Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 28, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | ATOSSA GENETICS INC | ||
Entity Central Index Key | 1,488,039 | ||
Document Type | 10-K | ||
Trading Symbol | ATOS | ||
Document Period End Date | Dec. 31, 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 Public Float | $ 4,852,826 | ||
Entity Common Stock, Shares Outstanding | 31,822,741 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 7,217,469 | $ 3,027,962 |
Restricted cash | 55,000 | 55,000 |
Prepaid expenses | 250,944 | 171,601 |
Research and development tax rebate receivable | 358,277 | |
Other current assets | 16,344 | |
Total current assets | 7,898,034 | 3,254,563 |
Furniture and equipment, net | 11,467 | 55,119 |
Intangible assets, net | 75,686 | 640,440 |
Other assets | 178,907 | 194,250 |
Total assets | 8,164,094 | 4,144,372 |
Current liabilities: | ||
Accounts payable | 334,901 | 254,320 |
Accrued expenses | 90,105 | 16,964 |
Payroll liabilities | 784,867 | 769,899 |
Other current liabilities | 15,534 | 6,083 |
Total current liabilities | 1,225,407 | 1,047,266 |
Commitments and contingencies (note 15) | ||
Stockholders' equity | ||
Common stock - $.015 par value; 75,000,000 shares authorized, 31,822,741 and 3,786,913 shares issued and outstanding at December 31, 2017 and December 31, 2016, respectively | 477,342 | 56,804 |
Additional paid-in capital | 71,887,674 | 60,344,050 |
Accumulated deficit | (65,426,329) | (57,303,748) |
Total stockholders' equity | 6,938,687 | 3,097,106 |
Total liabilities and stockholders' equity | $ 8,164,094 | $ 4,144,372 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.015 | $ 0.015 |
Common stock, authorized | 75,000,000 | 75,000,000 |
Common stock, issued | 31,822,741 | 3,786,913 |
Common stock, outstanding | 31,822,741 | 3,786,913 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Operating expenses: | ||
Research and development expenses | $ 2,328,087 | $ 770,427 |
General and administrative expenses | 4,859,369 | 6,479,193 |
Impairment of intangible assets | 461,715 | 718,970 |
Total operating expenses | 7,649,171 | 7,968,590 |
Operating loss | (7,649,171) | (7,968,590) |
Change in fair value of common stock warrants | (280,747) | |
Warrant financing expense | (192,817) | |
Other income, net | 154 | 1,599,705 |
Loss before income taxes | (8,122,581) | (6,368,885) |
Net loss | (8,122,581) | (6,368,885) |
Deemed dividend attributable to Series A preferred stock | (2,568,132) | |
Net loss attributable to common stockholders | $ (10,690,713) | $ (6,368,885) |
Loss per common share - basic and diluted (in dollars per share) | $ (0.91) | $ (2.16) |
Weighted average shares outstanding, basic and diluted (in shares) | 11,697,273 | 2,947,282 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 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, 2015 | $ 32,657 | $ 54,643,940 | $ (50,934,863) | $ 3,741,734 | ||
Balance, beginning (in shares) at Dec. 31, 2015 | 2,177,151 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common shares (net of issuance costs of $356,214) | $ 23,417 | 4,672,452 | 4,695,869 | |||
Issuance of common shares (net of issuance costs of $356,214) (in shares) | 1,561,080 | |||||
Issuance of common shares as commitment fees | $ 746 | 197,777 | 198,523 | |||
Issuance of common shares as commitment fees (in shares) | 49,736 | |||||
Amortization of commitment shares | (42,864) | (42,864) | ||||
Settlement of fractional shares | $ (1,054) | (3,444) | (3,460) | |||
Settlement of fractional shares (in shares) | (16) | |||||
Compensation cost for stock options granted to executives and employees | 876,189 | 876,189 | ||||
Net loss | (6,368,885) | (6,368,885) | ||||
Balance, ending at Dec. 31, 2016 | $ 56,804 | 60,344,050 | (57,303,748) | $ 3,097,106 | ||
Balance, ending (in shares) at Dec. 31, 2016 | 3,786,913 | 3,786,913 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock and warrants net of issuance costs of $768,412 | $ 267,001 | 5,895,587 | $ 6,162,588 | |||
Issuance of common stock and warrants net of issuance costs of $768,412 (in shares) | 17,800,000 | |||||
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) | ||||
Conversion of Series A convertible preferred stock to common stock | $ (4) | $ (3,234,769) | $ 70,040 | 3,164,733 | ||
Conversion of Series A convertible preferred stock to common stock (in shares) | (3,502) | 4,669,329 | ||||
Reclassification of warrant liability upon exercise of common stock warrants | $ 22,362 | 1,870,798 | 1,893,160 | |||
Reclassification of warrant liability upon exercise of common stock warrants (in shares) | 1,490,833 | |||||
Issuance of common stock upon warrant exercise for cash on liability warrant exercise | $ 43,225 | 706,008 | 749,233 | |||
Issuance of common stock upon warrant exercise for cash on liability warrant exercise (in shares) | 2,881,666 | |||||
Amortization of commitment shares | (79,410) | (79,410) | ||||
Compensation cost for stock options granted to executives and employees | 786,550 | 786,550 | ||||
Net loss | (8,122,581) | (8,122,581) | ||||
Balance, ending at Dec. 31, 2017 | $ 477,342 | $ 71,887,674 | $ (65,426,329) | $ 6,938,687 | ||
Balance, ending (in shares) at Dec. 31, 2017 | 31,822,741 | 31,822,741 |
CONSOLIDATED STATEMENTS OF STO6
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2016 | Dec. 31, 2017 | |
Statement of Stockholders' Equity [Abstract] | ||
Payments of stock issuance costs | $ 356,214 | $ 768,412 |
Payments of Class A units issuance costs | 65,816 | |
Payments of Series A Convertible Preferred Stock issuance costs | $ 267,231 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (8,122,581) | $ (6,368,885) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Compensation cost for stock options granted | 786,550 | 876,189 |
Loss on disposal of assets | 17,695 | 163,333 |
Impairment of intangible assets | 461,715 | 718,970 |
Change in fair value of common stock warrants | 280,747 | |
Warrant financing expense | 192,817 | |
Depreciation and amortization | 128,994 | 303,482 |
Changes in operating assets and liabilities: | ||
Restricted cash | 220,000 | |
Other assets | (80,408) | 144,951 |
Prepaid expenses | (79,343) | 21,692 |
Research and development tax rebate receivable | (358,277) | |
Accounts payable | 80,581 | (560,128) |
Payroll liabilities | 14,968 | (389,436) |
Accrued expenses | 73,141 | (446,712) |
Other current liabilities | 9,451 | (58,045) |
Net cash used in operating activities | (6,593,950) | (5,374,589) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of furniture and equipment | (9,213) | |
Net cash used in investing activities | (9,213) | |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Net proceeds from issuance of Class A and Class B Units | 3,871,636 | |
Proceeds from warrant exercises | 749,233 | |
Net proceeds from issuance of common stock and warrants | 6,162,588 | 4,695,869 |
Net cash provided by financing activities | 10,783,457 | 4,695,869 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 4,189,507 | (687,933) |
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR | 3,027,962 | 3,715,895 |
CASH AND CASH EQUIVALENTS, ENDING OF YEAR | 7,217,469 | 3,027,962 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest paid | 330 | |
NONCASH INVESTING AND FINANCING ACTIVITIES | ||
Amortization of commitment shares | $ 79,410 | $ 42,864 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 12 Months Ended |
Dec. 31, 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 and drug delivery programs. |
GOING CONCERN
GOING CONCERN | 12 Months Ended |
Dec. 31, 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 year ended December 31, 2017, the Company recorded a net loss of approximately $8.1 million and used approximately $6.6 million of cash in operating activities. As of December 31, 2017, the Company had approximately $7.2 million in cash and cash equivalents and working capital of approximately $6.7 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, potential exercise of outstanding warrants, 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. As of the date of filing this report, we expect that our existing resources will be sufficient to fund our planned operations for the next 6-8 months; however, additional capital resources will be needed to fund operations longer-term. 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 | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | NOTE 3: SUMMARY OF ACCOUNTING POLICIES Basis of Presentation: The accompanying consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the financial statements of Atossa Genetics Inc. and its wholly-owned subsidiaries. All significant intercompany account balances and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform to the 2017 presentation. 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 $0.015 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. As a result of the Reverse Stock Split, fractional shares totaling approximately 1,054 shares of common stock were rounded down and 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. 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 Research and Development All research and development costs are expensed as incurred. Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Company recognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the period in which such change occurs. The Company elects to accrue any interest or penalties related to income taxes as part of its income tax expense. Cash and Cash Equivalents Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less. Furniture and Equipment Furniture and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When furniture and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Useful Life Furniture and equipment 3 - 5 The Company applies the provisions of FASB ASC Topic 360 (“ASC 360”), Property, Plant, and Equipment Fair Value Measurements The Company records recurring and non-recurring financial assets and liabilities as well as all non-financial assets and liabilities subject to fair value measurement at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. These fair value principles prioritize valuation inputs across three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company's assumptions used to measure assets and liabilities at fair value. An asset or liability's classification within the various levels is determined based on the lowest level input that is significant to the fair value measurement. Intangible Assets Intangible assets consist of intellectual property and software acquired. Intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. Impairment losses must be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the assets. Estimating future cash flows related to an intangible asset involves significant estimates and assumptions. If our assumptions are not correct, there could be an impairment loss or, in the case of a change in the estimated useful life of the asset, a change in amortization expense. We continuously evaluate and reprioritize our research and development pipeline. Based on the most recent business strategies, we do not currently intend to develop and invest further in the Acueity patents and technologies and we now believe that additional investment may be required to update FDA marketing authorizations prior to commercializing the Acueity assets. Because of these changed business plans related to the Acueity assets, we have re-evaluated the assets for potential impairment during the year ended December 31, 2017. We have concluded that these assets are impaired and have recorded an asset impairment charge of $461,715 for the year ended December 31, 2017 to adjust the carrying value of these intangible assets to their estimated fair values to zero as of December 31, 2017. We concluded the patents were partially impaired and recorded impairment charges of $718,970 for the year ended December 31, 2016 to adjust the carrying value of the these intangible assets to their estimated fair values at December 31, 2016. We determined the fair values of the Acueity intangibles using an income approach (Level 3 of the fair value hierarchy). For purposes of the income approach, fair value was determined based on the present value of estimated future cash flows that a market participant could expect to generate from the development of products using the patented technology acquired in the Acueity transaction, discounted at an appropriate risk-adjusted rate reflecting the weighted average cost of capital for a potential market participant. The discount rate used in valuation for these intangible assets was 48.50%. The estimated future cash flows, including an estimate of long-term future growth rates, reflect our own assumptions of what market participants would utilize to price the assets pursuant to ASC 820, Fair Value Measurements Amortization is computed using the straight-line method over the estimate useful lives of the assets as follows: Useful Life Patents 10 Software 3 Financial Instruments with Characteristics of Both Liabilities and Equity During the year ended December 31, 2017, the Company issued certain financial instruments, consisting of 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 re-measured at fair value at subsequent reporting periods with the resulting change in fair value recorded in “change in fair value of common stock warrants” in the consolidated statement of operations. 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. There were no outstanding warrants accounted for as liabilities as of December 31, 2017. Share-Based Payments The Company follows the provisions of ASC Topic 718, Compensation - Stock Compensation The fair value of each option grant is estimated using the Black-Scholes option-pricing model, which requires assumptions regarding the expected volatility of the stock options, the expected life of the options, an expectation regarding future dividends on the Company’s common stock, and estimation of an appropriate risk-free interest rate. The Company’s expected common stock price volatility assumption is based upon the historical volatility of our stock price. The expected life assumption for stock options grants was based upon the simplified method provided for under ASC 718-10, which averages the contractual term of the options of ten years with the vesting term, typically one to four years. The dividend yield assumption of zero is based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends in the future. The risk-free interest rate used for each grant was based upon prevailing short-term interest rates over the expected life of the options. We adopted ASU No. 2016-09 Compensation - Stock Compensation |
RESTRICTED CASH
RESTRICTED CASH | 12 Months Ended |
Dec. 31, 2017 | |
Restricted Cash [Abstract] | |
RESTRICTED CASH | NOTE 4: RESTRICTED CASH Our restricted cash balance of $55,000 as of December 31, 2017 and 2016, consists entirely of cash pledged as security for the Company’s issued commercial credit cards. |
PREPAID EXPENSES
PREPAID EXPENSES | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expense, Current [Abstract] | |
PREPAID EXPENSES | NOTE 5: PREPAID EXPENSES Prepaid expenses consisted of the following: December 31, December 31, 2017 2016 Prepaid insurance $ 125,056 $ 121,333 Tradeshows 20,000 Professional services 97,788 Retainer and security deposits 14,218 14,218 Other 13,882 16,050 Total prepaid expenses $ 250,944 $ 171,601 |
RESEARCH AND DEVELOPMENT TAX RE
RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE | 12 Months Ended |
Dec. 31, 2017 | |
Research And Development Tax Rebate Receivable | |
RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE | NOTE 6: RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE On May 23, 2017 Atossa formed a wholly-owned subsidiary in Australia called Atossa Genetics AUS Pty Ltd. The purpose of this subsidiary is to perform research and development activities (“R&D”) including our Phase 1 and Phase 2 endoxifen clinical trials. Australia offers an R&D cash rebate of $0.435 per dollar spent on qualified R&D activities incurred in the country. For the period May 23, 2017 to December 31, 2017, the Company incurred qualified R&D expenses of approximately $824,000. For the year ended December 31, 2017, we have recorded an R&D rebate receivable of $358,277 and a corresponding offset to R&D expenses in the same amount. |
FURNITURE AND EQUIPMENT
FURNITURE AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
FURNITURE AND EQUIPMENT | NOTE 7: FURNITURE AND EQUIPMENT Furniture and equipment consisted of the following: December 31, December 31, 2017 2016 Furniture and equipment 170,917 210,528 Less: accumulated depreciation (159,450 ) (155,409 ) Total furniture and equipment, net $ 11,467 $ 55,119 Depreciation expense for the years ended December 31, 2017 and 2016 was $25,956 and $125,661, respectively. |
INTANGIBLE ASSETS
INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 8: INTANGIBLE ASSETS Intangible assets consisted of the following: December 31, December 31, 2017 2016 Patents $ 120,000 $ 639,000 Software 113,540 113,540 Intangible assets 233,540 752,540 Less: accumulated amortization (157,854 ) (112,100 ) Total intangible assets, net $ 75,686 $ 640,440 Intangible assets amounted to $75,686 and $640,440 as of December 31, 2017, and December 31, 2016, respectively, and consisted of patents and software acquired. The amortization period for the purchased software is three years. Amortization expense related to software for the years ended December 31, 2017 and 2016 was $32,754 and $28,806, respectively. Patent assets are amortized based on their determined useful life. We continuously evaluate and reprioritize our research and development pipeline based on the most recent business strategies, and as a result have delayed plans to develop and invest further in Acueity patents and technologies. In 2017 and 2016, we evaluated the Acueity assets and determined that the assets were impaired for the years ended December 31, 2017 and 2016 and we reduced the net carrying value of the patents by $461,715 and $718,970. The amortization period of the remaining patents is 10 years. Amortization expense related to patents was $70,284 and $149,015 for the years ended December 31, 2017 and 2016, respectively. Future estimated amortization expenses as of December 31, 2017, for the five succeeding years and thereafter is as follows: Years Ending December 31, Amounts 2018 $ 25,353 2019 13,000 2020 13,000 2021 13,000 2022 11,333 $ 75,686 |
PAYROLL LIABILITIES
PAYROLL LIABILITIES | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
PAYROLL LIABILITIES | NOTE 9: PAYROLL LIABILITIES Payroll liabilities consisted of the following: December 31, December 31, 2017 2016 Accrued bonus payable $ 566,000 $ 609,337 Accrued vacation 147,861 94,514 Accrued payroll liabilities 71,006 66,048 Total payroll liabilities $ 784,867 $ 769,899 |
FAIR VALUE OF FINANCIAL INSTRUM
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Of Financial Instruments | |
FAIR VALUE OF FINANCIAL INSTRUMENTS | NOTE 10: 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 There were no financial assets outstanding that were required to be measured at fair value on a recurring basis at December 31, 2017 or December 31, 2016. Warrants issued in the April 3, 2017 offering, which are discussed further in Note 11, contained provisions that could have required the Company to settle the warrants in cash in an event outside the Company’s control or had price protection rights and were therefore accounted for as liabilities while they were outstanding, with changes in the fair values included in net loss for the respective periods. Because some of the inputs to the valuation model were either not observable or were not derived principally from or corroborated by observable market data by correlation or other means, the warrant liability was 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 year ended December 31, 2017: Warrant liability Beginning balance $ Issuances of warrants 1,612,413 Warrant exercises (1,893,160 ) Change in fair value 280,747 Ending balance $ The Company’s intangible assets are classified within Level 3 of the fair value hierarchy, measured at fair value on a nonrecurring basis. Refer to Note 3 for further discussion. There were no transfers between Level 1, Level 2 or Level 3 for the years ended December 31, 2017 or December 31, 2016. |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 11: 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, through the filing of a certificate of designation with the Delaware Secretary of State, none of which are issued and outstanding as of December 31, 2017. 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 $2.2 million, or net proceeds of $2.1 million 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 and additional paid in capital of $746 and $197,777, respectively, which is amortized over the life of the stock purchase agreement. As of the date of filing this Annual Report with the SEC no shares of stock have been sold to Aspire Capital under the May 25, 2016 purchase agreement. As of December 31, 2017, 467,650 shares are available for sale to Aspire Capital under the May 25, 2016 purchase agreement. 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 $2.9 million to the Company, or net proceeds of $2.6 million 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 4,669,329 shares of common stock and warrants to purchase 4,669,329 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, were exercisable immediately and were scheduled to expire five years from the date of issuance. As of December 31, 2017, all of the warrants issued in the April 3, 2017 offering have been exercised and are no longer outstanding and all of the shares of Series A convertible preferred stock have been converted into shares of common stock. 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 were 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 were 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. 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 approximately 1.5 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. During the third quarter of 2017, all remaining warrants were exercised for cash so that no warrants issued in the April 3, 2017 financing remained outstanding. 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 (5,863,332 ) 0.26 Outstanding as of December 31, 2017 $ 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 are set forth below. All remaining warrants were exercised and no warrants issued in the April 2017 financing remained outstanding at December 31, 2017. 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 Conversion of Series A Convertible Preferred Stock During the year ended December 31, 2017, certain holders of the Series A convertible preferred stock exercised their conversion option and converted an aggregate of 3,502 shares of Series A convertible preferred stock into 4,669,329 shares of the Company’s common stock based on the conversion ratio of 1,333.33 shares of common stock for each share of Series A convertible preferred stock. As of December 31, 2017, no shares of Series A convertible preferred stock were outstanding. October 2017 Public Offering On October 26, 2017, the Company entered into an underwriting agreement with Maxim Group LLC relating to a public offering of common stock which closed on October 30, 2017. The offering generated gross proceeds to the Company of approximately $5.5 million and net proceeds of $4.9 million after deducting underwriting discounts, commission and other offering expenses paid by the Company. The offering included 11,500,000 shares of common stock at a public offering price of $0.44 per share. In addition, the underwriter exercised the over-allotment to purchase an additional 1,000,000 shares of common stock at the offering price of $0.44 per share, which are included in the gross proceeds of $5.5 million. December 2017 Public Offering and Private Placement On December 20, 2017, the Company entered into a placement agent agreement with Maxim Group LLC relating to the sale of the Company’s securities. Pursuant to the placement agent agreement, on December 20, 2017, the Company entered into a securities purchase agreement with certain purchasers named therein relating to the offering and sale of 5,300,000 shares of Company common stock at a public offering price of $0.27 per share. The offering generated gross proceeds to the Company of approximately $1.4 million and net proceeds of $1.2 million after deduction underwriting discounts, commissions, and other offering expenses paid by the Company. Concurrently with the public offering the Company also commenced a private placement whereby it issued and sold Class A and Class B Warrants, exercisable for an aggregate of 10,600,000 shares of common stock, at an exercise price of $0.315 per share. The public offering and the private placement involve the same purchasers. The Class A and Class B Warrants exercise price is fixed at $0.315 per warrant, and will become exercisable commencing six months from issuance. The Class A Warrants will expire eight months from issuance, while the Class B Warrants will expire on the first anniversary of the date of issuance. Other than the different expiration dates, the Class A Warrants and Class B Warrants have identical terms. None of the Class A Warrants, the Class B Warrants nor the shares issuable upon exercise of such Warrants have been registered with the Securities and Exchange Commission. The Warrants cannot be exercised on a cashless basis. There are no redemption features embodied in the Warrants and they have met the conditions for equity classification. Outstanding Warrants As of December 31, 2017, warrants to purchase 10,980,561 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 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 63.75 January 14, 2018 2017 Warrant A private placement 5,300,000 0.32 August 22, 2018 2017 Warrant B private placement 5,300,000 0.32 December 22, 2018 10,980,561 |
NET LOSS PER SHARE
NET LOSS PER SHARE | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 12: NET LOSS PER SHARE The Company accounts for and discloses net income (loss) per common share in accordance with ASC Topic 260, Earnings Per Share The following table summarizes the Company’s calculation of net loss per common share: Year Ended December 31, 2017 2016 Numerator Net loss $ (8,122,581 ) $ (6,368,885 ) Deemed dividend attributable to preferred stock (2,568,132 ) Net loss attributable to common shareholders $ (10,690,713 ) $ (6,368,885 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 11,697,273 2,947,282 Net loss per share of common stock, basic and diluted: $ (0.91 ) (2.16 ) There are no potential common shares excluded from the calculation of net loss per diluted share for the years ended December 31, 2017 and 2016 because the effect of them would be anti-dilutive. For the year ended December 31, 2017 and 2016, the average price of our common stock was less than the exercise price of the vested stock options and exercisable warrants. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 13: INCOME TAXES The Company accounts for income taxes using the asset and liability method, under which 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. On December 22, 2017, the President signed into law the Tax Cut and Jobs Act of 2017 (the “2017 Tax Act”). The 2017 Tax Act provisions applicable to the Company include a permanent reduction to the U.S. federal corporate income tax rate from 35% to 21%, the capitalization and amortization of research and development related expenses, and placing additional limits on the use of net operating losses. Under ASC Topic 740, Accounting for Income Taxes Amounts recorded by the Company during the year ended December 31, 2017 where the accounting is considered to be complete relate to a reduction, in the amount of $1.9 million, in the carrying value of the Company’s U.S. deferred tax assets resulting from the 2017 Tax Act’s reduction in the U.S. federal corporate income tax rate from 35% to 21%, which is fully offset by the valuation allowance. The Company did not record an income tax benefit for its losses incurred for the years ending December 31, 2017 or 2016 due to uncertainty regarding utilization of its net operating loss carryforwards and due to its history of losses. The benefit for income taxes differs from the benefit computed by applying the federal statutory rate to loss before income taxes as follows: Year Ended December 31, 2017 2016 Expected federal income tax benefit at statutory federal rate $ (2,761,678 ) $ (2,165,421 ) Share-based compensation 197,336 214,430 Other permanent items 2,668 1,034 Loss of tax attributes of former subsidiary 437,763 Effect of change in valuation allowance (15,344,015 ) 843,386 Prior year true-up (126,031 ) 656,812 Tax rate change 1,912,427 Effect of NOL limitation 16,119,293 Other 11,996 Actual federal income tax benefit $ $ The components of net deferred tax assets and liabilities are as follows: As of December 31, 2017 2016 Deferred tax assets Accrued bonuses $ $ 207,175 Obsolete inventory 21,881 35,426 Accrued vacation 31,051 32,135 Net operating loss carryforwards 1,774,700 16,382,515 Intangible assets, net 634,521 949,088 Share-based compensation 620,789 934,995 Basis difference in fixed assets 33,241 53,819 Contribution, carryforward 677 315 Valuation allowance, long term (3,089,306) (18,557,979 ) Deferred tax asset 27,554 37,489 Deferred tax liabilities Other (27,554 ) (37,489 ) Net deferred tax asset $ $ Based on an assessment of all available evidence including, but not limited to the Company’s limited operating history in its core business and lack of profitability, uncertainties of the commercial viability of its technology, the impact of government regulation and healthcare reform initiatives, and other risks normally associated with biotechnology companies, the Company has concluded that it is more likely than not that these net operating loss carryforwards and credits will not be realized and, as a result, a full valuation allowance has been recorded against the Company’s deferred income tax assets. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to ownership change limitations that may have occurred or that could occur in the future, as required by the Internal Revenue Code Section 382. In general, an “ownership change,” as defined by the code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50 percentage points of the outstanding stock of a company by certain stockholders or public groups. Any limitation may result in expiration of all or a portion of the net operating loss carryforwards before utilization. Since the Company’s initial public offering, ownership changes have triggered a Section 382 limitation, which limits the ability to utilize net operating loss carryforwards. The Company has incurred net operating losses from inception. At December 31, 2017, the Company had domestic federal net operating loss carryforwards of approximately $49.4 million. In October 2017, the Company completed a public offering, which triggered an ownership change under section 382. We believe that as of December 31, 2017, the gross net operating loss carryforwards have been limited to approximately $3.5 million, which are available to reduce future taxable income. These federal net operating loss carryforwards, expire at various dates beginning in 2030 through 2038. The Company recorded a valuation allowance against all of its net deferred tax assets of approximately $3.1 million and $18.6 million as of December 31, 2017 and 2016, respectively, for a net decrease of $15.5 million from 2016 to 2017 and a net increase of $800,000 from 2015 to 2016. The Company files income tax returns in the U.S. The Company is subject to tax examinations for the 2012 tax year and beyond. The Company has no unrecognized tax positions and does not believe there will be any material changes in its unrecognized tax positions over the next 12 months. The Company has not incurred any interest or penalties related to unrecognized tax positions. In the event that the Company is assessed interest or penalties at some point in the future, they will be classified in the financial statements as general and administrative expense. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 12 Months Ended |
Dec. 31, 2017 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 14: 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. As of December 31, 2017 and 2016, the Company had $6,967,469 and $2,777,962 in excess of the FDIC insured limit, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 15: COMMITMENTS AND CONTINGENCIES Lease Commitments The Company has a commitment under an operating lease to pay future minimum lease payments of $19,720, all of which is due in the year ending December 31, 2018. The total rent expense for the years ended December 31, 2017 and 2016 was $33,285 and $325,960, respectively. Rent expense was included in general and administrative expenses for both years. Besins Healthcare Luxembourg Settlement Agreement On January 28, 2016, the Company filed a complaint in the United States District Court for the District of Delaware captioned Atossa Genetics Inc. v. Besins Healthcare Luxembourg SARL Litigation and Contingencies On October 10, 2013, a putative securities class action complaint, captioned Cook v. Atossa Genetics, Inc., et al., No. 2:13-cv-01836-RSM, was filed in the United States District Court for the Western District of Washington against us, certain of our directors and officers and the underwriters of our November 2012 initial public offering. The complaint alleged that all defendants violated Sections 11 and 12(a)(2), and that we and certain of our directors and officers violated Section 15, of the Securities Act by making material false and misleading statements and omissions in the offering’s registration statement, and that we and certain of our directors and officers violated Sections 10(b) and 20A of the Exchange Act and SEC Rule 10b-5 promulgated thereunder by making false and misleading statements and omissions in the registration statement and in certain of our subsequent press releases and SEC filings with respect to our NAF specimen collection process, our ForeCYTE Breast Health Test and our MASCT device. The complaint sought, on behalf of persons who purchased our common stock between November 8, 2012 and October 4, 2013, inclusive, damages of an unspecific amount. On February 14, 2014, the district 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. On October 6, 2014 the Court granted defendants’ motion dismissing all claims against Atossa and all other defendants. 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 appealed the Court’s dismissal order to the U.S. Court of Appeals for the Ninth Circuit. On August 18, 2017, the Ninth Circuit affirmed in part and reversed in part the district court’s judgment. On September 11, 2017, the Ninth Circuit entered an order and mandate remanding the case to the United States District Court for the Western District of Washington. On October 19, 2017, plaintiffs filed an amended complaint that conforms to the ruling by the Ninth Circuit. Since the claims under Sections 11, 12(a)(2) and 15 were dismissed by the district court and not appealed, the amended complaint only alleges violations of Section 10(b) and 20A of the Exchange Act and SEC Rule 10b-5 promulgated thereunder against the company and one officer. All other claims and defendants have been dismissed. The alleged class period in the amended complaint is December, 2012 through October 4, 2013. We are subject to other legal proceedings and claims that arise in the normal course of business. We believe these matters are either without merit or of a kind that should not have a material effect, individually or in the aggregate, on our financial position, results of operations or cash flows. |
STOCK BASED COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | NOTE 16: 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 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 options to purchase 1,716,323 shares of common stock to employees and directors during the year ended December 31, 2017. The weighted average grant date fair value of options granted during 2017 was $0.40. There are 100,456 options available for grant under the 2010 Plan as of December 31, 2017, and as a result of the evergreen provision contained in the 2010 Plan, an additional 1,272,910 shares were added to the 2010 Plan on January 1, 2018. 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 $786,550 and $876,189 for the years ended December 31, 2017 and 2016, respectively, which was included in the following captions in the consolidated statements of operations. Year Ended December 31, 2017 2016 General and administrative $ 621,668 $ 850,378 Research and development 164,882 25,811 Total stock compensation expense $ 786,550 $ 876,189 The fair value of stock options granted for the years ended December 31, 2017 and 2016 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Year ended December 31, 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 December 31, 2017 and their activities during the year then ended are as follows: Number of Weighted- Weighted- Aggregate Outstanding as of January 1, 2017 378,924 $ 26.25 $ Granted 1,716,323 0.47 Forfeited (3,167 ) 15.00 Expired (19,081 ) 25.05 Outstanding as of December 31, 2017 2,072,999 4.10 9.041 $ Exercisable as of December 31, 2017 608,040 11.77 8.348 $ Vested and expected to vest 2,072,999 $ 4.10 9.041 $ At December 31, 2017, there were 1,461,648 unvested options outstanding and the related unrecognized total compensation cost associated with these options was $976,606. This expense is expected to be recognized over a weighted-average period of 1.94 years. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 17: RELATED PARTY TRANSACTIONS Shu-Chih Chen, Ph.D., a member of the Board of Directors and spouse of Steven C. Quay, Ph.D., M.D., the Company’s CEO, has provided consultancy services to the Company. Those services primarily include providing scientific and technical expertise in Atossa’s negotiations and ongoing arrangements with the manufacturer of endoxifen which is located in Taiwan. The cost of the services provided by Dr. Chen were approximately $27,000 through December 31, 2016 and have been approved by the Company’s audit committee. Ensisheim Partners LLC, which is under sole ownership and control by Drs. Quay and Chen, purchased the following shares of common stock directly from the Company in at-the-market transactions which were approved by the Company’s audit committee: Purchase Date Number of Shares Price per Share January 19, 2016 3,333 $ 3.30 February 16, 2016 1,000 $ 7.95 March 9, 2016 1,000 $ 5.55 There were no related party transactions during the year ended December 31, 2017. |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation: | Basis of Presentation: The accompanying consolidated financial statements have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) and in accordance with U.S. generally accepted accounting principles (“GAAP”). The accompanying consolidated financial statements include the financial statements of Atossa Genetics Inc. and its wholly-owned subsidiaries. All significant intercompany account balances and transactions have been eliminated in consolidation. Certain amounts from prior years have been reclassified to conform to the 2017 presentation. 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 $0.015 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. As a result of the Reverse Stock Split, fractional shares totaling approximately 1,054 shares of common stock were rounded down and 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. |
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 |
Research and Development | Research and Development All research and development costs are expensed as incurred. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to be recovered or settled. Realization of deferred tax assets is dependent upon future taxable income. A valuation allowance is recognized if it is more likely than not that some portion or all of a deferred tax asset will not be realized based on the weight of available evidence, including expected future earnings. The Company recognizes an uncertain tax position in its financial statements when it concludes that a tax position is more likely than not to be sustained upon examination based solely on its technical merits. Only after a tax position passes the first step of recognition will measurement be required. Under the measurement step, the tax benefit is measured as the largest amount of benefit that is more likely than not to be realized upon effective settlement. This is determined on a cumulative probability basis. The full impact of any change in recognition or measurement is reflected in the period in which such change occurs. The Company elects to accrue any interest or penalties related to income taxes as part of its income tax expense. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and all highly liquid instruments with original maturities of three months or less. |
Furniture and Equipment | Furniture and Equipment Furniture and equipment are stated at cost less accumulated depreciation. Expenditures for maintenance and repairs are charged to earnings as incurred; additions, renewals and betterments are capitalized. When furniture and equipment are retired or otherwise disposed of, the related cost and accumulated depreciation are removed from the respective accounts, and any gain or loss is included in operations. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Useful Life Furniture and equipment 3 - 5 The Company applies the provisions of FASB ASC Topic 360 (“ASC 360”), Property, Plant, and Equipment |
Fair Value Measurements | Fair Value Measurements The Company records recurring and non-recurring financial assets and liabilities as well as all non-financial assets and liabilities subject to fair value measurement at the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. These fair value principles prioritize valuation inputs across three broad levels. Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities. Level 2 inputs are quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument. Level 3 inputs are unobservable inputs based on the Company's assumptions used to measure assets and liabilities at fair value. An asset or liability's classification within the various levels is determined based on the lowest level input that is significant to the fair value measurement. |
Intangible Assets | Intangible Assets Intangible assets consist of intellectual property and software acquired. Intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the assets might not be recoverable. Impairment losses must be recorded when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the assets. Estimating future cash flows related to an intangible asset involves significant estimates and assumptions. If our assumptions are not correct, there could be an impairment loss or, in the case of a change in the estimated useful life of the asset, a change in amortization expense. We continuously evaluate and reprioritize our research and development pipeline. Based on the most recent business strategies, we do not currently intend to develop and invest further in the Acueity patents and technologies and we now believe that additional investment may be required to update FDA marketing authorizations prior to commercializing the Acueity assets. Because of these changed business plans related to the Acueity assets, we have re-evaluated the assets for potential impairment during the year ended December 31, 2017. We have concluded that these assets are impaired and have recorded an asset impairment charge of $461,715 for the year ended December 31, 2017 to adjust the carrying value of these intangible assets to their estimated fair values to zero as of December 31, 2017. We concluded the patents were partially impaired and recorded impairment charges of $718,970 for the year ended December 31, 2016 to adjust the carrying value of the these intangible assets to their estimated fair values at December 31, 2016. We determined the fair values of the Acueity intangibles using an income approach (Level 3 of the fair value hierarchy). For purposes of the income approach, fair value was determined based on the present value of estimated future cash flows that a market participant could expect to generate from the development of products using the patented technology acquired in the Acueity transaction, discounted at an appropriate risk-adjusted rate reflecting the weighted average cost of capital for a potential market participant. The discount rate used in valuation for these intangible assets was 48.50%. The estimated future cash flows, including an estimate of long-term future growth rates, reflect our own assumptions of what market participants would utilize to price the assets pursuant to ASC 820, Fair Value Measurements Amortization is computed using the straight-line method over the estimate useful lives of the assets as follows: Useful Life Patents 10 Software 3 |
Financial Instruments with Characteristics of Both Liabilities and Equity | Financial Instruments with Characteristics of Both Liabilities and Equity During the year ended December 31, 2017, the Company issued certain financial instruments, consisting of 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 re-measured at fair value at subsequent reporting periods with the resulting change in fair value recorded in “change in fair value of common stock warrants” in the consolidated statement of operations. 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. There were no outstanding warrants accounted for as liabilities as of December 31, 2017. |
Share-Based Payments | Share-Based Payments The Company follows the provisions of ASC Topic 718, Compensation - Stock Compensation The fair value of each option grant is estimated using the Black-Scholes option-pricing model, which requires assumptions regarding the expected volatility of the stock options, the expected life of the options, an expectation regarding future dividends on the Company’s common stock, and estimation of an appropriate risk-free interest rate. The Company’s expected common stock price volatility assumption is based upon the historical volatility of our stock price. The expected life assumption for stock options grants was based upon the simplified method provided for under ASC 718-10, which averages the contractual term of the options of ten years with the vesting term, typically one to four years. The dividend yield assumption of zero is based upon the fact that the Company has never paid cash dividends and presently has no intention of paying cash dividends in the future. The risk-free interest rate used for each grant was based upon prevailing short-term interest rates over the expected life of the options. We adopted ASU No. 2016-09 Compensation - Stock Compensation |
SUMMARY OF ACCOUNTING POLICIE26
SUMMARY OF ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Schedule of property, plant and equipment estimate useful lives | Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Useful Life Furniture and equipment 3 - 5 |
Schedule of finite-lived intangible assets estimate useful lives | Amortization is computed using the straight-line method over the estimate useful lives of the assets as follows: Useful Life Patents 10 Software 3 |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Prepaid Expense, Current [Abstract] | |
Schedule of prepaid expenses | Prepaid expenses consisted of the following: December 31, December 31, 2017 2016 Prepaid insurance $ 125,056 $ 121,333 Tradeshows 20,000 Professional services 97,788 Retainer and security deposits 14,218 14,218 Other 13,882 16,050 Total prepaid expenses $ 250,944 $ 171,601 |
FURNITURE AND EQUIPMENT (Tables
FURNITURE AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | Furniture and equipment consisted of the following: December 31, December 31, 2017 2016 Furniture and equipment 170,917 210,528 Less: accumulated depreciation (159,450 ) (155,409 ) Total furniture and equipment, net $ 11,467 $ 55,119 |
INTANGIBLE ASSETS (Tables)
INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: December 31, December 31, 2017 2016 Patents $ 120,000 $ 639,000 Software 113,540 113,540 Intangible assets 233,540 752,540 Less: accumulated amortization (157,854 ) (112,100 ) Total intangible assets, net $ 75,686 $ 640,440 |
Schedule of future amortization expense | Future estimated amortization expenses as of December 31, 2017, for the five succeeding years and thereafter is as follows: Years Ending December 31, Amounts 2018 $ 25,353 2019 13,000 2020 13,000 2021 13,000 2022 11,333 $ 75,686 |
PAYROLL LIABILITIES (Tables)
PAYROLL LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of payroll liabilities | Payroll liabilities consisted of the following: December 31, December 31, 2017 2016 Accrued bonus payable $ 566,000 $ 609,337 Accrued vacation 147,861 94,514 Accrued payroll liabilities 71,006 66,048 Total payroll liabilities $ 784,867 $ 769,899 |
FAIR VALUE OF FINANCIAL INSTR31
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Fair Value Of Financial Instruments Tables | |
Schedule of Level 3 warrant liability | The following table summarizes the changes in the Company’s Level 3 warrant liability for the year ended December 31, 2017: Warrant liability Beginning balance $ Issuances of warrants 1,612,413 Warrant exercises (1,893,160 ) Change in fair value 280,747 Ending balance $ |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Schedule of liability 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 (5,863,332 ) 0.26 Outstanding as of December 31, 2017 $ |
Schedule of valuation of the warrants | All remaining warrants were exercised and no warrants issued in the April 2017 financing remained outstanding at December 31, 2017. 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 December 31, 2017, warrants to purchase 10,980,561 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 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 63.75 January 14, 2018 2017 Warrant A private placement 5,300,000 0.32 August 22, 2018 2017 Warrant B private placement 5,300,000 0.32 December 22, 2018 10,980,561 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of net loss per common | The following table summarizes the Company’s calculation of net loss per common share: Year Ended December 31, 2017 2016 Numerator Net loss $ (8,122,581 ) $ (6,368,885 ) Deemed dividend attributable to preferred stock (2,568,132 ) Net loss attributable to common shareholders $ (10,690,713 ) $ (6,368,885 ) Denominator Weighted average common shares outstanding used to compute net loss per share, basic and diluted 11,697,273 2,947,282 Net loss per share of common stock, basic and diluted: $ (0.91 ) (2.16 ) |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of income tax expense (benefit) | The benefit for income taxes differs from the benefit computed by applying the federal statutory rate to loss before income taxes as follows: Year Ended December 31, 2017 2016 Expected federal income tax benefit at statutory federal rate $ (2,761,678 ) $ (2,165,421 ) Share-based compensation 197,336 214,430 Other permanent items 2,668 1,034 Loss of tax attributes of former subsidiary 437,763 Effect of change in valuation allowance (15,344,015 ) 843,386 Prior year true-up (126,031 ) 656,812 Tax rate change 1,912,427 Effect of NOL limitation 16,119,293 Other 11,996 Actual federal income tax benefit $ $ |
Schedule of deferred tax assets and liabilities | The components of net deferred tax assets and liabilities are as follows: As of December 31, 2017 2016 Deferred tax assets Accrued bonuses $ $ 207,175 Obsolete inventory 21,881 35,426 Accrued vacation 31,051 32,135 Net operating loss carryforwards 1,774,700 16,382,515 Intangible assets, net 634,521 949,088 Share-based compensation 620,789 934,995 Basis difference in fixed assets 33,241 53,819 Contribution, carryforward 677 315 Valuation allowance, long term (3,089,306) (18,557,979 ) Deferred tax asset 27,554 37,489 Deferred tax liabilities Other (27,554 ) (37,489 ) Net deferred tax asset $ $ |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 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 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 allocation of compensation costs | Accordingly, the Company recognized stock based compensation expense of $786,550 and $876,189 for the years ended December 31, 2017 and 2016, respectively, which was included in the following captions in the consolidated statements of operations. Year Ended December 31, 2017 2016 General and administrative $ 621,668 $ 850,378 Research and development 164,882 25,811 Total stock compensation expense $ 786,550 $ 876,189 |
Schedule of stock options valuation assumptions | The fair value of stock options granted for the years ended December 31, 2017 and 2016 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Year ended December 31, 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 December 31, 2017 and their activities during the year then ended are as follows: Number of Weighted- Weighted- Aggregate Outstanding as of January 1, 2017 378,924 $ 26.25 $ Granted 1,716,323 0.47 Forfeited (3,167 ) 15.00 Expired (19,081 ) 25.05 Outstanding as of December 31, 2017 2,072,999 4.10 9.041 $ Exercisable as of December 31, 2017 608,040 11.77 8.348 $ Vested and expected to vest 2,072,999 $ 4.10 9.041 $ |
RELATED PARTY TRANSACTIONS (Tab
RELATED PARTY TRANSACTIONS (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions Tables | |
Schedule of common stock issued to relared parties | Ensisheim Partners LLC, which is under sole ownership and control by Drs. Quay and Chen, purchased the following shares of common stock directly from the Company in at-the-market transactions which were approved by the Company’s audit committee: Purchase Date Number of Shares Price per Share January 19, 2016 3,333 $ 3.30 February 16, 2016 1,000 $ 7.95 March 9, 2016 1,000 $ 5.55 |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Net loss | $ (8,122,581) | $ (6,368,885) | |
Cash and cash equivalents | 7,217,469 | 3,027,962 | $ 3,715,895 |
Working capital | 6,700,000 | ||
Net cash provided by (used in) operating activities | $ (6,593,950) | $ (5,374,589) |
SUMMARY OF ACCOUNTING POLICIE38
SUMMARY OF ACCOUNTING POLICIES (Details) - Machinery and Equipment [Member] | 12 Months Ended |
Dec. 31, 2017 | |
Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 3 years |
Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
SUMMARY OF ACCOUNTING POLICIE39
SUMMARY OF ACCOUNTING POLICIES (Details 1) | 12 Months Ended |
Dec. 31, 2017 | |
Patents [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life (in years) | 10 years |
Software [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible asset, useful life (in years) | 3 years |
SUMMARY OF ACCOUNTING POLICIE40
SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - USD ($) | Aug. 26, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock, par or stated value (in dollars per share) | $ 0.015 | $ 0.015 | |
Impairment charges of long-lived assets held-for-use | $ 461,715 | $ 718,970 | |
Discount rate for intangible assets | 48.50% | ||
Reverse Stock Split [Member] | |||
Description of reverse stock split | 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 $0.015 per share. | ||
Common stock, par or stated value (in dollars per share) | $ 0.015 | ||
Number of fractional shares paid in cash | 1,054 |
RESTRICTED CASH (Details Narrat
RESTRICTED CASH (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Restricted Cash [Abstract] | ||
Restricted cash and cash equivalents | $ 55,000 | $ 55,000 |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expense, Current [Abstract] | ||
Prepaid insurance | $ 125,056 | $ 121,333 |
Tradeshows | 20,000 | |
Professional services | 97,788 | |
Retainer and security deposits | 14,218 | 14,218 |
Other | 13,882 | 16,050 |
Total prepaid expenses | $ 250,944 | $ 171,601 |
RESEARCH AND DEVELOPMENT TAX 43
RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE (Details Narrative) - USD ($) | 7 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Research and development expense | $ 2,328,087 | $ 770,427 | |
Research and development tax rebate receivable | $ 358,277 | ||
Atossa Genetics AUS Pty Ltd [Member] | |||
Description of research and development cash rebate offer | Australia offers an R&D cash rebate of $0.435 per dollar spent on qualified R&D activities incurred in the country. | ||
Research and development expense | $ 824,000 | ||
Research and development tax rebate receivable | $ 358,277 |
FURNITURE AND EQUIPMENT (Detail
FURNITURE AND EQUIPMENT (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Abstract] | ||
Furniture and equipment | $ 170,917 | $ 210,528 |
Less: accumulated depreciation | (159,450) | (155,409) |
Total furniture and equipment, net | $ 11,467 | $ 55,119 |
FURNITURE AND EQUIPMENT (Deta45
FURNITURE AND EQUIPMENT (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 25,956 | $ 125,661 |
INTANGIBLE ASSETS (Details)
INTANGIBLE ASSETS (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 233,540 | $ 752,540 |
Less: accumulated amortization | (157,854) | (112,100) |
Total intangible assets, net | 75,686 | 640,440 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | 120,000 | 639,000 |
Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets | $ 113,540 | $ 113,540 |
INTANGIBLE ASSETS (Details 1)
INTANGIBLE ASSETS (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 25,353 | |
2,019 | 13,000 | |
2,020 | 13,000 | |
2,021 | 13,000 | |
2,022 | 11,333 | |
Total intangible assets, net | $ 75,686 | $ 640,440 |
INTANGIBLE ASSETS (Details Narr
INTANGIBLE ASSETS (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Total intangible assets, net | $ 75,686 | $ 640,440 |
Reduction in carrying value of patents | $ 461,715 | 718,970 |
Patents [Member] | ||
Useful life of patents | 10 years | |
Amortization of patents | $ 70,284 | 149,015 |
Software [Member] | ||
Useful life of patents | 3 years | |
Amortization of patents | $ 32,754 | $ 28,806 |
PAYROLL LIABILITIES (Details)
PAYROLL LIABILITIES (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued bonus payable | $ 566,000 | $ 609,337 |
Accrued vacation | 147,861 | 94,514 |
Accrued payroll liabilities | 71,006 | 66,048 |
Total payroll liabilities | $ 784,867 | $ 769,899 |
FAIR VALUE OF FINANCIAL INSTR50
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Warrant liability [Roll Forward] | |
Beginning balance | |
Issuances of warrants | 1,612,413 |
Warrant exercises | (1,893,160) |
Change in fair value | 280,747 |
Ending balalnce |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Class of Warrant or Right Number of Securities called by Warrants or Rights [Roll Forward] | |
Outstanding at beginning | shares | |
Warrants Granted | shares | 5,863,332 |
Warrants Exercised | shares | (5,863,332) |
Outstanding at end | shares | |
Class of Warrant or Right Exercise Price of Warrants or Rights [Roll Forward] | |
Outstanding at beginning | $ / shares | |
Warrants Granted | $ / shares | 0.9375 |
Warrants Exercised | $ / shares | 0.26 |
Outstanding at end | $ / shares |
STOCKHOLDERS' EQUITY (Details 1
STOCKHOLDERS' EQUITY (Details 1) - $ / shares | Apr. 03, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Common stock price | $ 0.75 | $ 0.50 | ||
Exercise price | $ 0.9375 | $ 0.26 | ||
Expected volatility | 50.00% | 50.00% | ||
Dividend yield | 0.00% | 0.00% | ||
Minimum [Member] | ||||
Risk-free interest rate | 0.79% | 0.79% | ||
Expected term (years) | 2 months 26 days | 29 days | ||
Maximum [Member] | ||||
Risk-free interest rate | 1.88% | 1.88% | ||
Expected term (years) | 5 years | 4 years 9 months 4 days |
STOCKHOLDERS' EQUITY (Details 2
STOCKHOLDERS' EQUITY (Details 2) - $ / shares | 12 Months Ended | |||
Dec. 31, 2017 | Jun. 30, 2017 | Apr. 03, 2017 | Dec. 31, 2016 | |
Class of Warrant or Right [Line Items] | ||||
Class of Warrant or Right, Outstanding | 10,980,561 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.26 | $ 0.9375 | ||
2011 Private Placement [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Class of Warrant or Right, Outstanding | 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 | |||
2014 Public Offering [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Class of Warrant or Right, Outstanding | 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 | 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 | 3,166 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 63.75 | |||
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Jan. 14, 2018 | |||
2017 Warrant A Private Placement [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Class of Warrant or Right, Outstanding | 5,300,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.32 | |||
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Aug. 22, 2018 | |||
2017 Warrant B Private Placement [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Class of Warrant or Right, Outstanding | 5,300,000 | |||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ 0.32 | |||
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Dec. 22, 2018 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | Dec. 20, 2017 | Oct. 26, 2017 | Jun. 29, 2017 | Apr. 03, 2017 | Mar. 28, 2017 | May 25, 2016 | Aug. 31, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Jun. 30, 2017 | Nov. 11, 2015 | May 19, 2014 |
Number of total shares authorized (in shares) | 85,000,000 | ||||||||||||
Common stock, authorized (in shares) | 75,000,000 | 75,000,000 | |||||||||||
Common stock, par or stated value (in dollars per share) | $ 0.015 | $ 0.015 | |||||||||||
Preferred stock, authorized (in shares) | 10,000,000 | 10,000,000 | |||||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | $ 0.001 | |||||||||||
Preferred stock, issued (in shares) | 0 | 0 | |||||||||||
Preferred stock, outstanding (in shares) | 0 | 0 | |||||||||||
Number of new shares issued, value | $ 829,684 | ||||||||||||
Proceeds from issuance of common stock | $ 6,162,588 | $ 4,695,869 | |||||||||||
Issuance of common shares as commitment fees | $ 198,523 | ||||||||||||
Share price (in dollars per share) | $ 0.75 | $ 0.50 | |||||||||||
Initial exercise price (in dollars per share) | $ 0.9375 | $ 0.26 | |||||||||||
Number of shares conversion (in shares) | 1,333.33 | ||||||||||||
Allocation of Series A convertible preferred stock to warrants and beneficial conversion feature | $ (1,284,066) | ||||||||||||
2016 Public Offering [Member] | |||||||||||||
Number of new shares issued, value | $ 2,900,000 | ||||||||||||
Proceeds from issuance of common stock | $ 2,600,000 | ||||||||||||
Share price (in dollars per share) | $ 2.50 | ||||||||||||
Number of new shares issued (in shares) | 1,150,000 | ||||||||||||
Series A Preferred Stock [Member] | |||||||||||||
Preferred stock, authorized (in shares) | 750,000 | ||||||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | ||||||||||||
Preferred stock, issued (in shares) | 0 | ||||||||||||
Preferred stock, outstanding (in shares) | 0 | ||||||||||||
Series A Convertible Preferred Stock Convertible [Member] | |||||||||||||
Preferred stock, authorized (in shares) | 4,000 | ||||||||||||
Preferred stock, par or stated value (in dollars per share) | $ 0.001 | ||||||||||||
Conversion of Series A Convertible Preferred Stock to common stock (in shares) | 3,502 | ||||||||||||
Description of conversion ratio | Conversion ratio of 1,333.33 shares of common stock for each share of Series A Convertible Preferred Stock. | ||||||||||||
2017 Warrants [Member] | |||||||||||||
Share price (in dollars per share) | $ 0.52 | ||||||||||||
Number of new shares issued (in shares) | 3,000,000 | ||||||||||||
Initial exercise price (in dollars per share) | $ 0.26 | ||||||||||||
Number of shares conversion (in shares) | 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. | ||||||||||||
Additional Paid-in Capital [Member] | |||||||||||||
Allocation of Series A convertible preferred stock to warrants and beneficial conversion feature | $ (2,568,132) | ||||||||||||
Deemed Dividend on Series A Convertible Preferred Stock | 2,568,132 | ||||||||||||
Conversion of Series A Convertible Preferred Stock to common stock | (3,234,769) | ||||||||||||
Common Stock [Member] | |||||||||||||
Number of new shares issued, value | $ 17,910 | ||||||||||||
Issuance of common shares as commitment fees | $ 746 | ||||||||||||
Number of new shares issued (in shares) | 1,194,000 | ||||||||||||
Conversion of Series A Convertible Preferred Stock to common stock | $ 70,040 | ||||||||||||
Conversion of Series A Convertible Preferred Stock to common stock (in shares) | 4,669,329 | ||||||||||||
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] | 2017 Public Offering [Member] | Maxim Group LLC [Member] | |||||||||||||
Proceeds from issuance initial public offering | $ 5,500,000 | ||||||||||||
Net proceeds from issuance initial public offering | $ 4,900,000 | ||||||||||||
Number of shares included in offering (in shares) | 11,500,000 | ||||||||||||
Share price (in dollars per share) | $ 0.44 | ||||||||||||
Offering closed date | Oct. 30, 2017 | ||||||||||||
Underwriting Agreement [Member] | Over-Allotment Option [Member] | |||||||||||||
Proceeds from issuance initial public offering | $ 5,500,000 | ||||||||||||
Number of shares included in offering (in shares) | 1,000,000 | ||||||||||||
Share price (in dollars per share) | $ 0.44 | ||||||||||||
Underwriting Agreement [Member] | Series A Convertible Preferred Stock Convertible [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | |||||||||||||
Number of shares included in offering (in shares) | 3,502 | ||||||||||||
Underwriting Agreement [Member] | Class A Units [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | |||||||||||||
Number of shares included in offering (in shares) | 664,000 | ||||||||||||
Share price (in dollars per share) | $ 0.75 | ||||||||||||
Underwriting Agreement [Member] | Class B Units [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | |||||||||||||
Number of shares included in offering (in shares) | 1,000 | ||||||||||||
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 (in shares) | 530,000 | ||||||||||||
Number of new shares issued (in shares) | 530,000 | ||||||||||||
Initial exercise price (in dollars per share) | $ 0.9375 | $ 0.26 | |||||||||||
Warrant term | 5 years | ||||||||||||
Underwriting Agreement [Member] | Common Stock and Warrants [Member] | Series A Convertible Preferred Stock Convertible [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | |||||||||||||
Number of shares included in offering (in shares) | 4,669,329 | ||||||||||||
Number of new shares issued (in shares) | 4,669,329 | ||||||||||||
Underwriting Agreement [Member] | Common Stock and Warrants [Member] | Class A Units [Member] | 2017 Public Offering [Member] | Aegis Capital Corp [Member] | |||||||||||||
Number of shares included in offering (in shares) | 664,000 | ||||||||||||
Number of new shares issued (in shares) | 664,000 | ||||||||||||
Securities Purchase Agreement [Member] | December 2017 Offering and Private Placement [Member] | Maxim Group LLC [Member] | |||||||||||||
Proceeds from issuance initial public offering | $ 1,400,000 | ||||||||||||
Net proceeds from issuance initial public offering | $ 1,200,000 | ||||||||||||
Number of shares included in offering (in shares) | 5,300,000 | ||||||||||||
Share price (in dollars per share) | $ 0.27 | ||||||||||||
Securities Purchase Agreement [Member] | Class A Units [Member] | December 2017 Offering and Private Placement [Member] | Maxim Group LLC [Member] | |||||||||||||
Initial exercise price (in dollars per share) | 0.315 | ||||||||||||
Securities Purchase Agreement [Member] | Class B Units [Member] | December 2017 Offering and Private Placement [Member] | Maxim Group LLC [Member] | |||||||||||||
Initial exercise price (in dollars per share) | $ 0.315 | ||||||||||||
Securities Purchase Agreement [Member] | Common Stock and Warrants [Member] | December 2017 Offering and Private Placement [Member] | Maxim Group LLC [Member] | |||||||||||||
Number of new shares issued (in shares) | 10,600,000 | ||||||||||||
Initial exercise price (in dollars per share) | $ 0.315 | ||||||||||||
Aspire Capital Fund LLC [Member] | Stock Purchase Agreement [Member] | |||||||||||||
Proceeds from issuance of common stock | $ 2,200,000 | ||||||||||||
Net proceeds from issuance of common stock | $ 2,100,000 | ||||||||||||
Number of shares issued for services (in shares) | 49,736 | ||||||||||||
Number of shares issued for services, value | $ 746 | ||||||||||||
Number of new shares issued (in shares) | 405,747 | 467,650 | |||||||||||
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 | ||||||||||||
Aspire Capital Fund LLC [Member] | New Common Stock Purchase Agreement [Member] | |||||||||||||
Shares agreed to register in common stock (in shares) | 405,747 | ||||||||||||
Stock committed | $ 10,000,000 | ||||||||||||
Beneficial Owner [Member] | |||||||||||||
Ownership percentage (in percent) | 15.00% | ||||||||||||
Percentage of common stock outstanding (in percent) | 2.00% | ||||||||||||
Entitled to receive worth of common stock (in dollars per share) | $ 30 | ||||||||||||
Initial exercise price (in dollars per share) | $ 15 |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Numerator | ||
Net loss | $ (8,122,581) | $ (6,368,885) |
Deemed dividend attributable to preferred stock | (2,568,132) | |
Net loss attributable to common shareholders | $ (10,690,713) | $ (6,368,885) |
Denominator | ||
Weighted average common shares outstanding used to compute net loss per share, basic and diluted (in shares) | 11,697,273 | 2,947,282 |
Net loss per share of common stock, basic and diluted: (in dollar per share) | $ (0.91) | $ (2.16) |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Deferred | ||
Expected federal income tax benefit at statutory federal rate | $ (2,761,678) | $ (2,165,421) |
Share-based compensation | 197,336 | 214,430 |
Other permanent items | 2,668 | 1,034 |
Loss of tax attributes of former subsidiary | 437,763 | |
Effect of change in valuation allowance | (15,344,015) | 843,386 |
Prior year true-up | (126,031) | 656,812 |
Tax rate change | 1,912,427 | |
Effect of NOL limitation | 16,119,293 | |
Other | 11,996 | |
Actual federal income tax benefit |
INCOME TAXES (Details 1)
INCOME TAXES (Details 1) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets | ||
Accrued bonuses | $ 207,175 | |
Obsolete inventory | $ 21,881 | 35,426 |
Accrued vacation | 31,051 | 32,135 |
Net operating loss carryforwards | 1,774,700 | 16,382,515 |
Intangible assets, net | 634,521 | 949,088 |
Share-based compensation | 620,789 | 934,995 |
Basis difference in fixed assets | 33,241 | 53,819 |
Contribution, carryforward | 677 | 315 |
Valuation allowance, long term | (3,089,306) | (18,557,979) |
Deferred tax asset | 27,554 | 37,489 |
Deferred tax liabilities | ||
Other | (27,554) | (37,489) |
Net deferred tax asset |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | ||
Previous federal income tax rate | 35.00% | |
Federal income tax rate | 21.00% | |
Reduction in deferred tax assets | $ 1,900,000 | |
Description of operating loss carryforwards | 2030 through 2038. | |
Description of income tax examination | The Company files income tax returns in the U.S. The Company is subject to tax examinations for the 2012 tax year and beyond. | |
Domestic operating loss carryforwards | $ 49,400,000 | |
Net operating loss carryforwards | 3,500,000 | |
Valuation allowance | 3,100,000 | $ 18,600,000 |
Increase (decrease) in valuation allowance | $ (15,500,000) | $ 800,000 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Risks and Uncertainties [Abstract] | ||
Cash, FDIC insured amount | $ 250,000 | |
Cash, uninsured amount | $ 6,967,469 | $ 2,777,962 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Aug. 04, 2016 | Dec. 31, 2017 | Dec. 31, 2016 |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $ 33,285 | $ 325,960 | |
Operating lease to pay in 2018 future minimum lease payments | $ 19,720 | ||
Litigation settlement, amount | $ 1,762,931 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) | 12 Months Ended |
Dec. 31, 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 (Det62
STOCK BASED COMPENSATION (Details 1) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | $ 786,550 | $ 876,189 |
General and Administrative [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | 621,668 | 850,378 |
Research and Development [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Total stock compensation expense | $ 164,882 | $ 25,811 |
STOCK BASED COMPENSATION (Det63
STOCK BASED COMPENSATION (Details 2) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 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 volatility | 112.86% | 115.52% |
Maximum [Member] | ||
Risk free interest rate | 2.04% | 1.55% |
Expected term | 6 years 4 months 10 days | 6 years 22 days |
Expected volatility | 114.19% | 115.58% |
STOCK BASED COMPENSATION (Det64
STOCK BASED COMPENSATION (Details 3) | 12 Months Ended |
Dec. 31, 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 | 608,040 |
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 | 11.77 |
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 15 days |
Exercisable at end | 8 years 4 months 5 days |
Vested and expected to vest | 9 years 15 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Rollforward] | |
Outstanding at beginning | $ | |
Granted | $ | |
Forfeited | $ | |
Expired | $ | |
Outstanding at ending | $ | |
Exercisable at ending | $ | |
Vested and expected to vest | $ |
STOCK BASED COMPENSATION (Det65
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | 12 Months Ended | |||||
Dec. 31, 2017 | Dec. 31, 2016 | Jan. 01, 2018 | May 09, 2017 | May 18, 2016 | Sep. 28, 2010 | |
Share-based Compensation | $ 786,550 | $ 876,189 | ||||
Number of shares granted | 1,716,323 | |||||
Fair value of weighted average options granted | $ 0.47 | |||||
Number of unvested options outstanding | 1,461,648 | |||||
Unrecognized compensation cost | $ 976,606 | |||||
Vesting period | 1 year 11 months 8 days | |||||
Employees and Directors [Member] | ||||||
Number of shares granted | 1,716,323 | |||||
Fair value of weighted average options granted | $ 0.40 | |||||
Stock Option and Incentive Plan 2010 [Member] | ||||||
Number of shares available for grant | 100,456 | 66,667 | ||||
Shares reserved for additional issuance | 1,500,000 | 133,333 | ||||
Stock Option and Incentive Plan 2010 [Member] | Subsequent Event [Member] | ||||||
Number of shares available for grant | 1,272,910 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | Mar. 09, 2016 | Feb. 16, 2016 | Jan. 19, 2016 | Dec. 31, 2017 | Jun. 30, 2017 | Apr. 03, 2017 |
Number of shares issued | $ 829,684 | |||||
Share price | $ 0.50 | $ 0.75 | ||||
Ensisheim Partners LLC [Member] | ||||||
Number of shares issued | $ 1,000 | $ 1,000 | $ 3,333 | |||
Share price | $ 5.55 | $ 7.95 | $ 3.30 |
RELATED PARTY TRANSACTIONS (D67
RELATED PARTY TRANSACTIONS (Details Narrative) | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Consultant [Member] | |
Cost of services | $ 27,000 |