Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 06, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Cerecor Inc. | |
Entity Central Index Key | 1,534,120 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 26,054,857 |
Balance Sheets
Balance Sheets - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 23,955,397 | $ 5,127,958 |
Escrowed cash receivable | 3,750,803 | 0 |
Grants receivable | 30,135 | 132,472 |
Prepaid expenses and other current assets | 341,025 | 391,253 |
Restricted cash, current portion | 29,159 | 11,111 |
Total current assets | 28,106,519 | 5,662,794 |
Property and equipment, net | 34,183 | 43,243 |
Restricted cash, net of current portion | 62,847 | 62,828 |
Total assets | 28,203,549 | 5,768,865 |
Current liabilities: | ||
Term debt, net of discount | 0 | 2,353,667 |
Accounts payable | 312,514 | 1,010,209 |
Accrued expenses and other current liabilities | 1,290,683 | 947,987 |
Income taxes payable | 3,230,000 | 0 |
Total current liabilities | 4,833,197 | 4,311,863 |
License obligations | 1,250,000 | 1,250,000 |
Total liabilities | 6,083,197 | 5,561,863 |
Stockholders’ equity: | ||
Preferred stock—$0.001 par value; 5,000,000 shares authorized; zero shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 0 | 0 |
Common stock—$0.001 par value; 200,000,000 shares authorized; 26,054,857 and 9,434,141 shares issued and outstanding at September 30, 2017 and December 31, 2016, respectively | 26,055 | 9,434 |
Additional paid-in capital | 77,167,922 | 70,232,651 |
Accumulated deficit | (55,073,625) | (70,035,083) |
Total stockholders’ equity | 22,120,352 | 207,002 |
Total liabilities and stockholders’ equity | $ 28,203,549 | $ 5,768,865 |
Balance Sheets (Parenthetical)
Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (usd per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 26,054,857 | 9,434,141 |
Common stock, shares outstanding | 26,054,857 | 9,434,141 |
Statements of Operations (Unaud
Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income Statement [Abstract] | ||||
License and other revenue | $ 25,000,000 | $ 0 | $ 25,000,000 | $ 0 |
Grant revenue | 37,592 | 321,497 | 579,597 | 971,985 |
Total revenue | 25,037,592 | 321,497 | 25,579,597 | 971,985 |
Operating expenses: | ||||
Research and development | 964,574 | 4,581,605 | 2,411,293 | 9,376,633 |
General and administrative | 2,151,859 | 1,703,188 | 4,921,269 | 5,989,053 |
Income (loss) from operations | 21,921,159 | (5,963,296) | 18,247,035 | (14,393,701) |
Other income (expense): | ||||
Change in fair value of warrant liability and unit purchase option liability | 64 | (101,246) | (1,586) | (57,595) |
Interest income (expense), net | 29,387 | (104,183) | (53,991) | (381,603) |
Total other income (expense) | 29,451 | (205,429) | (55,577) | (439,198) |
Net income (loss) before taxes | 21,950,610 | (6,168,725) | 18,191,458 | (14,832,899) |
Income tax expense | 3,230,000 | 0 | 3,230,000 | 0 |
Net income (loss) after taxes | $ 18,720,610 | $ (6,168,725) | $ 14,961,458 | $ (14,832,899) |
Net income (loss) per common share, basic and diluted (USD per share) | $ 0.52 | $ (0.70) | $ 0.65 | $ (1.71) |
Weighted-average shares outstanding - basic (shares) | 21,382,683 | 8,756,393 | 14,952,391 | 8,685,818 |
Weighted-average shares outstanding - diluted (shares) | 21,407,702 | 8,756,393 | 14,960,032 | 8,685,818 |
Statements of Cash Flows (Unaud
Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Operating activities | ||
Net income (loss) | $ 14,961,458 | $ (14,832,899) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||
Depreciation | 17,050 | 20,468 |
Stock-based compensation expense | 852,210 | 1,439,194 |
Non-cash interest expense | 20,365 | 134,096 |
Change in fair value of warrant liability and unit purchase option liability | 1,586 | 57,595 |
Changes in assets and liabilities: | ||
Grants receivable | 102,337 | (379,256) |
Prepaid expenses and other assets | 50,228 | 191,527 |
Escrowed funds receivable | (3,750,803) | 0 |
Restricted cash | (18,067) | (79,051) |
Accounts payable | (697,695) | 109,908 |
Accrued expenses and other liabilities | 341,109 | 2,478,234 |
Income taxes payable | 3,230,000 | 0 |
Net cash provided by (used in) operating activities | 15,109,778 | (10,860,184) |
Investing activities | ||
Purchase of property and equipment | (7,990) | (25,646) |
Net cash used in investing activities | (7,990) | (25,646) |
Financing activities | ||
Proceeds from sale of shares under common stock purchase agreements, net | 1,693,498 | 1,000,000 |
Proceeds from sale of shares pursuant to private placement, net | 4,650,000 | 0 |
Proceeds from sales of common stock under employee stock purchase plan, net | 35,430 | 0 |
Principal payments on term debt | (2,374,031) | (2,459,493) |
Payment of financing costs | (279,246) | (1,467) |
Net cash provided by (used in) financing activities | 3,725,651 | (1,460,960) |
Increase (decrease) in cash and cash equivalents | 18,827,439 | (12,346,790) |
Cash and cash equivalents at beginning of period | 5,127,958 | 21,161,967 |
Cash and cash equivalents at end of period | 23,955,397 | 8,815,177 |
Supplemental disclosures of cash flow information | ||
Cash paid for interest | 72,526 | 287,841 |
Supplemental disclosures of noncash financing activities | ||
Accrued financing costs | $ 0 | $ 101,728 |
Business
Business | 9 Months Ended |
Sep. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business | Business Cerecor Inc. (the “Company” or “Cerecor”) is a biopharmaceutical company that is developing innovative drug candidates for commercialization, license or sale to make a difference in the lives of patients with neurologic and psychiatric disorders. The Company’s operations since inception have been limited to organizing and staffing the Company, acquiring rights to and developing certain product candidates, business planning and raising capital. Liquidity The Company's financial statements have been prepared on an accrual basis. The Company has not generated any product revenues and has not yet achieved profitable operations from commercialization. There is no assurance that profitable operations will ever be achieved, and if achieved, could be sustained on a continuing basis. Prior to the quarter ended September 30, 2017, the Company had incurred recurring operating losses since inception. For the nine months ended September 30, 2017 , the Company generated net income of $ 15.0 million and positive cash flows from operations of $ 15.1 million . In August 2017, the Company sold all of its rights to a prior product candidate, CERC-501, to Janssen Pharmaceuticals, Inc. (“Janssen”) in exchange for initial gross proceeds of $25.0 million , of which $3.75 million was deposited into a twelve-month escrow to secure certain indemnification obligations, as well as a potential future $20.0 million regulatory milestone payment. The terms of the agreement provide that Janssen will assume ongoing clinical trials and be responsible for any new development and commercialization of CERC-501. As of September 30, 2017 , the Company had an accumulated deficit of $ 55.1 million and a balance of $24.0 million in cash and cash equivalents. The Company anticipates operating losses to continue for the foreseeable future due to, among other things, costs related to its preclinical programs, additional clinical development of its product candidates, business development and costs associated with its organizational infrastructure. The Company will require substantial additional financing to fund its operations and to continue to execute its strategy. The Company plans to meet its capital requirements primarily through a combination of equity or debt financings, collaborations, or out-licensing arrangements, strategic alliances, federal and private grants, marketing, distribution or licensing arrangements and in the longer term, revenue from product sales to the extent its product candidates receive marketing approval and are commercialized. There can be no assurance, however, that the Company will be successful in obtaining financing at the level needed to sustain operations and develop its product candidates or on terms acceptable to the Company, or that the Company will obtain approvals necessary to market its products or achieve profitability or sustainable positive cash flow. If the Company fails to raise capital or enter into any such arrangements, it will have to further delay, scale back or discontinue the development of one or more of its product candidates or cease its operations altogether. In April 2017 the Company received $5.0 million in gross proceeds pursuant to a securities purchase agreement with Armistice Capital Master Fund Ltd (“Armistice”). The Company has the potential to raise additional cash through an equity distribution agreement with Maxim Group LLC ("Maxim Group") as described in Note 8. The Company expects its cash on hand at September 30, 2017 to fund future expenses through at least December 31, 2018. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Significant Accounting Policies Basis of Presentation The Company’s unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations and cash flows. The balance sheet at December 31, 2016 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited financial statements are read in conjunction with the December 31, 2016 audited financial statements. 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, liabilities, revenues, expenses, other comprehensive income and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to clinical trial accruals, the warrant liability and the unit purchase option liability. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. Net Income (Loss) Per Share, Basic and Diluted Earnings per share are computed using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Shares of the unexercised warrants issued in the Armistice Private Placement transaction are considered participating securities because these warrants contain a non-forfeitable right to dividends irrespective of whether the warrants are ultimately exercised. Under the two-class method, earnings per common share for the common stock and participating warrants are computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted-average number of shares of Common stock and participating warrants outstanding for the period. In applying the two-class method, undistributed earnings are allocated to common stock and participating warrants based on the weighted-average shares outstanding during the period. Diluted net income (loss) per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options issued under the Company's Long-Term Incentive Plans which are included under the "treasury stock method" when dilutive, (ii) common stock to be issued upon the assumed conversion of the Company's unit purchase option shares, which are included under the "if-converted method" when dilutive, and (iii) common stock to be issued upon the exercise of outstanding warrants which are included under the "treasury stock method" when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In addition, net losses are not allocated to the participating securities. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. Escrowed Cash Receivable On August 14. 2017, the Company sold all of its rights to CERC-501 to Janssen in exchange for initial gross proceeds of $25.0 million , of which $3.75 million was deposited into a twelve month escrow to secure certain indemnification obligations to Janssen Pharmaceuticals, Inc. The Company evaluates its escrowed cash receivable balance each reporting period and establishes a reserve for amounts deemed uncollectible. No reserve was recorded as of September 30, 2017. Restricted Cash The Company established the Employee Stock Purchase Plan in 2016. Eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the Plan administrator. At September 30, 2017, $29,200 of deposits had been made by employees for potential future stock purchases. In 2016 the Company entered into a bank services pledge agreement with Silicon Valley Bank. In exchange for receiving business credit card services from Silicon Valley Bank, the Company deposited $50,000 as collateral with Silicon Valley Bank. This amount will remain deposited with Silicon Valley Bank for the duration the business credit card services are used by the Company. In addition, the Company has deposited $13,000 with the landlord of the Company's office space as a security deposit. These deposits are recorded as restricted cash, net of current portion on the balance sheet at September 30, 2017. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be credit worthy. The Company has no financial instruments with off‑balance sheet risk of loss. Debt and Equity Issuance Costs The Company may record debt and equity discounts in connection with raising funds through the issuance of convertible notes or equity instruments. These discounts may arise from (i) the receipt of proceeds less than the face value of the convertible notes or equity instruments, (ii) allocation of proceeds to beneficial conversion features and/or (iii) recording derivative liabilities related to embedded features. For debt instruments, these costs are amortized over the life of the debt to interest expense utilizing the effective interest method. For equity instruments, these costs are netted against the gross proceeds received from the issuance of the equity. Property and Equipment Property and equipment consists of computers, office equipment, and furniture and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue from potential future milestones, if substantive, is recognized when the milestone is achieved and the payment is due and collectible. Grant Revenue Recognition The Company recognizes grant revenue when there is (i) reasonable assurance of compliance with the conditions of the grant and (ii) reasonable assurance that the grant will be received. Research and Development Research and development costs are expensed as incurred. These costs include, but are not limited to, employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel; expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; other supplies; facilities, depreciation and other expenses, which include direct and allocated expenses for rent, utilities and insurance; and costs associated with preclinical activities and regulatory operations. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources. Comprehensive loss was equal to net loss for all periods presented. Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Deferred tax assets primarily include net operating loss and tax credit carry-forwards, accrued expenses not currently deductible and the cumulative temporary differences related to certain research and patent costs. Certain tax attributes, including net operating losses and research and development credit carryforwards, may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code (the "Code"). See Note 10 for further information. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of September 30, 2017 , the Company does not believe any material uncertain tax positions are present. Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees and non‑employees, including employee stock options, in the statements of operations. For stock options issued to employees and members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. For stock options issued to non‑employees, the Company initially measures the options at their grant date fair values and revalues as the underlying equity instruments vest and are recognized as expense over the earlier of the period ending with the performance commitment date or the date the services are completed in accordance with the provisions of ASC 718 and ASC 505‑50, Equity‑Based Payments to Non‑Employees (“ASC 505‑50”). Clinical Trial Expense Accruals As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by subject progression and the timing of various aspects of the trial. The Company determines accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third‑party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in it reporting amounts that are too high or too low for any particular period. Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision‑making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one operating segment. All long‑lived assets of the Company reside in the United States. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑9, Revenue From Contracts With Customers (“ASU 2014‑9”). Pursuant to this update, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606) , which delays the effective date of ASU 2014-9 by one year. As a result, ASU 2014-9 will be effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-8, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-8”) and ASU No. 2016-10, Revenue From Contracts With Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), and in May 2016 the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), each of which clarify the guidance in ASU 2014-9 and have the same effective date as the original standard. The Company has substantially completed it's assessment of the impact of adoption of ASU 2014-9, ASU 2016-8, ASU 2016-10, or ASU 2016-12 on the financial statements, and the impact is not expected to be significant. The Company plans to adopt the new standard effective January 1, 2018. The Company continues to monitor additional changes, modifications, clarifications or interpretations being undertaken by the FASB, which may impact the Company’s current conclusions. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842). This guidance revises existing practice related to accounting for leases under ASC 840, Leases (“ASC 840”) for both lessees and lessors. The new guidance in ASU 2016-2 requires lessees to recognize a right-of-use asset and a lease liability for nearly all leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating leases or capital leases. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while capital leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. In March 2016, the FASB issued ASU No. 2016-9, Improvements to Employee Share-Based Payment Accounting. The guidance is intended to simplify several areas of accounting for share-based compensation, including income tax impacts, classification on the statement of cash flows and forfeitures. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early application is permitted. The new guidance was adopted by the Company effective January 1, 2017 and its adoption did not have any impact on its financial position, results of operations or cash flows. In connection with adoption, the Company has elected to account for forfeitures as they occur as opposed to being estimated at the time of grant and revised. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows , Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which reduces existing diversity in the classification of certain cash receipts and cash payments on the statements of cash flows. ASU 2016-15 I effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash . The guidance is intended to address the diversity that currently exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The new standard requires that entities show the changes in the total of cash and cash equivalents, restricted cash and restricted cash equivalents on the statement of cash flows and no longer present transfers between cash and cash equivalents, restricted cash and restricted cash equivalents on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. |
Net Income (Loss) Per Share of
Net Income (Loss) Per Share of Common Stock, Basic and Diluted | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share of Common Stock, Basic and Diluted | Net Income (Loss) Per Share of Common Stock, Basic and Diluted The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Basic income (loss) per share: Net income (loss) $ 18,720,610 $ (6,168,725 ) $ 14,961,458 $ (14,832,899 ) Undistributed earnings (loss) allocable to common shares $ 18,720,610 $ (6,168,725 ) $ 14,961,458 $ (14,832,899 ) Weighted average shares, basic Common stock 21,382,683 8,756,393 14,952,391 8,685,818 Participating warrants 14,285,714 — 8,163,265 — 35,668,397 8,756,393 23,115,656 8,685,818 Basic income (loss) per share: Common shares $ 0.52 $ (0.70 ) $ 0.65 $ (1.71 ) Participating warrants $ 0.52 $ — $ 0.65 $ — Diluted income (loss) per share: Net income (loss) $ 11,222,732 $ (6,168,725 ) $ 9,677,838 $ (14,832,899 ) Net income (loss) reallocated 5,256 — 1,746 — Undistributed earnings (loss) allocable to common shares $ 11,227,988 $ (6,168,725 ) $ 9,679,584 $ (14,832,899 ) Weighted average number of shares - basic 21,382,683 8,756,393 14,952,391 8,685,818 Effect of dilutive securities: Stock options 25,019 — 7,641 — Underwriters' unit purchase option — — — — Potentially dilutive shares 25,019 — 7,641 — Weighted average number of shares - diluted 21,407,702 8,756,393 14,960,032 8,685,818 Diluted income (loss) per share $ 0.52 $ (0.70 ) $ 0.65 $ (1.71 ) Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive, include the following: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Stock options 2,384,560 1,828,441 2,401,938 1,828,441 Warrants 4,661,145 7,400,934 4,661,145 7,400,934 Unit purchase option shares 40,000 40,000 40,000 40,000 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements ASC 820, Fair Value Measurements and Disclosures (“ASC 820”), defines fair value as the price that would be received to sell an asset, or paid to transfer a liability, in the principal or most advantageous market in an orderly transaction between market participants on the measurement date. The fair value standard also establishes a three‑level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date. The three levels are defined as follows: • Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for an identical asset or liability in an active market. • Level 2—inputs to the valuation methodology include quoted prices for a similar asset or liability in an active market or model‑derived valuations in which all significant inputs are observable for substantially the full term of the asset or liability. • Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement of the asset or liability. At September 30, 2017 and December 31, 2016 , the Company’s financial instruments included cash and cash equivalents, restricted cash, accounts payable, accrued expenses and other current liabilities, term debt (prior to its payoff in August 2017), the term loan warrant liability and the underwriters’ unit purchase option liability. The carrying amounts reported in the accompanying financial statements for cash and cash equivalents, restricted cash, accounts payable, and accrued expenses and other current liabilities approximate their respective fair values because of the short‑term nature of these accounts. The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis: September 30, 2017 Fair Value Measurements Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 23,715,016 $ — $ — Liabilities Warrant liability $ — $ — $ 531 Unit purchase option liability $ — $ — $ 6,607 December 31, 2016 Fair Value Measurements Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 4,758,539 $ — $ — Liabilities Warrant liability $ — $ — $ 5,501 Unit purchase option liability $ — $ — $ 51 * Investments in money market funds are reflected in cash and cash equivalents on the accompanying Balance Sheets. Level 3 Valuation The warrant liability (which relates to warrants to purchase shares of common stock as part of the term loan agreement) is marked‑to‑market each reporting period with the change in fair value recorded to other income (expense) in the accompanying statements of operations until the warrants are exercised, expire or other facts and circumstances lead the warrant liability to be reclassified to stockholders’ equity. The fair value of the warrant liability is estimated using a Black‑Scholes option-pricing model. The significant assumptions used in preparing the option pricing model for valuing the warrant liability as of September 30, 2017 , include (i) volatility of 65% , (ii) risk free interest rate of 1.63% , (iii) strike price ( $8.40 ), (iv) fair value of common stock ( $0.85 ), and (v) expected life of 3.1 years. The underwriters’ unit purchase option (the “UPO”) was issued to the underwriters of the Company’s initial public offering (“IPO”) and provides the underwriters the option to purchase up to a total of 40,000 units. The units underlying the UPO will be, immediately upon exercise, separated into shares of common stock, underwriters’ Class A warrants and underwriters’ Class B warrants (such warrants together referred to as the Underwriters’ Warrants). The Underwriters’ Warrants are warrants to purchase shares of common stock. The Company classifies the UPO as a liability as it is a freestanding marked-to-market derivative instrument that is precluded from being classified in stockholders’ equity. The UPO liability is marked‑to‑market each reporting period with the change in fair value recorded to other income (expense) in the accompanying statements of operations until the UPO is exercised, expire or other facts and circumstances lead the UPO to be reclassified to stockholders’ equity. The fair value of the UPO liability is estimated using a Black-Scholes option-pricing model within a Monte Carlo simulation model framework. The significant assumptions used in preparing the simulation model for valuing the UPO as of September 30, 2017 , include (i) volatility range of 65% to 75% , (ii) risk free interest rate range of 0.74% to 1.63% , (iii) unit strike price ($7.48) , (iv) underwriters’ Class A warrant strike price ( $5.23 ), (v) underwriters’ Class B warrant strike price ( $4.49 ), (vi) fair value of underlying equity ( $0.85 ), and (vii) optimal exercise point of immediately prior to the expiration of the underwriters’ Class B warrants, which occurred on April 20, 2017. The table presented below is a summary of changes of the Company’s Level 3 warrant liability and unit purchase option liability for the nine months ended September 30, 2017 : Warrant Liability Unit purchase option liability Total Balance at December 31, 2016 $ 5,501 $ 51 $ 5,552 Change in fair value (4,970 ) 6,556 1,586 Balance at September 30, 2017 $ 531 $ 6,607 $ 7,138 No other changes in valuation techniques or inputs occurred during the nine months ended September 30, 2017 and no transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy occurred during the nine months ended September 30, 2017 . |
Accrued Expenses And Other Curr
Accrued Expenses And Other Current Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: September 30, December 31, Compensation and benefits $ 524,409 $ 272,601 Research and development expenses 452,139 315,937 General and administrative 306,997 160,116 Accrued interest — 193,781 Warrant and UPO liability 7,138 5,552 Total accrued expenses and other current liabilities $ 1,290,683 $ 947,987 |
License Agreements
License Agreements | 9 Months Ended |
Sep. 30, 2017 | |
Research and Development [Abstract] | |
License Agreements | License Agreements Lilly CERC-611 License On September 22, 2016, the Company entered into an exclusive license agreement with Eli Lilly and Company (“Lilly”) pursuant to which the Company received exclusive, global rights to develop and commercialize CERC-611, previously referred to as LY3130481, a potent and selective Transmembrane AMPA Receptor Regulatory Proteins (“TARP”) γ-8-dependent α-amino-3-hydroxy-5-methyl-4-isoxazolepropionic acid (“AMPA”) receptor antagonist. The terms of the license agreement provide for an upfront payment of $2.0 million , of which $750,000 was due within 30 days of the effective date of the license agreement, and the remaining balance of $1.25 million is due after the first subject is dosed with CERC-611 in a multiple ascending dose study and is recorded as license obligations on the balance sheet at September 30, 2017. Additional payments may be due upon achievement of development and commercialization milestones, including the first commercial sale. Upon commercialization, the Company is obligated to pay Lilly milestone payments and a royalty on net sales. Merck CERC-301 License In 2013, the Company entered into an exclusive license agreement with Merck & Co., Inc. (“Merck”) pursuant to which Merck granted the Company rights relating to certain small molecule compounds. In consideration of the license, the Company may be required to make initial payments totaling $1.5 million upon the achievement of certain milestones. Pursuant to the license agreement the Company paid an initial payment of $750,000 , and upon achievement of acceptance by the United States Food and Drug Administration, or FDA, of Merck pre-clinical data and FDA approval of a Phase 3 clinical trial the Company will pay an additional $750,000 . Additional payments may be due upon achievement of development and regulatory milestones, including the first commercial sale. Upon commercialization, the Company is obligated to pay Merck milestone payments and royalties on net sales. Lilly CERC-501 License On August 14. 2017, the Company sold all of its rights to CERC-501 to Janssen in exchange for initial gross proceeds of $25.0 million , of which $3.75 million was deposited into a twelve month escrow to secure certain indemnification obligations to Janssen (see Note 11). In addition to the initial proceeds, the terms of the agreement provide for a potential future $20 million regulatory milestone payment. Further, the terms of the agreement provide that Janssen will assume ongoing clinical trials and be responsible for any new development and commercialization of CERC-501. Merck CERC-406 License In 2013, the Company entered into a separate exclusive license agreement with Merck pursuant to which Merck granted the Company certain rights in small molecule compounds which are known to inhibit the activity of COMT. In consideration of the license, the Company made a $200,000 upfront payment to Merck. Additional payments may be due upon the achievement of development and regulatory milestones. Upon commercialization of a COMT product, the Company is required to pay Merck royalties on net sales. |
Term Loan
Term Loan | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Term Loan | Term Loan In August 2014, the Company entered into a $7.5 million secured term loan from a finance company. The loan was secured by a lien on all of the Company’s assets, excluding intellectual property, which was subject to a negative pledge. The loan contained certain additional nonfinancial covenants. In connection with the loan agreement, the Company’s cash and investment accounts were subject to account control agreements with the finance company that gave the finance company the right to assume control of the accounts in the event of a loan default. Loan defaults were defined in the loan agreement and included, among others, the finance company’s determination that there was a material adverse change in the Company’s operations. Interest on the loan was at a rate of the greater of 7.95% , or 7.95% plus the prime rate as reported in The Wall Street Journal minus 3.25% . On August 1, 2017, the term loan matured and the Company made a final payment of $494,231 which included a termination fee of $187,500 . Debt consisted of the following as of September 30, 2017 and December 31, 2016 : September 30, 2017 December 31, Term loan $ — $ 2,374,031 Less: debt discount — (20,364 ) Term Loan, net of debt discount $ — $ 2,353,667 Interest expense, which includes amortization of a discount and the accrual of a termination fee, was approximately $1,000 and $110,000 for the three months ended September 30, 2017 and 2016, respectively, and $95,000 and $404,000 for the nine months ended September 30, 2017 and 2016, respectively, in the accompanying statements of operations. |
Capital Structure
Capital Structure | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Capital Structure | Capital Structure On October 20, 2015, the Company filed an amended and restated certificate of incorporation in connection with the closing of its IPO. The amended and restated certificate of incorporation authorizes the Company to issue two classes of stock, common stock and preferred stock, and eliminates all references to the previously existing series of preferred stock. At September 30, 2017, the total number of shares of capital stock the Company was authorized to issue was 205,000,000 of which 200,000,000 was common stock and 5,000,000 was preferred stock. All shares of common and preferred stock have a par value of $0.001 per share. On April 27, 2017, the Company further amended its amended and restated certificate of incorporation in connection with the closing of the Armistice Private Placement with the filing of a Certificate of Designation of Preferences, Rights and Limitations of Series A Convertible Preferred Stock (“Series A Preferred Stock”) of Cerecor Inc. (the “Certificate of Designation”). The Certificate of Designation authorized the issuance of 4,179 shares of Series A Preferred Stock to Armistice with a stated value of $1,000 per share, convertible into 11,940,000 shares of the Company’s common stock at a conversion price of $0.35 per share. On July 6, 2017, Armistice converted all of its outstanding shares of Series A Preferred Stock into common stock. Subsequent to the conversion of Armistice’s Series A Preferred Stock into common stock, Armistice has a majority voting control over the Company. Common Stock Initial Public Offering On October 20, 2015, the Company closed an IPO of its units. Each unit consisted of one share of common stock, one Class A warrant to purchase one share of common stock at an exercise price of $4.55 per share and one Class B warrant to purchase one-half share of common stock at an exercise price of $3.90 per full share (the “units”). The Class A warrants expire on October 20, 2018 and the Class B warrants expired on April 20, 2017 (the "Class B Expiration Date.") The closing of the IPO resulted in the sale of 4,000,000 units at an initial public offering price of $6.50 per unit for gross proceeds of $26.0 million . The net proceeds of the IPO, after underwriting discounts, commissions and expenses, and before offering expenses, to the Company were approximately $23.6 million . On November 13, 2015, the units separated into common stock, Class A warrants and Class B warrants and began trading separately on the NASDAQ Capital Market. On the Class B Expiration Date, the Class B warrants ceased trading on the NASDAQ Capital Market. No Class B warrants were exercised prior to the Class B Expiration Date. On November 23, 2015, the underwriter of the IPO exercised its over-allotment option for 20,000 shares of common stock, 551,900 Class A warrants to purchase one share of common stock and 551,900 Class B warrants to purchase one-half share of common stock for additional gross proceeds of $135,319 . The common stock and accompanying Class A warrants and Class B warrants have been classified to stockholders’ equity in the Company’s balance sheet. Underwriter’s Unit Purchase Option The underwriter of the IPO received, for $100 in the aggregate, the right to purchase up to a total of 40,000 units (or 1% of the units sold in the IPO) exercisable at $7.48 per unit (or 115% of the public offering price per unit in the IPO). The units underlying the UPO will be, immediately upon exercise, separated into shares of common stock and the Underwriters’ Warrants such that, upon exercise, the holder of a UPO will not receive actual units but will instead receive the shares of common stock and Underwriters’ Warrants, to the extent that any portion of the Underwriters’ Warrants underlying such units have not otherwise expired. The exercise prices of the underwriters’ Class A warrants and underwriter’s Class B warrants underlying the UPO are $5.23 and $4.49 , respectively. The UPO may be exercised for cash or on a cashless basis, at the holder’s option, and expires on October 14, 2020; however, following the expiration of underwriters’ Class B warrants on April 20, 2017, the UPO is exercisable only for shares of common stock and underwriters’ Class A warrants at an exercise price of $7.475 per unit; provided further, that, following the expiration of underwriters’ Class A warrants on October 20, 2018, the UPO will be exercisable only for shares of common stock at an exercise price of $7.47 . The Company classified the UPO as a liability as it is a freestanding marked-to-market derivative instrument that is precluded from being classified in stockholders’ equity. The fair value of the UPO is re-measured each reporting period and the change in fair value is recognized in the statement of operations (see Note 4). The Aspire Capital Transaction On September 8, 2016, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital, pursuant to which Aspire Capital committed to purchase up to an aggregate of $15.0 million of shares of the Company’s common stock over the 30 -month term of the Purchase Agreement. Upon execution of the Purchase Agreement, the Company issued and sold to Aspire Capital 250,000 shares of common stock at a price per share of $4.00 , for gross proceeds of $1.0 million . Additionally, as consideration for Aspire Capital entering into the Purchase Agreement, the Company issued 175,000 shares of common stock as a commitment fee. The net proceeds of the Aspire Capital transaction, after offering expenses, to the Company were approximately $1,900,000 for the year ended December 31, 2016. As of December 31, 2016, the Company had sold 763,998 shares of common stock to Aspire Capital under the Purchase Agreement. During the nine months ended September 30, 2017, the Company sold an additional 965,165 shares of common stock to Aspire Capital under the terms of the Purchase Agreement for gross proceeds of approximately $789,000 . As of the date of this Quarterly Report on Form 10-Q, the Company does not have any remaining shares available to issue under the purchase agreement. The Company may not issue any additional shares of common stock to Aspire Capital under the Purchase Agreement unless shareholder approval is obtained. The Maxim Group Equity Distribution Agreement On January 27, 2017, the Company entered into an Equity Distribution Agreement with Maxim Group LLC ("Maxim"), as sales agent, pursuant to which the Company may offer and sell, from time to time, through Maxim, up to $12,075,338 in shares of its common stock. The Company has no obligation to sell any of the shares, and may at any time suspend offers under the Equity Distribution Agreement. As of the September 30, 2017, the Company had sold 1,336,433 shares of its common stock through Maxim under the Equity Distribution Agreement for gross proceeds of $938,000 and the Company has the potential to sell up to approximately $2.9 million in additional shares of its common stock under the registration statement on Form S-3. Armistice Private Placement On April 27, 2017, the Company entered into a securities purchase agreement with Armistice, pursuant to which Armistice purchased $5.0 million of the Company’s securities, consisting of 2,345,714 shares of the Company’s common stock at a purchase price of $0.35 per share and 4,179 shares of Series A Preferred Stock at a price of $1,000 per share. The Company received $4.65 million in net proceeds from the Armistice Private Placement. The number of shares of common stock that were purchased in the private placement constituted approximately 19.99% of the Company’s outstanding shares of common stock immediately prior to the closing of the Armistice Private Placement. Armistice also received warrants to purchase up to 14,285,714 shares of the Company’s common stock at an exercise price of $0.40 per share. Under the terms of the securities purchase agreement, the Series A Preferred Stock were not convertible into common stock, and the warrants were not exercisable until the Company received approval of the private placement by the Company’s shareholders as required by the rules and regulations of the NASDAQ Capital Market. The Company received shareholder approval for this transaction on June 30, 2017, at which time the warrants became exercisable and the Series A Preferred Stock became convertible into common stock. As multiple instruments were issued in a single transaction, the Company initially allocated the issuance proceeds among the preferred stock, common stock and warrants using the relative allocation method. As the warrants were determined to be indexed to the Company’s stock, and would only be settled in common shares, entirely in the control of the Company, the warrant instrument was accounted for as an equity instrument. Fair value of the warrants was initially determined upon issuance using the Black-Scholes Model (level 3 fair value measurement). Armistice converted all of the Series A Preferred Stock into 11,940,000 shares of common stock on July 6, 2017. Common Stock Warrants At September 30, 2017 , the following common stock purchase warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 80,966 $ 28.00 August 2018 4,551,900 $ 4.55 October 2018 40,000* $ 5.23 October 2018 3,571 $ 28.00 December 2018 22,328* $ 8.40 October 2020 2,380 $ 8.68 May 2022 14,285,714 $ 0.40 June 2022 18,986,859 * Accounted for as a liability instrument (see Note 4) |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation 2016 Equity Incentive Plan On April 5, 2016, the Company’s board of directors adopted the 2016 Equity Incentive Plan (the “2016 Plan”) as the successor to the 2015 Omnibus Plan (the “2015 Plan”). The 2016 Plan was approved by the Company’s stockholders and became effective on May 18, 2016 (the “2016 Plan Effective Date”). As of the 2016 Plan Effective Date, no additional grants will be made under the 2015 Plan or the 2011 Stock Incentive Plan (the “2011 Plan”), which was previously succeeded by the 2015 Plan effective October 13, 2015. Outstanding grants under the 2015 Plan and 2011 Plan will continue in effect according to their terms as in effect under the applicable plan. Upon the 2016 Plan Effective Date, the 2016 Plan reserved and authorized up to 600,000 additional shares of common stock for issuance, as well as 464,476 unallocated shares remaining available for grant of new awards under the 2015 Plan. During the term of the 2016 Plan, the share reserve will automatically increase on the first trading day in January of each calendar year, beginning in 2017, by an amount equal to 4% of the total number of outstanding shares of common stock of the Company on the last trading day in December of the prior calendar year. On January 1, 2017, the shares reserved for issuance increased by 377,365 . As of September 30, 2017 , there were 483,214 shares available for future issuance under the 2016 Plan. The estimated grant date fair market value of the Company’s stock‑based awards is amortized ratably over the employees’ service periods, which is the period in which the awards vest. A summary of option activity for the nine months ended September 30, 2017 is as follows: Options Outstanding Number of shares Weighted‑average exercise price Fair value of options granted Weighted average remaining contractual term (in years) Balance, December 31, 2016 1,849,359 $ 5.57 Granted 578,611 $ 0.74 $ 301,743 Forfeited (18,391 ) $ 5.63 Balance, September 30, 2017 2,409,579 $ 4.41 8.12 Exercisable at September 30, 2017 1,467,463 $ 5.25 7.65 Employee Stock Purchase Plan On April 5, 2016, the Company’s board of directors approved the 2016 Employee Stock Purchase Plan (the “ESPP”). The ESPP was approved by the Company’s stockholders and became effective on May 18, 2016 (the “ESPP Effective Date”). Under the ESPP, eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the administrator. The ESPP is administered by the compensation committee of the Company’s board of directors. Under the ESPP, eligible employees may purchase stock at 95% of the lower of the fair market value of a share of the Company’s common stock (i) on the first day of an offering period or (ii) on the purchase date. Eligible employees may contribute up to 15% of their earnings during the offering period. The Company’s board of directors may establish a maximum number of shares of the Company’s common stock that may be purchased by any participant, or all participants in the aggregate, during each offering or offering period. Under the ESPP, a participant may not purchase more than 10,000 shares during any purchase period or accrue rights to purchase more than $25,000 of the fair market value of the Company’s common stock for each calendar year in which such right is outstanding. Upon the ESPP Effective Date, the ESPP reserved and authorized up to 500,000 shares of common stock for issuance. On January 1 of each calendar year, the aggregate number of shares that may be issued under the ESPP shall automatically increase by a number equal to the lesser of (i) 1% of the total number of shares of the Company’s capital stock outstanding on December 31 of the preceding calendar year, and (ii) 500,000 shares of the Company’s common stock, or (iii) a number of shares of the Company’s common stock as determined by the Company’s board of directors or compensation committee. Employees purchased 20,000 shares during 2016 and 33,406 shares during the nine months ended September 30, 2017. As of September 30, 2017 , 540,935 shares remained available for issuance. In accordance with the guidance in ASC 718-50, Employee Share Purchase Plans (“ASC 718-50”), the ability to purchase shares of the Company’s common stock at the lower of the offering date price or the purchase date price represents an option and, therefore, the ESPP is a compensatory plan under this guidance. Accordingly, stock-based compensation expense is determined based on the option’s grant-date fair value and is recognized over the requisite service period of the option. The Company used the Black-Scholes valuation model and recognized stock-based compensation expense of $20,886 and $69,492 for the three and nine months ended September 30, 2017 . Stock‑based compensation expense recognized for the three and nine months ended September 30, 2017 and 2016 was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Research and development $ 41,323 $ 43,861 $ 123,883 $ 95,013 General and administrative 222,924 243,913 728,327 1,344,181 Total stock-based compensation $ 264,247 $ 287,774 $ 852,210 $ 1,439,194 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The provision for income taxes was $3.2 million for the nine months ended September 30, 2017. The effective tax rate for the nine-month period ended September 30, 2017 was 17.76% as compared to 0% for the corresponding period in the prior year. The increase in the rate is attributable to changes in projected income as well as limitations on the utilization of NOL carryforwards as described below for the year primarily due to the sale of CERC-501. In addition, the Company was able to utilize net operating loss ("NOL") carryforwards of $2.7 million , which were previously subject to a valuation allowance, to offset a portion of projected income for the year considering Internal Revenue Code Section 382 limitations. As of December 31, 2016 the Company had $52.2 million of federal and Maryland state NOL carryforwards that will begin to expire in 2031. As of December 31, 2016 the Company also had $1.8 million and $57,000 of federal and Maryland state research and development credits, respectively, that will begin to expire in 2018. The NOL and research and development credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. NOL and tax credit carryforwards are also subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three‑year period in excess of 50%, as defined under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, as well as similar state tax provisions. The amount of the annual limitation depends upon the value of the Company immediately before the change, changes to the Company’s capital during a specified period prior to the change, and the federal published interest rate. Considering ownership changes that took place previously as well as during 2017 including the Armistice transaction, the Company is completing an analysis under Section 382 of the Code, and has initially determined the utilization of the NOLs and other tax attributes will be limited on a go forward basis. Approximately $2.7 million of NOL carryforwards will be available in 2017 and the Company will be able to utilize the NOL carryforwards to offset a portion of projected income for the year. Upon completion of the analysis by year end, to the extent there is a limitation, which could be significant, there would be a reduction in the deferred tax assets with an offsetting reduction in the valuation allowance, with no impact on current period income tax expense. In assessing the realizability of the remaining net deferred tax assets, the Company considers all relevant positive and negative evidence to determine whether it is more likely than not that some portion or all of the deferred income tax assets will not be realized. The realization of the gross deferred tax assets is dependent on several factors, including the generation of sufficient taxable income prior to the expiration of the net operating loss carryforwards. Other than the amount of NOL that is available to offset net income generated through September 30, 2017 there was a full valuation allowance against the net deferred tax assets as of September 30, 2017 and December 31, 2016. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Office Lease The Company’s corporate office space, which is leased under an operating lease, is located in Baltimore, Maryland. The lease provided for three months of rent abatement and includes escalating rent payments. Rent expense is recognized on a straight‑line basis over the term of the lease. Rent expense for the office lease amounted to approximately $125,000 for the nine months ended September 30, 2017 and 2016 . Pursuant to the terms of such lease, the Company’s future lease obligation is as follows: Year ending December 31, 2017* $ 39,433 2018 158,716 $ 198,149 * Three months remaining in 2017 Obligations to Contract Research Organizations and External Service Providers The Company has entered into agreements with contract research organizations and other external service providers for services, primarily in connection with the clinical trials and development of the Company’s product candidates. The Company was contractually obligated for up to approximately $1.2 million of future services under these agreements as of September 30, 2017 . The Company’s actual contractual obligations will vary depending upon several factors, including the progress and results of the underlying services. |
Significant Accounting Polici17
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company’s unaudited financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). In the opinion of management, the accompanying unaudited financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly the Company’s financial position, results of operations and cash flows. The balance sheet at December 31, 2016 has been derived from audited financial statements at that date. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in the financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to instructions, rules and regulations prescribed by the United States Securities and Exchange Commission (“SEC”). The Company believes that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited financial statements are read in conjunction with the December 31, 2016 audited financial statements. |
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, liabilities, revenues, expenses, other comprehensive income and related disclosures. On an ongoing basis, management evaluates its estimates, including estimates related to clinical trial accruals, the warrant liability and the unit purchase option liability. The Company bases its estimates on historical experience and other market‑specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. |
Net Income (Loss) Per Share, Basic and Diluted | Net Income (Loss) Per Share, Basic and Diluted Earnings per share are computed using the two-class method. The two-class method of computing earnings per share is an earnings allocation formula that determines earnings per share for common stock and any participating securities according to dividends declared (whether paid or unpaid) and participation rights in undistributed earnings. Shares of the unexercised warrants issued in the Armistice Private Placement transaction are considered participating securities because these warrants contain a non-forfeitable right to dividends irrespective of whether the warrants are ultimately exercised. Under the two-class method, earnings per common share for the common stock and participating warrants are computed by dividing the sum of distributed earnings to common shareholders and undistributed earnings allocated to common shareholders by the weighted-average number of shares of Common stock and participating warrants outstanding for the period. In applying the two-class method, undistributed earnings are allocated to common stock and participating warrants based on the weighted-average shares outstanding during the period. Diluted net income (loss) per share includes the potential dilutive effect of common stock equivalents as if such securities were converted or exercised during the period, when the effect is dilutive. Common stock equivalents include: (i) outstanding stock options issued under the Company's Long-Term Incentive Plans which are included under the "treasury stock method" when dilutive, (ii) common stock to be issued upon the assumed conversion of the Company's unit purchase option shares, which are included under the "if-converted method" when dilutive, and (iii) common stock to be issued upon the exercise of outstanding warrants which are included under the "treasury stock method" when dilutive. Because the impact of these items is generally anti-dilutive during periods of net loss, there is no difference between basic and diluted loss per common share for periods with net losses. In addition, net losses are not allocated to the participating securities. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost, which approximates their fair value. |
Restricted Cash | Restricted Cash The Company established the Employee Stock Purchase Plan in 2016. Eligible employees can purchase common stock through accumulated payroll deductions at such times as are established by the Plan administrator. At September 30, 2017, $29,200 of deposits had been made by employees for potential future stock purchases. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk are primarily cash and cash equivalents. The Company maintains a portion of its cash and cash equivalent balances in the form of a money market account with a financial institution that management believes to be credit worthy. The Company has no financial instruments with off‑balance sheet risk of loss. |
Debt and Equity Issuance Costs | Debt and Equity Issuance Costs The Company may record debt and equity discounts in connection with raising funds through the issuance of convertible notes or equity instruments. These discounts may arise from (i) the receipt of proceeds less than the face value of the convertible notes or equity instruments, (ii) allocation of proceeds to beneficial conversion features and/or (iii) recording derivative liabilities related to embedded features. For debt instruments, these costs are amortized over the life of the debt to interest expense utilizing the effective interest method. For equity instruments, these costs are netted against the gross proceeds received from the issuance of the equity. |
Property and Equipment | Property and Equipment Property and equipment consists of computers, office equipment, and furniture and is recorded at cost. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred. Property and equipment are depreciated on a straight‑line basis over their estimated useful lives. The Company uses a life of four years for computers and software, and five years for equipment and furniture. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized. |
License and Other Revenue | License and Other Revenue The Company recognizes revenues from collaboration, license or other research or sale arrangements when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. Revenue from potential future milestones, if substantive, is recognized when the milestone is achieved and the payment is due and collectible. |
Grant Revenue Recognition | Grant Revenue Recognition The Company recognizes grant revenue when there is (i) reasonable assurance of compliance with the conditions of the grant and (ii) reasonable assurance that the grant will be received. |
Research and Development | Research and Development Research and development costs are expensed as incurred. These costs include, but are not limited to, employee‑related expenses, including salaries, benefits and stock‑based compensation of research and development personnel; expenses incurred under agreements with contract research organizations and investigative sites that conduct clinical trials and preclinical studies; the cost of acquiring, developing and manufacturing clinical trial materials; other supplies; facilities, depreciation and other expenses, which include direct and allocated expenses for rent, utilities and insurance; and costs associated with preclinical activities and regulatory operations. Costs for certain development activities, such as clinical trials, are recognized based on an evaluation of the progress to completion of specific tasks using data such as patient enrollment, clinical site activations, or information provided to the Company by its vendors, such as clinical research organizations, with respect to their actual costs incurred. Payments for these activities are based on the terms of the individual arrangements, which may differ from the pattern of costs incurred, and are reflected in the financial statements as prepaid or accrued research and development expense, as the case may be. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non‑owner sources. Comprehensive loss was equal to net loss for all periods presented. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with ASC 740, Income Taxes (“ASC 740”). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Deferred tax assets primarily include net operating loss and tax credit carry-forwards, accrued expenses not currently deductible and the cumulative temporary differences related to certain research and patent costs. Certain tax attributes, including net operating losses and research and development credit carryforwards, may be subject to an annual limitation under Sections 382 and 383 of the Internal Revenue Code (the "Code"). See Note 10 for further information. The portion of any deferred tax asset for which it is more likely than not that a tax benefit will not be realized must then be offset by recording a valuation allowance. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not to be sustained upon examination based on the technical merits of the position. The amount for which an exposure exists is measured as the largest amount of benefit determined on a cumulative probability basis that the Company believes is more likely than not to be realized upon ultimate settlement of the position. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense. As of September 30, 2017 , the Company does not believe any material uncertain tax positions are present. |
Stock-Based Compensation | Stock‑Based Compensation The Company applies the provisions of ASC 718, Compensation—Stock Compensation (“ASC 718”), which requires the measurement and recognition of compensation expense for all stock‑based awards made to employees and non‑employees, including employee stock options, in the statements of operations. For stock options issued to employees and members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option using the Black‑Scholes option pricing model. The use of the Black‑Scholes option pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk‑free interest rates and expected dividend yields of the common stock. For awards subject to service‑based vesting conditions, including those with a graded vesting schedule, the Company recognizes stock‑based compensation expense equal to the grant date fair value of stock options on a straight‑line basis over the requisite service period, which is generally the vesting term. Forfeitures are recorded as they are incurred as opposed to being estimated at the time of grant and revised. For stock options issued to non‑employees, the Company initially measures the options at their grant date fair values and revalues as the underlying equity instruments vest and are recognized as expense over the earlier of the period ending with the performance commitment date or the date the services are completed in accordance with the provisions of ASC 718 and ASC 505‑50, Equity‑Based Payments to Non‑Employees (“ASC 505‑50”). |
Clinical Trial Expense Accruals | Clinical Trial Expense Accruals As part of the process of preparing its financial statements, the Company is required to estimate its expenses resulting from its obligations under contracts with vendors, clinical research organizations and consultants and under clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company’s objective is to reflect the appropriate trial expenses in its financial statements by matching those expenses with the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the trial as measured by subject progression and the timing of various aspects of the trial. The Company determines accrual estimates by taking into account discussion with applicable personnel and outside service providers as to the progress or state of consummation of trials, or the services completed. During the course of a clinical trial, the Company adjusts its clinical expense recognition if actual results differ from its estimates. The Company makes estimates of its accrued expenses as of each balance sheet date based on the facts and circumstances known to it at that time. The Company’s clinical trial accruals are dependent upon the timely and accurate reporting of contract research organizations and other third‑party vendors. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in it reporting amounts that are too high or too low for any particular period. |
Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision‑making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the chief executive officer. The Company and the chief executive officer view the Company’s operations and manage its business as one operating segment. All long‑lived assets of the Company reside in the United States. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014‑9, Revenue From Contracts With Customers (“ASU 2014‑9”). Pursuant to this update, an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14, Revenue From Contracts With Customers (Topic 606) , which delays the effective date of ASU 2014-9 by one year. As a result, ASU 2014-9 will be effective for annual reporting periods beginning after December 15, 2017 with early adoption permitted for annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU No. 2016-8, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) (“ASU 2016-8”) and ASU No. 2016-10, Revenue From Contracts With Customers (Topic 606): Identifying Performance Obligations and Licensing (“ASU 2016-10”), and in May 2016 the FASB issued ASU No. 2016-12, Revenue from Contracts with Customers (Topic 606), Narrow-Scope Improvements and Practical Expedients (“ASU 2016-12”), each of which clarify the guidance in ASU 2014-9 and have the same effective date as the original standard. The Company has substantially completed it's assessment of the impact of adoption of ASU 2014-9, ASU 2016-8, ASU 2016-10, or ASU 2016-12 on the financial statements, and the impact is not expected to be significant. The Company plans to adopt the new standard effective January 1, 2018. The Company continues to monitor additional changes, modifications, clarifications or interpretations being undertaken by the FASB, which may impact the Company’s current conclusions. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842). This guidance revises existing practice related to accounting for leases under ASC 840, Leases (“ASC 840”) for both lessees and lessors. The new guidance in ASU 2016-2 requires lessees to recognize a right-of-use asset and a lease liability for nearly all leases (other than leases that meet the definition of a short-term lease). The lease liability will be equal to the present value of lease payments and the right-of-use asset will be based on the lease liability, subject to adjustment such as for initial direct costs. For income statement purposes, the new standard retains a dual model similar to ASC 840, requiring leases to be classified as either operating leases or capital leases. For lessees, operating leases will result in straight-line expense (similar to current accounting by lessees for operating leases under ASC 840) while capital leases will result in a front-loaded expense pattern (similar to current accounting by lessees for capital leases under ASC 840). The new standard is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. In March 2016, the FASB issued ASU No. 2016-9, Improvements to Employee Share-Based Payment Accounting. The guidance is intended to simplify several areas of accounting for share-based compensation, including income tax impacts, classification on the statement of cash flows and forfeitures. The new standard is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early application is permitted. The new guidance was adopted by the Company effective January 1, 2017 and its adoption did not have any impact on its financial position, results of operations or cash flows. In connection with adoption, the Company has elected to account for forfeitures as they occur as opposed to being estimated at the time of grant and revised. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows , Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15), which reduces existing diversity in the classification of certain cash receipts and cash payments on the statements of cash flows. ASU 2016-15 I effective for fiscal years beginning after December 15, 2017, and for interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash . The guidance is intended to address the diversity that currently exists in the classification and presentation of changes in restricted cash on the statement of cash flows. The new standard requires that entities show the changes in the total of cash and cash equivalents, restricted cash and restricted cash equivalents on the statement of cash flows and no longer present transfers between cash and cash equivalents, restricted cash and restricted cash equivalents on the statement of cash flows. The new standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early application is permitted. The Company is currently evaluating the potential impact of the adoption of this standard on its financial statements. |
Net Income (Loss) Per Share o18
Net Income (Loss) Per Share of Common Stock, Basic and Diluted (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of the computation of basic and diluted net loss per share of common stock | The following table sets forth the computation of basic and diluted net income (loss) per share of common stock for the three and nine months ended September 30, 2017 and 2016 : Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Basic income (loss) per share: Net income (loss) $ 18,720,610 $ (6,168,725 ) $ 14,961,458 $ (14,832,899 ) Undistributed earnings (loss) allocable to common shares $ 18,720,610 $ (6,168,725 ) $ 14,961,458 $ (14,832,899 ) Weighted average shares, basic Common stock 21,382,683 8,756,393 14,952,391 8,685,818 Participating warrants 14,285,714 — 8,163,265 — 35,668,397 8,756,393 23,115,656 8,685,818 Basic income (loss) per share: Common shares $ 0.52 $ (0.70 ) $ 0.65 $ (1.71 ) Participating warrants $ 0.52 $ — $ 0.65 $ — Diluted income (loss) per share: Net income (loss) $ 11,222,732 $ (6,168,725 ) $ 9,677,838 $ (14,832,899 ) Net income (loss) reallocated 5,256 — 1,746 — Undistributed earnings (loss) allocable to common shares $ 11,227,988 $ (6,168,725 ) $ 9,679,584 $ (14,832,899 ) Weighted average number of shares - basic 21,382,683 8,756,393 14,952,391 8,685,818 Effect of dilutive securities: Stock options 25,019 — 7,641 — Underwriters' unit purchase option — — — — Potentially dilutive shares 25,019 — 7,641 — Weighted average number of shares - diluted 21,407,702 8,756,393 14,960,032 8,685,818 Diluted income (loss) per share $ 0.52 $ (0.70 ) $ 0.65 $ (1.71 ) |
Schedule of anti-dilutive securities excluded from computation of diluted weighted shares outstanding | Shares which have been excluded from diluted per share amounts because their effect would have been antidilutive, include the following: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Stock options 2,384,560 1,828,441 2,401,938 1,828,441 Warrants 4,661,145 7,400,934 4,661,145 7,400,934 Unit purchase option shares 40,000 40,000 40,000 40,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities that are measured at fair value on a recurring basis | The following table presents, for each of the fair value hierarchy levels required under ASC 820, the Company’s assets and liabilities that are measured at fair value on a recurring basis: September 30, 2017 Fair Value Measurements Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 23,715,016 $ — $ — Liabilities Warrant liability $ — $ — $ 531 Unit purchase option liability $ — $ — $ 6,607 December 31, 2016 Fair Value Measurements Using Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets Investments in money market funds* $ 4,758,539 $ — $ — Liabilities Warrant liability $ — $ — $ 5,501 Unit purchase option liability $ — $ — $ 51 * Investments in money market funds are reflected in cash and cash equivalents on the accompanying Balance Sheets. |
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation | The table presented below is a summary of changes of the Company’s Level 3 warrant liability and unit purchase option liability for the nine months ended September 30, 2017 : Warrant Liability Unit purchase option liability Total Balance at December 31, 2016 $ 5,501 $ 51 $ 5,552 Change in fair value (4,970 ) 6,556 1,586 Balance at September 30, 2017 $ 531 $ 6,607 $ 7,138 |
Accrued Expenses And Other Cu20
Accrued Expenses And Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following: September 30, December 31, Compensation and benefits $ 524,409 $ 272,601 Research and development expenses 452,139 315,937 General and administrative 306,997 160,116 Accrued interest — 193,781 Warrant and UPO liability 7,138 5,552 Total accrued expenses and other current liabilities $ 1,290,683 $ 947,987 |
Term Loan (Tables)
Term Loan (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Debt consisted of the following as of September 30, 2017 and December 31, 2016 : September 30, 2017 December 31, Term loan $ — $ 2,374,031 Less: debt discount — (20,364 ) Term Loan, net of debt discount $ — $ 2,353,667 |
Capital Structure (Tables)
Capital Structure (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Equity [Abstract] | |
Schedule of Common Stock Warrants | At September 30, 2017 , the following common stock purchase warrants were outstanding: Number of shares Exercise price Expiration underlying warrants per share date 80,966 $ 28.00 August 2018 4,551,900 $ 4.55 October 2018 40,000* $ 5.23 October 2018 3,571 $ 28.00 December 2018 22,328* $ 8.40 October 2020 2,380 $ 8.68 May 2022 14,285,714 $ 0.40 June 2022 18,986,859 * Accounted for as a liability instrument (see Note 4) |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of option activity | A summary of option activity for the nine months ended September 30, 2017 is as follows: Options Outstanding Number of shares Weighted‑average exercise price Fair value of options granted Weighted average remaining contractual term (in years) Balance, December 31, 2016 1,849,359 $ 5.57 Granted 578,611 $ 0.74 $ 301,743 Forfeited (18,391 ) $ 5.63 Balance, September 30, 2017 2,409,579 $ 4.41 8.12 Exercisable at September 30, 2017 1,467,463 $ 5.25 7.65 |
Schedule of stock-based compensation expense | Stock‑based compensation expense recognized for the three and nine months ended September 30, 2017 and 2016 was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2017 2016 2017 2016 Research and development $ 41,323 $ 43,861 $ 123,883 $ 95,013 General and administrative 222,924 243,913 728,327 1,344,181 Total stock-based compensation $ 264,247 $ 287,774 $ 852,210 $ 1,439,194 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future lease obligations | Pursuant to the terms of such lease, the Company’s future lease obligation is as follows: Year ending December 31, 2017* $ 39,433 2018 158,716 $ 198,149 * Three months remaining in 2017 |
Business (Details)
Business (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Apr. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 14, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||
Net income (loss) | $ 18,720,610 | $ (6,168,725) | $ 14,961,458 | $ (14,832,899) | ||||
Positive cash flows from operations | 15,109,778 | (10,860,184) | ||||||
Initial gross proceeds | 25,000,000 | 0 | 25,000,000 | 0 | ||||
Escrow deposit | 3,750,803 | 3,750,803 | $ 3,750,000 | $ 0 | ||||
Potential future regulatory milestone | 20,000,000 | |||||||
Accumulated deficit | 55,073,625 | 55,073,625 | 70,035,083 | |||||
Cash and cash equivalents | $ 23,955,397 | $ 8,815,177 | 23,955,397 | 8,815,177 | $ 5,127,958 | $ 21,161,967 | ||
Proceeds from sale of shares under common stock purchase agreements | $ 5,000,000 | $ 4,650,000 | $ 0 |
Significant Accounting Polici26
Significant Accounting Policies - Escrowed Cash Receivable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 14, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||||||
Initial gross proceeds | $ 25,000,000 | $ 0 | $ 25,000,000 | $ 0 | ||
Escrowed cash receivable | $ 3,750,803 | $ 3,750,803 | $ 3,750,000 | $ 0 |
Significant Accounting Polici27
Significant Accounting Policies - Restricted Cash (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2016 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deposits | $ 50,000 | |
Security deposit required, end of third year | $ 13,000 | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Deposits made by employees | $ 29,200 |
Significant Accounting Polici28
Significant Accounting Policies - Property and Equipment (Details) | 9 Months Ended |
Sep. 30, 2017 | |
Computers and software | |
Property, Plant and Equipment [Line Items] | |
Useful life | 4 years |
Equipment | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Furniture | |
Property, Plant and Equipment [Line Items] | |
Useful life | 5 years |
Significant Accounting Polici29
Significant Accounting Policies - Segment Information (Details) | 9 Months Ended |
Sep. 30, 2017segment | |
Accounting Policies [Abstract] | |
Number of operating segments | 1 |
Net Income (Loss) Per Share o30
Net Income (Loss) Per Share of Common Stock, Basic and Diluted - Basic and Diluted Net Loss Per Share (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Net income (loss) - basic | $ 18,720,610 | $ (6,168,725) | $ 14,961,458 | $ (14,832,899) |
Weighted average shares, basic (shares) | 21,382,683 | 8,756,393 | 14,952,391 | 8,685,818 |
Earnings per share basic (USD per share) | $ 0.52 | $ (0.70) | $ 0.65 | $ (1.71) |
Net income (loss) | $ 11,222,732 | $ (6,168,725) | $ 9,677,838 | $ (14,832,899) |
Net income (loss) reallocated | 5,256 | 0 | 1,746 | 0 |
Net income (loss) - diluted | $ 11,227,988 | $ (6,168,725) | $ 9,679,584 | $ (14,832,899) |
Effect of dilutive securities: | ||||
Stock options (shares) | 25,019 | 0 | 7,641 | 0 |
Underwriters' unit purchase option (shares) | 0 | 0 | 0 | 0 |
Dilutive potential shares (shares) | 25,019 | 0 | 7,641 | 0 |
Weighted average number of shares - diluted (shares) | 21,407,702 | 8,756,393 | 14,960,032 | 8,685,818 |
Earnings per share diluted (USD per share) | $ 0.52 | $ (0.70) | $ 0.65 | $ (1.71) |
Participating warrants | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted average shares, basic (shares) | 14,285,714 | 0 | 8,163,265 | 0 |
Earnings per share basic (USD per share) | $ 0.52 | $ 0 | $ 0.65 | $ 0 |
Common Stock and Participating Warrants | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted average shares, basic (shares) | 35,668,397 | 8,756,393 | 23,115,656 | 8,685,818 |
Net Income (Loss) Per Share o31
Net Income (Loss) Per Share of Common Stock, Basic and Diluted - Anti-dilutive Securities (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Stock options | ||||
Anti-dilutive securities | ||||
Antidilutive securities excluded from the computation of diluted weighted shares outstanding | 2,384,560 | 1,828,441 | 2,401,938 | 1,828,441 |
Warrants | ||||
Anti-dilutive securities | ||||
Antidilutive securities excluded from the computation of diluted weighted shares outstanding | 4,661,145 | 7,400,934 | 4,661,145 | 7,400,934 |
Unit purchase option shares | ||||
Anti-dilutive securities | ||||
Antidilutive securities excluded from the computation of diluted weighted shares outstanding | 40,000 | 40,000 | 40,000 | 40,000 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Common stock warrants | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Number of shares underlying warrants | shares | 40,000 |
Significant unobservable inputs (Level 3) | Warrants on Preferred Stock | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Volatility rate | 65.00% |
Risk free interest rate | 1.63% |
Strike price (usd per share) | $ 8.40 |
Fair value of common stock (usd per share) | $ 0.85 |
Expected life | 3 years 1 month 3 days |
Significant unobservable inputs (Level 3) | Equity Unit Purchase Option | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Strike price (usd per share) | $ 7.48 |
Fair value of common stock (usd per share) | 0.85 |
Significant unobservable inputs (Level 3) | Equity Unit Purchase Option | Class A Warrant | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Strike price (usd per share) | 5.23 |
Significant unobservable inputs (Level 3) | Equity Unit Purchase Option | Class B Warrant | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Strike price (usd per share) | $ 4.49 |
Significant unobservable inputs (Level 3) | Minimum | Equity Unit Purchase Option | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Volatility rate | 65.00% |
Risk free interest rate | 0.74% |
Significant unobservable inputs (Level 3) | Maximum | Equity Unit Purchase Option | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Volatility rate | 75.00% |
Risk free interest rate | 1.63% |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - Recurring basis - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | $ 23,715,016 | $ 4,758,539 |
Quoted prices in active markets for identical assets (Level 1) | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Quoted prices in active markets for identical assets (Level 1) | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Significant other observable inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Significant other observable inputs (Level 2) | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Significant other observable inputs (Level 2) | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 0 | 0 |
Significant unobservable inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments in money market funds | 0 | 0 |
Significant unobservable inputs (Level 3) | Warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | 531 | 5,501 |
Significant unobservable inputs (Level 3) | Unit purchase option liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Liabilities | $ 6,607 | $ 51 |
Fair Value Measurements - Chang
Fair Value Measurements - Changes of Level 3 Warrant Liability and Unit Purchase Option Liability (Details) - Significant unobservable inputs (Level 3) | 9 Months Ended |
Sep. 30, 2017USD ($) | |
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation | |
Balance at December 31, 2016 | $ 5,552 |
Change in fair value | 1,586 |
Balance at September 30, 2017 | 7,138 |
Warrant liability | |
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation | |
Balance at December 31, 2016 | 5,501 |
Change in fair value | (4,970) |
Balance at September 30, 2017 | 531 |
Unit purchase option liability | |
Summary of changes in the fair value of the Level 3 valuation for the Warrant Liability and the Investor Rights Obligation | |
Balance at December 31, 2016 | 51 |
Change in fair value | 6,556 |
Balance at September 30, 2017 | $ 6,607 |
Accrued Expenses And Other Cu35
Accrued Expenses And Other Current Liabilities (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Compensation and benefits | $ 524,409 | $ 272,601 |
Research and development expenses | 452,139 | 315,937 |
General and administrative | 306,997 | 160,116 |
Accrued interest | 0 | 193,781 |
Warrant and UPO liability | 7,138 | 5,552 |
Accrued Liabilities and Other Liabilities | $ 1,290,683 | $ 947,987 |
License Agreements (Details)
License Agreements (Details) - USD ($) | Aug. 14, 2017 | Sep. 22, 2016 | Dec. 31, 2013 | Sep. 30, 2017 | Dec. 31, 2016 |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Proceeds from definitive agreement for the assignment of CERC 501 | $ 25,000,000 | ||||
Escrowed cash receivable | $ 3,750,000 | $ 3,750,803 | $ 0 | ||
Escrow deposit, term | 12 months | ||||
Milestone payment from definitive agreement for the assignment of CERC 501 | $ 20,000,000 | ||||
Lilly | CERC-611 | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Initial license acquisition payments | $ 2,000,000 | ||||
Upfront payment due within 30 days | $ 750,000 | ||||
Term within execution of license agreement | 30 days | ||||
Upfront payment due after first subject dosed | $ 1,250,000 | ||||
Merck | CERC-301 | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Total initial payments | $ 1,500,000 | ||||
Additional payments | 750,000 | ||||
Merck | CERC-301 | Research and development | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Initial license acquisition payments | 750,000 | ||||
Merck | COMTi | |||||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||||
Initial license acquisition payments | $ 200,000 |
Term Loan - Additional Informat
Term Loan - Additional Information (Details) - Secured term loan - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Aug. 31, 2014 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Aug. 01, 2017 | |
Term Loan | ||||||
Secured term loan face amount | $ 7,500,000 | |||||
Final term loan payment | $ 494,231 | |||||
Term loan termination fee | $ 187,500 | |||||
Interest expense including amortization of discount and accrual of termination fee | $ 1,000 | $ 110,000 | $ 95,000 | $ 404,000 | ||
Term loan | Prime rate | ||||||
Term Loan | ||||||
Margin on interest rate | 3.25% | |||||
Term loan | Minimum | ||||||
Term Loan | ||||||
Interest rate | 7.95% | |||||
Term loan | Maximum | ||||||
Term Loan | ||||||
Interest rate | 7.95% |
Term Loan - Schedule of Debt (D
Term Loan - Schedule of Debt (Details) - USD ($) | Sep. 30, 2017 | Dec. 31, 2016 |
Debt Disclosure [Abstract] | ||
Term loan | $ 0 | $ 2,374,031 |
Less: debt discount | 0 | (20,364) |
Term Loan, net of debt discount | $ 0 | $ 2,353,667 |
Capital Structure - Additional
Capital Structure - Additional Information (Details) | Sep. 30, 2017$ / sharesshares | Apr. 27, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | Oct. 20, 2015class_of_stock |
Class of Stock [Line Items] | ||||
Number of classes of stock authorized | class_of_stock | 2 | |||
Capital stock, shares authorized | 205,000,000 | |||
Common stock, shares authorized | 200,000,000 | 200,000,000 | ||
Preferred stock, shares authorized | 5,000,000 | 5,000,000 | ||
Common stock, par value (usd per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Preferred stock, par value (usd per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Securities Purchase Agreement | ||||
Class of Stock [Line Items] | ||||
Conversion price (usd per share) | $ / shares | $ 0.35 | |||
Securities Purchase Agreement | Preferred Stock | Series A Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock, shares authorized | 4,179 | |||
Preferred stock, par value (usd per share) | $ / shares | $ 1,000 | |||
Securities Purchase Agreement | Common stock | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, common shares authorized | 11,940,000 |
Capital Structure - Initial Pub
Capital Structure - Initial Public Offering (Details) - USD ($) | Apr. 27, 2017 | Nov. 23, 2015 | Oct. 20, 2015 |
Private Placement | |||
Class of Stock [Line Items] | |||
Exercise price per share (usd per share) | $ 0.40 | ||
Gross proceeds | $ 5,000,000 | ||
IPO | Capital Unit | |||
Class of Stock [Line Items] | |||
Common stock issued (in shares) | 4,000,000 | ||
Share price (usd per share) | $ 6.50 | ||
Gross proceeds | $ 26,000,000 | ||
Net proceeds from IPO | 23,600,000 | ||
Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Gross proceeds | $ 135,319 | ||
Underwriters Unit Purchase Option | Capital Unit | |||
Class of Stock [Line Items] | |||
Proceeds from unit purchase option | $ 100 | ||
Units available, as a percentage of units sold | 1.00% | ||
Equity purchase option unit, exercise price per unit (usd per share) | $ 7.48 | ||
Equity purchase option unit, exercise price as percent of IPO price | 115.00% | ||
Underwriters Unit Purchase Option | Capital Unit | Maximum | |||
Class of Stock [Line Items] | |||
Number of units available under the option (in shares) | 40,000 | ||
Class A Warrant | |||
Class of Stock [Line Items] | |||
Number of shares per warrant | 1 | ||
Class A Warrant | IPO | |||
Class of Stock [Line Items] | |||
Number of equity instruments (in shares) | 1 | ||
Exercise price per share (usd per share) | $ 4.55 | ||
Class A Warrant | Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Common stock issued (in shares) | 551,900 | ||
Class A Warrant | Underwriters Unit Purchase Option | |||
Class of Stock [Line Items] | |||
Exercise price per share (usd per share) | 5.23 | ||
Equity purchase option, unit exercise price after first warrant expiration (usd per share) | 7.475 | ||
Equity purchase option, unit exercise price after second warrant expiration (usd per share) | $ 7.47 | ||
Class B Warrant | IPO | |||
Class of Stock [Line Items] | |||
Number of equity instruments (in shares) | 1 | ||
Exercise price per share (usd per share) | $ 3.90 | ||
Class B Warrant | Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Common stock issued (in shares) | 551,900 | ||
Class B Warrant | Underwriters Unit Purchase Option | |||
Class of Stock [Line Items] | |||
Exercise price per share (usd per share) | $ 4.49 | ||
Common Stock | IPO | |||
Class of Stock [Line Items] | |||
Number of equity instruments (in shares) | 1 | ||
Common Stock | Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Common stock issued (in shares) | 20,000 | ||
Common Stock | Class A Warrant | Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Number of shares per warrant | 1 | ||
Common Stock | Class B Warrant | |||
Class of Stock [Line Items] | |||
Number of shares per warrant | 0.5 | ||
Common Stock | Class B Warrant | Over-Allotment Option | |||
Class of Stock [Line Items] | |||
Number of shares per warrant | 0.5 |
Capital Structure - Aspire Capi
Capital Structure - Aspire Capital Transaction (Details) - USD ($) | Sep. 08, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Class of Stock [Line Items] | ||||
Number of shares sold under purchase agreement | 26,054,857 | 9,434,141 | ||
Proceeds from sale of stock | $ 1,693,498 | $ 1,000,000 | ||
Common Stock Purchase Agreement | ||||
Class of Stock [Line Items] | ||||
Maximum value of common stock purchases committed to by counterparty | $ 15,000,000 | |||
Term of the common stock purchase agreement | 30 months | |||
Number of shares sold under purchase agreement | 250,000 | 965,165 | 763,998 | |
Price per share (usd per share) | $ 4 | |||
Gross proceeds | $ 1,000,000 | $ 789,000 | ||
Number of shares of common stock issued as commitment fee | 175,000 | |||
Proceeds from sale of stock | $ 1,900,000 |
Capital Structure - The Maxim G
Capital Structure - The Maxim Group Equity Distribution Agreement (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Jan. 27, 2017 | |
Subsidiary, Sale of Stock [Line Items] | |||
Proceeds from sale of stock | $ 1,693,498 | $ 1,000,000 | |
Equity Distribution Agreement | Maxim | |||
Subsidiary, Sale of Stock [Line Items] | |||
Equity distribution agreement authorized amount of common stock (in shares) | $ 12,075,338 | ||
Proceeds from sale of stock | $ 938,000 | ||
Equity Distribution Agreement | Common stock | Maxim | |||
Subsidiary, Sale of Stock [Line Items] | |||
Common stock issued (in shares) | 1,336,433 | ||
Additional shares available to be issued | $ 2,900,000 |
Capital Structure - Armistice P
Capital Structure - Armistice Private Placement (Details) - Securities Purchase Agreement - USD ($) $ / shares in Units, $ in Thousands | Jul. 06, 2017 | Apr. 27, 2017 |
Class of Stock [Line Items] | ||
Value of securities issued | $ 5,000 | |
Proceeds from sale of shares under common stock purchase agreements | $ 4,650 | |
Warrants to purchase shares of common stock, maximum, shares | 14,285,714 | |
Exercise price per share (usd per share) | $ 0.40 | |
Common stock | ||
Class of Stock [Line Items] | ||
Common stock issued (in shares) | 2,345,714 | |
Share price (usd per share) | $ 0.35 | |
Shares of common stock purchased as a percent of outstanding shares | 19.99% | |
Conversion of preferred stock, shares issued | 11,940,000 | |
Preferred Stock | Series A Preferred Stock | ||
Class of Stock [Line Items] | ||
Common stock issued (in shares) | 4,179 | |
Share price (usd per share) | $ 1,000 |
Capital Structure - Common Stoc
Capital Structure - Common Stock Warrants (Details) - Common Stock | Sep. 30, 2017$ / sharesshares |
Warrants | |
Number of shares underlying warrants | 18,986,859 |
Common stock warrants, expiration date of August 2018 | |
Warrants | |
Number of shares underlying warrants | 80,966 |
Exercise price per share (usd per share) | $ / shares | $ 28 |
Common stock warrants, expiration date of October 2018 | |
Warrants | |
Number of shares underlying warrants | 4,551,900 |
Exercise price per share (usd per share) | $ / shares | $ 4.55 |
Common stock warrants, expiration date of October 2018 | |
Warrants | |
Number of shares underlying warrants | 40,000 |
Exercise price per share (usd per share) | $ / shares | $ 5.23 |
Common stock warrants, expiration date of December 2018 | |
Warrants | |
Number of shares underlying warrants | 3,571 |
Exercise price per share (usd per share) | $ / shares | $ 28 |
Common stock warrants, expiration date of October 2020 | |
Warrants | |
Number of shares underlying warrants | 22,328 |
Exercise price per share (usd per share) | $ / shares | $ 8.40 |
Common stock warrants, expiration date of May 2022 | |
Warrants | |
Number of shares underlying warrants | 2,380 |
Exercise price per share (usd per share) | $ / shares | $ 8.68 |
Common stock warrants expiration of June 2022 | |
Warrants | |
Number of shares underlying warrants | 14,285,714 |
Exercise price per share (usd per share) | $ / shares | $ 0.4 |
Stock-Based Compensation - 2016
Stock-Based Compensation - 2016 Equity Incentive Plan (Details) | Jan. 01, 2017shares | May 18, 2016grantshares | Sep. 30, 2017shares |
2015 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Grants to be made under 2015 Plan | grant | 0 | ||
Common stock remaining for future issuance (in shares) | 464,476 | ||
2016 Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Increase in number of shares reserved for issuance (in shares) | 600,000 | ||
Common stock remaining for future issuance (in shares) | 483,214 | ||
Annual share reserve increase (as a percent) | 4.00% | ||
Additional shares reserved for issuance | 377,365 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Option Activity (Details) | 9 Months Ended |
Sep. 30, 2017USD ($)$ / sharesshares | |
Number of shares | |
Balance, beginning of period (in shares) | shares | 1,849,359 |
Granted (in shares) | shares | 578,611 |
Forfeited (in shares) | shares | (18,391) |
Balance, end of period (in shares) | shares | 2,409,579 |
Exercisable (in shares) | shares | 1,467,463 |
Weighted‑average exercise price | |
Beginning of period (usd per share) | $ / shares | $ 5.57 |
Granted (usd per share) | $ / shares | 0.74 |
Forfeited (usd per share) | $ / shares | 5.63 |
End of period (usd per share) | $ / shares | 4.41 |
Exercisable (usd per share) | $ / shares | $ 5.25 |
Fair value of options granted | |
Granted | $ | $ 301,743 |
Weighted average remaining contractual term (in years) | |
Balance, end of period | 8 years 1 month 13 days |
Exercisable | 7 years 7 months 24 days |
Stock-Based Compensation - Empl
Stock-Based Compensation - Employee Stock Purchase Plan (Details) - USD ($) | May 18, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 264,247 | $ 287,774 | $ 852,210 | $ 1,439,194 | ||
ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of fair market value on the lower of first day or last day of the offering period at which employees may purchase stock under the ESPP | 95.00% | |||||
Maximum portion of earnings that employee may contribute to ESPP | 15.00% | |||||
Maximum annual number of shares that may be purchased under the ESPP | 10,000 | |||||
Maximum annual amount of fair market value of the Company's common stock that a participant may accrue the rights to purchase | $ 25,000 | |||||
Maximum automatic increase in the number of shares authorized for issuance | 500,000 | |||||
Maximum increase in shares that may automatically increase at the first of the year as a percentage of the outstanding capital stock at the end of the preceding calendar year | 1.00% | |||||
Shares remaining for future issuance (in shares) | 500,000 | 540,935 | 540,935 | |||
Stock purchased through employee stock purchase plan (in shares) | 33,406 | 20,000 | ||||
Stock-based compensation expense | $ 20,886 | $ 69,492 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 264,247 | $ 287,774 | $ 852,210 | $ 1,439,194 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | 41,323 | 43,861 | 123,883 | 95,013 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock-based compensation | $ 222,924 | $ 243,913 | $ 728,327 | $ 1,344,181 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |||||
Income tax expense | $ 3,230,000 | $ 0 | $ 3,230,000 | $ 0 | |
Effective tax rate | 17.76% | 0.00% | |||
Operating loss carryforwards, utilized | $ 2,700,000 | ||||
Operating Loss Carryforwards [Line Items] | |||||
Operating loss carryforward | $ 2,700,000 | $ 2,700,000 | $ 52,200,000 | ||
Federal Tax | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward | 1,800,000 | ||||
State and Local Jurisdiction | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax credit carryforward | $ 57,000 |
Commitments and Contingencies -
Commitments and Contingencies - Office Lease (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Period of abatement | 3 months | |
Rent expense | $ 125 | $ 125 |
Commitments and Contingencies51
Commitments and Contingencies - Future Lease Obligations (Details) | Sep. 30, 2017USD ($) |
December 31, 2017 | |
2,017 | $ 39,433 |
2,018 | 158,716 |
Total future lease obligation | $ 198,149 |
Commitments and Contingencies52
Commitments and Contingencies - Obligations to Contract Research Organizations and External Service Providers (Details) $ in Millions | Sep. 30, 2017USD ($) |
Research and Development Arrangement | |
Long-term Purchase Commitment [Line Items] | |
Obligation for future services | $ 1.2 |