Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 31, 2016 | Aug. 31, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | BioPharmX Corp | |
Entity Central Index Key | 1,504,167 | |
Document Type | 10-Q | |
Document Period End Date | Jul. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --01-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 31,175,582 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q2 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) | Jul. 31, 2016 | Jan. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 436,000 | $ 4,039,000 |
Accounts receivable, net | 1,000 | 7,000 |
Inventories | 112,000 | 100,000 |
Prepaid expenses and other current assets | 475,000 | 285,000 |
Total current assets | 1,024,000 | 4,431,000 |
Property and equipment, net | 204,000 | 216,000 |
Intangible assets, net | 104,000 | 119,000 |
Other assets | 50,000 | 50,000 |
Restricted cash | 35,000 | |
Total assets | 1,382,000 | 4,851,000 |
Current liabilities: | ||
Accounts payable | 3,416,000 | 1,777,000 |
Accrued expenses and other current liabilities | 998,000 | 795,000 |
Related party payables | 104,000 | 225,000 |
Total current liabilities | 4,518,000 | 2,797,000 |
Commitments and contingencies (Note 6) | ||
Stockholders' equity (deficit) | ||
Common stock, $0.001 par value; 90,000,000 shares authorized; 28,881,351 and 25,208,684 shares issued and outstanding at July 31, 2016 and January 31, 2016, respectively | 29,000 | 25,000 |
Additional paid-in capital | 32,562,000 | 28,261,000 |
Accumulated equity deficit | (35,727,000) | (26,232,000) |
Total stockholders' (deficit) equity | (3,136,000) | 2,054,000 |
Total liabilities, convertible redeemable preferred stock and stockholders' (deficit) equity | 1,382,000 | 4,851,000 |
Series A Convertible Redeemable Preferred Stock | ||
Current liabilities: | ||
Series A convertible redeemable preferred stock, $0.001 par value; 10,000,000 shares authorized; none outstanding |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Jul. 31, 2016 | Jan. 31, 2016 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 90,000,000 | 90,000,000 |
Common stock, issued | 28,881,351 | 25,208,684 |
Common stock, shares outstanding | 28,881,351 | 25,208,684 |
Series A Convertible Redeemable Preferred Stock | ||
Par value (in dollars per share) | $ 0.001 | $ 0.001 |
Shares authorized | 10,000,000 | 10,000,000 |
Shares outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) | ||||
Revenues, net | $ 19 | $ 5 | $ 52 | $ 9 |
Cost of goods sold | 17 | 10 | 37 | 19 |
Gross margin (deficit) | 2 | (5) | 15 | (10) |
Operating expenses: | ||||
Research and development | 2,973 | 1,141 | 5,146 | 2,217 |
Sales and marketing | 895 | 1,307 | 2,002 | 2,388 |
General and administrative | 1,169 | 1,118 | 2,362 | 2,144 |
Total operating expenses | 5,037 | 3,566 | 9,510 | 6,749 |
Loss from operations | (5,035) | (3,571) | (9,495) | (6,759) |
Other income (expense), net | 1 | 2 | (436) | |
Loss before income taxes | (5,034) | (3,571) | (9,493) | (7,195) |
Provision for income taxes | 2 | |||
Net and comprehensive loss | (5,034) | (3,571) | (9,495) | (7,195) |
Accretion on Series A convertible redeemable preferred stock | (79) | (202) | ||
Deemed dividend on Series A convertible redeemable preferred stock | (85) | (201) | ||
Net loss available to common stockholders | $ (5,034) | $ (3,735) | $ (9,495) | $ (7,598) |
Basic and diluted net loss available to common stockholders per share | $ (0.18) | $ (0.24) | $ (0.35) | $ (0.56) |
Shares used in computing basic and diluted net loss per share | 28,674,000 | 15,443,000 | 27,459,000 | 13,616,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (9,495) | $ (7,195) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock-based compensation expense | 697 | 624 |
Expense related to modification of warrants | 436 | |
Depreciation expense | 33 | 21 |
Amortization expense | 15 | 15 |
Changes in assets and liabilities: | ||
Accounts receivable | 6 | (32) |
Inventories | (12) | (204) |
Prepaid expenses and other assets | (190) | (175) |
Accounts payable | 1,639 | 2,177 |
Accrued expenses and other liabilities | 203 | 563 |
Related party payables | (121) | 8 |
Net cash used in operating activities | (7,225) | (3,762) |
Cash flows from investing activities: | ||
Change in restricted cash | 35 | |
Purchase of property and equipment | (21) | (13) |
Net cash provided by (used in) investing activities | 14 | (13) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock and warrants, net of issuance costs | 3,583 | 7,821 |
Proceeds from exercises of stock options | 25 | 25 |
Proceeds from exercises of common stock warrants | 1,512 | |
Proceeds from issuance of convertible notes payable | 500 | |
Net cash provided by financing activities | 3,608 | 9,858 |
Net (decrease) increase in cash and cash equivalents | (3,603) | 6,083 |
Cash and cash equivalents at beginning of period | 4,039 | 1,305 |
Cash and cash equivalents at end of period | $ 436 | $ 7,388 |
DESCRIPTION OF BUSINESS AND SUM
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 6 Months Ended |
Jul. 31, 2016 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 1. DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business BioPharmX Corporation (the “Company”) is incorporated under the laws of the state of Delaware and originally incorporated on August 30, 2010 in Nevada under the name Thompson Designs, Inc. The Company has one wholly-owned subsidiary, BioPharmX, Inc., a Nevada corporation. The Company is a specialty pharmaceutical company focused on utilizing its proprietary drug delivery technologies to develop and commercialize novel prescription and over-the-counter, or OTC, products that address large markets in women’s health and dermatology. The Company’s objective is to develop products that treat health or age-related conditions that (1) are not presently being addressed or treated or (2) are currently treated with drug therapies or drug delivery approaches that are suboptimal. The Company’s strategy is designed to bring new products to market by identifying optimal delivery mechanisms and/or alternative applications for FDA-approved active pharmaceutical ingredients, or APIs, and biological materials, while in appropriate circumstances, reducing the time, cost and risk typically associated with new product development by repurposing drugs with demonstrated safety profiles and taking advantage of the regulatory approval pathway under Section 505(b)(2) of the Federal Food, Drug and Cosmetic Act available for repurposed/reformulated drugs. The Company believes the 505(b)(2) regulatory pathway may reduce drug development risk and could reduce the time and resources it spends during development. Since the Company’s inception, substantially all of the Company’s efforts have been devoted to developing its product candidates, including conducting preclinical and clinical trials, and providing general and administrative support for its operations. The Company commercially launched its breast health supplement at the end of 2014, although to-date the Company has not generated significant revenue from product sales. The Company is not dependent on sales to any one customer. The Company has financed its operations primarily through the sale of equity and convertible debt securities. In June 2015, the Company raised $7.8 million through the sale of its common stock in a public offering and concurrently completed an uplisting to the NYSE MKT. In December 2015 the Company raised net proceeds of $5.5 million in a private offering of its common stock and, in April 2016, it raised net proceeds of approximately $3.6 million from an issuance of common stock and warrants to purchase common stock in a public offering. In August 2016, the Company raised net proceeds of approximately $1.4 million in a private offering of its common stock and $1.5 million through the sale of convertible promissory notes. Basis of Presentation and Principles of Consolidation These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and include the accounts of the Company and its subsidiary. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended January 31, 2016, filed on May 2, 2016. The condensed consolidated balance sheet as of January 31, 2016, included herein, was derived from the audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s statement of financial position as of July 31, 2016 and January 31, 2016, and the Company’s results of operations and its cash flows for the three and six months ended July 31, 2016 and 2015. The results for the three and six months ended July 31, 2016 are not necessarily indicative of the results to be expected for the year ending January 31, 2017 or any future period. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses recognized during the reported period. Actual results could differ from those estimates. Inventories Inventories are stated at the lower of cost or market. Cost is determined using the standard cost method which approximates actual cost on a first-in, first-out basis. Market value is determined as the lower of replacement cost or net realizable value. The Company regularly reviews inventory quantities in consideration of actual loss experiences, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been an impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any such impairment losses to date. Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred. Advertising expenses were approximately $59,000 and $313,000 for the three months ended July 31, 2016 and 2015, respectively. Advertising expenses were approximately $278,000 and $549,000 for the six months ended July 31, 2016 and 2015, respectively. Net Loss per Share Basic net loss per share attributable to common stockholders is calculated based on the weighted-average number of shares of the Company’s common stock outstanding during the period. The weighted average shares outstanding for the three and six months ended July 31, 2016 excludes 193,333 of unvested common stock. Diluted net loss per share attributable to common stockholders is calculated based on the weighted-average number of shares of the Company’s common stock outstanding and other dilutive securities outstanding during the period. The potential dilutive shares of common stock resulting from the assumed exercise of outstanding stock options, warrants and the assumed conversion of preferred stock are determined under the treasury stock method. For the three months ended July 31, 2016 and 2015, approximately 10,002,000 and 4,837,000 potentially dilutive securities, respectively, were excluded from the computation of diluted loss per share because their effect on net loss per share would be anti-dilutive. Summary of Significant Accounting Policies These unaudited interim condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and notes thereto contained in the Annual Report on Form 10-K for the fiscal year ended January 31, 2016. There have been no significant changes in the Company’s significant accounting policies for the three months ended July 31, 2016, as compared to the significant accounting policies described in the Annual Report on Form 10-K for the fiscal year ended January 31, 2016. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which requires entities to recognize assets and liabilities for leases with lease terms greater than twelve months. The new guidance also requires quantitative and qualitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. The standard is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments. This standard provides guidance on simplifying several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, accounting for forfeitures and classification of excess tax benefits on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which addresses certain implementation issues that have surfaced since the issuance of ASU No. 2014-09 in May 2014. ASU No. 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. ASU No. 2016-12 will affect all entities that enter into contracts with customers to transfer goods or services that are an output of the entity’s ordinary activities in exchange for consideration. The amendments in this update affect the guidance in ASU No. 2014-09 which is not yet effective. The amendments in this update also affect narrow aspects of Topic 606 including among others: assessing collectability criterion, noncash consideration, and presentation of sales taxes and other similar taxes collected from customers. The effective date of this update is the same as ASU No. 2014-09. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
GOING CONCERN
GOING CONCERN | 6 Months Ended |
Jul. 31, 2016 | |
GOING CONCERN | |
GOING CONCERN | 2. GOING CONCERN The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern, meaning the Company will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. As of July 31, 2016, the Company had cash and cash equivalents of $0.4 million and working capital deficit of $3.5 million. In August 2016, the Company raised net proceeds of approximately $2.9 million in a private offering of its common stock and sale of convertible promissory notes. The Company has incurred recurring losses and negative cash flows from operations since inception and has funded its operating losses through the sale of common stock in public and private offerings and the issuance of convertible notes, Series A convertible redeemable preferred stock and warrants. The Company incurred a net loss available to common stockholders of $5.0 million and $3.7 million during the three months ended July 31, 2016 and 2015, respectively, and $9.5 million and $7.6 million during the six months ended July 31, 2016 and 2015, respectively, and had an accumulated deficit of $35.7 million as of July 31, 2016. The Company has a limited operating history and its prospects are subject to risks, expenses and uncertainties frequently encountered by companies in its industry. To date, the Company has generated a de minimis amount of revenue from the sale of VI 2 OLET, its iodine dietary supplement. The Company continues its research and development efforts for its product candidates, which will require significant funding. If the Company is unable to obtain additional financing in the near-term, or if revenues fall short of expectations or research and development efforts require higher than anticipated capital, there may be a negative impact on the financial viability of the Company. The Company plans to increase working capital by managing its cash flows and expenses and raising additional capital through either private or public equity or debt financing. The Company also continues to pursue additional channel distribution expansion for VI 2 OLET through partnerships with women’s health companies to provide broader access to consumers. There can be no assurance that such financing will be available or on terms which are favorable to the Company. While management of the Company believes that it has a plan to fund ongoing operations, there is no assurance that its plan will be successfully implemented. Failure to generate sufficient cash flows from operations, raise additional capital through one or more financings, or reduce certain discretionary spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The condensed consolidated financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainties. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 6 Months Ended |
Jul. 31, 2016 | |
FAIR VALUE MEASUREMENTS | |
FAIR VALUE MEASUREMENTS | 3. FAIR VALUE MEASUREMENTS The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different levels of subjectivity and difficulty involved in determining fair value. · Level 1—Inputs used to measure fair value are unadjusted quoted prices that are available in active markets for the identical assets or liabilities as of the reporting date. · Level 2— Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the asset or liability. · Level 3— Unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. As of July 31, 2016, the Company held $0.2 million in money market funds, which are classified as Level 1 within the fair value hierarchy. No unrealized gains or losses are recorded in connection with these amounts. |
BALANCE SHEET DETAILS
BALANCE SHEET DETAILS | 6 Months Ended |
Jul. 31, 2016 | |
BALANCE SHEET DETAILS | |
BALANCE SHEET DETAILS | 4. BALANCE SHEET DETAILS July 31, January 31, (in thousands) Inventories: Work in process $ $ Finished goods Channel inventory Total $ $ |
RELATED PARTY PAYABLES
RELATED PARTY PAYABLES | 6 Months Ended |
Jul. 31, 2016 | |
RELATED PARTY PAYABLES | |
RELATED PARTY PAYABLES | 5. RELATED-PARTY PAYABLES Since the beginning of 2014, a portion of the compensation of the founding executives of the Company has been deferred and is included in the related party payables balance. The deferred compensation is non-interest bearing and has periodically been repaid to these executives. Related party payables as of July 31, 2016 and January 31, 2016 were approximately $104,000 and $225,000, respectively. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 6 Months Ended |
Jul. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Commitments The following table summarizes the Company’s commitments as of July 31, 2016 (in thousands): Total 2017 2018 2019 2020 2021 Operating lease $ $ $ — $ — $ — $ — Purchase commitment Total $ $ $ $ $ $ On August 23, 2013, the Company signed a lease for 10,800 square feet of office and laboratory space in Menlo Park, California. The lease expires in November 2016. Rent expense for the three months ended July 31, 2016 and 2015 was approximately $86,000 and $94,000, respectively. Rent expense for each of the six months ended July 31, 2016 and 2015 was approximately $172,000. The purchase commitment relates to the manufacturing of VI2OLET and is non-cancelable. Legal Proceedings The Company is not a party to any material legal proceeding that the Company believes is likely to have a material adverse effect on its consolidated financial position or results of operations. From time to time the Company may be subject to legal proceedings and claims in the ordinary course of business. These claims, even if not meritorious, could result in the expenditure of significant financial resources and diversion of management efforts. Indemnification The Company enters into standard indemnification arrangements in the ordinary course of business. Pursuant to these arrangements, the Company indemnifies, holds harmless, and agrees to reimburse the indemnified parties for losses suffered or incurred by the indemnified party, in connection with any trade secret, copyright, patent or other intellectual property infringement claim by any third-party with respect to the Company’s technology. The term of these indemnification agreements is generally perpetual. The maximum potential amount of future payments the Company could be required to make under these agreements is not determinable because it involves claims that may be made against the Company in the future, but have not yet been made. The Company has entered into indemnification agreements with its directors and officers that may require the Company to indemnify its directors and officers against liabilities that may arise by reason of their status or service as directors or officers, other than liabilities arising from willful misconduct of the individual. The Company has not incurred costs to defend lawsuits or settle claims related to these indemnification agreements. No liability associated with such indemnifications has been recorded to date. License Agreement In March 2013, the Company entered into an amended and restated collaboration and license agreement with Iogen LLC, which provides the Company with a license to certain rights to label, market, and resell the finished inventory and ongoing manufacturing of the Iogen molecular iodine technology for future product formulation development and commercialization. New formulation patents developed by the Company will be solely owned by the Company. The agreement gives the Company a perpetual, fully paid-up, exclusive license to make, have made, use, sell and offer for sale and import products. Pursuant to the terms of the license, the Company must pay: · a fee for the exclusive license to the IP. · 30% of net profit associated with direct commercialization of an OTC product or 30% of net royalties received from any sub-licensee. · a royalty of 3% of net sales for the first 24 months of commercialization and 2% of net sales thereafter for a prescription iodine tablet developed and commercialized under the license. · a royalty of 3% of net sales for the first 12 months of commercialization for other products developed and commercialized under the license and 2% of net sales thereafter until expiration of applicable patents covering such products and 1% thereafter. · a fixed royalty fee for the protection and indemnification of licensed intellectual property right (“IP rights”) for the prescription product developed, marketed and sold from newly developed formulations as long as the patents are valid and cover the prescription product. · a fixed royalty fee for the protection and indemnification of licensed IP rights for the other products utilizing the molecular iodine technology developed, marketed and sold from newly developed formulations as long as the patents are valid and cover the prescription product. The Company capitalized as intangible assets, in the year ended December 31, 2013, the amount of $150,000 related to this agreement. As of July 31, 2016 and January 31, 2016, the balance, net of amortization, was approximately $104,000 and $119,000, respectively. No royalties have been paid as of July 31, 2016. |
CONVERTIBLE REDEEMABLE PREFERRE
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | 6 Months Ended |
Jul. 31, 2016 | |
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | |
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY | 7. CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY Common Stock In June 2015, the Company uplisted to the NYSE MKT and simultaneously completed a public offering in which it issued 3,636,384 shares of common stock resulting in net proceeds of $7.8 million. Pursuant to the terms of a convertible note previously issued, immediately prior to the closing of the offering, the principal amount and all accrued and unpaid interest converted into 182,266 shares of common stock. Pursuant to a subscription agreement dated October 24, 2014, Korea Investment Partners Overseas Expansion Platform Fund (“KIP”), an existing stockholder, agreed to purchase 1,081,081 shares of common stock from the Company at a price of $1.85 per share in a private placement (the “KIP private placement”) upon the earlier to occur of (i) the Company receiving revenues from Violet of $2,000,000 or (ii) receipt by the Company of approval to list on any tier of the NYSE or Nasdaq stock market at a market price of at least $3.70 per share. In addition, KIP has previously informed the Company of its intention to complete the KIP private placement even if the Company’s stock price was not at least $3.70 per share. As of the date of this report, this private placement has not closed, and the Company does not expect the private placement to close. As consideration for Ping Wang’s service as a director of the Company (Wang is no longer a director of the Company), 290,000 shares of the Company’s common stock were issued, of which 96,667 shares vested immediately and 193,333 shares will vest immediately upon completion of the $2.0 million purchase. In December 2015, the Company sold 4,100,000 shares of common stock at a price per share of $1.43 resulting in net proceeds of $5.5 million in a private placement to investment funds managed by Franklin Advisers. For a period of five years, Franklin Advisers has the right to purchase up to an aggregate of 20% of the securities offered by the Company in any subsequent private placement. In April 2016, the Company issued 3,600,000 shares of common stock at a price per share of $1.195 resulting in net proceeds of approximately $3.6 million and warrants to purchase 1,952,000 shares of common stock in a public offering. These warrants have an exercise price of $1.20 per share and expire on April 1, 2021. As of July 31, 2016, all of these warrants were outstanding. Series A Preferred Stock During 2014, the Company entered into subscription agreements for the private placement of 4,207,987 shares of its Series A preferred stock and warrants to purchase 2,042,589 shares of common stock at an exercise price of $3.70 per share. In connection with the uplisting to the NYSE MKT, the Series A preferred stock, including accrued and unpaid interest, converted into 4,319,426 shares of common stock. The warrant exercise agreements included a provision such that if the public offering price related to the offering was less than $3.125 per share, then immediately prior to the closing of the offering, additional shares of common stock would be issued at no additional consideration to each holder equal to: (i) the product of (A) the difference between $2.50 per share and 80% of the public offering price and (B) such holder’s shares of common stock received pursuant to exercise of the amended warrants, divided by (ii) 80% of the public offering price in the offering. Based on a public offering price of $2.75 per share, 77,006 shares of common stock were issued pursuant to this provision. In March and April 2015, the Company amended certain of the warrants issued in connection with the Series A preferred stock financing to reduce the exercise price of such warrants from $3.70 to $2.50 per share with a corresponding increase in the number of shares of common stock exercisable under the warrants so that the aggregate exercise value of such warrants remained the same. As of January 31, 2016, certain holders had exercised such warrants for an aggregate of 564,662 shares of common stock for an aggregate cash exercise price of $1,411,655. The Company recorded a charge for the incremental fair value of $436,000 in other expense related to the amended warrants in the first quarter of fiscal year 2016. The fair value of the warrants exercised was computed as of the date of modification using the following assumptions: dividend rate of 0%, risk-free rate of 1.6%, contractual term of four to five years and expected volatility of 85.9%. As of July 31, 2016, of the warrants issued in connection with the Series A preferred stock financing, warrants to purchase 1,661,055 shares of common stock remain outstanding. Pursuant to the Certificate of Elimination filed with the Secretary of State of the State of Delaware on March 17, 2016, all shares of Series A preferred stock previously designated were returned to the status of authorized but unissued shares of preferred stock, without designation as to series or rights, preferences, privileges or limitations. Warrants In addition to the warrants issued in conjunction with the Series A preferred stock subscription agreements, the Company issued warrants on May 15, 2014, to a service provider for 316,395 shares of common stock at an exercise price of $2.035 per share, which were valued at $99,000 and expensed. As of July 31, 2016, all were outstanding. On May 14, 2014, the Company also issued warrants valued at $105,000 for 343,559 shares of common stock at an exercise price of $1.85 per share to a qualified investor as a part of his convertible loan package. These warrants expire five years after the date of issuance. These warrants are immediately exercisable, and in June 2015, a portion of the warrants were exercised for 54,054 shares of common stock. As of July 31, 2016, warrants exercisable for 289,505 shares of common stock remain outstanding. In connection with the offering completed in June 2015, warrants to purchase 109,091 shares of common stock were issued to the underwriters at the public offering price of $2.75. These warrants expire five years after the date of issuance. As of July 31, 2016, all of these warrants were outstanding. In connection with the sale of common stock in April 2016, warrants to purchase 1,952,000 shares of common stock were issued at an exercise price of $1.20. As of July 31, 2016, all of these warrants were outstanding. Equity Incentive Plan On July 5, 2016, the Company adopted the 2016 Equity Incentive Plan, or 2016 Plan, which permits the Company to grant equity awards to directors, officers, employees and consultants. In connection with the adoption of the 2016 Plan, the Company ceased to grant equity awards under its 2014 Equity Incentive Plan, or 2014 Plan, which was adopted on January 23, 2014. All grants and awards under the 2014 Plan, including stock options previously issued under BioPharmX, Inc.’s 2011 Equity Incentive Plan which were substituted with stock options issued under the 2014 Plan, remain in effect in accordance with their terms. Stock options generally vest in two to four years and expire ten years from the date of grant. Under the 2016 Plan, 4,000,000 shares were reserved for issuance. The 2014 Plan and 2016 Plan are referred to collectively as the “Plans.” The following table summarizes the Company’s stock option activities under the Plans: Available Shares Weighted Remaining Aggregate (in thousands) Outstanding as of January 1, 2016 $ $ Exercised — ) $ Cancelled ) $ Outstanding as of April 30 2016 $ $ Shares authorized for issuance — Granted ) $ Exercised — ) $ Cancelled ) $ Expired upon termination of the 2014 Plan ) — $ — Outstanding as of July 31, 2016 $ $ Vested and exercisable $ $ Vested and expected to vest $ $ Inducement Grants The Company has also awarded inducement option grants to purchase common stock to new employees outside of the 2014 Plan as permitted under Section 711(a) of the NYSE MKT Company Guide. Such options vest at the rate of 25% of the shares on the first anniversary of the commencement of such employee’s employment with the Company, and then one forty-eighth (1/48) of the shares monthly thereafter subject to such employee’s continued service. The following table summarizes the Company’s inducement grant stock option activities: Shares Weighted Remaining Aggregate (in thousands) Balance at January 31, 2016, April 30, 2016 and July 31, 2016 $ $ — Vested and exercisable — $ — — $ — Vested and expected to vest $ $ — The following table summarizes significant ranges of outstanding and exercisable options as of July 31, 2016: Options Outstanding Options Vested and Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted $0.25 - $0.62 $ $ $0.63 - $1.00 $ $ $1.01 - $1.67 $ $ $1.68 - $3.00 $ $ $3.01 - $3.25 $ $ $ $ The total intrinsic value of stock options exercised during the three and six months ended July 31, 2016 was approximately $5,000 and $39,000, respectively. The total intrinsic value of stock options exercised during the three and six months ended July 31, 2015 was $1.2 million and $1.3 million, respectively. |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 6 Months Ended |
Jul. 31, 2016 | |
STOCK-BASED COMPENSATION | |
STOCK-BASED COMPENSATION | 8. STOCK-BASED COMPENSATION The following table summarizes the stock-based compensation expenses included in the unaudited condensed consolidated statement of operations and comprehensive loss (in thousands): For the three months ended For the six months ended 2016 2015 2016 2015 Research and development $ $ $ $ Sales and marketing General and administrative expenses Total $ $ $ $ The Company estimates the fair value of stock options granted using the Black-Scholes pricing model. This model also requires subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. For employee grants, the fair value is amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. As of July 31, 2016, total compensation costs related to unvested, but not yet recognized, stock-based awards was $2.7 million, net of estimated forfeitures. This cost will be amortized on a straight-line basis over a weighted average remaining period of 2.76 years and will be adjusted for subsequent changes in estimated forfeitures. Valuation Assumptions The following assumptions were used to calculate the estimated fair value of awards granted during the three and six months ended July 31, 2016: For the three months ended For the six months ended 2016 2015 2016 2015 Expected volatility 97.0% - 98.6% 97.0% - 98.6% Expected term in years Risk-free interest rate 1.14% - 1.28% 1.14% - 1.28% 1.62% - 1.71% Expected dividend yield — — — — Expected Term The expected term represents the period that the Company’s stock-based awards are expected to be outstanding. For awards granted subject only to service vesting requirements, the Company utilizes the simplified method for estimating the expected term of the stock-based award, instead of historical exercise data. Expected Volatility The Company uses the historical volatility of the price of shares of common stock of selected public companies, including the Company’s stock price, in the biotechnology sector due to its limited trading history. Risk-Free Interest Rate The Company bases the risk-free interest rate used in the Black-Scholes pricing method upon the implied yield curve currently available on U.S. Treasury zero-coupon issues with a remaining term equal to the expected term used as the assumption in the model. Expected Dividend The Company has never paid dividends on its shares of common stock and currently does not intend to do so and, accordingly, the dividend yield percentage is zero for all periods. |
INCOME TAXES
INCOME TAXES | 6 Months Ended |
Jul. 31, 2016 | |
INCOME TAXES | |
INCOME TAXES | 9. INCOME TAXES The Company evaluates its ability to recover deferred tax assets, in full or in part, by considering all available positive and negative evidence, including past operating results and its forecast of future taxable income on a jurisdictional basis. The Company bases its estimate of current and deferred taxes on the tax laws and rates that are currently in effect in the appropriate jurisdiction. Changes in laws or rates may affect the tax provision as well as the amount of deferred tax assets or liabilities. Current tax laws impose substantial restrictions on the utilization of net operating loss and credit carry-forwards in the event of an “ownership change,” as defined by the Internal Revenue Code. If there should be an ownership change, the Company’s ability to utilize its carry-forwards could be limited. As of July 31, 2016 and January 31, 2016, the Company has not recorded any liability for unrecognized tax benefits related to uncertain tax positions. The 2011 to 2015 tax years remain open for examination by the federal and state authorities. |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 6 Months Ended |
Jul. 31, 2016 | |
SUBSEQUENT EVENTS | |
SUBSEQUENT EVENTS. | 10. SUBSEQUENT EVENTS In August 2016, the Company (i) raised net proceeds of approximately $1.4 million in a private offering of 2,423,077 shares of its common stock at $0.65 per share and (ii) issued convertible promissory notes in the principal amount of $1.5 million. One convertible promissory note is secured, has a principal amount of $1.0 million and matures 36 months from the date of issuance if not earlier converted pursuant to the terms therein. The secured note is convertible into shares of the Company’s common stock at a conversion rate of $0.80 per share and bears interest at a rate of 10% per year. The secured note will automatically convert into shares of the Company’s common stock at the conversion price on the earlier of (a) the closing of a Qualified Financing Event, (b) the Maturity Date, or (c) a Liquidation Event, each as defined and as further described in the secured note. In connection with the issuance of the secured note, the Company entered into a security agreement with the investor pursuant to which the investor was granted a security interest in substantially all assets of the Company. The other convertible promissory note is unsecured, has a principal amount of $0.5 million and matures six months from the date of issuance if not earlier converted pursuant to the terms therein. The unsecured note is convertible into shares of the Company’s common stock at a conversion rate of $0.80 per share and bears interest at a rate of 10% per year. The unsecured note will automatically convert into shares of the Company’s common stock at the conversion price on the earlier of (a) the Maturity Date, (b) the closing of a public offering of equity securities or securities convertible into equity securities or (c) a Liquidation Event, each as defined and as further described in the unsecured note. In connection with the August 2016 private placements, the Company entered into a standstill agreement with certain investors in the common stock offering as well as a registration rights agreement with all investors in the common stock offering, and registration rights agreements with each of the holders of the convertible promissory notes. |
DESCRIPTION OF BUSINESS AND S16
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 6 Months Ended |
Jul. 31, 2016 | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting and include the accounts of the Company and its subsidiary. Certain information and note disclosures normally included in the consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended January 31, 2016, filed on May 2, 2016. The condensed consolidated balance sheet as of January 31, 2016, included herein, was derived from the audited consolidated financial statements as of that date. The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary and have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company’s statement of financial position as of July 31, 2016 and January 31, 2016, and the Company’s results of operations and its cash flows for the three and six months ended July 31, 2016 and 2015. The results for the three and six months ended July 31, 2016 are not necessarily indicative of the results to be expected for the year ending January 31, 2017 or any future period |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses recognized during the reported period. Actual results could differ from those estimates. |
Inventories | Inventories Inventories are stated at the lower of cost or market. Cost is determined using the standard cost method which approximates actual cost on a first-in, first-out basis. Market value is determined as the lower of replacement cost or net realizable value. The Company regularly reviews inventory quantities in consideration of actual loss experiences, projected future demand and remaining shelf life to record a provision for excess and obsolete inventory when appropriate. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset might not be recoverable. When such an event occurs, management determines whether there has been an impairment by comparing the anticipated undiscounted future net cash flows to the related asset’s carrying value. If an asset is considered impaired, the asset is written down to fair value, which is determined based either on discounted cash flows or appraised value, depending on the nature of the asset. The Company has not identified any such impairment losses to date. |
Advertising Expenses | Advertising Expenses The Company expenses the costs of advertising, including promotional expenses, as incurred. Advertising expenses were approximately $59,000 and $313,000 for the three months ended July 31, 2016 and 2015, respectively. Advertising expenses were approximately $278,000 and $549,000 for the six months ended July 31, 2016 and 2015, respectively. |
Net Loss Per Share | Net Loss per Share Basic net loss per share attributable to common stockholders is calculated based on the weighted-average number of shares of the Company’s common stock outstanding during the period. The weighted average shares outstanding for the three and six months ended July 31, 2016 excludes 193,333 of unvested common stock. Diluted net loss per share attributable to common stockholders is calculated based on the weighted-average number of shares of the Company’s common stock outstanding and other dilutive securities outstanding during the period. The potential dilutive shares of common stock resulting from the assumed exercise of outstanding stock options, warrants and the assumed conversion of preferred stock are determined under the treasury stock method. For the three months ended July 31, 2016 and 2015, approximately 10,002,000 and 4,837,000 potentially dilutive securities, respectively, were excluded from the computation of diluted loss per share because their effect on net loss per share would be anti-dilutive. |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies These unaudited interim condensed consolidated financial statements and accompanying notes should be read in conjunction with the Company’s annual financial statements and notes thereto contained in the Annual Report on Form 10-K for the fiscal year ended January 31, 2016. There have been no significant changes in the Company’s significant accounting policies for the three months ended July 31, 2016, as compared to the significant accounting policies described in the Annual Report on Form 10-K for the fiscal year ended January 31, 2016. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2016-02, Leases, which requires entities to recognize assets and liabilities for leases with lease terms greater than twelve months. The new guidance also requires quantitative and qualitative disclosures regarding the amount, timing and uncertainty of cash flows arising from leases. The standard is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted upon issuance. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation — Stock Compensation: Improvements to Employee Share-Based Payment Accounting, which relates to the accounting for employee share-based payments. This standard provides guidance on simplifying several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, accounting for forfeitures and classification of excess tax benefits on the statement of cash flows. This standard will be effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In April 2016, the FASB issued ASU No. 2016-10, Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligations and Licensing, which addresses certain implementation issues that have surfaced since the issuance of ASU No. 2014-09 in May 2014. ASU No. 2016-10 provides guidance in identifying performance obligations and determining the appropriate accounting for licensing arrangements. This standard will be effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. In May 2016, the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. ASU No. 2016-12 will affect all entities that enter into contracts with customers to transfer goods or services that are an output of the entity’s ordinary activities in exchange for consideration. The amendments in this update affect the guidance in ASU No. 2014-09 which is not yet effective. The amendments in this update also affect narrow aspects of Topic 606 including among others: assessing collectability criterion, noncash consideration, and presentation of sales taxes and other similar taxes collected from customers. The effective date of this update is the same as ASU No. 2014-09. The Company is in the process of evaluating the impact of adoption on its consolidated financial statements. |
BALANCE SHEET DETAILS (Tables)
BALANCE SHEET DETAILS (Tables) | 6 Months Ended |
Jul. 31, 2016 | |
BALANCE SHEET DETAILS | |
Schedule of Inventories | July 31, January 31, (in thousands) Inventories: Work in process $ $ Finished goods Channel inventory Total $ $ |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 6 Months Ended |
Jul. 31, 2016 | |
COMMITMENTS AND CONTINGENCIES | |
Future minimum commitments | The following table summarizes the Company’s commitments as of July 31, 2016 (in thousands): Total 2017 2018 2019 2020 2021 Operating lease $ $ $ — $ — $ — $ — Purchase commitment Total $ $ $ $ $ $ |
CONVERTIBLE REDEEMABLE PREFER19
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (Tables) | 6 Months Ended |
Jul. 31, 2016 | |
Schedule of significant ranges of outstanding and exercisable options | The following table summarizes significant ranges of outstanding and exercisable options as of July 31, 2016: Options Outstanding Options Vested and Exercisable Range of Exercise Price Number Weighted Weighted Number Weighted $0.25 - $0.62 $ $ $0.63 - $1.00 $ $ $1.01 - $1.67 $ $ $1.68 - $3.00 $ $ $3.01 - $3.25 $ $ $ $ |
2014 Equity Incentive Plan | |
Stock option plan activity | Available Shares Weighted Remaining Aggregate (in thousands) Outstanding as of January 1, 2016 $ $ Exercised — ) $ Cancelled ) $ Outstanding as of April 30 2016 $ $ Shares authorized for issuance — Granted ) $ Exercised — ) $ Cancelled ) $ Expired upon termination of the 2014 Plan ) — $ — Outstanding as of July 31, 2016 $ $ Vested and exercisable $ $ Vested and expected to vest $ $ |
Outside the 2014 Equity Incentive Plan | |
Stock option plan activity | Shares Weighted Remaining Aggregate (in thousands) Balance at January 31, 2016, April 30, 2016 and July 31, 2016 $ $ — Vested and exercisable — $ — — $ — Vested and expected to vest $ $ — |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 6 Months Ended |
Jul. 31, 2016 | |
STOCK-BASED COMPENSATION | |
Summary of stock based compensation expense | The following table summarizes the stock-based compensation expenses included in the unaudited condensed consolidated statement of operations and comprehensive loss (in thousands): For the three months ended For the six months ended 2016 2015 2016 2015 Research and development $ $ $ $ Sales and marketing General and administrative expenses Total $ $ $ $ |
Black-Scholes option pricing model fair value assumptions | For the three months ended For the six months ended 2016 2015 2016 2015 Expected volatility 97.0% - 98.6% 97.0% - 98.6% Expected term in years Risk-free interest rate 1.14% - 1.28% 1.14% - 1.28% 1.62% - 1.71% Expected dividend yield — — — — |
DESCRIPTION OF BUSINESS AND S21
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Offerings (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | ||||
Aug. 31, 2016USD ($) | Apr. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Jun. 30, 2015USD ($) | Jul. 31, 2016USD ($)subsidiary | Jul. 31, 2015USD ($) | |
Other Disclosures | ||||||
Number of wholly owned subsidiaries | subsidiary | 1 | |||||
Net proceeds from the issuance of common stock and warrants | $ 3,583 | $ 7,821 | ||||
Subsequent event | Convertible Note | ||||||
Other Disclosures | ||||||
Net proceeds from convertible promissory notes | $ 1,500 | |||||
Private Placement | ||||||
Other Disclosures | ||||||
Net proceeds from the sale of common stock | $ 5,500 | |||||
Private Placement | Subsequent event | Convertible Note | ||||||
Other Disclosures | ||||||
Net proceeds from convertible promissory notes | 1,500 | |||||
Private Placement | Common Stock | Subsequent event | ||||||
Other Disclosures | ||||||
Net proceeds from private offering | $ 1,400 | |||||
Public Offering | ||||||
Other Disclosures | ||||||
Net proceeds from the sale of common stock | $ 7,800 | |||||
Net proceeds from the issuance of common stock and warrants | $ 3,600 |
DESCRIPTION OF BUSINESS AND S22
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Advertising Expenses | ||||
Advertising expenses | $ 59,000 | $ 313,000 | $ 278,000 | $ 549,000 |
DESCRIPTION OF BUSINESS AND S23
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Net Loss Per Share (Details) - shares | 3 Months Ended | |
Jul. 31, 2016 | Jul. 31, 2015 | |
Net Loss Per Share | ||
Common stock shares expected to vest | 193,333 | |
Anti dilutive securities excluded from computation of diluted net loss per share | 10,002,000 | 4,837,000 |
GOING CONCERN (Details)
GOING CONCERN (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Aug. 31, 2016 | Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | Jan. 31, 2016 | Jan. 31, 2015 | |
Cash and cash equivalents | $ 436 | $ 7,388 | $ 436 | $ 7,388 | $ 4,039 | $ 1,305 | |
Working capital (deficit) | (3,500) | (3,500) | |||||
Net loss available to common stockholders | (5,034) | $ (3,735) | (9,495) | $ (7,598) | |||
Accumulated equity deficit | $ (35,727) | $ (35,727) | $ (26,232) | ||||
Subsequent event | |||||||
Net proceeds from common stock and convertible promissory notes | $ 2,900 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - Money Market Funds $ in Millions | 6 Months Ended |
Jul. 31, 2016USD ($) | |
Fair Value Measurements | |
Unrealized gains (losses) | $ 0 |
Level 1 | |
Fair Value Measurements | |
Available-for-sale securities | $ 0.2 |
BALANCE SHEET DETAILS (Details)
BALANCE SHEET DETAILS (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Jan. 31, 2016 |
Inventories: | ||
Work in process | $ 54 | $ 18 |
Finished goods | 17 | 28 |
Channel inventory | 41 | 54 |
Total | $ 112 | $ 100 |
RELATED PARTY PAYABLES (Details
RELATED PARTY PAYABLES (Details) - USD ($) | Jul. 31, 2016 | Jan. 31, 2016 |
RELATED PARTY PAYABLES | ||
Related party payables | $ 104,000 | $ 225,000 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Lease Arrangements (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2016USD ($) | Jul. 31, 2015USD ($) | Jul. 31, 2016USD ($) | Jul. 31, 2015USD ($) | Aug. 23, 2013ft² | |
Operating lease commitments | |||||
2,017 | $ 99 | $ 99 | |||
Total | 99 | 99 | |||
Purchase commitments | |||||
2,017 | 316 | 316 | |||
2,018 | 263 | 263 | |||
2,019 | 263 | 263 | |||
2,020 | 263 | 263 | |||
2,021 | 263 | 263 | |||
Total | 1,368 | 1,368 | |||
Contractual obligation commitments | |||||
2,017 | 415 | 415 | |||
2,018 | 263 | 263 | |||
2,019 | 263 | 263 | |||
2,020 | 263 | 263 | |||
2,021 | 263 | 263 | |||
Total | 1,467 | 1,467 | |||
Rent expense | |||||
Leased office and laboratory area | ft² | 10,800 | ||||
Rent expense | $ 86,000 | $ 94,000 | $ 172,000 | $ 172,000 |
COMMITMENTS AND CONTINGENCIES29
COMMITMENTS AND CONTINGENCIES - Legal Proceedings and License Agreement (Details) - License Agreement - Iogen LLC | 6 Months Ended |
Jul. 31, 2016 | |
License Agreement | |
Non Royalty license fee equal to a certain percentage of net profit associated with OTC product | 30.00% |
Non Royalty license fee equal to a certain percentage of net royalties received from any sub-licensee | 30.00% |
Prescription Iodine Tablet | |
License Agreement | |
Royalty fee percentage based on net sales over a specific time period of commercialization | 3.00% |
Royalty fee percentage based on net sales after a specific period of time | 2.00% |
Time period for determining initial royalty fee as a percent of net sales | 24 months |
Other Products | |
License Agreement | |
Royalty fee percentage based on net sales over a specific time period of commercialization | 3.00% |
Royalty fee percentage based on net sales from initial period until expiration of applicable patents | 2.00% |
Royalty fee percentage based on net sales after a specific period of time | 1.00% |
Time period for determining initial royalty fee as a percent of net sales | 12 months |
COMMITMENTS AND CONTINGENCIES30
COMMITMENTS AND CONTINGENCIES - Intangible Assets (Details) - USD ($) | 6 Months Ended | ||
Jul. 31, 2016 | Jan. 31, 2016 | Dec. 31, 2013 | |
Finite-Lived Intangible Assets | |||
Intangible assets, net of amortization | $ 104,000 | $ 119,000 | |
Royalties paid | $ 0 | ||
Intellectual Property | |||
Finite-Lived Intangible Assets | |||
Fees to Iogen capitalized | $ 150,000 |
CONVERTIBLE REDEEMABLE PREFER31
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Common Stock (Details) - USD ($) | Oct. 24, 2014 | Apr. 30, 2016 | Dec. 31, 2015 | Jun. 30, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | Jan. 31, 2016 | Dec. 14, 2015 |
Shares issued | 28,881,351 | 25,208,684 | ||||||
Stock expected to vest | 193,333 | |||||||
Net proceeds from the issuance of common stock and warrants | $ 3,583,000 | $ 7,821,000 | ||||||
Korea Investment Partners | ||||||||
Shares issued | 290,000 | |||||||
Stock vested | 96,667 | |||||||
Stock expected to vest | 193,333 | |||||||
Convertible Note | ||||||||
Conversion of convertible notes payable to common stock (in shares) | 182,266 | |||||||
Public Offering | ||||||||
Issuance of common stock (in shares) | 3,600,000 | 3,636,384 | ||||||
Net proceeds from the sale of common stock | $ 7,800,000 | |||||||
Price per share | $ 1.195 | |||||||
Net proceeds from the issuance of common stock and warrants | $ 3,600,000 | |||||||
Number of shares of common stock subject to warrant | 1,952,000 | |||||||
Warrants exercise price | $ 1.20 | |||||||
Private Placement | ||||||||
Net proceeds from the sale of common stock | $ 5,500,000 | |||||||
Korea Investment Partners | Subscription Agreement | Common Stock | ||||||||
Shares issued | 1,081,081 | |||||||
Price per share | $ 1.85 | |||||||
Revenue from Violet | $ 2,000,000 | |||||||
Subscription agreement receivable | $ 2,000,000 | |||||||
Korea Investment Partners | Subscription Agreement | Common Stock | Minimum | ||||||||
Price per share | $ 3.70 | |||||||
Franklin Advisers | Private Placement | ||||||||
Issuance of common stock (in shares) | 4,100,000 | |||||||
Net proceeds from the sale of common stock | $ 5,500,000 | |||||||
Price per share | $ 1.43 | |||||||
Period within which securities can be purchased | 5 years | |||||||
Franklin Advisers | Private Placement | Maximum | ||||||||
Percentage of securities offered by entity | 20.00% |
CONVERTIBLE REDEEMABLE PREFER32
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Series A Preferred Stock & Warrants (Details) - USD ($) | May 15, 2014 | May 14, 2014 | Apr. 30, 2016 | Jan. 31, 2016 | Jun. 30, 2015 | Apr. 30, 2015 | Jul. 31, 2015 | Dec. 31, 2014 | Jul. 31, 2016 | Mar. 31, 2015 |
Equity | ||||||||||
Proceeds from warrant exercises | $ 1,512,000 | |||||||||
Incremental fair value of warrants | $ 436,000 | |||||||||
Public Offering | ||||||||||
Equity | ||||||||||
Number of shares of common stock subject to warrant | 1,952,000 | |||||||||
Warrants exercise price | $ 1.20 | |||||||||
Issuance of common stock, net of expenses of $2,500 (in shares) | 3,600,000 | 3,636,384 | ||||||||
Warrant | Public Offering | Underwriters | ||||||||||
Equity | ||||||||||
Number of shares of common stock subject to warrant | 109,091 | |||||||||
Warrants exercise price | $ 2.75 | |||||||||
Warrants expiration term | 5 years | |||||||||
Series A Warrant | Warrant | ||||||||||
Equity | ||||||||||
Number of shares of common stock subject to warrant | 2,042,589 | |||||||||
Warrants exercise price | $ 3.70 | |||||||||
Series A Convertible Redeemable Preferred Stock | Public Offering | ||||||||||
Equity | ||||||||||
Number of common shares into which share is convertible | 4,319,426 | |||||||||
Series A Convertible Redeemable Preferred Stock | Subscription Agreement | ||||||||||
Equity | ||||||||||
Number of shares sold | 4,207,987 | |||||||||
Series A Convertible Redeemable Preferred Stock | Series A Warrant | ||||||||||
Equity | ||||||||||
Number of shares of common stock subject to warrant | 564,662 | |||||||||
Proceeds from warrant exercises | $ 1,411,655 | |||||||||
Incremental fair value of warrants | $ 436,000 | |||||||||
Series A Convertible Redeemable Preferred Stock | Series A Warrant | Actual | ||||||||||
Equity | ||||||||||
Warrants exercise price | $ 2.50 | |||||||||
Series A Convertible Redeemable Preferred Stock | Series A Warrant | Previously Reported | ||||||||||
Equity | ||||||||||
Warrants exercise price | $ 3.70 | |||||||||
Series A Convertible Redeemable Preferred Stock | Series A Warrant | Public Offering | ||||||||||
Equity | ||||||||||
Offering price per share that triggers the issuance of additional shares related to the public offering | $ 3.125 | |||||||||
Percentage of public offering price | 80.00% | |||||||||
Issuance of common stock, net of expenses of $2,500 (in shares) | 77,006 | |||||||||
Series A Convertible Redeemable Preferred Stock | Series A Warrant | Warrant | ||||||||||
Equity | ||||||||||
Number of shares of common stock subject to warrant | 1,661,055 | |||||||||
Dividend rate | 0.00% | |||||||||
Risk-free rate | 1.60% | |||||||||
Expected volatility | 85.90% | |||||||||
Series A Convertible Redeemable Preferred Stock | Series A Warrant | Warrant | Minimum | ||||||||||
Equity | ||||||||||
Contractual term | 4 years | |||||||||
Series A Convertible Redeemable Preferred Stock | Series A Warrant | Warrant | Maximum | ||||||||||
Equity | ||||||||||
Contractual term | 5 years | |||||||||
Series A Convertible Redeemable Preferred Stock | Service Provider Warrant | Warrant | ||||||||||
Equity | ||||||||||
Number of shares of common stock subject to warrant | 316,395 | |||||||||
Warrants exercise price | $ 2.035 | |||||||||
Warrant expense | $ 99,000 | |||||||||
Series A Convertible Redeemable Preferred Stock | Convertible Debt Warrant | Warrant | ||||||||||
Equity | ||||||||||
Conversion of convertible notes payable to common stock (in shares) | 54,054 | |||||||||
Number of shares of common stock subject to warrant | 343,559 | 289,505 | ||||||||
Warrants exercise price | $ 1.85 | |||||||||
Adjustment to paid-in capital, warrant fair value | $ 105,000 | |||||||||
Contractual term | 5 years |
CONVERTIBLE REDEEMABLE PREFER33
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Equity Incentive Plan (Details) - 2016 Equity Incentive Plan | 6 Months Ended |
Jul. 31, 2016shares | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Number of shares reserved for issuance | 4,000,000 |
Options | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Expiration period | 10 years |
Minimum | Options | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Vesting period | 2 years |
Maximum | Options | |
Share-based Compensation Arrangement by Share-based Payment Award | |
Vesting period | 4 years |
CONVERTIBLE REDEEMABLE PREFER34
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Stock Option Activities (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2016 | Jan. 31, 2016 | Jan. 31, 2015 | |
Plans | |||||
Available for Grant | |||||
Available for grant, beginning | 438,375 | 350,875 | |||
Granted | (2,635,000) | ||||
Cancelled | 358,416 | 87,500 | |||
Available for grant, ending | 2,140,100 | 438,375 | 2,140,100 | 350,875 | |
Shares authorized for issuance | 4,000,000 | 4,000,000 | |||
Shares | |||||
Outstanding, Beginning | 2,562,775 | 2,704,608 | |||
Exercised | (18,334) | (54,333) | |||
Cancelled | (358,416) | (87,500) | |||
Outstanding, Ending | 4,821,025 | 2,562,775 | 4,821,025 | 2,704,608 | |
Granted | 2,635,000 | ||||
Vested and exercisable | 1,547,679 | 1,547,679 | |||
Vested and expected to vest | 4,295,839 | 4,295,839 | |||
Weighted Average Exercise Prices | |||||
Outstanding, Beginning | $ 1.61 | $ 1.59 | |||
Granted | 0.64 | ||||
Exercised | 0.35 | $ 0.33 | |||
Cancelled | 2.19 | 1.85 | |||
Outstanding, Ending | $ 0.95 | $ 1.61 | $ 0.95 | $ 1.59 | |
Granted | 2,635,000 | ||||
Vested and exercisable | $ 1.12 | 1.12 | |||
Vested and expected to vest | $ 0.97 | $ 0.97 | |||
Remaining Contractual Life | |||||
Outstanding | 8 years 5 months 1 day | 8 years 11 months 9 days | 8 years 4 months 13 days | ||
Vested and exercisable | 7 years 8 months 5 days | ||||
Vested and expected to vest | 8 years 10 months 6 days | ||||
Aggregate Intrinsic Value | |||||
Outstanding | $ 502 | $ 340 | $ 502 | $ 1,343 | |
Vested and exercisable | 237 | 237 | |||
Vested and expected to vest | $ 462 | $ 462 | |||
2014 Equity Incentive Plan | |||||
Available for Grant | |||||
Expired upon termination of the 2014 Plan | (21,691) | ||||
Outside the 2014 Equity Incentive Plan | |||||
Shares | |||||
Outstanding, Beginning | 660,000 | 660,000 | 660,000 | ||
Outstanding, Ending | 660,000 | 660,000 | 660,000 | 660,000 | |
Vested and expected to vest | 561,692 | 561,692 | |||
Weighted Average Exercise Prices | |||||
Outstanding, Beginning | $ 1.44 | $ 1.44 | $ 1.44 | ||
Outstanding, Ending | 1.44 | $ 1.44 | 1.44 | $ 1.44 | |
Vested and expected to vest | $ 1.44 | $ 1.44 | |||
Remaining Contractual Life | |||||
Outstanding | 9 years 2 months 19 days | 9 years 2 months 19 days | 9 years 2 months 19 days | ||
Vested and expected to vest | 9 years 2 months 19 days | ||||
Outside the 2014 Equity Incentive Plan | First anniversary | |||||
Available for Grant | |||||
Vesting percentage | 25.00% | ||||
Outside the 2014 Equity Incentive Plan | Subsequent to first anniversary | |||||
Available for Grant | |||||
Vesting percentage | 2.083% |
CONVERTIBLE REDEEMABLE PREFER35
CONVERTIBLE REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY - Range of Exercise Price (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jul. 31, 2016 | Apr. 30, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Options Outstanding | |||||
Number Outstanding (in shares) | 5,481,025 | ||||
Weighted Average Remaining Contractual Life | 8 years 11 months 19 days | ||||
Weighted Average Exercise Prices (in dollars per share) | $ 1 | ||||
Options Exercisable | |||||
Number Vested and Exercisable (in shares) | 1,547,679 | ||||
Weighted Average Exercise Prices (in dollars per share) | $ 1.12 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures | |||||
Total intrinsic value of options exercised | $ 5,000 | $ 1,200,000 | $ 39,000 | $ 1,300,000 | |
$0.25 - $0.62 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||||
Exercise prices, low end of range (in dollars per share) | $ 0.25 | ||||
Exercise prices, high end of range (in dollars per share) | $ 0.62 | ||||
Options Outstanding | |||||
Number Outstanding (in shares) | 2,547,259 | 2,547,259 | |||
Weighted Average Remaining Contractual Life | 9 years 18 days | ||||
Weighted Average Exercise Prices (in dollars per share) | $ 0.54 | $ 0.54 | |||
Options Exercisable | |||||
Number Vested and Exercisable (in shares) | 781,418 | 781,418 | |||
Weighted Average Exercise Prices (in dollars per share) | $ 0.42 | $ 0.42 | |||
$0.63 - $1.00 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||||
Exercise prices, low end of range (in dollars per share) | 0.63 | ||||
Exercise prices, high end of range (in dollars per share) | $ 1 | ||||
Options Outstanding | |||||
Number Outstanding (in shares) | 887,100 | 887,100 | |||
Weighted Average Remaining Contractual Life | 9 years 6 months 22 days | ||||
Weighted Average Exercise Prices (in dollars per share) | $ 0.73 | $ 0.73 | |||
Options Exercisable | |||||
Number Vested and Exercisable (in shares) | 108,332 | 108,332 | |||
Weighted Average Exercise Prices (in dollars per share) | $ 0.96 | $ 0.96 | |||
$1.01 - $1.67 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||||
Exercise prices, low end of range (in dollars per share) | 1.01 | ||||
Exercise prices, high end of range (in dollars per share) | $ 1.67 | ||||
Options Outstanding | |||||
Number Outstanding (in shares) | 1,365,666 | 1,365,666 | |||
Weighted Average Remaining Contractual Life | 9 years 1 month 13 days | ||||
Weighted Average Exercise Prices (in dollars per share) | $ 1.52 | $ 1.52 | |||
Options Exercisable | |||||
Number Vested and Exercisable (in shares) | 209,890 | 209,890 | |||
Weighted Average Exercise Prices (in dollars per share) | $ 1.57 | $ 1.57 | |||
$1.68 - $3.00 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||||
Exercise prices, low end of range (in dollars per share) | 1.68 | ||||
Exercise prices, high end of range (in dollars per share) | $ 3 | ||||
Options Outstanding | |||||
Number Outstanding (in shares) | 636,000 | 636,000 | |||
Weighted Average Remaining Contractual Life | 8 years 1 month 13 days | ||||
Weighted Average Exercise Prices (in dollars per share) | $ 2.04 | $ 2.04 | |||
Options Exercisable | |||||
Number Vested and Exercisable (in shares) | 403,039 | 403,039 | |||
Weighted Average Exercise Prices (in dollars per share) | $ 2.06 | $ 2.06 | |||
$3.01 - $3.25 | |||||
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range | |||||
Exercise prices, low end of range (in dollars per share) | 3.01 | ||||
Exercise prices, high end of range (in dollars per share) | $ 3.25 | ||||
Options Outstanding | |||||
Number Outstanding (in shares) | 45,000 | 45,000 | |||
Weighted Average Remaining Contractual Life | 1 month 21 days | ||||
Weighted Average Exercise Prices (in dollars per share) | $ 3.25 | $ 3.25 | |||
Options Exercisable | |||||
Number Vested and Exercisable (in shares) | 45,000 | 45,000 | |||
Weighted Average Exercise Prices (in dollars per share) | $ 3.25 | $ 3.25 |
STOCK-BASED COMPENSATION - Expe
STOCK-BASED COMPENSATION - Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Share-based Compensation | ||||
Stock-based compensation expense | $ 424 | $ 324 | $ 697 | $ 624 |
Total compensation costs not yet recognized | 2,700 | $ 2,700 | ||
Average remaining amortization period for recognition of expense | 2 years 9 months 4 days | |||
Research and development | ||||
Share-based Compensation | ||||
Stock-based compensation expense | 129 | 39 | $ 205 | 125 |
Sales and marketing | ||||
Share-based Compensation | ||||
Stock-based compensation expense | 98 | 83 | 182 | 207 |
General and administrative. | ||||
Share-based Compensation | ||||
Stock-based compensation expense | $ 197 | $ 202 | $ 310 | $ 292 |
STOCK-BASED COMPENSATION - Assu
STOCK-BASED COMPENSATION - Assumptions (Details) | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2016 | Jul. 31, 2015 | Jul. 31, 2016 | Jul. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Expected volatility | 82.60% | 82.60% | ||
Expected term in years | 6 years 6 months | 6 years | 6 years 6 months | 6 years |
Risk-free interest rate | 1.71% | |||
Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Expected volatility | 97.00% | 97.00% | ||
Risk-free interest rate | 1.14% | 1.14% | 1.62% | |
Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award | ||||
Expected volatility | 98.60% | 98.60% | ||
Risk-free interest rate | 1.28% | 1.28% | 1.71% |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Jul. 31, 2016 | Jan. 31, 2016 |
INCOME TAXES | ||
Liability for unrecognized tax benefits | $ 0 | $ 0 |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) - Subsequent event $ / shares in Units, $ in Millions | 1 Months Ended |
Aug. 31, 2016USD ($)$ / sharesshares | |
Convertible Note | |
SUBSEQUENT EVENTS | |
Principal amount | $ 1.5 |
Convertible Note | Unsecured debt | |
SUBSEQUENT EVENTS | |
Principal amount | $ 0.5 |
Maturity term (in months) | 6 months |
Conversion price (in dollars per share) | $ / shares | $ 0.80 |
Interest rate (in percent) | 10.00% |
Convertible Note | Secured debt | |
SUBSEQUENT EVENTS | |
Principal amount | $ 1 |
Maturity term (in months) | 36 months |
Conversion price (in dollars per share) | $ / shares | $ 0.80 |
Interest rate (in percent) | 10.00% |
Private Placement | Convertible Note | |
SUBSEQUENT EVENTS | |
Principal amount | $ 1.5 |
Private Placement | Common Stock | |
SUBSEQUENT EVENTS | |
Net proceeds from private offering | $ 1.4 |
Issuance of common stock (in shares) | shares | 2,423,077 |
Share price (in dollars per share) | $ / shares | $ 0.65 |