Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 28, 2020 | Jun. 28, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Registrant Name | SOLENO THERAPEUTICS INC | ||
Entity Central Index Key | 0001484565 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | false | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity File Number | 001-36593 | ||
Entity Tax Identification Number | 77-0523891 | ||
Entity Address, Address Line One | 203 Redwood Shores Parkway | ||
Entity Address, Address Line Two | Suite 500 | ||
Entity Address, City or Town | Redwood City | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 94065 | ||
City Area Code | 650 | ||
Local Phone Number | 213-8444 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Common Stock, Shares Outstanding | 44,686,811 | ||
Entity Public Float | $ 28 | ||
Title of 12(b) Security | Common Stock, $0.001 par value | ||
Trading Symbol | SLNO | ||
Security Exchange Name | NASDAQ | ||
Documents Incorporated by Reference | DOCUMENTS INCORPORATED BY REFERENCE Portions of the registrant’s Definitive Proxy Statement to be filed with the Commission pursuant to Regulation 14A in connection with the registrant’s 2020 Annual Meeting of Stockholders, to be filed subsequent to the date hereof, are incorporated by reference into Part III of this Report. Such Definitive Proxy Statement will be filed with the Securities and Exchange Commission not later than 120 days after the conclusion of the registrant’s fiscal year ended December 31, 2019. Except with respect to information specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed as part of this Form 10-K. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 20,733,000 | $ 23,099,000 |
Prepaid expenses and other current assets | 411,000 | 529,000 |
Due from related party | 64,000 | |
Minority interest investment in former subsidiary | 978,000 | |
Total current assets | 21,144,000 | 24,670,000 |
Long-term assets | ||
Property and equipment, net | 22,000 | 12,000 |
Operating lease right-of-use assets | 398,000 | |
Finance lease right-of-use assets | 24,000 | |
Intangible assets, net | 16,525,000 | 18,469,000 |
Other long-term assets | 59,000 | |
Total assets | 38,172,000 | 43,151,000 |
Current liabilities | ||
Accounts payable | 1,995,000 | 934,000 |
Accrued compensation | 283,000 | 274,000 |
Accrued clinical trial site costs | 1,999,000 | 320,000 |
Operating lease liabilities | 305,000 | |
Other current liabilities | 382,000 | 349,000 |
Total current liabilities | 4,964,000 | 1,877,000 |
Long-term liabilities | ||
Contingent liability for Essentialis purchase price | 5,938,000 | 5,649,000 |
Other long-term liabilities | 147,000 | |
Total liabilities | 23,225,000 | 12,738,000 |
Commitments and contingencies (Note 8) | ||
Stockholders’ equity | ||
Common stock | 45,000 | 32,000 |
Additional paid-in-capital | 172,708,000 | 157,413,000 |
Accumulated deficit | (157,806,000) | (127,032,000) |
Total stockholders’ equity | 14,947,000 | 30,413,000 |
Total liabilities and stockholders’ equity | 38,172,000 | 43,151,000 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders’ equity | ||
Preferred stock | ||
Series A Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | 49,000 | |
2017 PIPE Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | 10,822,000 | 4,563,000 |
2018 PIPE Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | $ 1,354,000 | $ 600,000 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) | Dec. 31, 2019 | Dec. 31, 2018 |
Preferred stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock shares authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 44,658,054 | 31,755,169 |
Common stock, shares outstanding | 44,658,054 | 31,755,169 |
Series B Convertible Preferred Stock [Member] | ||
Preferred stock par value (in dollars per share) | $ 0.001 | |
Preferred stock shares authorized | 13,780 | 13,780 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Preferred stock, aggregate liquidation preference | $ 0 | $ 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Operating expenses | ||
Research and development | $ 16,267 | $ 7,178 |
General and administrative | 6,930 | 6,556 |
Change in fair value of contingent consideration | 289 | 567 |
Total operating expenses | 23,486 | 14,301 |
Operating loss | (23,486) | (14,301) |
Other (expense) income | ||
Change in fair value of warrants liabilities | (6,964) | 522 |
Gain on deconsolidation of former subsidiary | 1,994 | |
Loss from minority interest investment | (478) | (160) |
Interest and other income | 154 | 104 |
Total other (expense) income | (7,288) | 2,460 |
Loss from continuing operations | (30,774) | (11,841) |
Loss from discontinued operations | (1,494) | |
Net loss | $ (30,774) | $ (13,335) |
Loss per common share from continuing operations, basic and diluted | $ (0.90) | $ (0.56) |
Loss per common share from discontinued operations, basic and diluted | (0.07) | |
Net loss per common share, basic and diluted | $ (0.90) | $ (0.64) |
Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 34,142,478 | 20,975,479 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | 2018 PIPE Warrant Liability [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Common Stock [Member]2018 PIPE Warrant Liability [Member] | Common Stock [Member]Essentialis, Inc. [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member]2018 PIPE Warrant Liability [Member] | Additional Paid-In Capital [Member]Essentialis, Inc. [Member] | Accumulated Deficit [Member] |
Balances at beginning at Dec. 31, 2017 | $ 26,817 | $ 19 | $ 140,495 | $ (113,697) | ||||||
Balances at beginning (shares) at Dec. 31, 2017 | 4,571 | 19,238,972 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation | 829 | 829 | ||||||||
Issuance of common stock on conversion of series B convertible preferred shares | $ 1 | (1) | ||||||||
Issuance of common stock on conversion of series B convertible preferred shares (shares) | (4,571) | 914,200 | ||||||||
Issuance of restricted stock units under equity incentive plans | 434 | 434 | ||||||||
Issuance of restricted stock units under equity incentive plans (shares) | 245,588 | |||||||||
Issuance of common stock held back on acquisition of Essentialis | $ 1 | $ (1) | ||||||||
Issuance of common stock held back on acquisition of Essentialis (Shares) | 1,084,034 | |||||||||
Issuance of common stock | $ 16,250 | $ 11 | $ 16,239 | |||||||
Issuance of common stock (shares) | 10,272,375 | |||||||||
Fair value at transaction date of warrants to purchase common stock | $ (582) | $ (582) | ||||||||
Net loss | (13,335) | (13,335) | ||||||||
Balances at ending at Dec. 31, 2018 | 30,413 | $ 32 | 157,413 | (127,032) | ||||||
Balances at end (shares) at Dec. 31, 2018 | 31,755,169 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Stock-based compensation | 693 | 693 | ||||||||
Issuance of restricted stock units under equity incentive plans | 132 | 132 | ||||||||
Issuance of restricted stock units under equity incentive plans (shares) | 61,218 | |||||||||
Issuance of common stock | 14,483 | $ 13 | 14,470 | |||||||
Issuance of common stock (shares) | 12,841,667 | |||||||||
Net loss | (30,774) | (30,774) | ||||||||
Balances at ending at Dec. 31, 2019 | $ 14,947 | $ 45 | $ 172,708 | $ (157,806) | ||||||
Balances at end (shares) at Dec. 31, 2019 | 44,658,054 |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement Of Stockholders Equity [Abstract] | ||
Less transaction costs | $ 927 | $ 250 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (30,774) | $ (13,335) |
Loss from discontinued operations | (1,494) | |
Loss from continuing operations | (30,774) | (11,841) |
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities: | ||
Depreciation and amortization | 1,958 | 1,963 |
Noncash lease expense | 386 | |
Stock-based compensation expense | 825 | 1,263 |
Change in fair value of stock warrants | 6,964 | (522) |
Change in fair value of contingent consideration | 289 | 567 |
Gain on deconsolidation of former subsidiary | (1,994) | |
Operating loss of minority interest investment | 478 | 160 |
Change in operating assets and liabilities: | ||
Prepaid expenses, other current assets and other assets | 10 | (60) |
Due from related party | 64 | (64) |
Accounts payable | 1,061 | 249 |
Accrued compensation | 9 | (103) |
Accrued clinical trial site costs | 1,679 | 321 |
Operating lease liabilities | (360) | |
Other liabilities | 36 | (261) |
Net cash used in continuing operating activities | (17,375) | (10,322) |
Net cash used in discontinued operating activities | (1,361) | |
Net cash used in operating activities | (17,375) | (11,683) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (21) | (8) |
Security deposit on sublease | (59) | |
Security deposit received from expired lease | 108 | |
Proceeds from sale of minority interest investment in former subsidiary | 500 | |
Net cash provided by (used in) continuing investing activities | 528 | (8) |
Net cash used in discontinued investing activities | (172) | |
Net cash provided by (used in) investing activities | 528 | (180) |
Cash flows from financing activities: | ||
Proceeds from sale of common stock and common stock warrants, net of costs | 14,483 | 16,302 |
Principal paid on finance lease liabilities | (2) | |
Net cash provided by continuing financing activities | 14,481 | 16,302 |
Net cash provided by discontinued financing activities | 1,525 | |
Net cash provided by financing activities | 14,481 | 17,827 |
Net increase (decrease) in cash and cash equivalents | (2,366) | 5,964 |
Cash and cash equivalents, beginning of period | 23,099 | 17,135 |
Cash and cash equivalents, end of period | 20,733 | 23,099 |
Supplemental disclosures of non-cash investing and financing information | ||
Accrued liability for cost of issuing common stock | 52 | |
Warrants issued in connection with sale of common stock | 582 | |
Continuing Operations [Member] | ||
Cash flows from financing activities: | ||
Net increase (decrease) in cash and cash equivalents | $ (2,366) | 5,972 |
Discontinued Operations [Member] | ||
Cash flows from financing activities: | ||
Net increase (decrease) in cash and cash equivalents | $ (8) |
Overview
Overview | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Overview | Note 1. Overview Soleno Therapeutics, Inc. (the “Company” or “Soleno”) was incorporated in the State of Delaware on August 25, 1999, and is located in Redwood City, California. On May 8, 2017, Soleno received stockholder approval to amend its Amended and Restated Certificate of Incorporation to change its name from “Capnia, Inc.” to “Soleno Therapeutics, Inc.” The Company Diazoxide Choline Controlled Release tablets, or DCCR Prader-Willi Syndrome, or PWS The Company initially established its operations as a diversified healthcare company that developed and commercialized innovative diagnostics, devices and therapeutics addressing unmet medical needs, which consisted of: precision metering of gas flow technology marketed as Serenz ® Allergy Relief, or Serenz, and the CoSense ® End-Tidal Carbon Monoxide Monitor, or CoSense, which measures End-Tidal Carbon Monoxide and aids in the detection of excessive hemolysis, a condition in which red blood cells degrade rapidly and which can lead to adverse neurological outcomes; and, products that included temperature probes, scales, surgical tables, and patient surfaces. On March 7, 2017, the Company completed its merger, or the Merger, with Essentialis, Inc., a Delaware corporation, or Essentialis, in accordance with the Merger Agreement by and between Soleno Therapeutics and Essentialis dated December 22, 2016, or the Merger Agreement. After the Merger, the Company’s primary focus has been the development and commercialization of novel therapeutics for the treatment of rare diseases. Essentialis was a privately-held, clinical-stage biotechnology company focused on the development of breakthrough medicines for the treatment of rare diseases in which there is increased mortality and risk of cardiovascular and endocrine complications. Prior to the Merger, Essentialis’s efforts were focused primarily on developing and testing product candidates that target the ATP-sensitive potassium channel, a metabolically-regulated membrane protein whose modulation has the potential to impact a wide range of rare metabolic, cardiovascular, and central nervous system diseases. Essentialis had tested DCCR as a treatment for PWS, a complex metabolic/neurobehavioral disorder. DCCR has orphan designation for the treatment of PWS in the United States, or U.S., as well as in the European Union, or E.U. Subsequent to the Merger with Essentialis described above, the Company determined to divest, sell or dispose of its business efforts focused on the development and commercialization of its Serenz and CoSense technologies. Accordingly, and pursuant to ASC 205-20-45-10, any assets and liabilities related to the discontinued activities of CoSense and Serenz were presented separately as held for sale items, and the related operations reported herein for the CoSense and Serenz activities are reported as discontinued operations in the statements of operations. The Company’s current research and development efforts are primarily focused on advancing its lead candidate, DCCR tablets, for the treatment of PWS, through late-stage clinical development. |
Going Concern and Management's
Going Concern and Management's Plans | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Going Concern and Management's Plans | Note 2. Going Concern and Management’s Plans The Company had a net loss of $30.8 million during 2019 and has an accumulated deficit of $157.8 million at December 31, 2019 resulting from having incurred losses since its inception. The Company had $20.7 million of cash on hand at December 31, 2019 and used $17.4 million of cash in its operating activities during 2019. The Company has financed its operations principally through issuances of equity securities. On October 25, 2019, the Company sold 12,841,667 shares of common stock in an underwritten public offering at a price of $1.20 per share for net proceeds of $14.5 million. The accompanying consolidated financial statements have been prepared under the assumption the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. The Company expects to continue incurring losses for the foreseeable future and will be required to raise additional capital to complete its clinical trials, pursue product development initiatives and penetrate markets for the sale of its products. Management believes that the Company will continue to have access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means, but the Company’s access to such capital resources is uncertain and is not assured. If the Company is unable to secure additional capital, it may be required to curtail its clinical trials and development of new products and take additional measures to reduce expenses in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays in the Company’s efforts to complete its clinical trials and commercialize its products, which is critical to the realization of its business plan and the future operations of the Company. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should it be unable to continue as a going concern. Management believes that the Company does not have sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. Additionally, in view of the Company’s expectation to incur significant losses for the foreseeable future it will be required to raise additional capital resources in order to fund its operations, although the availability of, and the Company’s access to such resources is not assured. Accordingly, management believes that there is substantial doubt regarding the Company’s ability to continue operating as a going concern within one year from the date of filing these financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain amounts from prior periods have been reclassified to conform to the current period presentation, including certain current liabilities within the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, certain immaterial amounts within the Consolidated Statements of Operations, and the presentation of restricted stock units and the related expense within the Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Cash Flows. Use of Estimates The preparation of consolidated 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, the valuation of financial instruments, stock-based compensation, value and life of acquired intangibles, and the valuation of contingent liabilities for the purchase price of assets obtained through acquisition. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents at one U.S. commercial bank. Cash and cash equivalents deposited with this commercial bank exceeded the Federal Deposit Insurance Corporation insurable limit at December 31, 2019 and 2018. The Company expects the maintenance of balances in excess of insurable limits will continue. Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting, making operating decisions, and assessing financial performance. All long-lived assets are maintained in the United States of America. Cash and Cash Equivalents The Company considers all highly liquid investments, including its money market fund, 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 the U.K. and include deposits in a money market fund which was unrestricted as to withdrawal or use. 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. Patent In March 2017, the Company completed the acquisition of Essentialis, Inc., a Delaware corporation, or Essentialis in accordance with the Merger Agreement by and between Soleno Therapeutics and Essentialis dated December 22, 2016. The merger transaction has been accounted for as an asset acquisition under the acquisition method of accounting and accordingly, the value of asset acquired in the amount of $22.0 million was assigned to the identifiable intangible asset relating to the patent for DCCR, which patent expires in June 2028. Property and Equipment, Net Property and equipment are stated at cost net of accumulated depreciation and amortization calculated 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 remaining 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. Equity Method Investment Equity method investments are equity securities in investees not controlled by the Company, but over which the Company has the ability to exercise significant influence. The Company’s equity method investment is measured at fair value minus impairment, if any, plus or minus the Company’s share of equity method investee income or loss. The Company’s equity method investment in Capnia, Inc. is classified as Minority interest investment in former subsidiary in the consolidated balance sheet as of December 31, 2018 and was initially measured at fair value. (See Note 9.) The Company sold its equity method investment in Capnia in September 2019. Long-Lived Assets The Company reviews its long-lived assets for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount and the fair value of the assets. Intangible Assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives of 11 years. The useful life of the intangible asset is evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining useful life. 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. Certain research and development expenses are reported as discontinued operations. (See Note 9.) Change in fair value of contingent consideration The Company recorded the value of contingent future consideration to be paid for the acquisition of Essentialis as a liability in March 2017 at the date of the acquisition. The changes in value of the liability for the contingent consideration since the acquisition date are recorded as operating expense in the consolidated statements of operations. 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. 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. The loss from discontinued operations is reported net of the related effect for income taxes in the statements of operations. Convertible Preferred Stock and other Hybrid Instruments The Company’s convertible preferred stock was classified as permanent equity on its consolidated balance sheet in accordance with authoritative guidance for the classification and measurement of hybrid securities and distinguishing liability from equity instruments. The preferred stock is not redeemable at the option of the holder. Further, the Company evaluated its Series B Convertible Preferred Stock and determined that it is considered an equity host under ASC 815, Derivatives and Hedging Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required. The Company determined that certain freestanding derivatives, which principally consist of Series A, Series C, the 2017 PIPE Warrants and 2018 PIPE Warrants, do not satisfy the criteria for classification as equity instruments due to the existence of certain cash settlement features that are not within the sole control of the Company or variable settlement provision that cause them to not be indexed to the Company’s own stock. Stock-Based Compensation Stock-based compensation costs related to stock options and restricted stock units granted to employees, nonemployees and directors are measured at the date of grant based on the estimated fair value of the award. For restricted stock units this fair value is based on the Company’s common stock price on the grant date. The Company estimates the grant date fair value of stock options, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The grant date fair value of stock-based awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the award. Stock options generally vest over four years. The Black-Scholes option-pricing model requires the use of highly subjective assumptions to estimate the fair value of stock-based awards. If we had made different assumptions, our stock-based compensation expense, net loss and net loss per share of common stock could have been significantly different. These assumptions include: • Expected volatility: The Company calculates the estimated volatility rate based the volatility of its common stock together with comparable companies in its industry. • Expected term: The Company does not believe it is able to rely on its historical exercise and post-vesting termination activity to provide accurate data for estimating the expected term for use in estimating the fair value-based measurement of our options. Therefore, the Company has opted to use the “simplified method” for estimating the expected term of options. • Risk-free rate: The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to liquidity. • Expected divided yield: The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, it used an expected dividend yield of zero. The Company accounts for forfeitures as they occur. Recent Accounting Standards Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 842, Leases. Leases requires lessees to capitalize most lease obligations as right-of-use assets with a corresponding liability on the balance sheet. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The guidance is effective for all public business entities and certain not-for-profit entities in fiscal years beginning after December 15, 2018, and for all other entities in fiscal years beginning after December 15, 2020. Early adoption is permitted. As the Company was an emerging growth company until December 31, 2019 and elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act, it adopted the standard as of January 1, 2019 on December 31, 2019. The Company adopted ASC 842 using the optional modified retrospective method and will not restate comparative periods. The Company has elected to apply the “practical expedient package”, which permits it to not reassess previous conclusions around lease identification, lease classification, and initial direct costs. Further, the Company will make an accounting policy election to exclude leases with terms of twelve months or less from the recognition requirements. The Company did not elect the use of the hindsight practical expedient. As a result of the adoption of the standard on January 1, 2019, the Company recognized lease liabilities based on the present value of the total fixed payments for its leases in the amount of approximately $322,000 and ROU assets of approximately $301,000 on its balance sheet. The adoption of the new standard did not have a material impact on the Company’s Statement of Operations or Cash Flows. In June 2018, the FASB issued ASU 2018-07, “ Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” In August 2018, SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification Recently Issued Accounting Standards In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. In December 2019, the FASB issued ASU 2019-12: “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 4. Fair Value of Financial Instruments The carrying value of the Company’s cash, cash equivalents and accounts payable, approximate fair value due to the short-term nature of these items. 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 — • Level II — • Level III — 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 (in thousands). Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Liabilities 2017 PIPE warrant liability $ 10,822 $ — $ — $ 10,822 2018 PIPE warrant liability 1,354 — — 1,354 Essentialis purchase price contingency liability 5,938 — — 5,938 Total common stock warrant and contingent consideration liability $ 18,114 $ - $ — $ 18,114 Fair Value Measurements at December 31, 2018 Total Level 1 Level 2 Level 3 Liabilities Series A warrant liability $ 49 $ 49 $ — $ — 2017 PIPE warrant liability 4,563 — — 4,563 2018 PIPE warrant liability 600 — — 600 Essentialis purchase price contingency liability 5,649 — — 5,649 Total common stock warrant and contingent consideration liability $ 10,861 $ 49 $ - $ 10,812 The Series A Warrant is a registered security that trades on the open market and the fair value of the Series A Warrant liability is based on the publicly quoted trading price of the warrants which is listed on and obtained from NASDAQ. Accordingly, the fair value of Series A Warrants is a Level 1 measurement. The fair value measurement of the Series C Warrants is based on significant inputs that are unobservable and thus represent Level 3 measurements. The Company’s estimated fair value of the Series C Warrant liability is calculated using the Black-Scholes valuation model, which is equivalent to fair value computed using the Binomial Lattice Option Model. Key assumptions include the volatility of the Company’s stock, the expected warrant term, expected dividend yield and risk-free interest rates. 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 1 and Level 3 warrants, which are treated as liabilities (dollars in thousands). Series A Warrants Series C Warrants 2017 PIPE Warrants 2018 PIPE Warrants Purchase Price Number of Warrants Liability Number of Warrants Liability Number of Warrants Liability Number of Warrants Liability Contingent Liability Balance at January 1, 2019 485,121 $ 49 118,083 $ — 6,024,425 $ 4,563 513,617 $ 600 $ 5,649 Expiration of Series A Warrants (485,121 ) (49 ) — — — — — — — Change in value of Series C Warrants — — — — — — — — Change in value of 2017 PIPE Warrants — — — — — 6,259 — — — Change in value of 2018 PIPE Warrants — — — — — — — 754 — Change in value of contingent liability — — — — — — — — 289 Balance at December 31, 2019 — $ — 118,083 $ — 6,024,425 $ 10,822 513,617 $ 1,354 $ 5,938 |
Other Financial Statement Detai
Other Financial Statement Details | 12 Months Ended |
Dec. 31, 2019 | |
Other Financial Statement Details Disclosure [Abstract] | |
Other Financial Statement Details | Note 5. Other Financial Statement Details Property and Equipment, Net Property and equipment are summarized in the following table (in thousands). December 31, 2019 December 31, 2018 Computer hardware $ 52 $ 67 Computer software — 2 Furniture and fixtures 1 23 Leasehold improvements — 13 53 105 Less accumulated depreciation and amortization (31 ) (93 ) Total $ 22 $ 12 Depreciation expense was approximately $11,000 and $19,000 for the years ended December 31, 2019 and December 31, 2018, respectively. Intangible Assets, Net Intangible assets consist of the following (in thousands). December 31, 2019 December 31, 2018 Amount Accumulated Amortization Net Amount Amount Accumulated Amortization Net Amount Patents and merger costs $ 22,003 $ (5,478 ) $ 16,525 $ 22,003 $ (3,534 ) $ 18,469 Total $ 22,003 $ (5,478 ) $ 16,525 $ 22,003 $ (3,534 ) $ 18,469 Future amortization expense for intangible assets over their remaining useful lives is as follows (in thousands). Year ending December 31 Patents and trademarks 2020 $ 1,944 2021 1,944 2022 1,944 2023 1,944 2024 1,944 2025 and thereafter 6,805 Total $ 16,525 Amortization expense was $1.9 million for the year ended December 31, 2019 and 2018. |
Warrant Liabilities
Warrant Liabilities | 12 Months Ended |
Dec. 31, 2019 | |
Text Block [Abstract] | |
Warrant Liabilities | Note 6. Warrant Liabilities The Company has issued multiple warrant series, of which the Series A Warrants, Series C Warrants, the 2017 PIPE Warrants and the 2018 PIPE Warrants (the “Warrants”) are considered liabilities pursuant to the guidance established by ASC 815 Derivatives and Hedging. Accounting Treatment The Company accounts for the Warrants in accordance with the guidance in ASC 815 The Company classified the Warrants as long-term liabilities at their fair value and will re-measure the warrants at each balance sheet date until they are exercised or expire. Any change in the fair value is recognized as other income (expense) in the Company’s consolidated statements of operations. Series A Warrants The Company issued 489,921 Series A Warrants to purchase shares of its common stock at an exercise price of $32.50 per share in connection with the unit offering offered in the Company’s initial public offering, or the IPO, in November 2014. The Series A Warrants were exercisable prior to the expiration of the five-year term on November 12, 2019. Upon the completion of the IPO, the Series A Warrants started trading on the NASDAQ under the symbol SLNOW. As the Series A Warrants are publicly traded, the Company used the closing price on the measurement date to determine the fair value of the Series A Warrants. The Series AWarrants contain a fundamental transactions provision that permitted their settlement in cash at fair value at the option of the holder upon the occurrence of a change in control. Such change in control events include tender offers or hostile takeovers, which are not within the sole control of the Company as the issuer of these warrants. Accordingly, the Warrants were considered to have a cash settlement feature that precludes their classification as equity instruments. Settlement at fair value upon the occurrence of a fundamental transaction would be computed using the Black Scholes Option Pricing Model, which approximates the binomial lattice model. Since their issuance, a total of 4,800 Series A Warrants have been exercised. On November 12, 2019, the remaining Series A Warrants expired. The decrease in fair value of approximately $49,000 from December 31, 2018 was recorded as other income (expense) in the consolidated statements of operations. Series C Warrants On March 5, 2015, the Company entered into separate agreements with certain Series B Warrant holders, who agreed to exercise their Series B Warrants to purchase an aggregate of 117,902 shares of the Company’s common stock at an exercise price of $32.50 per share, resulting in the de-recognition of $6.7 million of the previously issued Series B Warrant liability and gross proceeds to the Company of $3.8 million based on the exercise price of the Series B Warrants. In April 2015, the Company issued a tender offer to the remaining holders of Series B Warrants to induce the holders to cash exercise the outstanding Series B Warrants in exchange for new Series C Warrants with an exercise price of $31.25 per share that expire on March 5, 2020. The tender offer was extended to Series B Warrant holders under a registration statement filed with the SEC on Form S-4, which was declared effective on June 25, 2015 and expired on July 24, 2015. During July 2015, certain Series B Warrant holder(s) tendered their Series B Warrants under the tender offer, which resulted in the issuance of 181 shares of the Company’s common stock, the issuance of 181 Series C Warrants and proceeds to the Company of approximately $6,000. In connection with this exercise of the Series B Warrants, the Company issued to each investor who exercised Series B Warrants, new Series C Warrants for the number of shares of the Company’s common stock underlying the Series B Warrants that were exercised. Each Series C Warrant is exercisable at $31.25 per share and will expire on March 5, 2020. The Series C Warrants contract further provides for the payment of liquidated damages at an amount per month equal to 1% of the aggregate volume weighted average price, or VWAP, of the shares into which each Warrant is convertible into in the event that the Company is unable to maintain the effectiveness of a registration statement as described herein. The Company evaluated the registration payment arrangement stipulated in the terms of these securities and determined that it is probable that the Company will maintain an effective registration statement and has therefore not allocated any portion of the proceeds related to the warrant financings to the registration payment arrangement. The Warrants also contain a fundamental transactions provision that permits their settlement in cash at fair value at the option of the holder upon the occurrence of a change in control. Such change in control events include tender offers or hostile takeovers, which are not within the sole control of the Company as the issuer of these warrants. Accordingly, the Warrants are considered to have a cash settlement feature that precludes their classification as equity instruments. Settlement at fair value upon the occurrence of a fundamental transaction would be computed using the Black Scholes Option Pricing Model, which approximates the binomial lattice model. The Series C Warrants are exercisable into 118,083 shares of the Company’s common stock. As of December 31, 2019, the fair value of the Series C Warrants was determined to be zero, consistent with the value as of December 31, 2018. The Company has calculated the fair value of the Series C Warrants using a Black-Scholes pricing model. The Black-Scholes pricing model requires the input of highly subjective assumptions including the expected stock price volatility. The Company used the following inputs. December 31, 2019 December 31, 2018 Volatility 90 % 90 % Contractual term (years) 0.17 1.17 Expected dividend yield — % — % Risk-free rate 1.52 % 2.60 % Warrants Issued as Part of the Units in the 2017 PIPE Offering The 2017 PIPE Warrants were issued on December 15, 2017 in the 2017 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2017 PIPE Offering, and entitle the holders to purchase 6,024,425 shares of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2017 PIPE Warrants and terminating at the earlier of December 15, 2020 or 30 days following positive Phase III results for the DCCR tablet in PWS. The exercise price and number of shares of common stock issuable upon exercise of the 2017 PIPE Warrants may be adjusted in certain circumstances, including in the event of a stock split, stock dividend, extraordinary dividend, or recapitalization, reorganization, merger or consolidation. However, the exercise price of the 2017 PIPE Warrants will not be reduced below $1.72. In the event of a change of control of the Company, the holders of unexercised warrants may present their unexercised warrants to the Company, or its successor, to be purchased by the Company, or its successor, in an amount equal to the per share value determined by the Black Scholes methodology. As of December 31, 2019, the fair value of the 2017 PIPE Warrants was estimated at $10.8 million. The increase in the fair value of the liability for the 2017 PIPE Warrants of $6.3 million during the year ended December 31, 2019 was recorded as other expense in the consolidated statements of operations. The Company has calculated the fair value of the 2017 PIPE Warrants using a Monte Carlo simulation of a geometric Brownian motion model. The Monte Carlo simulation pricing model requires the input of highly subjective assumptions including the expected stock price volatility. The following summarizes certain key assumptions used in estimating the fair values. December 31, 2019 December 31, 2018 Volatility 99 % 75 % Contractual term (years) 1.0 2.0 Expected dividend yield — % — % Risk-free rate 1.60 % 2.51 % Warrants Issued as Part of the Units in the 2018 PIPE Offering The 2018 PIPE Warrants were issued on December 19, 2018 in the 2018 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2018 PIPE Offering, and entitle the holders to purchase 513,617 shares of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2018 PIPE Warrants and terminating on December 21, 2023. The exercise price and number of shares of common stock issuable upon exercise of the 2018 PIPE Warrants may be adjusted in certain circumstances, including in the event of a stock split, stock dividend, extraordinary dividend, or recapitalization, reorganization, merger or consolidation. However, the exercise price of the 2018 PIPE Warrants will not be reduced below $2.00. In the event of a change of control of the Company, the holders of unexercised warrants may present their unexercised warrants to the Company, or its successor, to be purchased by the Company, or its successor, in an amount equal to the per share value determined by the Black Scholes methodology. As of December 31, 2019, the fair value of the 2018 PIPE Warrants was estimated at $1.4 million. The approximate $754,000 increase in the fair value of the liability for the 2018 PIPE Warrants during the year ended December 31, 2019 was recorded as other expense in the consolidated statements of operations. The Company has calculated the fair value of the 2018 PIPE Warrants using a Monte Carlo simulation of a geometric Brownian motion model. The Monte Carlo simulation pricing model requires the input of highly subjective assumptions including the expected stock price volatility. The following summarizes certain key assumptions used in estimating the fair values. December 31, 2019 December 31, 2018 Volatility 99 % 75 % Contractual term (years) 4.0 5.0 Expected dividend yield — % — % Risk-free rate 1.56 % 2.51 % The Monte Carlo simulation of a geometric Brownian motion model requires the use of highly subjective assumptions to estimate the fair value of stock-based awards. These assumptions include the following estimates. • Volatility: The Company calculates the estimated volatility rate based on the volatilities of common stock of comparable companies in its industry together with the volatility of its own stock. • Contractual term: The expected life of the warrants, which is based on the contractual term of the warrants. • Expected dividend yield: The Company has never declared or paid any cash dividends and does not currently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero. • Risk-free rate: The risk-free interest rate is based on the U.S. Treasury rate for similar periods as those of expected volatility. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 7. Leases Leases The Company adopted ASC 842: Leases, as of January 1, 2019, using the modified retrospective method as described in Note 3, without adjusting prior comparative periods. The Company determines whether an arrangement is a lease at inception. Specifically, it considers whether it controls the underlying asset and has the right to obtain substantially all the economic benefits or outputs from the asset. If the contractual arrangement contains a lease, the Company then determines the classification of the lease, operating or finance, using the classification criteria described in ASC 842. The Company has elected not to separate lease components from non-lease components, such as common area maintenance charges, and instead accounts for the lease and non-lease components as a single component. The Company’s previous operating lease for its headquarters facility office space in Redwood City, California, terminated in August 2019, along with the related subleases. One of the subleases was with Capnia, of which the Company was a joint owner until September 2019. See note 9 for further information. Sublease income received from Capnia during the year ended December 31, 2019 was approximately $65,000. In July 2019, the Company executed a non-cancellable lease agreement for 6,368 square feet of new space in Redwood City, California, which began in September 2019 and expires in May 2021. The lease also provides the Company with the right to use office furniture in the space and allows the purchase of this furniture at the end of the lease term for $1. The lease agreement requires monthly lease payments of approximately $29,000 beginning in November of 2019, with an increase to approximately $30,000 per month in September of 2020. The Company has accounted for the new lease as an operating lease for the office space and a finance lease for the office furniture, based on their relative standalone prices. As of December 31, 2019, the Company’s operating lease right-of-use assets and finance lease right-of-use assets were approximately $398,000 and $24,000, respectively. The Company’s current operating lease liabilities were approximately $305,000 as of December 31, 2019. Each of these amounts appears as a separate line within the Company’s consolidated balance sheet. The Company’s current finance lease liabilities were approximately $17,000 as of December 31, 2019 and are included in other current liabilities on the consolidated balance sheet. As of December 31, 2019 the Company’s long-term operating lease liabilities were approximately $139,000 and the long-term finance lease liabilities were approximately $8,000, both of which are included in other long-term liabilities on the consolidated balance sheet. The components of lease expense during the year ended December 31, 2019 were as follows (in thousands): Operating lease cost: Operating lease cost $ 418 Sublease income (173 ) Total operating lease cost $ 245 Finance lease cost: Amortization of right-of-use assets $ 3 Interest on lease liabilities 1 Total finance lease cost $ 4 For the year ended December 31, 2018, rent expense was approximately $323,000, net of sublease income of approximately $277,000. Supplemental cash flow information related to leases was as follows for the year ended December 31, 2019 (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 219 Operating cash flows from finance leases $ 1 Financing cash flows from finance leases $ 2 Right-of use assets obtained in exchange for lease obligations (noncash): Operating leases $ 484 Finance leases $ 27 The following is a schedule by year of future maturities of the Company’s lease liabilities as of December 31, 2019 (in thousands): Operating Leases Finances Lease 2020 $ 336 $ 19 2021 143 8 Total lease payments 479 27 Less interest (34 ) (2 ) Total $ 445 $ 25 The weighted-average remaining lease term and discount rate related to the Company’s lease liabilities as of December 31, 2019 were 1.4 years and 10%, respectively, for both the operating leases and finance leases. The Company lease discount rates are based on estimates of its incremental borrowing rate, as the discount rates implicit in the Company’s leases cannot be readily determined. As the Company does not have any outstanding debt the Company estimates the incremental borrowing rate based on its estimated credit rating and available market information. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and 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. |
CoSense Joint Venture Agreement
CoSense Joint Venture Agreement and Discontinued Operations | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations And Disposal Groups [Abstract] | |
CoSense Joint Venture Agreement and Discontinued Operations | Note 9. CoSense Joint Venture Agreement and Discontinued Operations In December 2017, the Company entered into a joint venture with OptAsia Healthcare Limited, or OAHL, with respect to its CoSense product by agreeing to sell shares of Capnia, its then wholly-owned subsidiary, to OAHL. CoSense was Soleno’s first Sensalyze Technology Platform product to receive 510(k) clearances from the FDA and CE Mark certification. The Company’s entry into the joint venture resulted from a comprehensive review of strategic alternatives for its legacy products and product candidates following its transition to a primarily therapeutic drug product company. The terms of the Joint Venture Agreement provide that OAHL would invest up to a total of $2.2 million in Capnia’s common shares on an incremental quarterly basis commencing in December 2017. OAHL was also responsible for funding a portion of the Capnia operations. The Joint Venture Agreement provided that Capnia would issue shares of common stock to OAHL based on a negotiated price of $1.00 per share when the cumulative investment made by OAHL equaled or exceeded $1.2 million. For financial reporting purposes, Capnia’s assets, liabilities and results of operations had historically been consolidated with those of the Company. During October 2018, the Company and OAHL determined and agreed that the cumulative investment made by OAHL exceeded $1.2 million during the quarter ended September 30, 2018. Accordingly, on October 16, 2018, Capnia issued 1,690,322 shares of its common stock to OAHL, representing 53% of its outstanding shares. After the share issuance the Company no longer held a controlling interest in Capnia and resulted in the deconsolidation of Capnia’s financial statements from those of the Company and a $2.0 million gain was recognized in the fourth quarter of 2018 as a result of the deconsolidation. Of this amount, $1.2 million related to the remeasurement of the Company's retained interest in the joint venture to fair value which was measured based on the negotiated price of $1.00 per share for Soleno’s remaining ownership of 1,480,000 shares less a 23% discount for lack of control over Capnia. The total gain was included in other income from continuing operations on the Company's consolidated statements of operations. The remaining 47% investment in Capnia was classified as an equity method investment and presented as a Minority interest investment in former subsidiary in the consolidated balance sheet. During September 2019, the Company sold its remaining 47% investment in Capnia to Sinon for a total purchase price of $500,000. As of the sale date, the Company had a minority interest investment in former subsidiary balance of approximately $467,000, after recording approximately $511,000 for its share of Capnia’s losses during 2019 up until the date of sale, which is included in the line titled “Loss from minority interest investment” in the Company’s consolidated statements of operations. A gain of approximately $33,000 was recognized upon the sale and is presented, together with the Company’s share of Capnia’s net losses during the period, in the consolidated statements of operations in the line titled “Loss from minority interest investment”. Following the transaction, the Company has no interest remaining in Capnia and the previous joint venture agreement with OAHL has been terminated. There were no assets or liabilities held for sale as of December 31, 2019, or December 31, 2018, after the deconsolidation of Capnia in October 2018, and no discontinued operations during the year ended December 31, 2019. The components of the Statements of Operations presented as Discontinued Operations during the year ended December 31, 2018 follow (in thousands). Product revenue $ 62 Cost of product revenue 32 Gross profit 30 Expenses Research and development 1,106 Sales and marketing 25 General and administrative 393 Total expenses 1,524 Operating loss (1,494 ) Net loss from discontinued operations $ (1,494 ) Stock-based compensation expense of approximately $76,000 and was classified in discontinued operations for the years ended December 31, 2018. There were no discontinued operations during the year ended December 31, 2019. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | Note 10. Stockholders’ Equity Convertible Preferred Stock The Company is authorized to issue 10,000,000 shares of Preferred Stock. The Company had issued a total of 13,780 shares of Series B Convertible Preferred Stock pursuant to the Securities Purchase Agreement entered into on June 29, 2016 with Sabby Management, LLC. As of December 31, 2019, there were no shares of Series B Convertible Preferred Stock outstanding as all such previously issued shares had been converted to common shares. Common Stock On March 7, 2017, the Company completed the Merger with Essentialis and issued 3,783,388 shares of common stock to shareholders of Essentialis. Pursuant to the terms of the Merger Agreement, the Company held back shares of common stock as partial recourse to satisfy indemnification claims. Effective March 7, 2018, on the one-year anniversary of the closing of the merger, the Company issued 180,667 shares for the previously held back amount. In the second quarter of 2018 there were 903,367 additional shares of common stock issued upon the achievement of a development milestone. In total, 4,867,422 shares of common stock were issued to Essentialis stockholders. Additionally, upon the achievement of certain commercial milestones associated with the sale of Essentialis’ product in accordance with the terms of the Merger Agreement, the Company is obligated to make cash earnout payments of up to a maximum of $30.0 million to Essentialis stockholders. The merger consideration described above will be reduced by any such shares of common stock issuable, or cash earnout payments payable, to Essentialis’ management carve-out plan participants and other service providers of Essentialis, in each case, in accordance with the terms of the Merger Agreement. On January 27, 2017, the Company entered into the 2017 Aspire Purchase Agreement with Aspire Capital, which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital was committed to purchase up to an aggregate of $17.0 million in value of shares of the Company’s common stock over the 30-month term of the purchase agreement. Additionally, on the date of the closing of the financing, as defined in the Merger Agreement, the Company issued to Aspire Capital, and Aspire Capital purchased from the Company an aggregate of $2.0 million of the Company’s common stock. On December 19, 2018, the Company entered into a Securities Purchase Agreement with certain purchasers, pursuant to which the Company sold and issued 10,272,375 units at a price per unit of $1.61, for aggregate gross proceeds of $16.5 million. Each unit consisted of one share of the Company’s common stock and a warrant to purchase 0.05 shares of the Company’s common stock at an exercise price of $2.00 per share, for an aggregate of 10,272,375 shares of common stock and corresponding warrants to purchase an aggregate of 513,617 shares of common stock, together with the shares of common stock are referred to as the 2018 Resale Shares. The Company also granted certain registration rights to these stockholders, pursuant to which, among other things, the Company prepared and filed a registration statement with the SEC to register for resale the 2018 Resale Shares. The registration statement was declared effective in April 2019. On October 25, 2019, the Company sold 12,841,667 shares of its common stock, including 1,675,000 shares sold upon full exercise of the underwriters’ option to purchase additional shares, at a public offering price of $1.20 per share. The net proceeds of the offering were $14.5 million, after deducting the underwriting discount and other offering expenses. Equity Incentive Plans The Company has the 2014 Equity Incentive Plan, or the 2014 Plan. Under the 2014 Plan the Company may grant stock options, stock appreciation rights, restricted stock, restricted stock units, performance units or performance shares to employees, directors, advisors, and consultants. Options granted under the 2014 Plan may be incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees, including officers and directors. The Board of Directors has the authority to determine to whom stock 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 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. The vesting period is normally monthly over a period of 4 years from the vesting date. The contractual 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 terms and conditions governing restricted stock units is at the sole discretion of the Board. As of December 31, 2019, a total of 615,760 shares are available for future grant under the 2014 Plan. The Company recognized stock-based compensation expense related to options and restricted stock units granted to employees, directors and consultants for the years ended December 31, 2019 and 2018 of approximately $825,000 and $1.3 million, respectively, of which approximately $76,000 was recorded in discontinued operations in 2018. There were no discontinued operations during 2019. 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 during the year ended December 31, 2019 and December 31, 2018. Stock compensation expense was allocated between departments in continuing operations as follows (in thousands). Year ended December 31, 2019 December 31, 2018 Research and development $ 158 $ 205 General and administrative 667 982 Total $ 825 $ 1,187 Stock Options The Company granted options to purchase 658,285 and 756,086 of the Company’s common stock in 2019 and 2018, respectively. 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. Year Ended December 31, 2019 December 31, 2018 Expected life (years) 5.5-6.1 5.5-6.0 Risk-free interest rate 1.6%-2.6% 2.7%-2.8% Volatility 70%-75% 70%-71% Dividend rate — % — % The Black-Scholes option-pricing model requires the use of highly subjective assumptions to estimate the fair value of stock-based awards. These assumptions include the following estimates: • Expected life: 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 does not believe it is able to rely on historical exercise and post-vesting termination activity to provide accurate data for estimating the expected term for use in estimating the fair value-based measurement of stock options. Therefore, it has opted to use the “simplified method” for estimating the expected term of options. • Risk-free interest rate: The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to liquidity. • Volatility: The estimated volatility rate based on the volatilities of the Company’s common stock together with comparable companies in the Company’s industry. • Dividend rate: The Company has never declared or paid any cash dividends and does not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company used an expected dividend yield of zero The following table summarizes stock option and restricted stock unit transactions for the years ended December 31, 2019 and 2018 as issued under the 2014 Plan. Shares Available Number of Options Weighted- Average Exercise Price per Weighted Average Remaining Contractual Term for Grant Outstanding Share (in years) Balance at January 1, 2018 1,571,212 1,026,987 $ 9.99 7.94 Additional shares authorized 223,742 Shares allocated to grants of restricted stock units (245,588 ) Options granted (756,086 ) 756,086 $ 1.68 Options exercised — — — — Options canceled/forfeited 115,920 (115,920 ) $ 12.72 — Balance at December 31, 2018 909,200 1,667,153 $ 6.03 8.27 Additional shares authorized 223,742 Shares allocated to grants of restricted stock units (61,218 ) Options granted (658,285 ) 658,285 $ 1.77 Options exercised — — — — Options canceled/forfeited 202,321 (202,321 ) $ 6.99 — Balance at December 31, 2019 615,760 2,123,117 $ 4.62 7.87 Options vested at December 31, 2019 1,153,457 $ 6.91 7.24 Options vested and expected to vest at December 31, 2019 2,123,117 $ 4.62 7.87 The weighted-average grant date fair value of employee options granted was $1.14 and $1.08 per share for the year ended December 31, 2019 and December 31, 2018, respectively. At December 31, 2019 total unrecognized employee stock-based compensation was $1.1 million, which is expected to be recognized over the weighted-average remaining vesting period of 2.4 years. As of December 31, 2019, the outstanding stock options had an intrinsic value of $1.6 million. Restricted Stock Units There were 61,218 and 245,588 restricted stock units granted by the Company during the year ended December 31, 2019 and December 31, 2018, respectively, to employees, directors and consultants. The shares were 100% vested on the grant date and were valued based on the Company’s common stock price on the grant date, with approximately $132,000 and $434,000 of related stock-based compensation expense recognized during the year ended December 31, 2019 and December 31, 2018, respectively. 2014 Employee Stock Purchase Plan The Company’s board of directors and stockholders have adopted the 2014 Employee Stock Purchase Plan, or the ESPP. The ESPP has become effective, and the board of directors will implement commencement of offers thereunder in its discretion. A total of 27,967 shares of the Company’s common stock has been made available for sale under the ESPP. In addition, the ESPP provides for annual increases in the number of shares available for issuance under the plan on the first day of each year beginning in the year following the initial date that the board of directors authorizes commencement, equal to the least of: • 1.0% of the outstanding shares of the Company’s common stock on the first day of such year; • 55,936 shares; or • such amount as determined by the board of directors. As of December 31, 2019, there were no purchases by employees under this plan. Series D Warrants The Company issued 256,064 Series D Warrants in October 2015, which are exercisable into 586,182 shares of the Company’s common stock, with an exercise price of $12.30 and a term of five years expiring on October 15, 2020. The Company’s Series D Warrants contain standard anti-dilution provisions for stock dividends, stock splits, subdivisions, combinations and similar types of recapitalization events. They also contain a cashless exercise feature that provides for their net share settlement at the option of the holder in the event that there is no effective registration statement covering the continuous offer and sale of the warrants and underlying shares. The Company is required to comply with certain requirements to cause or maintain the effectiveness of a registration statement for the offer and sale of these securities. The Series D Warrant agreement further provides for the payment of liquidated damages at an amount per month equal to 1% of the aggregate VWAP of the shares into which each Series D Warrant is convertible into in the event that the Company is unable to maintain the effectiveness of a registration statement as described herein. The Company evaluated the registration payment arrangement stipulated in the terms of this securities agreement and determined that it is probable that the Company will maintain an effective registration statement and has therefore not allocated any portion of the proceeds to the registration payment arrangement. The Series D Warrant agreement specifically provides that under no circumstances will the Company be required to settle any Series D Warrant exercise for cash, whether by net settlement or otherwise. Accounting Treatment The Company accounts for the Series D Warrants in accordance with the guidance in ASC 815 Derivatives and Hedging. Other Common Stock Warrants As of December 31, 2019, the Company had 102,070 common stock warrants outstanding from the 2010/2012 convertible notes, with an exercise price of $24.35 and a term of 10 years expiring in November 2024. The Company also had outstanding 16,500 common stock warrants issued to the underwriter in the Company’s IPO, with an exercise price of $35.70 and a term of 10 years, expiring in November 2024. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes The geographical distribution of loss before income taxes are summarized below (in thousands). December 31, 2019 2018 United States $ (30,729 ) $ (11,830 ) Foreign (45 ) (11 ) Loss before income taxes $ (30,774 ) $ (11,841 ) Loss resulting from discontinued operations $ — $ (1,494 ) Taxes allocated to discontinued operations $ — $ — The provision for income tax benefit differs from the amount estimated by applying the statutory federal income tax rate to the operating loss from continuing operations due to the following (in thousands). December 31, 2019 2018 Tax on the loss before income tax expense computed at the federal statutory rate $ (6,463 ) $ (2,486 ) State tax (benefit) at statutory rate, net of federal benefit (1,691 ) (187 ) Foreign rate differential 10 2 Change in valuation allowance 6,696 4,143 Change in research and development credits (200 ) (99 ) Stock based compensation—ISOs 149 143 Change in fair value of warrants 1,461 (110 ) Change in fair value of contingent consideration 61 119 Gain on deconsolidation — (4 ) Disallowance of loss on discontinued operations — (426 ) Change in net operating loss true up (725 ) (590 ) Change in state rate true up 701 — Change in temporary difference true up — (456 ) Other 1 (49 ) Provision for income tax benefit $ — $ — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31, 2019 and 2018 (in thousands). December 31, 2019 2018 Non-current deferred tax assets: Federal and state net operating loss carryforwards $ 35,091 $ 28,532 Research and other credits 2,349 2,037 Reserves and accruals 77 52 Assets held for sale — 15 Fixed assets 71 67 Capital loss carryover 1,115 425 Stock based compensation 85 70 Lease liability 131 — Other deferred tax assets 196 542 Gross non-current deferred tax assets 39,115 31,740 Intangible assets (4,623 ) (4,062 ) Right-of-use assets (118 ) — Total non-current deferred tax liabilities (4,741 ) (4,062 ) Total deferred tax assets 34,374 27,678 Valuation allowance (34,374 ) (27,678 ) Net deferred tax assets $ — $ — The Company has recorded a full valuation allowance against its net deferred tax assets due to the uncertainty as to whether such assets will be realized. The valuation allowance increased by $6.7 million from December 31, 2018 to December 31, 2019 primarily due to the generation of current year net operating losses, capital losses and research and development credits claimed. As of December 31, 2019, the Company had $150.5 million of federal, $82.5 million of state and approximately $299,000 of foreign net operating losses available to offset future taxable income. The federal net operating loss carryforwards begin to expire in 2020, the federal net operating loss carryforwards of $31.7 million may be carried forward indefinitely, the state net operating loss carryforwards will begin to expire in 2028 and the foreign net operating loss carryforward can be carried forward indefinitely, if not utilized. The Company adjusted its state net operating loss carryforward by $10.4 million for the year ended December 31, 2018. As of December 31, 2019, the Company also had $1.4 million of federal and approximately $916,000 of state research and development credit carryforwards. The federal research and development credit carryforward begin to expire in 2024 and the state research and development credit can be carried forward indefinitely. Utilization of the net operating loss and tax credit carry forwards are subject to an annual limitation due to the ownership percentage change limitations provided by the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of the net operating loss before utilization. The Company completed Section 382 analysis through December 2016 and determined that an ownership change, as defined under Section 382 of the Internal Revenue Code, occurred in June 2016. The Company’s tax attributes are subject to an annual limitation of $0.5 million per year for federal purposes. For years ended after December 31, 2016, the utilization of net operating losses and tax credit carryforwards are subject to further limitation in the event an additional ownership change were to occur for tax purposes. The Company has not completed an updated analysis of whether there was an ownership change, as defined under Section 382 of the Internal Revenue Code, resulting from the issuance of new shares during 2018 through 2019 and, as such, is not able at this time to determine the impact on the net operating loss (“NOL”) carryforwards, if any, as of the date of these consolidated financial statements. United States taxes and foreign withholding taxes have not been provided on undistributed earnings for certain non-United States subsidiaries as of December 31, 2019, as the earnings, if any, are intended to be indefinitely reinvested. The following tables summarize the activities of gross unrecognized tax benefits (in thousands). December 31, 2019 2018 Beginning balance $ 964 $ 854 Increase related to prior year tax positions 7 23 Decrease related to prior year tax positions (4 ) — Increase related to current year tax positions 144 87 Ending balance $ 1,111 $ 964 The Company uses the “more likely than not” criterion for recognizing the tax benefit of uncertain tax positions and to establish measurement criteria for income tax benefits. The Company has determined it has $1.1 million of unrecognized assets and liabilities related to uncertain tax positions as of December 31, 2019. Changes in the unrecognized tax benefits within the next 12 months are expected to be similar to prior years and should not significantly increase or decrease. In the event the Company should need to recognize interest and penalties related to unrecognized tax liabilities, this amount will be recorded as a component of other expense. There were no unrecognized tax benefits that would impact the effective tax rate as of December 31, 2019 and December 31, 2018. As of December 31, 2019, unrecognized tax benefits of $1.1 million would be offset by a change in valuation allowance. The Company files income tax returns in the U.S. federal jurisdiction, certain state jurisdictions and United Kingdom. In the normal course of business, the Company is subject to examination by federal, state, local and foreign jurisdictions, where applicable. In the U.S federal jurisdiction, tax years 1999 forward remain open to examination, in the state tax jurisdiction, years 2008 forward remain open to examination and in the foreign jurisdiction, years 2015 forward remain open to examination. The Company is currently not under audit by any federal, state, local or foreign jurisdiction. The Jobs Act also establishes global intangible low-taxed income, or “GILTI,” provisions that impose a tax on foreign income in excess of a deemed return on intangible assets of foreign corporations. The Company’s accounting policy for the income tax effects of GILTI will be to recognize those taxes as expenses in the period incurred. In 2019, the Company’s foreign subsidiary realized a tested loss for the period and therefore, the Company did not have a GILTI inclusion for the year. |
Net loss per share
Net loss per share | 12 Months Ended |
Dec. 31, 2019 | |
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 exercise of common stock warrants and options. For the years ended December 31, 2019 and 2018, 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 in each of those periods. 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). As of December 31, 2019 2018 Warrants issued to 2010/2012 convertible note holders to purchase common stock 102,070 102,070 Options to purchase common stock 2,123,117 1,667,153 Warrants issued in 2009 to purchase common stock — 1,851 Warrants issued to underwriter to purchase common stock 16,500 16,500 Series A warrants to purchase common stock — 485,121 Series C warrants to purchase common stock 118,083 118,083 Series D warrants to purchase common stock 586,162 586,162 2017 PIPE warrants 6,024,425 6,024,425 2018 PIPE warrants 513,617 513,617 Total 9,483,974 9,514,982 |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2019 | |
Compensation And Retirement Disclosure [Abstract] | |
Defined Contribution Plan | Note 13. Defined Contribution Plan The Company sponsors a 401(k) Plan, which stipulates that eligible employees can elect to contribute to the 401(k) Plan, subject to certain limitations of eligible compensation. The Company may match employee contributions in amounts to be determined at the Company’s sole discretion. During the year ended December 31, 2019 the Company made matching contributions of approximately $37,000 to the 401(k) Plan. No contributions were made during the year ended December 31, 2018. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14. Subsequent Events The Company has evaluated its subsequent events from December 31, 2019 through the date these consolidated financial statements were issued and has determined that there are no subsequent events requiring disclosure in these consolidated financial statements. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the applicable rules and regulations of the Securities and Exchange Commission, or SEC. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Certain amounts from prior periods have been reclassified to conform to the current period presentation, including certain current liabilities within the Consolidated Balance Sheets and Consolidated Statements of Cash Flows, certain immaterial amounts within the Consolidated Statements of Operations, and the presentation of restricted stock units and the related expense within the Consolidated Statements of Stockholders’ Equity and Consolidated Statements of Cash Flows. |
Use of Estimates | Use of Estimates The preparation of consolidated 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, the valuation of financial instruments, stock-based compensation, value and life of acquired intangibles, and the valuation of contingent liabilities for the purchase price of assets obtained through acquisition. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents at one U.S. commercial bank. Cash and cash equivalents deposited with this commercial bank exceeded the Federal Deposit Insurance Corporation insurable limit at December 31, 2019 and 2018. The Company expects the maintenance of balances in excess of insurable limits will continue. |
Segments | Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting, making operating decisions, and assessing financial performance. All long-lived assets are maintained in the United States of America. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments, including its money market fund, 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 the U.K. and include deposits in a money market fund which was unrestricted as to withdrawal or use. |
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. |
Intangible Assets | Intangible Assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives of 11 years. The useful life of the intangible asset is evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining useful life. |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost net of accumulated depreciation and amortization calculated 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 remaining 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. |
Equity Method Investment | Equity Method Investment Equity method investments are equity securities in investees not controlled by the Company, but over which the Company has the ability to exercise significant influence. The Company’s equity method investment is measured at fair value minus impairment, if any, plus or minus the Company’s share of equity method investee income or loss. The Company’s equity method investment in Capnia, Inc. is classified as Minority interest investment in former subsidiary in the consolidated balance sheet as of December 31, 2018 and was initially measured at fair value. (See Note 9.) The Company sold its equity method investment in Capnia in September 2019. |
Long-Lived Assets | Long-Lived Assets The Company reviews its long-lived assets for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount and the fair value of the assets. |
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. Certain research and development expenses are reported as discontinued operations. (See Note 9.) |
Change in Fair Value of Contingent Consideration | Change in fair value of contingent consideration The Company recorded the value of contingent future consideration to be paid for the acquisition of Essentialis as a liability in March 2017 at the date of the acquisition. The changes in value of the liability for the contingent consideration since the acquisition date are recorded as operating expense in the consolidated statements of operations. |
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. 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. The loss from discontinued operations is reported net of the related effect for income taxes in the statements of operations. |
Convertible Preferred Stock and Other Hybrid Instruments | Convertible Preferred Stock and other Hybrid Instruments The Company’s convertible preferred stock was classified as permanent equity on its consolidated balance sheet in accordance with authoritative guidance for the classification and measurement of hybrid securities and distinguishing liability from equity instruments. The preferred stock is not redeemable at the option of the holder. Further, the Company evaluated its Series B Convertible Preferred Stock and determined that it is considered an equity host under ASC 815, Derivatives and Hedging |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between equity and liabilities is required. The Company determined that certain freestanding derivatives, which principally consist of Series A, Series C, the 2017 PIPE Warrants and 2018 PIPE Warrants, do not satisfy the criteria for classification as equity instruments due to the existence of certain cash settlement features that are not within the sole control of the Company or variable settlement provision that cause them to not be indexed to the Company’s own stock. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation costs related to stock options and restricted stock units granted to employees, nonemployees and directors are measured at the date of grant based on the estimated fair value of the award. For restricted stock units this fair value is based on the Company’s common stock price on the grant date. The Company estimates the grant date fair value of stock options, and the resulting stock-based compensation expense, using the Black-Scholes option-pricing model. The grant date fair value of stock-based awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period of the award. Stock options generally vest over four years. The Black-Scholes option-pricing model requires the use of highly subjective assumptions to estimate the fair value of stock-based awards. If we had made different assumptions, our stock-based compensation expense, net loss and net loss per share of common stock could have been significantly different. These assumptions include: • Expected volatility: The Company calculates the estimated volatility rate based the volatility of its common stock together with comparable companies in its industry. • Expected term: The Company does not believe it is able to rely on its historical exercise and post-vesting termination activity to provide accurate data for estimating the expected term for use in estimating the fair value-based measurement of our options. Therefore, the Company has opted to use the “simplified method” for estimating the expected term of options. • Risk-free rate: The risk-free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected time to liquidity. • Expected divided yield: The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, it used an expected dividend yield of zero. The Company accounts for forfeitures as they occur. |
Recent Accounting Standards | Recent Accounting Standards Recently Adopted Accounting Standards In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 842, Leases. Leases requires lessees to capitalize most lease obligations as right-of-use assets with a corresponding liability on the balance sheet. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. The guidance is effective for all public business entities and certain not-for-profit entities in fiscal years beginning after December 15, 2018, and for all other entities in fiscal years beginning after December 15, 2020. Early adoption is permitted. As the Company was an emerging growth company until December 31, 2019 and elected to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act, it adopted the standard as of January 1, 2019 on December 31, 2019. The Company adopted ASC 842 using the optional modified retrospective method and will not restate comparative periods. The Company has elected to apply the “practical expedient package”, which permits it to not reassess previous conclusions around lease identification, lease classification, and initial direct costs. Further, the Company will make an accounting policy election to exclude leases with terms of twelve months or less from the recognition requirements. The Company did not elect the use of the hindsight practical expedient. As a result of the adoption of the standard on January 1, 2019, the Company recognized lease liabilities based on the present value of the total fixed payments for its leases in the amount of approximately $322,000 and ROU assets of approximately $301,000 on its balance sheet. The adoption of the new standard did not have a material impact on the Company’s Statement of Operations or Cash Flows. In June 2018, the FASB issued ASU 2018-07, “ Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting” In August 2018, SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification Recently Issued Accounting Standards In August 2018, the FASB issued ASU 2018-13, “ Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement”. In December 2019, the FASB issued ASU 2019-12: “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” |
Patents [Member] | |
Intangible Assets | Patent In March 2017, the Company completed the acquisition of Essentialis, Inc., a Delaware corporation, or Essentialis in accordance with the Merger Agreement by and between Soleno Therapeutics and Essentialis dated December 22, 2016. The merger transaction has been accounted for as an asset acquisition under the acquisition method of accounting and accordingly, the value of asset acquired in the amount of $22.0 million was assigned to the identifiable intangible asset relating to the patent for DCCR, which patent expires in June 2028. |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
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 (in thousands). Fair Value Measurements at December 31, 2019 Total Level 1 Level 2 Level 3 Liabilities 2017 PIPE warrant liability $ 10,822 $ — $ — $ 10,822 2018 PIPE warrant liability 1,354 — — 1,354 Essentialis purchase price contingency liability 5,938 — — 5,938 Total common stock warrant and contingent consideration liability $ 18,114 $ - $ — $ 18,114 Fair Value Measurements at December 31, 2018 Total Level 1 Level 2 Level 3 Liabilities Series A warrant liability $ 49 $ 49 $ — $ — 2017 PIPE warrant liability 4,563 — — 4,563 2018 PIPE warrant liability 600 — — 600 Essentialis purchase price contingency liability 5,649 — — 5,649 Total common stock warrant and contingent consideration liability $ 10,861 $ 49 $ - $ 10,812 |
Summary of Changes in Fair Value of Level1 and Level 3 Financial Instruments | The following table sets forth a summary of the changes in the fair value of the Company’s Level 1 and Level 3 warrants, which are treated as liabilities (dollars in thousands). Series A Warrants Series C Warrants 2017 PIPE Warrants 2018 PIPE Warrants Purchase Price Number of Warrants Liability Number of Warrants Liability Number of Warrants Liability Number of Warrants Liability Contingent Liability Balance at January 1, 2019 485,121 $ 49 118,083 $ — 6,024,425 $ 4,563 513,617 $ 600 $ 5,649 Expiration of Series A Warrants (485,121 ) (49 ) — — — — — — — Change in value of Series C Warrants — — — — — — — — Change in value of 2017 PIPE Warrants — — — — — 6,259 — — — Change in value of 2018 PIPE Warrants — — — — — — — 754 — Change in value of contingent liability — — — — — — — — 289 Balance at December 31, 2019 — $ — 118,083 $ — 6,024,425 $ 10,822 513,617 $ 1,354 $ 5,938 |
Other Financial Statement Det_2
Other Financial Statement Details (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Other Financial Statement Details Disclosure [Abstract] | |
Schedule of Property and Equipment | Property and equipment are summarized in the following table (in thousands). December 31, 2019 December 31, 2018 Computer hardware $ 52 $ 67 Computer software — 2 Furniture and fixtures 1 23 Leasehold improvements — 13 53 105 Less accumulated depreciation and amortization (31 ) (93 ) Total $ 22 $ 12 |
Schedule of Intangible Assets | Intangible assets consist of the following (in thousands). December 31, 2019 December 31, 2018 Amount Accumulated Amortization Net Amount Amount Accumulated Amortization Net Amount Patents and merger costs $ 22,003 $ (5,478 ) $ 16,525 $ 22,003 $ (3,534 ) $ 18,469 Total $ 22,003 $ (5,478 ) $ 16,525 $ 22,003 $ (3,534 ) $ 18,469 |
Schedule of Future Amortization Expense | Future amortization expense for intangible assets over their remaining useful lives is as follows (in thousands). Year ending December 31 Patents and trademarks 2020 $ 1,944 2021 1,944 2022 1,944 2023 1,944 2024 1,944 2025 and thereafter 6,805 Total $ 16,525 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Series C Warrant [Member] | |
Fair Value of Convertible Preferred Stock Warrant Liability | The Company used the following inputs. December 31, 2019 December 31, 2018 Volatility 90 % 90 % Contractual term (years) 0.17 1.17 Expected dividend yield — % — % Risk-free rate 1.52 % 2.60 % |
2017 PIPE Warrant Liability [Member] | |
Fair Value of Convertible Preferred Stock Warrant Liability | The following summarizes certain key assumptions used in estimating the fair values. December 31, 2019 December 31, 2018 Volatility 99 % 75 % Contractual term (years) 1.0 2.0 Expected dividend yield — % — % Risk-free rate 1.60 % 2.51 % |
2018 PIPE Warrant Liability [Member] | |
Fair Value of Convertible Preferred Stock Warrant Liability | The following summarizes certain key assumptions used in estimating the fair values. December 31, 2019 December 31, 2018 Volatility 99 % 75 % Contractual term (years) 4.0 5.0 Expected dividend yield — % — % Risk-free rate 1.56 % 2.51 % |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense during the year ended December 31, 2019 were as follows (in thousands): Operating lease cost: Operating lease cost $ 418 Sublease income (173 ) Total operating lease cost $ 245 Finance lease cost: Amortization of right-of-use assets $ 3 Interest on lease liabilities 1 Total finance lease cost $ 4 |
Schedule Of Supplemental Cash Flow Information Related To Leases | Supplemental cash flow information related to leases was as follows for the year ended December 31, 2019 (in thousands): Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 219 Operating cash flows from finance leases $ 1 Financing cash flows from finance leases $ 2 Right-of use assets obtained in exchange for lease obligations (noncash): Operating leases $ 484 Finance leases $ 27 |
Operating Lease and Finance Lease Liability Maturity | The following is a schedule by year of future maturities of the Company’s lease liabilities as of December 31, 2019 (in thousands): Operating Leases Finances Lease 2020 $ 336 $ 19 2021 143 8 Total lease payments 479 27 Less interest (34 ) (2 ) Total $ 445 $ 25 |
CoSense Joint Venture Agreeme_2
CoSense Joint Venture Agreement and Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Components of Discontinued Operations | There were no assets or liabilities held for sale as of December 31, 2019, or December 31, 2018, after the deconsolidation of Capnia in October 2018, and no discontinued operations during the year ended December 31, 2019. The components of the Statements of Operations presented as Discontinued Operations during the year ended December 31, 2018 follow (in thousands). Product revenue $ 62 Cost of product revenue 32 Gross profit 30 Expenses Research and development 1,106 Sales and marketing 25 General and administrative 393 Total expenses 1,524 Operating loss (1,494 ) Net loss from discontinued operations $ (1,494 ) |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Summary of Stock Based Compensation Expense | Stock compensation expense was allocated between departments in continuing operations as follows (in thousands). Year ended December 31, 2019 December 31, 2018 Research and development $ 158 $ 205 General and administrative 667 982 Total $ 825 $ 1,187 |
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. Year Ended December 31, 2019 December 31, 2018 Expected life (years) 5.5-6.1 5.5-6.0 Risk-free interest rate 1.6%-2.6% 2.7%-2.8% Volatility 70%-75% 70%-71% Dividend rate — % — % |
Summary of Stock Option and Restricted Stock Unit Transactions | The following table summarizes stock option and restricted stock unit transactions for the years ended December 31, 2019 and 2018 as issued under the 2014 Plan. Shares Available Number of Options Weighted- Average Exercise Price per Weighted Average Remaining Contractual Term for Grant Outstanding Share (in years) Balance at January 1, 2018 1,571,212 1,026,987 $ 9.99 7.94 Additional shares authorized 223,742 Shares allocated to grants of restricted stock units (245,588 ) Options granted (756,086 ) 756,086 $ 1.68 Options exercised — — — — Options canceled/forfeited 115,920 (115,920 ) $ 12.72 — Balance at December 31, 2018 909,200 1,667,153 $ 6.03 8.27 Additional shares authorized 223,742 Shares allocated to grants of restricted stock units (61,218 ) Options granted (658,285 ) 658,285 $ 1.77 Options exercised — — — — Options canceled/forfeited 202,321 (202,321 ) $ 6.99 — Balance at December 31, 2019 615,760 2,123,117 $ 4.62 7.87 Options vested at December 31, 2019 1,153,457 $ 6.91 7.24 Options vested and expected to vest at December 31, 2019 2,123,117 $ 4.62 7.87 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Geographical Distribution of Loss before Income Taxes | The geographical distribution of loss before income taxes are summarized below (in thousands). December 31, 2019 2018 United States $ (30,729 ) $ (11,830 ) Foreign (45 ) (11 ) Loss before income taxes $ (30,774 ) $ (11,841 ) Loss resulting from discontinued operations $ — $ (1,494 ) Taxes allocated to discontinued operations $ — $ — |
Provision for Income Tax Benefit by Applying Statutory Federal Income Tax Rate to Operating Loss from Continuing Operations | The provision for income tax benefit differs from the amount estimated by applying the statutory federal income tax rate to the operating loss from continuing operations due to the following (in thousands). December 31, 2019 2018 Tax on the loss before income tax expense computed at the federal statutory rate $ (6,463 ) $ (2,486 ) State tax (benefit) at statutory rate, net of federal benefit (1,691 ) (187 ) Foreign rate differential 10 2 Change in valuation allowance 6,696 4,143 Change in research and development credits (200 ) (99 ) Stock based compensation—ISOs 149 143 Change in fair value of warrants 1,461 (110 ) Change in fair value of contingent consideration 61 119 Gain on deconsolidation — (4 ) Disallowance of loss on discontinued operations — (426 ) Change in net operating loss true up (725 ) (590 ) Change in state rate true up 701 — Change in temporary difference true up — (456 ) Other 1 (49 ) Provision for income tax benefit $ — $ — |
Significant Components of Company's Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31, 2019 and 2018 (in thousands). December 31, 2019 2018 Non-current deferred tax assets: Federal and state net operating loss carryforwards $ 35,091 $ 28,532 Research and other credits 2,349 2,037 Reserves and accruals 77 52 Assets held for sale — 15 Fixed assets 71 67 Capital loss carryover 1,115 425 Stock based compensation 85 70 Lease liability 131 — Other deferred tax assets 196 542 Gross non-current deferred tax assets 39,115 31,740 Intangible assets (4,623 ) (4,062 ) Right-of-use assets (118 ) — Total non-current deferred tax liabilities (4,741 ) (4,062 ) Total deferred tax assets 34,374 27,678 Valuation allowance (34,374 ) (27,678 ) Net deferred tax assets $ — $ — |
Summary of Gross Unrecognized Tax Benefits | The following tables summarize the activities of gross unrecognized tax benefits (in thousands). December 31, 2019 2018 Beginning balance $ 964 $ 854 Increase related to prior year tax positions 7 23 Decrease related to prior year tax positions (4 ) — Increase related to current year tax positions 144 87 Ending balance $ 1,111 $ 964 |
Net loss per share (Tables)
Net loss per share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [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). As of December 31, 2019 2018 Warrants issued to 2010/2012 convertible note holders to purchase common stock 102,070 102,070 Options to purchase common stock 2,123,117 1,667,153 Warrants issued in 2009 to purchase common stock — 1,851 Warrants issued to underwriter to purchase common stock 16,500 16,500 Series A warrants to purchase common stock — 485,121 Series C warrants to purchase common stock 118,083 118,083 Series D warrants to purchase common stock 586,162 586,162 2017 PIPE warrants 6,024,425 6,024,425 2018 PIPE warrants 513,617 513,617 Total 9,483,974 9,514,982 |
Going Concern and Management'_2
Going Concern and Management's Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Oct. 25, 2019 | Dec. 31, 2019 | Dec. 31, 2018 |
Liquidity And Managements Plans [Line Items] | |||
Net loss | $ (30,774) | $ (13,335) | |
Accumulated deficit | (157,806) | (127,032) | |
Cash on hand | 20,700 | ||
Net cash used in operating activities | $ (17,375) | $ (11,683) | |
Underwritten Public Offering [Member] | |||
Liquidity And Managements Plans [Line Items] | |||
Number of newly issued | 12,841,667 | ||
Price per unit | $ 1.20 | ||
Net proceeds from shares issued | $ 14,500 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2019USD ($)BankSegment | Dec. 31, 2018 | Jan. 01, 2019USD ($) | |
Schedule Of Significant Accounting Policies [Line Items] | |||
Number of commercial banks | Bank | 1 | ||
Number of operating segments | Segment | 1 | ||
Estimated useful life | 11 years | ||
Expected dividend yield | 0.00% | 0.00% | |
Accounting Standards Update 2016-02 [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Present value of total fixed payments | $ 322,000 | ||
Right-of-use assets recognized | $ 301,000 | ||
Stock Options and Restricted Stock Units [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Vesting period | 4 years | ||
Stock Options [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Vesting period | 4 years | ||
Expected dividend yield | 0.00% | ||
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 | ||
Essentialis, Inc. [Member] | |||
Schedule Of Significant Accounting Policies [Line Items] | |||
Net intangible assets acquired | $ 22,000,000 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Liabilities | ||
Contingent liability for Essentialis purchase price | $ 5,938 | $ 5,649 |
2017 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 10,822 | 4,563 |
2018 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 1,354 | 600 |
Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 49 | |
Fair Value, Measurements, Recurring [Member] | ||
Liabilities | ||
Total common stock warrant and contingent consideration liability | 18,114 | 10,861 |
Fair Value, Measurements, Recurring [Member] | Derivative Financial Instruments, Liabilities | 2017 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 10,822 | 4,563 |
Fair Value, Measurements, Recurring [Member] | Derivative Financial Instruments, Liabilities | 2018 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 1,354 | 600 |
Fair Value, Measurements, Recurring [Member] | Derivative Financial Instruments, Liabilities | Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 49 | |
Essentialis, Inc. [Member] | Fair Value, Measurements, Recurring [Member] | ||
Liabilities | ||
Contingent liability for Essentialis purchase price | 5,938 | 5,649 |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Liabilities | ||
Total common stock warrant and contingent consideration liability | 49 | |
Level 1 [Member] | Fair Value, Measurements, Recurring [Member] | Derivative Financial Instruments, Liabilities | Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 49 | |
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | ||
Liabilities | ||
Total common stock warrant and contingent consideration liability | 18,114 | 10,812 |
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Derivative Financial Instruments, Liabilities | 2017 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 10,822 | 4,563 |
Level 3 [Member] | Fair Value, Measurements, Recurring [Member] | Derivative Financial Instruments, Liabilities | 2018 PIPE Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 1,354 | 600 |
Level 3 [Member] | Essentialis, Inc. [Member] | Fair Value, Measurements, Recurring [Member] | ||
Liabilities | ||
Contingent liability for Essentialis purchase price | $ 5,938 | $ 5,649 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Level 1 and Level 3 Financial Instruments (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)shares | |
Purchase price contingent liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | $ 5,649 |
Change in value of liabilities | 289 |
Balance at end of period | 5,938 |
Series A Warrant Liability [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | $ 49 |
Balance at the beginning of period, in shares | shares | 485,121 |
Expiration of warrants, in shares | shares | (485,121) |
Expiration of warrants | $ (49) |
Series C Warrant [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period, in shares | shares | 118,083 |
Balance at the end of period, in shares | shares | 118,083 |
2017 PIPE Warrant Liability [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | $ 4,563 |
Balance at the beginning of period, in shares | shares | 6,024,425 |
Change in value of liabilities | $ 6,259 |
Balance at end of period | $ 10,822 |
Balance at the end of period, in shares | shares | 6,024,425 |
2018 PIPE Warrant Liability [Member] | Common stock warrant liability [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at the beginning of period | $ 600 |
Balance at the beginning of period, in shares | shares | 513,617 |
Change in value of liabilities | $ 754 |
Balance at end of period | $ 1,354 |
Balance at the end of period, in shares | shares | 513,617 |
Other Financial Statement Det_3
Other Financial Statement Details - Schedule of Property and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 53 | $ 105 |
Less accumulated depreciation and amortization | (31) | (93) |
Total | 22 | 12 |
Computer Hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 52 | 67 |
Computer Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 2 | |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 1 | 23 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 13 |
Other Financial Statement Det_4
Other Financial Statement Details - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Other Financial Statement Details Disclosure [Abstract] | ||
Depreciation expense | $ 11,000 | $ 19,000 |
Amortization | $ 1,900,000 | $ 1,900,000 |
Other Financial Statements Deta
Other Financial Statements Details - Intangible Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Amount | $ 22,003 | $ 22,003 |
Accumulated Amortization | (5,478) | (3,534) |
Net Amount | 16,525 | 18,469 |
Patents and Merger Costs [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Amount | 22,003 | 22,003 |
Accumulated Amortization | (5,478) | (3,534) |
Net Amount | $ 16,525 | $ 18,469 |
Other Financial Statement Det_5
Other Financial Statement Details - Future Amortization Expense (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Net Amount | $ 16,525 | $ 18,469 |
Patents And Trademark [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
2020 | 1,944 | |
2021 | 1,944 | |
2022 | 1,944 | |
2023 | 1,944 | |
2024 | 1,944 | |
2025 and thereafter | 6,805 | |
Net Amount | $ 16,525 |
Warrant Liabilities - Additiona
Warrant Liabilities - Additional Information (Detail) | Apr. 30, 2015$ / shares | Mar. 05, 2015USD ($)$ / sharesshares | Jul. 31, 2015USD ($)shares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($) | Dec. 19, 2018$ / sharesshares | Dec. 15, 2017$ / sharesshares |
Class Of Warrant Or Right [Line Items] | |||||||
Change in fair value of stock warrants | $ 6,964,000 | $ (522,000) | |||||
Expected Dividend Yield [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Measurement input | 0 | ||||||
Series A Warrants to Purchase Shares of Common Stock [Member] | IPO [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Number of common stock purchased upon issuance of warrants | shares | 489,921 | ||||||
Exercise price of warrants exercised | $ / shares | $ 32.50 | ||||||
Warrants term | 5 years | ||||||
Series A Warrant Liability [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Warrants exercised (in shares) | shares | 4,800 | ||||||
Change in fair value of stock warrants | (49,000) | ||||||
Warrant liability | 49,000 | ||||||
Series B Warrant Liability [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Exercise price of warrants exercised | $ / shares | $ 32.50 | ||||||
Warrants exercised (in shares) | shares | 117,902 | ||||||
De-recognition of warrant liability | $ 6,700,000 | ||||||
Proceeds from exercise of warrants | $ 3,800,000 | ||||||
Series C Warrant [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Number of common stock purchased upon issuance of warrants | shares | 118,083 | ||||||
Exercise price of warrants exercised | $ / shares | $ 31.25 | $ 31.25 | |||||
Tender offer expiration date | Mar. 5, 2020 | Mar. 5, 2020 | |||||
Proceeds from issuance of common stock under tender offer | $ 6,000 | ||||||
Warrants cashless exercised (in shares) | shares | 181 | ||||||
Aggregate VWAP (percent) | 1.00% | ||||||
Warrant liability | $ 0 | ||||||
Series C Warrant [Member] | Common Stock [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Issuance of shares upon cashless exercise warrants (in shares) | shares | 181 | ||||||
2017 PIPE Warrant Liability [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Number of common stock purchased upon issuance of warrants | shares | 6,024,425 | ||||||
Exercise price of warrants exercised | $ / shares | $ 2 | ||||||
Change in fair value of stock warrants | 6,300,000 | ||||||
Warrant liability | $ 10,822,000 | 4,563,000 | |||||
Warrant issuance description | The 2017 PIPE Warrants were issued on December 15, 2017 in the 2017 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2017 PIPE Offering, and entitle the holders to purchase 6,024,425 shares of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2017 PIPE Warrants and terminating at the earlier of December 15, 2020 or 30 days following positive Phase III results for the DCCR tablet in PWS. | ||||||
Fair value of estimated warrants | $ 10,800,000 | ||||||
2017 PIPE Warrant Liability to Purchase Common Stock [Member] | Minimum [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Exercise price of warrants exercised | $ / shares | $ 1.72 | ||||||
2018 PIPE Warrant Liability [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Number of common stock purchased upon issuance of warrants | shares | 513,617 | ||||||
Exercise price of warrants exercised | $ / shares | $ 2 | ||||||
Change in fair value of stock warrants | $ 754,000 | ||||||
Warrant liability | $ 1,354,000 | $ 600,000 | |||||
Warrant issuance description | The 2018 PIPE Warrants were issued on December 19, 2018 in the 2018 PIPE Offering, pursuant to a Warrant Agreement with each of the investors in the 2018 PIPE Offering, and entitle the holders to purchase 513,617 shares of the Company’s common stock at an exercise price equal to $2.00 per share, subject to adjustment as discussed below, at any time commencing upon issuance of the 2018 PIPE Warrants and terminating on December 21, 2023. | ||||||
Fair value of estimated warrants | $ 1,400,000 | ||||||
2018 PIPE Warrant Liability [Member] | Minimum [Member] | |||||||
Class Of Warrant Or Right [Line Items] | |||||||
Exercise price of warrants exercised | $ / shares | $ 2 |
Warrant Liabilities - Fair Valu
Warrant Liabilities - Fair Value of Convertible Preferred Stock Warrant Liability (Detail) | Dec. 31, 2019 | Dec. 31, 2018 |
Expected Dividend Yield [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0 | |
Series C Warrant [Member] | Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.90 | 0.90 |
Series C Warrant [Member] | Contractual Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement term | 2 months 1 day | 1 year 2 months 1 day |
Series C Warrant [Member] | Risk-free Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.0152 | 0.0260 |
2017 PIPE Warrant Liability [Member] | Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.99 | 0.75 |
2017 PIPE Warrant Liability [Member] | Contractual Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement term | 1 year | 2 years |
2017 PIPE Warrant Liability [Member] | Risk-free Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.0160 | 0.0251 |
2018 PIPE Warrant Liability [Member] | Volatility [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.99 | 0.75 |
2018 PIPE Warrant Liability [Member] | Contractual Term [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement term | 4 years | 5 years |
2018 PIPE Warrant Liability [Member] | Risk-free Rate [Member] | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.0156 | 0.0251 |
Leases - Additional Information
Leases - Additional Information (Detail) | 1 Months Ended | 12 Months Ended | |||
Sep. 30, 2020USD ($) | Nov. 30, 2019USD ($) | Jul. 31, 2019USD ($)ft² | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | |
Lessee Lease Description [Line Items] | |||||
Sublease income | $ 173,000 | ||||
Future minimum commitment under non-cancelable operating lease | 219,000 | ||||
Operating lease right-of-use assets | 398,000 | ||||
Finance lease right-of-use assets | 24,000 | ||||
Current operating lease liabilities | 305,000 | ||||
Current finance lease liabilities | $ 17,000 | ||||
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | ||||
Long-term operating lease liabilities | $ 139,000 | ||||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | ||||
Long-term finance lease liabilities | $ 8,000 | ||||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | ||||
Rent expense | $ 323,000 | ||||
Sublease income | $ 277,000 | ||||
Finance lease, weighted-average remaining lease term | 1 year 4 months 24 days | ||||
Finance lease, discount rate | 10.00% | ||||
Operating lease, weighted-average remaining lease term | 1 year 4 months 24 days | ||||
Operating lease, discount rate | 10.00% | ||||
Redwood City, California [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Area of operating lease | ft² | 6,368 | ||||
Operating lease, description | the Company executed a non-cancellable lease agreement for 6,368 square feet of new space in Redwood City, California, which began in September 2019 and expires in May 2021. | ||||
Operating lease beginning date | 2019-09 | ||||
Operating lease, expiration | 2021-05 | ||||
Payment to acquire office furniture under operating lease | $ 1 | ||||
Future minimum commitment under non-cancelable operating lease | $ 29,000 | ||||
Redwood City, California [Member] | Forecast [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Future minimum commitment under non-cancelable operating lease | $ 30,000 | ||||
Capnia Inc Joint Venture [Member] | Redwood City, California [Member] | |||||
Lessee Lease Description [Line Items] | |||||
Sublease income | $ 65,000 |
Leases - Schedule of Components
Leases - Schedule of Components of Lease Expense (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 418 |
Sublease income | (173) |
Total operating lease cost | 245 |
Amortization of right-of-use assets | 3 |
Interest on lease liabilities | 1 |
Total finance lease cost | $ 4 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 219 |
Operating cash flows from finance leases | 1 |
Financing cash flows from finance leases | 2 |
Right-of use assets obtained in exchange for lease obligations (noncash): | |
Operating leases | 484 |
Finance leases | $ 27 |
Leases - Schedule Of Future Mat
Leases - Schedule Of Future Maturities (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 336 |
2021 | 143 |
Total lease payments | 479 |
Less interest | (34) |
Total | 445 |
Finances Lease | |
2020 | 19 |
2021 | 8 |
Total lease payments | 27 |
Less interest | (2) |
Total | $ 25 |
CoSense Joint Venture Agreeme_3
CoSense Joint Venture Agreement and Discontinued Operations - Additional Information (Detail) | Oct. 16, 2018shares | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($)$ / shares |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Current period gain recognized | $ 2,000,000 | |||||||
Minority interest investment in former subsidiary | 978,000 | $ 978,000 | ||||||
Loss from minority interest investment | $ (478,000) | (160,000) | ||||||
Gain in minority interest investment | $ 33,000,000 | |||||||
Loss from discontinued operations | (1,494,000) | |||||||
Stock-based compensation expense | 825,000 | 1,300,000 | ||||||
Discontinued Operations, Held-for-sale [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Stock-based compensation expense | 0 | 76,000 | ||||||
CoSense, NFI and Serenz [Member] | Discontinued Operations, Held-for-sale [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Assets held for sale, current | 0 | 0 | 0 | |||||
Assets held for sale, long-term | 0 | 0 | 0 | |||||
Liabilities held for sale, current | 0 | 0 | 0 | |||||
Liabilities held for sale, long-term | $ 0 | 0 | 0 | |||||
Loss from discontinued operations | $ 0 | $ (1,494,000) | ||||||
Sinon Investments LLC [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Total purchase price | $ 500,000,000 | |||||||
Capnia Inc Joint Venture [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Negotiated price per share | $ / shares | $ 1 | |||||||
Percentage of ownership interest | 47.00% | |||||||
Number of shares owned | shares | 1,480,000 | |||||||
Percentage of discount for lack of control | 0.23 | |||||||
Loss from minority interest investment | $ 511,000,000 | |||||||
Capnia Inc Joint Venture [Member] | Sinon Investments LLC [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Percentage of ownership interest | 47.00% | |||||||
Minority interest investment in former subsidiary | $ 467,000,000 | 467,000,000 | ||||||
OAHL [Member] | Capnia Inc Joint Venture [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Minority interest investment in former subsidiary | $ 0 | $ 0 | ||||||
OAHL [Member] | Capnia Inc Joint Venture [Member] | Corporate Joint Venture [Member] | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Investment threshold requirement | $ 2,200,000 | |||||||
Negotiated price per share | $ / shares | $ 1 | |||||||
Investment threshold requirement stock issuance | $ 1,200,000 | $ 1,200,000 | ||||||
Issuance of common stock (shares) | shares | 1,690,322 | |||||||
Percentage of ownership interest | 53.00% |
CoSense Joint Venture Agreeme_4
CoSense Joint Venture Agreement and Discontinued Operations - Components of Income of Discontinued Operations (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Expenses | ||
Net loss from discontinued operations | $ (1,494,000) | |
CoSense, NFI and Serenz [Member] | Discontinued Operations, Held-for-sale [Member] | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Product revenue | 62,000 | |
Cost of product revenue | 32,000 | |
Gross profit | 30,000 | |
Expenses | ||
Research and development | 1,106,000 | |
Sales and marketing | 25,000 | |
General and administrative | 393,000 | |
Total expenses | 1,524,000 | |
Operating loss | (1,494,000) | |
Net loss from discontinued operations | $ 0 | $ (1,494,000) |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) | Oct. 25, 2019 | Dec. 19, 2018 | Mar. 07, 2017 | Jan. 27, 2017 | Oct. 31, 2015 | Jun. 30, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 29, 2016 |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||||||||
Stock-based compensation expense | $ 825,000 | $ 1,300,000 | ||||||||
Expected dividend yield | 0.00% | 0.00% | ||||||||
Weighted average grant date fair value per option granted (in dollars per share) | $ 1.14 | $ 1.08 | ||||||||
Future stock-based compensation for unvested employee options granted and outstanding | $ 1,100,000 | |||||||||
Stock options outstanding, intrinsic value | $ 1,600,000 | |||||||||
Number of shares available for issuance under the plan on the first day of each year | 44,658,054 | 31,755,169 | ||||||||
Series D Warrants [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 12.30 | |||||||||
Number of common stock purchased upon issuance of warrants | 586,182 | |||||||||
Warrants outstanding (in shares) | 256,064 | |||||||||
Warrants term | 5 years | |||||||||
Warrants expiration date | Oct. 15, 2020 | |||||||||
Liquidated damages amount percent of VWAP (percent) | 1.00% | |||||||||
Warrants to Purchase Stock [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 24.35 | |||||||||
Warrants outstanding (in shares) | 102,070 | |||||||||
Warrants term | 10 years | |||||||||
Warrants expiration period | 2024-11 | |||||||||
Underwriter [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Exercise price of warrants (in dollars per share) | $ 35.70 | |||||||||
Warrants outstanding (in shares) | 16,500 | |||||||||
Warrants term | 10 years | |||||||||
Warrants expiration period | 2024-11 | |||||||||
Discontinued Operations, Held-for-sale [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ 0 | $ 76,000 | ||||||||
Minimum [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Ownership interest of voting rights of all classes of stock (percent) | 10.00% | |||||||||
Stock Options [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Vesting period | 4 years | |||||||||
Number of shares available for grant | 615,760 | 909,200 | 1,571,212 | |||||||
Income tax benefits recognized from stock-based compensation | $ 0 | $ 0 | ||||||||
Number of options granted | 658,285 | 756,086 | ||||||||
Expected dividend yield | 0.00% | |||||||||
Future stock-based compensation, requisite service period | 2 years 4 months 24 days | |||||||||
Stock Options [Member] | Minimum [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Percentage of fair market value | 110.00% | |||||||||
Stock Options [Member] | Maximum [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Contractual term of option | 10 years | |||||||||
ISOs [Member] | Maximum [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Contractual term of option | 5 years | |||||||||
Restricted Stock Units [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Stock-based compensation expense | $ 132,000 | $ 434,000 | ||||||||
Stock units granted | 61,218 | 245,588 | ||||||||
Vesting percentage | 100.00% | |||||||||
Underwritten Public Offering [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Proceeds from issuance of common stock | $ 14,500,000 | |||||||||
Number of newly issued | 12,841,667 | |||||||||
Price per unit | $ 1.20 | |||||||||
Shares issued upon exercise of underwriters options | 1,675,000 | |||||||||
Net proceeds from issuance of public offering | $ 14,500,000 | |||||||||
Employee Stock Purchase Plan [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of shares available for grant | 27,967 | |||||||||
Percentage of outstanding stock maximum | 1.00% | |||||||||
Number of shares available for issuance under the plan on the first day of each year | 55,936 | |||||||||
Equity Unit Purchase Agreements [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of newly issued | 10,272,375 | |||||||||
Price per unit | $ 1.61 | |||||||||
Gross Proceeds from issuance of units | $ 16,500,000 | |||||||||
Common Stock [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Number of newly issued | 12,841,667 | |||||||||
Common Stock [Member] | Equity Unit Purchase Agreements [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Warrant to call common stock | 0.05 | |||||||||
Exercise price of warrants (in dollars per share) | $ 2 | |||||||||
Number of common stock purchased upon issuance of warrants | 513,617 | |||||||||
Aspire Capital Fund, LLC [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Maximum commitment under stock purchase agreement | $ 17,000,000 | |||||||||
Purchase agreement term | 30 months | |||||||||
Proceeds from issuance of common stock | $ 2,000,000 | |||||||||
Essentialis, Inc. [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Common stock shares issued in acquisition (shares) | 3,783,388 | |||||||||
Indemnification claims period | 1 year | |||||||||
Contingent consideration potential additional shares issuable if milestones are reached (shares) | 903,367 | |||||||||
Maximum total common stock issuable in acquisition (in shares) | 4,867,422 | |||||||||
Essentialis, Inc. [Member] | Indemnification Claims [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Common stock shares issued in acquisition (shares) | 180,667 | |||||||||
Essentialis, Inc. [Member] | Earnout Payments [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Maximum potential cash earnout payments | $ 30,000,000 | |||||||||
Series B Convertible Preferred Stock [Member] | ||||||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||||||||
Convertible preferred stock, shares authorized | 13,780 | 13,780 | ||||||||
Preferred stock shares issued | 0 | 0 | 13,780 | |||||||
Preferred stock, shares outstanding | 0 | 0 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Stock Based Compensation Expense (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | $ 825,000 | $ 1,300,000 |
Continuing Operations [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | 825,000 | 1,187,000 |
Research and Development [Member] | Continuing Operations [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | 158,000 | 205,000 |
General and Administrative [Member] | Continuing Operations [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | $ 667,000 | $ 982,000 |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Fair Value of Award Granted Using Black-Scholes Option Pricing Model (Detail) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Risk-free interest rate, Minimum | 1.60% | 2.70% |
Risk-free interest rate, Maximum | 2.60% | 2.80% |
Volatility, Minimum | 70.00% | 70.00% |
Volatility, Maximum | 75.00% | 71.00% |
Dividend rate | 0.00% | 0.00% |
Minimum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected life (years) | 5 years 6 months | 5 years 6 months |
Maximum [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected life (years) | 6 years 1 month 6 days | 6 years |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of Stock Option and Restricted Stock Unit Transactions (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Stock Options [Member] | |||
Shares Available for Grant | |||
Options Available, Beginning balance | 909,200 | 1,571,212 | |
Options Available, Additional shares authorized | 223,742 | 223,742 | |
Options Available, Granted | (658,285) | (756,086) | |
Options Available, Exercised | 0 | 0 | |
Options Available, Canceled/Forfeited | 202,321 | 115,920 | |
Options Available, Ending balance | 615,760 | 909,200 | 1,571,212 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Beginning balance | 1,667,153 | 1,026,987 | |
Options granted | 658,285 | 756,086 | |
Options exercised | 0 | 0 | |
Options canceled/forfeited | (202,321) | (115,920) | |
Ending balance | 2,123,117 | 1,667,153 | 1,026,987 |
Options vested at end of period (shares) | 1,153,457 | ||
Options vested and expected to vest at end of period (shares) | 2,123,117 | ||
Weighted-Average Exercise Price per Share | |||
Beginning balance (in dollars per share) | $ 6.03 | $ 9.99 | |
Options granted (in dollars per share) | 1.77 | 1.68 | |
Options exercised (in dollars per share) | 0 | 0 | |
Options canceled/forfeited (in dollars per share) | 6.99 | 12.72 | |
Ending balance (in dollars per share) | 4.62 | $ 6.03 | $ 9.99 |
Options vested at end of period (in dollars per share) | 6.91 | ||
Options vested and expected to vest at end of period (in dollars per share) | $ 4.62 | ||
Weighted Average Remaining Contractual Term | |||
Options outstanding at end of period | 7 years 10 months 13 days | 8 years 3 months 7 days | 7 years 11 months 8 days |
Options vested at end of period | 7 years 2 months 26 days | ||
Options vested and expected to vest at end of period | 7 years 10 months 13 days | ||
Restricted Stock Units [Member] | |||
Shares Available for Grant | |||
Options Available, Shares allocated to grants of restricted stock units | (61,218) | (245,588) |
Income Taxes - Schedule of Geog
Income Taxes - Schedule of Geographical Distribution of Loss before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (30,729) | $ (11,830) |
Foreign | (45) | (11) |
Loss before income taxes | $ (30,774) | (11,841) |
Loss resulting from discontinued operations | $ (1,494) |
Income Taxes - Provision for In
Income Taxes - Provision for Income Tax Benefit by Applying Statutory Federal Income Tax Rate to Operating Loss from Continuing Operations (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract] | ||
Tax on the loss before income tax expense computed at the federal statutory rate | $ (6,463) | $ (2,486) |
State tax (benefit) at statutory rate, net of federal benefit | (1,691) | (187) |
Foreign rate differential | 10 | 2 |
Change in valuation allowance | 6,696 | 4,143 |
Change in research and development credits | (200) | (99) |
Stock based compensation—ISOs | 149 | 143 |
Change in fair value of warrants | 1,461 | (110) |
Change in fair value of contingent consideration | 61 | 119 |
Gain on deconsolidation | (4) | |
Disallowance of loss on discontinued operations | (426) | |
Change in net operating loss true up | (725) | (590) |
Change in state rate true up | 701 | |
Change in temporary difference true up | (456) | |
Other | $ 1 | $ (49) |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Non-current deferred tax assets: | ||
Federal and state net operating loss carryforwards | $ 35,091 | $ 28,532 |
Research and other credits | 2,349 | 2,037 |
Reserves and accruals | 77 | 52 |
Assets held for sale | 15 | |
Fixed assets | 71 | 67 |
Capital loss carryover | 1,115 | 425 |
Stock based compensation | 85 | 70 |
Lease liability | 131 | |
Other deferred tax assets | 196 | 542 |
Gross non-current deferred tax assets | 39,115 | 31,740 |
Intangible assets | (4,623) | (4,062) |
Right-of-use assets | (118) | |
Total non-current deferred tax liabilities | (4,741) | (4,062) |
Total deferred tax assets | 34,374 | 27,678 |
Valuation allowance | $ (34,374) | $ (27,678) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Contingency [Line Items] | ||
Increase (decrease) in valuation allowance | $ 6,700,000 | |
Unrecognized assets and liabilities related to uncertain tax positions | 1,100,000 | |
Unrecognized Tax Benefits that Would Impact Effective Tax Rate | 0 | $ 0 |
Unrecognized tax benefit offset by change in valuation allowance | 1,100,000 | |
Internal Revenue Service (IRS) [Member] | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 500,000 | |
U.S. Federal Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 150,500,000 | |
Operating loss carryforwards, carried forward indefinitely | 31,700,000 | |
U.S. Federal Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforwards | 1,400,000 | |
State Tax Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 82,500,000 | $ 10,400,000 |
State Tax Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforwards | 916,000 | |
Foreign Tax Authority [Member] | Her Majesty's Revenue and Customs (HMRC) [Member] | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | $ 299,000 |
Income Taxes - Summary of Gross
Income Taxes - Summary of Gross Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Reconciliation Of Unrecognized Tax Benefits Excluding Amounts Pertaining To Examined Tax Returns Roll Forward | ||
Beginning balance | $ 964 | $ 854 |
Increase related to prior year tax positions | 7 | 23 |
Decrease related to prior year tax positions | (4) | |
Increase related to current year tax positions | 144 | 87 |
Ending balance | $ 1,111 | $ 964 |
Net loss per share - Schedule o
Net loss per share - Schedule of Potentially Dilutive Securities Outstanding Excluded from Computations of Diluted Weighted-Average Shares Outstanding (Detail) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 9,483,974 | 9,514,982 |
Warrants Issued to 2010/2012 Convertible Note Holders 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 | 102,070 | 102,070 |
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 | 2,123,117 | 1,667,153 |
Warrants Issued in 2009 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 | 1,851 | |
Underwriter [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 16,500 | 16,500 |
Series A Warrants to Purchase Shares of 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 | 485,121 | |
Series C Warrant 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 | 118,083 | 118,083 |
Series D Warrant 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 | 586,162 | 586,162 |
2017 PIPE Warrant Liability [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 6,024,425 | 6,024,425 |
2018 PIPE Warrant Liability [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 513,617 | 513,617 |
Defined Contribution Plan - Add
Defined Contribution Plan - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | ||
Matching contribution by Company | $ 37,000 | $ 0 |