Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Oct. 31, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Kala Pharmaceuticals, Inc. | |
Entity Central Index Key | 1,479,419 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | No | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 24,521,131 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash | $ 122,049 | $ 45,472 |
Prepaid expenses and other current assets | 886 | 154 |
Total current assets | 122,935 | 45,626 |
Property and equipment, net | 623 | 594 |
Restricted cash | 133 | 109 |
Total assets | 123,691 | 46,329 |
Current liabilities: | ||
Current portion of long-term debt | 6,111 | 556 |
Accounts payable | 1,135 | 997 |
Accrued expenses | 3,938 | 3,993 |
Total current liabilities | 11,184 | 5,546 |
Long-term liabilities: | ||
Long-term debt - less current portion | 13,629 | 9,098 |
Warrant liability | 0 | 1,039 |
Other long-term liabilities | 15 | 17 |
Total long-term liabilities | 13,644 | 10,154 |
Total liabilities | 24,828 | 15,700 |
Commitments and Contingencies (Note 13) | 0 | |
Stockholders' equity (deficit): | ||
Common stock | 24 | 1 |
Additional paid-in capital | 221,920 | 4,374 |
Accumulated deficit | (123,081) | (92,137) |
Total stockholders’ deficit | 98,863 | (87,762) |
Total liabilities, convertible preferred stock and stockholders' deficit | 123,691 | 46,329 |
Series Seed convertible preferred stock | ||
Long-term liabilities: | ||
Warrant liability | 0 | |
Convertible preferred stock | 11,065 | 11,065 |
Series A convertible preferred stock | ||
Long-term liabilities: | ||
Warrant liability | 0 | |
Convertible preferred stock | 10,736 | 10,736 |
Series B convertible preferred stock | ||
Long-term liabilities: | ||
Warrant liability | 0 | |
Convertible preferred stock | 22,185 | |
Series B-1 convertible preferred stock | ||
Long-term liabilities: | ||
Convertible preferred stock | 6,885 | |
Series C convertible preferred stock | ||
Long-term liabilities: | ||
Warrant liability | $ 0 | |
Convertible preferred stock | $ 67,520 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 5,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, authorized | 120,000,000 | 110,251,951 |
Common stock, shares issued | 24,347,150 | 1,181,429 |
Common stock, shares outstanding | 24,347,150 | 1,181,429 |
Convertible preferred stock. | ||
Convertible preferred stock, authorized | 0 | 170,336,260 |
Convertible preferred stock, shares outstanding | 0 | |
Series Seed convertible preferred stock | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 0 | 11,323,209 |
Convertible preferred stock, shares issued | 0 | 11,243,209 |
Convertible preferred stock, shares outstanding | 0 | 11,243,209 |
Series A convertible preferred stock | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 0 | 9,583,432 |
Convertible preferred stock, shares issued | 0 | 9,583,432 |
Convertible preferred stock, shares outstanding | 0 | 9,583,432 |
Series B convertible preferred stock | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 0 | 16,597,221 |
Convertible preferred stock, shares issued | 0 | 15,624,999 |
Convertible preferred stock, shares outstanding | 0 | 15,624,999 |
Series B-1 convertible preferred stock | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 0 | 4,629,629 |
Convertible preferred stock, shares issued | 0 | 4,629,629 |
Convertible preferred stock, shares outstanding | 0 | 4,629,629 |
Series C convertible preferred stock | ||
Convertible preferred stock, par value | $ 0.001 | $ 0.001 |
Convertible preferred stock, authorized | 0 | 43,034,639 |
Convertible preferred stock, shares issued | 0 | 42,782,688 |
Convertible preferred stock, shares outstanding | 0 | 42,782,688 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Operating expenses: | ||||
Research and development | $ 7,018 | $ 8,256 | $ 23,128 | $ 18,117 |
General and administrative | 2,516 | 1,491 | 5,607 | 6,356 |
Total operating expenses | 9,534 | 9,747 | 28,735 | 24,473 |
Loss from operations | (9,534) | (9,747) | (28,735) | (24,473) |
Other income (expense): | ||||
Interest income | 194 | 60 | 276 | 90 |
Interest expense | (212) | (186) | (618) | (566) |
Change in fair value of warrant liability | (623) | 206 | (1,844) | 177 |
Total other income (expense) | (641) | 80 | (2,186) | (299) |
Net loss attributable to common stockholders—basic and diluted | $ (10,175) | $ (9,667) | $ (30,921) | $ (24,772) |
Net loss per share attributable to common stockholders—basic and diluted | $ (0.56) | $ (8.18) | $ (4.51) | $ (20.97) |
Weighted average shares outstanding—basic and diluted | 18,034,278 | 1,181,429 | 6,860,777 | 1,181,429 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (30,921) | $ (24,772) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Depreciation | 213 | 220 |
Change in fair value of warrant liability | 1,844 | (177) |
Amortization of debt discount and debt issuance costs | 86 | 83 |
Write-off of deferred offering costs | 1,789 | |
Stock-based compensation | 2,070 | 1,747 |
Increase (decrease) in cash from: | ||
Prepaid expenses and other current assets | (732) | (29) |
Accounts payable | 74 | (292) |
Accrued expenses | (166) | 1,432 |
Other long-term liabilities | (2) | (22) |
Net cash used in operating activities | (27,534) | (20,021) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (197) | (95) |
Restricted cash | (25) | |
Net cash used in investing activities | (222) | (95) |
Cash flows from financing activities: | ||
Proceeds from issuance of Series C convertible preferred stock | 67,922 | |
Proceeds from common stock offering, net of underwriters discounts | 96,255 | |
Proceeds from venture debt | 10,000 | |
Payment of principal on venture debt facility | (1,000) | |
Payment of Series C issuance costs | (402) | |
Payment of common stock offering costs | (2,111) | |
Payment of deferred offering costs | (283) | |
Proceeds from exercise of stock options | 189 | |
Net cash provided by financing activities | 104,333 | 66,237 |
Net increase in cash | 76,577 | 46,121 |
Cash at beginning of period | 45,472 | 5,759 |
Cash at end of period | 122,049 | 51,880 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Conversion of convertible preferred stock into common stock | 118,391 | |
Common stock offering costs included in accounts payable and accruals | 131 | |
Reclassification of warrants to additional paid-in capital | 2,883 | 759 |
Purchases of property and equipment in accounts payable | 45 | |
Cash paid for interest | $ 532 | $ 490 |
NATURE OF BUSINESS AND BASIS OF
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2017 | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | |
NATURE OF BUSINESS AND BASIS OF PRESENTATION | 1. NATURE OF BUSINESS AND BASIS OF PRESENTATION Nature of Business —Kala Pharmaceuticals, Inc. (the “Company”) was incorporated on July 7, 2009, and is a biopharmaceutical company focused on the development and commercialization of therapies using its proprietary nanoparticle‑based Mucus Penetrating Particles, or MPP, technology, with an initial focus on the treatment of eye diseases. The Company has applied the MPP technology to lotepredol etabonate, or LE, a corticosteroid designed for ocular applications, resulting in two lead product candidates. These product candidates are INVELTYS TM (KPI-121 1.0%), for the treatment of post‑operative inflammation and pain following ocular surgery, for which the Company has submitted a New Drug Application, or NDA, and KPI-121 0.25% for the temporary relief of the signs and symptoms of dry eye disease, currently in Phase 3 clinical development. The Company is evaluating opportunities for MPP nanosuspensions of LE with less frequent daily dosing regimens for the treatment of inflammation and pain following ocular surgery, for the temporary relief of the signs and symptoms of dry eye disease and for potential chronic treatment of dry eye disease. The Company is also evaluating compounds in its topically applied MPP receptor Tyrosine Kinase Inhibitor program, or rTKI program, that inhibit the vascular endothelial growth factor, or VEGF, pathway, for the potential treatment of a number of retinal diseases. The brand name INVELTYS has been conditionally approved by the U.S. Food and Drug Administration. The Company is engaged in research and development activities, raising capital and recruiting skilled personnel. The Company is subject to a number of risks similar to those of other companies conducting high‑risk, early‑stage research and development of pharmaceutical product candidates. Principal among these risks are dependence on key individuals and intellectual property, competition from other products and companies and the technical risks associated with the successful research, development and marketing of its product candidates. The Company’s success is dependent upon its ability to raise additional capital in order to fund ongoing research and development, obtain regulatory approval of its product candidates, successfully commercialize its products, generate revenue, meet its obligations, and, ultimately, attain profitable operations. On July 25, 2017, the Company completed its initial public offering (“IPO”) of common stock pursuant to its registration statement on Form S-1, as amended (File No. 333-218936), which was declared effective by the Securities Exchange Commission (the “SEC”) on July 19, 2017. Pursuant to the registration statement, the Company issued and sold 6,900,000 shares of $0.001 par value common stock at an initial offering price of $15.00 per share, which included 900,000 shares of common stock pursuant to the underwriters’ option to purchase additional shares. The Company’s shares began trading on the NASDAQ Global Select Market under the symbol “KALA” on July 20, 2017. Proceeds from the Company’s IPO were approximately $94.1 million after deducting underwriting discounts and commissions of $7.2 million and offering costs of $2.2 million. Upon the closing of the IPO, all of the Company’s outstanding shares of convertible preferred stock automatically converted into 16,101,970 shares of common stock at the applicable conversion ratio then in effect. All of the Company’s outstanding warrants to purchase preferred stock automatically converted into warrants to purchase 202,020 shares of common stock. The Company believes that its existing cash on hand as of September 30, 2017, will enable it to fund its planned operating expenses, debt service obligations and capital expenditure requirements through the second quarter of 2019. The Company has based these estimates on assumptions that may prove to be wrong, and its operating plan may change as a result of many factors currently unknown. As a result, the Company could deplete its available capital resources sooner than it currently expects. Unaudited Interim Financial Information The condensed financial statements of the Company included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted from this report, as is permitted by such rules and regulations. The accompanying condensed financial statements reflect all adjustments consisting of normal, recurring adjustments, that are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year. Accordingly, these financial statements should be read in conjunction with the financial statements as of and for the year ended December 31, 2016, and notes thereto, included in the Company’s final prospectus for the IPO filed with the Securities and Exchange Commission pursuant to Rule 424(b)(4) on July 20, 2017 (the “Prospectus”). Reverse Stock Split — On July 7, 2017, the Company effected a one-for-5.2083 reverse stock split of the Company ’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for the Company’s convertible preferred stock. The par value per share and authorized shares of common and convertible preferred stock were not adjusted as a result of the reverse stock split. All common stock and common stock per share amounts within the financial statements and notes thereto have been retroactively adjusted for all periods presented to give effect to this reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. Automatic Conversion of Preferred Stock – On July 7, 2017, the Company effected an amendment to its Amended and Restated Certificate of Incorporation, as amended. This amendment eliminated the minimum price per share of Common Stock for an underwritten public offering that would result in the automatic conversion of all outstanding shares of the Company’s Series Seed, Series A, Series B, Series B‑1 and Series C Preferred Stock. |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expense, and related disclosures. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Estimates relied upon in preparing these financial statements relate to, but are not limited to, the fair value of common stock, preferred stock, warrants, stock compensation, accrued expenses and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Actual results may differ from these estimates under different assumptions or conditions. Summary of Significant Accounting Policies The Company’s significant accounting policies are described in Note 2, “Summary of Significant Accounting Policies,” in the Prospectus. There have been no material changes to the significant accounting policies during the period ended September 30, 2017. Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09” or “Topic 718”), which simplifies share‑based payment accounting through a variety of amendments. The standard is effective for annual periods beginning after December 15, 2016 and for interim periods within those fiscal years. The changes resulting from the adoption of this standard impact the accounting for income taxes, accounting for forfeitures, statutory tax withholding and the presentation of statutory tax withholding on the statement of cash flows. The Company adopted this standard on January 1, 2017. Under guidance within ASU 2016‑09, excess tax benefits and deficiencies are to be recognized as income tax expense or benefit in the statement of operations in the period in which they occur rather than as an increase or decrease in stockholders’ equity (deficit). Since the Company maintains a full valuation allowance on its net deferred tax asset, there was no net impact to its accumulated deficit or its net loss resulting from the adoption of this standard. Also under the guidance in ASU 2016‑09, an entity may elect to account for forfeitures as they occur or continue to estimate the total number of awards that are vested or expected to vest. The Company elected to account for forfeitures as they occur and applied the accounting change on a modified retrospective basis as a cumulative effect adjustment to accumulated deficit as of the date of adoption, January 1, 2017. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or statement of cash flows. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight‑line basis over the term of the lease, respectively. A lessee is also required to record a right‑of‑use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016‑02 (ASC Topic 842) supersedes the previous leases standard, ASC 840, Leases . The standard is effective for public entities for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑02 will have on its financial statements. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (“ASU 2016‑15”), to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. In November 2016, the FASB issued ASU 2016‑18, Statement of Cash Flows Restricted Cash (“ASU 2016‑18”). This new standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, and requires retrospective application. The Company does not believe that the adoption of ASU 2016‑18 will have a material impact on its financial statements and related disclosures. In May 2017, the FASB issued ASU Update No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ ASU 2017-09”), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in ASU 2017-09 are effective f or all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that ASU 2017-09 will have on the Company’s balance sheets, results of operations and statements of cash flows. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for, including adoption in an interim period. The Company is currently evaluating the impact of adopting this standard on its financial statements and related disclosures. |
PREPAID EXPENSES AND OTHER CURR
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 9 Months Ended |
Sep. 30, 2017 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | 3. PREPAID EXPENSES AND OTHER CURRENT ASSETS Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2017 2016 Rent $ 61 $ 58 Insurance 667 55 Other 158 41 Prepaid expenses and other current assets $ 886 $ 154 |
ACCRUED EXPENSES
ACCRUED EXPENSES | 9 Months Ended |
Sep. 30, 2017 | |
ACCRUED EXPENSES | |
ACCRUED EXPENSES | 4. ACCRUED EXPENSES Accrued expenses consist of the following (in thousands): September 30, December 31, 2017 2016 Development costs $ 2,350 $ 2,280 Compensation and benefits 1,140 1,480 Professional fees 194 171 Common stock offering costs 111 — Other 143 62 Accrued expenses $ 3,938 $ 3,993 |
DEBT
DEBT | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
DEBT | 5. DEBT 2014 Debt Facility In November 2014, the Company entered into a venture debt facility (“2014 Debt Facility”) for a total loan commitment of $10.0 million. On October 13, 2016, the Company entered into a First Amendment to the 2014 Debt Facility the (“First Amendment”), which reaffirmed the initial commitment to a total of $10.0 million of funding (“Term Loan A”) and increased the Company’s total borrowing capacity by an additional $10.0 million (“Term Loan B” and together with Term Loan A, “Term Loans”). On September 28, 2017, the Company drew the additional $10.0 million available under Term Loan B. Under the terms of the facility, the borrowings accrue interest at an annual rate equal to 3.00% above the Prime Rate then in effect. The interest rate was 6.50% as of December 31, 2016 and 7.25% as of September 30, 2017. The unpaid principal balance under the 2014 Debt Facility was $20.0 million and $10.0 million as of September 30, 2017 and December 31, 2016, respectively. The unamortized discount was $260,000 and $346,000 as of September 30, 2017 and December 31, 2016, respectively. During the three months ended September 30, 2017 and 2016, the Company recognized interest expense of $212,000 and $186,000, respectively, which consisted of amortization of the debt discount of $29,000 and $31,000 and the contractual coupon interest of $183,000 and $155,000, respectively. During the nine months ended September 30, 2017 and 2016, the Company recognized interest expense of $618,000 and $566,000, respectively, which consisted of amortization of the debt discount of $86,000 and $83,000 and the contractual coupon interest of $532,000 and $483,000, respectively. In connection with the 2014 Debt Facility and the initial borrowing of $5.0 million under Term Loan A, the Company issued warrants to the lender to purchase 138,889 shares of Series B Preferred Stock at an exercise price of $1.44 per share (the “2014 Warrants”). During 2015 the Company borrowed an additional $5.0 million under Term Loan A and the number of exercisable shares underlying the 2014 Warrants increased to 277,778 shares of Series B Preferred Stock or 53,333 shares of common stock at an exercise price of $7.50 per share on an as-converted basis after giving effect to the reverse stock split (see Note 1). Upon executing the First Amendment, the Company issued warrants to purchase up to 251,951 shares of Series C Preferred Stock at an exercise price of $1.59 per share (the “2016 Warrants”), or 48,374 shares of common stock at an exercise price of $8.27 per share on an as-converted basis after giving effect to the reverse stock split (see Note 1). Consistent with the warrants issued under the original 2014 Debt Facility, the number of shares of Series C Preferred Stock that become exercisable would increase in proportion to the amount of Term Loan B borrowings. Upon the September 28, 2017 draw down of Term B Loan, the 2016 Warrants became exercisable into 48,374 shares of common stock. The 2016 Warrants were not exercisable into shares as of the First Amendment date or December 31, 2016, as the Company had not borrowed under the Term B Loan during 2016. Upon issuance of the 2014 Warrants and 2016 Warrants, the Company estimated the fair value of the warrants using the Black‑Scholes option‑pricing model (see Note 6), and recorded the estimated fair value of the warrants as a liability separate from the loan balance, resulting in additional debt discount included within long‑term debt that is amortized to interest expense over the term of the loan using the effective interest method. The initial fair value of the 2014 Warrants and 2016 Warrants was $140,000 and $225,000, respectively. The warrants were subsequently re‑measured to fair value at every reporting date prior to the reporting period ending September 30, 2017 with changes in fair value recorded in the statement of operations as a component of other income (expense), as the shares underlying the warrants are exercisable into contingently redeemable shares. Upon the Company’s IPO on July 25, 2017 all of the underlying preferred stock warrants were converted into warrants for common stock, and the fair value of the warrant liability was reclassified to additional paid-in capital. As such, there was no warrant liability associated with the Term Loans as of September 30, 2017. As of December 31, 2016, the estimated fair value of the warrant liability associated with the original 2014 Debt Facility was $274,000 and the estimated fair value of the warrant liability associated with the First Amendment was $263,000. The future annual principal payments due under the Term Loans as of September 30, 2017 are as follows (in thousands): Years Ending December 31, 2017 $ 1,111 2018 6,666 2019 6,666 2020 5,557 Total $ 20,000 |
PREFERRED STOCK WARRANTS
PREFERRED STOCK WARRANTS | 9 Months Ended |
Sep. 30, 2017 | |
PREFERRED STOCK WARRANTS | |
PREFERRED STOCK WARRANTS | 6. PREFERRED STOCK WARRANTS The Company has issued warrants in connection with debt transactions that were completed prior to 2014, all of which were classified as liabilities as of December 31, 2016. The warrants were remeasured at fair value at each reporting period prior to the reporting period ending September 30, 2017, as the warrants were exercisable into contingently redeemable shares. As of December 31, 2016, warrants outstanding to acquire Series C Preferred Stock were not exercisable into shares of Series C Preferred Stock. As part of the draw down of Term Loan B on September 28, 2017, warrants to acquire 48,374 shares of common stock became exercisable. The following table summarizes the warrants outstanding at each of the dates identified: Shares Exercisable at Exercise Expiration September 30, December 31, Issued Exercisable for Price Date 2017 2016 2011 and 2012 Series Seed Preferred Stock $ 1.00 July 2019 — 80,000 (1) 2013 Series B Preferred Stock $ 1.44 April 2021 — 694,444 (1) 2014 Series B Preferred Stock $ 1.44 November 2024 — 277,778 (1) 2016 Series C Preferred Stock $ 1.59 October 2026 — (2) — (2) (1) As of December 31, 2016, the preferred stock warrants to purchase Series Seed Preferred Stock issued in 2011 and 2012, Series B Preferred Stock issued in 2013 and Series B Preferred Stock issued in 2014 were exercisable, and on a converted basis would have represented warrants to purchase common stock of 15,360, 133,334 and 53,333 shares, respectively. As of September 30, 2017 there were no preferred stock warrants outstanding (See Note 1). As of September 30, 2017 all of the underlying preferred stock warrants were converted into warrants for common stock, of which 149,327 were outstanding. (2) As of December 31, 2016, the preferred stock warrants to purchase Series C Preferred Stock were not exercisable and as of September 30, 2017, there were no preferred stock warrants outstanding (See Note 1). Upon the September 2017 $10.0 million draw down of the Term B Loan, the warrants became exercisable for 48,374 shares of common stock, which for comparative purposes represents 251,951 shares of Series C Preferred Stock on a pre-converted basis. As of September 30, 2017, all 48,374 warrants were outstanding. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | 7. FAIR VALUE OF FINANCIAL INSTRUMENTS Certain assets and liabilities are carried at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • • • The Company’s preferred stock warrant liability is carried at fair value determined according to the fair value hierarchy and classified as a Level 3 measurement. The carrying value of accounts payable and accrued expenses approximate their fair value due to the short‑term nature of these assets and liabilities. Management believes that the Company’s long‑term debt (See Note 5) bears interest at the prevailing market rate for instruments with similar characteristics and, accordingly, the carrying value of long‑term debt, including the current portion, also approximates its fair value. The fair value of the outstanding debt was estimated using a discounted cash flow analysis based on current market interest rates for debt issuances with similar remaining years to maturity, adjusted for credit risk, which represents a Level 3 measurement. Upon the Company’s IPO on July 25, 2017, all of the underlying preferred stock warrants became exercisable for common stock instead of preferred stock and the $2,883,000 fair value of the warrant liability as measured immediately prior to the IPO was charged to additional paid in capital with the reclassification of the warrants as equity, not a liability. There was no warrant liability as of September 30, 2017 and, as such, there were no assets and liabilities measured at fair value on a recurring basis of September 30, 2017. As of December 31, 2016, the Company’s preferred stock warrants associated with the issuances of the 2014 Debt Facility and the First Amendment, as well as debt transactions entered into prior to 2014, were recorded at fair value. The assets and liabilities measured at fair value on a recurring basis as of December 31, 2016, and the input categories associated with those assets and liabilities are as follows (in thousands): Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Carrying Value (Level 1) (Level 2) (Level 3) December 31, 2016 2011 and 2012 Series Seed Warrants $ 39 $ — $ — $ 39 2013 Series B Warrants 463 — — 463 2014 Series B Warrants 274 — — 274 2016 Series C Warrants 263 — — 263 Total warrant liability $ 1,039 $ — $ — $ 1,039 The Company has historically classified the value of the warrants as Level 3 measurements within the fair value hierarchy because the fair value is derived using significant unobservable inputs, which included the estimated volatility, the estimated fair value of the underlying preferred stock, and to the extent that the number of exercisable shares underlying the warrants were adjustable based on the amount of the Term Loans drawn down or the probability that the Company would draw down on the debt facility. The following table provides a summary of changes in the fair value of the Company’s derivative liability, which is included as a component of other (income) expense (in thousands): Three Months Ended September 30, 2017 2016 Warrant Warrant Liability Liability Fair value - June 30, $ 2,260 $ 965 Change in fair value of warrant liability 623 (206) Reclassification of preferred warrant liability (2,883) — Fair value - September 30, $ — $ 759 Nine Months Ended September 30, 2017 2016 Warrant Warrant Liability Liability Fair value - December 31, $ 1,039 $ 936 Change in fair value of warrant liability 1,844 (177) Reclassification of preferred warrant liability (2,883) — Fair value - September 30, $ — $ 759 The Company determined the fair values of the warrants at December 31, 2016 and on an interim basis on July 19, 2017, using the Black‑Scholes option‑pricing model. The July 19, 2017 valuation was performed as a basis for the anticipated reclassification of the preferred warrant liability to equity in connection with the IPO and conversion of the preferred stock and warrants. The following assumptions were used for the respective measurement date (1) : 2011 and 2012 Series 2013 2014 Seed Series B Series B Series C Warrants Warrants Warrants Warrants December 31, 2016 Volatility 100.00 % 87.00 % 114.00 % 58.30 % Risk-free interest rate 1.30 % 1.80 % 2.30 % 2.40 % Estimated fair value of underlying shares $ 0.89 $ 1.11 $ 1.11 1.54 Remaining contractual term (years) 2.6 4.3 7.9 9.8 Expected dividend yield — % — % — % — % July 19, 2017 Volatility 119.00 % 112.00 % 114.00 % 116.00 % Risk-free interest rate 1.40 % 1.60 % 2.10 % 2.20 % Estimated fair value of underlying shares $ 13.50 $ 13.50 $ 13.50 $ 13.50 Remaining contractual term (years) 2.0 3.7 7.3 9.2 Expected dividend yield — % — % — % — % (1) For purposes of determining the fair value of the warrants to purchase Series C Preferred Stock as of December 31, 2016 and July 19, 2017, the Company estimated that there was a 100% probability that it would draw down on the remaining $10.0 million available under the 2014 Debt Facility as of the measurement date, and as such, assumed that the warrants would be exercisable into the maximum number of shares stipulated in the First Amendment. |
CONVERTIBLE PREFERRED STOCK
CONVERTIBLE PREFERRED STOCK | 9 Months Ended |
Sep. 30, 2017 | |
CONVERTIBLE PREFERRED STOCK | |
CONVERTIBLE PREFERRED STOCK | 8. CONVERTIBLE PREFERRED STOCK Upon the closing of the Company’s IPO on July 25, 2017, all outstanding shares of convertible preferred stock converted into 16,101,970 shares of the Company’s common stock. As such, there were no outstanding shares of convertible preferred stock as of September 30, 2017. Convertible preferred stock consisted of the following as of December 31, 2016 (in thousands, except share amounts): Common Stock Shares Issued Issuable Designated and Liquidation Carrying Upon Shares Issuance Dates Outstanding Value Value Conversion (1) Series Seed 11,323,209 December 2009 2,000,001 October 2010 2,000,003 February 2012 7,243,205 11,243,209 $ 11,243 $ 11,065 Series A 9,583,432 February 2013 4,791,716 July 2013 4,791,716 9,583,432 $ 11,500 $ 10,736 Series B 16,597,221 April 2014 15,624,999 $ 22,500 $ 22,185 Series B-1 4,629,629 August 2015 4,629,629 $ 7,000 $ 6,885 Series C 43,034,639 April 2016 42,782,688 $ 67,922 $ 67,520 (1) No fractional shares of Common Stock were issuable upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company paid cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board of Directors of the Company. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion. Series Seed Convertible Preferred Stock In December 2009, the Company issued an aggregate of 2,000,001 shares of Series Seed Preferred Stock for gross proceeds of $2.0 million or $1.00 per share. In October 2010, the Company issued an aggregate of 2,000,003 shares of Series Seed Preferred Stock to existing investors for gross proceeds of $2.0 million or $1.00 per share. In February 2012, the Company issued an aggregate of 7,243,205 shares of Series Seed Preferred Stock to existing and new investors, which included 6,150,000 shares for gross proceeds of $6.2 million and 1,093,205 shares converted from convertible debt of $1.0 million principal and $93,000 accrued interest. Costs incurred in connection with each of the individual issuances of Series Seed Preferred Stock were $124,000, $39,000 and $15,000 respectively, which have been recorded as a reduction to the carrying amount of the Series Seed Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series Seed Convertible Stock converted into 2,158,708 shares of the Company’s common stock. As such, there were no outstanding shares of Series Seed Convertible Preferred Stock as of September 30, 2017. Series A Convertible Preferred Stock In February 2013, the Company issued 4,791,716 shares of Series A Preferred Stock, at a purchase price of $1.20 per share for gross proceeds of $5.8 million. Additionally, in accordance with the terms of the Series A Preferred Stock Purchase Agreement, investors were granted the right to purchase up to an additional 4,791,716 shares of Series A Preferred Stock, at a price of $1.20 per share, upon the Company meeting certain milestone criteria by December 31, 2013, approval of the Board and approval of the investors holding a majority of the outstanding shares of Series A Preferred Stock. In June 2013, the Board approved waiving one of the milestone events provided for in the Series A Preferred Stock Purchase Agreement. Accordingly, the second tranche of Series A Preferred Stock closed on July 15, 2013 and the Company issued 4,791,716 shares of Series A Preferred Stock for gross proceeds of $5.8 million, or $1.20 per share. Costs incurred in connection with the issuance of the Series A Preferred Stock were $93,000, which have been recorded as a reduction in the carrying amount of the Series A Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series A Convertible Stock converted into 1,840,029 shares of the Company’s common stock. As such, there were no outstanding shares of Series A Convertible Preferred Stock as of September 30, 2017. Series B Convertible Preferred Stock In April 2014, the Company issued 15,624,999 shares of Series B Preferred Stock for gross proceeds of $22.5 million or $1.44 per share which included conversion of the outstanding principal and interest on the 2013 Notes (See Note 7) of $5.1 million, which converted into 3,562,785 shares of Series B Preferred Stock pursuant to the terms of the Notes. Costs incurred in connection with the issuance of the Series B Preferred Stock were $315,000, which have been recorded as a reduction in the carrying amount of the Series B Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series B Convertible Stock converted into 3,000,017 shares of the Company’s common stock. As such, there were no outstanding shares of Series B Convertible Preferred Stock as of September 30, 2017. Series B‑1 Convertible Preferred Stock On August 17, 2015, the Company issued 4,629,629 shares of Series B‑1 Senior Convertible Preferred Stock (“Series B‑1 Preferred Stock”) for gross proceeds of $7.0 million or $1.512 per share. Costs incurred in connection with the issuance of the Series B‑1 Preferred Stock were $115,000, which have been recorded as a reduction in the carrying amount of the Series B‑1 Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series B-1 Convertible Stock converted into 888,894 shares of the Company’s common stock. As such, there were no outstanding shares of Series B-1 Convertible Preferred Stock as of September 30, 2017. Series C Convertible Preferred Stock On April 5, 2016, the Company issued 42,782,688 shares of Series C Preferred Stock for gross proceeds of $67.9 million or $1.5876 per share. Costs incurred in connection with the issuance of the Series C Preferred Stock were $402,000, which have been recorded as a reduction in the carrying amount of the Series C Preferred Stock. On July 25, 2017, upon the closing of the Company’s IPO, all outstanding shares of Series C Convertible Stock converted into 8,214,322 shares of the Company’s common stock. As such, there were no outstanding shares of Series C Convertible Preferred Stock as of September 30, 2017. Treatment of Preferred Stock Generally The rights, preferences, and privileges of the Series Seed, Series A, Series B, Series B-1 and Series C (collectively the “Preferred Stock”) are included in the Prospectus. As described in Note 1, on July 7, 2017, the Company effected an amendment to its Amended and Restated Certificated of the Incorporation, as amended. This amendment eliminated the minimum price per share of Common Stock for an underwritten public offering that would result in the automatic conversion of all outstanding shares of the Company’s Series Seed, Series A, Series B, Series B‑1 and Series C Preferred Stock. As described in Note 1, on July 7, 2017, the Company effected a one-for-5.2083 reverse stock split of the Company’s issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for the Company’s convertible preferred stock. |
COMMON STOCK
COMMON STOCK | 9 Months Ended |
Sep. 30, 2017 | |
COMMON STOCK AND PREFERRED STOCK | |
COMMON STOCK | 9. COMMON STOCK AND PREFERRED STOCK COMMON STOCK The Company was authorized to issue up to 120,000,000 and 110,251,951 shares of common stock with a $0.001 par value per share as of September 30, 2017 and December 31, 2016, respectively. As of September 30, 2017 and December 31, 2016, the Company had 24,347,150 and 1,181,429 shares of common stock issued and outstanding, respectively. The rights, preferences, and privileges of the Company’s common stock are included in the Prospectus. There were no changes to the rights, preferences, and privileges of the common stock during the nine months ended September 30, 2017. PREFERRED STOCK Upon completion of the Company’s IPO, all outstanding shares of the Company’s preferred stock automatically converted into an aggregate of 16.1 million shares of the Company’s common stock. The Company also is authorized to issue 5.0 million shares of undesignated preferred stock in one or more series. As of September 30, 2017, no shares of preferred stock were issued or outstanding. Reserved Shares —As of September 30, 2017, the Company had reserved the following shares of common stock issuable upon exercise of rights under warrants and exercise of stock options, and as of December 31, 2016, the Company had reserved the following shares of common stock issuable upon conversion of then outstanding convertible preferred stock, convertible preferred stock issuable upon exercise of rights under warrants and exercise of stock options (See Note 8): September 30, December 31, 2017 2016 Convertible preferred stock — 16,101,970 2013 Warrant rights to acquire Series B Preferred Stock — 133,327 2014 Warrant rights to acquire Series B Preferred Stock — 53,333 2016 Warrant rights to acquire Series C Preferred Stock — 48,374 2011 Warrant rights to acquire Series Seed Preferred Stock — 15,360 Warrant rights to acquire Common Stock 197,701 — 2009 stock option plan 3,001,752 3,533,726 2017 stock option plan 2,011,203 Total 5,210,656 19,886,090 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2017 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 10. STOCK‑BASED COMPENSATION Stock Incentive Plan —On December 11, 2009, the Board adopted the 2009 Employee, Director and Consultant Equity Incentive Plan (the “2009 Plan”) for the issuance of common stock and stock options to employees, officers, directors, consultants, and advisors. Under the 2009 Plan, the Board determined the number of shares of common stock to be granted pursuant to the awards, as well as the exercise price and terms of such awards. The exercise price of incentive stock options could not be less than the fair value of the common stock on the date of grant. Stock options awarded under the 2009 Plan expire 10 years after the grant date, unless the Board sets a shorter term. Options granted under the plan generally vest over a four‑year period. As of December 31, 2016, there were 338,256 shares of common stock available for future grant under the 2009 Plan. On July 19, 2017, the Company’s 2017 Prior to the IPO, the Company had granted 86,056 stock options which contain performance‑based vesting criteria. These criteria were milestone events that were specific to the Company’s corporate goals. Stock‑based compensation expense associated with performance‑based stock options is recognized if the achievement of the performance condition is considered probable using management’s best estimates. The milestones were not deemed probable as of December 31, 2016 and were not met and had expired as of September 30, 2017. The Company granted 0 stock options to non‑employee consultants for the three months ended September 30, 2017 and 2016, and 4,224 and 0 stock options for the nine months ended September 30, 2017 and 2016, respectively. During the three months ended September 30, 2017 and 2016, the Company recognized $46,000 and $6,000, respectively, in stock compensation expense related to non‑employee consultants. During the nine months ended September 30, 2017 and 2016, the Company recognized $83,000, and $34,000, respectively, in stock compensation expense related to non‑employee consultants. A portion of the unvested stock options will vest upon the sale of all or substantially all of the stock or assets of the Company. A summary of option activity for employee and non‑employee awards under the 2009 Plan and the 2017 Plan for the nine months ended September 30, 2017 is as follows (in thousands, except share and per share amounts): Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value (Years) Outstanding at January 1,2017 $ 3.26 $ 1,200 Granted 16.06 Exercised 1.46 Forfeited 2.72 Outstanding at September 30, 2017 $ 5.97 $ 61,572 Vested and expected to vest at September 30, 2017 3,645,645 $ 5.97 $ 61,552 Options exercisable at September 30, 2017 1,590,655 $ 3.43 $ 30,882 The Company records stock‑based compensation related to stock options granted at fair value. The Company utilizes the Black‑Scholes option‑pricing model to estimate the fair value of stock option grants and to determine the related compensation expense. The assumptions used in calculating the fair value of stock‑based payment awards represent management’s best estimates. The assumptions used in determining fair value of the stock options granted in the nine months ended September 30, 2017 and 2016 are as follows: Nine Months Ended September 30, 2017 2016 Expected volatility 103% - 122% 108% - 110% Risk-free interest rate 1.81% - 2.29% 1.21% - 1.33% Expected dividend yield 0% 0% Expected term (in years) 5.04 - 9.82 5.62 - 6.18 The Company derived the risk‑free interest rate assumption from the U.S. Treasury rates for U.S. Treasury zero‑coupon bonds with maturities similar to those of the expected term of the awards being valued. The Company based the assumed dividend yield on its expectation of not paying dividends in the foreseeable future. The Company calculated the weighted‑average expected term of options using the simplified method, as the Company lacks relevant historical data due to the Company’s limited operating experience. The estimated volatility is based upon the historical volatility of comparable companies with publicly available share prices. The impact of forfeitures on compensation expense are recorded as they occur. The weighted average grant‑date fair value of options granted was $14.74 and $2.77, respectively, during the three months ended September 30, 2017 and 2016, and $13.19 and $2.73, respectively, during the nine months ended September 30, 2017 and 2016. There were 747,892 and 1,516,894 options granted during the nine months ended September 30, 2017 and 2016, respectively. The fair value is being expensed over the vesting period of the options on a straight‑line basis as the services are being provided. The Company has recorded aggregate stock‑based compensation expense related to the issuance of stock option awards of $981,000 and $554,000, respectively, during the three months ended September 30, 2017 and 2016, and $2.1 million and $1.7 million during the nine months ended September 30, 2017 and 2016, respectively. As of September 30, 2017, there was $13.2 million of unrecognized compensation cost related to the stock options granted, which is expected to be expensed over a weighted‑average period of 3.07 years. Stock-based Compensation Expenses —Stock‑based compensation expense was classified in the statements of operations as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Research and development $ 357 $ 180 $ 749 $ 309 General and administrative 624 374 1,321 1,438 Total $ 981 $ 554 $ 2,070 $ 1,747 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2017 | |
INCOME TAXES | |
INCOME TAXES | 11. INCOME TAXES The Company did not record a provision or benefit for income taxes during the three and nine months ended September 30, 2017 and 2016. The Company continues to maintain a valuation allowance for its U.S. federal and state deferred tax assets. The Company has evaluated the positive and negative evidence bearing upon its ability to realize the deferred tax assets. Management has considered the Company’s history of cumulative net losses incurred since inception and its lack of commercialization of any products or generation of any revenue from product sales since inception and has concluded that it is more likely than not that the Company will not realize the benefits of the deferred tax assets. Management reevaluates the positive and negative evidence at each reporting period. Realization of the future tax benefits is dependent on many factors, including the Company’s ability to generate taxable income within the net operating loss carryforward period. Under the provisions of Section 382 of the Internal Revenue Code of 1986, certain substantial changes in the Company’s ownership, including a sale of the Company, or significant changes in ownership due to sales of equity, may have limited, or may limit in the future, the amount of net operating loss carryforwards, which could be used annually to offset future taxable income. The Company files its corporate income tax returns in the United States and Massachusetts, California, Kentucky, Pennsylvania, New Hampshire, New York, North Carolina and Texas. All tax years since the date of incorporation remain open to examination by the major taxing jurisdictions (state and federal) to which the Company is subject, as carryforward attributes generated in years past may still be adjusted upon examination by the Internal Revenue Service (“IRS”) or other authorities if they have or will be used in a future period. The Company is not currently under examination by the IRS or any other jurisdictions for any tax year. As of September 30, 2017 and 2016, the Company had no uncertain tax positions. The Company’s policy is to recognize interest and penalties related to income tax matters as a component of income tax expense, of which no interest or penalties were recorded for the nine months ended September 30, 2017 and 2016. |
NET LOSS PER COMMON SHARE
NET LOSS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2017 | |
NET LOSS PER COMMON SHARE | |
NET LOSS PER COMMON SHARE | 12. NET LOSS PER COMMON SHARE Net Loss per Share —Basic and diluted net loss per share attributable to common stockholders were calculated as follows (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net loss attributable to common stockholders $ (10,175) $ (9,667) $ (30,921) $ (24,772) Denominator: Weighted average shares outstanding—basic and diluted 18,034,278 1,181,429 6,860,777 1,181,429 Net loss per share attributable to common stockholders—basic and diluted $ (0.56) $ (8.18) $ (4.51) $ (20.97) The Company’s potential dilutive securities, which include stock options and warrants to purchase common stock as of September 30, 2017 and stock options, warrants to purchase preferred stock and convertible preferred stock as of December 31, 2016, have been excluded from the computation of diluted net loss per share, for each respective period, as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to common stockholders are the same. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share attributable to common stockholders for the periods indicated because including them would have had an anti‑dilutive effect: September 30, 2017 2016 Convertible preferred stock (as converted to common stock) - 16,101,970 Options to purchase common stock 3,646,631 3,063,049 Common stock warrants 197,701 250,394 3,844,332 19,415,413 |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES. | |
COMMITMENTS AND CONTINGENCIES. | 13. COMMITMENTS AND CONTINGENCIES Leases —The Company entered into a three‑year lease agreement for its new headquarters on September 30, 2013, with a commencement date of February 1, 2014. As part of the terms of the lease agreement, the landlord agreed to fund certain improvements to the Company’s facility. The amount funded by the landlord was $78,000 and has been recorded as a liability which is being amortized as a reduction of rent expense over the term of the lease. On June 30, 2016, the lease was amended to extend the term from January 31, 2017 to January 31, 2019. In connection with the lease agreement, the Company issued a letter of credit to the landlord for $84,000. The Company secured the letter of credit using restricted cash for the full amount of the letter. The restricted cash as of September 30, 2017 is included in other noncurrent assets in the accompanying balance sheets. Total rent expense for the lease, which is recorded on a straight‑line basis, for the three months ended September 30, 2017 and 2016 was $97,000 and $85,000, respectively and for the nine months ended September 30, 2017 and 2016 was $290,000 and $244,000, respectively. Future minimum commitments due under these non-cancelable operating lease agreements as of September 30, 2017 are as follows (in thousands): Years Ending December 31, 2017 (remaining three months) $ 99 2018 410 2019 34 Total minimum lease payments $ 543 License Agreement —In 2009, the Company entered into an exclusive license agreement with The Johns Hopkins University (“JHU”), as amended in November 2012, May 2014, August 2014 and October 2014, which licensed to the Company a portfolio of specified patent rights and remains in full force and effect. Pursuant to the terms of the agreement, as amended, the Company agreed to pay an initial license fee, minimum annual payments beginning in 2017, certain development and commercial milestone payments, royalties on product sales and reimburse all or a portion of the costs associated with the preparation, filing, prosecution and maintenance of the agreed‑upon patents and patent applications to JHU (“Prosecution Costs”). After 2016 and until the first commercial sale of product, the minimum annual payment will be $38,000. If the Company achieves the first commercial sale of the product in the United States, European Union, or Japan, the annual minimum payment will increase to $113,000. The Company is obligated to pay JHU low single‑digit running royalties based upon a percentage of net sales of the licensed products. The Company also has an obligation to pay JHU certain one‑time development and commercial milestone payments. The Company recorded research and development expenses related to the JHU agreement of $97,000 and $50,000, respectively, for the three months ended September 30, 2017 and 2016 and $108,000 and $99,000, respectively, for the nine months ended September 30, 2017 and 2016. In 2015, the Company entered into a non‑exclusive license agreement with Massachusetts Eye and Ear Infirmary (“MEEI”), which licensed to the Company a certain questionnaire called “Symptom Assessment in Dry Eye” for use in clinical trials. Pursuant to the terms of the agreement, the Company agreed to pay an initial license fee of $10,000. Beginning in 2016, the Company was also obligated to pay an annual payment of $5,000. The agreement terminates in 2018. Litigation —The Company is not currently subject to any material legal proceedings. Guarantees and Indemnifications —The Company’s Certificate of Incorporation authorizes the Company to indemnify and advance expenses to its officers and directors and agents to the fullest extent permitted by law. The Company leases office space under a non‑cancelable operating lease. Under the lease the Company is required to indemnify the landlord against claims, actions, or damages incurred in connection with, among other items, the Company’s occupancy and use of the premises. The Company’s equity agreements and certain other arrangements include standard indemnifications against claims, actions, or other matters that may arise in connection with these arrangements. As of September 30, 2017, the Company had not experienced any losses related to these indemnification obligations, and no claims with respect thereto were outstanding. The Company does not expect significant claims related to these indemnification obligations and has no amount accrued related to these contingencies. The Company does not expect these indemnifications to have a material adverse effect on these financial statements. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2017 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS | 14. SUBSEQUENT EVENTS The Company has evaluated all events and transactions that occurred after the balance sheet date through the date of this filing. During this period, the Company did not have any material subsequent events that impacted its financial statements or disclosures. |
SUMMARY OF SIGNIFICANT ACCOUN20
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Use of Estimates | Use of Estimates —The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expense, and related disclosures. The Company bases estimates and assumptions on historical experience when available and on various factors that it believes to be reasonable under the circumstances. The Company evaluates its estimates and assumptions on an ongoing basis. Estimates relied upon in preparing these financial statements relate to, but are not limited to, the fair value of common stock, preferred stock, warrants, stock compensation, accrued expenses and the recoverability of the Company’s net deferred tax assets and related valuation allowance. Actual results may differ from these estimates under different assumptions or conditions. |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016‑09, Improvements to Employee Share‑Based Payment Accounting (“ASU 2016‑09” or “Topic 718”), which simplifies share‑based payment accounting through a variety of amendments. The standard is effective for annual periods beginning after December 15, 2016 and for interim periods within those fiscal years. The changes resulting from the adoption of this standard impact the accounting for income taxes, accounting for forfeitures, statutory tax withholding and the presentation of statutory tax withholding on the statement of cash flows. The Company adopted this standard on January 1, 2017. Under guidance within ASU 2016‑09, excess tax benefits and deficiencies are to be recognized as income tax expense or benefit in the statement of operations in the period in which they occur rather than as an increase or decrease in stockholders’ equity (deficit). Since the Company maintains a full valuation allowance on its net deferred tax asset, there was no net impact to its accumulated deficit or its net loss resulting from the adoption of this standard. Also under the guidance in ASU 2016‑09, an entity may elect to account for forfeitures as they occur or continue to estimate the total number of awards that are vested or expected to vest. The Company elected to account for forfeitures as they occur and applied the accounting change on a modified retrospective basis as a cumulative effect adjustment to accumulated deficit as of the date of adoption, January 1, 2017. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations or statement of cash flows. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02”), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight‑line basis over the term of the lease, respectively. A lessee is also required to record a right‑of‑use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. ASU 2016‑02 (ASC Topic 842) supersedes the previous leases standard, ASC 840, Leases . The standard is effective for public entities for annual periods beginning after December 15, 2018 and for interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016‑02 will have on its financial statements. In August 2016, the FASB issued ASU No. 2016‑15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments (“ASU 2016‑15”), to address diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The standard is effective for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. In November 2016, the FASB issued ASU 2016‑18, Statement of Cash Flows Restricted Cash (“ASU 2016‑18”). This new standard requires companies to include amounts generally described as restricted cash and restricted cash equivalents in cash and cash equivalents when reconciling beginning‑of‑period and end‑of‑period total amounts shown on the statement of cash flows. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, and requires retrospective application. The Company does not believe that the adoption of ASU 2016‑18 will have a material impact on its financial statements and related disclosures. In May 2017, the FASB issued ASU Update No. 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting (“ ASU 2017-09”), which provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting. The amendments in ASU 2017-09 are effective f or all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017, with early adoption permitted. The Company is currently evaluating the impact that ASU 2017-09 will have on the Company’s balance sheets, results of operations and statements of cash flows. In July 2017, the FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), Derivatives and Hedging (Topic 815). The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. The amendments also clarify existing disclosure requirements for equity-classified instruments. The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect. For public business entities, the amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for, including adoption in an interim period. The Company is currently evaluating the impact of adopting this standard on its financial statements and related disclosures. |
PREPAID EXPENSES AND OTHER CU21
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | |
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets consist of the following (in thousands): September 30, December 31, 2017 2016 Rent $ 61 $ 58 Insurance 667 55 Other 158 41 Prepaid expenses and other current assets $ 886 $ 154 |
ACCRUED EXPENSES (Tables)
ACCRUED EXPENSES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
ACCRUED EXPENSES | |
Schedule of accrued expenses | Accrued expenses consist of the following (in thousands): September 30, December 31, 2017 2016 Development costs $ 2,350 $ 2,280 Compensation and benefits 1,140 1,480 Professional fees 194 171 Common stock offering costs 111 — Other 143 62 Accrued expenses $ 3,938 $ 3,993 |
DEBT (Tables)
DEBT (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
DEBT | |
Schedule of maturities of long-term debt | The future annual principal payments due under the Term Loans as of September 30, 2017 are as follows (in thousands): Years Ending December 31, 2017 $ 1,111 2018 6,666 2019 6,666 2020 5,557 Total $ 20,000 |
PREFERRED STOCK WARRANTS (Table
PREFERRED STOCK WARRANTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
PREFERRED STOCK WARRANTS | |
Schedule of outstanding warrants | Shares Exercisable at Exercise Expiration September 30, December 31, Issued Exercisable for Price Date 2017 2016 2011 and 2012 Series Seed Preferred Stock $ 1.00 July 2019 — 80,000 (1) 2013 Series B Preferred Stock $ 1.44 April 2021 — 694,444 (1) 2014 Series B Preferred Stock $ 1.44 November 2024 — 277,778 (1) 2016 Series C Preferred Stock $ 1.59 October 2026 — (2) — (2) (1) As of December 31, 2016, the preferred stock warrants to purchase Series Seed Preferred Stock issued in 2011 and 2012, Series B Preferred Stock issued in 2013 and Series B Preferred Stock issued in 2014 were exercisable, and on a converted basis would have represented warrants to purchase common stock of 15,360, 133,334 and 53,333 shares, respectively. As of September 30, 2017 there were no preferred stock warrants outstanding (See Note 1). As of September 30, 2017 all of the underlying preferred stock warrants were converted into warrants for common stock, of which 149,327 were outstanding. (2) As of December 31, 2016, the preferred stock warrants to purchase Series C Preferred Stock were not exercisable and as of September 30, 2017, there were no preferred stock warrants outstanding (See Note 1). Upon the September 2017 $10.0 million draw down of the Term B Loan, the warrants became exercisable for 48,374 shares of common stock, which for comparative purposes represents 251,951 shares of Series C Preferred Stock on a pre-converted basis. As of September 30, 2017, all 48,374 warrants were outstanding. |
FAIR VALUE OF FINANCIAL INSTR25
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | |
Schedule of assets and liabilities measured at fair value on a recurring basis | The assets and liabilities measured at fair value on a recurring basis as of December 31, 2016, and the input categories associated with those assets and liabilities are as follows (in thousands): Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Carrying Value (Level 1) (Level 2) (Level 3) December 31, 2016 2011 and 2012 Series Seed Warrants $ 39 $ — $ — $ 39 2013 Series B Warrants 463 — — 463 2014 Series B Warrants 274 — — 274 2016 Series C Warrants 263 — — 263 Total warrant liability $ 1,039 $ — $ — $ 1,039 |
Schedule of changes in Level 3 fair value measurements | The following table provides a summary of changes in the fair value of the Company’s derivative liability, which is included as a component of other (income) expense (in thousands): Three Months Ended September 30, 2017 2016 Warrant Warrant Liability Liability Fair value - June 30, $ 2,260 $ 965 Change in fair value of warrant liability 623 (206) Reclassification of preferred warrant liability (2,883) — Fair value - September 30, $ — $ 759 Nine Months Ended September 30, 2017 2016 Warrant Warrant Liability Liability Fair value - December 31, $ 1,039 $ 936 Change in fair value of warrant liability 1,844 (177) Reclassification of preferred warrant liability (2,883) — Fair value - September 30, $ — $ 759 |
Schedule of fair values of warrants, using the Black Scholes option pricing model | 2011 and 2012 Series 2013 2014 Seed Series B Series B Series C Warrants Warrants Warrants Warrants December 31, 2016 Volatility 100.00 % 87.00 % 114.00 % 58.30 % Risk-free interest rate 1.30 % 1.80 % 2.30 % 2.40 % Estimated fair value of underlying shares $ 0.89 $ 1.11 $ 1.11 1.54 Remaining contractual term (years) 2.6 4.3 7.9 9.8 Expected dividend yield — % — % — % — % July 19, 2017 Volatility 119.00 % 112.00 % 114.00 % 116.00 % Risk-free interest rate 1.40 % 1.60 % 2.10 % 2.20 % Estimated fair value of underlying shares $ 13.50 $ 13.50 $ 13.50 $ 13.50 Remaining contractual term (years) 2.0 3.7 7.3 9.2 Expected dividend yield — % — % — % — % For purposes of determining the fair value of the warrants to purchase Series C Preferred Stock as of December 31, 2016 and July 19, 2017, the Company estimated that there was a 100% probability that it would draw down on the remaining $10.0 million available under the 2014 Debt Facility as of the measurement date, and as such, assumed that the warrants would be exercisable into the maximum number of shares stipulated in the First Amendment. |
CONVERTIBLE PREFERRED STOCK (Ta
CONVERTIBLE PREFERRED STOCK (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
CONVERTIBLE PREFERRED STOCK | |
Schedule of preferred stock | Convertible preferred stock consisted of the following as of December 31, 2016 (in thousands, except share amounts): Common Stock Shares Issued Issuable Designated and Liquidation Carrying Upon Shares Issuance Dates Outstanding Value Value Conversion (1) Series Seed 11,323,209 December 2009 2,000,001 October 2010 2,000,003 February 2012 7,243,205 11,243,209 $ 11,243 $ 11,065 Series A 9,583,432 February 2013 4,791,716 July 2013 4,791,716 9,583,432 $ 11,500 $ 10,736 Series B 16,597,221 April 2014 15,624,999 $ 22,500 $ 22,185 Series B-1 4,629,629 August 2015 4,629,629 $ 7,000 $ 6,885 Series C 43,034,639 April 2016 42,782,688 $ 67,922 $ 67,520 (1) No fractional shares of Common Stock were issuable upon conversion of the Preferred Stock. In lieu of any fractional shares to which the holder would otherwise be entitled, the Company paid cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board of Directors of the Company. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Preferred Stock the holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion. |
COMMON STOCK (Tables)
COMMON STOCK (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
COMMON STOCK AND PREFERRED STOCK | |
Schedule of reserved common stock shares for potential conversion of outstanding convertible preferred stock | September 30, December 31, 2017 2016 Convertible preferred stock — 16,101,970 2013 Warrant rights to acquire Series B Preferred Stock — 133,327 2014 Warrant rights to acquire Series B Preferred Stock — 53,333 2016 Warrant rights to acquire Series C Preferred Stock — 48,374 2011 Warrant rights to acquire Series Seed Preferred Stock — 15,360 Warrant rights to acquire Common Stock 197,701 — 2009 stock option plan 3,001,752 3,533,726 2017 stock option plan 2,011,203 Total 5,210,656 19,886,090 |
STOCK_BASED COMPENSATION (Table
STOCK‑BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
STOCK-BASED COMPENSATION | |
Summary of option activity for employee and non employee awards | A summary of option activity for employee and non‑employee awards under the 2009 Plan and the 2017 Plan for the nine months ended September 30, 2017 is as follows (in thousands, except share and per share amounts): Weighted Weighted Average Average Remaining Aggregate Number of Exercise Contractual Intrinsic Shares Price Term Value (Years) Outstanding at January 1,2017 $ 3.26 $ 1,200 Granted 16.06 Exercised 1.46 Forfeited 2.72 Outstanding at September 30, 2017 $ 5.97 $ 61,572 Vested and expected to vest at September 30, 2017 3,645,645 $ 5.97 $ 61,552 Options exercisable at September 30, 2017 1,590,655 $ 3.43 $ 30,882 |
Schedule of assumptions used in determining fair value of the stock options granted | Nine Months Ended September 30, 2017 2016 Expected volatility 103% - 122% 108% - 110% Risk-free interest rate 1.81% - 2.29% 1.21% - 1.33% Expected dividend yield 0% 0% Expected term (in years) 5.04 - 9.82 5.62 - 6.18 |
Schedule of stock based compensation expense | Stock-based Compensation Expenses —Stock‑based compensation expense was classified in the statements of operations as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Research and development $ 357 $ 180 $ 749 $ 309 General and administrative 624 374 1,321 1,438 Total $ 981 $ 554 $ 2,070 $ 1,747 |
NET LOSS PER COMMON SHARE (Tabl
NET LOSS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
NET LOSS PER COMMON SHARE | |
Schedule of computation of basic and diluted net loss per share | Net Loss per Share —Basic and diluted net loss per share attributable to common stockholders were calculated as follows (in thousands, except share and per share amounts): Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Numerator: Net loss attributable to common stockholders $ (10,175) $ (9,667) $ (30,921) $ (24,772) Denominator: Weighted average shares outstanding—basic and diluted 18,034,278 1,181,429 6,860,777 1,181,429 Net loss per share attributable to common stockholders—basic and diluted $ (0.56) $ (8.18) $ (4.51) $ (20.97) |
Schedule of outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti-dilutive | September 30, 2017 2016 Convertible preferred stock (as converted to common stock) - 16,101,970 Options to purchase common stock 3,646,631 3,063,049 Common stock warrants 197,701 250,394 3,844,332 19,415,413 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
COMMITMENTS AND CONTINGENCIES. | |
Schedule of future minimum commitments | Future minimum commitments due under these non-cancelable operating lease agreements as of September 30, 2017 are as follows (in thousands): Years Ending December 31, 2017 (remaining three months) $ 99 2018 410 2019 34 Total minimum lease payments $ 543 |
NATURE OF BUSINESS AND BASIS 31
NATURE OF BUSINESS AND BASIS OF PRESENTATION - Nature of Business (Details) $ / shares in Units, $ in Thousands | Jul. 25, 2017USD ($)$ / sharesshares | Jul. 07, 2017 | Jul. 25, 2017USD ($)$ / sharesshares | Sep. 30, 2017USD ($)$ / shares | Dec. 31, 2016$ / shares |
Initial Public Offering | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | |||
Net proceeds | $ | $ 96,255 | ||||
Common stock shares issued | shares | 16,101,970 | ||||
Reverse Stock Split | |||||
Reverse stock split | 0.1920 | ||||
IPO | |||||
Initial Public Offering | |||||
Issuance of common stock upon IPO, net $96.3M (in shares) | shares | 6,900,000 | ||||
Share price (in dollars per share) | $ / shares | $ 15 | $ 15 | |||
Net proceeds | $ | $ 94,100 | ||||
Underwriter's option | |||||
Initial Public Offering | |||||
Issuance of common stock upon IPO, net $96.3M (in shares) | shares | 900,000 | ||||
Share price (in dollars per share) | $ / shares | $ 15 | $ 15 | |||
Underwriting discounts and commissions | $ | $ 7,200 | ||||
Offering costs | $ | $ 2,200 | ||||
Common stock. | |||||
Initial Public Offering | |||||
Shares warrants may purchase | shares | 202,020 | 202,020 | |||
Common stock. | IPO | |||||
Initial Public Offering | |||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 |
PREPAID EXPENSES AND OTHER CU32
PREPAID EXPENSES AND OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
PREPAID EXPENSES AND OTHER CURRENT ASSETS | ||
Rent | $ 61 | $ 58 |
Insurance | 667 | 55 |
Other | 158 | 41 |
Prepaid expenses and other current assets | $ 886 | $ 154 |
ACCRUED EXPENSES (Details)
ACCRUED EXPENSES (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
ACCRUED EXPENSES | ||
Development costs | $ 2,350 | $ 2,280 |
Compensation and benefits | 1,140 | 1,480 |
Professional fees | 194 | 171 |
Deferred offering costs | 111 | |
Other | 143 | 62 |
Accrued expenses | $ 3,938 | $ 3,993 |
DEBT (Details)
DEBT (Details) - USD ($) | Sep. 28, 2017 | Dec. 31, 2016 | Oct. 13, 2016 | Dec. 31, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 30, 2014 |
Debt instruments | |||||||||||
Total loan commitment | $ 10,000,000 | ||||||||||
Interest expense | $ 212,000 | $ 186,000 | $ 618,000 | $ 566,000 | |||||||
Term loan | 10,000,000 | ||||||||||
Unpaid balance | 20,000,000 | 20,000,000 | |||||||||
Warrant Liability | $ 1,039,000 | $ 0 | $ 0 | $ 1,039,000 | |||||||
2014 Series B Warrants | |||||||||||
Debt instruments | |||||||||||
Fair value of warrants | 274,000 | 274,000 | $ 140,000 | ||||||||
2016 Series C Warrants | |||||||||||
Debt instruments | |||||||||||
Fair value of warrants | $ 263,000 | $ 225,000 | $ 263,000 | ||||||||
2014 Debt Facility | |||||||||||
Debt instruments | |||||||||||
Total loan commitment | $ 10,000,000 | ||||||||||
Additional borrowing capacity | $ 10,000,000 | ||||||||||
Interest rate (as a percent) | 6.50% | 7.25% | 7.25% | 6.50% | |||||||
Unpaid principal balance | $ 10,000,000 | $ 20,000,000 | $ 20,000,000 | $ 10,000,000 | |||||||
Unamortized discount | 346,000 | 260,000 | 260,000 | 346,000 | |||||||
Interest expense | 212,000 | 186,000 | 618,000 | 566,000 | |||||||
Amortization of debt discount | 29,000 | 31,000 | 86,000 | 83,000 | |||||||
Contractual coupon interest | 183,000 | $ 155,000 | 532,000 | $ 483,000 | |||||||
2014 Debt Facility | Prime Rate | |||||||||||
Debt instruments | |||||||||||
Variable rate of interest | 3.00% | ||||||||||
Term Loan A | |||||||||||
Debt instruments | |||||||||||
Total loan commitment | $ 10,000,000 | ||||||||||
Proceeds from borrowing | $ 5,000,000 | $ 5,000,000 | |||||||||
Term Loan B | |||||||||||
Debt instruments | |||||||||||
Term loan | $ 10,000,000 | ||||||||||
Series B convertible preferred stock | |||||||||||
Debt instruments | |||||||||||
Warrant Liability | $ 0 | $ 0 | |||||||||
Shares Exercisable | 133,334 | ||||||||||
Series B convertible preferred stock | 2014 Series B Warrants | |||||||||||
Debt instruments | |||||||||||
Exercise Price | $ 1.44 | $ 1.44 | |||||||||
Shares Exercisable | $ 277,778 | ||||||||||
Series B convertible preferred stock | Term Loan A | 2014 Series B Warrants | |||||||||||
Debt instruments | |||||||||||
Shares warrants may purchase | 138,889 | 277,778 | |||||||||
Exercise Price | $ 1.44 | ||||||||||
Series C convertible preferred stock | |||||||||||
Debt instruments | |||||||||||
Warrant Liability | $ 0 | $ 0 | |||||||||
Shares warrants may purchase | 48,374 | ||||||||||
Shares Exercisable | $ 53,333 | ||||||||||
Series C convertible preferred stock | 2016 Series C Warrants | |||||||||||
Debt instruments | |||||||||||
Exercise Price | $ 1.59 | $ 1.59 | |||||||||
Series C convertible preferred stock | Term Loan B | 2016 Series C Warrants | |||||||||||
Debt instruments | |||||||||||
Exercise Price | $ 1.59 | ||||||||||
Series C convertible preferred stock | Term Loan B | 2016 Series C Warrants | Maximum | |||||||||||
Debt instruments | |||||||||||
Shares warrants may purchase | 48,374 | 251,951 | |||||||||
Common Stock | |||||||||||
Debt instruments | |||||||||||
Shares warrants may purchase | 251,951 | ||||||||||
Common Stock | Term Loan A | 2014 Series B Warrants | |||||||||||
Debt instruments | |||||||||||
Shares warrants may purchase | 53,333 | ||||||||||
Exercise Price | $ 7.50 | ||||||||||
Common Stock | Term Loan B | 2016 Series C Warrants | |||||||||||
Debt instruments | |||||||||||
Exercise Price | $ 8.27 | ||||||||||
Common Stock | Term Loan B | 2016 Series C Warrants | Maximum | |||||||||||
Debt instruments | |||||||||||
Shares warrants may purchase | 48,374 | ||||||||||
Shares Exercisable | $ 48,374 |
DEBT - Future annual principal
DEBT - Future annual principal payments (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Maturities of long-term debt | |
2,017 | $ 1,111 |
2,018 | 6,666 |
2,019 | 6,666 |
2,020 | 5,557 |
Total | $ 20,000 |
PREFERRED STOCK WARRANTS (Detai
PREFERRED STOCK WARRANTS (Details) - USD ($) | Dec. 31, 2016 | Sep. 30, 2017 | Dec. 31, 2016 | Sep. 28, 2017 | Oct. 13, 2016 |
Preferred stock warrants | |||||
Warrant Liability | $ 1,039,000 | $ 0 | $ 1,039,000 | ||
Total loan commitment | $ 10,000,000 | ||||
Series Seed convertible preferred stock | |||||
Preferred stock warrants | |||||
Shares Exercisable | 15,360 | ||||
Warrant Liability | $ 0 | ||||
Series Seed convertible preferred stock | 2011 and 2012 Series Seed Warrants | |||||
Preferred stock warrants | |||||
Exercise Price | $ 1 | ||||
Shares Exercisable | 80,000 | ||||
Series B convertible preferred stock | |||||
Preferred stock warrants | |||||
Shares Exercisable | 133,334 | ||||
Warrant Liability | $ 0 | ||||
Series B convertible preferred stock | 2013 Series B Warrants | |||||
Preferred stock warrants | |||||
Exercise Price | $ 1.44 | ||||
Shares Exercisable | 694,444 | ||||
Series B convertible preferred stock | 2014 Series B Warrants | |||||
Preferred stock warrants | |||||
Exercise Price | $ 1.44 | ||||
Shares Exercisable | $ 277,778 | ||||
Series C convertible preferred stock | |||||
Preferred stock warrants | |||||
Shares Exercisable | $ 53,333 | ||||
Warrant Liability | $ 0 | ||||
Shares warrants may purchase | 48,374 | ||||
Series C convertible preferred stock | 2016 Series C Warrants | |||||
Preferred stock warrants | |||||
Exercise Price | $ 1.59 | ||||
Series C convertible preferred stock | 2016 Series C Warrants | Term Loan B | |||||
Preferred stock warrants | |||||
Exercise Price | $ 1.59 | ||||
Preferred stock warrants outstanding | 48,374 | ||||
Series C convertible preferred stock | 2016 Series C Warrants | Term Loan B | Maximum | |||||
Preferred stock warrants | |||||
Shares warrants may purchase | 48,374 | 251,951 | |||
Common Stock | |||||
Preferred stock warrants | |||||
Preferred stock warrants outstanding | 149,327 | ||||
Shares warrants may purchase | 251,951 | ||||
Common Stock | 2016 Series C Warrants | Term Loan B | |||||
Preferred stock warrants | |||||
Exercise Price | $ 8.27 | ||||
Common Stock | 2016 Series C Warrants | Term Loan B | Maximum | |||||
Preferred stock warrants | |||||
Shares Exercisable | $ 48,374 | ||||
Shares warrants may purchase | 48,374 | ||||
Preferred stock | |||||
Preferred stock warrants | |||||
Preferred stock warrants outstanding | 0 |
FAIR VALUE OF FINANCIAL INSTR37
FAIR VALUE OF FINANCIAL INSTRUMENTS - Assets and Liabilities measured at fair value (Details) (Imported) - Recurring $ in Thousands | Dec. 31, 2016USD ($) |
Significant Unobservable Inputs | |
Warrant Liability | $ 1,039 |
Carrying Value | |
Warrant Liability | 1,039 |
2011 and 2012 Series Seed Warrants | Significant Unobservable Inputs | |
Warrant Liability | 39 |
2011 and 2012 Series Seed Warrants | Carrying Value | |
Warrant Liability | 39 |
2013 Series B Warrants | Significant Unobservable Inputs | |
Warrant Liability | 463 |
2013 Series B Warrants | Carrying Value | |
Warrant Liability | 463 |
2014 Series B Warrants | Significant Unobservable Inputs | |
Warrant Liability | 274 |
2014 Series B Warrants | Carrying Value | |
Warrant Liability | 274 |
2016 Series C Warrants | Significant Unobservable Inputs | |
Warrant Liability | 263 |
2016 Series C Warrants | Carrying Value | |
Warrant Liability | $ 263 |
FAIR VALUE OF FINANCIAL INSTR38
FAIR VALUE OF FINANCIAL INSTRUMENTS - Fair values of the warrants, using the Black‑Scholes option‑pricing model (Details) - USD ($) $ / shares in Units, $ in Millions | Jul. 19, 2017 | Dec. 31, 2016 |
Fair Value Measurements | ||
Percentage of probability | 100.00% | 100.00% |
Remaining borrowing capacity | $ 10 | $ 10 |
2011 and 2012 Series Seed Warrants | ||
Fair Value Measurements | ||
Volatility | 119.00% | 100.00% |
Risk-free interest rate | 1.40% | 1.30% |
Estimated fair value of underlying shares | $ 13.50 | $ 0.89 |
Remaining contractual term | 2 years | 2 years 7 months 6 days |
2013 Series B Warrants | ||
Fair Value Measurements | ||
Volatility | 112.00% | 87.00% |
Risk-free interest rate | 1.60% | 1.80% |
Estimated fair value of underlying shares | $ 13.50 | $ 1.11 |
Remaining contractual term | 3 years 8 months 12 days | 4 years 3 months 18 days |
2014 Series B Warrants | ||
Fair Value Measurements | ||
Volatility | 114.00% | 114.00% |
Risk-free interest rate | 2.10% | 2.30% |
Estimated fair value of underlying shares | $ 13.50 | $ 1.11 |
Remaining contractual term | 7 years 3 months 18 days | 7 years 10 months 24 days |
2016 Series C Warrants | ||
Fair Value Measurements | ||
Volatility | 116.00% | 58.30% |
Risk-free interest rate | 2.20% | 2.40% |
Estimated fair value of underlying shares | $ 13.50 | $ 1.54 |
Remaining contractual term | 9 years 2 months 12 days | 9 years 9 months 18 days |
FAIR VALUE OF FINANCIAL INSTR39
FAIR VALUE OF FINANCIAL INSTRUMENTS - Derivative liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Reconciliation of Liabilities Measured at Fair Value on a Recurring Basis Using Significant Unobservable Inputs (Level 3) | ||||
Balance at beginning of period | $ 1,039 | $ 936 | ||
Change in fair value of warrant liability | $ 623 | $ (206) | 1,844 | (177) |
Reclassification of preferred warrant liability | (2,883) | (2,883) | ||
Balance at end of period | $ 2,883 | $ 759 | $ 2,883 | $ 759 |
CONVERTIBLE PREFERRED STOCK - S
CONVERTIBLE PREFERRED STOCK - Shares issued (Details) - USD ($) $ in Thousands | Jul. 25, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | Apr. 05, 2016 | Aug. 17, 2015 | Apr. 30, 2014 | Jul. 15, 2013 | Feb. 28, 2013 | Feb. 29, 2012 | Oct. 31, 2010 | Dec. 31, 2009 |
Temporary Equity | |||||||||||
Common stock shares issued | 16,101,970 | ||||||||||
Convertible preferred stock. | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 0 | 170,336,260 | |||||||||
Shares Outstanding | 0 | ||||||||||
Series Seed convertible preferred stock | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 0 | 11,323,209 | |||||||||
Shares Issued | 0 | 11,243,209 | |||||||||
Shares Outstanding | 0 | 11,243,209 | |||||||||
Liquidation Value | $ 11,243 | $ 11,243 | |||||||||
Carrying Value | $ 11,065 | $ 11,065 | |||||||||
Common Stock Issuable Upon Conversion | 2,158,708 | 2,158,708 | |||||||||
Common stock shares issued | 2,158,708 | ||||||||||
Series Seed convertible preferred stock | December 2009 | |||||||||||
Temporary Equity | |||||||||||
Shares Issued | 2,000,001 | 2,000,001 | 2,000,001 | ||||||||
Shares Outstanding | 2,000,001 | 2,000,001 | |||||||||
Series Seed convertible preferred stock | October 2010 | |||||||||||
Temporary Equity | |||||||||||
Shares Issued | 2,000,003 | 2,000,003 | 2,000,003 | ||||||||
Shares Outstanding | 2,000,003 | 2,000,003 | |||||||||
Series Seed convertible preferred stock | February 2012 | |||||||||||
Temporary Equity | |||||||||||
Shares Issued | 7,243,205 | 7,243,205 | 7,243,205 | ||||||||
Shares Outstanding | 7,243,205 | 7,243,205 | |||||||||
Series A convertible preferred stock | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 0 | 9,583,432 | |||||||||
Shares Issued | 0 | 9,583,432 | |||||||||
Shares Outstanding | 0 | 9,583,432 | |||||||||
Liquidation Value | $ 11,500 | $ 11,500 | |||||||||
Carrying Value | $ 10,736 | $ 10,736 | |||||||||
Common Stock Issuable Upon Conversion | 1,840,029 | 1,840,029 | |||||||||
Common stock shares issued | 1,840,029 | ||||||||||
Series A convertible preferred stock | February 2013 | |||||||||||
Temporary Equity | |||||||||||
Shares Issued | 4,791,716 | 4,791,716 | 4,791,716 | ||||||||
Shares Outstanding | 4,791,716 | 4,791,716 | |||||||||
Series A convertible preferred stock | July 2013 | |||||||||||
Temporary Equity | |||||||||||
Shares Issued | 4,791,716 | 4,791,716 | 4,791,716 | ||||||||
Shares Outstanding | 4,791,716 | 4,791,716 | |||||||||
Series B convertible preferred stock | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 0 | 16,597,221 | |||||||||
Shares Issued | 0 | 15,624,999 | |||||||||
Shares Outstanding | 0 | 15,624,999 | |||||||||
Carrying Value | $ 22,185 | ||||||||||
Common stock shares issued | 3,000,017 | ||||||||||
Series B convertible preferred stock | April 2014 | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 16,597,221 | 16,597,221 | |||||||||
Shares Issued | 15,624,999 | 15,624,999 | 15,624,999 | ||||||||
Shares Outstanding | 15,624,999 | 15,624,999 | |||||||||
Liquidation Value | $ 22,500 | $ 22,500 | |||||||||
Carrying Value | $ 22,185 | $ 22,185 | |||||||||
Common Stock Issuable Upon Conversion | 3,000,017 | 3,000,017 | |||||||||
Series B-1 convertible preferred stock | |||||||||||
Temporary Equity | |||||||||||
Common stock shares issued | 888,894 | ||||||||||
Series B-1 convertible preferred stock | August 2015 | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 4,629,629 | 4,629,629 | |||||||||
Shares Issued | 4,629,629 | 4,629,629 | 4,629,629 | ||||||||
Shares Outstanding | 4,629,629 | 4,629,629 | |||||||||
Liquidation Value | $ 7,000 | $ 7,000 | |||||||||
Carrying Value | $ 6,885 | $ 6,885 | |||||||||
Common Stock Issuable Upon Conversion | 888,894 | 888,894 | |||||||||
Series C convertible preferred stock | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 0 | 43,034,639 | |||||||||
Shares Issued | 0 | 42,782,688 | |||||||||
Shares Outstanding | 0 | 42,782,688 | |||||||||
Carrying Value | $ 67,520 | ||||||||||
Common stock shares issued | 8,214,322 | ||||||||||
Series C convertible preferred stock | April 2016 | |||||||||||
Temporary Equity | |||||||||||
Designated Shares | 43,034,639 | 43,034,639 | |||||||||
Shares Issued | 42,782,688 | 42,782,688 | 42,782,688 | ||||||||
Shares Outstanding | 42,782,688 | 42,782,688 | |||||||||
Liquidation Value | $ 67,922 | $ 67,922 | |||||||||
Carrying Value | $ 67,520 | $ 67,520 | |||||||||
Common Stock Issuable Upon Conversion | 8,214,322 | 8,214,322 |
CONVERTIBLE PREFERRED STOCK -41
CONVERTIBLE PREFERRED STOCK - Shares converted (Details) | Jul. 25, 2017shares | Jul. 07, 2017 | Apr. 05, 2016USD ($)$ / sharesshares | Aug. 17, 2015USD ($)$ / sharesshares | Jul. 15, 2013USD ($)$ / sharesshares | Apr. 30, 2014USD ($)$ / sharesshares | Jun. 30, 2013item | Feb. 28, 2013USD ($)$ / sharesshares | Feb. 29, 2012USD ($)shares | Oct. 31, 2010USD ($)$ / sharesshares | Dec. 31, 2009USD ($)$ / sharesshares | Dec. 31, 2013$ / sharesshares | Sep. 30, 2017USD ($)shares | Dec. 31, 2016USD ($)shares |
Temporary equity | ||||||||||||||
Common stock shares issued | shares | 16,101,970 | |||||||||||||
Warrant Liability | $ | $ 0 | $ 1,039,000 | ||||||||||||
Reverse stock split | 0.1920 | |||||||||||||
Series Seed convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 0 | 11,243,209 | ||||||||||||
Issuance cost | $ | $ 15,000 | $ 39,000 | $ 124,000 | |||||||||||
Common stock shares issued | shares | 2,158,708 | |||||||||||||
Warrant Liability | $ | $ 0 | |||||||||||||
Series A convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 0 | 9,583,432 | ||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.20 | |||||||||||||
Additional shares available for purchase | shares | 4,791,716 | |||||||||||||
Issuance cost | $ | $ 93,000 | |||||||||||||
Number of milestones approved by the board | item | 1 | |||||||||||||
Common stock shares issued | shares | 1,840,029 | |||||||||||||
Warrant Liability | $ | $ 0 | |||||||||||||
Series B convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 0 | 15,624,999 | ||||||||||||
Common stock shares issued | shares | 3,000,017 | |||||||||||||
Warrant Liability | $ | $ 0 | |||||||||||||
Series B-1 convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Common stock shares issued | shares | 888,894 | |||||||||||||
Warrant Liability | $ | $ 0 | |||||||||||||
Series C convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 0 | 42,782,688 | ||||||||||||
Common stock shares issued | shares | 8,214,322 | |||||||||||||
Warrant Liability | $ | $ 0 | |||||||||||||
December 2009 | Series Seed convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 2,000,001 | 2,000,001 | 2,000,001 | |||||||||||
Gross proceeds | $ | $ 2,000,000 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1 | |||||||||||||
October 2010 | Series Seed convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 2,000,003 | 2,000,003 | 2,000,003 | |||||||||||
Gross proceeds | $ | $ 2,000,000 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1 | |||||||||||||
February 2012 | Series Seed convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 7,243,205 | 7,243,205 | 7,243,205 | |||||||||||
Gross proceeds | $ | $ 6,200,000 | |||||||||||||
Shares issued upon conversion (in shares) | shares | 6,150,000 | |||||||||||||
Shares issued upon conversion of convertible debt (in shares) | shares | 1,093,205 | |||||||||||||
Face amount | $ | $ 1,000,000 | |||||||||||||
Accrued interest | $ | $ 93,000 | |||||||||||||
February 2013 | Series A convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 4,791,716 | 4,791,716 | 4,791,716 | |||||||||||
Gross proceeds | $ | $ 5,800,000 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.20 | |||||||||||||
July 2013 | Series A convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 4,791,716 | 4,791,716 | 4,791,716 | |||||||||||
Gross proceeds | $ | $ 5,800,000 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.20 | |||||||||||||
April 2014 | Series B convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 15,624,999 | 15,624,999 | 15,624,999 | |||||||||||
Gross proceeds | $ | $ 22,500,000 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.44 | |||||||||||||
Shares issued upon conversion (in shares) | shares | 3,562,785 | |||||||||||||
Shares issued upon conversion of convertible debt | $ | $ 5,100,000 | |||||||||||||
Issuance cost | $ | $ 315,000,000 | |||||||||||||
August 2015 | Series B-1 convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 4,629,629 | 4,629,629 | 4,629,629 | |||||||||||
Gross proceeds | $ | $ 7,000,000 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.512 | |||||||||||||
Issuance cost | $ | $ 115,000 | |||||||||||||
April 2016 | Series C convertible preferred stock | ||||||||||||||
Temporary equity | ||||||||||||||
Shares Issued | shares | 42,782,688 | 42,782,688 | 42,782,688 | |||||||||||
Gross proceeds | $ | $ 67,900,000 | |||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.5876 | |||||||||||||
Issuance cost | $ | $ 402,000,000 |
COMMON STOCK AND PREFERRED STOC
COMMON STOCK AND PREFERRED STOCK (Details) - $ / shares | Sep. 30, 2017 | Jul. 25, 2017 | Dec. 31, 2016 |
Common stock and preferred stock | |||
Common stock, authorized | 120,000,000 | 110,251,951 | |
Common stock, par value | $ 0.001 | $ 0.001 | |
Common stock, shares issued | 24,347,150 | 16,100,000 | 1,181,429 |
Common stock, shares outstanding | 24,347,150 | 1,181,429 | |
Preferred stock, authorized | 5,000,000 | 5,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Common stock shares reserved for future issuance | 5,210,656 | 19,886,090 | |
2009 stock option plan | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 3,001,752 | 3,533,726 | |
2017 stock option plan | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 2,011,203 | ||
2013 Series B Warrants | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 133,327 | ||
2014 Series B Warrants | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 53,333 | ||
2016 Series C Warrants | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 48,374 | ||
Common Stock | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 197,701 | ||
Convertible preferred stock. | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 16,101,970 | ||
Common stock. | 2011 Warrant rights to acquire Series Seed Preferred Stock | |||
Common stock and preferred stock | |||
Common stock shares reserved for future issuance | 15,360 |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 18 Months Ended | 21 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Jun. 30, 2017 | Sep. 30, 2017 | Dec. 31, 2016 | |
Share-based compensation | |||||||
Common stock available for future grant | 5,210,656 | 5,210,656 | 5,210,656 | 19,886,090 | |||
Options granted | 747,892 | 1,516,894 | |||||
Stock based compensation expense | $ 981,000 | $ 554,000 | $ 2,070,000 | $ 1,747,000 | |||
Cash proceeds from the exercise of stock options | $ 189,000 | ||||||
Employee and Non-Employee Stock Options | Non-employees | |||||||
Share-based compensation | |||||||
Options granted | 0 | 4,224 | 0 | ||||
Stock based compensation expense | $ 46,000 | $ 6,000 | $ 83,000 | $ 34,000 | |||
Performance Stock Options | |||||||
Share-based compensation | |||||||
Options granted | 86,056 | ||||||
2009 Plan | |||||||
Share-based compensation | |||||||
Common stock available for future grant | 338,256 | ||||||
Options granted | 747,892 | ||||||
Unrecognized compensation expense | $ 13,200,000 | $ 13,200,000 | $ 13,200,000 | ||||
2009 Plan | Employee and Non-Employee Stock Options | |||||||
Share-based compensation | |||||||
Options Expiry Term | 10 years | ||||||
Vesting Period | 4 years | ||||||
2017 Equity Incentive Plan | |||||||
Share-based compensation | |||||||
Common stock available for future grant | 1,366,324 | 1,366,324 | 1,366,324 | ||||
Common Stock Capital Shares Reserved For Future Issuance Percent Of Outstanding Shares | 4.00% | ||||||
2017 Equity Incentive Plan | Minimum | |||||||
Share-based compensation | |||||||
Common stock available for future grant | 3,573,766 | 3,573,766 | 3,573,766 | ||||
2017 Equity Incentive Plan | Maximum | |||||||
Share-based compensation | |||||||
Common stock available for future grant | 3,533,757 | 3,533,757 | 3,533,757 |
STOCK_BASED COMPENSATION - Stoc
STOCK‑BASED COMPENSATION - Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Number of Shares | |||
Granted (in shares) | 747,892 | 1,516,894 | |
2009 Plan | |||
Number of Shares | |||
Outstanding at the beginning of the period (in shares) | 3,195,469 | ||
Granted (in shares) | 747,892 | ||
Exercised (in shares) | (129,461) | ||
Forfeited | (167,269) | ||
Outstanding at the end of the period (in shares) | 3,646,631 | 3,195,469 | |
Vested and expected to vest (in shares) | 3,645,645 | ||
Options exercisable (in shares) | 1,590,655 | ||
Weighted Average Exercise Price | |||
Outstanding at the beginning of the period (in dollars per share) | $ 3.26 | ||
Granted (in dollars per share) | 16.06 | ||
Exercised (in dollars per share) | 1.46 | ||
Forfeited | 2.72 | ||
Outstanding at the end of the period (in dollars per share) | 5.97 | $ 3.26 | |
Vested and expected to vest (in dollars per share ) | 5.97 | ||
Options exercisable (in dollars per shares) | $ 3.43 | ||
Weighted Average Remaining Contractual Term | |||
Weighted average period | 8 years 4 months 24 days | 8 years 7 months 6 days | |
Vested and expected to vest | 8 years 4 months 24 days | ||
Options exercisable | 7 years 9 months 18 days | ||
Aggregate Intrinsic Value | |||
Outstanding at the beginning of the period (in dollars) | $ 1,200 | ||
Outstanding at the end of the period (in dollars) | 61,572 | $ 1,200 | |
Vested and expected to vest (in dollars) | 61,552 | ||
Options exercisable (in dollars) | $ 30,882 |
STOCK_BASED COMPENSATION - Fair
STOCK‑BASED COMPENSATION - Fair Value Assumptions (Details) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | ||
Expected volatility (maximum) | 122.00% | |
Employee and Non-Employee Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | ||
Expected volatility (minimum) | 103.00% | 108.00% |
Expected volatility (maximum) | 110.00% | |
Risk-free interest rate (minimum) | 1.81% | 1.21% |
Risk-free interest rate (maximum) | 2.29% | 1.33% |
Expected dividend yield | 0.00% | 0.00% |
Minimum | Employee and Non-Employee Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | ||
Expected term (in years) | 5 years 15 days | 5 years 7 months 13 days |
Maximum | Employee and Non-Employee Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions and Methodology | ||
Expected term (in years) | 9 years 9 months 26 days | 6 years 2 months 5 days |
STOCK-BASED COMPENSATION - Othe
STOCK-BASED COMPENSATION - Other (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based compensation | ||||
Weighted average grant date fair value of options granted | $ 14.74 | $ 2.77 | $ 13.19 | $ 2.73 |
Options granted | 747,892 | 1,516,894 | ||
Stock based compensation expense | $ 981 | $ 554 | $ 2,070 | $ 1,747 |
2009 Plan | ||||
Share-based compensation | ||||
Options granted | 747,892 | |||
Unrecognized compensation expense | $ 13,200 | $ 13,200 | ||
Weighted average expense recognition period | 3 years 26 days |
STOCK_BASED COMPENSATION - St47
STOCK‑BASED COMPENSATION - Stock‑based compensation expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based compensation | ||||
Stock based compensation expense | $ 981 | $ 554 | $ 2,070 | $ 1,747 |
Research and development | ||||
Share-based compensation | ||||
Stock based compensation expense | 357 | 180 | 749 | 309 |
General and administrative | ||||
Share-based compensation | ||||
Stock based compensation expense | $ 624 | $ 374 | $ 1,321 | $ 1,438 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
INCOME TAXES | ||
Uncertain tax positions | $ 0 | $ 0 |
Interest or penalties recorded | $ 0 | $ 0 |
NET LOSS PER COMMON SHARE (Deta
NET LOSS PER COMMON SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Numerator: | ||||
Net loss attributable to common stockholders | $ (10,175) | $ (9,667) | $ (30,921) | $ (24,772) |
Denominator: | ||||
Weighted average shares outstanding—basic and diluted | 18,034,278 | 1,181,429 | 6,860,777 | 1,181,429 |
Net loss per share attributable to common stockholders—basic and diluted | $ (0.56) | $ (8.18) | $ (4.51) | $ (20.97) |
NET LOSS PER COMMON SHARE - Ant
NET LOSS PER COMMON SHARE - Antidilutive securities (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 28, 2017 | |
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive: | |||
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 3,844,332 | 19,415,413 | |
Total loan commitment | $ 10,000 | ||
Convertible preferred stock. | |||
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive: | |||
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 16,101,970 | ||
Stock Options | |||
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive: | |||
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 3,646,631 | 3,063,049 | |
Preferred stock warrants. | |||
Outstanding securities excluded from the computation of diluted weighted average shares outstanding as they would have been anti dilutive: | |||
Outstanding securities excluded from the computation of diluted weighted average shares outstanding (in shares) | 197,701 | 250,394 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Leases (Details) - USD ($) | Sep. 30, 2013 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 |
Leases | |||||
Lease term | 3 years | ||||
Amount funded by landlord | $ 78,000 | ||||
Total rent expense | $ 97,000 | $ 85,000 | $ 290,000 | $ 244,000 | |
Letter of Credit | |||||
Leases | |||||
Face amount | $ 84,000 | $ 84,000 |
COMMITMENTS AND CONTINGENCIES52
COMMITMENTS AND CONTINGENCIES - Future minimum obligations (Details) $ in Thousands | Sep. 30, 2017USD ($) |
Minimum obligations due under its license agreements | |
2017 (remaining three months) | $ 99 |
2,018 | 410 |
2,019 | 34 |
Total minimum license payments | $ 543 |
COMMITMENTS AND CONTINGENCIES53
COMMITMENTS AND CONTINGENCIES - License Agreement (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Contingencies | ||||||
Research and development expenses | $ 7,018,000 | $ 8,256,000 | $ 23,128,000 | $ 18,117,000 | ||
The Johns Hopkins University (“JHU”) | ||||||
Contingencies | ||||||
Minimum annual payment | 38,000 | |||||
License fee , if the company achieves the first commercial sale | 113,000 | |||||
Research and development expenses | $ 97,000 | $ 50,000 | $ 108,000 | $ 99,000 | ||
Massachusetts Eye and Ear Infirmary (“MEEI”) | ||||||
Contingencies | ||||||
Initial payment of license fee | $ 10,000 | |||||
Annual license fee | $ 5,000 |
COMMITMENTS AND CONTINGENCIES54
COMMITMENTS AND CONTINGENCIES - Guarantees and Indemnifications (Details) | Sep. 30, 2017USD ($) |
Indemnification obligations | |
Indemnification obligations | $ 0 |
Accrued Contingencies | $ 0 |