Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Dec. 15, 2014 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | FALSE | |
Document Period End Date | 30-Sep-14 | |
Document Fiscal Year Focus | 2014 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | CAPN | |
Entity Registrant Name | Capnia, Inc. | |
Entity Central Index Key | 1484565 | |
Current Fiscal Year End Date | -19 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 6,769,106 |
Condensed_Balance_Sheets
Condensed Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current assets | ||
Cash and cash equivalents | $64,000 | $1,269,000 |
Restricted cash | 20,000 | 20,000 |
Accounts receivable | 37,000 | 150,000 |
Prepaid expenses and other current assets | 186,000 | 85,000 |
Total current assets | 307,000 | 1,524,000 |
Long-term assets | ||
Deferred offering costs | 1,353,000 | |
Property and equipment, net | 36,000 | 63,000 |
Total assets | 1,696,000 | 1,587,000 |
Current liabilities | ||
Accounts payable | 1,238,000 | 58,000 |
Accrued liabilities | 358,000 | 129,000 |
Convertible promissory notes and accrued interest | 13,992,000 | |
Total current liabilities | 1,596,000 | 14,179,000 |
Long-term liabilities | ||
Convertible promissory notes and accrued interest, net of discounts | 15,604,000 | |
Convertible preferred stock warrant liability | 3,066,000 | 1,464,000 |
Commitments and contingencies | ||
Stockholders' deficit | ||
Common stock, $0.001 par value, 10,000,000 shares authorized at September 30, 2014 and December 31, 2013; 535,685 shares issued and outstanding at September 30, 2014 and December 31, 2013 | 1,000 | 1,000 |
Additional paid-in-capital | 20,741,000 | 19,235,000 |
Accumulated deficit | -63,120,000 | -57,100,000 |
Total stockholders' deficit | -42,378,000 | -37,864,000 |
Total liabilities and stockholders' deficit | 1,696,000 | 1,587,000 |
Series A convertible preferred stock [Member] | ||
Convertible Preferred Stock | ||
Convertible preferred stock | 1,500,000 | 1,500,000 |
Series B convertible preferred stock [Member] | ||
Convertible Preferred Stock | ||
Convertible preferred stock | 6,863,000 | 6,863,000 |
Series C convertible preferred stock [Member] | ||
Convertible Preferred Stock | ||
Convertible preferred stock | $15,445,000 | $15,445,000 |
Condensed_Balance_Sheets_Paren
Condensed Balance Sheets (Parenthetical) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Convertible preferred stock, shares authorized | 1,860,000 | |
Convertible preferred stock, shares outstanding | 865,429 | |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 10,000,000 | 10,000,000 |
Common stock, shares issued | 535,685 | 535,685 |
Common stock, shares outstanding | 535,685 | 535,685 |
Series A convertible preferred stock [Member] | ||
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 40,000 | 40,000 |
Convertible preferred stock, shares issued | 31,250 | 31,250 |
Convertible preferred stock, shares outstanding | 31,250 | 31,250 |
Convertible preferred stock, aggregate liquidation preference | $1,500 | $1,500 |
Series B convertible preferred stock [Member] | ||
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 320,000 | 320,000 |
Convertible preferred stock, shares issued | 119,140 | 119,140 |
Convertible preferred stock, shares outstanding | 119,140 | 119,140 |
Convertible preferred stock, aggregate liquidation preference | 6,863 | 6,863 |
Series C convertible preferred stock [Member] | ||
Convertible preferred stock, par value | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 1,500,000 | 1,500,000 |
Convertible preferred stock, shares issued | 715,039 | 715,039 |
Convertible preferred stock, shares outstanding | 715,039 | 715,039 |
Convertible preferred stock, aggregate liquidation preference | $15,445 | $15,445 |
Condensed_Statements_of_Operat
Condensed Statements of Operations and Comprehensive Loss (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Income Statement [Abstract] | ||||
Revenue | $3,000 | |||
Expenses | ||||
Research and development | 717 | 745 | 1,633 | 2,020 |
Sales and marketing | 84 | 96 | ||
General and administrative | 522 | 248 | 1,585 | 1,267 |
Total expenses | 1,323 | 993 | 3,314 | 3,287 |
Operating income (loss) | -1,323 | -993 | -3,314 | -287 |
Interest and other income (expense) | ||||
Interest income | 1 | 1 | ||
Interest (expense) | -752 | -571 | -1,811 | -2,550 |
Other income (expense), net | -318 | -26 | -895 | 103 |
Net loss and comprehensive loss | ($2,393) | ($1,590) | ($6,019) | ($2,733) |
Basic and diluted net loss per common share | ($4.47) | ($2.97) | ($11.24) | ($5.10) |
Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 535,685 | 535,685 | 535,685 | 535,611 |
Condensed_Statements_of_Cash_F
Condensed Statements of Cash Flows (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ||
Net loss | ($6,019) | ($2,733) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 20 | 32 |
Stock-based compensation expense | 21 | 35 |
Loss on disposition of property and equipment | 8 | |
Change in fair value of preferred stock warrants | 888 | 79 |
Non-cash interest expense relating to warrants and convertible promissory notes | 1,811 | 2,471 |
Change in operating assets and liabilities: | ||
Accounts receivable | 112 | -97 |
Other receivables | 151 | |
Prepaid expenses and other assets | -101 | 9 |
Accounts payable | 103 | -106 |
Accrued liabilities | 229 | -4 |
Net cash used in operating activities | -2,928 | -163 |
Cash flows from investing activities: | ||
Purchase of property and equipment | -1 | |
Net cash used in investing activities | -1 | |
Cash flows from financing activities: | ||
Proceeds from issuance of warrants | 2 | |
Proceeds from issuance of convertible notes payable | 1,997 | |
Deferred Offering Costs Paid | -276 | |
Net cash provided by financing activities | 1,723 | |
Net decrease in cash and cash equivalents | -1,205 | -164 |
Cash and cash equivalents, beginning of period | 1,269 | 2,155 |
Cash and cash equivalents, end of period | 64 | 1,992 |
Supplemental disclosures of noncash investing and financing information | ||
Issuance of warrants in connection with notes payable | 713 | |
Beneficial conversion feature in connection with convertible promissory notes | 1,484 | |
Deferred Offering Costs accrued and included in Accounts Payable | $1,077 |
Description_of_Business
Description of Business | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1. Description of Business |
Capnia, Inc. (the “Company”) was incorporated in the State of Delaware on August 25, 1999, and is located in Redwood City, California. The Company develops diagnostics and therapeutics based on its proprietary technology for precision metering of gas flow. | |
The Company’s first diagnostic product, CoSense®, aids in diagnosis of excessive hemolysis, a condition in which red blood cells degrade rapidly. When present in neonates with jaundice, hemolysis is a dangerous condition which can lead to long-term developmental disability. CoSense received initial 510(k) clearance for sale in the U.S. in the fourth quarter of 2012, with a more specific Indication for Use related to hemolysis issued in the first quarter of 2014, and received CE Mark approval for sale in the European Union (“E.U.”) in the third quarter of 2013. The Company initiated commercialization of CoSense in October 2014 using its own sales efforts. In addition, the Company is applying its research and development efforts to additional diagnostic products based on its Sensalyze™ Technology Platform, a portfolio of proprietary methods and devices which enables CoSense and can be applied to detect a variety of analytes in exhaled breath. | |
The Company has also obtained CE Mark approval in the E.U. for Serenz™, a therapeutic product candidate for the treatment of symptoms related to allergic rhinitis (“AR”). The Company out licensed Serenz to Block Drug Company, a wholly-owned subsidiary of GlaxoSmithKline (“GSK”) in 2013, realizing revenue in the form of a non-refundable up-front payment of $3.0 million. In June 2014, the GSK agreement terminated and the licensed rights to Serenz were returned to the Company. | |
Initial Public Offering | |
On November 18, 2014, the Company completed its initial public offering (“IPO”), pursuant to which the Company issued 1,650,000 units (each unit consisting of one share of common stock, one Series A warrant and one Series B warrant) and received net proceeds of approximately $8.2 million, after deducting underwriting discounts and commissions and IPO related expenses. In connection with the completion of the Company’s IPO, all shares of convertible preferred stock converted into 865,429 shares of common stock and all of the Company’s convertible preferred stock warrants were converted into warrants to purchase shares of common stock. In addition, the outstanding convertible notes and accrued interest issued during 2010 and 2012 converted into an aggregate of 3,165,887 shares of common stock and the issuance of 523,867 warrants to purchase common stock. The outstanding convertible notes issued during April, August and October, 2014 converted into an aggregate of 552,105 units in the IPO. As this was a subsequent event, as of September 30, 2014 all of the convertible preferred stock and convertible notes are shown on the balance sheet at their pre-converted amounts. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies | ||||||||||||||||
Basis of Presentation | |||||||||||||||||
The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed balance sheet at December 31, 2013 has been derived from the audited financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. | |||||||||||||||||
The unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly its financial position as of September 30, 2014 and results of its operations and comprehensive loss for the three months and nine months ended September 30, 2014 and 2013, and cash flows for the nine months ended September 30, 2014 and 2013. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. | |||||||||||||||||
The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2013 included in the Company’s Prospectus filed pursuant to Rule 424(b)(4) on November 12, 2014 with the SEC (the “Prospectus”). | |||||||||||||||||
Significant Risks and Uncertainties | |||||||||||||||||
The Company has experienced losses since its inception and, as of September 30, 2014, has an accumulated deficit of approximately $63.1 million and cash and cash equivalents of approximately $0.1 million. The Company received payments totaling approximately $3.0 million pursuant to the license agreement with GSK pertaining to Serenz. This agreement terminated in June 2014, and the Company does not expect additional revenue to result from it. The Company plans to commercialize Serenz in the E.U. via a partnership or distributorship arrangements. In the U.S., the Company intends to determine the regulatory approval pathway for Serenz in dialogue with the FDA, and subsequently to seek partnership or distributorship arrangements for commercialization. | |||||||||||||||||
The Company initiated its commercialization of CoSense® starting in October of 2014, and will likely achieve profitability only if it can generate sufficient revenue from sales of the Company’s CoSense instruments and consumables, or from license fees, milestone payments, and research and development payments in connection with potential future strategic partnerships. Although management has been successful in raising capital in the past, most recently in April 2014, August 2014, October 2014 and November 2014 (See Note 14), there can be no assurance that the Company will be successful, or that any needed financing will be available in the future at terms acceptable to the Company. | |||||||||||||||||
As of September 30, 2014, there was substantial doubt about the Company’s ability to continue as a going concern, if we did not secure additional financing. As a result, the Company’s independent registered public accounting firm included an explanatory paragraph in its report on the Company’s 2013 financial statements with respect to this uncertainty. However, as described more fully below, since September 30, 2014, we completed our IPO and received net proceeds of $8.2 million, after deducting underwriting discounts and commissions and IPO related expenses. We believe that the Company’s cash resources are sufficient to meet its cash needs for at least the next 12 months. | |||||||||||||||||
Use of Estimates | |||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates included in the financial statements include the valuation of deferred income tax assets and the valuation of debt and equity instruments and stock-based compensation. | |||||||||||||||||
Fair Value of Financial Instruments | |||||||||||||||||
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, contracts receivable, prepaid and other current assets, accounts payable, accrued liabilities, and certain related-party convertible notes payable approximate fair value due to their short-term maturities. | |||||||||||||||||
Cash and Cash Equivalents | |||||||||||||||||
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents are held in institutions in the U.S. and include deposits in a money market fund which was unrestricted as to withdrawal or use. | |||||||||||||||||
Deferred initial public offering costs | |||||||||||||||||
Deferred initial public offering costs as of September 30, 2014 consist of costs directly related to the offering of equity securities such as legal fees, external auditor fees, accounting fees for work associated with the IPO, printing and registration related fees. There were no such costs as of December 31, 2013. | |||||||||||||||||
Prepaid Expenses and Other Current Assets | |||||||||||||||||
Prepaid expenses and other current assets consist of payments primarily related to insurance and short-term deposits. Prepaid expenses are initially recorded upon payment and are expensed as goods or services are received. | |||||||||||||||||
Property and Equipment, Net | |||||||||||||||||
Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations in the period realized. | |||||||||||||||||
Impairment of Long-Lived Assets | |||||||||||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of their carrying cost or fair value less cost to sell. The Company has not recognized losses related to impairment since inception. | |||||||||||||||||
Related-Party Convertible Promissory Notes | |||||||||||||||||
The Company has issued convertible promissory notes pursuant to a number of private placements since 2010. These convertible promissory notes were issued with separate warrants to purchase shares of the Company’s convertible preferred stock. These warrants have been treated as liabilities. The convertible promissory notes and accrued interest were convertible into the Company’s capital stock or, for promissory notes issued in 2014, units to be sold in the IPO. The fair value of the warrants was determined using a Monte Carlo simulation and allocated as a debt discount using the intrinsic value allocation method. The discount has been amortized using the effective interest method over the term of the related convertible promissory notes. | |||||||||||||||||
The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20 “Debt with Conversion and Other Options.” The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt (see Note 5). | |||||||||||||||||
Convertible Preferred Stock Warrant Liability | |||||||||||||||||
The Company has issued freestanding warrants to purchase shares of its convertible preferred stock. At September 30, 2014, the Company has classified the fair value of these warrants as liabilities on the balance sheet as they correspond to the treatment of the preferred stock as temporary equity. The Company accounts for the warrants as a derivative instrument. Changes in the fair value of the warrants are presented separately as other expense (income) in the Company’s statements of operations for each reporting period. The Company uses the Monte Carlo simulation model to determine the fair value of the warrants. As a result, the valuation of this derivative instrument is subjective because the option-valuation model requires the input of highly subjective assumptions, including the expected stock price volatility and the probability of a future occurrence of a fundamental transaction. Changes in these assumptions can materially affect the fair value estimate and, such impacts can, in turn, result in material non-cash charges or credits, and related impacts on earnings or loss per share, in the statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the expiration of the warrants or their exercise, at which time the liability will be reclassified into stockholders’ deficit. The Company records any change in fair value as a component of other income or expense. At the time of the IPO, all of the warrants to purchase preferred stock converted into warrants to purchase common stock, which are no longer subject to adjustment to fair value. | |||||||||||||||||
Convertible Preferred Stock | |||||||||||||||||
Upon the occurrence of certain change in control events that are outside of the control of the Company, including sale or transfer of control of the Company, holders of the convertible preferred stock can force the Company to redeem these shares. The holders of convertible preferred stock are entitled to require the Company to redeem their shares upon the approval of at least two thirds of the holders of shares of the convertible preferred stock then outstanding. Accordingly, these shares are considered contingently redeemable and are classified as temporary equity on the accompanying balance sheets. At the time of the IPO, all outstanding shares of preferred stock converted into common stock, and reclassified to permanent equity. | |||||||||||||||||
Revenue Recognition | |||||||||||||||||
The Company recognized revenue during the year ended December 31, 2013 pursuant to its license agreement with GSK. The revenue was recognized because there was persuasive evidence of an arrangement, the price was fixed or determinable, and collectability was reasonably assured. The up-front payment for revenue recognized in 2013 was received prior to December 31, 2013 and was nonrefundable. No revenue was recognized during the nine months ended September 30, 2014. The agreement was terminated in the second quarter of 2014, and the Company does not have any further monetary obligations with respect to this agreement. | |||||||||||||||||
Research and Development | |||||||||||||||||
Research and development costs are charged to operations as incurred. Research and development costs consist primarily of salaries and benefits, consultant fees, prototype expenses, certain facility costs and other costs associated with clinical trials, net of reimbursed amounts. | |||||||||||||||||
Costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use are expensed to research and development costs when incurred. | |||||||||||||||||
Income Taxes | |||||||||||||||||
The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are recorded based on the estimated future tax effects of differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts recorded for income tax purposes. Deferred income taxes are classified as current or non-current, based on the classifications of the related assets and liabilities giving rise to the temporary differences. A valuation allowance is provided against the Company’s deferred income tax assets when their realization is not reasonably assured. | |||||||||||||||||
The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. | |||||||||||||||||
Stock-Based Compensation | |||||||||||||||||
For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the estimated fair value on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option pricing model. The determination of fair value for stock-based awards on the date of grant using an option pricing model requires management to make certain assumptions regarding a number of complex and subjective variables. | |||||||||||||||||
Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using the Black-Scholes option pricing model, as they are earned. The awards generally vest over the time period the Company expects to receive services from the non-employee. | |||||||||||||||||
Comprehensive Income (Loss) | |||||||||||||||||
Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. There have been no items qualifying as other comprehensive income (loss) and, therefore, for all periods presented, the Company’s comprehensive income (loss) was the same as its reported net income (loss). | |||||||||||||||||
Net Income (Loss) per Share of Common Stock | |||||||||||||||||
Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net income (loss) per share calculation, convertible preferred stock, convertible promissory notes, stock options and convertible preferred stock warrants are considered to be potentially dilutive securities. Because the Company has reported a net loss for the three and nine months ended September 30, 2014 and 2013, diluted net loss per common share is the same as basic net loss per common share for those periods. | |||||||||||||||||
Effective as of the completion of the IPO, all of the Company’s preferred stock was converted to common stock. For purposes of calculating net loss per common share for the three and nine month periods ended September 30, 2014, the preferred stock that converted to common stock in the IPO was not included in the net loss per common share calculation as it did not convert until November 2014. | |||||||||||||||||
The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in common stock equivalent shares): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended | ||||||||||||||||
September 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Convertible preferred stock | 865,429 | 865,429 | 865,429 | 865,429 | |||||||||||||
Warrants to purchase convertible preferred stock | Adjustable | Adjustable | Adjustable | Adjustable | |||||||||||||
Stock issuable upon conversion of convertible notes | Adjustable | Adjustable | Adjustable | Adjustable | |||||||||||||
Options to purchase common stock | 240,906 | 228,223 | 240,906 | 228,223 | |||||||||||||
Warrants to purchase common stock | 9,259 | 9,259 | 9,259 | 9,259 | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||||||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. | |||||||||||||||||
On June 10, 2014, the FASB issued ASU 2014-10, Elimination of Certain Financial Reporting Requirements, Including Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The pending content resulting from the issuance of ASU 2014-10 eliminates the definition of development stage entity, thereby removing the distinction between the development stage entities and other reporting entities. As a consequence, inception-to-date presentation and other incremental disclosure requirements in ASC Topic 915 for entities previously considered development stage entities are eliminated. For public business entities, the ASU’s elimination of the inception-to-date information and the other disclosures in Topic 915 is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. For other entities, this portion of the ASU is effective for annual reporting periods beginning after December 15, 2014, and interim reporting periods beginning after December 15, 2015. While the changes resulting from the issuance of ASU 2014-10 are not yet effective, early adoption of either the amendments to Topic 915 or Topic 810 is permitted for any annual or interim period for which a reporting entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities.) | |||||||||||||||||
The Company adopted ASU 2014-10 as of June 30, 2014, and therefore is no longer considered in the development stage. The Company continues to engage in research and development activities; however, the adoption of this ASU allows the Company to remove the inception to date information and all references to development stage in the accompanying financial statements. | |||||||||||||||||
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Fair Value of Financial Instruments | Note 3. Fair Value of Financial Instruments | ||||||||||||||||
The carrying value of the Company’s cash and cash equivalents, other receivable, prepaid expenses and other current assets, accounts payable, accrued liabilities, approximate fair value due to the short-term nature of these items. Convertible preferred stock call option liability and convertible preferred stock warrant liability are carried at fair value. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the convertible promissory notes approximates their fair value. | |||||||||||||||||
Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability 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. | |||||||||||||||||
The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: | |||||||||||||||||
• | Level I | Unadjusted quoted prices in active markets for identical assets or liabilities; | |||||||||||||||
• | Level II | Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and | |||||||||||||||
• | Level III | Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. | |||||||||||||||
The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. | |||||||||||||||||
The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy: | |||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Money market fund | $ | 1,256,752 | $ | 1,256,752 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Convertible preferred stock warrant liability | $ | 1,464,877 | $ | — | $ | — | $ | 1,464,877 | |||||||||
Fair Value Measurements at September 30, 2014 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Money market fund | $ | 30,000 | $ | 30,000 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Convertible preferred stock warrant liability | $ | 3,066,258 | $ | — | $ | — | $ | 3,066,258 | |||||||||
The fair value measurement of the convertible preferred stock warrant liability is based on significant inputs not observed in the market and thus represents a Level 3 measurement. The Company’s estimated fair value of the convertible preferred stock warrant liability is calculated using a Monte Carlo simulation and key assumptions including the probabilities of settlement scenarios, enterprise value, time to liquidity, risk-free interest rates, discount for lack of marketability and volatility (see Note 6). The estimates are based, in part, on subjective assumptions and could differ materially in the future. Generally, increases or decreases in the fair value of the underlying convertible preferred stock would result in a directionally similar impact in the fair value measurement of the warrant liability. | |||||||||||||||||
During the periods presented, the Company has not changed the manner in which it values liabilities that are measured at fair value using Level 3 inputs. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the periods presented. | |||||||||||||||||
The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments as follows: | |||||||||||||||||
Convertible | |||||||||||||||||
preferred | |||||||||||||||||
stock | |||||||||||||||||
warrant | |||||||||||||||||
liability | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,463,877 | |||||||||||||||
Issuance of convertible preferred stock warrants | 714,699 | ||||||||||||||||
Change in fair value recorded in other expense (income), net | 887,682 | ||||||||||||||||
Balance at September 30, 2014 | $ | 3,066,258 | |||||||||||||||
In connection with the completion of the Company’s IPO in November 2014, all of the outstanding warrants to purchase convertible preferred stock converted into warrants to purchase shares of common stock. |
Property_and_Equipment_Net
Property and Equipment, Net | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Property and Equipment, Net | Note 4. Property and Equipment, Net | ||||||||
Property and equipment consisted of the following: | |||||||||
December 31, | September 30, | ||||||||
2013 | 2014 | ||||||||
Furniture and fixtures | $ | 180,238 | $ | 139,695 | |||||
Computer hardware | 27,555 | 27,555 | |||||||
Leasehold improvements | 10,726 | 4,074 | |||||||
$ | 218,519 | $ | 171,324 | ||||||
Less accumulated depreciation and amortization | (155,352 | ) | (136,061 | ) | |||||
Total | $ | 63,167 | $ | 35,263 | |||||
Depreciation and amortization expense was $32,000 and $20,000 for the nine months ended September 30, 2013 and September 30, 2014, respectively. |
Related_Party_Convertible_Prom
Related Party Convertible Promissory Notes | 9 Months Ended |
Sep. 30, 2014 | |
Debt Disclosure [Abstract] | |
Related Party Convertible Promissory Notes | Note 5. Related Party Convertible Promissory Notes |
2014 Convertible Promissory Notes | |
In April 2014, the Company entered into convertible promissory notes with various investors for a total principal amount of $1,747,681. These notes bear interest at the rate of 2% per annum in the event that the note is automatically converted into units, equal to one share of common stock and a warrant to purchase one share of common stock, upon the Company’s Contemplated IPO, prior to the maturity date. At September 30, 2014, accrued interest for these convertible promissory notes totaled $14,761. The convertible notes’ principal amount, plus any accrued interest thereon, is due on September 30, 2015 following the occurrence of demand by two-thirds of the holders of the total principal amounts of convertible promissory notes outstanding. The outstanding principal and interest is convertible into the type of equity securities sold by the Company in the next round of equity financing under certain conditions, or into shares of Series C preferred stock. The convertible notes participate pari passu with the 2010 and 2012 convertible promissory notes upon repayment of the outstanding convertible promissory notes. | |
In connection with the April 2014 convertible notes, the Company issued a warrant for the purchase of preferred stock. The number of shares for which the warrant may be exercised is to be determined by dividing an amount equal to 25% of the unpaid principal by the exercise price prior to the expiration of this warrant. The exercise price for the warrant is 75% of the price per share of the next financing securities issued in the next financing or $16.20 per share if converted into the Series C preferred stock. The warrants are exercisable: (1) after the earlier of (a) the closing date of a next financing that occurs prior to the Company’s consummation of the IPO or (b) the note maturity date and (2) prior to the expiration of this warrant. The estimated fair value of the warrants at issuance was determined to be $600,148, which was recorded as a debt discount and amortized using the effective interest rate method over the term of the convertible notes. The Company estimated the fair value of its preferred stock warrant liability at issuance utilizing a Monte Carlo simulation based on expected volatility of 35%, expected time to liquidity of event of 5.00 years and risk-free interest rate of 1.62%. | |
After allocating $600,148 to the warrants issued in connection with the April 2014 convertible notes as discussed above, the Company determined the fair value of the conversion option to be $1, 347,406, which was recorded as a debt discount to the convertible notes and within additional paid-in capital. The debt discount was amortized using the effective interest rate method over the term of the convertible notes. The discount to convertible notes for the intrinsic value of conversion options embedded in debt instruments is based upon the differences between the fair value of the underlying preferred stock at the commitment date of the note transaction and the effective conversion price embedded in the note. | |
In relation to the April 2014 convertible notes payable, the Company recognized interest expense for the nine months ended September 30, 2014 of $14,761, which was included in the balance of convertible promissory notes and accrued interest on the accompanying balance sheets at September 30, 2014. Additionally, the Company recorded interest expense in connection with the amortization of the debt discount recorded for the nine months ended September 30, 2014 of $572,516. | |
In August 2014, the Company entered into convertible promissory notes with various investors for a total principal amount of $249,693. These notes bear interest at the rate of 2% per annum in the event that the note is automatically converted into units, equal to one share of common stock and a warrant to purchase one share of common stock, upon the Company’s Contemplated IPO, prior to the maturity date. At September 30, 2014, accrued interest for the August 2014 convertible promissory notes totaled $575. The convertible notes’ principal amount, plus any accrued interest thereon, is due on September 30, 2015 following the occurrence of demand by two-thirds of the holders of the total principal amounts of convertible promissory notes outstanding. The outstanding principal and interest is convertible into the type of equity securities sold by the Company in the next round of equity financing under certain conditions, or into shares of Series C preferred stock. The convertible notes participate pari passu with the 2010 and 2012 convertible promissory notes upon repayment of the outstanding convertible promissory notes. | |
In connection with the August 2014 convertible notes, the Company issued a warrant for the purchase of preferred stock. The number of shares for which the warrant may be exercised is to be determined by dividing an amount equal to 25% of the unpaid principal by the exercise price prior to the expiration of this warrant. The exercise price for the warrant is 75% of the price per share of the next financing securities issued in the next financing or $16.20 per share if converted into the Series C preferred stock. The warrants are exercisable: (1) after the earlier of (a) the closing date of a next financing that occurs prior to the Company’s consummation of the IPO or (b) the note maturity date and (2) prior to the expiration of this warrant. The estimated fair value of the warrants at issuance was determined to be $113,295, which was recorded as a debt discount and amortized using the effective interest rate method over the term of the convertible notes. The Company estimated the fair value of its preferred stock warrant liability at issuance utilizing a Monte Carlo simulation based on expected volatility of 35%, expected time to liquidity of event of 5.00 years and risk-free interest rate of 1.62%. | |
After allocating $113,295 to the warrants issued in connection with the April 2014 convertible notes as discussed above, the Company determined the fair value of the conversion option to be $136,705, which was recorded as a debt discount to the convertible notes and within additional paid-in capital. The debt discount was amortized using the effective interest rate method over the term of the convertible notes. The discount to convertible notes for the intrinsic value of conversion options embedded in debt instruments is based upon the differences between the fair value of the underlying preferred stock at the commitment date of the note transaction and the effective conversion price embedded in the note. | |
In relation to both the April and August 2014 convertible notes payable, the Company recognized interest expense for the nine months ended September 30, 2014 of $15,336 which was included in the balance of convertible promissory notes and accrued interest on the accompanying balance sheets at September 30, 2014. Additionally, the Company recorded interest expense in connection with the amortization of the debt discount recorded for the nine months ended September 30, 2014 of $25,246. |
Convertible_Preferred_Stock_Wa
Convertible Preferred Stock Warrants | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||
Convertible Preferred Stock Warrants | Note 6. Convertible Preferred Stock Warrants | ||||||||||||||||||
In 2010 and 2012, in conjunction with the related party convertible note financings, the Company issued preferred stock warrants. The Company re-measures the associated fair value of the convertible preferred stock warrant liability at each reporting period. | |||||||||||||||||||
As of December 31, 2013 and as of September 30, 2014, the Company used a Monte Carlo simulation to calculate the fair value of its convertible preferred stock warrant liability using the following inputs: | |||||||||||||||||||
December 31, | September 30, | ||||||||||||||||||
2013 | 2014 | ||||||||||||||||||
Volatility | 38% - 47% | 38% - 66% | |||||||||||||||||
Expected Term (years) | 0.75 - 2.00 | 4.00 - 8.00 | |||||||||||||||||
Expected dividend yield | 0.00% | 0.00% | |||||||||||||||||
Risk-free rate | 0.12% - 0.38% | 1.54% - 2.13% | |||||||||||||||||
In addition to the assumptions above, the Company’s estimated fair value of the convertible preferred stock warrant liability is calculated using other key assumptions including the probability and value of the next equity financing, enterprise value, and discount for lack of marketability. Management, with the assistance of an independent valuation firm, makes these subjective determinations based on available current information; however, as such information changes, so might management’s determinations and such changes could have a material impact of future operating results. | |||||||||||||||||||
As of September 30, 2014, outstanding convertible preferred stock warrants consisted of: | |||||||||||||||||||
Issuance date | Contractual | Exercise price per | Number of shares | Fair Value at | Fair Value at | ||||||||||||||
Term | share | underlying | December 31, 2013 | September 30, 2014 | |||||||||||||||
warrant | |||||||||||||||||||
Jan-09 | 10 years | $ | 21.6 | 9,259 | $ | 42,444 | $ | 3,597 | |||||||||||
February and March 2010 | 10 years | Adjustable | Adjustable | 461,421 | 530,197 | ||||||||||||||
Nov-10 | 10 years | Adjustable | Adjustable | 263,875 | 303,609 | ||||||||||||||
Jan-12 | 10 years | Adjustable | Adjustable | 263,978 | 453,036 | ||||||||||||||
Jul-12 | 10 years | Adjustable | Adjustable | 432,159 | 743,184 | ||||||||||||||
Apr-14 | 10 years | Adjustable | Adjustable | 904,380 | |||||||||||||||
Aug-14 | 10 years | Adjustable | Adjustable | 128,255 | |||||||||||||||
Total | $ | 1,463,877 | $ | 3,066,258 | |||||||||||||||
For the above warrants issued between February 2010, July 2012 and April 2014, the number of shares for which the warrants may be exercised are to be determined by dividing the unpaid principal by (a) 75% of the price per share of the equity securities issued in the next equity financing or (b) if converting into Series C preferred stock, $16.20 per share. The exercise price for these warrants is determined by dividing the unpaid principal and accrued interest by 75% of the price per share of common stock issued in such financing or $16.20 per share if converted into the Series C preferred stock. | |||||||||||||||||||
As of December 31, 2013 and as of September 30, 2014, all warrants issued from February 2010 through August 2014 by the Company were issued to related parties consisting of investors and the Chairman of the Board. No convertible preferred stock warrants expired or were exercised during 2013 or during the nine months ended September 30, 2014. |
Credit_Facility
Credit Facility | 9 Months Ended |
Sep. 30, 2014 | |
Text Block [Abstract] | |
Credit Facility | Note 7. Credit Facility |
On September 29, 2014, the Company established a line of credit in the amount of up to $0.1 million. The line of credit bears a fixed interest rate of 6.0% per annum simple interest. The line of credit has a two-year repayment term, with prepayment at the Company’s option with no penalty. The line of credit shall be payable out of cash received in the Company’s accounts receivable following their commencement of commercial sales. |
Commitments_and_Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies |
Facility Leases | |
The Company leases its headquarters facility under a non-cancelable operating lease agreement set to expire in May 2015. The Company previously leased two other facilities under non-cancelable operating lease agreements that expired in January 2014 and May 2014, respectively. Rent expense was $234,000 and $177,000 during the nine months ended September 30, 2013 and September 30, 2014, respectively. | |
As of September 30, 2014, the Company’s future minimum commitments under non-cancelable operating lease are approximately $73,000. | |
Contingencies | |
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. | |
In 2010 the Company entered into an asset purchase agreement with BioMedical Drug Development, Inc. Pursuant to the agreement, the Company made a payment of $150,000 for the acquisition of intellectual property which the Company used to develop its product, CoSense. As part of the terms of the agreement, the Company is contingently committed to make development and sales-related milestone payments of up to $200,000 under certain circumstances, as well as single-digit-percentage royalties relating to potential planned product sales of CoSense. The amount, timing and likelihood of these payments are unknown, as they are dependent on the occurrence of future events that may or may not occur. In 2013 and during the nine months ended September 30, 2014, the Company made no payments and incurred no liabilities in connection with the agreement, and there are no outstanding payments due as of December 31, 2013 and as of September 30, 2014. |
Capital_Stock
Capital Stock | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Capital Stock | Note 9. Capital Stock | ||||||||||||
Common Stock: | |||||||||||||
The Company is authorized to issue 10,000,000 shares of common stock as of September 30, 2014 with a par value of $0.001 per share. As of December 31, 2013 and as of September 30, 2014, the Company had 535,685 shares of common stock issued and outstanding. | |||||||||||||
Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of all classes of stock outstanding. The holders of common stock, voting as a separate class, are entitled to elect one member of the Board of Directors. | |||||||||||||
Convertible Preferred Stock: | |||||||||||||
The Company is authorized to issue 1,860,000 shares of convertible preferred stock as follows at December 31, 2013 and September 30, 2014: | |||||||||||||
Series | Par Value | Shares | Shares | ||||||||||
Authorized | Outstanding | ||||||||||||
A | $ | 0.001 | 40,000 | 31,250 | |||||||||
B | 0.001 | 320,000 | 119,140 | ||||||||||
C | 0.001 | 1,500,000 | 715,039 | ||||||||||
1,860,000 | 865,429 | ||||||||||||
In connection with the completion of the Company’s IPO on November 18, 2014, all shares of convertible preferred stock converted into 865,429 shares of common stock and all of the Company’s convertible preferred stock warrants were converted into warrants to purchase common stock. As of September 30, 2014, the holders of Series A, Series B and Series C convertible preferred stock, had the rights, preferences, privileges and restrictions as follows: | |||||||||||||
Voting: | |||||||||||||
The holders of each share of Series A, Series B and Series C would have been entitled to voting rights equal to the number of shares of common stock into which each share of preferred stock would have been converted. So long as at least 1,000,000 shares are outstanding, the holders of Series A, Series B and Series C, voting together as a single class, would have been entitled to elect three members of the Board of Directors. The holders of common stock, voting as a separate class, would have been entitled to elect one member of the Board of Directors. The holders of Series A, Series B, Series C and common stock, voting together as a single class on an as converted basis, would have been entitled to elect the remaining members of the Board of Directors. | |||||||||||||
Certain actions would have required the vote or written consent of at least two-thirds of the holders of preferred stock, including, but not limited to, the following: any amendment, alteration or appeal of the Certificate of Incorporation or the Bylaws of the Company that alters or changes the rights or restrictions of the preferred stock; any increase or decrease in the authorized number of shares of preferred stock; any distributions with respect to common stock or preferred stock; any agreement by the Company or its stockholders regarding asset transfer or acquisition; creation of any new class or series of shares having rights, preferences or privileges and voting rights for the Board of Directors, which are better than existing preferred stock. | |||||||||||||
Dividends: | |||||||||||||
The holders of Series A, Series B and Series C would have been entitled to receive non-cumulative dividends as adjusted for stock splits, dividends, reclassifications or the like, prior and in preference to any declaration or payment of any dividends to the holders of common stock, when and if declared by the Board of Directors, at a rate of $3.84, $4.61, and $1.73, respectively, per share, as adjusted, per annum. No dividends have been declared or paid to date. | |||||||||||||
Conversion: | |||||||||||||
Each share of Series A, Series B and Series C would have been convertible to common stock, at the option of the holder, at any time after the date of issuance. Each share of Series A, Series B and Series C converts into that number of shares of common stock determined in accordance with the conversion ratio (i) immediately prior to the closing of a public offering of common stock provided that the offering price per share is not less than $75.60 (adjusted for recapitalizations) and gross proceeds to the Company are not less than $30,000,000 or (ii) upon the written request by the Company from the holders of two thirds of the preferred stock outstanding. The initial conversion ratio would have been one share of common stock for each share of preferred stock. The initial conversion price would have been equal to the original issuance price of Series A, Series B and Series C, as adjusted. At December 31, 2013 and September 30, 2014, the conversion price is $48.00, $57.60 and $21.60 per share, for Series A, Series B and Series C, respectively. | |||||||||||||
Liquidation: | |||||||||||||
In the event of any liquidation, dissolution, or winding up of the Company, either voluntary or involuntary, the holders of Series A, Series B and Series C would have been entitled to receive, prior to and in preference to holders of common stock, an amount per share equal to $48.00, $57.60 and $21.60, respectively, as adjusted for stock splits, stock dividends, reclassifications or the like. If, upon occurrence of such an event, the assets and funds distributed among the holders of Series A, Series B and Series C are insufficient to permit the above payment to such holders, then the entire assets and funds of the Company legally available for distribution would have been distributed ratably among the holders of Series A, Series B and Series C in proportion to the preferential amount each such holder is otherwise entitled to receive. | |||||||||||||
Following the above payments, the remaining assets and surplus funds of the Company, if any, would have been distributed ratably among the holders of Series A, Series B, Series C and common stock based on the number of shares of common stock held on an as-if converted basis. | |||||||||||||
Redemption: | |||||||||||||
The holders of Series A, Series B and Series C would have been entitled to require the Company to redeem their shares, at any time after March 20, 2012, upon the approval of at least two thirds of the holders of shares of Series A, Series B and Series C then outstanding, voting together as a single class. The redemption would have been affected in two annual payments beginning no later than 45 days after the Company receives the redemption notice. The redemption price would have been equal to $48.00, $57.60 and $21.60 per share for Series A, Series B and Series C, respectively, as adjusted, plus all declared or accrued but unpaid dividends. As of December 31, 2013 and as of September 30, 2014, the total redemption price for Series A, Series B and Series C shares outstanding was $23,808,048. |
Stock_Option_Compensation
Stock Option Compensation | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock Option Compensation | Note 10. Stock Option Compensation | ||||||||||||
Stock Option Plan | |||||||||||||
The Company has adopted the 1999 Incentive Stock Plan, the 2010 Equity Incentive Plan, and the 2014 Equity Incentive Plan (together, the Plans). The 1999 Incentive Stock Plan expired in 2009, and the 2010 Equity Incentive Plan has been closed to new issuances. Therefore, the Company may issue options to purchase shares of common stock to employees, directors, and consultants only under the 2014 Equity Incentive Plan. Options granted under the 2010 Plan and 2014 Plan may be incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees and directors. NSOs may be granted to employees, directors, advisors, and consultants. The Board of Directors has the authority to determine to whom options will be granted, the number of options, the term, and the exercise price. | |||||||||||||
Options are to be granted at an exercise price not less than fair value for an ISO or 85% of fair value for an NSO. For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price of an option will not be less than 110% of fair value. Fair value is determined by the Board of Directors. The vesting period is normally monthly over a period of four years from the vesting date. The term of an option is no longer than five years for ISOs for which the grantee owns greater than 10% of the voting power of all classes of stock and no longer than ten years for all other options. | |||||||||||||
The Company recognized stock-based compensation expense related to options granted to employees for the nine-month periods ended September 30, 2013 and September 30, 2014 of $34,810 and $20,944, respectively. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the statements of operations for stock-based compensation arrangements as of December 31, 2013 and nine month ended September 30, 2014. | |||||||||||||
The Company did not grant any stock options in 2013. The Company granted 12,683 options to purchase common stock in February 2014. The fair value of each award granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for the nine-month period ended September 30, 2014: | |||||||||||||
Nine Months | |||||||||||||
Ended | |||||||||||||
September 30, 2014 | |||||||||||||
Expected life (years) | 5.0 - 8.0 | ||||||||||||
Risk-free interest rate | 1.6% - 2.3% | ||||||||||||
Volatility | 35% - 59% | ||||||||||||
Dividend rate | 0% | ||||||||||||
The most recent independent third-party valuation of the Company’s common stock found $7.56 to be the fair market value as of December 31, 2013 and $7.56 per share to be the fair market value as of September 30, 2014. | |||||||||||||
Expected volatility is based on volatilities of a group of public companies operating in the Company’s industry. The expected life of stock options represents the average of the contractual term of the options and the weighted-average vesting period, as permitted under the simplified method. The Company has elected to use the simplified method, as the Company does not have enough historical exercise experience to provide a reasonable basis upon which to estimate the expected term and the stock option grants are considered “plain vanilla” options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. | |||||||||||||
The following table summarizes stock option transactions for the years ended December 31, 2013, and for the nine month period ended September 30, 2014 as issued under the Plans: | |||||||||||||
Options | Number of | Average | |||||||||||
Available | Shares | Exercise Price | |||||||||||
Balances, December 31, 2013 | 124,824 | 239,606 | 3.36 | ||||||||||
Granted | (12,683 | ) | 12,683 | 7.56 | |||||||||
Cancelled | 11,382 | (11,382 | ) | 3.96 | |||||||||
Balances, September 30, 2014 | 123,523 | 240,906 | 3.59 | ||||||||||
At December 31, 2013 and at September 30, 2014, there were 232,302 and 228,224 shares, respectively, vested with a weighted-average exercise price of $3.36 and $3.59 per share, respectively, and a weighted average contractual life of 4.86 and 4.4 years, respectively. There were no stock options issued during the nine months ended September 30, 2014. | |||||||||||||
Future stock-based compensation for unvested employee options granted and outstanding as of December 31, 2013 and as of September 30, 2014 is $8,287 and $38,028, respectively, to be recognized over a remaining requisite service period of 0.4 and 3.0 years, respectively. | |||||||||||||
The fair value of an equity award granted to a non-employee generally is determined in the same manner as an equity award granted to an employee. In most cases, the fair value of the equity securities granted is more reliably determinable than the fair value of the goods or services received. Stock-based compensation related to its grant of options to non-employees has not been material to date. |
GSK_License_Agreement
GSK License Agreement | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |
GSK License Agreement | Note 11. GSK License Agreement |
In 2013, the Company entered into a license agreement with GSK in which GSK was to develop and commercialize the Company’s product, Serenz, on a world-wide basis. In 2013, the Company recognized license revenue of $3,000,000 due to a non-refundable payment upon execution of the agreement. In June 2014, the GSK agreement terminated and the licensed rights to Serenz were returned to the Company. Accordingly, the Company does not expect additional revenue to result from this agreement. Because the upfront payment was non-refundable, the Company is not obligated to return any of the funds as a result of the termination of the agreement. The Company does not have any continuing obligations under the GSK agreement. |
Net_Loss_per_Share
Net Loss per Share | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Net Loss per Share | Note 12. Net loss per share | ||||||||||||||||
Basic net loss per share is computed by dividing net loss by the weighted-average number of common stock actually outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common stock outstanding and dilutive potential common stock that would be issued upon the conversion of preferred stock. For the three and nine months ended September 30, 2014, the effect of issuing the potential common stock is anti-dilutive due to the net losses in those periods and the number of shares used to compute basic and diluted earnings per share are the same for each of those periods. | |||||||||||||||||
The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share during the three and nine months ended September 30, 2013 and 2014: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2014 | 2013 | 2014 | ||||||||||||||
Net loss | $ | (1,590,223 | ) | $ | (2,393,808 | ) | $ | (2,733,261 | ) | $ | (6,019,420 | ) | |||||
Weighted-average shares used in computing basic and diluted net loss per common share | 535,685 | 535,685 | 535,611 | 535,685 | |||||||||||||
Basic and diluted net loss per common share | $ | (2.97 | ) | $ | (4.47 | ) | $ | (5.10 | ) | $ | (11.24 | ) |
Subsequent_Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 13. Subsequent Events |
On October 30, 2014, the Company received cash proceeds of approximately $490,000 in exchange for convertible promissory notes and warrants to purchase convertible preferred stock issued to existing investors referred to herein as the October 2014 notes. These notes were issued on the same terms and conditions as the April 2014 and August 2014 notes, and represent a continuation of the second tranche issued pursuant to the Promissory Note and Warrant Purchase Agreement entered into with various investors in April 2014 and August 2014 (See note 5). | |
On November 18, 2014, the Company completed its IPO, pursuant to which the Company issued 1,650,000 units (each unit consisting of one share of common stock, one Series A warrant and one Series B warrant) and received net proceeds of approximately $8.2 million, after deducting underwriting discounts and commissions and IPO related expenses. In connection with the completion of the Company’s IPO, all shares of convertible preferred stock converted into 865,429 shares of common stock and all of the Company’s convertible preferred stock warrants were converted into warrants to purchase common stock. In addition, the outstanding convertible notes of $10.2 million issued during 2010 and 2012 and accrued interest of $5.2 million converted into an aggregate of 3,165,887 shares of common stock and the issuance of 523,867 warrants to purchase common stock. The outstanding convertible notes of approximately $2.5 million issued during April, August and October, 2014 and accrued interest of approximately $21,000 converted into an aggregate of 552,105 units in the IPO. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||||||||
The accompanying condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed balance sheet at December 31, 2013 has been derived from the audited financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. | |||||||||||||||||
The unaudited interim condensed financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly its financial position as of September 30, 2014 and results of its operations and comprehensive loss for the three months and nine months ended September 30, 2014 and 2013, and cash flows for the nine months ended September 30, 2014 and 2013. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. | |||||||||||||||||
The accompanying condensed financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2013 included in the Company’s Prospectus filed pursuant to Rule 424(b)(4) on November 12, 2014 with the SEC (the “Prospectus”). | |||||||||||||||||
Significant Risks and Uncertainties | Significant Risks and Uncertainties | ||||||||||||||||
The Company has experienced losses since its inception and, as of September 30, 2014, has an accumulated deficit of approximately $63.1 million and cash and cash equivalents of approximately $0.1 million. The Company received payments totaling approximately $3.0 million pursuant to the license agreement with GSK pertaining to Serenz. This agreement terminated in June 2014, and the Company does not expect additional revenue to result from it. The Company plans to commercialize Serenz in the E.U. via a partnership or distributorship arrangements. In the U.S., the Company intends to determine the regulatory approval pathway for Serenz in dialogue with the FDA, and subsequently to seek partnership or distributorship arrangements for commercialization. | |||||||||||||||||
The Company initiated its commercialization of CoSense® starting in October of 2014, and will likely achieve profitability only if it can generate sufficient revenue from sales of the Company’s CoSense instruments and consumables, or from license fees, milestone payments, and research and development payments in connection with potential future strategic partnerships. Although management has been successful in raising capital in the past, most recently in April 2014, August 2014, October 2014 and November 2014 (See Note 14), there can be no assurance that the Company will be successful, or that any needed financing will be available in the future at terms acceptable to the Company. | |||||||||||||||||
As of September 30, 2014, there was substantial doubt about the Company’s ability to continue as a going concern, if we did not secure additional financing. As a result, the Company’s independent registered public accounting firm included an explanatory paragraph in its report on the Company’s 2013 financial statements with respect to this uncertainty. However, as described more fully below, since September 30, 2014, we completed our IPO and received net proceeds of $8.2 million, after deducting underwriting discounts and commissions and IPO related expenses. We believe that the Company’s cash resources are sufficient to meet its cash needs for at least the next 12 months. | |||||||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||||||
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates included in the financial statements include the valuation of deferred income tax assets and the valuation of debt and equity instruments and stock-based compensation. | |||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||||||
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, contracts receivable, prepaid and other current assets, accounts payable, accrued liabilities, and certain related-party convertible notes payable approximate fair value due to their short-term maturities. | |||||||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||||||
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents are held in institutions in the U.S. and include deposits in a money market fund which was unrestricted as to withdrawal or use. | |||||||||||||||||
Deferred Initial Public Offering Costs | Deferred initial public offering costs | ||||||||||||||||
Deferred initial public offering costs as of September 30, 2014 consist of costs directly related to the offering of equity securities such as legal fees, external auditor fees, accounting fees for work associated with the IPO, printing and registration related fees. There were no such costs as of December 31, 2013. | |||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets | ||||||||||||||||
Prepaid expenses and other current assets consist of payments primarily related to insurance and short-term deposits. Prepaid expenses are initially recorded upon payment and are expensed as goods or services are received. | |||||||||||||||||
Property and Equipment, Net | Property and Equipment, Net | ||||||||||||||||
Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations in the period realized. | |||||||||||||||||
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets | ||||||||||||||||
The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets held and used is measured by comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of their carrying cost or fair value less cost to sell. The Company has not recognized losses related to impairment since inception. | |||||||||||||||||
Related-Party Convertible Promissory Notes | Related-Party Convertible Promissory Notes | ||||||||||||||||
The Company has issued convertible promissory notes pursuant to a number of private placements since 2010. These convertible promissory notes were issued with separate warrants to purchase shares of the Company’s convertible preferred stock. These warrants have been treated as liabilities. The convertible promissory notes and accrued interest were convertible into the Company’s capital stock or, for promissory notes issued in 2014, units to be sold in the IPO. The fair value of the warrants was determined using a Monte Carlo simulation and allocated as a debt discount using the intrinsic value allocation method. The discount has been amortized using the effective interest method over the term of the related convertible promissory notes. | |||||||||||||||||
The Company applies the accounting standards for derivatives and hedging and for distinguishing liabilities from equity when accounting for hybrid contracts that feature conversion options. The Company accounts for convertible debt instruments when the Company has determined that the embedded conversion options should not be bifurcated from their host instruments in accordance with ASC 470-20 “Debt with Conversion and Other Options.” The Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discounts under these arrangements are amortized over the term of the related debt (see Note 5). | |||||||||||||||||
Convertible Preferred Stock Warrant Liability | Convertible Preferred Stock Warrant Liability | ||||||||||||||||
The Company has issued freestanding warrants to purchase shares of its convertible preferred stock. At September 30, 2014, the Company has classified the fair value of these warrants as liabilities on the balance sheet as they correspond to the treatment of the preferred stock as temporary equity. The Company accounts for the warrants as a derivative instrument. Changes in the fair value of the warrants are presented separately as other expense (income) in the Company’s statements of operations for each reporting period. The Company uses the Monte Carlo simulation model to determine the fair value of the warrants. As a result, the valuation of this derivative instrument is subjective because the option-valuation model requires the input of highly subjective assumptions, including the expected stock price volatility and the probability of a future occurrence of a fundamental transaction. Changes in these assumptions can materially affect the fair value estimate and, such impacts can, in turn, result in material non-cash charges or credits, and related impacts on earnings or loss per share, in the statements of operations. The Company will continue to adjust the liability for changes in fair value until the earlier of the expiration of the warrants or their exercise, at which time the liability will be reclassified into stockholders’ deficit. The Company records any change in fair value as a component of other income or expense. At the time of the IPO, all of the warrants to purchase preferred stock converted into warrants to purchase common stock, which are no longer subject to adjustment to fair value. | |||||||||||||||||
Convertible Preferred Stock | Convertible Preferred Stock | ||||||||||||||||
Upon the occurrence of certain change in control events that are outside of the control of the Company, including sale or transfer of control of the Company, holders of the convertible preferred stock can force the Company to redeem these shares. The holders of convertible preferred stock are entitled to require the Company to redeem their shares upon the approval of at least two thirds of the holders of shares of the convertible preferred stock then outstanding. Accordingly, these shares are considered contingently redeemable and are classified as temporary equity on the accompanying balance sheets. At the time of the IPO, all outstanding shares of preferred stock converted into common stock, and reclassified to permanent equity. | |||||||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||||||
The Company recognized revenue during the year ended December 31, 2013 pursuant to its license agreement with GSK. The revenue was recognized because there was persuasive evidence of an arrangement, the price was fixed or determinable, and collectability was reasonably assured. The up-front payment for revenue recognized in 2013 was received prior to December 31, 2013 and was nonrefundable. No revenue was recognized during the nine months ended September 30, 2014. The agreement was terminated in the second quarter of 2014, and the Company does not have any further monetary obligations with respect to this agreement. | |||||||||||||||||
Research and Development | Research and Development | ||||||||||||||||
Research and development costs are charged to operations as incurred. Research and development costs consist primarily of salaries and benefits, consultant fees, prototype expenses, certain facility costs and other costs associated with clinical trials, net of reimbursed amounts. | |||||||||||||||||
Costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use are expensed to research and development costs when incurred. | |||||||||||||||||
Income Taxes | Income Taxes | ||||||||||||||||
The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are recorded based on the estimated future tax effects of differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts recorded for income tax purposes. Deferred income taxes are classified as current or non-current, based on the classifications of the related assets and liabilities giving rise to the temporary differences. A valuation allowance is provided against the Company’s deferred income tax assets when their realization is not reasonably assured. | |||||||||||||||||
The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. | |||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||||||
For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the estimated fair value on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option pricing model. The determination of fair value for stock-based awards on the date of grant using an option pricing model requires management to make certain assumptions regarding a number of complex and subjective variables. | |||||||||||||||||
Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using the Black-Scholes option pricing model, as they are earned. The awards generally vest over the time period the Company expects to receive services from the non-employee. | |||||||||||||||||
Comprehensive Income (Loss) | Comprehensive Income (Loss) | ||||||||||||||||
Comprehensive income (loss) is defined as a change in equity of a business enterprise during a period, resulting from transactions from non-owner sources. There have been no items qualifying as other comprehensive income (loss) and, therefore, for all periods presented, the Company’s comprehensive income (loss) was the same as its reported net income (loss). | |||||||||||||||||
Net Income (Loss) per Share of Common Stock | Net Income (Loss) per Share of Common Stock | ||||||||||||||||
Basic net income (loss) per common share is calculated by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock outstanding during the period, without consideration for potentially dilutive securities. Diluted net income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For purposes of the diluted net income (loss) per share calculation, convertible preferred stock, convertible promissory notes, stock options and convertible preferred stock warrants are considered to be potentially dilutive securities. Because the Company has reported a net loss for the three and nine months ended September 30, 2014 and 2013, diluted net loss per common share is the same as basic net loss per common share for those periods. | |||||||||||||||||
Effective as of the completion of the IPO, all of the Company’s preferred stock was converted to common stock. For purposes of calculating net loss per common share for the three and nine month periods ended September 30, 2014, the preferred stock that converted to common stock in the IPO was not included in the net loss per common share calculation as it did not convert until November 2014. | |||||||||||||||||
The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in common stock equivalent shares): | |||||||||||||||||
Three Months Ended September 30, | Nine Months Ended | ||||||||||||||||
September 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Convertible preferred stock | 865,429 | 865,429 | 865,429 | 865,429 | |||||||||||||
Warrants to purchase convertible preferred stock | Adjustable | Adjustable | Adjustable | Adjustable | |||||||||||||
Stock issuable upon conversion of convertible notes | Adjustable | Adjustable | Adjustable | Adjustable | |||||||||||||
Options to purchase common stock | 240,906 | 228,223 | 240,906 | 228,223 | |||||||||||||
Warrants to purchase common stock | 9,259 | 9,259 | 9,259 | 9,259 | |||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||||||
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. | |||||||||||||||||
On June 10, 2014, the FASB issued ASU 2014-10, Elimination of Certain Financial Reporting Requirements, Including Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation. The pending content resulting from the issuance of ASU 2014-10 eliminates the definition of development stage entity, thereby removing the distinction between the development stage entities and other reporting entities. As a consequence, inception-to-date presentation and other incremental disclosure requirements in ASC Topic 915 for entities previously considered development stage entities are eliminated. For public business entities, the ASU’s elimination of the inception-to-date information and the other disclosures in Topic 915 is effective for annual reporting periods beginning after December 15, 2014, and interim periods therein. For other entities, this portion of the ASU is effective for annual reporting periods beginning after December 15, 2014, and interim reporting periods beginning after December 15, 2015. While the changes resulting from the issuance of ASU 2014-10 are not yet effective, early adoption of either the amendments to Topic 915 or Topic 810 is permitted for any annual or interim period for which a reporting entity’s financial statements have not yet been issued (public business entities) or made available for issuance (other entities.) | |||||||||||||||||
The Company adopted ASU 2014-10 as of June 30, 2014, and therefore is no longer considered in the development stage. The Company continues to engage in research and development activities; however, the adoption of this ASU allows the Company to remove the inception to date information and all references to development stage in the accompanying financial statements. | |||||||||||||||||
The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||
Schedule of Potentially Dilutive Securities Outstanding Excluded from Computations of Diluted Weighted-Average Shares Outstanding | The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in common stock equivalent shares): | ||||||||||||||||
Three Months Ended September 30, | Nine Months Ended | ||||||||||||||||
September 30, | |||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
Convertible preferred stock | 865,429 | 865,429 | 865,429 | 865,429 | |||||||||||||
Warrants to purchase convertible preferred stock | Adjustable | Adjustable | Adjustable | Adjustable | |||||||||||||
Stock issuable upon conversion of convertible notes | Adjustable | Adjustable | Adjustable | Adjustable | |||||||||||||
Options to purchase common stock | 240,906 | 228,223 | 240,906 | 228,223 | |||||||||||||
Warrants to purchase common stock | 9,259 | 9,259 | 9,259 | 9,259 |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy: | ||||||||||||||||
Fair Value Measurements at December 31, 2013 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Money market fund | $ | 1,256,752 | $ | 1,256,752 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Convertible preferred stock warrant liability | $ | 1,464,877 | $ | — | $ | — | $ | 1,464,877 | |||||||||
Fair Value Measurements at September 30, 2014 | |||||||||||||||||
Total | Level 1 | Level 2 | Level 3 | ||||||||||||||
Assets | |||||||||||||||||
Money market fund | $ | 30,000 | $ | 30,000 | $ | — | $ | — | |||||||||
Liabilities | |||||||||||||||||
Convertible preferred stock warrant liability | $ | 3,066,258 | $ | — | $ | — | $ | 3,066,258 | |||||||||
Summary of Changes in Fair Value of Level 3 Financial Instruments | The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial instruments as follows: | ||||||||||||||||
Convertible | |||||||||||||||||
preferred | |||||||||||||||||
stock | |||||||||||||||||
warrant | |||||||||||||||||
liability | |||||||||||||||||
Balance at December 31, 2013 | $ | 1,463,877 | |||||||||||||||
Issuance of convertible preferred stock warrants | 714,699 | ||||||||||||||||
Change in fair value recorded in other expense (income), net | 887,682 | ||||||||||||||||
Balance at September 30, 2014 | $ | 3,066,258 | |||||||||||||||
Property_and_Equipment_Net_Tab
Property and Equipment, Net (Tables) | 9 Months Ended | ||||||||
Sep. 30, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of Property and Equipment | Property and equipment consisted of the following: | ||||||||
December 31, | September 30, | ||||||||
2013 | 2014 | ||||||||
Furniture and fixtures | $ | 180,238 | $ | 139,695 | |||||
Computer hardware | 27,555 | 27,555 | |||||||
Leasehold improvements | 10,726 | 4,074 | |||||||
$ | 218,519 | $ | 171,324 | ||||||
Less accumulated depreciation and amortization | (155,352 | ) | (136,061 | ) | |||||
Total | $ | 63,167 | $ | 35,263 | |||||
Convertible_Preferred_Stock_Wa1
Convertible Preferred Stock Warrants (Tables) | 9 Months Ended | ||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||
Text Block [Abstract] | |||||||||||||||||||
Fair Value of Convertible Preferred Stock Warrant Liability Using Monte Carlo Simulation | As of December 31, 2013 and as of September 30, 2014, the Company used a Monte Carlo simulation to calculate the fair value of its convertible preferred stock warrant liability using the following inputs: | ||||||||||||||||||
December 31, | September 30, | ||||||||||||||||||
2013 | 2014 | ||||||||||||||||||
Volatility | 38% - 47% | 38% - 66% | |||||||||||||||||
Expected Term (years) | 0.75 - 2.00 | 4.00 - 8.00 | |||||||||||||||||
Expected dividend yield | 0.00% | 0.00% | |||||||||||||||||
Risk-free rate | 0.12% - 0.38% | 1.54% - 2.13% | |||||||||||||||||
Summary of Outstanding Convertible Preferred Stock Warrants | As of September 30, 2014, outstanding convertible preferred stock warrants consisted of: | ||||||||||||||||||
Issuance date | Contractual | Exercise price per | Number of shares | Fair Value at | Fair Value at | ||||||||||||||
Term | share | underlying | December 31, 2013 | September 30, 2014 | |||||||||||||||
warrant | |||||||||||||||||||
Jan-09 | 10 years | $ | 21.6 | 9,259 | $ | 42,444 | $ | 3,597 | |||||||||||
February and March 2010 | 10 years | Adjustable | Adjustable | 461,421 | 530,197 | ||||||||||||||
Nov-10 | 10 years | Adjustable | Adjustable | 263,875 | 303,609 | ||||||||||||||
Jan-12 | 10 years | Adjustable | Adjustable | 263,978 | 453,036 | ||||||||||||||
Jul-12 | 10 years | Adjustable | Adjustable | 432,159 | 743,184 | ||||||||||||||
Apr-14 | 10 years | Adjustable | Adjustable | 904,380 | |||||||||||||||
Aug-14 | 10 years | Adjustable | Adjustable | 128,255 | |||||||||||||||
Total | $ | 1,463,877 | $ | 3,066,258 | |||||||||||||||
Capital_Stock_Tables
Capital Stock (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Equity [Abstract] | |||||||||||||
Summary of Convertible Preferred Stock | The Company is authorized to issue 1,860,000 shares of convertible preferred stock as follows at December 31, 2013 and September 30, 2014: | ||||||||||||
Series | Par Value | Shares | Shares | ||||||||||
Authorized | Outstanding | ||||||||||||
A | $ | 0.001 | 40,000 | 31,250 | |||||||||
B | 0.001 | 320,000 | 119,140 | ||||||||||
C | 0.001 | 1,500,000 | 715,039 | ||||||||||
1,860,000 | 865,429 | ||||||||||||
Stock_Option_Compensation_Tabl
Stock Option Compensation (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Schedule of Fair Value of Award Granted Using Black-Scholes Option Pricing Model | The fair value of each award granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for the nine-month period ended September 30, 2014: | ||||||||||||
Nine Months | |||||||||||||
Ended | |||||||||||||
September 30, 2014 | |||||||||||||
Expected life (years) | 5.0 - 8.0 | ||||||||||||
Risk-free interest rate | 1.6% - 2.3% | ||||||||||||
Volatility | 35% - 59% | ||||||||||||
Dividend rate | 0% | ||||||||||||
Summary of Stock Option Transactions | The following table summarizes stock option transactions for the years ended December 31, 2013, and for the nine month period ended September 30, 2014 as issued under the Plans: | ||||||||||||
Options | Number of | Average | |||||||||||
Available | Shares | Exercise Price | |||||||||||
Balances, December 31, 2013 | 124,824 | 239,606 | 3.36 | ||||||||||
Granted | (12,683 | ) | 12,683 | 7.56 | |||||||||
Cancelled | 11,382 | (11,382 | ) | 3.96 | |||||||||
Balances, September 30, 2014 | 123,523 | 240,906 | 3.59 |
Net_Loss_per_Share_Tables
Net Loss per Share (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||
Schedule of Calculation of Basic Earnings per Share and Diluted Earnings per Share | The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share during the three and nine months ended September 30, 2013 and 2014: | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2013 | 2014 | 2013 | 2014 | ||||||||||||||
Net loss | $ | (1,590,223 | ) | $ | (2,393,808 | ) | $ | (2,733,261 | ) | $ | (6,019,420 | ) | |||||
Weighted-average shares used in computing basic and diluted net loss per common share | 535,685 | 535,685 | 535,611 | 535,685 | |||||||||||||
Basic and diluted net loss per common share | $ | (2.97 | ) | $ | (4.47 | ) | $ | (5.10 | ) | $ | (11.24 | ) |
Description_of_Business_Additi
Description of Business - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Nov. 18, 2014 | Dec. 31, 2013 | |
Description Of Business [Line Items] | |||
State of incorporation | Delaware | ||
Date of incorporation | 25-Aug-99 | ||
Deferred revenue recognized | $0 | ||
Units [Member] | IPO [Member] | |||
Description Of Business [Line Items] | |||
Description of units issued | 1,650,000 units (each unit consisting of one share of common stock, one Series A warrant and one Series B warrant) | ||
Subsequent event [Member] | IPO [Member] | |||
Description Of Business [Line Items] | |||
Net proceeds after deducting underwriting discounts and commissions and IPO related expenses | 8,200,000 | ||
Subsequent event [Member] | IPO [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | Warrants to purchase common stock [Member] | |||
Description Of Business [Line Items] | |||
Debt conversion, warrants issued | 523,867 | ||
Subsequent event [Member] | Units [Member] | IPO [Member] | |||
Description Of Business [Line Items] | |||
Number of shares issued | 1,650,000 | ||
Net proceeds after deducting underwriting discounts and commissions and IPO related expenses | 8,200,000 | ||
Subsequent event [Member] | Units [Member] | IPO [Member] | 2014 Convertible Promissory Notes [Member] | |||
Description Of Business [Line Items] | |||
Debt conversion, shares issued | 552,105 | ||
Subsequent event [Member] | Common stock [Member] | IPO [Member] | |||
Description Of Business [Line Items] | |||
Common stock issued upon conversion of convertible preferred stock | 865,429 | ||
Subsequent event [Member] | Common stock [Member] | IPO [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | |||
Description Of Business [Line Items] | |||
Debt conversion, shares issued | 3,165,887 | ||
GlaxoSmithKline [Member] | |||
Description Of Business [Line Items] | |||
Deferred revenue recognized | $3,000,000 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Nov. 18, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Dec. 31, 2012 | |
Schedule Of Significant Accounting Policies [Line Items] | |||||
Accumulated deficit | ($63,120,000) | ($57,100,000) | |||
Cash and cash equivalents | 64,000 | 1,269,000 | 1,992,000 | 2,155,000 | |
Going concern note | As of September 30, 2014, there was substantial doubt about our ability to continue as a going concern, if we did not secure additional financing. As a result, our independent registered public accounting firm included an explanatory paragraph in its report on our 2013 financial statements with respect to this uncertainty. However, as described more fully below, since September 30, 2014, we completed our IPO and received net proceeds of $8.2 million, after deducting underwriting discounts and commissions and IPO related expenses. We believe that our cash resources are sufficient to meet our cash needs for at least the next 12 months. | ||||
Deferred revenue recognized | 0 | ||||
IPO [Member] | |||||
Schedule Of Significant Accounting Policies [Line Items] | |||||
Deferred initial public offering costs | 0 | ||||
Subsequent event [Member] | IPO [Member] | |||||
Schedule Of Significant Accounting Policies [Line Items] | |||||
Net proceeds from issuance of IPO | 8,200,000 | ||||
Minimum [Member] | |||||
Schedule Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of property and equipment | 3 years | ||||
Maximum [Member] | |||||
Schedule Of Significant Accounting Policies [Line Items] | |||||
Estimated useful lives of property and equipment | 5 years | ||||
GlaxoSmithKline [Member] | |||||
Schedule Of Significant Accounting Policies [Line Items] | |||||
Proceeds from license agreement | 3,000,000 | ||||
Deferred revenue recognized | $3,000,000 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies - Schedule of Potentially Dilutive Securities Outstanding Excluded from Computations of Diluted Weighted-Average Shares Outstanding (Detail) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Convertible preferred stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 865,429 | 865,429 | 865,429 | 865,429 |
Stock issuable upon conversion of convertible notes [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | ||||
Options to purchase common stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 240,906 | 228,223 | 240,906 | 228,223 |
Warrants to purchase convertible preferred stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | ||||
Warrants to purchase common stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 9,259 | 9,259 | 9,259 | 9,259 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Liabilities | ||
Convertible preferred stock warrant liability | $3,066,000 | $1,464,000 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | ||
Liabilities | ||
Convertible preferred stock warrant liability | 3,066,258 | 1,464,877 |
Fair Value, Measurements, Recurring [Member] | Money market fund [Member] | ||
Assets | ||
Money market fund | 30,000 | 1,256,752 |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Money market fund [Member] | ||
Assets | ||
Money market fund | 30,000 | 1,256,752 |
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | ||
Liabilities | ||
Convertible preferred stock warrant liability | $3,066,258 | $1,464,877 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Level 3 Financial Instruments (Detail) (Level 3 [Member], Convertible preferred stock warrant liability [Member], USD $) | 9 Months Ended |
Sep. 30, 2014 | |
Level 3 [Member] | Convertible preferred stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Balance at December 31, 2013 | $1,463,877 |
Issuance of convertible preferred stock warrants | 714,699 |
Change in fair value recorded in other expense (income), net | 887,682 |
Balance at September 30, 2014 | $3,066,258 |
Property_and_Equipment_Net_Sch
Property and Equipment, Net - Schedule of Property and Equipment (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, net | $36,000 | $63,000 |
Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 171,324 | 218,519 |
Less accumulated depreciation and amortization | -136,061 | -155,352 |
Property and equipment, net | 35,263 | 63,167 |
Furniture and fixtures [Member] | Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 139,695 | 180,238 |
Computer hardware [Member] | Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 27,555 | 27,555 |
Leasehold improvements [Member] | Property, Plant and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $4,074 | $10,726 |
Property_and_Equipment_Net_Add
Property and Equipment, Net - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $20 | $32 |
Related_Party_Convertible_Prom1
Related Party Convertible Promissory Notes - Additional Information (Detail) (USD $) | 9 Months Ended | 1 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Aug. 31, 2014 | Apr. 30, 2014 | Dec. 31, 2013 | |
Debt Instrument [Line Items] | |||||
Debt instrument, percentage of share price | 75.00% | ||||
Estimated fair value of warrants | $3,066,258 | $1,463,877 | |||
Beneficial conversion feature related to convertible promissory notes | 1,484,000 | ||||
Debt instrument, interest expense | 1,811,000 | 2,471,000 | |||
2014 Convertible Promissory Notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Principal amount of convertible promissory notes | 249,693 | 1,747,681 | |||
Debt instrument, interest rate | 2.00% | 2.00% | |||
Debt instrument, maturity date | 30-Sep-15 | ||||
Beneficial conversion feature related to convertible promissory notes | 136,705 | 1,347,406 | |||
2014 Convertible Promissory Notes [Member] | Warrants to purchase preferred stock, issued with convertible notes [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, percentage of unpaid principal | 25.00% | 25.00% | |||
Debt instrument, percentage of share price | 75.00% | 75.00% | |||
Debt instrument, conversion price per share | $16.20 | $16.20 | |||
Estimated fair value of warrants | 113,295 | 600,148 | |||
Estimated volatility rate | 35.00% | 35.00% | |||
Estimated liquidity term | 5 years | 5 years | |||
Estimated risk-free interest rate | 1.62% | 1.62% | |||
2014 Convertible Promissory Notes [Member] | Issuance Date April 2014 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, accrued interest | 14,761 | ||||
Debt instrument, interest expense | 14,761 | ||||
Amortization of debt discount | 572,516 | ||||
2014 Convertible Promissory Notes [Member] | Issuance Date August 2014 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, accrued interest | 575 | ||||
2014 Convertible Promissory Notes [Member] | Issuance Date April and August 2014 [Member] | |||||
Debt Instrument [Line Items] | |||||
Debt instrument, interest expense | 15,336 | ||||
Amortization of debt discount | $25,246 |
Convertible_Preferred_Stock_Wa2
Convertible Preferred Stock Warrants - Fair Value of Convertible Preferred Stock Warrant Liability Using Monte Carlo Simulation (Detail) (Convertible preferred stock warrant liability [Member]) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Expected dividend yield | 0.00% | 0.00% |
Minimum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Volatility | 38.00% | 38.00% |
Expected Term (years) | 4 years | 9 months |
Risk-free rate | 1.54% | 0.12% |
Maximum [Member] | ||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||
Volatility | 66.00% | 47.00% |
Expected Term (years) | 8 years | 2 years |
Risk-free rate | 2.13% | 0.38% |
Convertible_Preferred_Stock_Wa3
Convertible Preferred Stock Warrants - Summary of Outstanding Convertible Preferred Stock Warrants (Detail) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2013 | |
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Fair Value | $3,066,258 | $1,463,877 |
Issuance Date January 2009 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Contractual Term | 10 years | |
Convertible preferred stock warrants, Exercise price per share | $21.60 | |
Convertible preferred stock warrants, Number of shares underlying warrant | 9,259 | |
Convertible preferred stock warrants, Fair Value | 3,597 | 42,444 |
Issuance Date February and March 2010 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Contractual Term | 10 years | |
Convertible preferred stock warrants, Fair Value | 530,197 | 461,421 |
Issuance Date November 2010 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Contractual Term | 10 years | |
Convertible preferred stock warrants, Fair Value | 303,609 | 263,875 |
Issuance Date January 2012 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Contractual Term | 10 years | |
Convertible preferred stock warrants, Fair Value | 453,036 | 263,978 |
Issuance Date July 2012 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Contractual Term | 10 years | |
Convertible preferred stock warrants, Fair Value | 743,184 | 432,159 |
Issuance Date April 2014 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Contractual Term | 10 years | |
Convertible preferred stock warrants, Fair Value | 904,380 | |
Issuance Date August 2014 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Convertible preferred stock warrants, Contractual Term | 10 years | |
Convertible preferred stock warrants, Fair Value | $128,255 |
Convertible_Preferred_Stock_Wa4
Convertible Preferred Stock Warrants - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Class of Warrant or Right [Line Items] | ||
Debt instrument, percentage of share price | 75.00% | |
Series C convertible preferred stock [Member] | ||
Class of Warrant or Right [Line Items] | ||
Debt instrument, conversion price per share | 16.2 | |
Convertible preferred stock [Member] | ||
Class of Warrant or Right [Line Items] | ||
Class of warrants expired or exercised | 0 | 0 |
Credit_Facility_Additional_Inf
Credit Facility - Additional Information (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 29, 2014 |
Line of Credit Facility [Abstract] | ||
Line of credit amount | $0.10 | |
Line of credit, fixed interest rate per annum | 6.00% | |
Line of credit, interest rate description | The line of credit bears a fixed interest rate of 6.0% per annum simple interest. | |
Line of credit, repayment term | 2 years | |
Line of credit facility, initiation date | 29-Sep-14 |
Commitments_and_Contingencies_
Commitments and Contingencies - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | Dec. 31, 2010 | |
Facilities | ||||
Loss Contingencies [Line Items] | ||||
Non-cancelable operating lease agreement expiration date | 2015-05 | |||
Number of previously leased facilities | 2 | |||
Rent expense | $177,000 | $234,000 | ||
Future minimum commitments under non-cancelable operating lease | 73,000 | |||
BioMedical Drug Development, Inc. [Member] | Milestone Payments [Member] | ||||
Loss Contingencies [Line Items] | ||||
Development and sales-related milestone payments, maximum | 200,000 | |||
Payments made and liabilities incurred under asset purchase agreement | 0 | 0 | ||
Outstanding payments | 0 | 0 | ||
Intellectual property [Member] | BioMedical Drug Development, Inc. [Member] | ||||
Loss Contingencies [Line Items] | ||||
Acquisition of intellectual property | $150,000 | |||
Facility one [Member] | ||||
Loss Contingencies [Line Items] | ||||
Non-cancelable operating lease agreement expiration date | 2014-01 | |||
Facility two [Member] | ||||
Loss Contingencies [Line Items] | ||||
Non-cancelable operating lease agreement expiration date | 2014-05 |
Capital_Stock_Additional_Infor
Capital Stock - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | |
Sep. 30, 2014 | Nov. 18, 2014 | Dec. 31, 2013 | |
Payment | |||
Class of Stock [Line Items] | |||
Common stock, shares authorized | 10,000,000 | 10,000,000 | |
Common stock, par value | $0.00 | $0.00 | |
Common stock, shares issued | 535,685 | 535,685 | |
Common stock, shares outstanding | 535,685 | 535,685 | |
Common stock, vote description | Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of all classes of stock outstanding. The holders of common stock, voting as a separate class, are entitled to elect one member of the Board of Directors. | ||
Convertible preferred stock, shares authorized | 1,860,000 | ||
Minimum shares outstanding for voting rights | 1,000,000 | ||
Voting rights description | The holders of each share of Series A, Series B and Series C would have been entitled to voting rights equal to the number of shares of common stock into which each share of preferred stock would have been converted. So long as at least 1,000,000 shares are outstanding, the holders of Series A, Series B and Series C, voting together as a single class, would have been entitled to elect three members of the Board of Directors. The holders of common stock, voting as a separate class, would have been entitled to elect one member of the Board of Directors. The holders of Series A, Series B, Series C and common stock, voting together as a single class on an as converted basis, would have been entitled to elect the remaining members of the Board of Directors. | ||
Dividends declared or paid amount | $0 | ||
Conversion of stock, description | Each share of Series A, Series B and Series C would have been convertible to common stock, at the option of the holder, at any time after the date of issuance. Each share of Series A, Series B and Series C converts into that number of shares of common stock determined in accordance with the conversion ratio (i) immediately prior to the closing of a public offering of common stock provided that the offering price per share is not less than $75.60 (adjusted for recapitalizations) and gross proceeds to the Company are not less than $30,000,000 or (ii) upon the written request by the Company from the holders of two thirds of the preferred stock outstanding. | ||
Convertible preferred stock conversion terms, common stock offering minimum price per share | $75.60 | ||
Convertible preferred stock, conversion terms, common stock offering minimum gross proceeds. | 30,000,000 | ||
Common stock conversion basis | The initial conversion ratio would have been one share of common stock for each share of preferred stock. | ||
Convertible preferred stock, earliest redemption date | 20-Mar-12 | ||
Convertible preferred stock, number of annual payments | 2 | ||
Convertible preferred stock, redemption price | $23,808,048 | $23,808,048 | |
Common stock [Member] | Subsequent event [Member] | IPO [Member] | |||
Class of Stock [Line Items] | |||
Common stock issued upon conversion of convertible preferred stock | 865,429 | ||
Convertible preferred stock [Member] | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, shares authorized | 1,860,000 | 1,860,000 | |
Series A convertible preferred stock [Member] | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, shares authorized | 40,000 | 40,000 | |
Non-cumulative dividends rate | $3.84 | ||
Conversion price per share | $48 | $48 | |
Liquidation amount per share | $48 | ||
Series B convertible preferred stock [Member] | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, shares authorized | 320,000 | 320,000 | |
Non-cumulative dividends rate | $4.61 | ||
Conversion price per share | $57.60 | $57.60 | |
Liquidation amount per share | $57.60 | ||
Series C convertible preferred stock [Member] | |||
Class of Stock [Line Items] | |||
Convertible preferred stock, shares authorized | 1,500,000 | 1,500,000 | |
Non-cumulative dividends rate | $1.73 | ||
Conversion price per share | $21.60 | $21.60 | |
Liquidation amount per share | $21.60 |
Capital_Stock_Summary_of_Conve
Capital Stock - Summary of Convertible Preferred Stock (Detail) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Class of Stock [Line Items] | ||
Shares Authorized | 1,860,000 | |
Shares Outstanding | 865,429 | |
Series A convertible preferred stock [Member] | ||
Class of Stock [Line Items] | ||
Par Value | $0.00 | $0.00 |
Shares Authorized | 40,000 | 40,000 |
Shares Outstanding | 31,250 | 31,250 |
Series B convertible preferred stock [Member] | ||
Class of Stock [Line Items] | ||
Par Value | $0.00 | $0.00 |
Shares Authorized | 320,000 | 320,000 |
Shares Outstanding | 119,140 | 119,140 |
Series C convertible preferred stock [Member] | ||
Class of Stock [Line Items] | ||
Par Value | $0.00 | $0.00 |
Shares Authorized | 1,500,000 | 1,500,000 |
Shares Outstanding | 715,039 | 715,039 |
Stock_Option_Compensation_Stoc
Stock Option Compensation - Stock Option Plan - Additional Information (Detail) (USD $) | 1 Months Ended | 9 Months Ended | 12 Months Ended | |
Feb. 28, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $21,000 | $35,000 | ||
Number of options granted | 12,683 | 0 | ||
Fair value of common stock, per share | $7.56 | $7.56 | ||
Number of shares, vested | 228,224 | 232,302 | ||
Weighted-average exercise price | $3.59 | $3.36 | ||
Weighted-average contractual life | 4 years 4 months 24 days | 4 years 10 months 10 days | ||
Number of stock options issued | 0 | |||
NSO [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of fair market value | 85.00% | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock option compensation, description | For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price of an option will not be less than 110% of fair value. | |||
Vesting period | 4 years | |||
Stock-based compensation expense | 20,944 | 34,810 | ||
Income tax benefits recognized from stock-based compensation | 0 | 0 | ||
Number of options granted | 12,683 | |||
Future stock-based compensation for unvested employee options granted and outstanding | $38,028 | $8,287 | ||
Future stock-based compensation, requisite service period | 3 years | 4 months 24 days | ||
Maximum [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of option | 10 years | |||
Individuals holding more than 10% of the voting rights of all classes of stock [Member] | Minimum [Member] | Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of fair market value | 110.00% | |||
Individuals holding more than 10% of the voting rights of all classes of stock [Member] | Maximum [Member] | ISOs [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Term of option | 5 years |
Stock_Option_Compensation_Sche
Stock Option Compensation - Schedule of Fair Value of Award Granted Using Black-Scholes Option Pricing Model (Detail) (Stock Options [Member]) | 9 Months Ended |
Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 1.60% |
Risk-free interest rate, maximum | 2.30% |
Volatility, minimum | 35.00% |
Volatility, maximum | 59.00% |
Dividend rate | 0.00% |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life (years) | 5 years |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life (years) | 8 years |
Stock_Option_Compensation_Summ
Stock Option Compensation - Summary of Stock Option Transactions (Detail) (USD $) | 1 Months Ended | 12 Months Ended | 9 Months Ended |
Feb. 28, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of Shares, Granted | 12,683 | 0 | |
Stock Options [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options Available, Beginning balance | 124,824 | ||
Options Available, Granted | -12,683 | ||
Options Available, Cancelled | 11,382 | ||
Options Available, Ending balance | 123,523 | ||
Number of Shares, Outstanding, Beginning balance | 239,606 | ||
Number of Shares, Granted | 12,683 | ||
Number of Shares, Cancelled | -11,382 | ||
Number of Shares, Outstanding, Ending balance | 240,906 | ||
Average Exercise Price, Beginning balance | $3.36 | ||
Average Exercise Price, Granted | $7.56 | ||
Average Exercise Price, Cancelled | $3.96 | ||
Average Exercise Price, Ending balance | $3.59 |
GSK_License_Agreement_Addition
GSK License Agreement - Additional Information (Detail) (USD $) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2014 | Dec. 31, 2013 | |
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue recognized | $0 | |
GlaxoSmithKline [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Deferred revenue recognized | $3,000,000 |
Net_Loss_per_Share_Schedule_of
Net Loss per Share - Schedule of Calculation of Basic Earnings per Share and Diluted Earnings per Share (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Earnings Per Share [Abstract] | ||||
Net loss | ($2,393) | ($1,590) | ($6,019) | ($2,733) |
Weighted-average shares used in computing basic and diluted net loss per common share | 535,685 | 535,685 | 535,685 | 535,611 |
Basic and diluted net loss per common share | ($4.47) | ($2.97) | ($11.24) | ($5.10) |
Subsequent_Events_Additional_I
Subsequent Events - Additional Information (Detail) (USD $) | 9 Months Ended | 0 Months Ended | |
Sep. 30, 2014 | Oct. 30, 2014 | Nov. 18, 2014 | |
Subsequent Event [Line Items] | |||
Cash proceeds in exchange for convertible promissory notes and warrants to purchase convertible preferred stock | $1,997,000 | ||
IPO [Member] | Units [Member] | |||
Subsequent Event [Line Items] | |||
Description of units issued | 1,650,000 units (each unit consisting of one share of common stock, one Series A warrant and one Series B warrant) | ||
Subsequent event [Member] | |||
Subsequent Event [Line Items] | |||
Cash proceeds in exchange for convertible promissory notes and warrants to purchase convertible preferred stock | 490,000 | ||
Subsequent event [Member] | IPO [Member] | |||
Subsequent Event [Line Items] | |||
Net proceeds after deducting underwriting discounts and commissions and IPO related expenses | 8,200,000 | ||
Subsequent event [Member] | IPO [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | |||
Subsequent Event [Line Items] | |||
Outstanding convertible notes | 10,200,000 | ||
Debt instrument, accrued interest | 5,200,000 | ||
Subsequent event [Member] | IPO [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | Warrants to purchase common stock [Member] | |||
Subsequent Event [Line Items] | |||
Debt conversion, warrants issued | 523,867 | ||
Subsequent event [Member] | IPO [Member] | 2014 Convertible Promissory Notes [Member] | |||
Subsequent Event [Line Items] | |||
Outstanding convertible notes | 2,500,000 | ||
Debt instrument, accrued interest | 21,000 | ||
Subsequent event [Member] | IPO [Member] | Units [Member] | |||
Subsequent Event [Line Items] | |||
Number of shares issued | 1,650,000 | ||
Net proceeds after deducting underwriting discounts and commissions and IPO related expenses | $8,200,000 | ||
Subsequent event [Member] | IPO [Member] | Units [Member] | 2014 Convertible Promissory Notes [Member] | |||
Subsequent Event [Line Items] | |||
Debt conversion, shares issued | 552,105 | ||
Subsequent event [Member] | IPO [Member] | Common stock [Member] | |||
Subsequent Event [Line Items] | |||
Common stock issued upon conversion of convertible preferred stock | 865,429 | ||
Subsequent event [Member] | IPO [Member] | Common stock [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | |||
Subsequent Event [Line Items] | |||
Debt conversion, shares issued | 3,165,887 |