Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2017 | Aug. 14, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | ATOSSA GENETICS INC | |
Entity Central Index Key | 1,488,039 | |
Document Type | 10-Q | |
Trading Symbol | ATOS | |
Document Period End Date | Jun. 30, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 11,701,075 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 3,690,023 | $ 3,027,962 |
Restricted cash | 55,000 | 55,000 |
Prepaid expenses | 228,370 | 171,601 |
Other accounts receivable | 2,736 | |
Total current assets | 3,976,129 | 3,254,563 |
Furniture and equipment, net | 18,989 | 55,119 |
Intangible assets, net | 585,683 | 640,440 |
Other assets | 128,577 | 194,250 |
Total assets | 4,709,378 | 4,144,372 |
Current liabilities | ||
Accounts payable | 495,811 | 254,320 |
Accrued expenses | 44,017 | 16,964 |
Payroll liabilities | 482,420 | 769,899 |
Common stock warrant liability | 864,371 | |
Other current liabilities | 19,157 | 6,083 |
Total current liabilities | 1,905,776 | 1,047,266 |
Commitments and contingencies (note 13) | ||
Stockholders' equity | ||
Preferred stock | ||
Additional paid in capital- Series A convertible preferred stock | 744,977 | |
Common stock - $.015 par value; 75,000,000 shares authorized, 10,032,410 and 3,786,913 shares issued and outstanding, as of June 30, 2017 and December 31, 2016, respectively | 150,486 | 56,804 |
Additional paid-in capital | 63,126,929 | 60,344,050 |
Accumulated deficit | (61,248,791) | (57,303,748) |
Total stockholders' equity | 2,803,602 | 3,097,106 |
Total liabilities and stockholders' equity | 4,709,378 | 4,144,372 |
Series A Convertible Preferred Stock Convertible [Member] | ||
Stockholders' equity | ||
Preferred stock | $ 1 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2017 | Dec. 31, 2016 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.015 | $ 0.015 |
Common stock, authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 10,032,410 | 3,786,913 |
Common stock, outstanding | 10,032,410 | 3,786,913 |
Series A Convertible Preferred Stock Convertible [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 4,000 | 0 |
Preferred stock, issued | 839 | 0 |
Preferred stock, outstanding | 839 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Operating expenses: | ||||
Research and development | $ 824,094 | $ 168,992 | $ 1,368,396 | $ 318,963 |
General and administrative | 1,072,169 | 1,553,391 | 2,214,712 | 3,730,960 |
Total operating expenses | 1,896,263 | 1,722,383 | 3,583,108 | 4,049,923 |
Operating loss | (1,896,263) | (1,722,383) | (3,583,108) | (4,049,923) |
Change in fair value of common stock warrants | (152,447) | (152,447) | ||
Warrant financing expense | (192,817) | (192,817) | ||
Other income (expense), net | 38 | (16,671) | ||
Loss before income taxes | (2,241,489) | (1,722,383) | (3,945,043) | (4,049,923) |
Income taxes | ||||
Net loss | (2,241,489) | (1,722,383) | (3,945,043) | (4,049,923) |
Deemed dividends attributable to Series A Preferred Stock | (2,568,132) | (2,568,132) | ||
Net loss applicable to common stockholders | $ (4,809,621) | $ (1,722,383) | $ (6,513,175) | $ (4,049,923) |
Loss per common share - basic and diluted (in dollars per share) | $ (0.64) | $ (0.67) | $ (1.15) | $ (1.63) |
Weighted average shares outstanding, basic and diluted (in shares) | 7,476,046 | 2,587,871 | 5,641,671 | 2,485,853 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) - 6 months ended Jun. 30, 2017 - USD ($) | Series A Convertible Preferred Stock [Member] | Additional Paid-in Capital [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total |
Balance, beginning at Dec. 31, 2016 | $ 56,804 | $ 60,344,050 | $ (57,303,748) | $ 3,097,106 | ||
Balance, beginning (in shares) at Dec. 31, 2016 | 3,786,913 | 3,786,913 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock in Class A units, net of issuance costs of $65,816 | $ 17,910 | 811,774 | $ 829,684 | |||
Issuance of common stock in Class A units, net of issuance costs of $65,816 (in shares) | 1,194,000 | |||||
Allocation of Class A unit proceeds to warrant liability | (328,350) | (328,350) | ||||
Issuance of Series A convertible preferred stock in Class B units, net of issuance costs of $267,231 | $ 4 | $ 3,234,769 | 3,234,773 | |||
Issuance of Series A convertible preferred stock in Class B units, net of issuance costs of $267,231 (in shares) | 3,502 | |||||
Allocation of Series A convertible preferred stock to warrants and beneficial conversion feature | (2,568,132) | 1,284,066 | (1,284,066) | |||
Deemed Dividend on Series A Convertible Preferred Stock | 2,568,132 | $ 2,568,132 | (2,568,132) | |||
Conversion of Series A Convertible Preferred Stock to common stock | $ (3) | (2,459,792) | $ 53,260 | $ 2,406,535 | ||
Conversion of Series A Convertible Preferred Stock to common stock (in shares) | (2,663) | 3,550,664 | ||||
Reclassification of warrant liability upon net cashless exercise of common stock warrants | $ 22,362 | |||||
Reclassification of warrant liability upon net cashless exercise of common stock warrants (in shares) | 1,490,833 | 878,126 | 900,488 | |||
Issuance of common stock upon warrant exercise for cash | $ 150 | $ 2,450 | $ 2,600 | |||
Issuance of common stock upon warrant exercise for cash (in shares) | 10,000 | |||||
Shares tendered for liability warrant exercise | $ (22,362) | (775,233) | (797,595) | |||
Shares tendered for liability warrant exercise (in shares) | (1,490,833) | |||||
Amortization of commitment shares | (39,705) | (39,705) | ||||
Compensation cost for stock options granted to executives and employees | 336,115 | 336,115 | ||||
Net loss | (3,945,043) | (3,945,043) | ||||
Balance, ending at Jun. 30, 2017 | $ 1 | $ 774,977 | $ 150,486 | $ 63,126,929 | $ (61,248,791) | $ 2,803,602 |
Balance, ending (in shares) at Jun. 30, 2017 | 839 | 10,032,410 | 10,032,410 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) | 6 Months Ended |
Jun. 30, 2017USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Payments of stock issuance costs | $ 65,816 |
Payments of Series A Convertible Preferred Stock issuance costs | $ 267,231 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (3,945,043) | $ (4,049,923) |
Compensation cost for stock options granted | 336,115 | 392,664 |
Loss on disposal of intangible asset | 17,695 | 163,333 |
Depreciation and amortization | 73,193 | 152,574 |
Change in fair value of common stock warrants | 152,447 | |
Warrant financing expense | 192,817 | |
Changes in operating assets and liabilities: | ||
Change in restricted cash | 220,000 | |
Prepaid expenses | (56,769) | (15,836) |
Other assets | 25,831 | 110,527 |
Accounts payable | 241,491 | (531,657) |
Payroll liabilities | (287,479) | (666,368) |
Accrued expenses | 27,053 | (387,903) |
Other current liabilities | 13,074 | (41,473) |
Net cash used in operating activities | (3,209,575) | (4,654,062) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of furniture and equipment | (4,941) | |
Net cash used in investing activities | (4,941) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from issuance of Class A and Class B Units, net of issuance costs | 3,871,636 | |
Proceeds from issuance of common stock, net of issuance costs | 2,133,974 | |
Net cash provided by financing activities | 3,871,636 | 2,133,974 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 662,061 | (2,525,029) |
CASH AND CASH EQUIVALENTS, BEGINNING BALANCE | 3,027,962 | 3,715,895 |
CASH AND CASH EQUIVALENTS, ENDING BALANCE | 3,690,023 | 1,190,866 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest paid | 383 | |
NONCASH INVESTING AND FINANCING ACTIVITIES: | ||
Common stock issued for cashless exercise of common stock warrants | 900,488 | |
Amount receivable for warrant exercise | 2,600 | |
Allocation of Class A and Class B Unit proceeds to warrant liability | 1,612,416 | |
Common stock issued as commitment fee under stock purchase agreement | 198,523 | |
Amortization of commitment shares | $ 39,705 | $ 6,617 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | NOTE 1: NATURE OF OPERATIONS Atossa Genetics Inc. (the “Company”) was incorporated on April 30, 2009 in the State of Delaware. The Company was formed to develop and market medical devices, laboratory tests and therapeutics to address breast health conditions. The Company’s fiscal year ends on December 31. The Company is focused on development of its pharmaceutical programs. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2: GOING CONCERN The Company’s consolidated financial statements are prepared using Generally Accepted Accounting Principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses and negative operating cash flows since inception. For the six months ended June 30 2017, the Company recorded a net loss of approximately $3.9 million and used approximately $3.2 million of cash in operating activities. As of June 30, 2017, the Company had approximately $3.7 million in cash and cash equivalents and working capital of approximately $2.1 million. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. The Company can give no assurances that any additional capital that it is able to obtain, if any, will be sufficient to meet its needs, or that any such capital will be obtained on acceptable terms. If the Company is unable to obtain adequate capital, it could be forced to cease operations or substantially curtail its activities. These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should the Company be unable to continue as a going concern. Management’s plan to continue as a going concern is as follows. In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plans to obtain such resources for the Company include obtaining capital from the sale of its equity securities and short-term borrowings from banks, stockholders or other related party(ies), if needed. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans. We expect that our existing resources will be sufficient to fund our planned operations for the next four to six months; however, additional capital resources will be needed to fund operations for the next twelve months. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraphs and eventually to secure other sources of financing and attain profitable operations. |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | NOTE 3: SUMMARY OF ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2016. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. On August 26, 2016, the Company completed a 1-for-15 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of Common Stock, and the par value per share was changed to $.015 per share. No fractional shares were issued because of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were paid in cash. The number of authorized shares of common stock was not reduced as a result of the Reverse Stock Split. The Company’s common stock began trading on a reverse stock split-adjusted basis on August 26, 2016. All share and per share data included in this report has been retroactively restated to reflect the Reverse Stock Split. Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Financial Instruments with Characteristics of Both Liabilities and Equity: During the three months ended June 30, 2017, the Company issued certain financial instruments, including warrants to purchase common stock, which have characteristics of both liability and equity. Financial instruments such as warrants that are classified as liabilities are fair valued upon issuance and are remeasured at fair value at subsequent reporting periods with the resulting change in fair value recorded in “change in fair value of common stock warrants”. The fair value of warrants is estimated using valuation models that require the input of subjective assumptions including stock price volatility, expected life, and the probability of future equity issuances and their impact to the price protection feature. Recently Issued Accounting Pronouncements: In February 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Lease Accounting Topic 842. In April 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features and Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception |
PREPAID EXPENSES
PREPAID EXPENSES | 6 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | NOTE 4: PREPAID EXPENSES Prepaid expenses consisted of the following: June 30, December 31, Prepaid insurance 156,532 121,333 Trade show 20,000 Retainer and security deposits 29,968 14,218 Financial exchange fees 21,000 Other 20,870 16,050 Total prepaid expenses $ 228,370 $ 171,601 |
FURNITURE AND EQUIPMENT
FURNITURE AND EQUIPMENT | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
FURNITURE AND EQUIPMENT | NOTE 5: FURNITURE AND EQUIPMENT Furniture and equipment consisted of the following: June 30, December 31, Furniture and equipment $ 170,916 $ 210,528 Less: Accumulated depreciation (151,927 ) (155,409 ) Total furniture and equipment, net $ 18,989 $ 55,119 Depreciation expense for the three months ended June 30, 2017 and 2016 was $8,773 and $32,734, respectively, and $18,434, and $62,353, for the six months ended June 30, 2017 and 2016, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 6: INTANGIBLE ASSETS Intangible assets consisted of the following: June 30, December 31, Patents $ 639,000 $ 639,000 Software 113,540 113,540 Total intangible assets 752,540 752,540 Less: Accumulated amortization (166,857 ) (112,100 ) Total intangible assets, net $ 585,683 $ 640,440 Software amounted to $113,540 as of June 30, 2017 and December 31, 2016. The amortization period for the purchased software is 3 years. Amortization expense related to software for the three months ended June 30, 2017 and 2016 was $6,759 and $7,857, respectively, and was $19,614 and $15,714, for the six months ended June 30 2017 and 2016, respectively. Patents amounted to $639,000 as of June 30, 2017 and December 31, 2016, and mainly consisted of patents acquired from Acueity on September 30, 2012 in an asset purchase transaction. Patent assets are amortized based on their determined useful life, and tested annually for impairment. The amortization period is from 7 to 12 years. Amortization expense related to patents was $17,571 and $37,254 for the three months ended June 30, 2017 and 2016, respectively and was $35,142 and $74,508 for the six months ended June 30, 2017 and 2016, respectively. Future estimated amortization expenses as of June 30, 2017 for the five succeeding years is as follows: For the years ending December 31, Amounts 2017 (includes the remainder of the year) $ 48,282 2018 73,433 2019 70,285 2020 70,285 2021 70,285 Thereafter 253,113 $ 585,683 |
PAYROLL LIABILITIES
PAYROLL LIABILITIES | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
PAYROLL LIABILITIES | NOTE 7: PAYROLL LIABILITIES Payroll liabilities consisted of the following: June 30, December 31, Accrued bonus payable $ 280,008 $ 609,337 Accrued vacation 134,865 94,514 Accrued payroll liabilities 67,547 66,048 Total payroll liabilities $ 482,420 $ 769,899 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 8: STOCKHOLDERS’ EQUITY The Company is authorized to issue a total of 85,000,000 shares of stock consisting of 75,000,000 shares of common stock, par value $0.015 per share, and 10,000,000 shares of preferred stock, par value $0.001 per share. The Company has designated 750,000 shares of Series A Junior Participating Preferred Stock, par value $0.001 per share, and 4,000 shares of Series A Convertible Preferred Stock, par value $0.001 per share through the filings of certificates of designation with the Delaware Secretary of State. On May 19, 2014, the Company adopted a stockholder rights agreement which provides that all stockholders of record on May 26, 2014 received a non-taxable distribution of one preferred stock purchase right for each share of the Company’s common stock held by such stockholder. Each right is attached to and trades with the associated share of common stock. The rights will become exercisable only if one of the following occurs: (1) a person becomes an “Acquiring Person” by acquiring beneficial ownership of 15% or more of the Company’s common stock (or, in the case of a person who beneficially owned 15% or more of the Company’s common stock on the date the stockholder rights agreement was executed, by acquiring beneficial ownership of additional shares representing 2.0% of the Company’s common stock then outstanding (excluding compensatory arrangements)), or (2) a person commences a tender offer that, if consummated, would result in such person becoming an Acquiring Person. If a person becomes an Acquiring Person, each right will entitle the holder, other than the Acquiring Person and certain related parties, to purchase a number of shares of the Company’s common stock with a market value that equals twice the exercise price of the right. The initial exercise price of each right is $15.00, so each holder (other than the Acquiring Person and certain related parties) exercising a right would be entitled to receive $30.00 worth of the Company’s common stock. If the Company is acquired in a merger or similar business combination transaction at any time after a person has become an Acquiring Person, each holder of a right (other than the Acquiring Person and certain related parties) will be entitled to purchase a similar amount of stock of the acquiring entity. 2016 Issuances of Additional Shares to Aspire Capital On November 11, 2015, we terminated our prior agreement with Aspire Capital Fund, LLC (“Aspire Capital”) and entered into a new common stock purchase agreement. Concurrently with entering into the new purchase agreement, we also entered into a registration rights agreement with Aspire Capital in which we agreed to register 405,747 shares of our common stock. During the first quarter of 2016, we sold a total of 405,747 shares of common stock to Aspire Capital under the stock purchase agreement dated November 11, 2015 with aggregate gross proceeds to the Company of $2,177,083, or net proceeds of $2,133,973 after deducting costs of the offering. On May 25, 2016, the Company terminated the November 11, 2015 stock purchase agreement with Aspire Capital and entered into a new common stock purchase agreement with Aspire Capital which provided that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $10.0 million of shares of our common stock over the 30-month term of the purchase agreement, subject to the terms and conditions set forth therein. Concurrently with entering into the purchase agreement, the Company also entered into a registration rights agreement with Aspire Capital, in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, registering the sale of the shares of our common stock that have been and may be issued to Aspire Capital under the purchase agreement. As part of the stock purchase agreement we issued 49,736 common shares as a commitment fee. The value of the common shares issued as a commitment fee of $198,523 has been reflected as an addition to common stock of $746 and $197,777 in additional paid in capital which will be amortized over the life of the stock purchase agreement. As of the date of filing this Quarterly Report with the SEC no shares of stock have been sold to Aspire Capital under the May 25, 2016 purchase agreement. In connection with our public offering that closed on April 3, 2017, we agreed not to utilize the financing arrangement with Aspire Capital until June 30, 2017 and on June 30, 2017 in connection with the temporary modification of our common stock warrants to allow for the net exercise of those warrants we agreed to extend this stand still for an additional 45 days. 2016 Public Offering of Common Stock In August 2016, the Company completed an underwritten public offering of 1,150,000 shares of common stock at a price per share of $2.50, with gross proceeds of $2,875,000 to the Company, or net proceeds of $2,561,896 after deducting underwriter discounts, commissions, non-accountable expense allowance and expense reimbursement. 2017 Public Offering of Class A and Class B Units Consisting of Common Stock, Series A Convertible Preferred Stock and Warrants On March 28, 2017, the Company entered into an underwriting agreement with Aegis Capital Corp. relating to a public offering which closed on April 3, 2017. The offering generated gross proceeds to the Company of approximately $4.4 million and net proceeds of approximately $3.9 million after deducting underwriting discounts and commissions and other offering expenses paid by the Company. The offering included 664,000 Class A Units at a public offering price of $0.75 per Class A Unit, which consisted of 664,000 shares of common stock and warrants to purchase 664,000 shares of common stock. The offering also included 3,502 Class B Units at a public offering price of $1,000 per Class B Unit, which consisted of 3,502 shares of Series A Convertible Preferred Stock convertible into a total of 4,669,333 shares of common stock and warrants to purchase 4,669,333 shares of common stock. In addition, the underwriter exercised the over-allotment to purchase an additional 530,000 shares of common stock and warrants to purchase 530,000 shares of common stock, which are included in the gross proceeds of $4.4 million. The warrants had a per share exercise price of $0.9375, are exercisable immediately and will expire five years from the date of issuance. Series A Convertible Preferred Stock The terms and provisions of our Series A Convertible Preferred Stock (the “Series A Preferred”) are as follows: Rank. Conversion. Liquidation Preference. Voting Rights. Dividends. Redemption. 2017 Warrants The terms and conditions of the warrants included in the 2017 public offering are as follows: Exercisability Exercise Limitation Exercise Price Transferability Fundamental Transactions Rights as a Stockholder Accounting Treatment The Company allocated the proceeds from the sale of the Class A and Class B units to the separate securities issued. The Company determined that, on the date of issuance, the warrants were not considered indexed to its own stock because the underlying instruments were not “fixed-for-fixed” due to the price protection and fundamental transaction provisions and, therefore, the warrants should be accounted for as liabilities. At the end of each reporting period, the changes in fair value of the warrants during the period are recorded in non-operating income (expense) in the consolidated statement of operations. The Company allocated the amount representing the fair value of the warrants at the date of issuance separately to the warrant liability and recorded the remaining proceeds as common stock, in the case of the Class A units, or as Series A convertible preferred stock, in the case of the Class B units. Due to the allocation of a portion of the proceeds to the warrants, the Series A convertible preferred stock contained a beneficial conversion feature upon issuance, which was recorded in the amount of $1,284,066 based on the intrinsic value of the beneficial conversion feature. The discount on the Series A convertible preferred stock of $1,284,066 caused by allocation of the proceeds to the warrant was recorded as a deemed dividend upon issuance of the Series A convertible preferred stock. As a result, total deemed dividends of $2,568,132 was recorded upon issuance of the Series A convertible preferred stock, which is reflected as an addition to net loss in the consolidated statement of operations to arrive at net loss applicable to common shareholders. Net Exercise of 2017 Warrants On June 29, 2017, the Company offered to modify the rights of the holders of the warrants issued in the public offering the Company completed on April 3, 2017. The temporary modification included (a) lowering the exercise price of the warrants to $0.26 per share, (b) setting the applicable volume-weighted average price (VWAP) at $0.52 per share, and (c) allowing for temporary cashless exercise of the warrants for all holders that accepted the temporary modification before 8:00 a.m. Eastern daylight time on June 30, 2017. Holders of warrants to purchase a total of approximately 3.0 million shares of Common Stock accepted the offer resulting in the cancellation of those warrants and the issuance by the Company of a total of approximately1.5 million shares of Common Stock (including shares held in abeyance). The shares of Common Stock are registered under the Securities Act of 1933, as amended. If delivery of the shares of Common Stock pursuant to the foregoing would result in the holder exceeding the 4.99% “Beneficial Ownership Limitation” (as defined in the warrant) then the shares in excess of such 4.99% will be held in abeyance by the Company pending further instruction from the holder. In connection with the temporary modification, the Company agreed to extend the “Lock-up Period” of the underwriting agreement between the Company and Aegis Capital Corp., dated March 28, 2017, by 45 days and the Company agreed not to enter into any further amendments to the warrants during such extended Lock-up Period without the prior written consent of each holder. Upon exercise of these warrants, the amount of the warrant liability at the date of exercise was reclassified from warrant liability to additional paid-in capital. The following table summarizes the 2017 liability warrant activity: Shares Weighted Average Exercise Price Outstanding as of December 31, 2016 Warrants granted 5,863,332 $ 0.9375 Warrants exercised (2,991,666 ) 0.26 Warrants cancelled Outstanding as of June 30, 2017 2,871,666 $ 0.26 The Company estimated the fair value of the warrants using the Monte Carlo simulation (MCS) model, which is a type of income approach, where the current value of an asset is expressed as the sum of probable future cash flows across various scenarios and time frames discounted for risk and time. The significant assumptions include timing of future rounds of financing, timing and success rates of oncology clinical trials, and the probability of a merger and acquisition adjusted for a lack of marketability discount. The MCS model also includes a full term and an early conversion scenario that are each weighted at 50% in the final concluded fair value. Inputs used in the valuation of the warrants at the issuance date of April 3, 2017 and June 30, 2017 were as follows: Initial valuation Common stock price $ 0.75 Exercise price $ 0.9375 Expected Volatility 50 % Dividend Yield 0 % Risk-Free Interest Rate 0.79% - 1.88 % Expected Term (years) 0.24 - 5 June 30, 2017 valuation Common stock price $ 0.50 Exercise price $ 0.26 Expected Volatility 50 % Dividend Yield 0 % Risk-Free Interest Rate 0.79% - 1.88 % Expected Term (years) 0.08-4.76 Outstanding Warrants As of June 30, 2017, warrants to purchase 3,273,894 shares of common stock were outstanding including: Outstanding Warrants to Purchase Shares Exercise Price Expiration Date 2011 private placement 283,470 $ 18.75 - 24.00 May 8, 2018 Acueity warrants 21,667 75.00 September 30, 2017 2014 public offering 77,790 45.00 January 29, 2019 Placement agent fees for Company’s offerings 16,135 31.80 - 186.45 March - November, 2018 Outside consulting 3,166 63.60 January 14, 2018 2017 public offering 2,871,666 0.26 April 3, 2022 3,273,894 Conversion of Series A Convertible Preferred Stock During the three months ended June 30, 2017, certain holders of the Series A Convertible Preferred Stock exercised their conversion option and converted an aggregate of 2,663 shares of Series A Convertible Preferred Stock into 3,550,664 shares of the Company’s common stock based on the conversion ratio of 1,333.33 shares of Series A Convertible Preferred Stock to common stock. |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 9: FAIR VALUE OF FINANCIAL INSTRUMENTS Pursuant to the accounting guidance for fair value measurement and its subsequent updates, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the “exit price”) in an orderly transaction between market participants at the measurement date. The accounting guidance establishes a hierarchy for inputs used in measuring fair value that minimizes the use of unobservable inputs by requiring the use of observable market data when available. Observable inputs are inputs that market participants would use in pricing the asset or liability based on active market data. Unobservable inputs are inputs that reflect the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances. The fair value hierarchy is broken down into the three input levels summarized below: ● Level 1 ● Level 2 ● Level 3 The following tables present the Company’s fair value hierarchy for all its financial assets, in thousands, by major security type measured at fair value on a recurring basis as of June 30, 2017: June, 30 2017 Estimated Fair Value Level 1 Level 2 Level 3 Assets: $ $ $ $ Liabilities: Common Stock Warrant Liability $ 864,371 $ 864,371 There were no financial assets outstanding that were required to be measured at fair value at December 31, 2016. Warrants containing provisions that could require the Company to settle the warrants in cash in an event outside the Company’s control or that have price protection rights are accounted for as liabilities, with changes in the fair values included in net loss for the respective periods. Because some of the inputs to the valuation model are either not observable or are not derived principally from or corroborated by observable market data by correlation or other means, the warrant liability is classified as Level 3 in the fair value hierarchy. The following table summarizes the changes in the Company’s Level 3 warrant liability for the six months ended June 30, 2017: June 30, 2017 Warrant liability Beginning balance $ Issuances of warrants 1,612,417 Warrant exercises (900,493 ) Change in fair value 152,447 Ending balance 864,371 There were no transfers between Level 1, Level 2 or Level 3 for the three and six months ended June 30, 2017 and year ended December 31, 2016. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 10: NET LOSS PER SHARE The Company accounts for and discloses net loss per common share in accordance with FASB Accounting Standards Codification (“ASC”) Topic 260, Earnings Per Share The following table summarizes the Company’s calculation of net loss per common share: Three Months Ended Six Months Ended 2017 2016 2017 2016 Net Loss Per share Numerator Net loss $ 2,241,489 $ 1,722,383 $ 3,945,043 $ 4,049,920 Deemed dividend attributable to preferred stock $ 2,568,132 $ 2,568,132 Net loss attributable to common shareholders $ 4,809,621 $ 1,722,383 $ 6,513,175 $ 4,049,920 Denominator Weighted average common shares outstanding 7,476,046 2,587,871 5,641,671 2,485,853 Basic and diluted net loss per share $ 0.64 $ 0.67 $ 1.15 $ 1.63 The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three months and six months ended June 30, 2017 and 2016 because the effect of them would be anti-dilutive: Three Months Ended Six Months Ended 2017 2016 2017 2016 Options to purchase common stock 1,121,567 394,090 754,093 394,090 Series A convertible preferred stock 2,184,356 1,098,212 Warrants to purchase common stock 6,139,797 402,228 3,286,862 402,228 Total 9,445,720 796,318 5,139,167 796,318 |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 11: INCOME TAXES Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate. No income tax liabilities existed as of June 30, 2017 and December 31, 2016 due to the Company’s continuing operating losses. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Jun. 30, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 12: CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At June 30, 2017 and December 31, 2016, the Company had $3,440,023 and $2,777,962 in excess of the FDIC insured limit, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 13: COMMITMENTS AND CONTINGENCIES Lease Commitments The future minimum lease payments due subsequent to June 30, 2017 under all non-cancelable operating and capital leases for the next five years are as follows: Year Ending December 31, Operating Leases Amount 2017 (remainder of year) $ 4,930 Total minimum lease payments $ 4,930 The total rent expense for the three and six months ended June 30, 2017 and June 30, 2016 was $7,395 and $18,540, respectively and $78,600 and $157,200, respectively. Rent expense was included in general and administrative expenses for both years. Litigation and Contingencies On October 10, 2013, a putative securities class action complaint, captioned Cook v. Atossa Genetics, Inc. On February 14, 2014, the Court appointed plaintiffs Miko Levi, Bandar Almosa and Gregory Harrison (collectively, the “Levi Group”) as lead plaintiffs, and approved their selection of co-lead counsel and liaison counsel. The Court also amended the caption of the case to read In re Atossa Genetics, Inc. Securities Litigation No. 2:13-cv-01836-RSM. An amended complaint was filed on April 15, 2014. The Company and other defendants filed motions to dismiss the amended complaint on May 30, 2014. The plaintiffs filed briefs in opposition to these motions on July 11, 2014. The Company replied to the opposition brief on August 11, 2014. On October 6, 2014 the Court granted defendants’ motion dismissing all claims against Atossa and all other defendants. The Court’s order provided plaintiffs with a deadline of October 26, 2014 to file a motion for leave to amend their complaint and the plaintiffs did not file such a motion by that date. On October 30, 2014, the Court entered a final order of dismissal. On November 3, 2014, plaintiffs filed a notice of appeal with the Court and have appealed the Court’s dismissal order to the U.S. Court of Appeals for the Ninth Circuit. The appeal was fully-briefed and oral arguments were held on May 18, 2017. We are currently awaiting a decision from the Court. The Company believes this lawsuit is without merit and plans to defend itself vigorously; however, failure by the Company to obtain a favorable resolution of the claims set forth in the complaint could have a material adverse effect on the Company’s business, results of operations and financial condition. Currently, the amount of such material adverse effect cannot be reasonably estimated, and no provision or liability has been recorded for these claims as of June 30, 2017. The costs associated with defending and resolving the lawsuit and ultimate outcome cannot be predicted. These matters are subject to inherent uncertainties and the actual cost, as well as the distraction from the conduct of the Company’s business, will depend upon many unknown factors and management’s view of these may change in the future. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | NOTE 14: STOCK BASED COMPENSATION Stock Options and Incentive Plan On September 28, 2010, the Board of Directors approved the adoption of the 2010 Stock Option and Incentive Plan, or the 2010 Plan, to provide for the grant of equity-based awards to employees, officers, non-employee directors and other key persons providing services to the Company. Awards of incentive options may be granted under the 2010 Plan until September 2020. No other awards may be granted under the 2010 Plan after the date that is 10 years from the date of stockholder approval. An aggregate of 66,667 shares were initially reserved for issuance in connection with awards granted under the 2010 Plan and on May 18, 2016, an additional 133,333 shares were reserved for issuance under the 2010 Plan. On May 9, 2017, the stockholders approved an additional 1,500,000 shares for issuance under the 2010 Plan. The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of shares 2012 30,018 2013 34,452 2014 49,532 2015 65,557 2016 220,419 2017 151,477 Total additional shares 551,455 The Company granted 1,716,323 options to purchase shares of common stock during the six months ended June 30, 2017. No options were exercised during the three or six months ended June 30, 2017. There are 100,456 shares available for grant under the 2010 Plan as of June 30, 2017. Compensation costs associated with the Company’s stock options are recognized, based on the grant-date fair values of these options, over the requisite service period, or vesting period. Accordingly, the Company recognized stock based compensation expense of $181,408 and $200,187 for the three months ended June 30, 2017 and 2016, respectively and $336,115 and $392,664 for the six months ended June 30, 2017 and 2016, respectively. The fair value of stock options granted for the six months ended June 30, 2017 and 2016 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Period ended June 30, 2017 2016 Risk free interest rate 1.86% - 2.04% 1.48% - 1.55% Expected term 5.32- 6.36 years 5.58 - 6.06 years Dividend yield - % - % Expected volatility 112.86% - 114.19% 115.52% - 115.58% Options issued and outstanding as of June 30, 2017 and their activities during the six months then ended are as follows: Number of Weighted- Weighted- Aggregate Outstanding as of January 1, 2017 378,924 $ 26.25 $ Granted 1,716,323 .47 Forfeited (3,167 ) 15.00 Expired (19,081 ) 25.05 Outstanding as of June 30, 2017 2,072,999 4.10 9.25 $ 51,512 Exercisable as of June 30, 2017 229,158 31.65 7.44 $ — Vested and expected to vest 2,072,999 $ 4.10 9.26 $ 51,512 At June 30, 2017, there were 1,840,530 unvested options outstanding and the related unrecognized total compensation cost associated with these options was approximately $1,427,000. This expense is expected to be recognized over a weighted-average period of 2.10 years. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 15: SUBSEQUENT EVENTS Subsequent to June 30, 2017 and throughout August 11, 2017 an additional 1,656,666 common stock warrants have been exercised at $0.26 per warrant for cash proceeds of $434,733. As of August 14, 2017 there are 1,215,000 common stock warrants still outstanding. |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (GAAP) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2016. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. On August 26, 2016, the Company completed a 1-for-15 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of Common Stock, and the par value per share was changed to $.015 per share. No fractional shares were issued because of the Reverse Stock Split and any fractional shares that would otherwise have resulted from the Reverse Stock Split were paid in cash. The number of authorized shares of common stock was not reduced as a result of the Reverse Stock Split. The Company’s common stock began trading on a reverse stock split-adjusted basis on August 26, 2016. All share and per share data included in this report has been retroactively restated to reflect the Reverse Stock Split. |
Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. |
Financial Instruments with Characteristics of Both Liabilities and Equity: | Financial Instruments with Characteristics of Both Liabilities and Equity: During the three months ended June 30, 2017, the Company issued certain financial instruments, including warrants to purchase common stock, which have characteristics of both liability and equity. Financial instruments such as warrants that are classified as liabilities are fair valued upon issuance and are remeasured at fair value at subsequent reporting periods with the resulting change in fair value recorded in “change in fair value of common stock warrants”. The fair value of warrants is estimated using valuation models that require the input of subjective assumptions including stock price volatility, expected life, and the probability of future equity issuances and their impact to the price protection feature. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements: In February 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-02, Lease Accounting Topic 842. In April 2016, the FASB issued ASU No. 2016-09, Compensation - Stock Compensation In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features and Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception adoption |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses | Prepaid expenses consisted of the following: June 30, December 31, Prepaid insurance 156,532 121,333 Trade show 20,000 Retainer and security deposits 29,968 14,218 Financial exchange fees 21,000 Other 20,870 16,050 Total prepaid expenses $ 228,370 $ 171,601 |
FURNITURE AND EQUIPMENT (Tables
FURNITURE AND EQUIPMENT (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of furniture and equipment | Furniture and equipment consisted of the following: June 30, December 31, Furniture and equipment $ 170,916 $ 210,528 Less: Accumulated depreciation (151,927 ) (155,409 ) Total furniture and equipment, net $ 18,989 $ 55,119 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: June 30, December 31, Patents $ 639,000 $ 639,000 Software 113,540 113,540 Total intangible assets 752,540 752,540 Less: Accumulated amortization (166,857 ) (112,100 ) Total intangible assets, net $ 585,683 $ 640,440 |
Schedule of future amortization expense | Future estimated amortization expenses as of June 30, 2017 for the five succeeding years is as follows: For the years ending December 31, Amounts 2017 (includes the remainder of the year) $ 48,282 2018 73,433 2019 70,285 2020 70,285 2021 70,285 Thereafter 253,113 $ 585,683 |
PAYROLL LIABILITIES (Tables)
PAYROLL LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of payroll liabilities | Payroll liabilities consisted of the following: June 30, December 31, Accrued bonus payable $ 280,008 $ 609,337 Accrued vacation 134,865 94,514 Accrued payroll liabilities 67,547 66,048 Total payroll liabilities $ 482,420 $ 769,899 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of warrant activity | The following table summarizes the 2017 liability warrant activity: Shares Weighted Average Exercise Price Outstanding as of December 31, 2016 Warrants granted 5,863,332 $ 0.9375 Warrants exercised (2,991,666 ) 0.26 Warrants cancelled Outstanding as of June 30, 2017 2,871,666 $ 0.26 |
Schedule of inputs used in valuation of warrants | Inputs used in the valuation of the warrants at the issuance date of April 3, 2017 and June 30, 2017 were as follows: Initial valuation Common stock price $ 0.75 Exercise price $ 0.9375 Expected Volatility 50 % Dividend Yield 0 % Risk-Free Interest Rate 0.79% - 1.88 % Expected Term (years) 0.24 - 5 June 30, 2017 valuation Common stock price $ 0.50 Exercise price $ 0.26 Expected Volatility 50 % Dividend Yield 0 % Risk-Free Interest Rate 0.79% - 1.88 % Expected Term (years) 0 .08-4.76 |
Schedule of warrants | As of June 30, 2017, warrants to purchase 3,273,894 shares of common stock were outstanding including: Outstanding Warrants to Purchase Shares Exercise Price Expiration Date 2011 private placement 283,470 $ 18.75 - 24.00 May 8, 2018 Acueity warrants 21,667 75.00 September 30, 2017 2014 public offering 77,790 45.00 January 29, 2019 Placement agent fees for Company’s offerings 16,135 31.80 - 186.45 March - November, 2018 Outside consulting 3,166 63.60 January 14, 2018 2017 public offering 2,871,666 0.26 April 3, 2022 3,273,894 |
FAIR VALUE OF FINANCIAL INSTR29
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial assets on recurring basis | The following tables present the Company’s fair value hierarchy for all its financial assets, in thousands, by major security type measured at fair value on a recurring basis as of June 30, 2017: June, 30 2017 Estimated Fair Value Level 1 Level 2 Level 3 Assets: $ $ $ $ Liabilities: Common Stock Warrant Liability $ 864,371 $ 864,371 |
Schedule of changes in the Company's Level 3 warrant liability | The following table summarizes the changes in the Company’s Level 3 warrant liability for the six months ended June 30, 2017: June 30, 2017 Warrant liability Beginning balance $ Issuances of warrants 1,612,417 Warrant exercises (900,493 ) Change in fair value 152,447 Ending balance 864,371 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of earning per share | The following table summarizes the Company’s calculation of net loss per common share: Three Months Ended Six Months Ended 2017 2016 2017 2016 Net Loss Per share Numerator Net loss $ 2,241,489 $ 1,722,383 $ 3,945,043 $ 4,049,920 Deemed dividend attributable to preferred stock $ 2,568,132 $ 2,568,132 Net loss attributable to common shareholders $ 4,809,621 $ 1,722,383 $ 6,513,175 $ 4,049,920 Denominator Weighted average common shares outstanding 7,476,046 2,587,871 5,641,671 2,485,853 Basic and diluted net loss per share $ 0.64 $ 0.67 $ 1.15 $ 1.63 |
Schedule of antidilutive securities | The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three months and six months ended June 30, 2017 and 2016 because the effect of them would be anti-dilutive: Three Months Ended Six Months Ended 2017 2016 2017 2016 Options to purchase common stock 1,121,567 394,090 754,093 394,090 Series A convertible preferred stock 2,184,356 1,098,212 Warrants to purchase common stock 6,139,797 402,228 3,286,862 402,228 Total 9,445,720 796,318 5,139,167 796,318 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments under all non-cancelable operating and capital leases | The future minimum lease payments due subsequent to June 30, 2017 under all non-cancelable operating and capital leases for the next five years are as follows: Year Ending December 31, Operating Leases Amount 2017 (remainder of year) $ 4,930 Total minimum lease payments $ 4,930 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of automatic additions to the 2010 Plan | The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of shares 2012 30,018 2013 34,452 2014 49,532 2015 65,557 2016 220,419 2017 151,477 Total additional shares 551,455 |
Schedule of stock options, valuation assumptions | The fair value of stock options granted for the six months ended June 30, 2017 and 2016 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Period ended June 30, 2017 2016 Risk free interest rate 1.86% - 2.04% 1.48% - 1.55% Expected term 5.32- 6.36 years 5.58 - 6.06 years Dividend yield - % - % Expected volatility 112.86% - 114.19% 115.52% - 115.58% |
Schedule of stock options | Options issued and outstanding as of June 30, 2017 and their activities during the six months then ended are as follows: Number of Underlying Shares Weighted- Average Exercise Price Per Share Weighted- Average Contractual Life Remaining in Years Aggregate Intrinsic Value Outstanding as of January 1, 2017 378,924 $ 26.25 $ Granted 1,716,323 .47 Forfeited (3,167 ) 15.00 Expired (19,081 ) 25.05 Outstanding as of June 30, 2017 2,072,999 4.10 9.25 $ 51,512 Exercisable as of June 30, 2017 229,158 31.65 7.44 $ Vested and expected to vest 2,072,999 $ 4.10 9.26 $ 51,512 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||
Net loss | $ 2,241,489 | $ 1,722,383 | $ 3,945,043 | $ 4,049,923 | ||
Net cash provided by (used in) operating activities | 3,200,000 | |||||
Cash and cash equivalents | 3,690,023 | $ 1,190,866 | 3,690,023 | $ 1,190,866 | $ 3,027,962 | $ 3,715,895 |
Working capital | $ 2,100,000 | $ 2,100,000 |
SUMMARY OF ACCOUNTING POLICIE34
SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - $ / shares | Aug. 26, 2016 | Jun. 30, 2017 | May 31, 2017 | Dec. 31, 2016 |
Common stock, par or stated value (in dollars per share) | $ 0.015 | $ 0.015 | ||
Common stock, outstanding | 10,032,410 | 3,786,913 | ||
Reverse Stock Split [Member] | ||||
Description of reverse stock split | The Company completed a 1-for-15 reverse stock split of the shares of the Company’s common stock (the “Reverse Stock Split”). As a result of the Reverse Stock Split, every 15 shares of issued and outstanding common stock were combined into one issued and outstanding share of Common Stock, and the par value per share was changed to $.015 per share. | |||
Common stock, par or stated value (in dollars per share) | $ 0.015 | |||
Common stock, outstanding | 0 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 156,532 | $ 121,333 |
Trade show | 20,000 | |
Retainer and security deposits | 29,968 | 14,218 |
Financial exchange fees | 21,000 | |
Other | 20,870 | 16,050 |
Total prepaid expenses | $ 228,370 | $ 171,601 |
FURNITURE AND EQUIPMENT (Detail
FURNITURE AND EQUIPMENT (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Furniture and equipment | $ 170,916 | $ 210,528 |
Less: Accumulated depreciation | (151,927) | (155,409) |
Total furniture and equipment, net | $ 18,989 | $ 55,119 |
FURNITURE AND EQUIPMENT (Deta37
FURNITURE AND EQUIPMENT (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 8,773 | $ 32,734 | $ 18,434 | $ 62,353 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 752,540 | $ 752,540 |
Less: Accumulated amortization | (166,857) | (112,100) |
Total intangible assets, net | 585,683 | 640,440 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | 639,000 | 639,000 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 113,540 | $ 113,540 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2017 (includes the remainder of the year) | $ 48,282 | |
2,018 | 73,433 | |
2,019 | 70,285 | |
2,020 | 70,285 | |
2,021 | 70,285 | |
Thereafter | 253,113 | |
Total intangible assets, net | $ 585,683 | $ 640,440 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | |
Software [Member] | |||||
Finite-lived intangible assets acquired | $ 113,540 | $ 113,540 | |||
Useful life | 3 years | ||||
Amortization expense | $ 6,759 | $ 7,857 | $ 19,614 | $ 15,714 | |
Patents [Member] | |||||
Finite-lived intangible assets acquired | 639,000 | $ 639,000 | |||
Amortization expense | $ 17,571 | $ 37,254 | $ 35,142 | $ 74,508 | |
Patents [Member] | Minimum [Member] | |||||
Useful life | 7 years | ||||
Patents [Member] | Maximum [Member] | |||||
Useful life | 12 years |
PAYROLL LIABILITIES (Details)
PAYROLL LIABILITIES (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued bonus payable | $ 280,008 | $ 609,337 |
Accrued vacation | 134,865 | 94,514 |
Accrued payroll liabilities | 67,547 | 66,048 |
Total payroll liabilities | $ 482,420 | $ 769,899 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Class of Warrant or Right Number of Securities called by Warrants or Rights [Roll Forward] | |
Warrants Granted | shares | 5,863,332 |
Warrants Exercised | shares | (2,991,666) |
Outstanding at end | shares | 2,871,666 |
Class of Warrant or Right Exercise Price of Warrants or Rights [Roll Forward] | |
Warrants Granted | $ / shares | $ 0.9375 |
Warrants Exercised | $ / shares | 0.26 |
Outstanding at end | $ / shares | $ 0.26 |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - $ / shares | Apr. 03, 2017 | Jun. 30, 2017 | Jun. 29, 2017 |
Exercise price (in dollars per share) | $ 0.26 | ||
2017 Warrants [Member] | |||
Common stock price | $ 0.75 | 0.50 | $ 0.52 |
Exercise price (in dollars per share) | $ 0.9375 | $ 0.26 | $ 0.26 |
Expected Volatility | 50.00% | 50.00% | |
Dividend Yield | 0.00% | 0.00% | |
2017 Warrants [Member] | Minimum [Member] | |||
Risk-Free Interest Rate | 0.79% | 0.79% | |
Expected Term | 2 months 26 days | 29 days | |
2017 Warrants [Member] | Maximum [Member] | |||
Risk-Free Interest Rate | 1.88% | 1.88% | |
Expected Term | 5 years | 4 years 9 months 4 days |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) | 6 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 3,273,894 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.26 |
2017 Public Offering [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 2,871,666 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.26 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Apr. 3, 2022 |
2011 Private Placement [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 283,470 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | May 8, 2018 |
2011 Private Placement [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 18.75 |
2011 Private Placement [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 24 |
Acueity Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 21,667 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 75 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Sep. 30, 2017 |
2014 Public Offering [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 77,790 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 45 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Jan. 29, 2019 |
Placement Agent Fee [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 16,135 |
Placement Agent Fee [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 31.80 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Mar. 31, 2018 |
Placement Agent Fee [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 186.45 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Nov. 30, 2018 |
Outside Consulting Firm [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 3,166 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 63.60 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Jan. 14, 2018 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Jun. 29, 2017 | Apr. 03, 2017 | Mar. 28, 2017 | May 25, 2016 | Aug. 31, 2016 | Jun. 30, 2017 | Mar. 31, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | Dec. 31, 2016 | Nov. 11, 2015 | May 19, 2014 |
Number of total shares authorized | 85,000,000 | 85,000,000 | ||||||||||
Common stock, authorized | 75,000,000 | 75,000,000 | 75,000,000 | |||||||||
Common stock, par or stated value (in dollars per share) | $ 0.015 | $ 0.015 | $ 0.015 | |||||||||
Preferred stock, authorized | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Number of new shares issued, value | $ 829,684 | |||||||||||
Proceeds from issuance of common stock | $ 2,133,974 | |||||||||||
Initial exercise price (in dollars per share) | $ 0.26 | $ 0.26 | ||||||||||
Number of shares conversion | 1,333.33 | 1,333.33 | ||||||||||
Allocation of Series A convertible preferred stock to warrants and beneficial conversion feature | $ (1,284,066) | |||||||||||
Conversion of Series A Convertible Preferred Stock to common stock | ||||||||||||
2016 Public Offering [Member] | ||||||||||||
Number of new shares issued, value | $ 2,875,000 | |||||||||||
Proceeds from issuance of common stock | $ 2,561,896 | |||||||||||
Share price (in dollars per share) | $ 2.50 | |||||||||||
Number of new shares issued | 1,150,000 | |||||||||||
2017 Public Offering [Member] | ||||||||||||
Initial exercise price (in dollars per share) | $ 0.26 | $ 0.26 | ||||||||||
Common Stock [Member] | ||||||||||||
Number of new shares issued, value | $ 17,910 | |||||||||||
Number of new shares issued | 1,194,000 | |||||||||||
Deemed Dividend on Series A Convertible Preferred Stock | $ 2,568,132 | |||||||||||
Conversion of Series A Convertible Preferred Stock to common stock | $ 53,260 | |||||||||||
Conversion of Series A Convertible Preferred Stock to common stock (in shares) | 3,550,664 | 3,550,664 | ||||||||||
Additional Paid-in Capital [Member] | ||||||||||||
Number of new shares issued, value | $ 811,774 | |||||||||||
Allocation of Series A convertible preferred stock to warrants and beneficial conversion feature | 1,284,066 | |||||||||||
Deemed Dividend on Series A Convertible Preferred Stock | (2,568,132) | |||||||||||
Conversion of Series A Convertible Preferred Stock to common stock | $ 2,406,535 | |||||||||||
Underwriting Agreement [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | ||||||||||||
Proceeds from issuance initial public offering | $ 4,400,000 | $ 4,400,000 | ||||||||||
Net proceeds from issuance initial public offering | $ 3,900,000 | |||||||||||
Underwriting Agreement [Member] | Common Stock and Warrants [Member] | Over-Allotment Option [Member] | Aegis Capital Corp [Member] | ||||||||||||
Proceeds from issuance initial public offering | $ 4,400,000 | |||||||||||
Number of shares included in offering | 530,000 | |||||||||||
Number of new shares issued | 530,000 | |||||||||||
Initial exercise price (in dollars per share) | $ 0.9375 | $ 0.26 | $ 0.26 | |||||||||
Warrant term | 5 years | |||||||||||
Beneficial Owner [Member] | ||||||||||||
Ownership percentage | 15.00% | |||||||||||
Percentage of common stock outstanding | 2.00% | |||||||||||
Entitled to receive worth of common stock | $ 30 | |||||||||||
Initial exercise price (in dollars per share) | $ 15 | |||||||||||
Aspire Capital Fund LLC [Member] | New Common Stock Purchase Agreement [Member] | ||||||||||||
Shares agreed to register in common stock | 405,747 | |||||||||||
Stock committed | $ 10,000,000 | |||||||||||
Aspire Capital Fund LLC [Member] | Stock Purchase Agreement [Member] | ||||||||||||
Proceeds from issuance of common stock | $ 2,177,083 | |||||||||||
Net proceeds from issuance of common stock | $ 2,133,973 | |||||||||||
Number of shares issued for services | 49,736 | |||||||||||
Number of shares issued for services, value | $ 746 | |||||||||||
Number of new shares issued | 405,747 | |||||||||||
Aspire Capital Fund LLC [Member] | Stock Purchase Agreement [Member] | Additional Paid-in Capital [Member] | ||||||||||||
Number of shares issued for services, value | 197,777 | |||||||||||
Issuance of common shares as commitment fees | $ 198,523 | |||||||||||
Series A Convertible Preferred Stock Convertible [Member] | ||||||||||||
Preferred stock, authorized | 4,000 | 4,000 | 0 | |||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||
Description of preferred stock conversion | Each share of the Series A Preferred is convertible into 1,333.33 shares of our Common Stock (subject to adjustment as provided in the related certificate of designation of preferences, rights and limitations). Holders of Series A Preferred are prohibited from converting Series A Preferred into shares of our common stock if, as a result of such conversion, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of our Common Stock then issued and outstanding. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99%, provided that any increase in such percentage shall not be effective until 61 days after such notice to us. | |||||||||||
Conversion of Series A Convertible Preferred Stock to common stock (in shares) | 2,663 | |||||||||||
Description of conversion ratio | Conversion ratio of 1,333.33 shares of Series A Convertible Preferred Stock to common stock. | |||||||||||
Series A Convertible Preferred Stock Convertible [Member] | Underwriting Agreement [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | ||||||||||||
Number of shares included in offering | 3,502 | |||||||||||
Series A Convertible Preferred Stock Convertible [Member] | Underwriting Agreement [Member] | Common Stock and Warrants [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | ||||||||||||
Number of shares included in offering | 4,669,333 | |||||||||||
Number of new shares issued | 4,669,333 | |||||||||||
Series A Preferred Stock [Member] | ||||||||||||
Preferred stock, authorized | 750,000 | 750,000 | ||||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | $ 0.001 | ||||||||||
Class A Units [Member] | Underwriting Agreement [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | ||||||||||||
Number of shares included in offering | 664,000 | |||||||||||
Share price (in dollars per share) | $ 0.75 | |||||||||||
Class A Units [Member] | Underwriting Agreement [Member] | Common Stock and Warrants [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | ||||||||||||
Number of shares included in offering | 664,000 | |||||||||||
Number of new shares issued | 664,000 | |||||||||||
Class B Units [Member] | Underwriting Agreement [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | ||||||||||||
Number of shares included in offering | 1,000 | |||||||||||
2017 Warrants [Member] | ||||||||||||
Share price (in dollars per share) | $ 0.52 | $ 0.75 | 0.50 | 0.50 | ||||||||
Number of new shares issued | 3,000,000 | |||||||||||
Initial exercise price (in dollars per share) | $ 0.26 | $ 0.9375 | $ 0.26 | $ 0.26 | ||||||||
Warrant term | 5 years | |||||||||||
Number of shares conversion | 1,500,000 | |||||||||||
Description of exercise limitation | The shares of Common Stock are registered under the Securities Act of 1933, as amended. If delivery of the shares of Common Stock pursuant to the foregoing would result in the holder exceeding the 4.99% “Beneficial Ownership Limitation” (as defined in the warrant) then the shares in excess of such 4.99% will be held in abeyance by the Company pending further instruction from the holder. | A holder will not have the right to exercise any portion of the Warrant if the holder (together with its affiliates) would beneficially own in excess of 4.99% of the number of shares of our stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants. However, any holder may increase or decrease such percentage to any other percentage not in excess of 9.99% upon at least 61 days’ prior notice from the holder to us. | ||||||||||
Fair value of warrants | $ 1,800,000 | |||||||||||
Initial fair value of warrants | $ 1,600,000 |
FAIR VALUE OF FINANCIAL INSTR46
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Assets | ||
Total assets | $ 4,709,378 | $ 4,144,372 |
Liabilities | ||
Common Stock Warrant Liability | 864,371 | |
Level 3 [Member] | ||
Liabilities | ||
Common Stock Warrant Liability | 864,371 | |
Fair Value, Measurements, Recurring [Member] | ||
Liabilities | ||
Common Stock Warrant Liability | $ 864,371 |
FAIR VALUE OF FINANCIAL INSTR47
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended |
Jun. 30, 2017 | Jun. 30, 2017 | |
Warrant liability [Roll Forward] | ||
Issuances of warrants | $ 1,612,415 | |
Warrant exercises | (900,493) | |
Change in fair value | $ 152,447 | 152,447 |
Ending balalnce | $ 864,371 | $ 864,371 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Numerator | ||||
Net loss | $ 2,241,489 | $ 1,722,383 | $ 3,945,043 | $ 4,049,923 |
Deemed dividend attributable to preferred stock | (2,568,132) | (2,568,132) | ||
Net loss attributable to common shareholders | $ 4,809,621 | $ 1,722,383 | $ 6,513,175 | $ 4,049,923 |
Denominator | ||||
Weighted average common shares outstanding | 7,476,046 | 2,587,871 | 5,641,671 | 2,485,853 |
Basic and diluted net loss per share | $ 0.64 | $ 0.67 | $ 1.15 | $ 1.63 |
NET LOSS PER SHARE (Details 1)
NET LOSS PER SHARE (Details 1) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potential common shares excluded | 9,445,720 | 796,318 | 5,139,167 | 796,318 |
Series A Convertible Preferred Stock Convertible [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potential common shares excluded | 2,184,356 | 1,098,212 | ||
Equity Option [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potential common shares excluded | 1,121,567 | 394,090 | 754,093 | 394,090 |
Warrant [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of potential common shares excluded | 6,139,797 | 402,228 | 3,286,862 | 402,228 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | Jun. 30, 2017 | Dec. 31, 2016 |
Risks and Uncertainties [Abstract] | ||
Cash, FDIC insured amount | $ 250,000 | |
Cash, uninsured amount | $ 3,440,023 | $ 2,777,962 |
COMMITMENTS AND CONTINGENCIES51
COMMITMENTS AND CONTINGENCIES (Details) | Jun. 30, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2017 (remainder of year) | $ 4,930 |
Total minimum lease payments | $ 4,930 |
COMMITMENTS AND CONTINGENCIES52
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||||
Rent expense | $ 7,395 | $ 78,600 | $ 18,540 | $ 157,200 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) | 6 Months Ended |
Jun. 30, 2017shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 551,455 |
2012 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 30,018 |
2013 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 34,452 |
2014 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 49,532 |
2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 65,557 |
2016 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 220,419 |
2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 151,477 |
STOCK BASED COMPENSATION (Det54
STOCK BASED COMPENSATION (Details 1) - Stock Option and Incentive Plan [Member] | 6 Months Ended | |
Jun. 30, 2017 | Jun. 30, 2016 | |
Dividend yield | ||
Minimum [Member] | ||
Risk free interest rate | 1.86% | 1.48% |
Expected term | 5 years 3 months 25 days | 5 years 6 months 29 days |
Expected stock volatility | 112.86% | 115.52% |
Maximum [Member] | ||
Risk free interest rate | 2.04% | 1.55% |
Expected term | 6 years 4 months 10 days | 622 days |
Expected stock volatility | 114.19% | 115.58% |
STOCK BASED COMPENSATION (Det55
STOCK BASED COMPENSATION (Details 2) | 6 Months Ended |
Jun. 30, 2017USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning | shares | 378,924 |
Granted | shares | 1,716,323 |
Forfeited | shares | (3,167) |
Expired | shares | (19,081) |
Outstanding at ending | shares | 2,072,999 |
Exercisable at ending | shares | 229,158 |
Vested and expected to vest | shares | 2,072,999 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Rollforward] | |
Outstanding at beginning | $ / shares | $ 26.25 |
Granted | $ / shares | 0.47 |
Forfeited | $ / shares | 15 |
Expired | $ / shares | 25.05 |
Outstanding at ending | $ / shares | 4.10 |
Exercisable at ending | $ / shares | 31.65 |
Vested and expected to vest | $ / shares | $ 4.10 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Contractual Life Remaining in Years [Rollforward] | |
Outstanding at ending | 9 years 3 months |
Exercisable at end | 7 years 5 months 8 days |
Vested and expected to vest | 9 years 3 months 4 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Rollforward] | |
Outstanding at ending | $ | $ 51,512 |
Vested and expected to vest | $ | $ 51,512 |
STOCK BASED COMPENSATION (Det56
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2017 | Jun. 30, 2016 | Jun. 30, 2017 | Jun. 30, 2016 | May 09, 2017 | May 18, 2016 | Sep. 28, 2010 | |
Share-based Compensation | $ 181,408 | $ 200,187 | $ 336,115 | $ 392,664 | |||
Number of shares granted | 1,716,323 | ||||||
Number of unvested options outstanding | 1,840,530 | 1,840,530 | |||||
Unrecognized compensation cost | $ 1,427,000 | $ 1,427,000 | |||||
Vesting period | 2 years 1 month 6 days | ||||||
Stock Option and Incentive Plan 2010 [Member] | |||||||
Shares held in employee stock option plan suspense shares | 1,500,000 | 133,333 | 66,667 | ||||
Number of shares available for grant | 100,456 | 100,456 | |||||
Scientific Advisor [Member] | |||||||
Number of shares granted | 1,716,323 |
SUBSEQUENT EVENTS (Details Narr
SUBSEQUENT EVENTS (Details Narrative) - USD ($) | Aug. 11, 2017 | Aug. 14, 2017 | Jun. 30, 2017 |
Subsequent Event [Line Items] | |||
Number of warrants outstanding | 3,273,894 | ||
Exercise price (in dollars per share) | $ 0.26 | ||
Additional common stock warrants exercised | 2,871,666 | ||
Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Number of warrants outstanding | 1,215,000 | ||
Cash proceeds warrant | $ 434,733 | ||
Exercise price (in dollars per share) | $ 0.26 | ||
Additional common stock warrants exercised | 1,656,666 |