Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 30, 2016 | Jun. 30, 2015 | |
Document And Entity Information [Abstract] | |||
Document Type | S1 | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2015 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | XBIO | ||
Entity Registrant Name | Xenetic Biosciences, Inc. | ||
Entity Central Index Key | 1,534,525 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 151,980,084 | ||
Current Reporting Status | Yes | ||
Well known Seasoned Issuer | No | ||
Entity Voluntary Filers | Yes | ||
Entity Public Float | $ 9,500,000 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash | $ 132,229 | $ 2,507,401 |
Restricted cash | 66,510 | 66,000 |
Prepayment on acquisition | 3,744,517 | 0 |
Prepaid expenses and other | 247,298 | 204,012 |
Total current assets | 4,190,554 | 2,777,413 |
Property and equipment, net | 62,021 | 119,449 |
Goodwill | 3,283,379 | 3,465,157 |
Indefinite-lived intangible assets | 9,243,128 | 9,754,857 |
Other assets | 129,306 | 199,270 |
Total assets | 16,908,388 | 16,316,146 |
Current liabilities: | ||
Accounts payable | 1,788,521 | 852,760 |
Accrued expenses | 1,487,046 | 1,409,691 |
Hybrid debt instrument, net | 3,652,749 | 0 |
Other current liabilities | 19,098 | 41,472 |
Loans due to related parties | 395,000 | 395,000 |
Total current liabilities | 7,342,414 | 2,698,923 |
Deferred tax liability | 2,918,518 | 3,080,097 |
Other liabilities | 38,791 | 56,383 |
Total liabilities | 10,299,723 | 5,835,403 |
Stockholders' equity: | ||
Common stock, $0.001 par value; 1,500,000,000 and 215,456,000 shares authorized as of December 31, 2015 and December 31, 2014, respectively; 162,013,011 and 149,985,476 shares issued as of December 31, 2015 and December 31, 2014, respectively; 151,324,817 and 139,297,282 shares outstanding as of December 31, 2015 and December 31, 2014, respectively | 162,013 | 149,986 |
Additional paid in capital | 99,605,997 | 90,660,689 |
Accumulated deficit | (88,131,899) | (75,624,428) |
Accumulated other comprehensive income | 253,734 | 575,676 |
Treasury stock | (5,281,180) | (5,281,180) |
Total stockholders' equity | 6,608,665 | 10,480,743 |
Total liabilities and stockholders' equity | $ 16,908,388 | $ 16,316,146 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ .001 | $ .001 |
Common stock, shares authorized | 1,500,000,000 | 215,456,000 |
Common stock, shares issued | 162,013,011 | 149,985,476 |
Common stock, shares outstanding | 151,324,817 | 139,297,282 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Operating costs and expenses: | ||
Research and development | $ (3,434,016) | $ (6,323,896) |
General and administrative | (6,388,000) | (6,600,870) |
Loss from operations | (9,822,016) | (12,924,766) |
Other income (expense): | ||
Change in fair value of derviative liability | (2,125,117) | 0 |
Loss on disposal of subsidiaries | 0 | (1,069,675) |
Other expense | (295,033) | (326,916) |
Interest income | 1,694 | 18,959 |
Interest expense | (266,999) | (4,706) |
Total other income (expense) | (2,685,455) | (1,382,338) |
Net loss | (12,507,471) | (14,307,104) |
Other comprehensive income (loss) | ||
Other comprehensive loss from foreign currency translation adjustment | (321,942) | (324,578) |
Total comprehensive loss | $ (12,829,413) | $ (14,631,682) |
Net loss per share of common stock, basic and diluted | $ (.09) | $ (.11) |
Weighted-average shares of common stock outstanding, basic and diluted | 140,397,488 | 135,896,022 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (12,507,471) | $ (14,307,104) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 56,115 | 88,689 |
Amortization of hybrid debt instrument discount | 108,527 | 0 |
Non-cash interest expense | 153,791 | 0 |
Share-based payments | 2,594,113 | 1,513,238 |
Warrant expense for services | 933,195 | 239,889 |
Change in fair value of derivative liability | 2,125,117 | 0 |
Loss on issuance of hybrid debt instrument | 59,612 | 0 |
Hybrid debt instrument issuance costs | (30,933) | 0 |
Loss on disposal of subsidiaries | 0 | 1,069,675 |
Fee paid on disposal of subsidiaries | 0 | (430,000) |
Foreign currency translation | 369,947 | (353,952) |
Other non-cash transactions | (127,875) | 0 |
Changes in operating assets and liabilities: | ||
Other receivables, prepayments and other assets | 21,227 | (24,468) |
Accounts payable, accrued expenses and other liabilities | 943,909 | (479,015) |
Net cash used in operating activities | (5,300,726) | (12,683,048) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchases of property and equipment | (1,663) | (57,669) |
Disposition of property and equipment | 7,882 | 5,487 |
Cash acquired from acquisition | 0 | 43,502 |
Cash transferred in connection with Hive Out Agreement | 0 | (43,502) |
Net cash provided by (used in) investing activities | 6,219 | (52,182) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of debt | 3,100,000 | 0 |
Payments on debt | (100,000) | 0 |
Proceeds from issuance of common stock | 0 | 10,000,000 |
Proceeds from exercise of stock options | 0 | 101,933 |
Payments on loan from related party | 0 | (286,124) |
Net cash provided by financing activities | 3,000,000 | 9,815,809 |
Effect of exchange rate change on cash | (80,665) | 587,336 |
Net change in cash, excluding restricted cash | (2,375,172) | (2,332,085) |
Cash at beginning of period | 2,507,401 | 4,839,486 |
Cash at end of period | 132,229 | 2,507,401 |
SUPPLEMENTAL CASH FLOW INFORMATION: | ||
Cash paid for interest | 592 | 4,706 |
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Interest paid in common stock | 75,935 | 0 |
Non-cash issuance of common stock in connection with pending asset acquisition | 3,744,517 | 0 |
Non-cash issuance of warrants in connection with debt | 1,626,344 | 0 |
Non-cash recording of derivative liability in connection with debt | 1,419,105 | 0 |
Equity consideration transferred in the acquisition | 0 | 3,750,000 |
Repurchase and cancellation of common stock in disposal of subsidiaries | $ 0 | $ (3,750,000) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Treasury Stock [Member] | Total |
Beginning balance, shares at Dec. 31, 2013 | 130,575,516 | |||||
Beginning balance, value at Dec. 31, 2013 | $ 130,576 | $ 75,175,039 | $ (58,306,999) | $ 900,254 | $ (5,281,180) | $ 12,617,690 |
Exercise of stock options, shares | 1,984,080 | |||||
Exercise of stock options, value | $ 1,984 | 99,949 | 101,933 | |||
Issuance of common stock, shares | 13,939,971 | |||||
Issuance of common stock | $ 13,940 | 10,797,256 | 10,811,196 | |||
Issuance of warrants | 239,889 | 239,889 | ||||
Deemed issuance of shares in reverse merger, shares | 13,500,000 | |||||
Deemed issuance of shares in reverse merger | $ 13,500 | 3,736,500 | 3,750,000 | |||
Repurchase and cancellation of shares in Hive Out Agreement, shares | (10,000,000) | |||||
Repurchase and cancellation of shares in Hive Out Agreement | $ (10,000) | (90,000) | (3,010,325) | (3,110,325) | ||
Repurchase and cancellation of shares in acquisition, shares | (14,091) | |||||
Repurchase and cancellation of shares in acquisition | $ (14) | 14 | ||||
Settlement of accrued interest in common stock | 0 | |||||
Share-based payments | 702,042 | 702,042 | ||||
Net loss | (14,307,104) | (14,307,104) | ||||
Foreign currency translation | (324,578) | (324,578) | ||||
Ending balance, shares at Dec. 31, 2014 | 149,985,476 | |||||
Ending balance, value at Dec. 31, 2014 | $ 149,986 | 90,660,689 | (75,624,428) | 575,676 | (5,281,180) | 10,480,743 |
Issuance of common stock, shares | 1,027,535 | |||||
Issuance of common stock | $ 1,027 | 336,313 | 337,340 | |||
Issuance of common stock in connection with pending asset acquisition, shares | 11,000,000 | |||||
Issuance of common stock in connection with pending asset acquisition | $ 11,000 | 3,733,517 | 3,744,517 | |||
Issuance of warrants | 933,195 | 933,195 | ||||
Issuance of warrants in connection with debt (net of issuance costs of $16,769) | 1,609,575 | 1,609,575 | ||||
Settlement of accrued interest in common stock | 75,935 | 75,935 | ||||
Share-based payments | 2,256,773 | 2,256,773 | ||||
Net loss | (12,507,471) | (12,507,471) | ||||
Foreign currency translation | (321,942) | (321,942) | ||||
Ending balance, shares at Dec. 31, 2015 | 162,013,011 | |||||
Ending balance, value at Dec. 31, 2015 | $ 162,013 | $ 99,605,997 | $ (88,131,899) | $ 253,734 | $ (5,281,180) | $ 6,608,665 |
Consolidated Statements of Cha7
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Statement of Stockholders' Equity [Abstract] | |
Issuance costs in connection with warrants issued | $ 16,769 |
1. The Company
1. The Company | 12 Months Ended |
Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company | Background Xenetic Biosciences, Inc. (the “Company”), incorporated in the state of Nevada and based in Lexington, Massachusetts, is a clinical stage biopharmaceutical company that is focused on the discovery, development and planned commercialization of a new generation of human drug therapies for the treatment of a variety of conditions including anemia, refractory Acute Myeloid Leukemia, Cystic Fibrosis and certain other cancers based upon its proprietary and patented drug delivery platform systems and drug development collaborations with major third party pharmaceutical companies around the world. The Company’s core technologies include PolyXen™ a platform for creating next generation biologic drugs by extending the efficacy, safety and half-life of existing biologic drugs, OncoHist™, for the development of novel oncology drug therapies focused on orphan indications in humans, and ImuXen™, for the development of vaccines that can simultaneously deliver multiple active pharmaceutical ingredients. The Company is also developing a broad pipeline of drug candidates for next generation biologics and novel oncology therapeutics in a number of orphan disease indications. Going Concern and Management’s Plan While these consolidated financial statements have been prepared on a going concern basis, if the Company does not successfully raise additional working capital, there can be no assurance that the Company will be able to continue its operations and these conditions raise substantial doubt about its ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. In March 2016, the Company engaged an investment banking firm to assist with a proposed sale of the Company’s securities. The Company is optimistic that it will be successful in obtaining financing, however there can be no assurance that it will be able to do so or, if it is able to, that is can do so under commercially reasonable terms. In the event the Company is unsuccessful in this proposed sale, the Company will plan to rely upon proceeds from the sale of up to $6.5 million in securities to OJSC Pharmsynthez (“Pharmsynthez”) as provided for in the AS Kevelt Asset Purchase Agreement. AS Kevelt Asset Purchase Agreement In November 2015, the Company entered into an Asset Purchase Agreement (the “APA”) with AS Kevelt, an Estonian company (“Kevelt”), and Pharmsynthez, parent of Kevelt (together referred to as the “Sellers”). Pursuant to the APA, Kevelt will transfer to the Company certain intellectual property rights held by the Sellers with respect to the immunomodulatory product candidate Virexxa® held by Kevelt and the Sellers will grant the Company the worldwide right to develop, market and license Virexxa® for certain uses except for excluded uses in Russia, the Commonwealth of Independent States and certain other countries. In consideration, the Company will issue to Pharmsynthez 100.5 million shares of its common stock. The APA also provides for the Company’s issuance of 10% Senior Secured Convertible Promissory Notes of up to $3.5 million to Pharmsynthez (the “APA Notes”) and certain warrants to purchase a number of shares equal to the issuable shares of the Company’s stock upon conversion of the APA Notes. There is also a provision in the APA for the contingent sale of up to $6.5 million of the Company’s common stock in the event of a qualifying capital raise. Also as part of the APA, Dr. Dmitry Genkin and Kirill Surkhov, shareholders and founders of Pharmsynthez, will assign a U.S. provisional patent application to the Company in exchange for 11 million shares of the Company’s common stock. The Company issued 11 million shares in November 2015 as a prepayment toward completing the APA transaction, recording $3.74 million as the proportional fair value of the total consideration to be recorded upon the completion of the APA transaction. In connection with the APA, certain terms in the Securities Purchase Agreement (the “SPA”) with Pharmsynthez issued in July 2015 were modified. See Note 8, Hybrid Debt Instrument 2014 Business Combination On January 23, 2014, the Company consummated a reverse merger (the “Acquisition”) pursuant to a written plan of reorganization, in which the Company merged with Xenetic Biosciences (UK) Limited (formerly Xenetic Biosciences plc) (“Xenetic UK”), a company incorporated in England and Wales under the Companies Act of 1985, such that Xenetic UK became a wholly owned subsidiary of the Company. Upon completion of the Acquisition, the Company acquired all issued and outstanding shares of capital stock of Xenetic UK. As a result, 132,545,504 shares of the Company’s common stock were newly issued and, immediately following the Acquisition, there were 136,045,504 shares of common stock issued and outstanding. At that time, because former Xenetic UK shareholders owned approximately 97% of the combined company on a fully diluted basis and all members of the combined company’s executive management were from Xenetic UK, Xenetic UK was deemed to be the acquiring company for accounting purposes and the transaction was accounted for as a reverse acquisition in accordance with accounting principles generally accepted in the United States (“US GAAP”). Prior to the Acquisition, the Company changed its name from General Sales and Leasing, Inc. to Xenetic Biosciences, Inc. As used in these consolidated financial statements, unless otherwise indicated, all references herein to “Xenetic”, the “Company”, “we” or “us” refer to Xenetic Biosciences, Inc. and its wholly owned subsidiaries. |
2. Summary of Significant Accou
2. Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Preparation of Financial Statements These consolidated financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. This assumption is presently in question and contingent upon the Company’s ability to raise additional working capital. The financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Certain prior period amounts have been reclassified to conform to the presentation for the current period. Principles of Consolidation The financial statements of the Company include the accounts of Xenetic UK and its wholly owned subsidiaries: Lipoxen Technologies Limited (“Lipoxen”), Xenetic Bioscience, Incorporated, and SymbioTec GmbH (“SymbioTec”). All material intercompany balances and transactions have been eliminated on consolidation. Use of Estimates The consolidated financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of the financial statements in accordance with US GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenue and expenses in the financial statements and disclosures in the accompanying notes. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. Change in Accounting Principle During the second quarter of 2015, the Company elected to apply pushdown accounting to the Company’s acquisition of SymbioTec that occurred in 2012. Pushdown accounting refers to the use of the acquirer’s basis in the preparation of the acquiree’s separate financial statements as the new basis of accounting for the acquiree. Application of pushdown accounting is treated as a change in accounting principle and was applied retrospectively to the Company’s consolidated financial statements. This change resulted in no impact to the consolidated financial statements for the year ended December 31, 2015 or 2014. Functional Currency Change Effective April 1, 2015, the functional currency of the Company’s foreign subsidiaries changed from the British Pound Sterling to the United States (“U.S.”) dollar. The changes in the economic facts and circumstances that caused the functional currency to change to that of the parent company include: the closing of the Company’s last office outside of the U.S. during the first quarter of 2015, a shift of financial dependence of the subsidiaries to the parent and the growth of the Company’s operations in U.S. dollar-denominated expenses. The Company translated assets and liabilities of these foreign subsidiaries at the exchange rate in effect at the balance sheet date and included accumulated net translation adjustments in equity as a component of accumulated other comprehensive loss. The change in functional currency is applied on a prospective basis. Therefore, any gains and losses that were previously recorded in accumulated other comprehensive loss remain unchanged through March 31, 2015. Foreign currency transaction gains and losses are the result of exchange rate changes on transactions denominated in currencies other than the functional currency. The remeasurement of those foreign currency transactions is included in determining net income or loss for the period of exchange. Foreign Currency Translation The Company’s reporting currency is U.S. dollars. During the years ended December 31, 2015 and 2014, the Company had operations in the U.S., United Kingdom (“U.K.”) and Germany. Assets and liabilities of foreign operations were translated to U.S. dollars at the exchange rate in effect at the balance sheet date and revenue and expenses at the average exchange rate for the period. Gains and losses from the translation of the consolidated financial statements of foreign subsidiaries into U.S. dollars were included in stockholders’ equity as a component of other comprehensive income. The Company did not record tax provisions or benefits for the net changes in foreign currency translation adjustments, as the Company intends to permanently reinvest undistributed earnings in its foreign subsidiaries. Following the change in the functional currency of the Company’s foreign subsidiaries to the U.S. dollar on April 1, 2015, it is no longer necessary to record gains and losses from the translation of the consolidated financial statements of foreign subsidiaries from a foreign functional currency into the reporting currency. Realized and unrealized gains and losses resulting from foreign currency transactions arising from exchange rate fluctuations on balances denominated in currencies other than the functional currencies, are recognized in “Other (expense) income” in the consolidated statements of comprehensive loss. Monetary assets and liabilities that are denominated in a currency other than the functional currency are re-measured to the functional currency using the exchange rate at the balance sheet date and gains or losses are recorded within the “Other income (expense)” section of the consolidated statements of comprehensive loss. Correction of Identified Errors During the second quarter of 2015, the Company identified an error in the consolidated financial statements related to the accounting for foreign currency matters. One of the Company’s subsidiary’s functional currency had been incorrectly designated as the Euro instead of British Pound Sterling during the period January 1, 2013 through March 31, 2015. As a result, certain applicable financial results of this entity were being translated to the reporting currency when they should have been first remeasured into the functional currency. In addition, the Company identified an error in the consolidated financial statements related to the pushdown accounting of that subsidiary. The new basis of accounting of the acquired entity formed as a result of the acquisition was not first remeasured into the functional currency before being translated to the reporting currency. The correction of the errors identified above resulted in the recognition of foreign currency net gains and foreign currency translation net losses. We concluded that these adjustments were not material to the Company’s financial position or results of operations for any of the prior periods presented. Therefore, we recognized the cumulative impact during the three months ended June 30, 2015, which resulted in a net gain in other income (expenses) in the consolidated statement of comprehensive loss of $0.24 million for the year ended December 31, 2015 and a cumulative impact in accumulated other comprehensive income in the consolidated balance sheet of $0.31 million as of June 30, 2015. Fair Value of Financial Instruments ASC Topic 820 Fair Value Measurement Fair Value Measurements Cash, Cash Equivalents and Investments The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents. Investments with original maturities of greater than 90 days from the date of purchase but less than one year from the balance sheet date are classified as short-term investments, while investments with maturities of one year or beyond from the balance sheet date are classified as long-term investments. Management determines the appropriate classification of its cash equivalents and investment securities at the time of purchase and re-evaluates such determination as of each balance sheet date. Restricted Cash As of December 31, 2015 and 2014, restricted cash represents a certificate of deposit that matures annually, and secures the Company’s outstanding letter of credit of $66,000 for the operating lease for office and laboratory space in Lexington, Massachusetts. The letter of credit is required to be maintained through the term of the lease, which expires in January 2019. Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk include cash and cash equivalents. The Company maintains cash and cash equivalents with various major financial institutions. The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. Property and Equipment The Company records property and equipment at cost less accumulated depreciation. Expenditures for major renewals and improvements which extend the life or usefulness of the asset are capitalized. Items of an ordinary repair or maintenance nature are charged directly to operating expense as incurred. The Company calculates depreciation using the straight-line method over the estimated useful lives of the assets: Asset Classification Estimated Useful Life Laboratory equipment 3 years Office and computer equipment 3 years Leasehold improvements 5 years or the remaining term of the lease, if shorter Furniture and fixtures 5 years The Company eliminates the cost of assets retired or otherwise disposed of, along with the corresponding accumulated depreciation, from the related accounts, and the resulting gain or loss is reflected in the results of operations. Indefinite-Lived Intangible Assets Acquired indefinite-lived intangible assets consist of In-Process Research and Development (“IPR&D”) related to the Company’s business combination with SymbioTec, which was recorded at fair value on the acquisition date. IPR&D intangible assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. Substantial additional research and development may be required before the Company’s IPR&D reaches technological feasibility. Upon completion of the IPR&D project, the IPR&D assets will be amortized over their estimated useful lives. In accordance with ASC Topic 350, Intangibles - Goodwill and Other he circumstances leads to the determination that it is more likely than not (that is, a likelihood of more than 50%) that the acquired IPR&D is impaired. If the Company chooses to first assess the qualitative factors and it is determined that it is not more likely than not acquired IPR&D is impaired, the Company is not required to take further action to test for impairment. The Company also has the option to bypass the qualitative assessment and perform only the quantitative impairment test, which the Company may choose to perform in some periods but not in others. No impairment was recorded during the years ended December 31, 2015 and 2014. Goodwill Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but in accordance with ASC 350, the Company assesses goodwill for impairment at least annually, or when events or changes in the business environment indicate the carrying value may not be fully recoverable. The Company also has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to the determination that it is more likely than not (that is, a likelihood of more than 50%) that goodwill is impaired. If the Company chooses to first assess qualitative factors and it is determined that it is not more likely than not goodwill is impaired, the Company is not required to take further action to test for impairment. The Company also has the option to bypass the qualitative assessment and perform only the quantitative impairment test, which the Company may choose to do in some periods but not in others. The Company performs its annual impairment review as of October 1. No impairment was recorded during the years ended December 31, 2015 and 2014. Impairment of Long-Lived Assets In accordance with ASC Topic 360 Property, Plant and Equipment Evaluation of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset group and its eventual disposition. Impairment, if any, is calculated as the amount by which an asset’s carrying value exceeds its fair value, typically using discounted cash flows to determine fair value. Embedded Derivatives Related to Debt Instruments Embedded derivatives that are required to be bifurcated from their host contract are evaluated and valued separately from the host contract (i.e., the debt instrument). Features of the Company’s debt instrument that meet the definition of a derivative and the criteria for separate accounting include the conversion feature and certain put options. Embedded derivatives are valued individually and recorded as a compound derivative. The compound derivative is presented together with the host debt instrument and the related debt discount on a combined basis. Changes in the estimated fair value of the bifurcated embedded derivatives are reported as gains and losses in the consolidated statement of comprehensive loss each reporting period. Revenue Recognition The Company enters into supply, license and collaboration arrangements with pharmaceutical and biotechnology partners, some of which include royalty agreements based on potential net sales of approved commercial pharmaceutical products. The Company recognizes revenue in accordance with the authoritative guidance, ASC Topic 605, Revenue Recognition The terms of the Company’s license agreements include delivery of an Intellectual Property (“IP”) license to a collaboration partner. The Company may be compensated under license arrangements through a combination of non-refundable upfront payments, development and regulatory objective payments and royalty payments on future product sales by partners. Non-refundable upfront payments and development and regulatory objective payments received by the Company in license and collaboration arrangements that include future obligations, such as supply obligations, are recognized ratably over the Company’s expected performance period under each respective arrangement. The Company makes its best estimate of the period over which the Company expects to fulfil the Company’s performance obligations, which may include technology transfer assistance, research activities, clinical development activities, and manufacturing activities from development through the commercialization of the product. Given the uncertainties of these collaboration arrangements, significant judgment is required to determine the duration of the performance period. Non-refundable upfront license fees received, whereby continued performance or future obligations are considered inconsequential or perfunctory to the relevant licensed technology, are recognized as revenue upon delivery of the technology. The Company expects to recognize royalty revenue in the period of sale, based on the underlying contract terms, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, assuming all other revenue recognition criteria are met. Reimbursements for research and development services completed by the Company related to the collaboration agreements are recognized in operations as revenue on a gross basis. The Company’s license and collaboration agreements with certain collaboration partners could also provide for future payments to the Company based solely upon the performance of the respective collaboration partner in consideration of deadline extensions or upon the achievement of specified sales volumes of approved drugs. For such payments, the Company expects to recognize the payments as revenue when earned under the applicable contract terms on a performance basis or ratably over the term of the agreement. These payments may also be recognized as revenue when continued performance or future obligations by the Company are considered inconsequential or perfunctory. Research and Development Expenses Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits, facilities expenses, overhead expenses, clinical trial and related clinical manufacturing expenses, fees paid to clinical research organizations and clinical manufacturing organizations and other outside expenses. The Company expenses research and development costs as incurred. The Company expenses upfront, non-refundable payments made for research and development services as obligations are incurred. The value ascribed to intangible assets acquired but which have not met capitalization criteria is expensed as research and development at the time of acquisition. Share-based Payments Stock options The Company grants share-based payments in the form of options to employees and non-employees, Joint Share Ownership Plan (“JSOP”) awards to employees, as well as agreements to issue common stock in exchange for services provided by non-employees. The Company measures share-based payments to employees in accordance with ASC Topic 718, Compensation – Stock Compensation Equity Stock option compensation expenses are based on the fair value of the option calculated using the Black-Scholes option pricing model. Determining the appropriate fair value model and related assumptions requires judgment, including estimating share price volatility and expected terms of the awards. The expected volatility rates are estimated based on the actual volatility of the Company and of comparable public companies over the expected term. The expected terms represent the time that options are expected to be outstanding. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company has not paid dividends and does not anticipate paying cash dividends in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of US Treasury securities with maturities consistent with the estimated expected term of the awards. Upon exercise, stock options are redeemed for newly issued shares of common stock. For employee options that vest based solely on service conditions, the fair value measurement date is generally on the date of grant and the related compensation expense, less expense for expected forfeitures, is recognized on a straight-line basis over the requisite vesting period of the awards. For non-employee options, the fair value measurement date is the earlier of the date the performance of services is complete or the date the performance commitment has been reached. The Company generally determines that the fair value of the stock options is more reliably measurable than the fair value of the services received. Compensation expense related to stock options granted to non-employees that vest based solely on service conditions is subject to re-measurement at each reporting period until the options vest and is recognized on a straight-line basis over the requisite vesting period of the awards. Common stock awards The Company grants common stock awards to non-employees in exchange for services provided. The Company generally measures the fair value of these awards using the fair value of the services provided as it is a more reliable measure of the fair value of the awards. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash. Joint Share Ownership Plan awards The Company measures the fair value of JSOP awards using Monte Carlo simulations based on the terms of the plan, which includes vesting conditions based on the achievement of certain market conditions in the form of share price hurdles. Determination of the appropriate fair value model and related assumptions requires judgment, including estimating share price volatility and the expected term of the awards. Accordingly, the Company recognizes compensation expense related to its JSOP awards using a graded vesting model. Warrants In connection with certain financing, consulting and collaboration arrangements, the Company issues warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued to collaboration partners in conjunction with the issuance of common stock are initally recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 11, Stockholders’ Equity Income Taxes The Company accounts for income taxes using the liability method in accordance with ASC Topic 740, Income Taxes Basic and Diluted Net Loss per Share The Company computes basic net loss per share by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The Company computes diluted net loss per share after giving consideration to the dilutive effect of stock options that are outstanding during the period, except where such non-participating securities would be anti-dilutive. The Company’s JSOP awards, prior to exercise, are considered treasury shares by the Company and thus do not impact the Company’s net loss per share calculation. As of December 31, 2015 and 2014, there were 10,688,194 JSOP awards issued. Basic and diluted net loss per share are the same for the years ended December 31, 2015 and 2014 as the Company was in a net loss position. Potentially dilutive non-participating securities have not been included in the calculations of diluted net loss per share, as their inclusion would be anti-dilutive. 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, who is the Company’s Chief Executive Officer, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business in one operating segment. Operating Leases The Company leases an administrative and laboratory facility under an operating lease. Lease agreements may include rent holidays, rent escalation clauses and tenant improvement allowances. The Company recognizes scheduled rent increases on a straight-line basis over the lease term beginning with the date the Company takes possession of the leased space. Acquisitions The Company has a history of engaging in acquisition transactions that require the Company to evaluate whether the transaction meets the criteria of a business combination and, in some cases, whether it meets the definition of a reverse merger. For those acquisitions that meet the criteria for a reverse merger, the Company evaluates the entities involved to distinguish the appropriate accounting acquirer and acquiree according to ASC 805. If the transaction does not meet the business combination requirements, the transaction is accounted for as an asset acquisition or recapitalization and no goodwill is recognized. If the acquisition meets the definition of a business combination, the Company allocates the purchase price, including any contingent consideration, to the assets acquired and the liabilities assumed at their estimated fair values as of the date of the acquisition with any excess of the purchase price paid over the estimated fair value of net assets acquired recorded as goodwill. The fair value of the assets acquired and liabilities assumed is typically determined by using either estimates of replacement costs or discounted cash flow valuation methods. When determining the fair value of tangible assets acquired, the Company estimates the cost to replace the asset with a new asset, taking into consideration such factors as age, condition and the economic useful life of the asset. When determining the fair value of intangible assets acquired, the Company uses judgment to estimate the applicable discount rate, growth rates and the timing and amount of future cash flows. The fair value of assets acquired and liabilities assumed is typically determined using the assistance of an independent third party specialist. Business combination related costs are expensed in the period in which the costs are incurred and the services are received. Asset acquisition related costs are generally capitalized as a component of cost of the assets acquired. Recent Accounting Pronouncements In March 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-06, Derivatives and Hedging (Topic 815) In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) In November 2015, FASB issued ASU 2015-17, Income Taxes (Topic 740) In April 2015, FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date The Company has considered other recent accounting pronouncements and concluded that they are either not applicable to the business, or that no material effect is expected on the consolidated financial statements as a result of future adoption. |
3. Acquisitions
3. Acquisitions | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Acquisitions | 2014 Business Combination On January 23, 2014, the Company completed the Acquisition transaction with Xenetic UK which resulted in the Company acquiring all of the issued and outstanding common stock of Xenetic UK. The Acquisition was accounted for as a reverse acquisition under the acquisition method of accounting per ASC 805, with Xenetic UK treated as the accounting acquirer and the Company treated as the “acquired” company for financial reporting purposes. This was determined based on the following facts: (i) after the reverse merger, former shareholders of Xenetic UK held a majority of the voting interest of the combined company; (ii) former Board of Directors of Xenetic UK possess majority control of the Board of Directors of the combined company; and (iii) members of the management of Xenetic UK are responsible for the management of the combined company. As such, the financial statements of Xenetic UK are treated as the historical financial statements of the combined company. The fair value of the consideration transferred in the reverse merger was $3.75 million. This was calculated as the number of shares of common stock that Xenetic UK would have had to issue in order for the Company’s shareholders to hold the same equity interest in the combined entity immediately following the acquisition (approximately 9.2%), multiplied by the estimated fair value of the Company’s common stock on the acquisition date (£0.06 per share). The estimated fair value of the Company’s common stock was based on the price of the Company’s stock on the acquisition date, which was actively traded on the Alternative Investments Market of the London Stock Exchange in the United Kingdom. In addition, Xenetic UK incurred approximately $3 million of transaction costs related to the reverse merger. The Company recognized approximately $0.5 million of transaction costs related to the reverse merger in general and administrative expenses on the consolidated statement of comprehensive loss during the year ended December 31, 2014. No transaction costs related to the reverse merger were recognized during the year ended December 31, 2015. As of December 31, 2014, the Company finalized the purchase accounting for the Acquisition. Management determined the purchase price allocations based on estimates of the fair values of all assets acquired and liabilities assumed. The Company believe that such information provides a reasonable basis for estimating the fair values of assets acquired and liabilities assumed. The fair values of the acquired assets and liabilities assumed are as follows: Cash $ 43,502 Accounts receivable 145 Prepaid expenses 8,643 Property, plant and equipment 331,500 Accounts payable (354,079 ) Accrued expenses (36,146 ) Long-term debt (372,813 ) Total identifiable net assets (379,248 ) Goodwill 4,129,248 Total $ 3,750,000 Following the Acquisition, an Agreement of Conveyance, Transfer and Assignment of Subsidiaries and Assumption of Obligations (the “Hive Out Agreement”) was executed, whereupon 10,000,000 outstanding shares of common stock held by Oxbridge Technology Partners SA (“Oxbridge”) were returned to the Company and recorded as treasury shares and were subsequently canceled. In exchange, Oxbridge acquired all issued and outstanding shares of both of the Company’s former operating subsidiaries, Shift It Media Co. and General Aircraft, Inc. (the “Disposed Subsidiaries”), including all assets and liabilities connected with the businesses transferred. In addition, the Company disposed of the associated goodwill. The Hive Out Agreement also required a payment to Oxbridge of $430,000, which was paid by the Company shortly after the Acquisition. The Company recorded this divestiture as a separate transaction from the Acquisition that results in the disposal of two of the Company’s subsidiaries. The Disposed Subsidiaries did not record any operations in the combined entity following the Acquisition before they were disposed and these financial statements do not reflect the historical financial statements of the Disposed Subsidiaries as they were previously owned by the accounting acquiree. Accordingly, there are no balances to be recorded as discontinued operations on the statement of comprehensive loss. As a result of the divestiture of the Disposed Subsidiaries, the Company recorded a loss on disposal of subsidiaries of $1,069,675 during the year ended December 31, 2014. Due to the nature of the Acquisition and related Hive Out Agreement, the transaction did not result in any adjustments with a continuing impact on the Company’s results of operations. 2015 Asset Purchase Agreement In November 2015, the Company entered into the APA with Kevelt and Pharmsynthez, parent of Kevelt. Pursuant to the APA, the Sellers Kevelt will transfer to the Company certain intellectual property rights held by the Sellers with respect to the immunomodulatory product candidate Virexxa® held by Kevelt and the Sellers will grant the Company the worldwide right to develop, market and license Virexxa® for certain uses except for excluded uses in Russia, the Commonwealth of Independent States and certain other countries. In consideration, the Company will issue to Pharmsynthez 100.5 million shares of the Company’s common stock. Also as part of the APA, Dr. Dmitry Genkin and Kirill Surkhov, shareholders and founders of Pharmsynthez, will assign a U.S. provisional patent application to the Company in exchange for 11 million shares of the Company’s common stock. During December 2015, the 11 million shares were issued to Dr. Genkin and Mr. Surkhov under the terms of the APA. However, as of December 31, 2015, the APA transaction was not yet consummated and is contingent upon the parties meeting their respective closing conditions as set forth in the APA. As a result, the Company recorded approximately $3.74 million, the fair value of the proportional consideration provided, as a prepayment within current assets on the consolidated balance sheet as of December 31, 2015. The APA also provides for the Company’s issuance of 10% Senior Secured Convertible Promissory Notes of up to $3.5 million to Pharmsynthez and certain warrants to purchase shares of the Company’s common stock. In connection with the APA, certain terms in the SPA with Pharmsynthez issued in July 2015 were modified. See Note 8, Hybrid Debt Instrument Stockholders’ Equity There is also a provision in the APA for the contingent sale of up to $6.5 million of the Company’s common stock in the event of a qualifying capital raise. The APA transaction is expected to be completed during 2016. |
4. Significant Strategic Drug D
4. Significant Strategic Drug Development Collaborations - Related Parties | 12 Months Ended |
Dec. 31, 2015 | |
Significant Strategic Drug Development Collaborations - Related Parties | |
Significant Strategic Drug Development Collaborations - Related Parties | Baxalta Incorporated In August 2005, the Company entered into an exclusive research, development, license and supply agreement with Baxter Healthcare SA (“Baxter SA”) and Baxter Healthcare Corporation (together referred to as “Baxter”) to develop products with an extended half-life of certain proteins and molecules using the Company’s patent protected PolyXen™ technology whereby polysialic acid (“PSA” – a chain of polysialic acids) is conjugated with Baxter’s proprietary molecule(s) to create a new generation of drugs to treat the failure of blood to coagulate in the therapeutic treatment of blood and bleeding disorders, such as hemophilia. The lead candidate in this collaboration is a longer-acting form of a recombinant Factor VIII (“rFVIII”) protein. During June 2015, in connection with the separation of its biopharmaceuticals business to form Baxalta Incorporated (“Baxalta”), Baxter assigned all of its rights and obligations under its existing agreement with the Company to Baxalta. This agreement has been amended several times since 2005, most recently in January 2014. The January 2014 amendment provides for increased future development, regulatory, sales and deadline extension receipts, restructured target deadlines and royalty receipts on potential net sales. The Company is entitled to up to $100 million in potential development, regulatory, sales and deadline extension receipts, which are contingent on the performance of Baxalta achieving certain milestones. The Company is also entitled to royalties on potential net sales varying by country of sale. The Company’s right to receive these royalties in any particular country will expire upon the later of ten years after the first commercial sale of the product in that country or the expiration of patent rights in that particular country. In connection with this amendment, Baxter SA also made a $10 million equity investment in the Company in exchange for 10,695,187 shares of the Company’s common stock during January 2014. Through December 31, 2015, the Company and Baxalta continued to engage in research and development activities with no resultant commercial products. The Company did not recognize revenue in connection with this collaboration during the years ended December 31, 2015 and 2014. Baxalta is a related party of the Company, with a share ownership of approximately 8.0% and 8.7% of the total issued common stock of the Company as of December 31, 2015 and 2014, respectively. SynBio LLC In August, 2011, SynBio LLC (“SynBio”) and the Company entered into a stock subscription and collaborative development of pharmaceutical products agreement (the “Co-Development Agreement”). The Company granted an exclusive license to SynBio to develop pharmaceutical products using certain molecule(s) based on SynBio’s technology and the Company’s proprietary technology (PolyXen™, OncoHist™ and ImuXen™) that prolongs the active life and/or improves the pharmacokinetics of certain therapeutic proteins and peptides (as well as conventional drugs). In return, SynBio granted an exclusive license to the Company to use the pre-clinical and clinical data generated by SynBio in certain agreed products and engage in the development of commercial candidates. SynBio and the Company are each responsible for funding their own research activities. There are no milestone or other research-related payments due under the agreement other than fees for the supply of each company’s respective research supplies based on their technology, which, when provided, are due to mutual convenience and not representative of an ongoing or recurring obligation to supply research supplies. Most recently, similar to the Company’s agreement with Baxalta, Serum Institute of India Limited (“Serum Institute”) has agreed to directly provide the research supplies to SynBio, where the Company is not liable for any failure to supply the research supplies as a result of any act or fault of Serum Institute’s. Upon successful commercialization of any resultant products, the Company is entitled to receive royalties on sales in certain territories and pay royalties to SynBio for sales outside those certain territories. Through December 31, 2015, the Company and SynBio continued to engage in research and development activities with no resultant commercial products. The Company did not recognize revenue in connection with the Co-Development Agreement during the years ended December 31, 2015 and 2014. SynBio is an affiliate of the Company, with a share ownership of approximately 39.0% and 41.6% of the total issued common stock of the Company as of December 31, 2015 and 2014, respectively. On December 31, 2014, the Company granted SynBio a warrant to purchase 6,745,000 shares of common stock in connection with ongoing collaborative activities. See Note 9, Stockholders’ Equity Serum Institute of India Limited In the period from 2004 through 2011, the Company entered into and amended certain license and supply agreements with Serum Institute. The original license agreement with Serum Institute was a collaborative Development and Manufacturing Arrangement (“DMA”) to develop agreed upon potential commercial product candidates using the Company’s PolyXen ™ Following the 2011 amendment, Serum Institute retained an exclusive license to use the Company’s PolyXen™ technology to research and develop one potential commercial product, Polysialylated Erythropoietin (“PSA-EPO”). Serum Institute will be responsible for conducting all pre-clinical and clinical trials required to achieve regulatory approvals within the certain predetermined territories at Serum Institute’s own expense. The royalty payment schedule based on net revenues on the future commercial sales of PSA-EPO under the DMA was also modified as a result of the 2011 amendment. Royalty payments are payable by Serum Institute to the Company for net sales to certain customers in the Serum Institute sales territory. Royalty payments are payable by the Company to Serum Institute for net sales received by the Company over the term of the license. There are no milestone or other research-related payments due under the DMA. Through December 31, 2015, the Company and Serum Institute continued to engage in research and development activities with no resultant commercial products. No royalty revenue or expense was recognized by the Company related to the Serum Institute arrangement during the years ended December 31, 2015 and 2014. Serum Institute is a related party of the Company, with a share ownership of approximately 8.5% and 9.2% of the total issued common stock of the Company as of December 31, 2015 and 2014, respectively. On December 31, 2014, the Company granted Serum Institute a warrant to purchase 3,200,000 shares of common stock in connection with ongoing collaborative activities. See Note 9, Stockholders’ Equity OJSC Pharmsynthez In November 2011, the Company entered into a collaborative research and development license agreement with OJSC Pharmsynthez (the “Pharmsynthez Arrangement”) pursuant to which the Company granted an exclusive license to Pharmsynthez to develop, commercialize and market six product candidates based on the Company’s PolyXen™ and ImuXen™ technology in certain territories. In exchange, Pharmsynthez granted an exclusive license to the Company to use any pre-clinical and clinical data developed by Pharmsynthez, within the scope of the Pharmsynthez Arrangement, and to engage in further research, development and commercialization of drug candidates outside of certain territories at the Company’s own expense. In July 2015, the Company entered into the SPA with Pharmsynthez providing for the issuance of certain promissory notes and certain warrants to purchase shares of the Company’s common stock. See Note 8, Hybrid Debt Instrument Stockholders’ Equity In November 2015, the Company entered into the APA with the Sellers. Pursuant to the APA, Kevelt will transfer to the Company certain intellectual property rights with respect to the immunomodulatory product candidate Virexxa® held by Kevelt. See Note 3, Acquisitions Stockholders’ Equity Pharmsynthez is a related party of SynBio, which is an affiliate of the Company. In addition, one of the Company’s directors is also a director of SynBio and Pharmsynthez. |
5. Property and Equipment, net
5. Property and Equipment, net | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and equipment, net consists of the following: December 31, December 31, Laboratory equipment $ 249,969 $ 254,150 Office and computer equipment 35,190 189,459 Leasehold improvements 26,841 92,354 Furniture and fixtures 20,263 50,150 Property and equipment 332,263 586,113 Less accumulated depreciation (270,242 ) (466,664 ) Property and equipment – net $ 62,021 $ 119,449 In connection with the closing of the London office in March 2015, the Company disposed of approximately $247,000 of depreciated fixed assets with a net book value of approximately $6,000 for cash proceeds of approximately $8,000, resulting in a gain of approximately $2,000. Depreciation expense was $48,750 and $83,863 for the years ended December 31, 2015 and 2014, respectively. |
6. Goodwill and Indefinite-Live
6. Goodwill and Indefinite-Lived Intangible Assets | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Indefinite-Lived Intangible Assets | Goodwill A reconciliation of the change in the carrying value of goodwill is as follows: Balance as of January 1, 2014 $ 3,665,199 Acquired from acquisitions 4,129,248 Disposed with Hive Out Agreement (4,129,248 ) Foreign currency translation (200,042 ) Balance as of December 31, 2014 $ 3,465,157 Foreign currency translation (181,778 ) Balance as of December 31, 2015 $ 3,283,379 The goodwill acquired from the Acquisition was disposed in connection with the Hive Out Agreement. See Footnote 3, Acquisitions Indefinite-Lived Intangible Assets The Company’s acquired indefinite-lived intangible asset, OncoHist™, is IPR&D relating to the Company’s business combination with SymbioTec in 2012. The carrying value of OncoHist™ was $9.24 million and $9.75 million as of December 31, 2015 and 2014, respectively. No impairment was recorded during the years ended December 31, 2015 and 2014. The changes in the carrying value reflected herein are solely comprised of the effects of changes in foreign currency. OncoHist™ is not yet commercialized and has not yet begun to be amortized as of December 31, 2015. |
7. Accrued Expenses
7. Accrued Expenses | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued expenses consist of the following: December 31, December 31, Accrued payroll and benefits $ 625,289 $ 67,120 Accrued professional fees 413,945 574,186 Accrued research costs 145,026 573,879 Accrued interest 77,857 – Other 224,929 194,506 $ 1,487,046 $ 1,409,691 |
8. Hybrid Debt Instrument
8. Hybrid Debt Instrument | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Hybrid Debt Instrument | Securities Purchase Agreement On July 1, 2015, the Company entered into the SPA with Pharmsynthez providing for the issuance of a minimum of a $3 million 10% Senior Secured Collateralized Convertible Promissory Note (the “SPA Note”). The SPA also provides for the issuance of certain warrants up to the amount of the SPA Note. See Note 11, Stockholders’ Equity On July 1, 2015, the Company issued the SPA Note for $3 million plus a warrant to purchase 10 million shares of common stock in accordance with the terms of the SPA. In the event the SPA Note remains outstanding at April 1, 2016, Pharmsynthez will be granted an additional warrant to purchase $10 million shares of common stock. The SPA Note carries a term of one year and is convertible, in whole or in part, at the option of Pharmsynthez into shares of common stock at a conversion price of $0.15. The SPA Note bears interest at the rate of 10% annually, payable quarterly in cash or, at the Company’s option, in shares of common stock at the lessor of $0.15 or the then applicable conversion price. At any point after six months following the issuance of the SPA Note, but before the maturity date of the SPA Note, the Company has the option of prepayment of the SPA Note and any accrued interest. If the Company exercises the prepayment option, the Company is obligated to pay the outstanding principal amount of the SPA Note and accrued interest multiplied by 115%. If the SPA Note is converted or redeemed, prior to the maturity date, the Company will pay cash to Pharmsynthez equal to the interest that would have accrued from the conversion or redemption date to the maturity date. Upon a qualifying capital raise in which the Company obtains financing of $7 million or greater (“Capital Raise”), Pharmsynthez has the option to either redeem the SPA Note for cash at the balance of principal plus accrued interest multiplied by 115% or convert the principal plus accrued interest multiplied by 115% into common stock at the effective conversion price. In the event of default, as defined under the terms of the SPA Note, all obligations will be immediately due and payable and the interest rate will increase to 18% annually. The Company determined these two features represent contingent put options for Pharmsynthez. The Company concluded the two contingent put option features related to a Capital Raise and event of default, the SPA Note conversion feature and the ability for interest to be paid in shares of common stock feature each meet the definition of a derivative under ASC Topic 815, Derivatives and Hedging The fair value of the compound derivative is remeasured at each report date until settled, with changes in fair value recognized in the consolidated statement of comprehensive loss as a gain or loss on derivative. The fair value of the compound derivative increased $2.1 million since issuance to $3.5 million as of December 31, 2015. This change was recognized as a loss in Other Expense in the consolidated statement of comprehensive loss for the year ended December 31, 2015. The key assumptions used to calculate the estimated fair value of the compound derivative liability at issuance and as of December 31, 2015 are as follows: December 31, 2015 July 1, 2015 Company stock price $ 0.51 $ 0.22 Expected volatility (%) 105 % 115 % Risk-free interest rate (%) 0.65 % 0.28 % The offset to debt arising from the recording of the compound derivative liability, the warrants and the associated issuance costs exceeded the debt proceeds by approximately $60,000. This amount was recorded as a loss in Other Expense in the consolidated statement of comprehensive loss for the year ended December 31, 2015. Interest expense related to the SPA Note of approximately $154,000 was recognized in Interest Expense in the consolidated statement of comprehensive loss for the year ended December 31, 2015. Of this amount, approximately $78,000 is recorded as accrued interest on the hybrid debt instrument and approximately $76,000 was settled in shares of issuable common stock as of December 31, 2015, as provided in the APA. The Company also evaluated the provision in the SPA Note that increases the annual interest rate in the event of default and concluded that the initial value of this contingent feature is immaterial to the consolidated financial statements as of December 31, 2015. The Company will evaluate the value of this contingent feature at each reporting period. Asset Purchase Agreement In November 2015, the Company entered into the APA with Kevelt and Pharmsynthez providing for the issuance of 10% Senior Secured Convertible Promissory Notes of up to $3.5 million to Pharmsynthez (the “APA Notes”) and warrants to purchase a number of shares of the Company’s common stock equal to 50% of the number of shares issuable under the APA Notes. In the event that the APA Notes remain outstanding at May 11, 2016, Pharmsynthez shall be granted an additional warrant to purchase an additional number of shares of the Company’s common stock equal to 50% of the number of shares issuable under the APA Notes. The APA Notes will be issued under similar terms and conditions as the SPA Note. No APA Notes were issued by the Company during the year ended December 31, 2015. |
9. Fair Value Measurements
9. Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | ASC Topic 820, Fair Value Measurement, The Company’s cash and restricted cash are measured at fair value are classified as Level 1 in the fair value hierarchy. The carrying amount of certain of the Company’s financial instruments approximate fair value due to their short maturities. The Company’s derivative liabilities are measured at fair value on a recurring basis and are classified as Level 3 in the fair value hierarchy. The following table provides a summary of the changes in fair value of the compound derivative measured at fair value on a recurring basis using significant unobservable inputs during the year ended December 31, 2015. Balance as of January 1, 2015 $ – Issuance of compound derivative instrument (1,419,105 ) Change in fair value of compound derivative instrument (2,125,117 ) Balance as of December 31, 2015 $ (3,544,222 ) There were no financial instruments classified as Level 3 in the fair value hierarchy during the year ended December 31, 2014. |
10. Income Taxes
10. Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | The Company accounts for income taxes using the liability method under ASC Topic 740, Income Taxes The components of (loss) before income taxes are as follows: Year ended December 31, 2015 2014 Domestic (U.S.) $ (7,724,418 ) $ (4,040,654 ) Foreign (U.K.) (4,767,363 ) (10,003,427 ) Foreign (Germany) (15,690 ) (263,023 ) Loss before income taxes $ (12,507,471 ) $ (14,307,104 ) The reconciliation of income tax provision (benefit) at the U.S. corporation tax rate, being the rate applicable to the country of domicile of Xenetic Biosciences, Inc. to net income tax provision (benefit) is as follows: Year ended December 31, 2015 2014 Federal $ (4,252,540 ) $ (4,860,256 ) State (276,601 ) (145,209 ) Increase in tax losses not recognized 2,238,879 4,949,805 Permanent differences, net 800,891 (1,529,190 ) Mark to market 722,540 – Foreign rate differential 502,357 1,184,770 Share-based payments, net 308,888 505,035 Other – 7,273 Enhanced research and development tax credits (44,414 ) (112,228 ) Net provision (benefit) for income taxes $ – $ – Deferred tax assets and liabilities reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets are as follows: Year ended December 31, 2015 2014 Deferred tax assets: U.K. net operating loss carryforwards $ 9,402,398 $ 9,198,798 U.K. capital loss carryforwards 1,775,932 1,874,254 U.S. federal net operating loss carryforwards 1,659,050 923,816 Share-based payments 1,313,226 52,320 Enhanced research and development tax credits 852,272 786,342 Germany net operating loss carryforwards 401,906 393,638 U.S. state net operating loss carryforwards 422,622 233,825 Accrued expenses 44,557 157,329 Depreciation 25,823 37,703 Other 4,998 115,384 Total deferred tax assets before valuation allowance 15,902,784 13,773,409 Deferred tax liabilities: Indefinite-lived intangible asset (2,918,518 ) (3,080,096 ) Debt discount (578,346 ) – Total deferred tax liabilities (3,496,864 ) (3,080,096 ) Less valuation allowance (15,324,438 ) (13,773,409 ) Total net deferred tax liability $ (2,918,518 ) $ (3,080,096 ) For the years ended December 31, 2015 and 2014, the Company had U.K. net operating loss carryforwards of $47.01 million and $45.99 million, respectively, U.S. federal net operating loss carryforwards of $5.30 million and $2.95 million, respectively, U.S. state net operating loss carryforwards of $5.28 million and $2.92 million, respectively, and Germany net operating loss carryforwards of approximately $1.27 million and $1.25 million, respectively. The U.K. and Germany net operating loss carryforwards can be carried forward indefinitely. The U.S. federal and state net operating loss carryforwards begin to expire in 2032. The Company’s ability to use its operating loss carryforwards and tax credits generated in the U.S. to offset future taxable income is subject to restrictions under Section 382 of the United States Internal Revenue Code (the “Internal Revenue Code”). These restrictions may limit the future use of the operating loss carryforwards and tax credits if certain ownership changes described in the Internal Revenue Code occur. Future changes in stock ownership may occur that would create further limitations on the Company’s use of the operating loss carryforwards and tax credits. In such a situation, the Company may be required to pay income taxes, even though significant operating loss carryforwards and tax credits exist. The Company’s ability to use its operating loss carryforwards and tax credits generated in the U.K. are subject to restrictions under U.K. tax legislation. These regulations may limit the future use of operating loss carryforwards if there is a change in ownership and a change in the nature or conduct of the business carried on by the Company, and in certain circumstances where there is a change in the nature or conduct of the business only. In such cases the carryforwards would cease to be available to set against future income. The Company’s ability to use its operating loss carryforwards and tax credits generated in Germany are also subject to restrictions under German tax legislation. These regulations may limit the future use of operating loss carryforwards if there is a change in ownership. In such cases the carryforwards would cease to be available to set against future income. As of December 31, 2015 and 2014, the Company did not record any uncertain tax positions. As of January 1, 2014, the Company had recorded an uncertain tax position due to a claim for research and development tax credits with a full valuation allowance. During 2014, the Company determined that it is unable to obtain and compile the necessary information to support and defend the recoverability of the research and development tax credits, resulting in the write-off of the previously fully reserved balance. The changes to uncertain tax positions for 2015 and 2014 were as follows: Year ended December 31, 2015 2014 Uncertain tax benefits as of January 1 $ – $ 185,961 Gross adjustments in tax positions – (185,961 ) Uncertain tax positions as of December 31 $ – $ – The Company files income tax returns in the U.S. federal tax jurisdiction and Massachusetts state tax jurisdiction, and certain foreign tax jurisdictions. The Company is subject to examination by the U.S. federal, state, foreign, and local income tax authorities for calendar tax years ending 2012 through 2015 due to available net operating loss carryforwards and research and development tax credits arising in those years. The Company has not been notified of any examinations by the Internal Revenue Service or any other tax authorities as of December 31, 2015. The Company has not recorded any interest or penalties for unrecognized tax benefits since its inception. Potential 382 Limitation The Company’s net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service. The Company’s ability to utilize our net operating loss (“NOL”) and alternative minimum tax (“AMT”) and research and development credit (“R&D”) carryforwards may be substantially limited due to ownership changes that may have occurred or that could occur in the future, as required by Section 382 of the Internal Revenue Code of 1986, as amended (the “Code”), as well as similar state provisions. These ownership changes may limit the amount of NOL, AMT and R&D credit carryforwards that can be utilized annually to offset future taxable income and tax, respectively. In general, an ownership change, as defined in Section 382 of the Code, results from a transaction or series of transactions over a three-year period resulting in an ownership change of more than 50% of the outstanding stock of a company by certain stockholders or public groups. The Company has not completed a study to assess whether one or more ownership changes have occurred since we became a loss corporation as defined in Section 382 of the Code, but we believe that it is likely that an ownership change has occurred. If we have experienced an ownership change, utilization of the NOL, AMT and R&D credit carryforwards would be subject to an annual limitation, which is determined by first multiplying the value of our common stock at the time of the ownership change by the applicable long-term, tax-exempt rate, and then could be subject to additional adjustments, as required. Any such limitation may result in the expiration of a portion of the NOL, AMT or R&D credit carryforwards before utilization. Until a study is completed and any limitation known, no amounts are being considered as an uncertain tax position or disclosed as an unrecognized tax benefit under ASC 740. Any carryforwards that expire prior to utilization as a result of such limitations will be removed from deferred tax assets with a corresponding adjustment to the valuation allowance. Due to the existence of the valuation allowance, it is not expected that any potential limitation will have a material impact on our operating results. From time to time the Company may be assessed interest or penalties by major tax jurisdictions, namely the state of Massachusetts. As of December 31, 2015, the Company had no material unrecognized tax benefits and no adjustments to liabilities or operations were required. No interest and penalties have been recognized by the Company to date. The Company net operating loss carryforwards are subject to review and possible adjustment by the Internal Revenue Service and are subject to certain limitations in the event of cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%. |
11. Stockholders' Equity
11. Stockholders' Equity | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Stockholders' Equity | Common Stock Each share of common stock entitles the holder to one vote on all matters submitted to a vote of the Company’s stockholders. Common stockholders are entitled to dividends when and if declared by the Board of Directors. In the event of any voluntary or involuntary liquidation, dissolution or winding-up of the Company, the holders of common stock are entitled to share ratably in the assets of the Company available for distribution. On September 30, 2015, the Company filed an Amendment to the Articles of Incorporation with the Secretary of State of the State of Nevada to increase the authorized shares of common stock of the Company and change the par value per share of common stock (the “Amendment”). The Amendment authorizes the Company to issue 1,500,000,000 shares of Common Stock and changes the par value to $0.001 per share. Prior periods have been reclassified to reflect the change in the par value per share to conform to the presentation in the present period. On January 30, 2014, the Company announced the amendment of the licensing agreement with Baxter in which certain financial and timing aspects of the agreement were modified. As a result, the Company is entitled to receive certain amounts in development, regulatory and sales milestone payments as well as increased royalties on potential net sales. In addition, Baxter SA made a direct equity investment of $10 million in cash in exchange for 10,695,187 shares of the Company’s common stock. During June 2015, in connection with the separation of its biopharmaceuticals business to form Baxalta Incorporated (“Baxalta”), Baxter assigned all of its rights and obligations under its existing agreement with the Company to Baxalta. In December 2015, 11 million shares of new common stock were issued to Dr. Genkin and Mr. Surkhov in connection with the APA. As a result, the Company recorded approximately $3.74 million, the fair value of the proportional consideration provided, as a prepayment within current assets on the consolidated balance sheet as of December 31, 2015. Warrants In connection with the Company’s collaboration and consultant agreements and financing arrangements, the Company issues warrants to purchase shares of common stock. These warrants were fair valued at issuance date using the Black-Scholes option pricing model. The warrants are subject to re-measurement at each reporting period until the measurement date is reached. Expense is recognized on a straight-line basis over the expected service period or at the date of issuance, if there is not a service period. Warrants Related to Collaboration and Consulting Agreements In 2010, the Company granted Baxter SA a warrant to purchase 4,588,298 new shares of common stock. During June 2015, in connection with the separation of its biopharmaceuticals business to form Baxalta, Baxter assigned the warrant to Baxalta. The warrant was exercisable immediately after issuance and had an initial expiration date of June 30, 2015, which the Company expects to extend subsequent to December 31, 2015. These warrants, which were fair valued at $932,000 at the time of issuance, were not exercised during the years ended December 31, 2015 and 2014. In 2011, the Company granted SynBio a warrant to purchase 3,545,600 new shares of common stock, which was exercisable two years after issuance and expires on December 2, 2016 (“SynBio 2011 Warrant”). On December 31, 2014, SynBio was granted a warrant to purchase 6,745,000 new shares of common stock at an exercise price of $0.77 per share (“SynBio 2014 Warrant”). The SynBio 2014 Warrant is exercisable in four equal tranches, each with separate non-market, performance-based vesting criteria. The Company uses its judgment to assess the probability and timing of SynBio achieving this vesting criteria and estimated that it is not probable that the vesting criteria for any tranche will be achieved. As a result, the Company did not recognize expense related to this warrant during the years ended December 31, 2015 and 2014. These judgments are reassessed at each reporting period until the measurement date is reached. Upon issuance of the SynBio 2014 Warrant on December 31, 2014, the SynBio 2011 Warrant was canceled and of no further force and effect. In connection with the SynBio 2014 Warrant grant, warrants to purchase 320,000 aggregate new shares of common stock were issued to SynBio and Pharmsynthez non-director designees (“SynBio Partner Warrants”) on December 31, 2014 under the same terms and conditions of the SynBio 2014 Warrant. The Company estimated that it is not probable that the vesting criteria for any trance will be achieved and, as a result, the Company did not recognize expense related to the SynBio Partner Warrants during the years ended December 31, 2015 and 2014. The SynBio 2014 Warrant and SynBio Partner Warrants expire on December 30, 2019 and no warrants were exercised during the years ended December 31, 2015 and 2014. On December 31, 2014, the Company granted Serum Institute a warrant to purchase 3,200,000 new shares of common stock at an exercise price of $0.77 per share (“Serum Institute 2014 Warrant”). The Serum Institute 2014 Warrant, which was fair valued at approximately $480,000 at the time of issuance, is exercisable in two equal tranches, each with separate non-market, performance-based vesting criteria. The Company uses its judgment to assess the probability and timing of Serum Institute achieving this vesting criteria and estimated that it is probable that the vesting criteria will be achieved for each tranche. These judgments are reassessed at each reporting period until the measurement date is reached. In connection with the Serum Institute 2014 Warrant grant, warrants to purchase 160,000 aggregate new shares of common stock were issued to Serum Institute employees (“Serum Institute Partner Warrants”) on December 31, 2014 under the same terms and conditions of the Serum Institute 2014 Warrant. The Serum Institute Partner Warrants were fair valued at approximately $24,000 at the time of issuance. The Company recognized warrant expense of $706,500 and zero during the years ended December 31, 2015 and 2014, respectively, related to the Serum Institute 2014 Warrant and Serum Institute Partner Warrants. The Serum Institute 2014 Warrant and Serum Institute Partner Warrants expire on December 30, 2019 and no warrants were exercised during the years ended December 31, 2015 and 2014. On December 31, 2014, the Company granted a non-employee director a warrant to purchase 1,600,000 new shares of common stock at an exercise price of $0.77 per share for services provided to the Company. The warrant is a standalone instrument that is not puttable or mandatorily redeemable by the holder and is classified as an equity award. The Company determined that the fair value of the warrant is more reliably measureable than the fair value of the services received. As a result, the warrant was fair valued at approximately $240,000 at the time of issuance. As performance was completed and the measurement date reached at the time of issuance, the Company recorded expense of approximately $240,000 to general and administrative expenses in the consolidated statement of comprehensive loss during the year ended December 31, 2014. The warrant is exercisable two years after issuance and expires on December 30, 2019. In August 2015, the Company issued a warrant to purchase approximately 833,000 shares of common stock to a consultant upon engagement of services to be provided to the Company. The warrant has a term of five years and an exercise price of $0.77. The warrant is a standalone instrument that is not puttable or mandatorily redeemable by the holder and is classified as an equity award. The Company determined that the fair value of the warrant is more reliably measureable than the fair value of the services received. As a result, the warrant was fair valued at approximately $227,000 at the time of issuance using the Black-Scholes option pricing model. As all services were completed as of December 31, 2015, the warrant expense was recognized during the year ended December 31, 2015. Key assumptions used in the Black-Scholes option pricing model for warrants related to collaboration and consultant agreements granted during the years ended December 31, 2015 and 2014 are as follows: 2015 2014 Weighted-average expected dividend yield (%) – – Weighted-average expected volatility (%) 104.81 103.32 Weighted-average risk-free interest rate (%) 1.03 0.96 Weighted-average expected life of option (years) 5.00 5.00 Weighted-average exercise price ($) 0.77 0.77 Model used Black-Scholes Black-Scholes Warrants Related to Financing Arrangements In connection with the Company’s issuance of the SPA Note on July 1, 2015, the Company issued a warrant to purchase 10 million shares of common stock in accordance with the terms of the SPA (the “Warrant”). The Warrant has a five-year term and is exercisable commencing January 1, 2016. The exercise price per share under the Warrant is the lessor of $0.20 or 120% of the Capital Raise price, in the event there is a Capital Raise. If the SPA Note is not repaid or converted on or before six months from the date of issuance, the Holder will be issued an additional warrant to purchase 10 million shares of common stock under the same terms as the Warrant (the “Contingent Warrant”, or together referred to as the “Warrants”). The Company determined there is a high probability that the SPA Note will not be repaid or converted within the period six months from the date of issuance, resulting in the issuance of the Contingent Warrant. As such, the Company concluded the Contingent Warrant is considered to be issued and outstanding as of the SPA Note issuance date in accordance with ASC 815. The fair values of the Warrants were calculated using the Black-Scholes option pricing model. The key valuation assumptions used consist of the Company’s stock price, a risk free rate of 1.70% and an expected volatility of 125%. Using an allocation of the SPA Note proceeds between the relative fair values of the Warrants and the SPA Note, the Company recorded the Warrants at a value of $1.6 million on the consolidated balance sheet as equity paid-in-capital. This created a debt discount of $1.6 million that will amortize from the date of issuance through the term of the SPA Note. In November 2015, the Company entered into the APA with Kevelt and Pharmsynthez, which provided for the issuance of certain warrants to purchase a number of share of the Company’s common stock equal to 50% of the number of shares issuable under the APA Notes. In the event that the APA Notes remain outstanding at May 11, 2016, Pharmsynthez shall be granted an additional warrant to purchase an additional number of shares of the Company’s common stock equal to 50% of the number of shares issuable under the APA Notes. The warrants will be issued under the same terms and conditions as the warrants under the SPA. No warrants under the APA were issued by the Company during the year ended December 31, 2015. |
12. Share-Based Payments
12. Share-Based Payments | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Payments | Total share-based payments related to employee and non-employee stock options, common stock awards and JSOP awards was $2,594,113 and $1,513,238 for the years ended December 31, 2015 and 2014, respectively. Share-based payments is classified in the consolidated statements of comprehensive loss as follows: Year Ended December 31, 2015 2014 Research and development expenses $ 229,964 $ 952,829 General and administrative expenses 2,364,149 560,409 $ 2,594,113 $ 1,513,238 Stock Option Modifications Prior to the Acquisition in 2014, the Company had two incentive stock plans, the Lipoxen plc Unapproved Share Option Plan (the “2000 Stock Plan”) and the Xenetic Biosciences plc 2007 Share Option Scheme (the “2007 Stock Plan”). Subsequent to the Acquisition, the 2000 and 2007 Stock Plans were converted to reflect the new shares issued by the Company under the Scheme of Arrangement related to the Acquisition. As part of the conversion, option holders under the 2000 and 2007 Stock Plan have the right to subscribe for a number of shares of common stock in the Company (the “Replacement Option Shares”) in exchange for the cancellation and surrender by the option holder of the original options granted by the 2000 and 2007 Stock Plans. The number of Replacement Option Shares is determined in the same manner in which the shareholders of Xenetic UK were given the right to acquire shares of common stock in the Company according to the Acquisition. The aggregate exercise price payable in U.S. dollars for Replacement Option Shares is the same as the aggregate exercise price in pounds sterling of the original options, using a foreign currency exchange rate for pounds sterling into U.S. dollars quoted by Barclays Bank plc at 12 noon Greenwich Mean Time (“GMT”) on January 23, 2014, the date of the Acquisition. The conversion of the options is treated as an option modification. The Company accounted for the option modification under ASC Topic 718, Compensation – Stock Compensation During the year ended December 31, 2015, the Company modified 688,408 employee stock option awards to extend the expiry dates through March 31, 2016. The Company accounted for the option modification under ASC Topic 718, Compensation – Stock Compensation Stock Options The Company grants stock option awards to employees and non-employees with varying vesting terms under the Xenetic Biosciences, Inc. Equity Incentive Plan (“Stock Plan”). The Company measures the fair value of stock option awards using the Black-Scholes option pricing model, which uses the assumptions noted in the tables below, including the risk-free interest rate, expected term, share price volatility, dividend yield and forfeiture rate. The risk-free interest rate is based upon the U.S. Treasury yield curve in effect at the time of grant, with a term that approximates the expected life of the option. For employee stock options issued in 2015 and 2014 that qualify as “plain vanilla” stock options in accordance with Staff Accounting Bulletin No. 110 (“SAB 110”), the expected term is based on the simplified method, as defined by SAB 110. The Company has a limited history of stock option exercises, which does not provide a reasonable basis for the Company to estimate the expected term of employee stock options. For all other employee stock options, the Company estimates the expected life using judgment based on the anticipated research and development milestones of the Company’s clinical projects and behaviour of the Company’s employees. The expected life of non-employee options is the contractual life of the option. The Company determines the expected volatility based on a blended volatility rate of its own historical volatility with that of comparable publicly traded companies with product candidates in similar therapeutic areas and stages of nonclinical and clinical development to the Company’s product candidates. The Company has applied an expected dividend yield of 0% as the Company has not historically declared a dividend and does not anticipate declaring a dividend during the expected life of the options. Further, the Company has applied a forfeiture rate of 0% as the Company has not historically experienced forfeitures. Employee Stock Options During the years ended December 31, 2015 and 2014, 16.3 million and 1.08 million total stock options to purchase shares of common stock were granted under the Stock Plan, respectively, with a weighted average grant date fair value per option share of $0.28 and $0.23, respectively. During the year ended December 31, 2014, 1,984,080 stock options were exercised and cash received from those stock option exercises was $101,933. No stock options were exercised during the year ended December 31, 2015. During the year ended December 31, 2015 and 2014, 5.33 million and 0.68 million total stock options vested, with total fair values of $1,391,450 and $115,864, respectively. As of December 31, 2015, there was $2,931,117 of unrecognized share-based payments related to employee stock options that are expected to vest. The Company expects to recognize this expense over a weighted-average period of approximately 2 years. Key assumptions used in the Black-Scholes option pricing model for options granted to employees during the years ending December 31, 2015 and 2014 are as follows: Year Ended December 31, 2015 2014 Weighted-average expected dividend yield (%) – – Weighted-average expected volatility (%) 124.17 103.36 Weighted-average risk-free interest rate (%) 0.44 1.48 Weighted-average expected life of option (years) 2.50 5.33 Weighted-average exercise price ($) 0.42 0.31 Model used Black-Scholes Black-Scholes The following is a summary of employee stock option activity for the years ended December 31, 2015 and 2014: Number of shares Weighted-average exercise price Weighted-average remaining life (years) Aggregate intrinsic value Outstanding as of January 1, 2014 5,222,430 0.47 Granted 1,080,000 0.31 Exercised (1,984,080 ) 0.05 $ 509,622 Expired (132,422 ) 0.93 Outstanding as of December 31, 2014 4,185,928 0.62 6.86 $ 80,338 Granted 16,300,000 0.42 Expired (51,072 ) 0.47 Outstanding as of December 31, 2015 20,434,856 0.46 8.92 $ 1,915,942 Vested or expected to vest as of December 31, 2015 20,434,856 0.46 8.92 $ 1,915,942 Exercisable as of December 31, 2014 2,630,024 $ 0.60 5.48 $ 80,338 Exercisable as of December 31, 2015 7,913,567 $ 0.52 7.78 $ 688,343 A summary of the status of the Company’s non-vested employee stock option shares as of December 31, 2015 and the changes during the year ended December 31, 2015 is as follows: Number of shares Weighted-average grant date fair value Balance as of January 1, 2015 1,555,904 $ 0.15 Granted 16,300,000 $ 0.28 Vested (5,334,615 ) $ 0.26 Balance as of December 31, 2015 12,521,289 $ 0.28 Non-Employee Stock Options Share-based payments expense related to stock options granted to non-employees is recognized as the services are rendered on a straight-line basis. The Company determined that the fair value of the stock options is more reliably measurable than the fair value of the services received. Compensation expense related to stock options granted to non-employees is subject to re-measurement at each reporting period until the options vest. During the years ended December 31, 2015 and 2014, 1 million and 0.48 million non-employee stock options were granted under the Stock Plan, respectively, with a weighted average grant date fair value per option share of $0.40 and $0.23, respectively. No non-employee stock options were exercised during years ended December 31, 2015 and 2014. During the year ended December 31, 2015 and 2014, 0.59 million and 0.26 million total stock options vested, with total fair values of $195,575 and $62,121, respectively. As of December 31, 2015, there was $263,778 of unrecognized share-based payments related to non-employee stock options that are expected to vest. The Company expects to recognize this expense over a weighted-average period of approximately 1.5 years. Key assumptions used in the Black-Scholes option pricing model for non-employees options during the years ended December 31, 2015 and 2014 are as follows: Year Ended December 31, 2015 2014 Weighted-average expected dividend yield (%) – – Weighted-average expected volatility (%) 120.51 116.22 Weighted-average risk-free interest rate (%) 1.54 1.62 Weighted-average expected life of option (years) 10.00 7.60 Weighted-average exercise price ($) 0.42 0.39 Model used Black-Scholes Black-Scholes The following is a summary of non-employee stock option activity for the years ended December 31, 2015 and 2014: Number of shares Weighted-average exercise price Weighted-average remaining life (years) Aggregate intrinsic value Outstanding as of January 1, 2014 415,520 $ 0.52 5.90 $ 49 Granted 480,000 0.25 Outstanding as of December 31, 2014 895,520 0.39 7.60 $ 159 Granted 1,000,000 0.42 Outstanding as of December 31, 2015 1,895,520 0.41 8.23 $ 220,764 Vested or expected to vest as of December 31, 2015 1,895,520 0.41 8.23 $ 220,764 Exercisable as of December 31, 2014 383,664 $ 0.42 6.40 $ 159 Exercisable as of December 31, 2015 972,926 $ 0.41 7.37 $ 119,164 A summary of the status of the Company’s non-vested non-employee stock option shares as of December 31, 2015 and the changes during the year ended December 31, 2015 is as follows: Number of shares Weighted-average grant date fair value Balance as of January 1, 2015 511,856 $ 0.21 Granted 1,000,000 $ 0.40 Vested (589,262 ) $ 0.33 Balance as of December 31, 2015 922,594 $ 0.36 Common Stock Awards The Company granted common stock awards to several non-employees in exchange for services provided. The Company measures the fair value of these awards using the fair value of the services provided or the fair value of the awards granted, whichever is more reliably measurable. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized as services are rendered on a straight-line basis. A summary of the Company’s common stock awards granted and issued during the years ended December 31, 2015 and 2014 are as follows: Number of shares Balance as of January 1, 2014 460,116 Granted 3,432,190 Issued (3,244,784 ) Balance as of December 31, 2014 647,522 Granted 1,135,280 Issued (1,027,535 ) Balance as of December 31, 2015 755,267 The Company granted 1,135,280 and 187,406 shares of common stock during the years ended December 31, 2015 and 2014, respectively, in exchange for professional services. As all services were rendered in each respective period, expense related to common stock awards of $392,661 and $102,000 was recognized during the years ended December 31, 2015 and 2014, respectively. In December 2014, 3,244,784 shares of new common stock were granted and issued to FDS Pharma ASS (“FDS”) in consideration for the performance of services and termination of a prior collaboration agreement between Lipoxen and FDS. The Company determined that the fair value of the shares of common stock granted is more reliably measurable than the fair value of the services received. The Company assessed the fair value of one share of common stock on the measurement date to be $0.25. As performance by FDS was complete at the issuance date, the Company recorded expense of approximately $812,000 to research and development expense in the consolidated statement of comprehensive loss during the year ended December 31, 2014. FDS is a related party of SynBio, an affiliate of the Company. Joint Share Ownership Plan In 2010 and 2012, the Company issued 1,701,913 and 8,986,281 JSOP awards, respectively, to two senior executives under the JSOP. Under the JSOP, shares in the Company are jointly purchased at fair market value by the participating executives and the trustees of the JSOP trust, with such shares held in the JSOP trust. For US GAAP purposes the awards were valued as employee options and recorded as a reduction in equity as treasury shares until such time as they are exercised by the employee. During 2011, the 2010 JSOP awards fully vested under the terms of the JSOP due to a significant change in beneficial ownership of the Company and the related compensation charges were fully recorded during periods prior to 2013 related to this accelerated vesting. During the first quarter of 2014, the 2012 JSOP awards fully vested under the terms of the JSOP due the achievement of specific share price hurdles and the related compensation charges were fully recorded during the first quarter of 2014 related to this accelerated vesting. As of December 31, 2014, all JSOP awards were fully vested. The Company recognized zero and $344,905, respectively, of JSOP compensation expense during the years ended December 31, 2015 and 2014. As of December 2015 and 2014, there were 10,688,194 JSOP awards issued. |
13. Employee Benefit Plans
13. Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | The Company has a defined contribution 401(k) savings plan (the “401(k) Plan”). The 401(k) Plan covers substantially all U.S. employees, and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the 401(k) Plan may be made at the discretion of the Board of Directors. During the year ended December 31, 2015 and 2014, the Company made contributions of approximately $34,000 and $32,000, respectively, to the 401(k) Plan. In the U.K., the Company has adopted a defined contribution plan (the “UK Plan”) which qualifies under the rules established by HM Revenue & Customs. The UK Plan generally allows all U.K. employees to contribute a minimum of 3% of salary with no maximum limit. The Company contributes to the plan between 8% and 12% of the employee’s salary, depending upon seniority of the employee. The Company, at its discretion, may also contribute to an employee’s personal pension plan. The Company paid total contributions of approximately $144,000 and $108,000 during the years ended December 31, 2015 and 2014, respectively. |
14. Commitments and Contingent
14. Commitments and Contingent Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Lease In August 2013, the Company entered into an agreement to lease office and laboratory space in Lexington, Massachusetts under an operating lease with a commencement date of January 1, 2014 and a termination date of January 31, 2019. With the execution of this lease, the Company is required to maintain a $66,000 letter of credit as a security deposit, which is classified as a current asset within the consolidated balance sheet. In connection with the Lexington lease, the Company recorded $90,838 as prepaid rent as of December 31, 2015, with $61,377 recorded as a non-current asset. The Company also incurred a liability of $89,074 with respect to the CompanyÂ’s contribution to the landlordÂ’s leasehold improvements, of which $56,538 is outstanding as of December 31, 2015, with $38,791 recorded as a non-current liability. This liability is repayable as additional rent expense over the term of the lease and bears interest at 6%. In addition, the Company leased office space in London, U.K. during 2014 and 2015. The U.K. lease was terminated in March 2015 in accordance with the terms of the lease. The CompanyÂ’s contractual commitments under all non-cancelable operating leases as of December 31, 2015 are as follows: As of December 31, Total Operating Leases 2016 $ 98,645 2017 102,604 2018 106,563 2019 8,908 Total minimum lease payments $ 316,720 Rent expense is calculated on a straight-line basis over the term of the lease. Rent expense under the CompanyÂ’s operating leases was $134,875 and $172,821 for the years ended December 31, 2015 and 2014, respectively. Employment Agreements The Company has contingent bonus compensation agreements with certain of the CompanyÂ’s employees. The bonuses become payable upon the achievement of certain capital raise and stock listing metrics. The amount of contingent bonuses that may be paid out in future periods is a range of approximately $380,000 to $680,000 as of December 31, 2015. |
15. Related Party Transactions
15. Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | In May 2011, the Company received a short term unsecured loan facility of up to $1.7 million from SynBio, an affiliate of the Company, of which $395,000 was outstanding as of December 31, 2015 and 2014, respectively. A payment of $286,124 on the outstanding loan was made to SynBio during the year ended December 31, 2014. No payments were made during the year ended December 31, 2015. The loan had an interest rate of 8.04% per annum as of the date of grant, with interest payable upon repayment of the loan, which was to be seven months after the closing date of the loan. During 2012, the loan matured and it was agreed by both parties that the loan can be called due with full repayment of the outstanding principal including accrued interest upon future agreement by both parties. It was also agreed as of July 1, 2012 that no further interest on the outstanding loan balance would be accrued. The loan is recorded in “Loans due to related parties” within current liabilities as of December 31, 2015 and 2014. The loan does not bear interest at the prevailing market rate for instruments with similar characteristics. During the years ended December 31, 2015 and 2014, the Company received research and consulting services from a non-employee director of the Company. The total amount of services received was $72,594 and $74,582 for the years ended December 31, 2015 and 2014, respectively, with $17,791 and zero included in accounts payable on the consolidated balance sheet as of December 31, 2015 and 2014, respectively. During the years ended December 31, 2015 and 2014, the Company also received consulting services from a firm owned by a non-employee director of the Company. The total amount of services received was $4,000 and $133,381 for the years ended December 31, 2015 and 2014, respectively, with zero and $51,708 included in accounts payable on the consolidated balance sheet as of December 31, 2015 and 2014, respectively. Please refer to Note 4, Significant Strategic Drug Development Collaborations, Stockholder’s Equity |
16. Subsequent Events
16. Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | The Company performed a review of events subsequent to the balance sheet date through the date the financial statements were issued and determined, except as disclosed herein, that there were no other such events requiring recognition or disclosure in the financial statements. During the first quarter of 2016, the Company received total proceeds of $3.5 million in connection with the APA financing arrangement. The APA provided for the issuance of certain warrants to purchase a number of share of the CompanyÂ’s common stock equal to 50% of the number of shares issuable under the APA Notes. The Warrant has a five-year term and is exercisable commencing March 31, 2016. The exercise price per share under the Warrant is the lessor of $0.20 or 120% of the Capital Raise price, in the event there is a Capital Raise. If the APA Note is not repaid or converted on or before six months from the date of issuance, the Holder will be issued an additional warrant under the same terms as the Warrant. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts | SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 Valuation Allowance on Deferred Tax Assets Balance Beginning of Period Additions (Deductions) Charged to (from) Income Tax Expense Other Changes to Valuation Allowance Balance End of Period 2015 $ (13,773,409) (1,551,029) - $ (15,324,438) 2014 $ (9,521,260) (4,252,149) - $ (13,773,409) |
2. Summary of Significant Acc25
2. Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Preparation of Financial Statements | Preparation of Financial Statements These consolidated financial statements have been prepared on the assumption that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. This assumption is presently in question and contingent upon the CompanyÂ’s ability to raise additional working capital. The financial statements do not include any adjustments relating to recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. Certain prior period amounts have been reclassified to conform to the presentation for the current period. |
Principles of Consolidation | Principles of Consolidation The financial statements of the Company include the accounts of Xenetic UK and its wholly owned subsidiaries: Lipoxen Technologies Limited (“Lipoxen”), Xenetic Bioscience, Incorporated, and SymbioTec GmbH (“SymbioTec”). All material intercompany balances and transactions have been eliminated on consolidation. |
Use of Estimates | Use of Estimates The consolidated financial statements and accompanying notes are prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). The preparation of the financial statements in accordance with US GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenue and expenses in the financial statements and disclosures in the accompanying notes. Actual results and outcomes may differ materially from management’s estimates, judgments and assumptions. |
Change in Accounting Principle | Change in Accounting Principle During the second quarter of 2015, the Company elected to apply pushdown accounting to the CompanyÂ’s acquisition of SymbioTec that occurred in 2012. Pushdown accounting refers to the use of the acquirerÂ’s basis in the preparation of the acquireeÂ’s separate financial statements as the new basis of accounting for the acquiree. Application of pushdown accounting is treated as a change in accounting principle and was applied retrospectively to the CompanyÂ’s consolidated financial statements. This change resulted in no impact to the consolidated financial statements for the year ended December 31, 2015 or 2014. |
Functional Currency Change | Functional Currency Change Effective April 1, 2015, the functional currency of the Company’s foreign subsidiaries changed from the British Pound Sterling to the United States (“U.S.”) dollar. The changes in the economic facts and circumstances that caused the functional currency to change to that of the parent company include: the closing of the Company’s last office outside of the U.S. during the first quarter of 2015, a shift of financial dependence of the subsidiaries to the parent and the growth of the Company’s operations in U.S. dollar-denominated expenses. The Company translated assets and liabilities of these foreign subsidiaries at the exchange rate in effect at the balance sheet date and included accumulated net translation adjustments in equity as a component of accumulated other comprehensive loss. The change in functional currency is applied on a prospective basis. Therefore, any gains and losses that were previously recorded in accumulated other comprehensive loss remain unchanged through March 31, 2015. Foreign currency transaction gains and losses are the result of exchange rate changes on transactions denominated in currencies other than the functional currency. The remeasurement of those foreign currency transactions is included in determining net income or loss for the period of exchange. |
Foreign Currency Translation | Foreign Currency Translation The Company’s reporting currency is U.S. dollars. During the years ended December 31, 2015 and 2014, the Company had operations in the U.S., United Kingdom (“U.K.”) and Germany. Assets and liabilities of foreign operations were translated to U.S. dollars at the exchange rate in effect at the balance sheet date and revenue and expenses at the average exchange rate for the period. Gains and losses from the translation of the consolidated financial statements of foreign subsidiaries into U.S. dollars were included in stockholders’ equity as a component of other comprehensive income. The Company did not record tax provisions or benefits for the net changes in foreign currency translation adjustments, as the Company intends to permanently reinvest undistributed earnings in its foreign subsidiaries. Following the change in the functional currency of the Company’s foreign subsidiaries to the U.S. dollar on April 1, 2015, it is no longer necessary to record gains and losses from the translation of the consolidated financial statements of foreign subsidiaries from a foreign functional currency into the reporting currency. Realized and unrealized gains and losses resulting from foreign currency transactions arising from exchange rate fluctuations on balances denominated in currencies other than the functional currencies, are recognized in “Other (expense) income” in the consolidated statements of comprehensive loss. Monetary assets and liabilities that are denominated in a currency other than the functional currency are re-measured to the functional currency using the exchange rate at the balance sheet date and gains or losses are recorded within “Other income (expense)” section of the consolidated statements of comprehensive loss. |
Correction of Identified Errors | Correction of Identified Errors During the second quarter of 2015, the Company identified an error in the consolidated financial statements related to the accounting for foreign currency matters. One of the CompanyÂ’s subsidiaryÂ’s functional currency had been incorrectly designated as the Euro instead of British Pound Sterling during the period January 1, 2013 through March 31, 2015. As a result, certain applicable financial results of this entity were being translated to the reporting currency when they should have been first remeasured into the functional currency. In addition, the Company identified an error in the consolidated financial statements related to the pushdown accounting of that subsidiary. The new basis of accounting of the acquired entity formed as a result of the acquisition was not first remeasured into the functional currency before being translated to the reporting currency. The correction of the errors identified above resulted in the recognition of foreign currency net gains and foreign currency translation net losses. We concluded that these adjustments were not material to the CompanyÂ’s financial position or results of operations for any of the prior periods presented. Therefore, we recognized the cumulative impact during the three months ended June 30, 2015, which resulted in a net gain in other income (expenses) in the consolidated statement of comprehensive loss of $0.24 million for the year ended December 31, 2015 and a cumulative impact in accumulated other comprehensive income in the consolidated balance sheet of $0.31 million as of June 30, 2015. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments ASC Topic 820 Fair Value Measurement Fair Value Measurements |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents. Investments with original maturities of greater than 90 days from the date of purchase but less than one year from the balance sheet date are classified as short-term investments, while investments with maturities of one year or beyond from the balance sheet date are classified as long-term investments. Management determines the appropriate classification of its cash equivalents and investment securities at the time of purchase and re-evaluates such determination as of each balance sheet date. |
Restricted Cash | Restricted Cash As of December 31, 2015 and 2014, restricted cash represents a certificate of deposit that matures annually, and secures the CompanyÂ’s outstanding letter of credit of $66,000 for the operating lease for office and laboratory space in Lexington, Massachusetts. The letter of credit is required to be maintained through the term of the lease, which expires in January 2019. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that subject the Company to concentrations of credit risk include cash and cash equivalents. The Company maintains cash and cash equivalents with various major financial institutions. The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. |
Property and Equipment | Property and Equipment The Company records property and equipment at cost less accumulated depreciation. Expenditures for major renewals and improvements which extend the life or usefulness of the asset are capitalized. Items of an ordinary repair or maintenance nature are charged directly to operating expense as incurred. The Company calculates depreciation using the straight-line method over the estimated useful lives of the assets: Asset Classification Estimated Useful Life Laboratory equipment 3 years Office and computer equipment 3 years Leasehold improvements 5 years or the remaining term of the lease, if shorter Furniture and fixtures 5 years The Company eliminates the cost of assets retired or otherwise disposed of, along with the corresponding accumulated depreciation, from the related accounts, and the resulting gain or loss is reflected in the results of operations. |
Indefinite-Lived Intangible Assets | Indefinite-Lived Intangible Assets Acquired indefinite-lived intangible assets consist of In-Process Research and Development (“IPR&D”) related to the Company’s business combination with SymbioTec, which was recorded at fair value on the acquisition date. IPR&D intangible assets are considered indefinite-lived intangible assets until completion or abandonment of the associated research and development efforts. Substantial additional research and development may be required before the Company’s IPR&D reaches technological feasibility. Upon completion of the IPR&D project, the IPR&D assets will be amortized over their estimated useful lives. In accordance with ASC Topic 350, Intangibles - Goodwill and Other he circumstances leads to the determination that it is more likely than not (that is, a likelihood of more than 50%) that the acquired IPR&D is impaired. If the Company chooses to first assess the qualitative factors and it is determined that it is not more likely than not acquired IPR&D is impaired, the Company is not required to take further action to test for impairment. The Company also has the option to bypass the qualitative assessment and perform only the quantitative impairment test, which the Company may choose to perform in some periods but not in others. No impairment was recorded during the years ended December 31, 2015 and 2014. |
Goodwill | Goodwill Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized, but in accordance with ASC 350, the Company assesses goodwill for impairment at least annually, or when events or changes in the business environment indicate the carrying value may not be fully recoverable. The Company also has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to the determination that it is more likely than not (that is, a likelihood of more than 50%) that goodwill is impaired. If the Company chooses to first assess qualitative factors and it is determined that it is not more likely than not goodwill is impaired, the Company is not required to take further action to test for impairment. The Company also has the option to bypass the qualitative assessment and perform only the quantitative impairment test, which the Company may choose to do in some periods but not in others. The Company performs its annual impairment review as of October 1. No impairment was recorded during the years ended December 31, 2015 and 2014. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets In accordance with ASC Topic 360 Property, Plant and Equipment Evaluation of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset or asset group and its eventual disposition. Impairment, if any, is calculated as the amount by which an assetÂ’s carrying value exceeds its fair value, typically using discounted cash flows to determine fair value. |
Embedded Derivatives Related to Debt Instruments | Embedded Derivatives Related to Debt Instruments Embedded derivatives that are required to be bifurcated from their host contract are evaluated and valued separately from the host contract (i.e., the debt instrument). Features of the CompanyÂ’s debt instrument that meet the definition of a derivative and the criteria for separate accounting include the conversion feature and certain put options. Embedded derivatives are valued individually and recorded as a compound derivative. The compound derivative is presented together with the host debt instrument and the related debt discount on a combined basis. Changes in the estimated fair value of the bifurcated embedded derivatives are reported as gains and losses in the consolidated statement of comprehensive loss each reporting period. |
Revenue Recognition | Revenue Recognition The Company enters into supply, license and collaboration arrangements with pharmaceutical and biotechnology partners, some of which include royalty agreements based on potential net sales of approved commercial pharmaceutical products. The Company recognizes revenue in accordance with the authoritative guidance, ASC Topic 605, Revenue Recognition The terms of the Company’s license agreements include delivery of an Intellectual Property (“IP”) license to a collaboration partner. The Company may be compensated under license arrangements through a combination of non-refundable upfront payments, development and regulatory objective payments and royalty payments on future product sales by partners. Non-refundable upfront payments and development and regulatory objective payments received by the Company in license and collaboration arrangements that include future obligations, such as supply obligations, are recognized ratably over the Company’s expected performance period under each respective arrangement. The Company makes its best estimate of the period over which the Company expects to fulfil the Company’s performance obligations, which may include technology transfer assistance, research activities, clinical development activities, and manufacturing activities from development through the commercialization of the product. Given the uncertainties of these collaboration arrangements, significant judgment is required to determine the duration of the performance period. Non-refundable upfront license fees received, whereby continued performance or future obligations are considered inconsequential or perfunctory to the relevant licensed technology, are recognized as revenue upon delivery of the technology. The Company expects to recognize royalty revenue in the period of sale, based on the underlying contract terms, provided that the reported sales are reliably measurable and the Company has no remaining performance obligations, assuming all other revenue recognition criteria are met. Reimbursements for research and development services completed by the Company related to the collaboration agreements are recognized in operations as revenue on a gross basis. The Company’s license and collaboration agreements with certain collaboration partners could also provide for future payments to the Company based solely upon the performance of the respective collaboration partner in consideration of deadline extensions or upon the achievement of specified sales volumes of approved drugs. For such payments, the Company expects to recognize the payments as revenue when earned under the applicable contract terms on a performance basis or ratably over the term of the agreement. These payments may also be recognized as revenue when continued performance or future obligations by the Company are considered inconsequential or perfunctory. |
Research and Development Expenses | Research and Development Expenses Research and development expenses consist of expenses incurred in performing research and development activities, including compensation and benefits, facilities expenses, overhead expenses, clinical trial and related clinical manufacturing expenses, fees paid to clinical research organizations and clinical manufacturing organizations and other outside expenses. The Company expenses research and development costs as incurred. The Company expenses upfront, non-refundable payments made for research and development services as obligations are incurred. The value ascribed to intangible assets acquired but which have not met capitalization criteria is expensed as research and development at the time of acquisition. |
Share-Based Compensation | Share-based Payments Stock options The Company grants share-based payments in the form of options to employees and non-employees, Joint Share Ownership Plan (“JSOP”) awards to employees, as well as agreements to issue common stock in exchange for services provided by non-employees. The Company measures share-based payments to employees in accordance with ASC Topic 718, Compensation – Stock Compensation Equity Stock option compensation expenses are based on the fair value of the option calculated using the Black-Scholes option pricing model. Determining the appropriate fair value model and related assumptions requires judgment, including estimating share price volatility and expected terms of the awards. The expected volatility rates are estimated based on the actual volatility of the Company and of comparable public companies over the expected term. The expected terms represent the time that options are expected to be outstanding. The Company estimates forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company has not paid dividends and does not anticipate paying cash dividends in the foreseeable future and, accordingly, uses an expected dividend yield of zero. The risk-free interest rate is based on the rate of US Treasury securities with maturities consistent with the estimated expected term of the awards. Upon exercise, stock options are redeemed for newly issued shares of common stock. For employee options that vest based solely on service conditions, the fair value measurement date is generally on the date of grant and the related compensation expense, less expense for expected forfeitures, is recognized on a straight-line basis over the requisite vesting period of the awards. For non-employee options, the fair value measurement date is the earlier of the date the performance of services is complete or the date the performance commitment has been reached. The Company generally determines that the fair value of the stock options is more reliably measurable than the fair value of the services received. Compensation expense related to stock options granted to non-employees that vest based solely on service conditions is subject to re-measurement at each reporting period until the options vest and is recognized on a straight-line basis over the requisite vesting period of the awards. Common stock awards The Company grants common stock awards to non-employees in exchange for services provided. The Company generally measures the fair value of these awards using the fair value of the services provided as it is a more reliable measure of the fair value of the awards. The fair value measurement date of these awards is generally the date the performance of services is complete. The fair value of the awards is recognized on a straight-line basis as services are rendered. The share-based payments related to common stock awards for the settlement of services provided by non-employees is recorded on the consolidated statement of comprehensive loss in the same manner and charged to the same account as if such settlements had been made in cash. Joint Share Ownership Plan awards The Company measures the fair value of JSOP awards using Monte Carlo simulations based on the terms of the plan, which includes vesting conditions based on the achievement of certain market conditions in the form of share price hurdles. Determination of the appropriate fair value model and related assumptions requires judgment, including estimating share price volatility and the expected term of the awards. Accordingly, the Company recognizes compensation expense related to its JSOP awards using a graded vesting model. |
Warrants | Warrants In connection with certain financing, consulting and collaboration arrangements, the Company issues warrants to purchase shares of its common stock. The outstanding warrants are standalone instruments that are not puttable or mandatorily redeemable by the holder and are classified as equity awards. The Company measures the fair value of the awards using the Black-Scholes option pricing model as of the measurement date. Warrants issued to collaboration partners in conjunction with the issuance of common stock are initally recorded at fair value as a reduction in additional paid-in capital of the common stock issued. All other warrants are recorded at fair value as expense over the requisite service period or at the date of issuance, if there is not a service period. Warrants granted in connection with ongoing arrangements are more fully described in Note 11, StockholdersÂ’ Equity |
Income Taxes | Income Taxes The Company accounts for income taxes using the liability method in accordance with ASC Topic 740, Income Taxes |
Basic and Diluted Net Loss per Share | Basic and Diluted Net Loss per Share The Company computes basic net loss per share by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period. The Company computes diluted net loss per share after giving consideration to the dilutive effect of stock options that are outstanding during the period, except where such non-participating securities would be anti-dilutive. The CompanyÂ’s JSOP awards, prior to exercise, are considered treasury shares by the Company and thus do not impact the CompanyÂ’s net loss per share calculation. As of December 31, 2015 and 2014, there were 10,688,194 JSOP awards issued. Basic and diluted net loss per share are the same for the years ended December 31, 2015 and 2014 as the Company was in a net loss position. Potentially dilutive non-participating securities have not been included in the calculations of diluted net loss per share, as their inclusion would be anti-dilutive. As of December 31, 2015 and 2014, approximately 12.03 million and 11.87 million potentially dilutive securities were deemed anti-dilutive. |
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, who is the CompanyÂ’s Chief Executive Officer, in making decisions on how to allocate resources and assess performance. The Company views its operations and manages its business in one operating segment. |
Operating Leases | Operating Leases The Company leases an administrative and laboratory facility under an operating lease. Lease agreements may include rent holidays, rent escalation clauses and tenant improvement allowances. The Company recognizes scheduled rent increases on a straight-line basis over the lease term beginning with the date the Company takes possession of the leased space. |
Acquisitions | Acquisitions The Company has a history of engaging in acquisition transactions that require the Company to evaluate whether the transaction meets the criteria of a business combination and, in some cases, whether it meets the definition of a reverse merger. For those acquisitions that meet the criteria for a reverse merger, the Company evaluates the entities involved to distinguish the appropriate accounting acquirer and acquiree according to ASC 805. If the transaction does not meet the business combination requirements, the transaction is accounted for as an asset acquisition or recapitalization and no goodwill is recognized. If the acquisition meets the definition of a business combination, the Company allocates the purchase price, including any contingent consideration, to the assets acquired and the liabilities assumed at their estimated fair values as of the date of the acquisition with any excess of the purchase price paid over the estimated fair value of net assets acquired recorded as goodwill. The fair value of the assets acquired and liabilities assumed is typically determined by using either estimates of replacement costs or discounted cash flow valuation methods. When determining the fair value of tangible assets acquired, the Company estimates the cost to replace the asset with a new asset, taking into consideration such factors as age, condition and the economic useful life of the asset. When determining the fair value of intangible assets acquired, the Company uses judgment to estimate the applicable discount rate, growth rates and the timing and amount of future cash flows. The fair value of assets acquired and liabilities assumed is typically determined using the assistance of an independent third party specialist. Business combination related costs are expensed in the period in which the costs are incurred and the services are received. Asset acquisition related costs are generally capitalized as a component of cost of the assets acquired. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In March 2016, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-06, Derivatives and Hedging (Topic 815) In February 2016, FASB issued ASU 2016-02, Leases (Topic 842) In November 2015, FASB issued ASU 2015-17, Income Taxes (Topic 740) In April 2015, FASB issued ASU 2015-03, Interest – Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) Revenue Recognition Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date The Company has considered other recent accounting pronouncements and concluded that they are either not applicable to the business, or that no material effect is expected on the consolidated financial statements as a result of future adoption. |
2. Summary of Significant Acc26
2. Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accounting Policies [Abstract] | |
Schedule of Estimated Useful Life of Assets | Asset Classification Estimated Useful Life Laboratory equipment 3 years Office and computer equipment 3 years Leasehold improvements 5 years or the remaining term of the lease, if shorter Furniture and fixtures 5 years |
3. Acquisitions (Tables)
3. Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of Preliminary Fair Values of Acquired Assets and Liabilities Assumed | Cash $ 43,502 Accounts receivable 145 Prepaid expenses 8,643 Property, plant and equipment 331,500 Accounts payable (354,079 ) Accrued expenses (36,146 ) Long-term debt (372,813 ) Total identifiable net assets (379,248 ) Goodwill 4,129,248 Total $ 3,750,000 |
5. Property and Equipment, net
5. Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | December 31, December 31, Laboratory equipment $ 249,969 $ 254,150 Office and computer equipment 35,190 189,459 Leasehold improvements 26,841 92,354 Furniture and fixtures 20,263 50,150 Property and equipment 332,263 586,113 Less accumulated depreciation (270,242 ) (466,664 ) Property and equipment – net $ 62,021 $ 119,449 |
6. Goodwill and Indefinite-Li29
6. Goodwill and Indefinite-Lived Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Reconciliation of Change in Carrying Value of Goodwill | Balance as of January 1, 2014 $ 3,665,199 Acquired from acquisitions 4,129,248 Disposed with Hive Out Agreement (4,129,248 ) Foreign currency translation (200,042 ) Balance as of December 31, 2014 $ 3,465,157 Foreign currency translation (181,778 ) Balance as of December 31, 2015 $ 3,283,379 |
7. Accrued Expenses (Tables)
7. Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | December 31, December 31, Accrued payroll and benefits $ 625,289 $ 67,120 Accrued professional fees 413,945 574,186 Accrued research costs 145,026 573,879 Accrued interest 77,857 – Other 224,929 194,506 $ 1,487,046 $ 1,409,691 |
8. Hybrid Debt Instrument (Tabl
8. Hybrid Debt Instrument (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Assumptions used for derivative liability | December 31, 2015 July 1, 2015 Company stock price $ 0.51 $ 0.22 Expected volatility (%) 105 % 115 % Risk-free interest rate (%) 0.65 % 0.28 % |
9. Fair Value Measurements (Tab
9. Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | |
Schedule of derivative measured on a recurring basis | Balance as of January 1, 2015 $ – Issuance of compound derivative instrument (1,419,105 ) Change in fair value of compound derivative instrument (2,125,117 ) Balance as of December 31, 2015 $ (3,544,222 ) |
10. Income Taxes (Tables)
10. Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Components of loss before income taxes | Year ended December 31, 2015 2014 Domestic (U.S.) $ (7,724,418 ) $ (4,040,654 ) Foreign (U.K.) (4,767,363 ) (10,003,427 ) Foreign (Germany) (15,690 ) (263,023 ) Loss before income taxes $ (12,507,471 ) $ (14,307,104 ) |
Reconciliation of income tax provision (benefit) | Year ended December 31, 2015 2014 Federal $ (4,252,540 ) $ (4,860,256 ) State (276,601 ) (145,209 ) Increase in tax losses not recognized 2,238,879 4,949,805 Permanent differences, net 800,891 (1,529,190 ) Mark to market 722,540 – Foreign rate differential 502,357 1,184,770 Share-based payments, net 308,888 505,035 Other – 7,273 Enhanced research and development tax credits (44,414 ) (112,228 ) Net provision (benefit) for income taxes $ – $ – |
Schedule of deferred tax assets and liabilities | Year ended December 31, 2015 2014 Deferred tax assets: U.K. net operating loss carryforwards $ 9,402,398 $ 9,198,798 U.K. capital loss carryforwards 1,775,932 1,874,254 U.S. federal net operating loss carryforwards 1,659,050 923,816 Share-based payments 1,313,226 52,320 Enhanced research and development tax credits 852,272 786,342 Germany net operating loss carryforwards 401,906 393,638 U.S. state net operating loss carryforwards 422,622 233,825 Accrued expenses 44,557 157,329 Depreciation 25,823 37,703 Other 4,998 115,384 Total deferred tax assets before valuation allowance 15,902,784 13,773,409 Deferred tax liabilities: Indefinite-lived intangible asset (2,918,518 ) (3,080,096 ) Debt discount (578,346 ) – Total deferred tax liabilities (3,496,864 ) (3,080,096 ) Less valuation allowance (15,324,438 ) (13,773,409 ) Total net deferred tax liability $ (2,918,518 ) $ (3,080,096 ) |
Uncertain tax benefits | Year ended December 31, 2015 2014 Uncertain tax benefits as of January 1 $ – $ 185,961 Gross adjustments in tax positions – (185,961 ) Uncertain tax positions as of December 31 $ – $ – |
11. Stockholders' Equity (Table
11. Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Assumptions used | 2015 2014 Weighted-average expected dividend yield (%) – – Weighted-average expected volatility (%) 104.81 103.32 Weighted-average risk-free interest rate (%) 1.03 0.96 Weighted-average expected life of option (years) 5.00 5.00 Weighted-average exercise price ($) 0.77 0.77 Model used Black-Scholes Black-Scholes |
12. Share-Based Compensation (T
12. Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Schedule of Share-Based Compensation Expense | Year Ended December 31, 2015 2014 Research and development expenses $ 229,964 $ 952,829 General and administrative expenses 2,364,149 560,409 $ 2,594,113 $ 1,513,238 |
Non-Vested Non-Employee Stock Options [Member] | |
Option activity | Number of shares Weighted-average grant date fair value Balance as of January 1, 2015 511,856 $ 0.21 Granted 1,000,000 $ 0.40 Vested (589,262 ) $ 0.33 Balance as of December 31, 2015 922,594 $ 0.36 |
Common Stock Awards [Member] | |
Option activity | Number of shares Balance as of January 1, 2014 460,116 Granted 3,432,190 Issued (3,244,784 ) Balance as of December 31, 2014 647,522 Granted 1,135,280 Issued (1,027,535 ) Balance as of December 31, 2015 755,267 |
Employee Stock Options [Member] | |
Assumptions used | Year Ended December 31, 2015 2014 Weighted-average expected dividend yield (%) – – Weighted-average expected volatility (%) 124.17 103.36 Weighted-average risk-free interest rate (%) 0.44 1.48 Weighted-average expected life of option (years) 2.50 5.33 Weighted-average exercise price ($) 0.42 0.31 Model used Black-Scholes Black-Scholes |
Option activity | Number of shares Weighted-average exercise price Weighted-average remaining life (years) Aggregate intrinsic value Outstanding as of January 1, 2014 5,222,430 0.47 Granted 1,080,000 0.31 Exercised (1,984,080 ) 0.05 $ 509,622 Expired (132,422 ) 0.93 Outstanding as of December 31, 2014 4,185,928 0.62 6.86 $ 80,338 Granted 16,300,000 0.42 Expired (51,072 ) 0.47 Outstanding as of December 31, 2015 20,434,856 0.46 8.92 $ 1,915,942 Vested or expected to vest as of December 31, 2015 20,434,856 0.46 8.92 $ 1,915,942 Exercisable as of December 31, 2014 2,630,024 $ 0.60 5.48 $ 80,338 Exercisable as of December 31, 2015 7,913,567 $ 0.52 7.78 $ 688,343 |
Employee Stock Options [Member] | Non-Vested [Member] | |
Option activity | Number of shares Weighted-average grant date fair value Balance as of January 1, 2015 1,555,904 $ 0.15 Granted 16,300,000 $ 0.28 Vested (5,334,615 ) $ 0.26 Balance as of December 31, 2015 12,521,289 $ 0.28 |
Non Employee Stock Options [Member] | Non-Vested [Member] | |
Assumptions used | Year Ended December 31, 2015 2014 Weighted-average expected dividend yield (%) – – Weighted-average expected volatility (%) 120.51 116.22 Weighted-average risk-free interest rate (%) 1.54 1.62 Weighted-average expected life of option (years) 10.00 7.60 Weighted-average exercise price ($) 0.42 0.39 Model used Black-Scholes Black-Scholes |
Option activity | Number of shares Weighted-average exercise price Weighted-average remaining life (years) Aggregate intrinsic value Outstanding as of January 1, 2014 415,520 $ 0.52 5.90 $ 49 Granted 480,000 0.25 Outstanding as of December 31, 2014 895,520 0.39 7.60 $ 159 Granted 1,000,000 0.42 Outstanding as of December 31, 2015 1,895,520 0.41 8.23 $ 220,764 Vested or expected to vest as of December 31, 2015 1,895,520 0.41 8.23 $ 220,764 Exercisable as of December 31, 2014 383,664 $ 0.42 6.40 $ 159 Exercisable as of December 31, 2015 972,926 $ 0.41 7.37 $ 119,164 |
14. Commitments and Contingen36
14. Commitments and Contingent Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum operating lease payment schedule | As of December 31, Total Operating Leases 2016 $ 98,645 2017 102,604 2018 106,563 2019 8,908 Total minimum lease payments $ 316,720 |
Schedule II - Valuation and Q37
Schedule II - Valuation and Qualifying Accounts (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule of Valuation and Qualifying Accounts | Valuation Allowance on Deferred Tax Assets Balance Beginning of Period Additions (Deductions) Charged to (from) Income Tax Expense Other Changes to Valuation Allowance Balance End of Period 2015 $ (13,773,409) (1,551,029) - $ (15,324,438) 2014 $ (9,521,260) (4,252,149) - $ (13,773,409) |
1. The Company (Details Narrati
1. The Company (Details Narrative) | 12 Months Ended |
Dec. 31, 2015USD ($)shares | |
Issuance of common stock in connection with pending asset acquisition | $ 3,744,517 |
Asset Purchase Agreement [Member] | |
Issuance of common stock in connection with pending asset acquisition, shares | shares | 11,000,000 |
Issuance of common stock in connection with pending asset acquisition | $ 3,740,000 |
2. Summary of Significant Acc39
2. Summary of Significant Accounting Policies (Details - Useful Lives) | 12 Months Ended |
Dec. 31, 2015 | |
Laboratory Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Office and Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 3 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated Useful Life | 5 years |
2. Summary of Significant Acc40
2. Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||
Comprehensive loss adjustment due to correction of accounting for foreign currency matters in a prior period | $ 240,000 | |
Accumulated other comprehensive loss adjustment due to correction of accounting for foreign currency matters in a prior period | 310,000 | |
Letter of credit | $ 66,000 | |
Letter of credit purpose | Required for operating lease for office and laboratory space in Lexington, Massachusetts. | |
Impairment of indefinate lived intangible assets | $ 0 | $ 0 |
Impairment of goodwill | 0 | 0 |
Impairment of long-lived assets | $ 0 | $ 0 |
Antidilutive shares | 12,030,000 | 11,870,000 |
JSOP [Member] | ||
Basis Of Presentation And Significant Accounting Policies [Line Items] | ||
JSOP awards issued | 10,688,194 |
3. Acquisitions (Details - Acqu
3. Acquisitions (Details - Acquisition) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Goodwill | $ 3,283,379 | $ 3,465,157 | $ 3,665,199 |
Xenetic UK [Member] | |||
Cash | 43,502 | ||
Accounts receivable | 145 | ||
Prepaid expenses | 8,643 | ||
Property, plant and equipment | 331,500 | ||
Accounts payable | (354,079) | ||
Accrued expenses | (36,146) | ||
Long-term debt | (372,813) | ||
Total identifiable net assets | (379,248) | ||
Goodwill | 4,129,248 | ||
Total consideration transferred | $ 3,750,000 |
3. Acquisitions (Details Narrat
3. Acquisitions (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 23, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | |||
Loss on disposal of subsidiaries | $ 0 | $ (1,069,675) | |
Prepayment on acquisition | 3,744,517 | $ 0 | |
Issuance of common stock in connection with pending asset acquisition | 3,744,517 | ||
Asset Purchase Agreement [Member] | |||
Business Acquisition [Line Items] | |||
Prepayment on acquisition | $ 3,744,517 | ||
Issuance of common stock in connection with pending asset acquisition, shares | 11,000,000 | ||
Issuance of common stock in connection with pending asset acquisition | $ 3,740,000 | ||
Xenetic UK [Member] | |||
Business Acquisition [Line Items] | |||
Consideration transferred | $ 3,750,000 | ||
Oxbridge [Member] | |||
Business Acquisition [Line Items] | |||
Common stock returned and cancelled, shares | 10,000,000 | ||
Cash paid for Hive Out Agreement | $ 430,000 |
4. Significant Strategic Drug43
4. Significant Strategic Drug Development Collaborations (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Shares issued for equity investment, value | $ 337,340 | $ 10,811,196 | |
Research, development, license and supply agreement [Member] | Baxalta [Member] | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Shares issued for equity investment, shares | 10,695,187 | ||
Shares issued for equity investment, value | $ 10,000,000 | ||
Revenue recognized | $ 1,000,000 | ||
Percent ownership in Xenetic | 8.00% | 8.70% | |
Stock subscription and collaborative development agreement [Member] | SynBio LLC [Member] | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Revenue recognized | $ 0 | ||
Percent ownership in Xenetic | 39.00% | 41.60% | |
Warrant granted to purchase common stock, common shares available for purchase | 6,745,000 | ||
License and supply agreements [Member] | Serum Institute of India Ltd [Member] | |||
Research and Development Arrangement, Contract to Perform for Others [Line Items] | |||
Revenue recognized | $ 0 | ||
Percent ownership in Xenetic | 8.50% | 9.20% | |
Warrant granted to purchase common stock, common shares available for purchase | 3,200,000 |
5. Property and Equipment, ne44
5. Property and Equipment, net (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment - at cost | $ 332,263 | $ 586,113 |
Less accumulated depreciation | (270,242) | (466,664) |
Property and equipment - net | 62,021 | 119,449 |
Laboratory Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment - at cost | 249,969 | 254,150 |
Office and Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment - at cost | 35,190 | 189,459 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment - at cost | 26,841 | 92,354 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment - at cost | $ 20,263 | $ 50,150 |
5. Property and Equipment, ne45
5. Property and Equipment, net (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | ||
Proceeds from disposal of fixed assets | $ 7,882 | $ 5,487 |
Depreciation expense | 48,750 | $ 83,863 |
Fixed Assets [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Disposal of fixed assets, net book value | 6,000 | |
Proceeds from disposal of fixed assets | 8,000 | |
Gain on disposition of assets | $ 2,000 |
6. Goodwill and Indefinite-Li46
6. Goodwill and Indefinite-Lived Intangible Assets (Details - Goodwill) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Beginning Balance | $ 3,465,157 | $ 3,665,199 |
Acquired from acquisitions | 4,129,428 | |
Disposed with Hive Out Agreement | (4,129,248) | |
Foreign currency translation | (181,778) | (200,042) |
Ending Balance | $ 3,283,379 | $ 3,465,157 |
6. Goodwill and Indefinite-Li47
6. Goodwill and Indefinite-Lived Intangible Assets (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying value of indefinite-lived intangible asset | $ 9,243,128 | $ 9,754,857 |
Impairment of indefinite-lived intangible asset | 0 | 0 |
OncoHist [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Carrying value of indefinite-lived intangible asset | 9,240,000 | 9,750,000 |
Impairment of indefinite-lived intangible asset | $ 0 | $ 0 |
7. Accrued Expenses (Details)
7. Accrued Expenses (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Payables and Accruals [Abstract] | ||
Accrued payroll and benefits | $ 625,289 | $ 67,120 |
Accrued professional fees | 413,945 | 574,186 |
Accrued research costs | 145,026 | 573,879 |
Accrued interest | 77,857 | 0 |
Other | 224,929 | 194,506 |
Total accrued expenses | $ 1,487,046 | $ 1,409,691 |
8. Hybrid Debt Instrument (Deta
8. Hybrid Debt Instrument (Details) - Hybrid Debt Instrument [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Jul. 01, 2015 | |
December 31, 2015 [Member] | ||
Company stock price | $ 0.51 | |
Expected volatility | 105.00% | |
Risk-free interest rate | 0.65% | |
July 1, 2015 [Member] | ||
Company stock price | $ .22 | |
Expected volatility | 115.00% | |
Risk-free interest rate | 0.28% |
8. Hybrid Debt Instrument (De50
8. Hybrid Debt Instrument (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Change in fair value of derivative liability | $ 2,125,117 | $ 0 |
Costs exceeding the debt proceeds | (295,033) | (326,916) |
Interest expense | 266,999 | 4,706 |
Accrued interest | 77,857 | 0 |
Stock issuable for accrued interest | 75,935 | $ 0 |
SPA Note [Member] | ||
Convertible note face value | $ 3,000,000 | |
Debt stated interest rate | 10.00% | |
Warrants issued with note | 10,000,000 | |
Conversion price | $ .15 | |
Value of compound derivative | $ 3,500,000 | |
Change in fair value of derivative liability | (2,100,000) | |
Costs exceeding the debt proceeds | (60,000) | |
Interest expense | 154,000 | |
Accrued interest | 78,000 | |
Stock issuable for accrued interest | $ 76,000 |
9. Fair Value Measurements (Det
9. Fair Value Measurements (Details) - Fair Value, Inputs, Level 3 [Member] | 12 Months Ended |
Dec. 31, 2015USD ($) | |
Beginning Balance | $ 0 |
Issuances of compound derivative instrument | (1,419,105) |
Change in fair value of compund derivative instrument | (2,125,117) |
Ending Balance | $ (3,544,222) |
10. Income Taxes (Details - Inc
10. Income Taxes (Details - Income by geographic regions) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Loss before income taxes | $ (12,507,471) | $ (14,307,104) |
UNITED STATES [Member] | ||
Loss before income taxes | (7,724,418) | (4,040,654) |
UNITED KINGDOM [Member] | ||
Loss before income taxes | (4,767,363) | (10,003,427) |
GERMANY [Member] | ||
Loss before income taxes | $ (15,690) | $ (263,023) |
10. Income Taxes (Details - Tax
10. Income Taxes (Details - Tax reconcilation) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Federal | $ (4,252,540) | $ (4,860,256) |
State | (276,601) | (145,209) |
Increase in tax losses not recognized | 2,238,879 | 4,949,805 |
Permanent differences, net | 800,891 | (1,529,190) |
Mark to market | 722,540 | 0 |
Foreign rate differential | 502,357 | 1,184,770 |
Share-based payments, net | 308,888 | 505,035 |
Other | 0 | 7,273 |
Enhanced research and development tax credits | (44,414) | (112,228) |
Net provision (benefit) for income taxes | $ 0 | $ 0 |
10. Income Taxes (Details - Def
10. Income Taxes (Details - Deferred Tax Assets) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Deferred tax assets: | ||
Foreign capital loss carryforwards | $ 1,775,932 | $ 1,874,254 |
U.S. federal net operating loss carryforwards | 1,659,050 | 923,816 |
Share-based compensation | 1,313,226 | 52,320 |
Enhanced research and development tax credits | 852,272 | 786,342 |
U.S. state net operating loss carryforwards | 422,622 | 233,825 |
Accrued expenses | 44,557 | 157,329 |
Depreciation | 25,823 | 37,703 |
Other | 4,998 | 115,384 |
Total deferred tax assets before valuation allowance | 15,902,784 | 13,773,409 |
Deferred tax liability: | ||
Indefinite-lived intangible asset | (2,918,518) | (3,080,096) |
Debt discount | (578,346) | 0 |
Total deferred tax liabilities | (3,496,864) | (3,080,096) |
Less valuation allowance | (15,324,438) | (13,773,409) |
Total net deferred tax liability | (2,918,518) | (3,080,096) |
UNITED KINGDOM [Member] | ||
Deferred tax assets: | ||
Foreign net operating loss carryforwards | 9,402,398 | 9,198,798 |
Foreign capital loss carryforwards | 1,775,932 | 1,874,254 |
GERMANY [Member] | ||
Deferred tax assets: | ||
Foreign net operating loss carryforwards | $ 401,906 | $ 393,638 |
10. Income Taxes (Details - Unc
10. Income Taxes (Details - Uncertain tax benefits) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | ||
Uncertain tax benefits as of January 1 | $ 0 | $ 185,961 |
Gross adjustments in tax positions | 0 | (185,961) |
Uncertain tax positions as of December 31 | $ 0 | $ 0 |
10. Income Taxes (Details Narra
10. Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
UNITED KINGDOM [Member] | ||
Net operating loss carryforwards | $ 47,010,000 | $ 45,990,000 |
UNITED STATES [Member] | ||
Net operating loss carryforwards | $ 5,300,000 | 2,950,000 |
Operating loss expiration dates | Dec. 31, 2032 | |
State [Member] | ||
Net operating loss carryforwards | $ 5,280,000 | 2,920,000 |
Operating loss expiration dates | Dec. 31, 2032 | |
GERMANY [Member] | ||
Net operating loss carryforwards | $ 1,270,000 | $ 1,250,000 |
11. Stockholders' Equity (Detai
11. Stockholders' Equity (Details) - Warrants [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted-average expected dividend yield | 0.00% | 0.00% |
Weighted-average expected volatility | 104.81% | 103.32% |
Weighted-average risk-free interest rate | 1.03% | 0.96% |
Weighted-average expected life of option (years) | 5 years | 5 years |
Weighted-average exercise price | $ .77 | $ .77 |
Model used | Black-Scholes | Black-Scholes |
11. Stockholders' Equity (Det58
11. Stockholders' Equity (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Prepayment on acquisition | $ 3,744,517 | $ 0 |
Research and development expense | $ 3,434,016 | $ 6,323,896 |
SynBio 2014 Warrant [Member] | ||
Warrant issued to purchase common stock | 6,745,000 | |
Warrant exercise price per share | $ 0.77 | |
Warrants exercised | 0 | 0 |
SynBio Partner Warrants [Member] | SynBio 2014 Warrant [Member] | ||
Warrant issued to purchase common stock | 320,000 | |
Warrants exercised | 0 | 0 |
Serum Institute 2014 Warrant [Member] | ||
Warrant issued to purchase common stock | 3,200,000 | |
Fair value of warrant at date of grant | $ 480,000 | |
Warrant exercise price per share | $ .77 | |
Serum Institute 2014 Warrant [Member] | Serum Institute Partner Warrants [Member] | ||
Warrant issued to purchase common stock | 160,000 | |
Fair value of warrant at date of grant | $ 24,000 | |
Warrants exercised | 0 | 0 |
Warrant expense | $ 706,500 | $ 0 |
Asset Purchase Agreement [Member] | ||
Prepayment on acquisition | $ 3,744,517 | |
Issuance of common stock in connection with pending asset acquisition, shares | 11,000,000 | |
Non-Employee Director [Member] | ||
Warrant issued to purchase common stock | 1,600,000 | |
Fair value of warrant at date of grant | $ 240,000 | |
Warrant exercise price per share | $ 0.77 | |
Consultant [Member] | ||
Warrant issued to purchase common stock | 833,000 | |
Fair value of warrant at date of grant | $ 227,000 | |
Warrant exercise price per share | $ .77 | |
Warrant expense | $ 227,000 | |
Baxalta [Member] | ||
Stock issued for equity investment, shares | 10,695,187 | |
custom:StockIssuedForEquityInvestment | $ 10,000,000 | |
Non-Employee Director [Member] | ||
Warrant expense | $ 240,000 |
12. Share-Based Compensation (D
12. Share-Based Compensation (Details - Share based compensation) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based compensation | $ 2,594,113 | $ 1,513,238 |
Research and Development Expense [Member] | ||
Share-based compensation | 229,964 | 952,829 |
General and Administrative Expense [Member] | ||
Share-based compensation | $ 2,364,149 | $ 560,409 |
12. Share-Based Compensation 60
12. Share-Based Compensation (Details - Assumptions Employee) - Employee Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted-average expected dividend yield | 0.00% | 0.00% |
Weighted-average expected volatility | 124.17% | 103.36% |
Weighted-average risk-free interest rate | 0.44% | 1.48% |
Weighted-average expected life of option | 2 years 6 months | 5 years 3 months 29 days |
Weighted-average exercise price | $ 0.42 | $ 0.31 |
Model used | Black-Scholes | Black-Scholes |
12. Share-Based Compensation 61
12. Share-Based Compensation (Details - Employee option activity) - Employee Stock Options [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Options outstanding, beginning balance | 4,185,928 | 5,222,430 |
Options granted | 16,300,000 | 1,080,000 |
Options exercised | 0 | (1,984,080) |
Options expired | (51,072) | (132,422) |
Options outstanding, ending balance | 20,434,856 | 4,185,928 |
Options vested or expected to vest | 20,434,856 | |
Options exercisable | 7,913,567 | 2,630,024 |
Weighted-average exercise price outstanding, beginning balance | $ 0.62 | $ .47 |
Weighted-average exercise price, granted | .42 | .31 |
Weighted-average exercise price, exercised | .05 | |
Weighted-average exercise price, expired | 0.47 | 0.93 |
Weighted-average exercise price, ending balance | 0.46 | 0.62 |
Weighted-average exercise price, vested or expected to vest | .46 | |
Weighted-average exercise price, exercisable | $ .52 | $ .60 |
Weighted-average remaining life outstanding | 8 years 11 months 1 day | 6 years 10 months 10 days |
Weighted-average remaining life, vested or expected to vest | 8 years 11 months 1 day | |
Weighted-average remaining life, exercisable | 7 years 9 months 11 days | 5 years 5 months 23 days |
Aggregate intrinsic value, outstanding beginning balance | $ 80,338 | |
Aggregate intrinsic value, exercised | $ 509,622 | |
Aggregate intrinsic value, outstanding ending balance | 1,915,942 | 80,338 |
Aggregate intrinsic value, vested or expected to vest | 1,915,942 | |
Aggregate intrinsic value, exercisable | $ 688,343 | $ 80,338 |
12. Share-Based Compensation 62
12. Share-Based Compensation (Details - Non-Vested employee Option activity) - Employee Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Options granted | 16,300,000 | 1,080,000 |
Options exercised | 0 | (1,984,080) |
Options vested | (5,330,000) | (680,000) |
Options forfeited/expired | (51,072) | (132,422) |
Non-Vested [Member] | ||
Options outstanding, beginning balance | 1,555,904 | |
Options granted | 16,300,000 | |
Options vested | (5,334,615) | |
Options outstanding, ending balance | 12,521,289 | 1,555,904 |
Weighted-average grant date fair value per share, beginning balance | $ 0.15 | |
Weighted-average grant date fair value per share, options granted | 0.28 | |
Weighted-average grant date fair value per share, options vested | 0.26 | |
Weighted-average grant date fair value per share, ending balance | $ 0.28 | $ 0.15 |
12. Share-Based Compensation 63
12. Share-Based Compensation (Details - Non-Employee assumptions) - Non Employee Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted-average expected dividend yield | 0.00% | |
Weighted-average expected volatility | 116.22% | |
Weighted-average risk-free interest rate | 1.62% | |
Weighted-average expected life of option | 7 years 7 months 6 days | |
Weighted-average exercise price | $ 0.42 | $ 0.39 |
Model used | Black-Scholes | |
Non-Vested [Member] | ||
Weighted-average expected dividend yield | 0.00% | |
Weighted-average expected volatility | 120.51% | |
Weighted-average risk-free interest rate | 1.54% | |
Weighted-average expected life of option | 10 years | |
Model used | Black-Scholes |
12. Share-Based Compensation 64
12. Share-Based Compensation (Details - Non-employee option activity) - Non Employee Stock Options [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Options outstanding, beginning balance | 895,520 | 415,520 | |
Options granted | 1,000,000 | 480,000 | |
Options exercised | 0 | 0 | |
Options outstanding, ending balance | 1,895,520 | 895,520 | 415,520 |
Options vested or expected to vest | 1,895,520 | ||
Options exercisable | 972,926 | 383,664 | |
Weighted-average exercise price outstanding, beginning balance | $ 0.39 | $ 0.52 | |
Weighted-average exercise price, granted | 0.42 | 0.25 | |
Weighted-average exercise price, ending balance | .41 | 0.39 | $ 0.52 |
Weighted-average exercise price, vested or expected to vest | 0.41 | ||
Weighted-average exercise price, exercisable | $ .41 | $ .42 | |
Weighted-average remaining life outstanding | 8 years 2 months 23 days | 7 years 7 months 6 days | 5 years 10 months 24 days |
Weighted-average remaining life, vested or expected to vest | 8 years 2 months 23 days | ||
Weighted-average remaining life, exercisable | 7 years 4 months 13 days | 6 years 4 months 24 days | |
Aggregate intrinsic value, outstanding beginning balance | $ 159 | $ 49 | |
Aggregate intrinsic value, outstanding ending balance | 220,764 | 159 | $ 49 |
Aggregate intrinsic value, vested or expected to vest | 220,764 | ||
Aggregate intrinsic value, exercisable | $ 119,164 | $ 159 |
12. Share-Based Compensation 65
12. Share-Based Compensation (Details - Non-vested non-employee) - Non Employee Stock Options [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Options outstanding, beginning balance | 511,856 | |
Options granted | 1,000,000 | 480,000 |
Options exercised | 0 | 0 |
Options vested | (590,000) | (260,000) |
Options outstanding, ending balance | 511,856 | |
Non-Vested [Member] | ||
Options granted | 1,000,000 | |
Options vested | (589,262) | |
Options outstanding, ending balance | 922,594 | |
Weighted-average grant date fair value per share, beginning balance | $ .21 | |
Weighted-average grant date fair value per share, options granted | .40 | |
Weighted-average grant date fair value per share, options vested | .33 | |
Weighted-average grant date fair value per share, ending balance | $ .36 | $ .21 |
12. Share-Based Compensation 66
12. Share-Based Compensation (Details - Common stock awards) - Common Stock Awards [Member] - shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Common stock awards outstanding, beginning balance | 647,522 | 460,116 |
Common stock awards granted | 1,135,280 | 3,432,190 |
Common stock awards issued | (1,027,535) | (3,244,784) |
Common stock awards outstanding, ending balance | 755,267 | 647,522 |
12. Share-Based Compensation 67
12. Share-Based Compensation (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share based compensation | $ 2,594,113 | $ 1,513,238 |
Incremental compensation expense | $ 25,008 | |
FDS Pharma [Member] | ||
Stock granted for services, shares | 3,244,784 | |
Stock granted for services, value | $ 812,000 | |
Employee Stock Options [Member] | ||
Options granted | 16,300,000 | 1,080,000 |
Weighted average grant date fair value | $ .28 | $ .23 |
Options exercised | 0 | 1,984,080 |
Proceeds from exercise of stock options | $ 0 | $ 101,933 |
Options vested | 5,330,000 | 680,000 |
Fair value of options vested | $ 1,391,450 | $ 115,864 |
Unrecognized compensation expense | $ 2,931,117 | |
Unrecognized compensation expense recognition period | 2 years | |
Non Employee Stock Options [Member] | ||
Options granted | 1,000,000 | 480,000 |
Weighted average grant date fair value | $ .40 | $ .23 |
Options exercised | 0 | 0 |
Options vested | 590,000 | 260,000 |
Fair value of options vested | $ 195,575 | $ 62,121 |
Unrecognized compensation expense | $ 263,778 | |
Unrecognized compensation expense recognition period | 1 year 6 months | |
Common Stock Awards [Member] | ||
Stock granted for services, shares | 1,135,280 | 187,406 |
Stock granted for services, value | $ 392,661 | $ 102,000 |
JSOP [Member] | ||
Share based compensation | $ 0 | $ 344,905 |
JSOP awards outstanding | 10,688,194 | 10,688,194 |
13. Employee Benefit Plans (Det
13. Employee Benefit Plans (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
401k Plan [Member] | ||
Contribution to 401k plan | $ 34,000 | $ 32,000 |
UK Plan [Member] | ||
Contribution to 401k plan | $ 144,000 | $ 108,000 |
14. Commitments and Contingen69
14. Commitments and Contingent Liabilities (Details) | Dec. 31, 2015USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,016 | $ 98,645 |
2,017 | 102,604 |
2,018 | 106,563 |
2,019 | 8,908 |
Total minimum lease payments | $ 316,720 |
14. Commitments and Contingen70
14. Commitments and Contingent Liabilities (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Prepaid rent | $ 90,838 | |
Prepaid rent, noncurrent | 61,377 | |
Landlord's leasehold obligation | 56,538 | |
Landlord's leasehold obligation, noncurrent portion | 38,791 | |
Rent expense | 134,875 | $ 172,821 |
Letter of credit | $ 66,000 | |
Contingent bonuses payable range | $380,000 to $680,000 |
15. Related Party Transactions
15. Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Payments to related parties | $ 0 | $ 286,124 |
Accounts payable | 1,788,521 | 852,760 |
SynBio LLC [Member] | ||
Due to related party | 395,000 | 395,000 |
Payments to related parties | 286,124 | |
Non-Employee Director [Member] | ||
Professional fees | 72,594 | 74,582 |
Non-Employee Director [Member] | Consulting Services [Member] | ||
Accounts payable | 17,791 | 0 |
Firm of Non-Employee Director [Member] | ||
Professional fees | 4,000 | 133,381 |
Firm of Non-Employee Director [Member] | Consulting Services [Member] | ||
Accounts payable | $ 0 | $ 51,708 |
Schedule II - Valuation and Q72
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Valuation and Qualifying Accounts [Abstract] | ||
Valuation allowance on deferred tax assets, beginning balance | $ (13,773,409) | $ (9,521,260) |
Additions (deductions) charged to (from) income tax expense | (1,551,029) | (4,252,149) |
Other changes to valuation allowance | 0 | 0 |
Valuation allowance on deferred tax assets, ending balance | $ (15,324,438) | $ (13,773,409) |