18,880 | 18,898 | |||
Exercise of stock options, 2,000 shares | 2,120 | 2,120 | ||||
Issuance of common stock from vesting of restricted stock awards, 1,201,555 shares | 240 | (240) | ||||
Stock-based compensation | 3,269,948 | 3,269,948 | ||||
Other comprehensive income (loss) | 8,654 | 8,654 | ||||
Net loss | (20,017,568) | (367,148) | (20,384,716) | |||
Balance at Dec. 31, 2019 | $ 6,757 | $ 118,173,843 | $ (104,597,748) | $ (11,250) | $ (413,752) | $ 13,157,850 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Consolidated Statements of Stockholders’ Equity | ||
Public offering, shares | 14,375,000 | |
Public offering, shares | 9,200,000 | |
Exercise of warrants, shares | 3,054,667 | |
Issuance of common stock, shares | 90,300 | 1,566,997 |
Issuance of common stock from exercise of stock options, shares | 2,000 | |
Issuance of common stock from vesting of restricted stock awards | 1,201,555 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash Flows from Operating Activities | ||
Net loss | $ (20,384,716) | $ (16,591,293) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Goodwill impairment loss | 737,000 | |
Depreciation and amortization | 232,506 | 237,318 |
Noncash lease expense | 39,116 | |
Noncash interest expense | 954 | |
Loss on disposal of equipment | 11,998 | |
Stock-based compensation | 3,269,948 | 788,659 |
Change in fair value of contingent consideration | 613,290 | 495,936 |
Unrealized gain on investments | (5,457) | 131 |
Increase (decrease) in cash arising from changes in assets and liabilities: | ||
Accounts receivable | (6,472) | (14,094) |
Prepaid expenses and other current assets | 540,789 | 1,000,961 |
Deferred financing costs | 30,000 | |
Operating lease right-of-use asset | (590,210) | |
Accounts payable | 529,269 | (55,820) |
Deferred revenue | 2,377,780 | (5,793,849) |
Deferred tax liability | 45,178 | (985,487) |
Accrued expenses and other liabilities | 8,518 | (595,896) |
Other long-term liabilities | (213,724) | 53,165 |
Deposits | (43,417) | (281,422) |
Net Cash Used in Operating Activities | (12,837,650) | (21,711,691) |
Cash Flows from Investing Activities | ||
Purchase of short-term investments | (138,438) | (5,570,158) |
Purchase of property and equipment | (265,188) | (593,573) |
Proceeds from sale of property and equipment | 109,630 | |
Net Cash Used in Investing Activities | (293,996) | (6,163,731) |
Cash Flows from Financing Activities | ||
Proceeds from public offering, net of underwriting discounts | 34,499,997 | |
Proceeds from the issuance of common stock, net of commissions | 18,898 | 3,910,093 |
Proceeds from exercise of stock options | 2,120 | |
Proceeds from exercise of warrants | 4,838,593 | |
Stock issuance costs | (3,130,133) | |
Repayments on principal of finance lease | (1,966) | |
Net Cash Provided by Financing Activities | 19,052 | 40,118,550 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,770) | 145,764 |
Net (Decrease) Increase in Cash, Cash Equivalents and Restricted Cash | (13,114,364) | 12,388,892 |
Cash, Cash Equivalents – Beginning of Period | 22,154,251 | 9,765,359 |
Cash, Cash Equivalents – End of Period | 9,039,887 | 22,154,251 |
Supplemental Disclosure for Cash Flow Information | ||
Operating lease right-of-use assets obtained with lease liabilities | 1,945,617 | |
Finance lease right-of-use assets obtained with lease liabilities | $ 192,783 | |
Acquisition of non-controlling interest of Heat I/Pelican | $ 2,400,677 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2019 | |
Organization | |
Organization | 1. Organization Heat Biologics is a biopharmaceutical company developing immunotherapies focused on activating a patient’s immune system against cancer through T-cell activation and expansion. Our T-cell Activation Platform (TCAP), includes two variations for intradermal administration, Immune Pan-antigen Cytotoxic Therapy (ImPACT®) and Combination Pan-antigen Cytotoxic Therapy (ComPACT™). HS-110 (viagenpumatucel-L) is our first biologic product candidate in a series of proprietary ImPACT® based immunotherapies designed to stimulate a patient’s own T-cells to destroy cancer. HS-130 is an allogeneic (“off-the-shelf”) cell line engineered to express the extracellular domain of OX40 ligand fusion protein (OX40L-Fc), a key costimulator of T-cells, with the potential to augment antigen-specific CD8+ T-cell response. To further augment antigen experienced T-cell activation and expansion, we are also developing PTX-35, a novel T-cell co-stimulator agonist antibody targeting TNFRSF25 for systemic administration. These programs are designed to harness the body's natural antigen specific immune activation and tolerance mechanisms to reprogram immunity and provide a long-term, durable clinical effect. We have completed recruiting patients in our Phase 2 HS-110 non-small cell lung cancer (NSCLC) trial, have dosed our first patient in our first Phase 1 clinical trial of HS-130 and anticipate clearance by the U.S. Food & Drug Administration (FDA) of an IND for our PTX-35 program in the second quarter of 2020. We are also providing pre-clinical, CMC development, and administrative support for these operations; while constantly focusing on protecting and expanding our intellectual property in areas of strategic interest. In July 2019, we completed patient enrollment in our Phase 2 clinical trial for HS-110 in advanced NSCLC, that administered HS-110 in combination with either Bristol-Myers Squibb’s anti-PD1 checkpoint inhibitor nivolumab (Opdivo®) or more recently, Merck & Co., Inc.’s (Merck’s) anti-PD1 checkpoint inhibitor, pembrolizumab (KEYTRUDA®). We also announced interim results of this study in June 2019. We believe that this data may represent the first Phase 2 data showing clinical activity of a checkpoint inhibitor combination in NSCLC patients whose disease has progressed after prior treatment with a checkpoint inhibitor (CPI). Our T-cell Activation Platform (TCAP), which includes a variation of two TCAPs, ImPACT ® and ComPACT ™, is designed to activate and expand tumor antigen specific “killer” T-cells to destroy a patient’s cancer. By turning immunologically “COLD tumors HOT,” we believe our platform will become an essential component of the immuno-oncology cocktail to enhance the effectiveness and durability of checkpoint inhibitors and other cancer therapies, thereby improving outcomes for those patients less likely to benefit from checkpoint inhibitors alone. We believe the advantage of our approach is that our biologic agents deliver a broad range of tumor antigens that are unrecognized by the patient’s immune system prior to the malignant rise of the patient’s tumor. TCAP combines these tumor antigens with a powerful, naturally occurring immune adjuvant, gp96, to actively chaperone these antigens out of our non-replicating allogenic cell-based therapy into the local microenvironment of the skin. The treatment primes local natural immune recognition to activate T-cells to seek and destroy the cancer cells throughout the body. These TCAP agents can be administered with a variety of immuno-modulators to enhance a patient’s immune response through ligand specific T-cell activation. Unlike many other “patient specific” or autologous immunotherapy approaches, our drugs are fully allogenic, “off-the-shelf” products which means that we can administer them immediately without the extraction of blood or tumor tissue from each patient or the creation of an individualized treatment based on these patient materials. Our TCAP product candidates are produced from allogeneic cell lines expressing tumor-specific proteins common among cancers. Because each patient receives the same treatment, we believe that our immunotherapy approach offers superior speed to initiation, logistical, manufacturing and importantly, cost benefits, compared to “personalized” precision medicine approaches. Our ImPACT® platform is an allogenic cell-based, T-cell-stimulating platform that functions as an immune activator to stimulate and expand T-cells. The key component of this innovative immunotherapy platform is the dual functionality of the heat shock protein, gp96. As a molecular chaperone, gp96 is typically found within the cell’s endoplasmic reticulum and facilitates the folding of newly synthesized proteins for functionalized tasks. When a cell abnormally dies through necrosis or infection, gp96 is naturally released into the surrounding microenvironment. At this moment, gp96 becomes a Danger Associated Molecular Protein, or “DAMP”, a molecular warning signal for localized innate activation of the immune system. In this context, gp96 serves as a potent adjuvant, or immune stimulator, via Toll-Like Receptor 4/2 (TLR4 and TLR2) signaling which serves to activate professional antigen presenting cells (APCs), such as dendritic cells that upregulate T-cell costimulatory ligands, major histocompatibility (MHC) molecules and immune activating cytokines. It is among the most powerful adjuvants found in the body and uniquely shows exclusive specificity to CD8+ “killer” T-cells through cross-presentation of the gp96-chaperoned tumor associated peptide antigens directly to MHC class I molecules for direct activation and expansion of CD8+ T-cells. Thus, gp96 plays a critical role in the mechanism of action for our T-cell activating platform immuno-therapies; mimicking necrotic cell death and activating a powerful, tumor antigen-specific T-cell immune response to attack the patient’s cancer cells. ComPACT™, our second TCAP, is a dual-acting immunotherapy designed to deliver antigen-driven T-cell activation and specific co-stimulation in a single product. ComPACT™ is designed to help unlock the body’s natural defenses and builds upon ImPACT ® by providing specific co-stimulation to enhance T-cell activation and expansion. This technology has the potential to simplify combination immunotherapy development for oncology patients, as it is designed to deliver the gp96 heat shock protein and a T-cell co-stimulatory fusion protein (OX40L) as a single therapeutic, without the need for multiple, independent biologic products. The potential advantages of ComPACT™ include: (a) enhanced activation of antigen-specific CD8+ T-cells; (b) serving as a booster to expand the number of antigen-specific CD8+ and CD4+ T-cells compared to OX40L alone; (c) stimulation of T-cell memory function to remain effective in the body after treatment, even if the cancer comes back; (d) demonstration of less toxicity, as the source of cancer associated antigens and co-stimulator are supplied at the same time locally and the draining lymph nodes, which drive targeted, cancer specific immunity towards the tumor rather than throughout the body; and (e) a potential paradigm shift that is designed to simplify combination cancer immunotherapy versus systemic co-stimulation with conventional monoclonal antibodies (mAbs). Pelican Therapeutics, Inc. (“Pelican”), our majority owned subsidiary, is a biotechnology company focused on the development of biologic based therapies designed to activate the immune system. Pelican is developing an agonist mAb, PTX-35, against T-cell costimulatory receptor, TNFRSF25. PTX-35 has completed IND-enabling activities in preparation for a first-in-human (FIH) trial for an oncology indication. PTX-35 is designed to harness the body's natural antigen specific immune activation and tolerance mechanisms to reprogram immunity and provide a long-term, durable clinical effect. TNFRSF25 agonism has been shown to provide highly selective and potent stimulation of antigen experienced ‘memory’ CD8+ cytotoxic T-cells, which are the class of long-lived T-cells capable of eliminating tumor cells in patients. Due to the preferential specificity of PTX-35 to antigen experienced CD8+ T-cells, this agent represents a promising candidate as a T-cell co-stimulator in cancer patients. When combined in preclinical studies with ImPACT ® and ComPACT ™ platform immunotherapies, PTX-35 has been shown to enhance antigen specific T-cell activation to eliminate tumor cells. Pelican is also developing other biologics that target TNFRSF25 for various immunotherapy approaches, including PTX-45, a human TL1A-lg like fusion protein designed as a shorter half-life agonist of TNFRSF25. We have completed patient enrollment in our HS-110 Phase 2 combination immunotherapy trial, dosed our first patient in our first Phase 1 clinical trial of HS-130, advanced pre-clinical development of Pelican assets in anticipation of clearance by the FDA of an IND submission in the second quarter of 2020, and provided general and administrative support for these operations while protecting our intellectual property. We currently do not have any products approved for sale and we have not generated any revenue from product sales since our inception. We expect to continue to incur significant expenses and to incur increasing operating losses for at least the next several years. We anticipate that our expenses will increase substantially as we (1) complete the ongoing clinical trials of our product candidates; (2) maintain, expand and protect our intellectual property portfolio; (3) seek to obtain regulatory approvals for our product candidates; (4) continue our research and development efforts; (5) add operational, financial and management information systems and personnel, including personnel to support our product development and commercialization efforts; and (6) operate as a public company All share numbers in the consolidated financial statements and footnotes below have been adjusted for the one-for-ten reverse stock split effective January 19, 2018. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements 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, Zolovax, Inc., Delphi Therapeutics, Inc., and Scorpion Biosciences, Inc. Additionally, beginning April 28, 2017 the accompanying consolidated financials include Pelican. As of December 31, 2019, there was no activity for Delphi Therapeutics, Inc. or Scorpion Biosciences, Inc. The functional currency of the entities located outside the United States of America (the foreign entities) is the applicable local currency of 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, 2019 and 2018, Heat held 100% controlling interest in Heat I. The December 31, 2019 and 2018 year-end financials include 85% controlling interest in Pelican. Heat accounts for its less than 100% interest in the consolidated financial statements in accordance with U.S. GAAP. Accordingly, the Company presents non-controlling interest 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. Liquidity and Going Concern The Company has an accumulated deficit of $104.6 million as of December 31, 2019 and a net loss of approximately $20.4 million for the year ended December 31, 2019 and has not generated significant revenue or positive cash flows from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern for one year after the financial statements are issued. The consolidated financial statements do not include any adjustments that may result from the outcome of this uncertainty. The Company expects to incur significant expenses and continued losses from operations for the foreseeable future. The Company expects its expenses to increase in connection with its ongoing activities, particularly as the Company continues its research and development and advances its clinical trials of, and seek marketing approval for, its product candidates and as the Company continues to fund the Pelican matching funds required in order to access the CPRIT Grant. In addition, if the Company obtains marketing approval for any of its product candidates, the Company expects to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution. Accordingly, the Company will need to obtain substantial additional funding in connection with its continuing operations. Adequate additional financing may not be available to the Company on acceptable terms, or at all. If the Company is unable to raise capital when needed or on attractive terms, it would be forced to delay, reduce or eliminate its research and development programs or any future commercialization efforts. To meet its capital needs, the Company intends to continue to consider multiple alternatives, including, but not limited to, additional equity financings such as sales of its common stock under at-the-market offerings, if available, debt financings, partnerships, collaborations and other funding transactions. This is based on the Company’s current estimates, and the Company could use its available capital resources sooner than it currently expects. The Company is continually evaluating various cost-saving measures in light of its cash requirements in order to focus resources on its product candidates. The Company will need to generate significant revenues to achieve profitability, and it may never do so. Management has determined that there is substantial doubt about the Company's ability to continue as a going concern within one year after the consolidated financial statements are issued. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but not limited to, useful lives of fixed assets, contingent consideration, valuation of goodwill and IPR&D, income taxes and stock-based compensation. Actual results may differ from those estimates. Segments The Company has one reportable segment – the development of immunotherapies designed to activate and expand a patient’s T-cell mediated immune system against cancer. Cash and Cash Equivalents and Restricted Cash The Company considers all cash and other highly liquid investments with initial maturities from the date of purchase of three months or less to be cash and cash equivalents. Concentration of Credit Risk At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company has never experienced any losses related to these balances. As of December 31, 2019 and 2018, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2019 was $8,474,836. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents. Property and Equipment Property and equipment are stated at cost and are capitalized. Depreciation is calculated using the straight-line method and is based on estimated useful lives of five years for lab equipment, three years for computer equipment, and eight years for both furniture and fixtures and leasehold improvements. Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each year. Fully diluted net loss per share is computed using the weighted average number of common shares and dilutive securities outstanding during each year. Dilutive securities having an anti-dilutive effect on diluted loss per share are excluded from the calculation. Fair Value of Financial Instruments The carrying amount of certain of the Company’s financial instruments, including cash and cash equivalents, accounts 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 Company’s 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 Company’s cash equivalents are classified within Level I of the fair value hierarchy. As of December 31, 2019 and 2018, the fair values of cash, accounts payable, and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The Company’s short-term investments consist of Level I securities which are comprised of highly liquid money market funds. The estimated fair value of the short-term investments was based on quoted market prices. There were no transfers between fair value hierarchy levels during the years ended December 31, 2019 or 2018. The fair value of financial instruments measured on a recurring basis is as follows: As of December 31, 2019 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,713,922 $ 5,713,922 — — Liabilities: Contingent consideration $ 3,718,515 — — $ 3,718,515 As of December 31, 2018 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,570,027 $ 5,750,027 — — Liabilities: Contingent consideration $ 3,105,225 — — $ 3,105,225 The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the year ended December 31, 2019: Contingent Consideration Balance at December 31, 2017 $ 2,609,289 Change in fair value 495,936 Balance at December 31, 2018 $ 3,105,225 Change in fair value 613,290 Balance at December 31, 2019 $ 3,718,515 The change in the fair value of the contingent consideration of $613,290 and $495,936 for the years ended December 31, 2019 and 2018 was primarily due to the effect of the change in discount rate, probability of achieving milestones, and passage of time on the fair value measurement. Adjustments associated with the change in fair value of contingent consideration are included in the Company’s consolidated statement of operations and comprehensive loss. The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements of contingent consideration classified as Level 3 as of December 31, 2019 and 2018: As of December 31, 2019 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2020-2026 Discount rate 7.83% Probability of occurrence 2.1% to 82% As of December 31, 2018 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2019-2025 Discount rate 7.20% Probability of occurrence 1.6% to 62.5% 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 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 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 December 31, 2019 and 2018, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s 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 consolidated statements of operations and comprehensive loss. As of December 31, 2019 and 2018, the Company had no such accruals. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act lowered the Federal corporate tax rate from 34% to 21% and made numerous other tax law changes. The Company has measured deferred tax assets at the enacted tax rate expected to apply when these temporary differences are expected to be realized or settled. Under the guidance of SAB 118, the Company is required to recognize the effect of tax law changes in the period of enactment. Reasonable estimates were made based on the Company’s analysis of the Tax Act. These provisional amounts were adjusted during 2018 when additional information was obtained with no material adjustments. Stock-Based Compensation The Company accounts for stock-based compensation arrangements with employees and non-employee directors using a fair value method that requires the recognition of compensation expense for costs related to all stock-based payments, including stock options and restricted stock units. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model. The fair value of restricted stock units is estimated based on the closing price of the Company’s stock on the date of grant, and for the purposes of expense recognition, the total new number of shares expected to vest is adjusted for estimated forfeitures. Stock-based compensation costs are based on the fair value of the underlying option calculated using the Black-Scholes-Merton option pricing model on the date of grant for stock options and are recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, forfeiture rates and expected term. The expected volatility rates are estimated based on the actual volatility of comparable public companies over the expected term. The expected term for the years ended December 31, 2019 and 2018 represents the average time that options are expected to be outstanding based on the average of the vesting term and the contractual term of the option. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. Net loss attributable to non-controlling interests Net loss attributable to non-controlling interests is the result of the Company’s consolidation of subsidiaries of which it does not own 100%. In October 2018, the Company entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in the Company’s subsidiaries, Heat I, Inc. and Pelican, a related party prior to acquisition, for 35,000 shares of the Company’s common stock. The stock exchange resulted in the Company owning 100% of Heat I, Inc. and increasing its controlling ownership in Pelican from 80% to 85%. The Company’s net loss attributable to non-controlling interests relates to the 15% ownership of Pelican that Heat does not own as of December 31, 2019 and 2018. Revenue Recognition Effective January 1, 2019, the Company has adopted ASU No. 2018-08 Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The Company’s sole source of revenue is grant revenue related to the CPRIT contract, which is being accounted for under ASC 958 as a conditional non-exchange contribution. The CPRIT grant covers the periods from June 1, 2017 through May 31, 2020, for a total grant award of up to $15.2 million. CPRIT advances grant funds upon request by the Company consistent with the agreed upon amounts and schedules as provided in the contract. The first tranche of funding of $1.8 million was received in May 2017, and a second tranche of funding of $6.5 million was received in October 2017, and the third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be awarded after we have fulfilled every requirement of the grant and the grant has been approved to be finalized. Funds received are reflected in deferred revenue as a liability until revenue is earned. Grant revenue is recognized when qualifying costs are incurred. As of December 31, 2019, the deferred revenue balance was $3.4 million with $10.3 million recognized as revenue since contract inception. Business Combinations We account for acquisitions using the acquisition method of accounting, which requires that all identifiable assets acquired and liabilities assumed be recorded at their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired patented technology. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed (see Note 4). Goodwill and In-Process Research and Development The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. The Company determines the useful lives of definite-lived intangible assets after considering specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, and other economic facts; including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, primarily on a straight-line basis, over their estimated useful lives. Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate a potential impairment exists, using a fair value-based test. Pursuant to ASU 2017-04, the Company must record a goodwill impairment charge if a reporting unit’s carrying value exceeds its fair value. See Note 7 regarding impairment at December 31, 2019. In-process research and development, or IPR&D, assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that the Company acquires, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. Deferred Revenue Deferred revenue is comprised of proceeds of $3.4 million received from CPRIT for which the costs have not been incurred or the conditions of the award have not been met and grant funds received from an economic development grant agreement with the City of San Antonio (“Economic Development Grant”) that we entered into on November 1, 2017. Under the Economic Development Grant, we received $0.2 million in state enterprise fund grants for the purpose of defraying costs toward the purchase of laboratory equipment. As part of the agreement, we will provide the city of San Antonio with a purchase money security interest in the equipment to secure the repayment of grant funds should we fail to perform under the terms and conditions of the agreement. Our obligations under the agreement include meeting certain employment levels for a period of not less than seven years commencing on or before December 31, 2017 and establishing Pelican’s corporate headquarters in San Antonio. The Economic Development Grant funds will be recognized as income upon the achievement of the performance criteria and determination that the cash is no longer refundable to the State of Texas. Contingent Consideration Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations. The Company estimates the fair value of the contingent consideration as of the acquisition date using the estimated future cash outflows based on the probability of meeting future milestones. The milestone payments will be made upon the achievement of clinical and commercialization milestones as well as single low digit royalty payments and payments upon receipt of sublicensing income. Subsequent to the date of acquisition, the Company reassess the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets (see Note 4). Research and Development Research and development costs associated with developmental products not yet approved by the FDA as well as costs associated with bringing developmental products into advanced phase clinical trials as incurred. These costs consist primarily of pre-manufacturing and manufacturing drug costs, clinical trial execution, investigator payments, license fees, salaries, stock-based compensation and related personnel costs. Other costs include fees paid to consultants and outside service providers related to the development of the Company’s product candidates and other expenses relating to the design, development, and testing and enhancement of its product candidates. Impact of Recently Issued Accounting Standards: In November 2018, the FASB issued ASU 2018‑18: Collaborative Arrangements (Topic 808) : Clarifying the Interaction between Topic 808 and Topic 606. This ASU, in part, requires that certain transactions with collaboration partners be excluded from revenue recognized under Topic 606. ASU 2018‑18 is effective for fiscal years beginning after December 15, 2019. The Company adopted this ASU in the first quarter of 2020 and there was no material effect on the recognition or measurement of revenue in the Company’s financial statements. In June 2018, the FASB issued ASU 2018‑07: Compensation – Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting. This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees, and as a result, the accounting for share-based payments to non-employees will be substantially aligned. ASU 2018‑07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, early adoption is permitted but no earlier than an entity’s adoption date of Topic 606. The Company adopted this ASU in the first quarter of 2019 and there was no material effect on the Company’s results of operations or cash flows. In June 2018, the FASB issued ASU No. 2018‑08, Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made , which is intended to clarify and improve the scope and the accounting guidance for contributions received and contributions made. The amendments in ASU No. 2018‑08 should assist entities in (1) evaluating whether transactions should be accounted for as contributions (nonreciprocal transaction) within the scope of Topic 958, Not-for-Profit Entities, or as exchange (reciprocal) transactions subject to other guidance and (2) determining whether a contribution is conditional. This amendment applies to all entities that make or receive grants or contributions. This ASU is effective for public companies serving as a resource recipient for fiscal years beginning after June 15, 2018, including interim periods within that fiscal year. The Company adopted this ASU in the first quarter of 2019 and there was no material effect on the recognition or measurement of revenue in the Company’s financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease and requires disclosure of certain information about leasing arrangements. Generally, a lease exists when a contract or part of a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining whether a lease exists, the Company considers whether a contract provides it with both the right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset. The Company adopted the standard on January 1, 2019 using the optional transition method and, as a result, did not recast prior period unaudited comparative financial statements. The Company has determined that its leases, consisting of leases for office and laboratory space without optional terms or variable components, are operating leases. Adoption of the new standard resulted in the recording of operating lease right-of-use assets and associated lease liabilities of $520,399 and $528,253, respectively, as of January 1, 2019 on the consolidated balance sheet with no cumulative impact to accumulated deficit and did not have a material impact on the Company’s results of operations or cash flows. |
Short-Term Investments
Short-Term Investments | 12 Months Ended |
Dec. 31, 2019 | |
Short-Term Investments | |
Short-Term Investments | 3. Short-Term Investments Short-term investments consist of equity securities with a maturity of greater than three months when acquired. The Company holds its securities at fair value as of December 31, 2019 and 2018. Unrealized gains and losses on securities are reported in the statement of operation. Short-term investments at December 31, 2019 and 2018 consisted of mutual funds with fair values of $5.7 million and $5.6 million, respectively. |
Acquisition of Pelican Therapeu
Acquisition of Pelican Therapeutics | 12 Months Ended |
Dec. 31, 2019 | |
Acquisition of Pelican Therapeutics | |
Acquisition of Pelican Therapeutics | 4. Acquisition of Pelican Therapeutics In 2017, the Company consummated the acquisition of 80% of the outstanding equity of Pelican, a related party, and Pelican became a majority owned subsidiary of the Company. During the quarter ended March 31, 2018, cash consideration of approximately $300,000 was distributed to the participating Pelican stockholders and the remainder of approximately $200,000 for certain Pelican liabilities not satisfied was recognized as other income in the statements of operations and comprehensive loss for the period. In October 2018, Heat entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in Heat’s subsidiaries, Heat I, Inc. and Pelican. The stock exchange resulted in Heat increasing its controlling ownership in Pelican from 80% to 85%. Under the agreement, the Company is also obligated to make future payments based on the achievement of certain clinical and commercialization milestones, as well as low single digit royalty payments and payments upon receipt of sublicensing income. · $2.0 million upon Pelican’s dosing of the first patient in its first Phase 1 trial for an oncology indication; · $1.5 million upon Pelican’s dosing of the first patient in its first Phase 2 trial for an oncology indication; · $3.0 million upon successful outcome of the first Phase 2 trial for an oncology indication; · $6.0 million upon Pelican’s dosing of the first patient in its first Phase 3 trial for an oncology indication; · $3.0 million upon Pelican’s dosing of the first patient in its first Phase 3 trial for a non- oncology indication; · $7.5 million upon successful outcome of the first Phase 3 trial for an oncology indication; · $3.0 million upon successful outcome of the first Phase 3 trial for a non-oncology indication; · $7.5 million upon acceptance of a Biologics License Application (BLA) submission for an oncology indication; · $3.0 million upon acceptance of a BLA submission for a non-oncology indication; · $7.5 million upon first product indication approval in the United States or Europe for an oncology indication; · $3.0 million upon first product indication approval in the United States or Europe for a non-oncology indication. The fair value of these future milestone payments is reflected in the contingent consideration account under current liabilities with the non-current portion under long term liabilities on the balance sheet. The estimated fair value of the contingent consideration was determined using a probability-weighted income approach, at a discount of 7.83% based on the median yield of publicly traded non-investment grade debt of companies in the pharmaceutical industry. As discussed in Note 2, the Company estimates the fair value of the contingent consideration on a quarterly basis. Goodwill was calculated as the difference between the acquisition-date fair value of the consideration transferred and the fair values of the assets acquired and liabilities assumed. The goodwill resulting from this acquisition related largely to synergies expected from combining the operations. The goodwill is not deductible for income tax purposes. In-process R&D assets are treated as indefinite-lived until the completion or abandonment of the associated R&D program, at which time the appropriate useful lives will be determined. The Company calculated the fair value of the non-controlling interest acquired in the acquisition as 20% of the equity interest of Pelican, adjusted for a minority interest discount. As discussed in Note 10, in May 2016, Pelican was awarded a $15.2 million CPRIT Grant from CPRIT for development of Pelican’s lead product candidate, PTX-35. The CPRIT Grant is expected to support Peli can in developing PTX-35 through a Phase 1 clinical trial designed to evaluate PTX-35 in combination with other immunotherapies. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses And Other Current Assets. | |
Prepaid Expenses and Other Current Assets | 5. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following at: December 31, 2019 2018 Prepaid manufacturing expense 148,156 559,110 Prepaid insurance 120,851 284,931 Other prepaid expenses and current assets 132,162 117,261 Other current assets 19,159 15 $ 420,328 $ 961,317 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment | |
Property and Equipment | 6. Property and Equipment Property and equipment are recorded at cost and depreciated using the straight-line method over 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 at: December 31, 2019 2018 Lab equipment $ 1,311,853 $ 1,218,532 Computers 53,065 9,445 Furniture and fixtures 50,453 38,589 Leasehold improvements 14,259 58,146 Total 1,429,630 1,324,712 Accumulated depreciation (870,220) (681,566) Property and equipment, net $ 559,410 $ 643,146 Depreciation expense totaled $227,296 and $237,318 for the years ended December 31, 2019 and 2018, respectively. |
Goodwill and In-process R&D
Goodwill and In-process R&D | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and In-process R&D | |
Goodwill and In-process R&D | 7. Goodwill and In-process R&D Goodwill of $2.2 million and in-process R&D of $5.9 million were recorded in connection with the acquisition of Pelican, as described in Note 4. The Company performs an annual impairment test at the reporting unit level. However, during the year ended December 31, 2019, the Company experienced a sustained decline in the quoted market price of the Company’s common stock and as a result the Company determined that as of September 30, 2019 it was more likely than not that the carrying value of these acquired intangibles exceeded their estimated fair value. Accordingly, the Company performed an interim impairment analysis as of that date using the income approach. This analysis required significant judgments, including primarily the estimation of future development costs, the probability of success in various phases of its development programs, potential post-launch cash flows and a risk-adjusted weighted average cost of capital. Pursuant to ASU 2017-04, the Company recorded a goodwill impairment charge for the excess of the reporting unit’s carrying value over its fair value. During the year ended December 31, 2019, goodwill with a total carrying value of $2.2 million was written down to $1.5 million and an impairment charge of $0.7 million was recorded. The Company determined that the fair value of the IPR&D was in excess of its carrying value as of December 31, 2019 and 2018 and therefore no impairment was recorded for the IPR&D. The following table provides a rollforward of the Company’s goodwill as of December 31, 2018 and 2019: Goodwill Goodwill from acquisition of Pelican $ 2,189,338 Balance at December 31, 2018 2,189,338 Goodwill impairment loss (737,000) Balance at December 31, 2019 $ 1,452,338 The following table provides a rollforward of the Company’s in-process R&D as of December 31, 2018. There was no change in in-process R&D during 2019. In-process R&D In-process R&D from acquisition of Pelican $ 5,866,000 Balance at December 31, 2018 $ 5,866,000 . |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses | |
Accrued Expenses | 8. Accrued Expenses Accrued expenses consist of the following at: December 31, December 31, 2019 2018 Accrued clinical trial expenses $ 1,156,618 $ 919,750 Compensation and related benefits 303,870 628,147 Patent fees — 40,000 Deferred rent — 7,854 Other expenses 215,979 82,300 $ 1,676,467 $ 1,678,051 |
License Agreements
License Agreements | 12 Months Ended |
Dec. 31, 2019 | |
License Agreements | |
License Agreements | 9. License Agreements University of Miami · Beginning in 2008, the Company has entered into various agreements with the University of Miami (“UM”) for intellectual and tangible property rights relating to the ImPACT ® , technology activities (“License Agreement 03‑31, 05‑39” and “License Agreement 97‑14”, or collectively “License Agreements”). These license agreements were subsequently assigned to the Company’s subsidiary Heat Biologics I, Inc. (Heat I) which issued to UM shares of its common stock representing seven and one-half percent (7.5%) of its common stock. The term of the license is the length of the last to expire patent, unless terminated earlier. · The Company agreed to make minimum royalty payments of $10,000 for three years beginning in 2010 that are due on the anniversary date of the agreement for License Agreement 97‑14. Beginning in 2013, and thereafter for the life of the agreement, the minimum royalty payment shall be $20,000 due on the same date. In July 2016, the Company and UM entered into an amendment which replaced the milestone payment of $250,000 by approval of a BLA for the lung cancer vaccine with a payment of $500,000 upon approval of an NDA for a lung cancer vaccine covered by Patent Rights. · In August 2009, Heat I and UM entered into a second amendment (“Amendment 2”) to License Agreement 97‑14 to extend the foregoing payment due dates for all past due license fees and patent costs. · On February 18, 2011, Heat I entered into a license agreement (“SS114A”) with UM to obtain additional technology related to License Agreement 97‑14. Heat I agreed to reimburse UM for all past patent costs of $37,381. As partial consideration for SS114A, Heat II agreed to grant back certain exclusive rights to UM. · On February 18, 2011, Heat I entered into a license agreement (“143”) with UM to obtain additional technology related to License Agreement 97‑14. In consideration for 143, Heat I agreed to pay UM a fee of $50,000 and reimburse them for past patent costs of $14,158. · On February 18, 2011, Heat I entered into a license agreement (“J110”) with UM to obtain additional technology related to License Agreement 97‑14. In consideration for J110, Heat I agreed to pay UM a fee of $10,000 and reimburse them for past patent costs of $1,055. · In addition, Heat entered into an agreement for “Modified Heat Shock Proteins-Antigenic Peptide Complex” with UM in September 2014 for a cancer cell line where UM agreed not to license the cell line to third parties while the Company is in good standing and in compliance of its patent license agreements with UM relating to our ImPACT ® platform. There is no financial obligation on the Company’s part under the arrangement. · On October 25, 2016, the Company entered into an exclusive license agreement with UM for the license and development of intellectual property related to its gp96 platform to target the Zika virus and other infectious diseases. As consideration for the rights granted in this license agreement the Company is obligated to pay UM an upfront license fee of $20,000 and nominal annual maintenance fees over the initial ten years that total $82,000 and increasing thereafter. The Company is obligated to pay royalties equal to a percentage (mid-single digits) of net sales of products covered by the patent-related rights, subject to reduction if additional licenses from third parties are required to commercialize licensed products . University of Miami - Pelican For each agreement, the Company agreed to make minimum royalty payments of $10,000 for three years beginning 2010 due on the anniversary date of the agreements to the University of Miami. Beginning in 2013, and thereafter for the life of the agreements, the minimum royalty payments shall be $20,000 due on the same date. License 0331, 0539: · Pelican is obligated to make milestone payments as follows: $150,000 due upon submission and approval of an IND and the completion of a Phase 1 clinical trial and $250,000 due upon the earlier of May 2022 or approval of an NDA. The Company has the right to terminate this Agreement without obligation for future unpaid milestones. · In August 2009, Pelican and UM entered into a second amendment (“Amendment 2”) to License Agreement 0331, 0539 to extend the foregoing payment due dates for all past due license fees and patent costs. · In February 2010, Pelican and UM entered into a third amendment (“Amendment 3”) to License Agreement 0331, 0539 to grant back to UM a certain nonexclusive license. In all other respects, the original agreement remained the same. · In October 2010, Pelican and UM entered into a fourth amendment (“Amendment 4”) to License Agreement 0331, 0539 to grant to the licensor a nonexclusive license right for certain technology as research reagents and research tools. License I176: · On December 12, 2010, Pelican entered into another license agreement (“I176”) with UM for one component of complimentary technology to the July 11, 2008 agreement. Pelican agreed to pay UM a license fee of $50,000 and a reimbursement of $15,797 for past patent fees. Pelican also agreed to make a minimum royalty payment of $10,000 during 2012 through 2014 and then $20,000 every year thereafter. Pelican is obligated to make milestone payments as follows: $150,000 due upon submission and approval of an IND and the completion of a Phase 1 clinical trial and $500,000 due upon the earlier of May 2022 or approval of an NDA. The Company has the right to terminate this Agreement without obligation for future unpaid milestones. · In August 2012, Pelican and UM entered into a second amendment (“I176 Amendment 2”) to License Agreement I176 to extend the foregoing payment due dates for all past due license fees and patent costs. UMM143: · On November 19, 2013, Pelican entered into another license agreement (“UMM143”) with UM for an exclusive license of complimentary technology and patent rights. Pelican agreed to pay UM a license issue fee of $35,000 and agreed to make minimum royalty payments if the I176 license agreement is terminated. No minimum royalty payments or milestone payments are due for any year in which the I176 license agreement is in force. The Company has the right to terminate this Agreement without obligation for future unpaid milestones. Other License Agreements · On April 12, 2011, the Company entered into a non-exclusive evaluation and biological material license agreement with a not-for-profit corporation for evaluation and production of vaccines. In consideration for the evaluation and commercial use license, the Company agreed to pay the not-for-profit corporation a fee of $5,000 and $50,000, respectively. The Company has the option to renew the license once the original term has expired. Milestone payments are due upon certain events agreed upon by Heat and the not-for-profit corporation. In December 2015, the Company amended the evaluation and biological material license agreement to add additional cell lines in exchange for a one-time payment of $1,000. · On August 30, 2010, the Company entered into an option agreement with the University of Michigan (“University”) to acquire the right to negotiate an exclusive license for certain materials which include cancer cells and all unmodified derivatives of these cells. An option fee of $2,000 was paid on September 8, 2010 to grant a period of nine months for this consideration. In July 2011, the Company exercised the option to acquire the license for $10,000. · In June 2016, the Company entered into an exclusive license agreement with Shattuck Labs, Inc. (“Shattuck”) pursuant to which the Company licensed certain provisional patent applications and know-how related to fusion proteins to treat cancer and other diseases that were not being developed by us. Shattuck paid the Company an initial license fee of $50,000 and is obligated to pay the Company fees upon its receipt of sublicensing income, achievement of certain milestones and royalties upon sales of commercial products. Inasmuch as the technology that the Company out-licensed is in the early stages of development and there is a low likelihood of success for any technology at such stage, there can be no assurance that any products will be developed by Shattuck or that the Company will derive any revenue from Shattuck. Future minimum royalty payments by the Company for licenses as of December 31, 2019 are as follows (in thousands): Year ended December 31, 2020 $ 103 2021 228 2022 784 2023 74 2024 — Total $ 1,189 |
Grant Revenue
Grant Revenue | 12 Months Ended |
Dec. 31, 2019 | |
Grant Revenue | |
Grant Revenue | 10. Grant Revenue In June 2016, Pelican entered into a cancer research grant contract or Grant Contract with CPRIT, under which CPRIT awarded a grant not to exceed $15.2 million for use in developing cancer treatments by targeting a novel T-cell costimulatory receptor (namely, TNFRSF25). The Grant Contract initially covered a period from June 1, 2016 through November 30, 2019, as amended, was extended to May 30, 2020. The first tranche of funding of $1.8 million was received in May 2017, a second tranche of funding of $6.5 million was received in October 2017, and a third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 will be awarded after we have fulfilled every requirement of the grant and the grant has been approved to be finalized. The grant is subject to customary CPRIT funding conditions including a matching funds requirement where Pelican will match $0.50 for every $1.00 from CPRIT. Consequently, Pelican is required to provide $7.6 million in matching funds over the life of the project. Upon commercialization of the product, the terms of the grant require Pelican to pay tiered royalties in the low to mid-single digit percentages. Such royalties reduce to less than one percent after a mid-single-digit multiple of the grant funds have been paid to CPRIT in royalties. Through December 31, 2019, $10.3 million of grant funding received to date has been recognized as revenue. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | 11. Stockholders’ Equity Authorized Capital Heat has authorized 10,000,000 shares of Preferred Stock (par value $0.0001) as of December 31, 2019 and 2018. As of December 31, 2019 and 2018, there were no outstanding shares of Preferred Stock. Heat had 100,000,000 shares of common stock (par value $0.0002) authorized as of December 31, 2019 and 2018. On March 20, 2020, an amendment to increase the authorized shares of common stock to 250,000,000 was filed. As of December 31, 2019, and 2018, 33,785,999 and 32,492,144 common stock shares were issued and outstanding as of December 31, 2019 and 2018, respectively. Financings On January 18, 2018, the Company entered into a Common Stock Sales Agreement (the “Underwriting Agreement”) with H.C. Wainwright & Co., LLC, (“HCW”) as sales agent, pursuant to which the Company may sell from time to time, at its option, shares of its common stock, for the sale of up to $3.7 million of shares of the Company’s common stock and on March 15, 2018 filed with the SEC a prospectus supplement for an additional aggregate offering of up to $1.3 million shares of Common Stock. Sales of shares of Common Stock have been made pursuant to the Company’s shelf registration statement on Form S‑3 (File No. 333‑221201) filed with the U.S. Securities and Exchange Commission (“SEC”), dated November 13, 2017 (“2017 Shelf”). As of December 31, 2018, the Company sold an aggregate of 1,566,997 shares of common stock under the HCW Sales Agreement resulting in net proceeds of approximately $3.8 million. On May 7, 2018, the Company closed an underwritten public offering (the “Offering ”) in which it issued and sold (i) 4,875,000 shares of common stock together with a number of common warrants to purchase 2,437,500 shares of its common stock, and (ii) 9,500,000 pre-funded warrants, with each pre-funded warrant exercisable for one share of common stock, together with a number of common warrants to purchase 4,750,000 shares of its common stock. The public offering price was $1.44 per share of common stock, $1.43 per pre-funded warrant and $0.01 per common warrant. The net proceeds to the Company were approximately $18.8 million, net of underwriting discounts and commissions and other estimated offering expenses. The common stock warrants expire five years after date of issuance and have an exercise price of $1.584 per share. As of December 31, 2018, 3,054,667 common stock warrants have been exercised for an additional $4.8 million of proceeds to the Company and all pre-funded warrants have been exercised. In connection with the offering the Company entered into an underwriting agreement, dated May 2, 2018 with A.G.P./Alliance Global Partners (A.G.P.), as representative of the underwriters. The Underwriting Agreement contained 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. On November 26, 2018, the Company closed an underwritten public offering in which it issued and sold 8,000,000 shares of the Company’s common stock together with warrants to purchase 4,000,000 shares of the Company’s common stock at a combined price to the public of $1.50. The warrants have an exercise price of $1.65, are exercisable upon issuance and expire five years from the date of issuance. In addition, the underwriter exercised the over-allotment option to purchase an additional 1,200,000 shares of common stock and warrants to purchase 600,000 shares of common stock. Net proceeds to Heat from this offering are approximately $12.7 million after deducting underwriting discounts and commissions and other estimated offering expenses payable by Heat. A.G.P./Alliance Global Partners acted as the sole book-running manager for the offering. Common Stock Warrants In connection with the November 26, 2018 public offering, the Company issued 4,600,000 common stock warrants of which are exercisable for one share of common stock. The common stock warrants have an exercise price of $1.65 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 of approximately $5.6 million at the date of issuance was estimated using the Black-Scholes Merton model which used the following inputs: term of 5 years, risk free rate of 2.89%, 0% dividend yield, volatility of 133.26%, and share price of $1.42 per share based on the trading price of the Company’s common stock. In connection with the May 7, 2018 public offering, the Company issued 9,500,000 pre-funded warrants and 7,187,500 common stock warrants each of which are exercisable for one share of common stock. The pre-funded warrants had an exercise price of $0.01 per share and as of December 31, 2019 all pre-funded warrants have been exercised. The common stock warrants have an exercise price of $1.584 per share and expire five years from the issuance date. As of December 31, 2019, 3,054,667 common stock warrants have been exercised. The warrants have been accounted for as equity instruments. The fair value of the common stock warrants of approximately $7.8 million at the date of issuance was estimated using the Black-Scholes Merton model which used the following inputs: term of 5 years, risk free rate of 2.78%, 0% dividend yield, volatility of 124.14%, and share price of $1.30 per share based on the trading price of the Company’s common stock. In connection with the March 23, 2016 public offering, the Company issued warrants to purchase 682,500 shares of common stock with an exercise price of $10.00 per share that expire five years from the issuance date. In connection with the Company’s July 23, 2013 initial public offering, the Company issued warrants to the underwriters for 12,500 shares of common stock issuable at $125.00 per share which expired July 22, 2018. 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 of which 1,738 warrants remain outstanding. The warrants have an exercise price of $4.80 per share and expire ten years from the issuance date. During the year ended December 31, 2018, 3,054,667 common stock warrants have been exercised and 12,500 common stock warrants have expired. No warrants were issued or exercised during the same period in 2019. As of December 31, 2019 the Company has outstanding warrants to purchase 4,600,000 shares of common stock issuable at $1.65 per share, 4,132,833 shares of common stock issuable at $1.584 per share, 296,159 shares of common stock issuable at $10.00 per share; and warrants to purchase 1,738 shares of common stock issuable at $4.80 per share. These warrants do not meet the criteria required to be classified as liability awards and therefore are treated as equity awards. The Company has a total of 9,030,730 warrants outstanding at a weighted average exercise price of $1.89 to purchase its common stock as of December 31, 2019. These warrants are summarized as follows: Issuance Date Number of Shares Exercise Price Expiration Date 3/10/2011 1,738 $ 4.80 3/10/2021 3/23/2016 296,159 $ 10.00 3/23/2021 5/7/2018 4,132,833 $ 1.58 5/8/2023 11/26/2018 4,600,000 $ 1.65 11/26/2023 The following table summarizes the warrant activity of the Company’s common stock warrants. There were no changes in the Company’s outstanding warrants during 2019: Common Stock Warrants Outstanding, December 31, 2017 310,397 Issued 11,787,500 Exercised (3,054,667) Expired (12,500) Outstanding, December 31, 2018 9,030,730 Equity Compensation Plans 2009 Stock Incentive Plan In 2009, the Company adopted the 2009 Stock Option Plan of Heat Biologics, Inc. (the “2009 Plan”), under which stock options to acquire 21,739 common shares could be granted to key employees, directors, and independent contractors. Under the 2009 Plan, both incentive and non-qualified stock options could be granted under terms and conditions established by the Board of Directors. The exercise price for incentive stock options was the fair market value of the related common stock on the date the stock option was granted. Stock options granted under the 2009 Plan generally have terms of 10 years and have various vesting schedules. The Company amended the 2009 Stock Option Plan and all related addendum agreements in April 2011. This second amendment increased the number of shares available for issuance from 21,739 to 65,217. The Company amended the 2009 Plan to increase the number of shares available for issuance to 86,957. The 2009 Plan expired in September 2019, however all options outstanding at the time of expiration remained outstanding and exercisable by their term. As of December 31, 2019 and 2018, there were 47,267 and 23,799 stock options outstanding under the 2009 Plan, respectively. 2014 Stock Incentive Plan In June 2014, the stockholders approved the 2014 Stock Option Plan of Heat Biologics, Inc. (the “2014 Plan”), under which the Company is authorized to grant 50,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2014 Plan. In 2015, the stockholders approved an amendment to the Plan to increase the number of shares by 60,000 and in 2016, the stockholders approved an amendment that allowed the Company to grant up to 300,000 awards in total. As of December 31, 2019 and 2018, there were 228,276 and 263,484 stock options outstanding under the 2014 Plan, respectively. 2017 Stock Incentive Plan In June 2017, the stockholders approved the 2017 Stock Incentive Plan of Heat Biologics, Inc. (the “2017 Plan”), under which the Company is authorized to grant 500,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2017 Plan. As of December 31, 2019 and 2018 there were 345,383 and 234,540 stock options outstanding under the 2017 Plan, respectively. 2018 Stock Incentive Plan In October 2018, the stockholders approved the 2018 Stock Incentive Plan of Heat Biologics, Inc. (the “2018 Plan”), under which the Company is authorized to grant 4,000,000 awards in the form of both incentive and non-qualified stock options, restricted stock, stock appreciation rights and other stock based awards with terms established by the Compensation Committee of the Board of Directors which has been appointed by the Board of Directors to administer the 2018 Plan. At our 2019 Annual Meeting of Stockholders, the stockholders approved an amendment to the Plan to increase the number of shares by 4,000,000. As of December 31, 2019 and 2018 there were 3,729,264 and nil stock options outstanding under the 2018 plan, respectively. There are 3,219,346 stock options remaining available for grant under the Plans. The following table summarizes the components of the Company’s stock-based compensation included in net loss: For the years ended December 31, 2019 2018 Employee stock options $ 1,349,089 $ 443,684 Non-employee stock options 351,812 20,420 Employee stock awards 1,243,526 318,186 Non-employee stock awards 325,521 6,369 $ 3,269,948 $ 788,659 Accounting for Stock-Based Compensation: Stock Compensation Expense - For the years ended December 31, 2019, and 2018, we recorded $3,269,948, and $788,659 of stock-based compensation expense, respectively. No compensation expense of employees with stock awards was capitalized during the years ended December 31, 2019 and 2018. Stock Options - Under the Plan, we have issued stock options. A stock option granted gives the holder the right, but not the obligation to purchase a certain number of shares at a predetermined price for a specific period of time. We typically issue options that vest over four years in equal installments beginning on the first anniversary of the date of grant. Under the terms of the Plan, the contractual life of the option grants may not exceed ten years. During the years ended December 31, 2019, and 2018, we issued options that expire ten years from the date of grant. Fair Value Determination - We have used the Black-Scholes-Merton option pricing model to determine fair value of our stock option awards on the date of grant. We will reconsider the use of the Black-Scholes-Merton model if additional information becomes available in the future that indicates another model would be more appropriate or if grants issued in future periods have characteristics that cannot be reasonably estimated under this model. The following weighted-average assumptions were used for option grants during the years ended December 31, 2019 and 2018: · Volatility – 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 had a limited to no trading history for its common stock. · Expected life of options – The expected term represents the period that the Company’s 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. · Risk-free interest rate – The 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. · Dividend yield – The expected dividend yield was considered to be 0% in the option pricing formula since the Company had not paid any dividends and had no plan to do so in the future. · Forfeitures – As required by ASC 718, the Company reviews recent forfeitures and stock compensation expense. Forfeitures are estimated at the time of the grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Additionally, the Company conducts a sensitivity analysis of the forfeiture rate. Based on these evaluations the Company currently does not apply a forfeiture rate. The following table summarizes weighted-average assumptions used in our calculations of fair value for the years ended December 31, 2019 and 2018: December 31, 2019 2018 Dividend yield — % — % Expected volatility 89.59-91.03 % 83.63-121.81 % Risk-free interest rate 1.63-2.52 % 2.32-2.98 % Expected lives (years) 5.4-6.3 5.1-6.3 Stock Option Activity - The weighted-average fair value of options granted during the years ended December 31, 2019 and 2018, as determined under the Black-Scholes valuation model, was $0.75 and $2.65, respectively. The following table summarizes stock option activity for the years ended December 31, 2019 and 2018: Weighted Weighted Average Average Exercise Remaining Shares Price Contractual Life Stock options outstanding at December 31, 2017 266,810 $ 19.57 Granted 221,410 3.57 Cancelled and expired (22,917) 26.97 Stock options outstanding at December 31, 2018 465,303 11.60 Granted 1.03 Exercised (2,000) 1.06 Forfeited/Expired (319,688) 1.76 Stock options outstanding at December 31, 2019 $ 2.56 Years Stock options exercisable at December 31, 2019 $ 4.21 Years Unrecognized compensation expense related to unvested stock options was $1.0 million as of December 31, 2019, which is expected to be recognized over a weighted-average period of 1.3 years and will be adjusted for forfeitures as they occur. Restricted Stock - Under the Plan, we have issued restricted stock. A restricted stock award is an issuance of shares that cannot be sold or transferred by the recipient until the vesting period lapses. Restricted stock issued to members of our Board of Directors and Executives vest 50% on grant date, 30% on the first anniversary and 10% each anniversary thereafter. The grant date fair value of the restricted stock is equal to the closing market price of our common stock on the date of grant. Restricted Stock Activity - The following table summarizes the restricted stock activity during the years ended December 31, 2019 and 2018: Weighted Average Shares Fair Value Restricted stock at December 31, 2018 — $ — Granted 2,479,179 0.85 Vested (1,179,811) 0.84 Cancelled (44,715) 1.06 Restricted stock at December 31, 2019 1,254,653 $ 0.86 RSUs - Under the Plan, we issued time-based RSUs. RSUs are not actual shares, but rather a right to receive shares in the future. The shares are not issued and the employee cannot sell or transfer shares prior to vesting and has no voting rights until the RSUs vest. The employees' time-based RSUs will result in the delivery of shares in one-fourth increments commencing on the award date. The grant date fair value of the RSUs is equal to the closing market price of our common stock on the grant date. We recognize the grant date fair value of RSUs of shares we expect to issue as compensation expense ratably over the requisite service period. The following table summarizes the RSU activity during the years ended December 31, 2019 and 2018: Weighted Average Shares Fair Value RSUs at December 31, 2017 21,826 $ 8.68 Granted 99,614 3.97 Vested (59,794) 4.59 Cancelled (5,126) 5.93 RSUs at December 31, 2018 56,520 $ 4.95 Vested (21,744) 5.34 Cancelled (4,750) 5.63 RSUs at December 31, 2019 30,026 $ 4.33 |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax | |
Income Tax | 1 2. 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 statements 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 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 December 31, 2019 and 2018, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s 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 consolidated statements of operations. As of December 31, 2019 and 2018, the Company had no such accruals. The components of income tax expense (benefit) attributable to continuing operations are as follows: 2019 2018 Current Expense: Federal $ — $ — State — — Foreign — — — — Deferred Expense: Federal $ 45,178 $ (985,488) State — — Foreign — — Total $ 45,178 $ (985,488) The differences between the company’s income tax expense attributable to continuing operations and the expense computed at the 21 % United States statutory income tax rate were as follows: 2019 2018 Federal income tax expense at statutory rate: $ (4,271,000) $ (3,577,000) Increase (reduction) in income tax resulting from: State Income Taxes (581,000) (207,000) Foreign Rate Differential (9,000) (17,000) Nondeductible Expenses 15,000 7,000 Prior Period True-Up - Pelican — 208,000 Research & Development Credit (772,000) (763,000) Stock Based Compensation 132,000 60,000 Excess Executive Compensation 295,000 — Goodwill Impairment 155,000 Reserve for Loss Carryforwards Limited by Sec. 382 8,000 22,000 Other 74,178 25,512 Increase in Valuation Allowance 4,999,000 3,256,000 $ 45,178 $ (985,488) The tax effects of temporary differences and operating loss carryforwards that gave rise to significant portions of the deferred tax assets and deferred tax liabilities were as follows at December 31, 2019 and December 31, 2018: 2019 2018 Deferred tax assets: Net Operating Loss Carryforward $ 22,278,013 $ 18,731,555 R&D Credits 3,829,550 2,729,737 Stock Compensation 878,094 744,506 Contingent Consideration 854,129 713,259 Lease Liability 9,950 — Other Accrued Expenses 20,797 — Deferred tax assets 27,870,533 22,919,057 Deferred tax liabilities: Property, plant and equipment, primarily due to differences in depreciation (91,764) (127,140) Other Accrued Expenses — (11,926) Intangible Assets (1,347,399) (1,302,220) Deferred tax liabilities (1,439,163) (1,441,286) Valuation allowance (26,793,281) (21,794,504) Net deferred tax assets (liabilities) $ (361,911) $ (316,733) At December 31, 2019 and December 31, 2018, the Company evaluated all significant available positive and negative evidence, including the existence of losses in recent years and management’s forecast of future taxable income, and, as a result, determined it was more likely than not that federal and state deferred tax assets, including benefits related to net operating loss carryforwards, would not be realized. The valuation allowance was increased from $21,794,504 at December 31, 2018 to $26,793,281 at December 31, 2019. Net Operating Losses created in years beginning after 2017 now only offset 80% of Taxable Income but no longer have a 20 year expiration. As such, NOL’s created after 2018 can be used to offset indefinite lived liabilities up to 80%. At December 31, 2019, the Company has federal net operating loss carryforwards of approximately $100,199,714, including $3,027,284 acquired from Pelican Therapeutics, which are available to offset future taxable income. However, due to potential Section 382 limitations (discussed in further detail below) a reserve has been set up for the Pelican Therapeutics NOL of $(2,380,864). The federal net operating loss carryforwards begin to expire in 2029. The Company has various state net operating loss carryforwards totaling approximately $87,841,606 including $2,464,819 from Pelican Therapeutics, which are available to offset future state taxable income. State net operating losses begin to expire in 2024. The Company has various foreign net operating loss carryforwards of approximately $96,032. The foreign net operating loss carryforwards are carried forward indefinitely. Because the Company has incurred cumulative net operating losses since inception, all tax years remain open to examination by U.S. federal, state, and foreign income tax authorities. In accordance with FASB ASC 740, Accounting for Income Taxes , the Company reflects in the 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 December 31, 2019, and 2018, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s 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 income. As of December 31, 2019, and 2018, the Company had no such accruals. The Company files income tax returns in the United States, various state and foreign jurisdictions. The Company is subject to examination by taxing authorities for the tax years ended December 31, 2009 through 2018. Potential 382 Limitation The Company’s ability to utilize its net operating loss (NOL) and research and development (R&D) credit carryforwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the Code), as well as similar state provisions. These ownership changes may limit the amount of NOL and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an “ownership change,” as defined by Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percent of the outstanding stock of a company by certain stockholders or public groups. The Company has not completed a study to assess whether one or more ownership changes have occurred since the Company became a loss corporation under the definition of Section 382. If the Company has experienced an ownership change, utilization of the NOL or R&D credit carryforwards would be subject to an annual limitation, which is determined by first multiplying the value of the Company’s stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any such limitation may result in the expiration of a portion of the NOL or R&D credit carryforwards before utilization. Until a study is completed and any limitation known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit under ASC-740. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding reduction of the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any possible limitation will have an impact on the results of operations of the Company. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Leases | 13. Leases As described in Note 2, effective January 1, 2019, the Company adopted ASC 842 using the optional transition method, applying no practical expedients. In accordance with the optional transition method, the Company did not recast the prior period consolidated financial statements. The lease term is the noncancelable period of the lease. There are no termination provisions or renewal periods reasonably certain of exercise or options controlled by the lessor. The Company conducts its operations from leased facilities in Morrisville, North Carolina, and San Antonio, Texas, the leases for which will expire in 2027 and 2023. The leases are for general office space and require the Company to pay property taxes, insurance, common area expenses and maintenance costs. On October 1, 2019, commencement date of our Morrisville, North Carolina lease, a right-of-use asset of $2.0 million and a liability of $1.4 million were recorded on our balance sheet. Total cash paid for operating leases during the year ended December 31, 2019 was $0.7 million and is included within cash flows from operating activities within the consolidated statement of cash flows. The Company leases furniture and specialized lab equipment under finance leases. The related right-of-use assets are amortized on a straight-line basis over the lesser of the lease term or the estimated useful life of the asset. The effective interest rate is 6.2%. The Company’s lease cost reflected in the accompanying Statements of Operations and Comprehensive loss as follows: For the Year Ended December 31, 2019 Operating lease cost $ 191,737 Finance lease cost Amortization of lease assets 5,210 Interest on lease liabilities 954 Lease cost $ 6,164 The weighted average remaining lease term and incremental borrowing rate as of December 31, 2019 were as follows: Weighted average remaining lease term (years) Operating leases 7 years Finance leases 3 years Weighted average discount rate Operating leases 6.58 % Finance leases 6.17 % Maturities of operating and finance lease liabilities as of December 31, 2019 were as follows: For the year ending December 31: Operating Leases Finance Leases Total 2020 $ 321,273 58,980 380,253 2021 330,032 58,980 389,012 2022 338,960 93,990 432,950 2023 244,973 - 244,973 2024 231,503 - 231,503 Thereafter 693,272 - 693,272 Total minimum lease payments 2,160,013 211,950 2,371,963 Less: Interest (423,607) (20,179) (443,786) Present value of lease liabilities $ 1,736,406 191,771 1,928,177 Maturities of operating lease liabilities as of December 31, 2018 were as follows: For the year ending December 31: 2019 309,729 2020 115,580 2021 118,158 2022 120,736 2023 20,194 Total $ 684,397 |
Non-Controlling Interest
Non-Controlling Interest | 12 Months Ended |
Dec. 31, 2019 | |
Non-Controlling Interest | |
Non-Controlling Interest | 14. Non-Controlling Interest In October 2018, Heat entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in Heat’s subsidiaries, Heat I, Inc. and Pelican Therapeutics, Inc. (“Pelican”), a related party prior to acquisition. The stock exchange resulted in Heat owning 100% of Heat I, Inc. and increasing its controlling ownership in Pelican from 80% to 85%. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions | |
Related Party Transactions | 15. Related Party Transactions The Company compensates its board members. Board members received cash compensation between approximately $61,500 and $221,000, for services rendered during 2019 and 2018, respectively. Board members also received equity compensation. The Company owns 85% of the outstanding equity of Pelican, a related party as of the year ended December 31, 2019. See Note 4 about future milestone payments that may be paid to Participating Pelican Shareholders. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2019 | |
Net Loss Per Share | |
Net Loss Per Share | 16. Net Loss Per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the periods. Fully diluted net loss per common share is computed using the weighted average number of common and dilutive common equivalent shares outstanding during the periods. Common equivalent shares consist of stock options and warrants that are computed using the treasury stock method. For the years ended December 31, 2019 and 2018, all of the Company’s common stock options, unvested restricted stock units and warrants are anti-dilutive and therefore have been excluded from the diluted calculation. The following table reconciles net loss to net loss attributable to Heat Biologics, Inc.: For the years ended December 31, 2019 2018 Net loss $ (20,384,716) $ (16,591,293) Net loss - Non-controlling interest (367,148) (857,439) Net loss attributable to Heat Biologics, Inc. $ (20,017,568) $ (15,733,854) Weighted-average number of common shares used in net loss per share attributable to common stockholders —basic and diluted 33,281,817 17,485,461 Net loss per share attributable to Heat Biologics, Inc —basic and diluted $ (0.60) $ (0.90) The following potentially dilutive securities were excluded from the calculation of diluted net loss per share due to their anti-dilutive effect: For the years ended December 31, 2019 2018 Outstanding stock options 3,063,636 465,303 Restricted stock subject to forfeiture and restricted stock units 1,284,679 56,520 Outstanding common stock warrants 9,030,730 9,030,730 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Event | |
Subsequent Events | 17. Subsequent Events On January 21, 2020, we closed on a public offering consisting of 20,000,000 shares of common stock together with Warrants to purchase 10,000,000 shares of common stock. The gross proceeds to the Company from this offering were approximately $7,000,000, before deducting underwriting discounts, commissions and other offering expenses. As of March 3, 2020, investors exercised 9,960,000 warrants through a cashless exercise for 7,470,000 shares of common stock. Between March 2, 2020 and March 3, 2020, the Company entered into exchange agreements with holders of its warrants issued in 2018 extinguishing 3,291,666 shares of its common stock through the issuance of 2,238,332 shares of common stock. On March 12, 2020, the Company filed a Form S-8 Registration Statement with the Securities and Exchange Commission for an aggregate of 12,000,000 shares of the Company’s common stock, $0.001 par value per share, that are subject to issuance by the Company under the Company’s 2018 Stock Incentive Plan. Subsequent to the year ended December 31, 2019, the Company has issued an additional 12,051,735 shares of common stock in “at-the-market” offerings under the 2017 Shelf and received $10.8 million of net proceeds. On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. A health pandemic is a disease outbreak that spreads rapidly and widely by infection and affects many individuals in an area or population at the same time. Heat and the business of the supplier of our clinical product candidate and the suppliers of the standard of care drugs that are administered in combination with our clinical product candidate could be materially and adversely affected by the risks, or the public perception of the risks, related to a pandemic or other health crisis. Such events could result in the complete or partial closure of one or more manufacturing facilities which could impact our supply of our clinical product candidate or the standard of care drugs that are administered in combination with our clinical product candidate. In addition, an outbreak near our clinical trial sites are located would likely impact our ability to recruit patients, delay our clinical trials, and could affect our ability to complete our clinical trials within the planned time periods. In addition, it could impact economies and financial markets, resulting in an economic downturn that could impact our ability to raise capital or slow down potential partnering relationships. It is not possible for the Company to predict the duration or magnitude of the adverse results of the outbreak and its effects on our business or results of operations at this time. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements 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, Zolovax, Inc., Delphi Therapeutics, Inc., and Scorpion Biosciences, Inc. Additionally, beginning April 28, 2017 the accompanying consolidated financials include Pelican. As of December 31, 2019, there was no activity for Delphi Therapeutics, Inc. or Scorpion Biosciences, Inc. The functional currency of the entities located outside the United States of America (the foreign entities) is the applicable local currency of 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, 2019 and 2018, Heat held 100% controlling interest in Heat I. The December 31, 2019 and 2018 year-end financials include 85% controlling interest in Pelican. Heat accounts for its less than 100% interest in the consolidated financial statements in accordance with U.S. GAAP. Accordingly, the Company presents non-controlling interest 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. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Estimates are used for, but not limited to, useful lives of fixed assets, contingent consideration, valuation of goodwill and IPR&D, income taxes and stock-based compensation. Actual results may differ from those estimates. |
Segments | Segments The Company has one reportable segment – the development of immunotherapies designed to activate and expand a patient’s T-cell mediated immune system against cancer. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all cash and other highly liquid investments with initial maturities from the date of purchase of three months or less to be cash and cash equivalents. |
Concentration of Credit Risk | Concentration of Credit Risk At times, cash balances may exceed the Federal Deposit Insurance Corporation (“FDIC”) insurable limits. The Company has never experienced any losses related to these balances. As of December 31, 2019 and 2018, cash amounts in excess of $250,000 were not fully insured. The uninsured cash balance as of December 31, 2019 was $8,474,836. The Company does not believe it is exposed to significant credit risk on cash and cash equivalents. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost and are capitalized. Depreciation is calculated using the straight-line method and is based on estimated useful lives of five years for lab equipment, three years for computer equipment, and eight years for both furniture and fixtures and leasehold improvements. |
Net Loss per Share | Net Loss per Share Basic net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during each year. Fully diluted net loss per share is computed using the weighted average number of common shares and dilutive securities outstanding during each year. Dilutive securities having an anti-dilutive effect on diluted loss per share are excluded from the calculation. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The carrying amount of certain of the Company’s financial instruments, including cash and cash equivalents, accounts 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 Company’s 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 Company’s cash equivalents are classified within Level I of the fair value hierarchy. As of December 31, 2019 and 2018, the fair values of cash, accounts payable, and accrued expenses approximated their carrying values because of the short-term nature of these assets or liabilities. The Company’s short-term investments consist of Level I securities which are comprised of highly liquid money market funds. The estimated fair value of the short-term investments was based on quoted market prices. There were no transfers between fair value hierarchy levels during the years ended December 31, 2019 or 2018. The fair value of financial instruments measured on a recurring basis is as follows: As of December 31, 2019 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,713,922 $ 5,713,922 — — Liabilities: Contingent consideration $ 3,718,515 — — $ 3,718,515 As of December 31, 2018 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,570,027 $ 5,750,027 — — Liabilities: Contingent consideration $ 3,105,225 — — $ 3,105,225 The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the year ended December 31, 2019: Contingent Consideration Balance at December 31, 2017 $ 2,609,289 Change in fair value 495,936 Balance at December 31, 2018 $ 3,105,225 Change in fair value 613,290 Balance at December 31, 2019 $ 3,718,515 The change in the fair value of the contingent consideration of $613,290 and $495,936 for the years ended December 31, 2019 and 2018 was primarily due to the effect of the change in discount rate, probability of achieving milestones, and passage of time on the fair value measurement. Adjustments associated with the change in fair value of contingent consideration are included in the Company’s consolidated statement of operations and comprehensive loss. The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements of contingent consideration classified as Level 3 as of December 31, 2019 and 2018: As of December 31, 2019 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2020-2026 Discount rate 7.83% Probability of occurrence 2.1% to 82% |
Income Tax | 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 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 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 December 31, 2019 and 2018, the Company had no unrecognized income tax benefits and correspondingly there is no impact on the Company’s effective income tax rate associated with these items. The Company’s 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 consolidated statements of operations and comprehensive loss. As of December 31, 2019 and 2018, the Company had no such accruals. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Act”) was signed into law. The Tax Act lowered the Federal corporate tax rate from 34% to 21% and made numerous other tax law changes. The Company has measured deferred tax assets at the enacted tax rate expected to apply when these temporary differences are expected to be realized or settled. Under the guidance of SAB 118, the Company is required to recognize the effect of tax law changes in the period of enactment. Reasonable estimates were made based on the Company’s analysis of the Tax Act. These provisional amounts were adjusted during 2018 when additional information was obtained with no material adjustments. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation arrangements with employees and non-employee directors using a fair value method that requires the recognition of compensation expense for costs related to all stock-based payments, including stock options and restricted stock units. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option pricing model. The fair value of restricted stock units is estimated based on the closing price of the Company’s stock on the date of grant, and for the purposes of expense recognition, the total new number of shares expected to vest is adjusted for estimated forfeitures. Stock-based compensation costs are based on the fair value of the underlying option calculated using the Black-Scholes-Merton option pricing model on the date of grant for stock options and are recognized as expense on a straight-line basis over the requisite service period, which is the vesting period. Determining the appropriate fair value model and related assumptions requires judgment, including estimating stock price volatility, forfeiture rates and expected term. The expected volatility rates are estimated based on the actual volatility of comparable public companies over the expected term. The expected term for the years ended December 31, 2019 and 2018 represents the average time that options are expected to be outstanding based on the average of the vesting term and the contractual term of the option. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company has not paid dividends and does not anticipate paying a cash dividend in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of U.S. Treasury securities with maturities consistent with the estimated expected term of the awards. |
Net loss attributable to non-controlling interests | Net loss attributable to non-controlling interests Net loss attributable to non-controlling interests is the result of the Company’s consolidation of subsidiaries of which it does not own 100%. In October 2018, the Company entered into an agreement with the University of Miami (“UM”) whereby UM exchanged its shares of stock in the Company’s subsidiaries, Heat I, Inc. and Pelican, a related party prior to acquisition, for 35,000 shares of the Company’s common stock. The stock exchange resulted in the Company owning 100% of Heat I, Inc. and increasing its controlling ownership in Pelican from 80% to 85%. The Company’s net loss attributable to non-controlling interests relates to the 15% ownership of Pelican that Heat does not own as of December 31, 2019 and 2018. |
Revenue Recognition | Revenue Recognition Effective January 1, 2019, the Company has adopted ASU No. 2018-08 Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made. The Company’s sole source of revenue is grant revenue related to the CPRIT contract, which is being accounted for under ASC 958 as a conditional non-exchange contribution. The CPRIT grant covers the periods from June 1, 2017 through May 31, 2020, for a total grant award of up to $15.2 million. CPRIT advances grant funds upon request by the Company consistent with the agreed upon amounts and schedules as provided in the contract. The first tranche of funding of $1.8 million was received in May 2017, and a second tranche of funding of $6.5 million was received in October 2017, and the third tranche of funding of $5.4 million was received in December 2019. The remaining $1.5 million will be awarded after we have fulfilled every requirement of the grant and the grant has been approved to be finalized. Funds received are reflected in deferred revenue as a liability until revenue is earned. Grant revenue is recognized when qualifying costs are incurred. As of December 31, 2019, the deferred revenue balance was $3.4 million with $10.3 million recognized as revenue since contract inception. |
Business Combinations | Business Combinations We account for acquisitions using the acquisition method of accounting, which requires that all identifiable assets acquired and liabilities assumed be recorded at their estimated fair values. The excess of the fair value of purchase consideration over the fair values of identifiable assets and liabilities is recorded as goodwill. When determining the fair values of assets acquired and liabilities assumed, management makes significant estimates and assumptions. Critical estimates in valuing certain intangible assets include but are not limited to future expected cash flows from acquired patented technology. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. Other estimates associated with the accounting for acquisitions may change as additional information becomes available regarding the assets acquired and liabilities assumed (see Note 4). |
Goodwill and In-Process Research and Development | Goodwill and In-Process Research and Development The Company classifies intangible assets into three categories: (1) intangible assets with definite lives subject to amortization, (2) intangible assets with indefinite lives not subject to amortization and (3) goodwill. The Company determines the useful lives of definite-lived intangible assets after considering specific facts and circumstances related to each intangible asset. Factors the Company considers when determining useful lives include the contractual term of any agreement related to the asset, the historical performance of the asset, and other economic facts; including competition and specific market conditions. Intangible assets that are deemed to have definite lives are amortized, primarily on a straight-line basis, over their estimated useful lives. Intangible assets that are deemed to have indefinite lives, including goodwill, are reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the asset might be impaired. The impairment test for indefinite-lived intangibles, other than goodwill, consists of a comparison of the fair value of the intangible asset with its carrying amount. If the carrying amount exceeds the fair value, an impairment charge is recognized in an amount equal to that excess. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis or when events or changes in circumstances indicate a potential impairment exists, using a fair value-based test. Pursuant to ASU 2017-04, the Company must record a goodwill impairment charge if a reporting unit’s carrying value exceeds its fair value. See Note 7 regarding impairment at December 31, 2019. In-process research and development, or IPR&D, assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. IPR&D assets represent the fair value assigned to technologies that the Company acquires, which at the time of acquisition have not reached technological feasibility and have no alternative future use. During the period that the assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval and the ability to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. |
Deferred Revenue | Deferred Revenue Deferred revenue is comprised of proceeds of $3.4 million received from CPRIT for which the costs have not been incurred or the conditions of the award have not been met and grant funds received from an economic development grant agreement with the City of San Antonio (“Economic Development Grant”) that we entered into on November 1, 2017. Under the Economic Development Grant, we received $0.2 million in state enterprise fund grants for the purpose of defraying costs toward the purchase of laboratory equipment. As part of the agreement, we will provide the city of San Antonio with a purchase money security interest in the equipment to secure the repayment of grant funds should we fail to perform under the terms and conditions of the agreement. Our obligations under the agreement include meeting certain employment levels for a period of not less than seven years commencing on or before December 31, 2017 and establishing Pelican’s corporate headquarters in San Antonio. The Economic Development Grant funds will be recognized as income upon the achievement of the performance criteria and determination that the cash is no longer refundable to the State of Texas. |
Contingent Consideration | Contingent Consideration Consideration paid in a business combination may include potential future payments that are contingent upon the acquired business achieving certain milestones in the future (“contingent consideration”). Contingent consideration liabilities are measured at their estimated fair value as of the date of acquisition, with subsequent changes in fair value recorded in the consolidated statements of operations. The Company estimates the fair value of the contingent consideration as of the acquisition date using the estimated future cash outflows based on the probability of meeting future milestones. The milestone payments will be made upon the achievement of clinical and commercialization milestones as well as single low digit royalty payments and payments upon receipt of sublicensing income. Subsequent to the date of acquisition, the Company reassess the actual consideration earned and the probability-weighted future earn-out payments at each balance sheet date. Any adjustment to the contingent consideration liability will be recorded in the consolidated statements of operations. Contingent consideration liabilities expected to be settled within 12 months after the balance sheet date are presented in current liabilities, with the non-current portion recorded under long term liabilities in the consolidated balance sheets (see Note 4). |
Research and Development | Research and Development Research and development costs associated with developmental products not yet approved by the FDA as well as costs associated with bringing developmental products into advanced phase clinical trials as incurred. These costs consist primarily of pre-manufacturing and manufacturing drug costs, clinical trial execution, investigator payments, license fees, salaries, stock-based compensation and related personnel costs. Other costs include fees paid to consultants and outside service providers related to the development of the Company’s product candidates and other expenses relating to the design, development, and testing and enhancement of its product candidates. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards: In November 2018, the FASB issued ASU 2018‑18: Collaborative Arrangements (Topic 808) : Clarifying the Interaction between Topic 808 and Topic 606. This ASU, in part, requires that certain transactions with collaboration partners be excluded from revenue recognized under Topic 606. ASU 2018‑18 is effective for fiscal years beginning after December 15, 2019. The Company adopted this ASU in the first quarter of 2020 and there was no material effect on the recognition or measurement of revenue in the Company’s financial statements. In June 2018, the FASB issued ASU 2018‑07: Compensation – Stock Compensation (Topic 718) : Improvements to Nonemployee Share-Based Payment Accounting. This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees, and as a result, the accounting for share-based payments to non-employees will be substantially aligned. ASU 2018‑07 is effective for fiscal years beginning after December 15, 2018, including interim periods within that fiscal year, early adoption is permitted but no earlier than an entity’s adoption date of Topic 606. The Company adopted this ASU in the first quarter of 2019 and there was no material effect on the Company’s results of operations or cash flows. In June 2018, the FASB issued ASU No. 2018‑08, Not-For-Profit Entities (Topic 958): Clarifying the Scope and the Accounting Guidance for Contributions Received and Contributions Made , which is intended to clarify and improve the scope and the accounting guidance for contributions received and contributions made. The amendments in ASU No. 2018‑08 should assist entities in (1) evaluating whether transactions should be accounted for as contributions (nonreciprocal transaction) within the scope of Topic 958, Not-for-Profit Entities, or as exchange (reciprocal) transactions subject to other guidance and (2) determining whether a contribution is conditional. This amendment applies to all entities that make or receive grants or contributions. This ASU is effective for public companies serving as a resource recipient for fiscal years beginning after June 15, 2018, including interim periods within that fiscal year. The Company adopted this ASU in the first quarter of 2019 and there was no material effect on the recognition or measurement of revenue in the Company’s financial statements. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which requires recognition of a right-of-use asset and liability for future lease payments for contracts that meet the definition of a lease and requires disclosure of certain information about leasing arrangements. Generally, a lease exists when a contract or part of a contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In determining whether a lease exists, the Company considers whether a contract provides it with both the right to obtain substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset. The Company adopted the standard on January 1, 2019 using the optional transition method and, as a result, did not recast prior period unaudited comparative financial statements. The Company has determined that its leases, consisting of leases for office and laboratory space without optional terms or variable components, are operating leases. Adoption of the new standard resulted in the recording of operating lease right-of-use assets and associated lease liabilities of $520,399 and $528,253, respectively, as of January 1, 2019 on the consolidated balance sheet with no cumulative impact to accumulated deficit and did not have a material impact on the Company’s results of operations or cash flows. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Summary of Significant Accounting Policies | |
Schedule of Fair Value of Financial Instruments Measurements | As of December 31, 2019 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,713,922 $ 5,713,922 — — Liabilities: Contingent consideration $ 3,718,515 — — $ 3,718,515 As of December 31, 2018 Description Total Level 1 Level 2 Level 3 Assets: Short-term investments $ 5,570,027 $ 5,750,027 — — Liabilities: Contingent consideration $ 3,105,225 — — $ 3,105,225 |
Schedule of Level 3 Fair Value Measurements | Contingent Consideration Balance at December 31, 2017 $ 2,609,289 Change in fair value 495,936 Balance at December 31, 2018 $ 3,105,225 Change in fair value 613,290 Balance at December 31, 2019 $ 3,718,515 |
Schedule of Fair Value Measurements of Contingent Consideration | As of December 31, 2019 Valuation Significant Weighted Average Methodology Unobservable Input (range, if applicable) Contingent Consideration Probability weighted income approach Milestone dates 2020-2026 Discount rate 7.83% Probability of occurrence 2.1% to 82% |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Prepaid Expenses And Other Current Assets. | |
Schedule of Prepaid Expenses and Other Current Assets | December 31, 2019 2018 Prepaid manufacturing expense 148,156 559,110 Prepaid insurance 120,851 284,931 Other prepaid expenses and current assets 132,162 117,261 Other current assets 19,159 15 $ 420,328 $ 961,317 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Property and Equipment | |
Schedule of Property and Equipment | December 31, 2019 2018 Lab equipment $ 1,311,853 $ 1,218,532 Computers 53,065 9,445 Furniture and fixtures 50,453 38,589 Leasehold improvements 14,259 58,146 Total 1,429,630 1,324,712 Accumulated depreciation (870,220) (681,566) Property and equipment, net $ 559,410 $ 643,146 |
Goodwill and In-process R&D (Ta
Goodwill and In-process R&D (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill and In-process R&D | |
Schedule of Goodwill and In-process R&D | The following table provides a rollforward of the Company’s goodwill as of December 31, 2018 and 2019: Goodwill Goodwill from acquisition of Pelican $ 2,189,338 Balance at December 31, 2018 2,189,338 Goodwill impairment loss (737,000) Balance at December 31, 2019 $ 1,452,338 The following table provides a rollforward of the Company’s in-process R&D as of December 31, 2018. There was no change in in-process R&D during 2019. In-process R&D In-process R&D from acquisition of Pelican $ 5,866,000 Balance at December 31, 2018 $ 5,866,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accrued Expenses | |
Schedule of Accrued Expenses and other payables | December 31, December 31, 2019 2018 Accrued clinical trial expenses $ 1,156,618 $ 919,750 Compensation and related benefits 303,870 628,147 Patent fees — 40,000 Deferred rent — 7,854 Other expenses 215,979 82,300 $ 1,676,467 $ 1,678,051 |
License Agreements (Tables)
License Agreements (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
License Agreements | |
Schedule of Future Minimum Royalty Payments | Future minimum royalty payments by the Company for licenses as of December 31, 2019 are as follows (in thousands): Year ended December 31, 2020 $ 103 2021 228 2022 784 2023 74 2024 — Total $ 1,189 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of Common Stock Warrants by Exercise Price Range | Issuance Date Number of Shares Exercise Price Expiration Date 3/10/2011 1,738 $ 4.80 3/10/2021 3/23/2016 296,159 $ 10.00 3/23/2021 5/7/2018 4,132,833 $ 1.58 5/8/2023 11/26/2018 4,600,000 $ 1.65 11/26/2023 |
Common Stock Warrants Outstanding | Common Stock Warrants Outstanding, December 31, 2017 310,397 Issued 11,787,500 Exercised (3,054,667) Expired (12,500) Outstanding, December 31, 2018 9,030,730 |
Schedule of Components of Stock-based Compensation Included in Net Loss | For the years ended December 31, 2019 2018 Employee stock options $ 1,349,089 $ 443,684 Non-employee stock options 351,812 20,420 Employee stock awards 1,243,526 318,186 Non-employee stock awards 325,521 6,369 $ 3,269,948 $ 788,659 |
Schedule of Stock Option Valuation Assumptions | December 31, 2019 2018 Dividend yield — % — % Expected volatility 89.59-91.03 % 83.63-121.81 % Risk-free interest rate 1.63-2.52 % 2.32-2.98 % Expected lives (years) 5.4-6.3 5.1-6.3 |
Schedule of Stock Option Activity | Weighted Weighted Average Average Exercise Remaining Shares Price Contractual Life Stock options outstanding at December 31, 2017 266,810 $ 19.57 Granted 221,410 3.57 Cancelled and expired (22,917) 26.97 Stock options outstanding at December 31, 2018 465,303 11.60 Granted 1.03 Exercised (2,000) 1.06 Forfeited/Expired (319,688) 1.76 Stock options outstanding at December 31, 2019 $ 2.56 Years Stock options exercisable at December 31, 2019 $ 4.21 Years |
Schedule of Unvested Restricted Stock Activity | Weighted Average Shares Fair Value Restricted stock at December 31, 2018 — $ — Granted 2,479,179 0.85 Vested (1,179,811) 0.84 Cancelled (44,715) 1.06 Restricted stock at December 31, 2019 1,254,653 $ 0.86 |
Share-based Payment Arrangement, Restricted Stock Unit, Activity [Table Text Block] | Weighted Average Shares Fair Value RSUs at December 31, 2017 21,826 $ 8.68 Granted 99,614 3.97 Vested (59,794) 4.59 Cancelled (5,126) 5.93 RSUs at December 31, 2018 56,520 $ 4.95 Vested (21,744) 5.34 Cancelled (4,750) 5.63 RSUs at December 31, 2019 30,026 $ 4.33 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax | |
Schedule of Components of Income Tax Expense | 2019 2018 Current Expense: Federal $ — $ — State — — Foreign — — — — Deferred Expense: Federal $ 45,178 $ (985,488) State — — Foreign — — Total $ 45,178 $ (985,488) |
Schedule of Income Tax Rate Reconciliation | 2019 2018 Federal income tax expense at statutory rate: $ (4,271,000) $ (3,577,000) Increase (reduction) in income tax resulting from: State Income Taxes (581,000) (207,000) Foreign Rate Differential (9,000) (17,000) Nondeductible Expenses 15,000 7,000 Prior Period True-Up - Pelican — 208,000 Research & Development Credit (772,000) (763,000) Stock Based Compensation 132,000 60,000 Excess Executive Compensation 295,000 — Goodwill Impairment 155,000 Reserve for Loss Carryforwards Limited by Sec. 382 8,000 22,000 Other 74,178 25,512 Increase in Valuation Allowance 4,999,000 3,256,000 $ 45,178 $ (985,488) |
Schedule of Deferred Tax Assets and Liabilities | 2019 2018 Deferred tax assets: Net Operating Loss Carryforward $ 22,278,013 $ 18,731,555 R&D Credits 3,829,550 2,729,737 Stock Compensation 878,094 744,506 Contingent Consideration 854,129 713,259 Lease Liability 9,950 — Other Accrued Expenses 20,797 — Deferred tax assets 27,870,533 22,919,057 Deferred tax liabilities: Property, plant and equipment, primarily due to differences in depreciation (91,764) (127,140) Other Accrued Expenses — (11,926) Intangible Assets (1,347,399) (1,302,220) Deferred tax liabilities (1,439,163) (1,441,286) Valuation allowance (26,793,281) (21,794,504) Net deferred tax assets (liabilities) $ (361,911) $ (316,733) |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases | |
Schedule of lease cost | The Company’s lease cost reflected in the accompanying Statements of Operations and Comprehensive loss as follows: For the Year Ended December 31, 2019 Operating lease cost $ 191,737 Finance lease cost Amortization of lease assets 5,210 Interest on lease liabilities 954 Lease cost $ 6,164 The weighted average remaining lease term and incremental borrowing rate as of December 31, 2019 were as follows: Weighted average remaining lease term (years) Operating leases 7 years Finance leases 3 years Weighted average discount rate Operating leases 6.58 % Finance leases 6.17 % |
Schedule of future lease liabilities | For the year ending December 31: Operating Leases Finance Leases Total 2020 $ 321,273 58,980 380,253 2021 330,032 58,980 389,012 2022 338,960 93,990 432,950 2023 244,973 - 244,973 2024 231,503 - 231,503 Thereafter 693,272 - 693,272 Total minimum lease payments 2,160,013 211,950 2,371,963 Less: Interest (423,607) (20,179) (443,786) Present value of lease liabilities $ 1,736,406 191,771 1,928,177 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Net Loss Per Share | |
Schedule of Net Loss Per Share | For the years ended December 31, 2019 2018 Net loss $ (20,384,716) $ (16,591,293) Net loss - Non-controlling interest (367,148) (857,439) Net loss attributable to Heat Biologics, Inc. $ (20,017,568) $ (15,733,854) Weighted-average number of common shares used in net loss per share attributable to common stockholders —basic and diluted 33,281,817 17,485,461 Net loss per share attributable to Heat Biologics, Inc —basic and diluted $ (0.60) $ (0.90) |
Schedule of Potentially Dilutive Securities | For the years ended December 31, 2019 2018 Outstanding stock options 3,063,636 465,303 Restricted stock subject to forfeiture and restricted stock units 1,284,679 56,520 Outstanding common stock warrants 9,030,730 9,030,730 |
Organization (Details)
Organization (Details) | Jan. 19, 2018 |
Organization | |
Reverse stock split | 0.1 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Narrative) (Details) | Nov. 01, 2017USD ($) | Dec. 31, 2019USD ($) | Oct. 31, 2018shares | Oct. 31, 2017USD ($) | May 31, 2017USD ($) | Jun. 30, 2016USD ($) | May 31, 2016USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) | May 31, 2020USD ($) | Oct. 01, 2019USD ($) | Jan. 01, 2019USD ($) | Sep. 30, 2018 |
Revenue | $ 3,049,104 | $ 5,793,849 | ||||||||||||
Accumulated deficit | $ (104,597,748) | (104,597,748) | (84,580,180) | |||||||||||
Net loss | $ (20,384,716) | $ (16,591,293) | ||||||||||||
Number of reportable segments | segment | 1 | |||||||||||||
Percentage of non-controlling interest acquired | 15.00% | 15.00% | 15.00% | |||||||||||
Restricted cash from cash flows | $ 9,039,887 | $ 9,039,887 | $ 22,154,251 | $ 9,765,359 | ||||||||||
Cash balance insured | 250,000 | 250,000 | 250,000 | |||||||||||
Cash balance uninsured | 8,474,836 | 8,474,836 | ||||||||||||
Assets transfer from level 1 to level 2 | 0 | 0 | 0 | |||||||||||
Assets transfer from level 2 to level 1 | 0 | 0 | 0 | |||||||||||
Liabilities transfer from level 1 to level 2 | 0 | 0 | 0 | |||||||||||
Liabilities transfer from level 2 to level 1 | 0 | 0 | 0 | |||||||||||
Assets transfer in to level 3 | 0 | 0 | ||||||||||||
Assets transfer out of level 3 | 0 | 0 | ||||||||||||
Liabilities transfer in to level 3 | 0 | 0 | ||||||||||||
Liabilities transfer out of level 3 | 0 | 0 | ||||||||||||
Fair value of the contingent consideration | 613,290 | 495,936 | ||||||||||||
Revenue From Contract With Customer Including Assessed Tax | 3,049,104 | 5,793,849 | ||||||||||||
Unrecognized tax benefit | 0 | $ 0 | $ 0 | |||||||||||
Federal corporate tax rate | 21.00% | 34.00% | ||||||||||||
Right-of-use asset | $ 2,287,500 | $ 2,287,500 | $ 2,000,000 | |||||||||||
ASU 2016-02 | ||||||||||||||
Right-of-use asset | $ 520,399 | |||||||||||||
Lease liabilities | $ 528,253 | |||||||||||||
Lab equipment | ||||||||||||||
Useful life | P5Y | |||||||||||||
Computers | ||||||||||||||
Useful life | P3Y | |||||||||||||
Furniture and fixtures and leasehold improvements | ||||||||||||||
Useful life | P8Y | |||||||||||||
Heat I | ||||||||||||||
Ownership interest in subsidiary | 100.00% | 100.00% | 100.00% | 100.00% | ||||||||||
Pelican Therapeutics, Inc. | ||||||||||||||
Ownership interest in subsidiary | 85.00% | 85.00% | 85.00% | 85.00% | 80.00% | |||||||||
CPRIT | ||||||||||||||
Deferred revenue | $ 3,400,000 | $ 3,400,000 | $ 3,400,000 | |||||||||||
Grant receivable | $ 200,000 | |||||||||||||
CPRIT | Minimum | ||||||||||||||
Period of maintenance of employment levels | 7 years | |||||||||||||
CPRIT | Grant revenue | ||||||||||||||
Grant receivable | $ 1,500,000 | $ 1,500,000 | ||||||||||||
Heat I, Inc. and Pelican | ||||||||||||||
Shares issued in acquisition | shares | 35,000 | |||||||||||||
Pelican Therapeutics, Inc. | ||||||||||||||
Percentage of voting interests acquired in acquisition | 85.00% | 85.00% | 80.00% | 80.00% | ||||||||||
Percentage of non-controlling interest acquired | 20.00% | 20.00% | ||||||||||||
Amount awarded from CPRIT grant | $ 15,200,000 | $ 15,200,000 | $ 15,200,000 | |||||||||||
Contract value | $ 10,300,000 | |||||||||||||
Pelican Therapeutics, Inc. | Grant revenue | ||||||||||||||
Revenue | 10,300,000 | |||||||||||||
Revenue From Contract With Customer Including Assessed Tax | 10,300,000 | |||||||||||||
Grant receivable | $ 1,500,000 | $ 1,500,000 | ||||||||||||
Pelican Therapeutics, Inc. | First tranche | Grant revenue | ||||||||||||||
Revenue | $ 1,800,000 | |||||||||||||
Revenue From Contract With Customer Including Assessed Tax | $ 1,800,000 | |||||||||||||
Pelican Therapeutics, Inc. | Second tranche | Grant revenue | ||||||||||||||
Revenue | $ 6,500,000 | |||||||||||||
Revenue From Contract With Customer Including Assessed Tax | $ 6,500,000 | |||||||||||||
Pelican Therapeutics, Inc. | Third Tranche | Grant revenue | ||||||||||||||
Revenue | 5,400,000 | |||||||||||||
Revenue From Contract With Customer Including Assessed Tax | $ 5,400,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies (Schedule of Fair Value of Financial Instruments Measurements) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Assets: | |||
Short-term investments | $ 5,713,922 | $ 5,570,027 | |
Contingent consideration | 3,718,515 | 3,105,225 | $ 2,609,289 |
Level 1 | |||
Assets: | |||
Short-term investments | 5,713,922 | 5,750,027 | |
Level 3 | |||
Assets: | |||
Contingent consideration | $ 3,718,515 | $ 3,105,225 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies (Schedule of Fair Value Measurements) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies | ||
Beginning Balance | $ 3,105,225 | $ 2,609,289 |
Change in fair value | 613,290 | 495,936 |
Ending Balance | $ 3,718,515 | $ 3,105,225 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies (Schedule of Fair Value Measurements of Contingent Consideration) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Summary of Significant Accounting Policies | ||
Valuation Methodology | Probability weighted income approach | Probability weighted income approach |
Significant unobservable input - milestone dates | 2020-2026 | 2019-2025 |
Discount rate | 7.83% | 7.20% |
Probability of occurrence - minimum | 2.10% | 1.60% |
Probability of occurrence - maximum | 82.00% | 62.50% |
Short-Term Investments (Schedul
Short-Term Investments (Schedule of Short Term Investments) (Details) - USD ($) $ in Millions | Dec. 31, 2019 | Dec. 31, 2018 |
Mutual funds | ||
Estimated fair value | $ 5.7 | $ 5.6 |
Acquisition of Pelican Therap_2
Acquisition of Pelican Therapeutics (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | 36 Months Ended | |||||
Jun. 30, 2016 | May 31, 2016 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | May 31, 2020 | Oct. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | |
Business Acquisition [Line Items] | |||||||||
Accrued liabilities | $ 1,676,467 | $ 1,678,051 | |||||||
Goodwill | $ 1,452,338 | $ 2,189,338 | |||||||
Percentage of non-controlling interest acquired | 15.00% | 15.00% | |||||||
Revenue | $ 3,049,104 | $ 5,793,849 | |||||||
Net loss (income) | (20,017,568) | (15,733,854) | |||||||
Net loss | $ 20,384,716 | $ 16,591,293 | |||||||
Pelican Therapeutics, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Ownership interest in subsidiary | 85.00% | 85.00% | 85.00% | 80.00% | |||||
Pelican Therapeutics, Inc. | |||||||||
Business Acquisition [Line Items] | |||||||||
Percentage of voting interests acquired in acquisition | 85.00% | 80.00% | 80.00% | ||||||
Fair value of contingent consideration | $ 200,000 | ||||||||
Percentage of non-controlling interest acquired | 20.00% | ||||||||
Amount awarded from CPRIT grant | $ 15,200,000 | $ 15,200,000 | $ 15,200,000 | ||||||
Pelican Therapeutics, Inc. | Stockholders | |||||||||
Business Acquisition [Line Items] | |||||||||
Cash consideration | $ 300,000 |
Acquisition of Pelican Therap_3
Acquisition of Pelican Therapeutics (Future Milestone Payments) (Details) - Pelican Therapeutics, Inc. $ in Millions | Dec. 31, 2019USD ($) |
Future milestone payment upon Pelican's dosing of the first patient in its first Phase 1 trial for an oncology indication | $ 2 |
Future milestone payment upon Pelican's dosing of the first patient in its first Phase 2 trial for an oncology indication | 1.5 |
Future milestone payment upon successful outcome of the first Phase 2 trial for an oncology indication | 3 |
Future milestone payment upon Pelican's dosing of the first patient in its first Phase 3 trial for an oncology indication | 6 |
Future milestone payment upon Pelican's dosing of the first patient in its first Phase 3 trial for a non- oncology indication | 3 |
Future milestone payment upon successful outcome of the first Phase 3 trial for an oncology indication | 7.5 |
Future milestone payment upon successful outcome of the first Phase 3 trial for a non-oncology indication | 3 |
Future milestone payment upon acceptance of a Biologics License Application (BLA) submission for an oncology indication | 7.5 |
Future milestone payment upon acceptance of a BLA submission for a non-oncology indication | 3 |
Future milestone payment upon first product indication approval in the United States or Europe for an oncology indication | 7.5 |
Future milestone payment upon first product indication approval in the United States or Europe for a non- oncology indication | $ 3 |
Discount rate used for calculation of fair value of contingent consideration | 7.83% |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Schedule of Prepaid Expenses and Other Current Assets) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Prepaid Expenses And Other Current Assets | ||
Prepaid manufacturing expense | $ 148,156 | $ 559,110 |
Prepaid insurance | 120,851 | 284,931 |
Other prepaid expenses | 132,162 | 117,261 |
Other current assets | 19,159 | 15 |
Prepaid expenses and other current assets | $ 420,328 | $ 961,317 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,429,630 | $ 1,324,712 |
Accumulated depreciation | (870,220) | (681,566) |
Property and equipment, net | 559,410 | 643,146 |
Depreciation expense | $ 227,296 | 237,318 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 5 years | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives | 7 years | |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 1,311,853 | 1,218,532 |
Leasehold Improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total | 53,065 | 9,445 |
Computers | ||
Property, Plant and Equipment [Line Items] | ||
Total | 50,453 | 38,589 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Total | $ 14,259 | $ 58,146 |
Goodwill and In-process R&D (Sc
Goodwill and In-process R&D (Schedule of Goodwill) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and In-process R&D | ||
Goodwill gross | $ 2,200,000 | |
Goodwill beginning balance | 2,189,338 | |
Goodwill from acquisition of Pelican | $ 2,189,338 | |
Goodwill impairment loss | (737,000) | |
Goodwill ending balance | $ 1,452,338 | $ 2,189,338 |
Goodwill and In-process R&D (_2
Goodwill and In-process R&D (Schedule of In-process R&D) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill and In-process R&D | ||
In-process R&D beginning balance | $ 5,866,000 | |
In-process R&D from acquisition of Pelican | 5,866,000 | $ 5,866,000 |
In-process R&D ending balance | $ 5,866,000 | $ 5,866,000 |
Accrued Expenses (Schedule of A
Accrued Expenses (Schedule of Accrued Expenses) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses | ||
Accrued clinical trial expenses | $ 1,156,618 | $ 919,750 |
Compensation and related benefits | 303,870 | 628,147 |
Patent fees | 40,000 | |
Deferred rent | 7,854 | |
Other expenses | 215,979 | 82,300 |
Accrued expenses | $ 1,676,467 | $ 1,678,051 |
License Agreements (Narrative)
License Agreements (Narrative) (Details) - USD ($) | Oct. 25, 2016 | Oct. 25, 2016 | Jun. 30, 2016 | Nov. 19, 2013 | Jul. 31, 2011 | Apr. 30, 2011 | Feb. 28, 2011 | Jun. 30, 2009 | Dec. 31, 2019 | Dec. 31, 2010 | Dec. 31, 2018 | Dec. 31, 2017 | May 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Sep. 08, 2010 |
Minimum royalty payment for first three years, per year | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | |||||||||||||
Milestone payment | 1,000 | $ 500,000 | ||||||||||||||||||
Milestone payment upon annual net sales of $100,000,000 or more | 250,000 | |||||||||||||||||||
Option fees | $ 2,000 | |||||||||||||||||||
Exercise of stock options | $ 10,000 | 2,120 | ||||||||||||||||||
Maintenance fee | $ 82,000 | |||||||||||||||||||
Period of payment of nominal maintenance fee | 10 years | |||||||||||||||||||
Upfront fee | $ 20,000 | |||||||||||||||||||
Pelican Therapeutics, Inc. | ||||||||||||||||||||
Minimum royalty payment for first three years, per year | 10,000 | 10,000 | $ 10,000 | |||||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | 20,000 | 20,000 | 20,000 | 20,000 | 20,000 | 20,000 | 20,000 | |||||||||||||
License agreement ("SS114A") | ||||||||||||||||||||
Reimbursement of for past patent fees | $ 37,381 | |||||||||||||||||||
License Agreement ("143") | ||||||||||||||||||||
Reimbursement of for past patent fees | 50,000 | |||||||||||||||||||
License Agreement ("J110") | ||||||||||||||||||||
Reimbursement of for past patent fees | 10,000 | |||||||||||||||||||
License Agreement for Multiple Myeloma | ||||||||||||||||||||
Maintenance fee | 5,000 | |||||||||||||||||||
License 0331, 0539 | Pelican Therapeutics, Inc. | ||||||||||||||||||||
Milestone payments due upon submission | 150,000 | |||||||||||||||||||
Milestone payments completion of phase 1 clinical trial | 250,000 | |||||||||||||||||||
License I176 | Pelican Therapeutics, Inc. | ||||||||||||||||||||
Minimum royalty payment for first three years, per year | $ 10,000 | $ 10,000 | $ 10,000 | |||||||||||||||||
Minimum royalty payment for remainder life of agreement, per year | 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | $ 20,000 | |||||||||||||||
License Costs | 50,000 | |||||||||||||||||||
Reimbursement of for past patent fees | $ 15,797 | |||||||||||||||||||
Milestone payments due upon submission | 150,000 | |||||||||||||||||||
Milestone payments completion of phase 1 clinical trial | $ 500,000 | |||||||||||||||||||
UMM143 | Pelican Therapeutics, Inc. | ||||||||||||||||||||
License Costs | $ 35,000 | |||||||||||||||||||
Not For Profit Corporation Fee Two | ||||||||||||||||||||
License Costs | $ 50,000 | |||||||||||||||||||
Patents | License Agreement ("143") | ||||||||||||||||||||
License Costs | 14,158 | |||||||||||||||||||
Patents | License Agreement ("J110") | ||||||||||||||||||||
License Costs | $ 1,055 | |||||||||||||||||||
Subsidiary One | Not For Profit Corporation Fee Two | ||||||||||||||||||||
Percentage of issued and outstanding stock owned | 7.50% | |||||||||||||||||||
Shattuck | ||||||||||||||||||||
License Costs | $ 50,000 |
License Agreements (Schedule of
License Agreements (Schedule of Future Minimum Royalty Payments) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
License Agreements | |
2019 | $ 103 |
2020 | 228 |
2021 | 784 |
2022 | 74 |
Total | $ 1,189 |
Grant Revenue (Details)
Grant Revenue (Details) - USD ($) | 1 Months Ended | 12 Months Ended | 36 Months Ended | |||||
Dec. 31, 2019 | Oct. 31, 2017 | May 31, 2017 | Jun. 30, 2016 | May 31, 2016 | Dec. 31, 2019 | Dec. 31, 2018 | May 31, 2020 | |
Deferred Revenue Arrangement [Line Items] | ||||||||
Revenue | $ 3,049,104 | $ 5,793,849 | ||||||
Pelican Therapeutics, Inc. | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Amount awarded from CPRIT grant | $ 15,200,000 | $ 15,200,000 | $ 15,200,000 | |||||
Contribution to be made by Pelican | $ 7,600,000 | 7,600,000 | ||||||
Pelican Therapeutics, Inc. | Tranche I | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Revenue | $ 1,800,000 | |||||||
Pelican Therapeutics, Inc. | Tranche II | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Revenue | $ 6,500,000 | |||||||
Pelican Therapeutics, Inc. | Tranche III | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Revenue | 5,400,000 | |||||||
Pelican Therapeutics, Inc. | Grant revenue | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Revenue | 10,300,000 | |||||||
Grant receivable | $ 1,500,000 | $ 1,500,000 | ||||||
Percentage of contribution | 0.50% | |||||||
Pelican Therapeutics, Inc. | Grant revenue | Maximum | ||||||||
Deferred Revenue Arrangement [Line Items] | ||||||||
Royalty percentage after threshold is met | 1.00% |
Stockholders' Equity (Authorize
Stockholders' Equity (Authorized Capital) (Details) - $ / shares | Mar. 20, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Stockholders' Equity Note [Abstract] | |||
Preferred Stock, par value per share | $ 0.0001 | $ 0.0001 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock, par value per share | $ 0.0002 | $ 0.0002 | |
Common stock, shares authorized | 250,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 33,785,999 | 32,492,144 | |
Common stock, shares outstanding | 33,785,999 | 32,492,144 |
Stockholders' Equity (Financing
Stockholders' Equity (Financings) (Details) - USD ($) | Nov. 26, 2018 | May 07, 2018 | Mar. 15, 2018 | Jan. 18, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 22, 2018 | Mar. 23, 2016 |
Class of Stock [Line Items] | ||||||||
Proceeds from sale of common stock | $ 18,898 | $ 3,910,093 | ||||||
Exercise price of warrants | $ 1.584 | |||||||
Warrants, expiry period | 5 years | |||||||
Exercise of warrants, shares | 3,054,667 | |||||||
Common warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Public offering price | $ 0.01 | |||||||
Pre-funded warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Public offering price | $ 1.43 | |||||||
Outstanding common stock warrants | ||||||||
Class of Stock [Line Items] | ||||||||
Warrants to purchase common stock | 4,600,000 | 9,500,000 | 4,600,000 | 12,500 | 682,500 | |||
Number of shares of common stock each warrant is exercisable into | 1 | |||||||
Public offering price | $ 1.44 | |||||||
Underwriting Agreement | ||||||||
Class of Stock [Line Items] | ||||||||
Shares issued for initial public offering | 4,875,000 | |||||||
Proceeds from initial public offering | $ 18,800,000 | |||||||
Price per share | $ 1.50 | |||||||
Proceeds from sale of common stock | $ 12,700,000 | |||||||
Number of shares sold | 8,000,000 | |||||||
Warrants to purchase common stock | 4,000,000 | |||||||
Exercise price of warrants | $ 1.65 | |||||||
Warrants, expiry period | 5 years | |||||||
Underwriting Agreement | Common warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Warrants to purchase common stock | 2,437,500 | |||||||
Underwriting Agreement | Pre-funded warrant | ||||||||
Class of Stock [Line Items] | ||||||||
Warrants to purchase common stock | 4,750,000 | |||||||
Offering | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from initial public offering | $ 4,800,000 | |||||||
Proceeds from sale of common stock | $ 1,300,000 | $ 3,700,000 | ||||||
Number of shares sold | 1,200,000 | |||||||
Warrants to purchase common stock | 600,000 | |||||||
Exercise of warrants, shares | 3,054,667 | |||||||
Sales Agreement | ||||||||
Class of Stock [Line Items] | ||||||||
Proceeds from sale of common stock | $ 3,800,000 | |||||||
Number of shares sold | 1,566,997 |
Stockholders' Equity (Common St
Stockholders' Equity (Common Stock Warrants) (Details) - USD ($) | Nov. 26, 2018 | May 07, 2018 | Mar. 10, 2011 | Mar. 23, 2016 | Feb. 28, 2014 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 22, 2018 | Dec. 31, 2017 | Dec. 31, 2011 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock shares issued | 33,785,999 | 32,492,144 | ||||||||
Weighted average price | $ 2.56 | $ 11.60 | $ 19.57 | |||||||
Exercise price of warrant liabilities | $ 1.584 | |||||||||
Fair value of common stock | $ 6,757 | $ 6,499 | ||||||||
Dividend yield | 0.00% | 0.00% | ||||||||
Outstanding common stock warrants | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Warrant outstanding | 1,738 | 0 | ||||||||
Warrants exercised | 3,054,667 | 3,054,667 | ||||||||
Weighted average price | $ 1.89 | |||||||||
Number of shares of common stock issuable through warrants | 4,600,000 | 9,500,000 | 682,500 | 4,600,000 | 12,500 | |||||
Common stock issued for conversion of warrants | 7,187,500 | |||||||||
Number of shares of common stock each warrant is exercisable into | 1 | |||||||||
Expiration term | 5 years | 5 years | 10 years | 5 years | ||||||
Exercise price | $ 1.65 | $ 1.584 | $ 4.80 | $ 10 | $ 1.65 | $ 125 | $ 4.80 | |||
Price per share | $ 1.30 | $ 1.42 | ||||||||
Fair value of common stock | $ 7,800,000 | $ 5,600,000 | ||||||||
Dividend yield | 0.00% | 0.00% | ||||||||
Expected volatility | 124.14% | 133.26% | ||||||||
Risk-free interest rate | 2.78% | 2.89% | ||||||||
Expected term (years) | 5 years | 5 years | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 9,030,730 | |||||||||
Number of shares outstanding from cashless exercise of warrant | 1,738 | |||||||||
Pre-funded warrant | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Exercise price | $ 0.01 | |||||||||
Common Stock Warrant One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Common stock shares issued | 296,159 | |||||||||
Number of shares of common stock issuable through warrants | 4,132,833 | |||||||||
Price per share | $ 10 |
Stockholders' Equity (Equity Co
Stockholders' Equity (Equity Compensation Plan) (Narrative) (Details) - USD ($) | 12 Months Ended | ||||||||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2016 | Dec. 31, 2009 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2015 | Jun. 30, 2014 | Apr. 30, 2011 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Outstanding stock options | 3,063,636 | 465,303 | 266,810 | ||||||
Granted | 2,920,021 | 221,410 | |||||||
Stock-based compensation expense | $ 3,269,948 | $ 788,659 | |||||||
Dividend yield | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Annual interest on outstanding balance | 0.00% | ||||||||
2009 Stock Incentive Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock Incentive Plan, shares authorized | 21,739 | 65,217 | |||||||
Expiration term | 10 years | ||||||||
Outstanding stock options | 47,267 | 23,799 | |||||||
Common shares available for issuance | 86,957 | ||||||||
2014 Stock Option Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock Incentive Plan, shares authorized | 50,000 | ||||||||
Stock Incentive Plan, shares authorized increased | 60,000 | ||||||||
Outstanding stock options | 228,276 | 263,484 | |||||||
2009 and 2014 Plans | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Granted | 300,000 | ||||||||
2017 Stock Option Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock Incentive Plan, shares authorized | 500,000 | ||||||||
Outstanding stock options | 345,383 | 234,540 | |||||||
2018 Stock Option Plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Stock Incentive Plan, shares authorized | 4,000,000 | ||||||||
Outstanding stock options | 3,729,264 | 0 | |||||||
Increase in the additional number of shares available for grant | 4,000,000 | ||||||||
Common shares available for issuance | 3,219,346 |
Stockholders' Equity (Schedule
Stockholders' Equity (Schedule of Warrants By Exercise Price) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Number of Shares | 3,063,636 | 465,303 | 266,810 |
Exercise Price | $ 2.56 | $ 11.60 | $ 19.57 |
3/10/2011 | |||
Issuance Date | Mar. 10, 2011 | ||
Number of Shares | 1,738 | ||
Exercise Price | $ 4.80 | ||
Expiration Date | Mar. 10, 2021 | ||
3/23/2016 | |||
Issuance Date | Mar. 23, 2016 | ||
Number of Shares | 296,159 | ||
Exercise Price | $ 10 | ||
Expiration Date | Mar. 23, 2021 | ||
5/7/2018 | |||
Issuance Date | May 7, 2018 | ||
Number of Shares | 4,132,833 | ||
Exercise Price | $ 1.58 | ||
Expiration Date | May 8, 2023 | ||
11/26/2018 | |||
Issuance Date | Nov. 26, 2018 | ||
Number of Shares | 4,600,000 | ||
Exercise Price | $ 1.65 | ||
Expiration Date | Nov. 26, 2023 |
Stockholders' Equity (Schedul_2
Stockholders' Equity (Schedule of Warrant Activity) (Details) - Warrant | 12 Months Ended |
Dec. 31, 2018shares | |
Stockholders’ Equity | |
Outstanding, beginning balance | 310,397 |
Issued | 11,787,500 |
Exercised | (3,054,667) |
Expired | (12,500) |
Outstanding, ending balance | 9,030,730 |
Stockholders' Equity (Schedul_3
Stockholders' Equity (Schedule of Stock-based Compensation) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation. | $ 3,269,948 | $ 788,659 |
Employee stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation. | 1,349,089 | 443,684 |
Employee stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation. | 1,243,526 | 318,186 |
Non-employee stock awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation. | 325,521 | 6,369 |
Non-employee stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation. | $ 351,812 | $ 20,420 |
Stockholders' Equity (Accountin
Stockholders' Equity (Accounting for Stock-Based Compensation) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock based compensation. | $ 3,269,948 | $ 788,659 |
Compensation expenses capitalized | $ 0 | $ 0 |
Term of award | P10Y | P10Y |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 10 years | |
Employee stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Vesting period | 4 months |
Stockholders' Equity (Schedul_4
Stockholders' Equity (Schedule of Stock Option Valuation Assumptions) (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
weighted-average fair value of options granted | $ 0.75 | $ 2.65 |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 89.59% | 83.63% |
Risk-free interest rate | 1.63% | 2.32% |
Expected term (years) | 5 years 4 months 24 days | 5 years 1 month 6 days |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility | 91.03% | 121.81% |
Risk-free interest rate | 2.52% | 2.98% |
Expected term (years) | 6 years 3 months 18 days | 6 years 3 months 18 days |
Stockholders' Equity (Schedul_5
Stockholders' Equity (Schedule of Stock Option Activity) (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | ||
Outstanding, beginning balance | 465,303 | 266,810 |
Granted | 2,920,021 | 221,410 |
Exercised | (2,000) | |
Forfeited/Expired | (319,688) | (22,917) |
Outstanding, ending balance | 3,063,636 | 465,303 |
Stock options exercisable | 1,337,600 | |
Weighted Average Exercise Price | ||
Outstanding, beginning balance | $ 11.60 | $ 19.57 |
Granted | 1.03 | 3.57 |
Exercised | 1.06 | |
Forfeited/Expired | 1.76 | 26.97 |
Outstanding, ending balance | 2.56 | $ 11.60 |
Stock options exercisable | $ 4.21 | |
Weighted Average Remaining Contractual Life | ||
Stock options outstanding at December 31, 2019 | 8 years 6 months 26 days | |
Stock options exercisable at December 31, 2019 | 8 years 2 months 23 days | |
Unrecognized stock-based compensation expense | $ 1 | |
Unrecognized stock-based compensation expense, recognition period | 1 year 3 months 18 days |
Stockholders' Equity (Restricte
Stockholders' Equity (Restricted Stock) (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 | |
Restricted stock | |||
Shares | |||
Granted | 2,479,179 | ||
Vested | (1,179,811) | ||
Cancelled | (44,715) | ||
Restricted stock at December 31, 2019 | 1,254,653 | ||
Weighted Average Fair Value | |||
Granted | $ 0.85 | ||
Vested | (0.84) | ||
Cancelled | $ (1.06) | ||
Restricted stock at December 31, 2019 | $ 0.86 | ||
Restricted stock | vest on grant date | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 50.00% | ||
Restricted stock | vest on first anniversary | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 30.00% | ||
Restricted stock | vest on each anniversary thereafter | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting percentage | 10.00% | ||
RSU's | |||
Shares | |||
Restricted stock at December 31, 2018 | 56,520 | 21,826 | |
Granted | 99,614 | ||
Vested | (21,744) | (59,794) | |
Cancelled | (4,750) | (5,126) | |
Restricted stock at December 31, 2019 | 30,026 | 56,520 | |
Weighted Average Fair Value | |||
Restricted stock at December 31, 2018 | $ 4.95 | $ 8.68 | |
Granted | 3.97 | ||
Vested | (5.34) | (4.59) | |
Cancelled | (5.63) | (5.93) | |
Restricted stock at December 31, 2019 | $ 4.95 | $ 8.68 | $ 4.33 |
Income Tax (Narrative) (Details
Income Tax (Narrative) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2017 | Dec. 31, 2018 | |
Operating Loss Carryforwards [Line Items] | |||
Unrecognized tax benefit | $ 0 | $ 0 | |
Statutory federal tax rate | 21.00% | 34.00% | |
Valuation allowance | $ 26,793,281 | $ 21,794,504 | |
State Net Operating Loss Carryforwards | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 87,841,606 | ||
Net operating loss carryforwards expiration dates | Dec. 31, 2024 | ||
Federal Net Operating Loss Carryforwards | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 100,199,714 | ||
Net operating loss carryforwards expiration dates | Dec. 31, 2029 | ||
Pelican Therapeutics | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 3,027,284 | ||
State Net Pelican Therapeutics | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 2,464,819 | ||
Foreign Net Operating Loss Carryforwards | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | 96,032 | ||
Pelican Net Operating Loss Carryforwards | |||
Operating Loss Carryforwards [Line Items] | |||
Net operating loss carryforwards | $ 2,380,864 |
Income Tax (Schedule of Income
Income Tax (Schedule of Income Tax Expense (Benefit)) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Deferred Expense: | ||
Federal | $ 45,178 | $ (985,488) |
Total | $ 45,178 | $ (985,488) |
Income Tax (Schedule of Incom_2
Income Tax (Schedule of Income Tax Rate Differences) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax | ||
Federal income tax expense at statutory rate: | $ (4,271,000) | $ (3,577,000) |
Increase (reduction) in income tax resulting from: | ||
State Income Taxes | (581,000) | (207,000) |
Foreign Rate Differential | (9,000) | (17,000) |
Nondeductible Expenses | 15,000 | 7,000 |
Period True-Up - Pelican | 208,000 | |
Research & Development Credit | (772,000) | (763,000) |
Stock Based compensation | 132,000 | 60,000 |
Excess Executive Compensation | 295,000 | |
Goodwill Impairment | 155,000 | |
Reserve for Loss Carryforwards Limited by Sec. 382 | 8,000 | 22,000 |
Other | 74,178 | 25,512 |
Increase (Decrease) in Valuation Allowance | 4,999,000 | 3,256,000 |
Total | $ 45,178 | $ (985,488) |
Income Tax (Schedule of Deferre
Income Tax (Schedule of Deferred Tax Assets) (Details) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Net Operating Loss Carryfowards | $ 22,278,013 | $ 18,731,555 |
R & D credits | 3,829,550 | 2,729,737 |
Stock Compensation | 878,094 | 744,506 |
Contingent Consideration | 854,129 | 713,259 |
Lease Liability | 9,950 | |
Other Accrued Expenses | 20,797 | |
Deferred tax assets | 27,870,533 | 22,919,057 |
Deferred tax liabilities: | ||
Property, plant and equipment, primarily due to differences in depreciation | (91,764) | (127,140) |
Other Accrued Expenses | (11,926) | |
Intangible Assets | (1,347,399) | (1,302,220) |
Deferred tax liabilities | (1,439,163) | (1,441,286) |
Valuation allowance | (26,793,281) | (21,794,504) |
Net deferred tax assets (liabilities) | $ (361,911) | $ (316,733) |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Oct. 01, 2019 | |
Leases | ||
Right-of-use asset | $ 2,287,500 | $ 2,000,000 |
Operating lease liability | 1,736,406 | $ 1,400,000 |
Operating lease payments | $ 700,000 | |
Effective interest rate | 6.20% | |
Operating lease cost | $ 191,737 | |
Finance lease cost | ||
Amortization of lease assets | 5,210 | |
Interest on lease liabilities | 954 | |
Lease cost | $ 6,164 | |
Weighted average remaining lease term (years), Operating leases | 7 years | |
Weighted average remaining lease term (years), Finance leases | 3 years | |
Weighted average discount rate, Operating leases | 6.58% | |
Weighted average discount rate, Finance leases | 6.17% |
Leases (Schedule of Operating L
Leases (Schedule of Operating Lease Liabilities Maturities) (Details) - USD ($) | Dec. 31, 2019 | Oct. 01, 2019 | Dec. 31, 2018 |
Maturities of operating lease liabilities | |||
2020 | $ 321,273 | $ 309,729 | |
2021 | 330,032 | 115,580 | |
2022 | 338,960 | 118,158 | |
2023 | 244,973 | 120,736 | |
2024 | 231,503 | 20,194 | |
Thereafter | 693,272 | ||
Total lease payments | 2,160,013 | $ 684,397 | |
Less: imputed interest | (423,607) | ||
Present value of operating lease liabilities | 1,736,406 | $ 1,400,000 | |
Maturities of finance lease liabilities | |||
2020 | 58,980 | ||
2021 | 58,980 | ||
2022 | 93,990 | ||
Total minimum lease payments | 211,950 | ||
Less: Interest | (20,179) | ||
Present value of lease liabilities | 191,771 | ||
Maturities of lease liabilities | |||
2020 | 380,253 | ||
2021 | 389,012 | ||
2022 | 432,950 | ||
2023 | 244,973 | ||
2024 | 231,503 | ||
Thereafter | 693,272 | ||
Total minimum lease payments | 2,371,963 | ||
Less: Interest | (443,786) | ||
Present value of lease liabilities | $ 1,928,177 |
Non-Controlling Interest (Detai
Non-Controlling Interest (Details) | Dec. 31, 2019 | Dec. 31, 2018 | Oct. 31, 2018 | Dec. 31, 2017 |
Pelican Therapeutics, Inc. | ||||
Noncontrolling Interest [Line Items] | ||||
Percentage of voting interests acquired in acquisition | 85.00% | 80.00% | 80.00% | |
Heat I | ||||
Noncontrolling Interest [Line Items] | ||||
Ownership interest in subsidiary | 100.00% | 100.00% | 100.00% |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Pelican, Inc. | ||
Related Party Transaction [Line Items] | ||
Purchase of ownership interest | 85.00% | |
Board One | ||
Related Party Transaction [Line Items] | ||
Officers' Compensation | $ 61,500 | $ 221,000 |
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 ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Net Loss Per Share | ||
Net loss | $ (20,384,716) | $ (16,591,293) |
Net loss: Non-controlling interest | (367,148) | (857,439) |
Net loss attributable to Heat Biologics, Inc. | $ (20,017,568) | $ (15,733,854) |
Weighted-average number of common shares used in net loss per share attributable to Heat Biologics, Inc.-basic and diluted | 33,281,817 | 17,485,461 |
Net loss per share applicable to Heat Biologics, Inc - basic and diluted | $ (0.60) | $ (0.90) |
Net Loss Per Share (Schedule _2
Net Loss Per Share (Schedule of Antidilutive Securities) (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Employee stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 3,063,636 | 465,303 |
Restricted stock subject to forfeiture and restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 1,284,679 | 56,520 |
Outstanding common stock warrants | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Potentially dilutive securities | 9,030,730 | 9,030,730 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Mar. 12, 2020 | Mar. 03, 2020 | Mar. 03, 2020 | Jan. 21, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Subsequent Event [Line Items] | ||||||
Shares issued (in shares) | 14,375,000 | |||||
Common stock, par value per share | $ 0.0002 | $ 0.0002 | ||||
Proceeds from the issuance of common stock, net of commissions | $ 18,898 | $ 3,910,093 | ||||
Subsequent Events | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued (in shares) | 20,000,000 | |||||
Warrants to purchase common stock (in shares) | 3,291,666 | 3,291,666 | 10,000,000 | |||
Gross Proceeds from offering | $ 7,000,000 | |||||
Warrants exercised | 9,960,000 | |||||
Common stock issued for conversion of warrants | 2,238,332 | 7,470,000 | ||||
2018 Stock Option Plan | Subsequent Events | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued (in shares) | 12,000,000 | |||||
Common stock, par value per share | $ 0.001 | |||||
At The Market Offerings | ||||||
Subsequent Event [Line Items] | ||||||
Shares issued (in shares) | 12,051,735 | |||||
Proceeds from the issuance of common stock, net of commissions | $ 10,800,000 |