Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 10, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | ATOSSA GENETICS INC | |
Entity Central Index Key | 1,488,039 | |
Document Type | 10-Q | |
Trading Symbol | ATOS | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity a Well-known Seasoned Issuer | No | |
Entity a Voluntary Filer | No | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 5,069,599 | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 15,236,736 | $ 7,217,469 |
Restricted cash | 55,000 | 55,000 |
Prepaid expenses | 440,389 | 250,944 |
Research and development tax rebate receivable | 626,011 | 358,277 |
Other current assets | 50,035 | 16,344 |
Total current assets | 16,408,171 | 7,898,034 |
Furniture and equipment, net | 60,926 | 11,467 |
Intangible assets, net | 59,882 | 75,686 |
Other assets | 48,867 | 178,907 |
Total assets | 16,577,846 | 8,164,094 |
Current liabilities | ||
Accounts payable | 191,217 | 334,901 |
Accrued expenses | 286,713 | 90,105 |
Payroll liabilities | 952,657 | 784,867 |
Stock-based compensation liability | 1,557,163 | |
Other current liabilities | 23,331 | 15,534 |
Total current liabilities | 3,011,081 | 1,225,407 |
Commitments and contingencies (note 11) | ||
Stockholders' equity | ||
Preferred stock - $0.001 par value; 10,000,000 shares authorized, consisting of: Series A convertible preferred stock-$0.001 par value; 4,000 shares authorized, and 0 shares outstanding as of June 30, 2018 and December 31, 2017; Series B convertible preferred stock- $0.001 par value; 25,000 and 0 shares authorized, and 5,802 and 0 shares issued and outstanding, as of June 30, 2018 and December 31, 2017, respectively | 6 | |
Additional paid-in capital-Series B convertible preferred stock | 5,234,116 | |
Common stock - $0.18 par value; 175,000,000 shares authorized, 4,874,099 and 2,651,952 shares issued and outstanding, as of June 30, 2018 and December 31, 2017, respectively | 877,329 | 477,342 |
Additional paid-in capital | 78,898,602 | 71,887,674 |
Accumulated deficit | (71,443,288) | (65,426,329) |
Total stockholders' equity | 13,566,765 | 6,938,687 |
Total liabilities and stockholders' equity | $ 16,577,846 | $ 8,164,094 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 10,000,000 | 10,000,000 |
Common stock, par value (in dollars per share) | $ 0.18 | $ 0.18 |
Common stock, authorized | 175,000,000 | 175,000,000 |
Common stock, issued | 4,874,099 | 2,651,952 |
Common stock, outstanding | 4,874,099 | 2,651,952 |
Series A convertible preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 4,000 | 4,000 |
Preferred stock, issued | 0 | |
Preferred stock, outstanding | 0 | 0 |
Series B convertible preferred Stock [Member] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 25,000 | 0 |
Preferred stock, issued | 5,802 | 0 |
Preferred stock, outstanding | 5,802 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Operating expenses: | ||||
Research and development | $ 1,467,736 | $ 824,094 | $ 1,938,712 | $ 1,368,396 |
General and administrative | 2,674,920 | 1,072,169 | 4,078,385 | 2,231,458 |
Total operating expenses | 4,142,656 | 1,896,263 | 6,017,097 | 3,599,854 |
Operating loss | (4,142,656) | (1,896,263) | (6,017,097) | (3,599,854) |
Change in fair value of common stock warrants | (152,447) | (152,447) | ||
Warrant financing expense | (192,817) | (192,817) | ||
Other income | 79 | 38 | 138 | 75 |
Loss before income taxes | (4,142,577) | (2,241,489) | (6,016,959) | (3,945,043) |
Net loss | (4,142,577) | (2,241,489) | (6,016,959) | (3,945,043) |
Deemed dividends attributable to preferred stock | (4,782,100) | (2,568,132) | (4,782,100) | (2,568,132) |
Net loss applicable to common stockholders | $ (8,924,677) | $ (4,809,621) | $ (10,799,059) | $ (6,513,175) |
Loss per common share - basic and diluted (in dollars per share) | $ (2.90) | $ (7.72) | $ (3.77) | $ (13.85) |
Weighted average shares outstanding, basic and diluted (in shares) | 3,073,803 | 623,004 | 2,864,033 | 470,139 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Unaudited) - 6 months ended Jun. 30, 2018 - USD ($) | Series B 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, 2017 | $ 477,342 | $ 71,887,674 | $ (65,426,329) | $ 6,938,687 | ||
Balance, beginning (in shares) at Dec. 31, 2017 | 2,651,952 | 2,651,952 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of Series B convertible preferred stock, net of issuance costs of $1,333,449 | $ 14 | $ 12,290,537 | $ 12,290,551 | |||
Issuance of Series B convertible preferred stock, net of issuance costs of $1,333,449 (in shares) | 13,624 | |||||
Allocation of Series B convertible preferred stock to beneficial conversion feature | (4,782,100) | 4,782,100 | ||||
Deemed Dividend on Series B convertible preferred stock | 4,782,100 | (4,782,100) | ||||
Conversion of Series B convertible preferred stock to common stock | $ (8) | (7,056,421) | $ 399,987 | 6,656,442 | ||
Conversion of Series B convertible preferred stock to common stock (in shares) | (7,822) | 2,222,147 | ||||
Amortization of commitment shares | (39,703) | (39,703) | ||||
Compensation cost for stock options granted to executives and employees | 394,189 | 394,189 | ||||
Net loss | (6,016,959) | (6,016,959) | ||||
Balance, ending at Jun. 30, 2018 | $ 6 | $ 5,234,116 | $ 877,329 | $ 78,898,602 | $ (71,443,288) | $ 13,566,765 |
Balance, ending (in shares) at Jun. 30, 2018 | 5,802 | 4,874,099 | 4,874,099 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (Parenthetical) | 6 Months Ended |
Jun. 30, 2018USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Payments of Class A units issuance costs | $ 1,333,449 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES | |||||
Net loss | $ (4,142,577) | $ (2,241,489) | $ (6,016,959) | $ (3,945,043) | |
Compensation cost for stock options granted | 394,189 | 336,115 | |||
Loss on disposal of intangible asset | 17,695 | ||||
Change in stock-based compensation liability | 179,050 | 181,408 | 1,557,163 | ||
Depreciation and amortization | 17,838 | 73,193 | |||
Change in fair value of common stock warrants | 152,447 | 152,447 | |||
Warrant financing expense | 192,817 | 192,817 | |||
Changes in operating assets and liabilities: | |||||
Prepaid expenses | (189,445) | (56,769) | |||
Research and development tax rebate receivable | (267,734) | ||||
Other assets | 56,644 | 25,831 | |||
Accounts payable | (143,684) | 241,491 | |||
Payroll liabilities | 167,790 | (287,479) | |||
Accrued expenses | 196,608 | 27,053 | |||
Other current liabilities | 7,797 | 13,074 | |||
Net cash used in operating activities | (4,219,793) | (3,209,575) | |||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||
Purchase of furniture and equipment | (51,491) | ||||
Net cash used in investing activities | (51,491) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||
Proceeds from issuance of Class A and Class B Units, net of issuance costs | 3,871,636 | ||||
Proceeds from issuance of Series B convertible preferred stock, net of issuance costs | 12,290,551 | ||||
Net cash provided by financing activities | 12,290,551 | 3,871,636 | |||
NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH | 8,019,267 | 662,061 | |||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING BALANCE | 7,272,469 | 3,082,962 | $ 3,082,962 | ||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, ENDING BALANCE | $ 15,291,736 | $ 3,745,023 | 15,291,736 | $ 3,745,023 | $ 7,272,469 |
NONCASH INVESTING AND FINANCING ACTIVITIES | |||||
Common stock issued for cashless exercise of common stock warrants | 900,488 | ||||
Amount receivable for warrant exercise | $ 2,600 | ||||
Allocation of Class A and Class B Unit proceeds to warrant liability | 1,612,416 | ||||
Amortization of commitment shares | $ 39,703 | $ 39,705 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 6 Months Ended |
Jun. 30, 2018 | |
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 | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GOING CONCERN | NOTE 2: GOING CONCERN The Company’s consolidated financial statements are prepared using Generally Accepted Accounting Principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. The Company has incurred net losses and negative operating cash flows since inception. For the six months ended June 30, 2018, the Company recorded a net loss of approximately $6.0 million and used approximately $4.2 million of cash in operating activities. As of June 30, 2018 the Company had approximately $15.2 million in cash and cash equivalents and working capital of approximately $13.4 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 includes obtaining 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 parties, 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 12 to 18 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 | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | NOTE 3: SUMMARY OF ACCOUNTING POLICIES Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2017. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. On April 20, 2018, the Company completed a 1-for-12 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 12 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 $0.18 per share. 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 April 20, 2018. 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 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 In June 2018, The FASB issued ASU 2018-07, Compensation-Stock Compensation Improvements to Nonemployee Share Based Payment Accounting. Revenue from Contracts with Customers |
PREPAID EXPENSES
PREPAID EXPENSES | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid Expenses | NOTE 4: PREPAID EXPENSES Prepaid expenses consisted of the following: June 30, December 31, Prepaid insurance $ 148,284 $ 125,056 Retainer and security deposits 16,718 14,218 Professional services 110,094 97,788 Prepaid research and development 115,014 Financial exchange fees 27,500 Other 22,779 13,882 Total prepaid expenses $ 440,389 $ 250,944 |
RESEARCH AND DEVELOPMENT TAX RE
RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE | 6 Months Ended |
Jun. 30, 2018 | |
Research And Development Tax Rebate Receivable | |
RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE | NOTE 5: 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 six months ended June 30, 2018, the Company incurred qualified R&D expenses of approximately $616,000, resulting in an increase to the R&D rebate receivable of approximately $268,000 from the year ended December 31, 2017 balance, and a corresponding offset to R&D expenses in the same amount. At June 30, 2018, we had a total R&D rebate receivable of approximately $626,000. |
PAYROLL LIABILITIES
PAYROLL LIABILITIES | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
PAYROLL LIABILITIES | NOTE 6: PAYROLL LIABILITIES Payroll liabilities consisted of the following: June 30, December 31, Accrued bonus payable $ 662,512 $ 566,000 Accrued vacation 167,174 147,861 Accrued payroll liabilities 122,971 71,006 Total payroll liabilities $ 952,657 $ 784,867 |
STOCKHOLDERS' EQUITY
STOCKHOLDERS' EQUITY | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 7: STOCKHOLDERS’ EQUITY The Company is authorized to issue a total of 185,000,000 shares of stock consisting of 175,000,000 shares of common stock, par value $0.18 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, 4,000 shares of Series A convertible preferred stock, par value $0.001 per share, and 25,000 shares of Series B convertible preferred stock through the filings of certificates of designation with the Delaware Secretary of State. No shares of Series A junior participating preferred stock and no shares of Series A convertible preferred stock are issued and outstanding as of June 30, 2018. 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. 2018 Subscription Rights Offering of Units Consisting of Series B Convertible Preferred Stock and Warrants On May 9, 2018, the Company’s Registration Statement on Form S-1 with the Securities and Exchange Commission was declared effective to offer subscription rights to purchase up to 25,000 units at $1,000 per unit with each unit consisting of one share of Series B convertible preferred stock and warrants to purchase 284 shares of common stock. On May 29, 2018, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series B convertible preferred stock with the Delaware Secretary of State creating a new series of its authorized preferred stock, par value $0.001 per share, designated as the Series B convertible preferred stock. The number of shares initially constituting the Series B preferred stock was set at 25,000 shares. On May 30, 2018, the Company completed its previously announced rights offering pursuant to which the Company sold an aggregate of 13,624 units consisting of an aggregate of 13,624 shares of Series B convertible preferred stock and 3,869,216 warrants, with each warrant exercisable for one share of common stock at an exercise price of $4.048 per share (the “2018 Warrants”), resulting in net proceeds to the Company of approximately $12.3 million, after deducting expenses relating to the rights offering, including dealer-manager fees and expenses, and excluding any proceeds received upon exercise of any warrants. Series B Convertible Preferred Stock The terms and provisions of our Series B convertible preferred stock are: Conversion. Fundamental Transactions. In the event we effect certain mergers, consolidations, sales of substantially all of our assets, tender or exchange offers, reclassifications or share exchanges in which our common stock is effectively converted into or exchanged for other securities, cash or property, we consummate a business combination in which another person acquires 50% of the outstanding shares of our common stock, or any person or group becomes the beneficial owner of 50% of the aggregate ordinary voting power represented by our issued and outstanding common stock, then, upon any subsequent conversion of the Series B convertible preferred stock, the holders of the Series B convertible preferred stock will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon conversion in full of the Series B convertible preferred stock. Dividends. Voting Rights. Liquidation Preference . Redemption Rights. 2018 Warrants The terms and conditions of the warrants included in the 2018 rights offering are as follows: Exercisability The number of shares of common stock issuable upon exercise of the warrants is subject to adjustment in certain circumstances, including a stock split of, stock dividend on, or a subdivision, combination or recapitalization of the common stock. Upon the merger, consolidation, sale of substantially all of our assets, or other similar transaction, the holders of warrants shall, at the option of the company, be required to exercise the warrants immediately prior to the closing of the transaction, or such warrants shall automatically expire. Upon such exercise, the holders of warrants shall participate on the same basis as the holders of common stock in connection with the transaction. Cashless Exercise Exercise Price Transferability Exchange Listing Rights as Stockholder Redemption Rights Outstanding Warrants As of June 30, 2018, warrants to purchase 4,760,270 shares of common stock were outstanding including: Outstanding Warrants to Purchase Shares Exercise Price Expiration Date 2014 public offering 6,483 $540.00 January 29, 2019 Placement agent fees for Company’s offerings 1,231 381.60 – 1,044.00 August - November, 2018 2017 Warrant A private placement 441,670 3.78 August 22, 2018 2017 Warrant B private placement 441,670 3.78 December 22, 2018 2018 Warrants 3,869,216 4.05 May 30, 2022 4,760,270 Conversion of Series B Convertible Preferred Stock During the three months ended June 30, 2018, certain holders of the Series B convertible preferred stock exercised their conversion option and converted an aggregate of 7,822 shares of Series B convertible preferred stock into 2,222,147 shares of the Company's common stock based on the conversion ratio of approximately 284 shares of common stock for each share of Series B convertible preferred stock. |
NET LOSS PER SHARE
NET LOSS PER SHARE | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
NET LOSS PER SHARE | NOTE 8: 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: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net Loss Per share Numerator Net loss $ (4,142,577 ) $ (2,241,489 ) $ (6,016,959) $ (3,945,043 ) Deemed dividend attributable to preferred stock (4,782,100 ) (2,568,132 ) (4,782,100) (2,568,132 ) Net loss attributable to common shareholders $ (8,924,677 ) $ (4,809,621 ) $ (10,799,059) $ (6,513,175 ) Denominator Weighted average common shares outstanding 3,073,803 623,004 2,864,033 470,139 Basic and diluted net loss per share $ (2.90 ) $ (7.72 ) $ (3.77 ) $ (13.85 ) The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three and six months ended June 30, 2018 and 2017 because including them would be anti-dilutive: Three Months Ended Six Months Ended 2018 2017 2018 2017 Options to purchase common stock 200,954 93,464 187,391 62,841 Series A convertible preferred stock 182,030 91,518 Series B convertible preferred stock 900,367 452,671 Warrants to purchase common stock 2,275,808 511,650 1,599,074 273,905 Total 3,377,129 787,144 2,239,136 428,264 For the three and six months ended June 30, 2018 and 2017, 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 | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 9: INCOME TAXES Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate. No income tax liabilities existed as of June 30, 2018 and December 31, 2017 due to the Company’s continuing operating losses. |
CONCENTRATION OF CREDIT RISK
CONCENTRATION OF CREDIT RISK | 6 Months Ended |
Jun. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK | NOTE 10: CONCENTRATION OF CREDIT RISK Financial instruments that potentially subject the Company to concentration of credit risk consist principally of cash deposits. Accounts at each institution are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At June 30, 2018 and December 31, 2017, the Company had $14,986,736 and $6,967,469 in excess of the FDIC insured limit, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 11: COMMITMENTS AND CONTINGENCIES Lease Commitments The Company has a commitment under an operating lease to pay future minimum lease payments of $4,930, all of which is due in the year ending December 31, 2018. Litigation and Contingencies On October 10, 2013, a putative securities class action complaint, captioned Cook v. Atossa Genetics, Inc., et al. On March 23, 2018, the parties filed a stipulation of settlement with the court to settle the matter for $3.5 million, completely funded by defendants’ insurers, and on July 20, 2018 the Court approved the settlement. 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 | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
STOCK BASED COMPENSATION | NOTE 12: STOCK BASED COMPENSATION Stock Option and Incentive Plan On September 28, 2010, the Board of Directors approved the adoption of the 2010 Stock Option and Incentive Plan 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 stock-holder approval. An aggregate of 5,556 shares were initially reserved for issuance in connection with awards granted under the 2010 Plan and on May 18, 2016, an additional 11,111 shares were reserved for issuance under the 2010 Plan. On May 9, 2017, the stockholders approved an additional 125,000 shares for issuance under the 2010 Plan. On April 12, 2018, the stockholders approved an additional 500,000 shares for issuance under the 2010 Plan. The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of shares 2012 2,502 2013 2,871 2014 4,128 2015 5,463 2016 18,368 2017 12,623 2018 106,076 Total additional shares 152,031 The Company granted 611,668 options to purchase shares of common stock under the 2010 Plan during the six months ended June 30, 2018. No options were exercised during the three or six months ended June 30, 2018. There are 3,118 shares available for grant under the 2010 Plan as of June 30, 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 $179,050 and $181,408 for the three months ended June 30, 2018 and 2017, respectively and $394,189 and $336,116 for the six months ended June 30, 2018 and 2017, respectively (excluding the liability options discussed below). The fair value of stock options granted for the six months ended June 30, 2018 and 2017 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Period ended June 30, 2018 2017 Risk free interest rate 2.47% - 2.71% 1.86% - 2.04% Expected term 5.24- 5.57 years 5.32- 6.36 years Dividend yield - % - % Expected volatility 108.81% - 126.43% 112.86% - 114.19% Options issued and outstanding as of June 30, 2018 under the 2010 Plan and their activities during the six months then ended are as follows: Number of Weighted- Weighted- Average Contractual Life Remaining in Years Aggregate Outstanding as of January 1, 2018 172,510 $ 49.27 $ Granted 611,668 2.39 Forfeited (338 ) 5.64 Expired Outstanding as of June 30, 2018 783,840 12.70 9.67 $ Exercisable as of June 30, 2018 82,536 93.84 8.19 $ Vested and expected to vest 783,840 12.70 9.67 $ At June 30, 2018, there were 701,304 unvested options outstanding and the related unrecognized total compensation cost associated with these options was approximately $1,810,227. This expense is expected to be recognized over a weighted-average period of 1.71 years. Option Grants Classified as Liabilities (“Liability Grants”) On June 27, 2018, the Company issued option awards to Dr. Steven C. Quay, Chairman of the Board, President and Chief Executive Officer and Kyle Guse, Chief Financial Officer, General Counsel and Secretary. The Company granted Dr. Quay 2,300,000 options and granted Mr. Guse 700,000 options, each exercisable for an equivalent number of shares of Company common stock. The options were granted pursuant to an option award agreement and were granted outside the Company’s 2010 Plan; however, they are subject to the terms and conditions of the 2010 Plan. The Liability Grants are exercisable for shares of common stock at an exercise price of $2.38 per share, which was the fair market value on the date of grant. The options have an exercise period of ten years from their date of issuance. If at the time the options are exercised the Company cannot deliver shares of common stock to the optionee including, for example, if there are insufficient shares available under the Plan at the time of exercise, then in lieu of the optionee paying the exercise price and the Company issuing shares of stock, the option may only be exercised on a cash “net basis” so that the Company will pay cash in an amount equal to the excess of the fair market value of the common stock over the option exercise price. There currently are not sufficient shares available under the Plan and the Company would be obligated to settle these options in cash if they were exercised. Because these options contain provisions that could require the Company to settle the options in cash in an event outside the Company’s control, they are accounted for as liabilities. The Liability Grants are subject to vesting requirements. Twenty-five percent of the options have vested as of the grant date, 50% of the options will vest quarterly over two years, and the remaining 25% will vest upon achievement of certain milestones related to clinical trial progress. Compensation costs associated with the Liability Grants are initially recognized, based on the grant-date fair values of these options, over the requisite or vesting period for time-based options or when it is probable the performance criteria will be achieved for options that vest based on performance. Compensation cost is remeasured each period based on the market value of our underlying stock until award vesting or settlement. For the three and six months ended June 30, 2018, the Company recognized compensation expense related to these options of $1,557,163. The fair value of liability options granted for the six months ended June 30, 2018 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Six months ended June 30, 2018 Risk free interest rate 2.71% Expected term 5.0 years Dividend yield - % Expected volatility 125.0% |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation: The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all information and notes required by GAAP for complete financial statements. However, except as disclosed herein, there has been no material change in the information disclosed in the Notes to Consolidated Financial Statements included in the Annual Report on Form 10-K of the Company for the year ended December 31, 2017. In the opinion of management, all adjustments (including normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ending December 31, 2018. On April 20, 2018, the Company completed a 1-for-12 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 12 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 $0.18 per share. 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 April 20, 2018. 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 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 In June 2018, The FASB issued ASU 2018-07, Compensation-Stock Compensation Improvements to Nonemployee Share Based Payment Accounting. Revenue from Contracts with Customers |
PREPAID EXPENSES (Tables)
PREPAID EXPENSES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses | Prepaid expenses consisted of the following: June 30, December 31, Prepaid insurance $ 148,284 $ 125,056 Retainer and security deposits 16,718 14,218 Professional services 110,094 97,788 Prepaid research and development 115,014 Financial exchange fees 27,500 Other 22,779 13,882 Total prepaid expenses $ 440,389 $ 250,944 |
PAYROLL LIABILITIES (Tables)
PAYROLL LIABILITIES (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of payroll liabilities | Payroll liabilities consisted of the following: June 30, December 31, Accrued bonus payable $ 662,512 $ 566,000 Accrued vacation 167,174 147,861 Accrued payroll liabilities 122,971 71,006 Total payroll liabilities $ 952,657 $ 784,867 |
STOCKHOLDERS' EQUITY (Tables)
STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Equity [Abstract] | |
Schedule of warrants | As of June 30, 2018, warrants to purchase 4,760,270 shares of common stock were outstanding including: Outstanding Warrants to Purchase Shares Exercise Price Expiration Date 2014 public offering 6,483 $540.00 January 29, 2019 Placement agent fees for Company’s offerings 1,231 381.60 – 1,044.00 August - November, 2018 2017 Warrant A private placement 441,670 3.78 August 22, 2018 2017 Warrant B private placement 441,670 3.78 December 22, 2018 2018 Warrants 3,869,216 4.05 May 30, 2022 4,760,270 |
NET LOSS PER SHARE (Tables)
NET LOSS PER SHARE (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of earning per share | The following table summarizes the Company’s calculation of net loss per common share: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Net Loss Per share Numerator Net loss $ (4,142,577 ) $ (2,241,489 ) $ (6,016,959) $ (3,945,043 ) Deemed dividend attributable to preferred stock (4,782,100 ) (2,568,132 ) (4,782,100) (2,568,132 ) Net loss attributable to common shareholders $ (8,924,677 ) $ (4,809,621 ) $ (10,799,059) $ (6,513,175 ) Denominator Weighted average common shares outstanding 3,073,803 623,004 2,864,033 470,139 Basic and diluted net loss per share $ (2.90 ) $ (7.72 ) $ (3.77 ) $ (13.85 ) |
Schedule of antidilutive securities | The following table sets forth the number of potential common shares excluded from the calculation of net loss per diluted share for the three and six months ended June 30, 2018 and 2017 because including them would be anti-dilutive: Three Months Ended Six Months Ended 2018 2017 2018 2017 Options to purchase common stock 200,954 93,464 187,391 62,841 Series A convertible preferred stock 182,030 91,518 Series B convertible preferred stock 900,367 452,671 Warrants to purchase common stock 2,275,808 511,650 1,599,074 273,905 Total 3,377,129 787,144 2,239,136 428,264 |
STOCK BASED COMPENSATION (Table
STOCK BASED COMPENSATION (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of automatic additions to the 2010 Plan | The following table presents the automatic additions to the 2010 Plan since inception pursuant to the “evergreen” terms of the 2010 Plan: January 1, Number of shares 2012 2,502 2013 2,871 2014 4,128 2015 5,463 2016 18,368 2017 12,623 2018 106,076 Total additional shares 152,031 |
Schedule of stock options | Options issued and outstanding as of June 30, 2018 under the 2010 Plan and their activities during the six months then ended are as follows: Number of Weighted- Weighted- Aggregate Outstanding as of January 1, 2018 172,510 $ 49.27 $ Granted 611,668 2.39 Forfeited (338 ) 5.64 Expired Outstanding as of June 30, 2018 783,840 12.70 9.67 $ Exercisable as of June 30, 2018 82,536 93.84 8.19 $ Vested and expected to vest 783,840 12.70 9.67 $ |
Schedule of stock options valuation assumptions | The fair value of stock options granted for the six months ended June 30, 2018 and 2017 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Period ended June 30, 2018 2017 Risk free interest rate 2.47% - 2.71% 1.86% - 2.04% Expected term 5.24- 5.57 years 5.32- 6.36 years Dividend yield - % - % Expected volatility 108.81% - 126.43% 112.86% - 114.19% |
Schedule of fair value of liability options granted | The fair value of liability options granted for the six months ended June 30, 2018 was calculated using the Black-Scholes option-pricing model applying the following assumptions: Six months ended June 30, 2018 Risk free interest rate 2.71% Expected term 5.0 years Dividend yield - % Expected volatility 125.0% |
GOING CONCERN (Details Narrativ
GOING CONCERN (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||
Net loss | $ (4,142,577) | $ (2,241,489) | $ (6,016,959) | $ (3,945,043) | |
Cash and cash equivalents | 15,236,736 | 15,236,736 | $ 7,217,469 | ||
Working capital | $ 13,400,000 | 13,400,000 | |||
Net cash provided by (used in) operating activities | $ (4,219,793) | $ (3,209,575) |
SUMMARY OF ACCOUNTING POLICIE27
SUMMARY OF ACCOUNTING POLICIES (Details Narrative) - USD ($) | Aug. 20, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 |
Common stock, par or stated value (in dollars per share) | $ 0.18 | $ 0.18 | ||
Restricted cash and cash equivalents | $ 55,000 | $ 55,000 | ||
Reverse Stock Split [Member] | Subsequent Event [Member] | ||||
Description of reverse stock split | The Company completed a 1-for-12 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 12 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 $0.18 per share. |
PREPAID EXPENSES (Details)
PREPAID EXPENSES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid insurance | $ 148,284 | $ 125,056 |
Retainer and security deposits | 16,718 | 14,218 |
Professional services | 110,094 | 97,788 |
Prepaid research and development | 115,014 | |
Financial exchange fees | 27,500 | |
Other | 22,779 | 13,882 |
Total prepaid expenses | $ 440,389 | $ 250,944 |
RESEARCH AND DEVELOPMENT TAX 29
RESEARCH AND DEVELOPMENT TAX REBATE RECEIVABLE (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Research and development expense | $ 1,467,736 | $ 824,094 | $ 1,938,712 | $ 1,368,396 | |
Research and development tax rebate receivable | $ 267,734 | ||||
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 | $ 616,000 | ||||
Research and development tax rebate receivable | $ 626,000 | $ 268,000 |
PAYROLL LIABILITIES (Details)
PAYROLL LIABILITIES (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued bonus payable | $ 662,512 | $ 566,000 |
Accrued vacation | 167,174 | 147,861 |
Accrued payroll liabilities | 122,971 | 71,006 |
Total payroll liabilities | $ 952,657 | $ 784,867 |
STOCKHOLDERS' EQUITY (Details)
STOCKHOLDERS' EQUITY (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 4,760,270 |
2014 Public Offering [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 6,483 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 540 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Jan. 29, 2019 |
Placement Agent Fee [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 1,231 |
Placement Agent Fee [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 381.60 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Aug. 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 | $ / shares | $ 1,044 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Nov. 30, 2018 |
2017 Warrant A Private Placement [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 441,670 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.78 |
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 | shares | 441,670 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 3.78 |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | Dec. 22, 2018 |
2018 Warrants [Member] | |
Class of Warrant or Right [Line Items] | |
Expiration Dates of Class of Warrant or Right Not Date From Which Warrants or Rights Exercisable | May 30, 2018 |
2018 Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Class of Warrant or Right, Outstanding | shares | 3,869,216 |
Class of Warrant or Right, Exercise Price of Warrants or Rights | $ / shares | $ 4.05 |
STOCKHOLDERS' EQUITY (Details N
STOCKHOLDERS' EQUITY (Details Narrative) - USD ($) | May 30, 2018 | May 09, 2018 | Jun. 30, 2018 | May 29, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |||
Preferred stock, authorized | 10,000,000 | 10,000,000 | |||
Value of shares issued | $ 12,290,551 | ||||
Series B convertible preferred Stock [Member] | |||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||
Preferred stock, authorized | 25,000 | ||||
Number of stock converted | 7,822 | ||||
Number of stock issued upon conversion | 2,222,147 | ||||
Subscription Rights [Member] | |||||
Number of units issued | 13,624 | 25,000 | |||
Unit price (in dollars per unit) | $ 1,000 | ||||
Subscription Rights [Member] | Series B convertible preferred Stock [Member] | |||||
Number of shares consist in each unit | 1 | ||||
Number of shares issued | 13,624 | ||||
Stock conversion price (in dollars per share) | $ 3.52 | ||||
Subscription Rights [Member] | Common Stock [Member] | Warrant [Member] | |||||
Number of shares consist in each unit | 284 | ||||
Number of shares issued | 3,869,216 | ||||
Number of common stock exercisable | 1 | ||||
Warrant exercise price (in dollars per share) | $ 4.048 | ||||
Value of shares issued | $ 1,230 | ||||
Description of warrant redemption rights | Warrants for $0.18 per warrant if the volume-weighted-average-price of our common stock equals or exceeds $10.56 per share for ten consecutive trading days. |
NET LOSS PER SHARE (Details)
NET LOSS PER SHARE (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Numerator | ||||
Net loss | $ (4,142,577) | $ (2,241,489) | $ (6,016,959) | $ (3,945,043) |
Deemed dividend attributable to preferred stock | (4,782,100) | (2,568,132) | (4,782,100) | (2,568,132) |
Net loss attributable to common shareholders | $ (8,924,677) | $ (4,809,621) | $ (10,799,059) | $ (6,513,175) |
Denominator | ||||
Weighted average common shares outstanding | 3,073,803 | 623,004 | 2,864,033 | 470,139 |
Basic and diluted net loss per share | $ (2.90) | $ (7.72) | $ (3.77) | $ (13.85) |
NET LOSS PER SHARE (Details 1)
NET LOSS PER SHARE (Details 1) - shares | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 23, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of potential common shares excluded | 3,377,129 | 787,144 | 2,239,136 | 428,264 | |
Series A Preferred Stock [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of potential common shares excluded | 182,030 | 91,518 | |||
Series B convertible preferred Stock [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of potential common shares excluded | 900,367 | 452,671 | |||
Equity Option [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of potential common shares excluded | 200,954 | 93,464 | 187,391 | 62,841 | |
Warrant [Member] | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Number of potential common shares excluded | 2,275,808 | 511,650 | 1,599,074 | 273,905 |
CONCENTRATION OF CREDIT RISK (D
CONCENTRATION OF CREDIT RISK (Details Narrative) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Risks and Uncertainties [Abstract] | ||
Cash, FDIC insured amount | $ 250,000 | |
Cash, uninsured amount | $ 14,986,736 | $ 6,967,469 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($) | Mar. 23, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 |
Commitments and Contingencies Disclosure [Abstract] | |||||
Operating lease to pay in 2018 future minimum lease payments | $ 4,930 | $ 4,930 | |||
General and administrative expenses | $ 2,674,920 | $ 1,072,169 | $ 4,078,385 | $ 2,231,458 | |
Amount paid claim settlement | $ 3,500,000 |
STOCK BASED COMPENSATION (Detai
STOCK BASED COMPENSATION (Details) | 6 Months Ended |
Jun. 30, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 152,031 |
2012 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 2,502 |
2013 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 2,871 |
2014 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 4,128 |
2015 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 5,463 |
2016 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 18,368 |
2017 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 12,623 |
2018 [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total additional shares | 106,076 |
STOCK BASED COMPENSATION (Det38
STOCK BASED COMPENSATION (Details 1) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Risk free interest rate | 2.71% | |
Expected term | 5 years | |
Expected volatility | 125.00% | |
Minimum [Member] | ||
Risk free interest rate | 2.47% | 1.86% |
Expected term | 5 years 2 months 26 days | |
Expected volatility | 108.81% | 112.86% |
Maximum [Member] | ||
Risk free interest rate | 2.71% | 2.04% |
Expected term | 5 years 6 months 25 days | |
Expected volatility | 126.43% | 114.19% |
STOCK BASED COMPENSATION (Det39
STOCK BASED COMPENSATION (Details 2) | 6 Months Ended |
Jun. 30, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding at beginning | shares | 172,510 |
Granted | shares | 611,668 |
Forfeited | shares | 338 |
Outstanding at ending | shares | 783,840 |
Exercisable at ending | shares | 82,536 |
Vested and expected to vest | shares | 783,840 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Rollforward] | |
Outstanding at beginning | $ / shares | $ 49.27 |
Granted | $ / shares | 2.39 |
Forfeited | $ / shares | 5.64 |
Outstanding at ending | $ / shares | 12.70 |
Exercisable at ending | $ / shares | 93.84 |
Vested and expected to vest | $ / shares | $ 12.70 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted Average Contractual Life Remaining in Years [Rollforward] | |
Outstanding at ending | 9 years 8 months 12 days |
Exercisable at end | 8 years 2 months 8 days |
Vested and expected to vest | 9 years 8 months 12 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 (Det40
STOCK BASED COMPENSATION (Details 3) | 6 Months Ended |
Jun. 30, 2018 | |
Stock Based Compensation | |
Risk free interest rate | 2.71% |
Expected term | 5 years |
Expected volatility | 125.00% |
STOCK BASED COMPENSATION (Det41
STOCK BASED COMPENSATION (Details Narrative) - USD ($) | Jun. 27, 2018 | Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 |
Stock-based compensation expense | $ 179,050 | $ 181,408 | $ 1,557,163 | |
Number of options granted | 611,668 | |||
Option exercise price (in dollars per share) | $ 2.39 | |||
2010 Plan [Member] | ||||
Option exercise price (in dollars per share) | $ 2.38 | |||
Description of vesting rights | Twenty-five percent of the options have vested as of the grant date, 50% of the options will vest quarterly over two years, and the remaining 25% will vest upon achievement of certain milestones related to clinical trial progress. | |||
2010 Plan [Member] | Dr. Steven C. Quay [Member] | ||||
Number of options granted | 2,300,000 | |||
2010 Plan [Member] | Kyle Guse [Member] | ||||
Number of options granted | 700,000 |