Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 01, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2019 | |
Document Transition Report | false | |
Entity Registrant Name | Soliton, Inc. | |
Title of 12(b) Security | Common Stock | |
Trading Symbol | SOLY | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding (in shares) | 16,932,184 | |
Entity Central Index Key | 0001548187 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 8,505,960 | $ 133,435 |
Restricted cash | 202,681 | 0 |
Total cash | 8,708,641 | 133,435 |
Prepaid expenses and other current assets | 198,272 | 10,533 |
Total current assets | 8,906,913 | 143,968 |
Deferred direct issuance costs - offering | 0 | 276,560 |
Property and equipment, net of accumulated depreciation | 907,309 | 1,014,240 |
Intangible assets, net of accumulated amortization | 89,521 | 84,942 |
Other assets | 23,283 | 23,283 |
Total assets | 9,927,026 | 1,542,993 |
Current liabilities: | ||
Accounts payable | 887,992 | 2,737,836 |
Accrued liabilities | 1,838,474 | 1,863,874 |
Dividends payable | 0 | 4,613,260 |
Accrued interest | 0 | 133,804 |
Accrued interest - related party | 0 | 1,162,719 |
Convertible notes payable, net | 0 | 1,784,976 |
Convertible notes payable - related party | 0 | 8,422,000 |
Notes payable, net | 0 | 293,568 |
Notes payable - related party, net | 0 | 65,479 |
Deferred rent - current portion | 7,493 | 7,106 |
Total current liabilities | 2,733,959 | 21,084,622 |
Deferred rent | 10,920 | 16,256 |
Total liabilities | 2,744,879 | 21,100,878 |
Commitments and contingencies (Note 5) | ||
Stockholders’ equity (deficit): | ||
Common stock | 16,405 | 1,998 |
Additional paid-in capital | 59,934,012 | 22,568,857 |
Accumulated deficit | (52,768,270) | (42,131,275) |
Total stockholders’ equity (deficit) | 7,182,147 | (19,557,885) |
Total liabilities and stockholders’ equity | 9,927,026 | 1,542,993 |
Series A Preferred Stock | ||
Stockholders’ equity (deficit): | ||
Preferred stock | 0 | 417 |
Series B Preferred Stock | ||
Stockholders’ equity (deficit): | ||
Preferred stock | $ 0 | $ 2,118 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parentheticals) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Preferred stock par value (in dollars per share) | $ 0.001 | |
Common stock, par value (in dollars per share) | $ 0.001 | |
Common stock, shares authorized (in shares) | 100,000,000 | |
Common stock, shares issued (in shares) | 16,405,062 | 1,998,056 |
Common stock shares outstanding (in shares) | 16,405,062 | 1,998,056 |
Series A Preferred Stock | ||
Preferred stock par value (in dollars per share) | $ 0.001 | |
Preferred stock liquidation value | $ 1,999,997 | |
Preferred stock, shares authorized (in shares) | 416,666 | |
Preferred stock, shares issued (in shares) | 0 | 416,666 |
Preferred stock, shares outstanding (in shares) | 0 | 416,666 |
Series B Preferred Stock | ||
Preferred stock par value (in dollars per share) | $ 0.001 | |
Preferred stock liquidation value | $ 14,000,641 | |
Preferred stock, shares authorized (in shares) | 2,118,100 | |
Preferred stock, shares issued (in shares) | 0 | 2,118,100 |
Preferred stock, shares outstanding (in shares) | 0 | 2,118,100 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 0 | $ 0 | $ 0 | $ 0 |
Operating expenses: | ||||
Research and development | 2,430,503 | 1,717,113 | 3,660,236 | 3,804,015 |
Sales and marketing | 33,166 | 109,565 | 136,845 | 178,115 |
Depreciation and amortization | 73,347 | 30,028 | 146,095 | 90,321 |
General and administrative | 1,763,597 | 794,991 | 5,719,568 | 2,078,191 |
Total operating expenses | 4,300,613 | 2,651,697 | 9,662,744 | 6,150,642 |
Loss from operations | (4,300,613) | (2,651,697) | (9,662,744) | (6,150,642) |
Other (expense) income: | ||||
Interest expense | 0 | (327,978) | (822,858) | (747,492) |
Interest income | 5,716 | 1,054 | 8,826 | 2,760 |
Total other (expense) income | 5,716 | (326,924) | (814,032) | (744,732) |
Net loss | (4,294,897) | (2,978,621) | (10,476,776) | (6,895,374) |
Dividend to series A and B preferred stockholders | 0 | (320,000) | (160,219) | (960,000) |
Net loss attributable to common stockholders | $ (4,294,897) | $ (3,298,621) | $ (10,636,995) | $ (7,855,374) |
Net loss per common share, basic and diluted (in dollars per share) | $ (0.27) | $ (1.74) | $ (0.83) | $ (4.23) |
Weighted average number of common shares outstanding, basic and diluted (in shares) | 15,994,002 | 1,898,056 | 12,877,047 | 1,855,190 |
Condensed Statements of Changes
Condensed Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) - USD ($) | Total | Preferred StockSeries A Preferred Stock | Preferred StockSeries B Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Private Investment in Public Equity Offering | Private Investment in Public Equity OfferingCommon Stock | Private Investment in Public Equity OfferingAdditional Paid-In Capital | Stock Issuance, Excluding PIPE Deal | Stock Issuance, Excluding PIPE DealCommon Stock | Stock Issuance, Excluding PIPE DealAdditional Paid-In Capital |
Balance (in shares) at Dec. 31, 2017 | 416,666 | 2,118,100 | 1,820,556 | |||||||||
Balance at Dec. 31, 2017 | $ (10,500,595) | $ 417 | $ 2,118 | $ 1,821 | $ 21,031,388 | $ (31,536,339) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 145,553 | 145,553 | ||||||||||
Accrued preferred dividends | (320,000) | (320,000) | ||||||||||
Net loss | (1,351,665) | (1,351,665) | ||||||||||
Balance (in shares) at Mar. 31, 2018 | 416,666 | 2,118,100 | 1,820,556 | |||||||||
Balance at Mar. 31, 2018 | (12,026,707) | $ 417 | $ 2,118 | $ 1,821 | 21,176,941 | (33,208,004) | ||||||
Balance (in shares) at Dec. 31, 2017 | 416,666 | 2,118,100 | 1,820,556 | |||||||||
Balance at Dec. 31, 2017 | (10,500,595) | $ 417 | $ 2,118 | $ 1,821 | 21,031,388 | (31,536,339) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Debt discount on convertible notes and notes payable – issuance of warrants | 0 | |||||||||||
Accrued preferred dividends | (960,000) | |||||||||||
Net loss | (6,895,374) | |||||||||||
Debt forgiveness | 0 | |||||||||||
Balance (in shares) at Sep. 30, 2018 | 416,666 | 2,118,100 | 1,898,056 | |||||||||
Balance at Sep. 30, 2018 | (17,591,758) | $ 417 | $ 2,118 | $ 1,898 | 21,795,523 | (39,391,714) | ||||||
Balance (in shares) at Mar. 31, 2018 | 416,666 | 2,118,100 | 1,820,556 | |||||||||
Balance at Mar. 31, 2018 | (12,026,707) | $ 417 | $ 2,118 | $ 1,821 | 21,176,941 | (33,208,004) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 201,690 | 201,690 | ||||||||||
Debt discount on convertible notes and notes payable – issuance of warrants | 103,006 | 103,006 | ||||||||||
Issuance of shares during period, new issues (in shares) | 77,500 | |||||||||||
Issuance of shares during period, new issues | 0 | $ 77 | (77) | |||||||||
Accrued preferred dividends | (320,000) | (320,000) | ||||||||||
Net loss | (2,565,089) | (2,565,089) | ||||||||||
Balance (in shares) at Jun. 30, 2018 | 416,666 | 2,118,100 | 1,898,056 | |||||||||
Balance at Jun. 30, 2018 | (14,607,100) | $ 417 | $ 2,118 | $ 1,898 | 21,481,560 | (36,093,093) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 313,963 | 313,963 | ||||||||||
Accrued preferred dividends | (320,000) | (320,000) | ||||||||||
Net loss | (2,978,621) | (2,978,621) | ||||||||||
Balance (in shares) at Sep. 30, 2018 | 416,666 | 2,118,100 | 1,898,056 | |||||||||
Balance at Sep. 30, 2018 | (17,591,758) | $ 417 | $ 2,118 | $ 1,898 | 21,795,523 | (39,391,714) | ||||||
Balance (in shares) at Dec. 31, 2018 | 416,666 | 2,118,100 | 1,998,056 | |||||||||
Balance at Dec. 31, 2018 | (19,557,885) | $ 417 | $ 2,118 | $ 1,998 | 22,568,857 | (42,131,275) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 512,045 | 512,045 | ||||||||||
Debt discount on convertible notes and notes payable – issuance of warrants | 145,974 | 145,974 | ||||||||||
Payment of deferred direct issuance costs | (186,029) | (186,029) | ||||||||||
Issuance of common shares for extinguishment of preferred shares (in shares) | (416,666) | (2,118,100) | ||||||||||
Issuance of common shares for extinguishment of preferred shares | $ (417) | $ (2,118) | ||||||||||
Issuance of common shares for extinguishment of preferred shares (in shares) | 2,534,766 | |||||||||||
Issuance of common shares for extinguishment of preferred shares | $ 2,535 | |||||||||||
Issuance of common shares for extinguishment of preferred shares | 0 | |||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 6,825,391 | |||||||||||
Issuance of common shares for extinguishment of convertible debt | 11,784,987 | $ 6,825 | 11,778,162 | |||||||||
Issuance of common shares for extinguishment of dividends payable (in shares) | 954,696 | |||||||||||
Issuance of common shares for extinguishment of dividends payable | 4,773,480 | $ 955 | 4,772,525 | |||||||||
Issuance of shares during period, new issues (in shares) | 2,172,591 | |||||||||||
Issuance of shares during period, new issues | 9,873,667 | $ 2,173 | 9,871,494 | |||||||||
Issuance of common shares for accelerated vesting (in shares) | 127,500 | |||||||||||
Issuance of common shares for accelerated vesting | 0 | $ 127 | (127) | |||||||||
Accrued preferred dividends | (160,219) | (160,219) | ||||||||||
Net loss | (3,208,345) | (3,208,345) | ||||||||||
Debt forgiveness | 434,065 | 434,065 | ||||||||||
Balance (in shares) at Mar. 31, 2019 | 0 | 0 | 14,613,000 | |||||||||
Balance at Mar. 31, 2019 | 4,411,740 | $ 0 | $ 0 | $ 14,613 | 49,896,966 | (45,499,839) | ||||||
Balance (in shares) at Dec. 31, 2018 | 416,666 | 2,118,100 | 1,998,056 | |||||||||
Balance at Dec. 31, 2018 | (19,557,885) | $ 417 | $ 2,118 | $ 1,998 | 22,568,857 | (42,131,275) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Debt discount on convertible notes and notes payable – issuance of warrants | 145,974 | |||||||||||
Accrued preferred dividends | (160,219) | |||||||||||
Net loss | (10,476,776) | |||||||||||
Debt forgiveness | 434,065 | |||||||||||
Balance (in shares) at Sep. 30, 2019 | 0 | 0 | 16,405,062 | |||||||||
Balance at Sep. 30, 2019 | 7,182,147 | $ 0 | $ 0 | $ 16,405 | 59,934,012 | (52,768,270) | ||||||
Balance (in shares) at Mar. 31, 2019 | 0 | 0 | 14,613,000 | |||||||||
Balance at Mar. 31, 2019 | 4,411,740 | $ 0 | $ 0 | $ 14,613 | 49,896,966 | (45,499,839) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 686,029 | 686,029 | ||||||||||
Issuance of shares during period, new issues (in shares) | 675,000 | 405,715 | ||||||||||
Issuance of shares during period, new issues | $ 8,641,951 | $ 675 | $ 8,641,276 | $ 0 | $ 406 | $ (406) | ||||||
Net loss | (2,973,534) | (2,973,534) | ||||||||||
Balance (in shares) at Jun. 30, 2019 | 0 | 0 | 15,693,715 | |||||||||
Balance at Jun. 30, 2019 | 10,766,186 | $ 0 | $ 0 | $ 15,694 | 59,223,865 | (48,473,373) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||
Stock-based compensation | 661,726 | 661,726 | ||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 273,034 | |||||||||||
Issuance of common shares for extinguishment of convertible debt | 47,781 | $ 273 | 47,508 | |||||||||
Issuance of shares during period, new issues (in shares) | 0 | 438,313 | ||||||||||
Issuance of shares during period, new issues | $ 1,351 | $ 0 | $ 1,351 | $ 0 | $ 438 | $ (438) | ||||||
Net loss | (4,294,897) | (4,294,897) | ||||||||||
Balance (in shares) at Sep. 30, 2019 | 0 | 0 | 16,405,062 | |||||||||
Balance at Sep. 30, 2019 | $ 7,182,147 | $ 0 | $ 0 | $ 16,405 | $ 59,934,012 | $ (52,768,270) |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (10,476,776) | $ (6,895,374) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 146,095 | 90,321 |
Stock-based compensation | 1,859,800 | 661,205 |
Impairment of intangible assets | 0 | 19,138 |
Amortization of debt discount | 664,953 | 44,921 |
Deferred rent | (4,949) | (1,510) |
Changes in operating assets - (Increase)/Decrease: | ||
Prepaid expenses and other current assets | (187,739) | (7,643) |
Changes in operating liabilities - Increase/(Decrease): | ||
Accounts payable | (1,599,844) | 1,322,260 |
Accrued liabilities | 408,663 | 339,275 |
Non-convertible accrued interest - non-related and related party | 10,617 | 79,988 |
Convertible accrued interest - related party | 145,667 | 621,114 |
NET CASH USED IN OPERATING ACTIVITIES: | (9,033,513) | (3,726,305) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payments for the purchase of property and equipment | (39,164) | (16,008) |
Payments for acquisition of intangibles | (4,579) | (11,152) |
NET CASH USED IN INVESTING ACTIVITIES: | (43,743) | (27,160) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of non-convertible notes payable - related party and non-related party | (985,000) | 0 |
Payment of non-convertible notes payable accrued interest - related party and non-related party | (20,038) | 0 |
Proceeds from the issuance of non-convertible notes payable - non-related party | 300,000 | 0 |
Proceeds from initial public offering | 9,714,198 | 0 |
Proceeds from private investment in public equity offering | 8,643,302 | 0 |
Loan from non-related party | 0 | 1,978,000 |
Deferred financing issuance costs | 0 | (163,760) |
Proceeds from convertible notes payable - related party | 0 | 2,397,000 |
Payment of deferred direct issuance costs - proposed offering | 0 | 278,212 |
NET CASH PROVIDED BY FINANCING ACTIVITIES: | 17,652,462 | 3,933,028 |
Net increase in cash | 8,575,206 | 179,563 |
Cash, beginning of period | 133,435 | 18,412 |
Cash, end of period | 8,708,641 | 197,975 |
Supplemental cash flow disclosures: | ||
Cash paid for interest (non-convertible notes payable - related and non-related party) | 20,038 | 0 |
Non-cash financing activities: | ||
Accrued preferred dividends | 160,219 | 960,000 |
Warrants debt discount on convertible notes | 0 | 103,006 |
Capital contributions - debt forgiveness | 434,065 | 0 |
Issuance of common stock for extinguishment of convertible note payable - related party and non-related party | 10,400,000 | 0 |
Issuance of common stock for extinguishment of convertible note payable accrued interest - related party and non-related party | 1,432,768 | 0 |
Issuance of common stock for extinguishment of dividends payable | 4,773,480 | 0 |
Issuance of common stock for extinguishment of preferred stock A and preferred stock B | 2,535 | 0 |
Debt discount on convertible notes and notes payable – issuance of warrants | 145,974 | 0 |
Deferred direct issuance costs - offering | $ 276,560 | $ 0 |
Description of the Business and
Description of the Business and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Description of the Business and Summary of Significant Accounting Policies | Description of the Business and Summary of Significant Accounting Policies Description of the Business Soliton, Inc. (“Soliton” or the “Company”) was organized under the laws of the State of Delaware on March 27, 2012. The Company operates in one segment as a medical device company organized to develop and commercialize products utilizing a proprietary Rapid Acoustic Pulse ("RAP") technology platform. The Company is a pre-revenue stage company with its first product being developed for the removal of tattoos. In addition, the Company has recently completed a proof-of-concept clinical trial for the reduction of cellulite and has initiated a four-site pivotal trial for the reduction of cellulite. Initial Public Offering On February 19, 2019, the Company consummated its initial public offering (“IPO”). In the IPO, the Company sold a total of 2,172,591 shares of common stock at a purchase price of $5.00 per share for gross proceeds of $10,862,955 and net proceeds of approximately $9,700,000. In connection with the closing of the IPO, the Company's convertible notes (and related accrued interest) of $11,784,987 were initially converted into 6,825,391 shares of the Company's common stock, accrued dividends of $4,773,480 were converted into 954,696 shares of the Company's common stock, and preferred stock, both Series A and Series B, was converted into 2,534,766 shares of the Company's common stock. In addition, 127,500 shares of unvested restricted grants were immediately vested upon the completion of the IPO. Total shares of common stock outstanding at the closing of the IPO amounted to 14,613,000. Upon the closing of the IPO, certain notes were to be automatically converted according to their terms into the Company’s common stock to the extent and provided that certain holders of these notes are not permitted to convert such notes to the extent that the holders or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. Due to this 4.99% limitation, principal representing $47,781 of these notes remained outstanding and were converted into 273,034 shares of its common stock in August and September 2019 when the conversion did not result in the holders and any of its affiliates owning more than 4.99% of the Company's outstanding common shares. Private Investment in Public Equity Offering On June 16, 2019, the Company entered into a private offering with certain institutional and accredited investors for the sale by the Company of 675,000 units (each a “June Unit”) of common stock issued at $14.00 per June Unit for total gross proceeds of $9,450,000. Each June Unit consisted of (i) one share of the Company’s common stock, and (ii) 0.7 of a warrant to purchase one share of common stock (each a “June Warrant”). The offering price of the June Units was $14.00 per Unit. The June Warrants included in the June Units are exercisable at a price of $16.00 per share commencing on the date of issuance and will expire 5 years from the effective date of the registration statement pursuant to which the resale of the shares of common stock underlying the June Warrants are registered, or August 23, 2024. The Company estimates the net proceeds from the closing of the sale of the June Units on June 19, 2019 was approximately $8,600,000 after deducting the placement agent fees and estimated offering expenses payable by the Company. On October 10, 2019, the Company entered into a private placement with certain institutional and accredited investors for the sale by the Company of 485,250 units (each an “October Unit”) of common stock issued at $12.88 per October Unit for total gross proceeds of $6,250,020. Each October Unit consisted of (i) one share of the Company’s common stock and (ii) 1.1 of a warrant to purchase one share of common stock (each an “October Warrant”). The October Warrants included in the October Units are exercisable at a price of $12.88 per share commencing on the date of issuance and will expire 5 years from the date of issuance. The Company estimates the net proceeds from the closing of the sale of the October Units on October 11, 2019 was approximately $5,700,000 after deducting the placement agent fees and estimated offering expenses payable by the Company. Going Concern The Company is an early stage and emerging growth company and has not generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage and emerging growth companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the three and nine months ended September 30, 2019 and 2018, the Company incurred net losses of $4,294,897 and $2,978,621, respectively, and $10,476,776 and $6,895,374, respectively, and for the nine months ended September 30, 2019 and 2018, had net cash flows used in operating activities of $9,033,513 and $3,726,305, respectively. At September 30, 2019, the Company had an accumulated deficit of $52,768,270, working capital of $6,172,954 and cash, cash equivalents and restricted cash of $8,708,641. The Company does not expect to experience positive cash flows from operating activities in the near future, if at all. The Company anticipates incurring operating losses for the next several years as it completes the development of its products and seeks requested regulatory clearances to market such products. These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. The accompanying financial statements have been prepared on a going concern basis and do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s cash, cash equivalents and restricted cash on hand of $8,708,641 as of September 30, 2019 and subsequent closing of approximately $5,700,000 in net proceeds from the Company's private placement with certain institutional and accredited investors on October 11, 2019 are sufficient to fund the Company's operations through the third quarter of 2020 but not beyond. The Company also believes it will need to raise additional capital in order to continue to execute its business plan, including obtaining additional regulatory clearance for its products currently under development and commercializing and generating revenues from products under development. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital will adversely impact the Company’s ability to meet its financial obligations as they become due and payable and to achieve its intended business objectives. If the Company is unable to raise sufficient additional funds, it will have to scale back its operations. Basis of Presentation The accompanying condensed interim financial statements are unaudited. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all the information and notes required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and accompanying notes as found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 29, 2019. In the opinion of management, the unaudited condensed interim financial statements reflect all the adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The December 31, 2018 balance sheet included herein was derived from the audited financial statements, but does not include all disclosures, including notes, required by GAAP for complete financial statements. Segments The Company operates in one reportable segment based on management’s view of its business for purposes of evaluating performance and making operating decisions. Use of Estimates in Financial Statement Presentation The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company's significant estimates and assumptions include valuation of equity related instruments, estimates of work performed by outside consultants, depreciable lives of long-lived assets (including property and equipment and intangible assets), and the valuation allowance related to deferred taxes. Some of these judgments can be subjective and complex, and, consequently, actual results could differ from those estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates. Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents or restricted cash. The Company participates in an insured cash sweep program through its bank that sweeps cash balances exceeding the FDIC insured limit of $250,000 into multiple accounts. Periodically in the ordinary course of business, the Company may carry cash balances at financial institutions in excess of the insured limits of $250,000. Restricted cash consists of amounts held in deposit with the Company’s bank to collateralize a letter of credit which supports the Company's obligations to pay or perform according to the requirements of an underlying agreement with a certain vendor. Such letter of credit has an initial term of one year, renews automatically and can only be modified or canceled with the approval of the beneficiary. As of September 30, 2019, the letter of credit was not used. Property and Equipment Property and equipment are stated at historical cost and depreciated on a straight-line basis over the estimated useful lives, generally three five Intangible Assets Intangible assets include trademarks. At September 30, 2019 and December 31, 2018, the Company had trademarks of $89,521 and $84,942, respectively. The Company no longer amortizes trademarks with indefinite useful lives, rather, such assets are required to be tested for impairment at least annually or sooner if events or changes in circumstances indicate that the asset may be impaired. Amortization expense for each of the three months ended September 30, 2019 and 2018 was $0, and for the nine months ended September 30, 2019 and 2018 was $0 and $376, respectively. Long-Lived Assets The Company evaluates its long-lived assets, including equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the asset is considered impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets . Deferred Rent Deferred rent is recorded and amortized to the extent the total minimum rental payments allocated to the current period on a straight-line basis differ from the cash payments required. Convertible Debt When conversion terms related to convertible debt would be triggered by future events not controlled by the Company, the Company accounts for the conversion feature as contingent conversion options. Recognition of the intrinsic value of the conversion option is recognized only upon the occurrence of a triggering event. Fair Value Measurements Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. At September 30, 2019 and December 31, 2018, the carrying amounts of the Company's financial instruments, including cash and cash equivalents, restricted cash and accounts payable, approximate their respective fair value due to the short-term nature of these instruments. At September 30, 2019 and December 31, 2018, the Company does not have any assets or liabilities required to be measured at fair value on a recurring basis. Deferred Direct IPO Issuance Costs – Offering The Company had capitalized offering costs of $276,560, consisting of legal, accounting and other fees and costs related to the IPO, which were reclassified to additional paid-in capital ("APIC") as a reduction of the proceeds upon the closing of the IPO in February 2019. Warrants to Purchase Common Stock The Company issued warrants to purchase shares of common stock related to (i) bridge notes issued prior to its IPO, (ii) private investment public equity ("PIPE") deals, and (iii) as part of underwriter compensation in 2019 and 2018. The Company accounted for such warrants in accordance with Accounting Standards Codification (ASC) Topic 480-10, Distinguishing Liabilities from Equity , which identifies three categories of freestanding financial instruments that are required to be accounted for as a liability. Based on this guidance, the Company determined, for each issuance, that its warrants did not need to be accounted for as a liability. Accordingly, the warrants were classified as equity and are not subject to remeasurement at each balance sheet date. In addition, the Company accounts for issuance costs of warrants issued with debt instruments in accordance with ASC 470-20, Debt with Conversion and Other Options , which states proceeds from the sale of a debt instrument with stock purchase warrants (detachable call options) are allocated to elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds so allocated to the warrants are accounted for as paid-in capital. The remainder of the proceeds are allocated to the debt instrument, which may result in a discount or premium. On July 1, 2019, the Company filed a Registration Statement on Form S-1 to register for resale the common stock underlying the June Units sold with the Company's June 2019 private offering. Related registration rights agreements are accounted for in accordance with Topic ASC Topic 450-20, Loss Contingencies , which requires measurement of the contingent liability when an entity would be required to deliver shares under a registration payment arrangement, the transfer of consideration is probable and the number of shares to be delivered can be reasonably estimated. Accordingly, there is no liability under the payment arrangement requiring disclosure or recognition. The fair value of warrants is estimated using the Black-Scholes option pricing model, based on the market value of the underlying common stock at the measurement dates, the contractual terms of the warrants, risk-free interest rates and expected volatility of the price of the underlying common stock. There are no expected dividends. Research and Development Expenses Research and development expenses are recognized as incurred and include the costs related to the Company's various contract research service providers, suppliers, engineering studies, supplies, outsourced testing and consulting, clinical costs, patent costs and salaries and related costs of employees working directly on research activities. Stock-Based Compensation Stock-based compensation expense includes the estimated fair value of equity awards vested during the reporting period. The expense for equity awards vested during the reporting period is determined based upon the grant date fair value of the award and is recognized as expense over the applicable vesting period of the stock award using either the straight-line method or the accelerated method, depending on the vesting structure, and is included in general and administrative expenses. Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of reported assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company must then assess the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Tax rate changes are reflected in income during the period such changes are enacted. The Company's tax years ending December 31, 2016 and thereafter remain subject to examination by the tax authorities. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company has recorded a full valuation allowance against its net total deferred tax assets as of September 30, 2019 and December 31, 2018 because management determined that it is not more-likely-than not that those assets will be realized. Accordingly, there was no income tax benefit for all periods presented. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company's financial statement as of September 30, 2019. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date. The Company classifies interest expense and any related penalties related to income tax uncertainties as a component of income tax expense. No interest or penalties have been recognized for the three and nine months ended September 30, 2019 and 2018. Net Loss per Common Share Basic net loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. The Company's unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities and are contemplated in the computations of basic and diluted earnings or loss per share. These securities do not participate in losses and accordingly no such allocation has been made in the periods presented. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. As of September 30, 2019, potentially dilutive securities included options to purchase 2,843,550 common shares, warrants to purchase 888,333 common shares and unvested restricted stock of 170,834 shares. As of September 30, 2018, potentially dilutive securities included options to purchase 2,235,000 common shares, preferred stock convertible to 2,534,766 common shares, warrants to purchase 91,350 common shares, accrued preferred stock dividend convertible at a price determined by the Company's Board of Directors (the "Board") (the Company also had the option to pay the accrued preferred stock dividend in cash), unvested restricted stock of 227,500 shares, respectively, and notes and accrued interest convertible to common shares upon a future financing. JOBS Act Accounting Election The Company is an emerging growth company ("EGC"), as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised, and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an EGC nor an EGC which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Subsequent Events The Company’s management reviewed all material events through the date that the financial statements were issued for subsequent event disclosure consideration. See Note 7 and elsewhere in the notes to the financial statements for additional information. Recent Accounting Standards In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, “Leases (Topic 842)” , which establishes a right-of-use (“ROU”) model requiring a lessee to recognize a ROU asset and a lease liability for all leases with terms greater-than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance is currently effective, for public EGC companies like the Company, for fiscal years beginning after December 15, 2020 and may include interim periods within those fiscal years. The modified retrospective transition approach applies to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has the option to instead apply the provisions at the effective date without adjusting the comparative periods presented. The Company is currently evaluating the impact of this guidance on its financial position, results of operations, and cash flows. In June 2018, the FASB issued ASU No. 2018-07, “Compensation Stock Compensation (Topic 718), Improvements to Non-Employee Share-Based Payment Accounting.” Under legacy guidance, the accounting for non-employee share-based payments differs from that applied to employee awards, particularly with regard to the measurement date and the impact of performance conditions. ASU No. 2018-7 provides that existing employee guidance will apply to non-employee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attributions of compensation cost. The cost of non-employee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for non-employee awards. The Company adopted the standard as of January 1, 2019 and it did not have an impact on the Company's financial statements, as non-employee stock compensation is nominal relative to the Company's total expenses for the three and nine months ended September 30, 2019. The Company does not believe that any other recently issued effective standards, or standards issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. Reclassifications In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had an effect on previously reported cash flows between operating and financing activities. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 9 Months Ended |
Sep. 30, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consisted of the following: September 30, December 31, Prepaid insurance $ 171,539 $ 9,453 Other prepaids and receivables 26,733 1,080 Total prepaid expenses and other current assets $ 198,272 $ 10,533 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: September 30, December 31, Computer equipment and software $ 115,911 $ 105,704 Research and development equipment 244,480 244,480 Lab equipment 780,000 780,000 Leasehold improvements 271,124 242,167 Furniture 19,893 19,893 Subtotal 1,431,408 1,392,244 Less: accumulated depreciation (524,099) (378,004) Total property and equipment, net $ 907,309 $ 1,014,240 Depreciation expense for the three months ended September 30, 2019 and 2018 was $73,347 and $30,028, respectively. Depreciation expense for the nine months ended September 30, 2019 and 2018 was $146,095 and $89,945, respectively. |
Convertible Notes Payable
Convertible Notes Payable | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Convertible Notes Payable | Convertible Notes PayableOn February 19, 2019, the Company consummated its IPO. In connection with the closing of the IPO, the Company's convertible notes (and related accrued interest) of $11,784,987 were converted into 6,825,391 shares of the Company's common stock. Upon the closing of the IPO, certain notes were to be automatically converted according to their terms into the Company’s common stock to the extent and provided that certain holders of these notes are not permitted to convert such notes to the extent that the holders or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. Due to this 4.99% limitation, principal representing $47,781 of these notes remained outstanding and were converted into 273,034 shares of its common stock in August and September 2019 when the conversion did not result in the holders and any of its affiliates owning more than 4.99% of the Company's outstanding common shares. The total amount of issuances under the Company's First Note and First Amendment throughout 2017 amounted to $5,000,000 and were issued to a single related party, who is a major stockholder of the Company. As a result of the Company’s IPO on February 19, 2019, the principal amount of $5,000,000 and accrued interest of $944,063 were converted into 1,585,086 shares of the Company’s common stock. On November 1, 2017, the Board approved a second note purchase agreement (the "Second Note") allowing the Company to sell an aggregate of $1,900,000 of Notes. The Notes were convertible into either the Company’s preferred or common stock (depends on the equity securities offered in the equity financing) at 75% of the price paid per share in a subsequent equity financing where the Company receives gross proceeds of not less than $5,000,000 or at 85% of the per share price determined by dividing the equity value of the Company that is expected to be available for distribution to the Company’s stockholders by the aggregate number of the Company’s fully-diluted common shares upon the closing of a sale, liquidation, merger, or change of control of the Company. The Notes bore interest at 8.25% per annum and initially matured on June 29, 2018, which date was extended as discussed below. At maturity, the interest rate increased to 12.0% per annum. The Company closed the initial tranche of the Second Note on November 9, 2017 for $400,000, followed by a tranche on December 1, 2017, for $375,000, a third tranche on December 26, 2017 for $250,000, a fourth tranche on January 8, 2018 for $250,000, a fifth tranche on January 25, 2018 for $250,000 and a final tranche on February 13, 2018 for $375,000 for a total of $1,900,000. On June 29, 2018, the Company and the related party modified the maturity date of the Notes entered into under the First Note and Second Note to April 30, 2019. The total amount of issuance under the Second Note amounted to $1,900,000 and were issued to a single related party, who is a major stockholder of the Company. As a result of the Company’s IPO, the principal amount of $1,900,000 and accrued interest of $223,368 were converted into 566,235 shares of the Company’s common stock. On April 2, 2018, the Board approved a note purchase agreement (the "Third Note"), which was amended on August 10, 2018, allowing the Company to sell an aggregate of $500,000 of Notes. The Third Note provided that, on the closing date of the IPO, the outstanding principal and accrued, but unpaid, interest would be converted into common stock at the conversion price of $0.175. However, certain notes holders were not permitted to convert their notes when the holders or any of its affiliates would beneficially owned in excess of 4.99% of the Company’s common stock after such conversion. The holders of the Company’s outstanding preferred shares agreed to waive the adjustment to the preferred stock conversion price triggered by the Third Note. The Notes bore interest at 10.0% per annum and were to mature on April 2, 2020 but were settled as a result of the Company's IPO on February 19, 2019. The total amount of issuance under the Third Note amounted to $500,000. The Company issued $250,000 to a single related party, who is a major stockholder of the Company, and $250,000 to four non-related party investors. As a result of the Company’s IPO, principal amount of $452,219 and accrued interest of $43,562 were converted into 2,833,034 shares of the Company’s common stock. In August and September 2019, the remaining principal amount of $47,781 was converted into 273,034 shares of the Company's common stock. As of September 30, 2019, the amount outstanding under the Third Note was fully converted for a total of 3,106,068 shares of the Company's common stock. On April 17, 2018, the Board approved a note purchase agreement (the "Fourth Note") allowing the Company to sell an aggregate of $3,000,000 of Notes. The Fourth Note provided that on the closing date of the IPO, the outstanding principal and accrued, but unpaid, interest would be converted into common stock at the conversion price of $1.75. The holders of the Company’s outstanding preferred shares agreed to waive the adjustment to the preferred stock conversion price triggered by the Fourth Note. The Notes bore interest at 10% per annum and matured two years from the Note issuance date but were settled as a result of the Company's IPO on February 19, 2019. The total amount of issuance under the Fourth Note amounted to $3,000,000. The Company issued $1,272,000 in principal amount of such Notes to related party investors and $1,728,000 to non-related party investors. As a result of the Company’s IPO, the principal amount of $3,000,000 and accrued interest of $221,775 were converted into 1,841,036 shares of the Company’s common stock. The Company incurred issuance costs relating to the Fourth Note in the amount of $163,760, which were being amortized over 24-months but were accelerated as a result of the Company’s IPO closing, resulting in the remaining $118,492 being expensed during the nine months ended September 30, 2019. The Company also issued warrants to purchase 91,350 shares of common stock at a price of $1.75 per share to placement agents in connection with the Notes issued under the Fourth Note. For additional information, see Note 6. The value of these warrants were $103,006 which was being amortized over 24-months months but were accelerated as a result of the Company’s IPO closing, resulting in the remaining $74,532 being expensed during the nine months ended September 30, 2019. On August 7, 2018, the Company's Board authorized it to commence a new offering for up to $485,000 10% non-convertible promissory notes, which were accompanied by a five On August 31, 2018, the Company's Board approved a $200,000 increase to the Fifth Note authorized on August 7, 2018. On December 21, 2018, the Company's Board approved an additional $300,000 increase to the Fifth Note authorized on August 7, 2018 up to a maximum of $985,000. From October 2018 to February 2019, the Company issued $125,000 and $860,000 of the Fifth Note to related parties and non-related parties, respectively. On February 15, 2019, the Company paid $985,000 in principal and $20,038 in accrued interest to the note holders to repay the Fifth Note in full. The Company issued 685,000 warrants in connection with the issuances of the Fifth Note in 2018. These warrants were valued at $775,616. Proceeds of $363,748 (of which $66,423 was for related party and $297,325 was for non-related party) were allocated to issuance cost based on the relative fair value of these warrants. These issuance costs were being amortized over 24-months but were accelerated as a result of the Company’s IPO closing, resulting in the remaining balance of $325,955 being expensed during the nine months ended September 30, 2019. The Company issued 300,000 warrants in connection with the issuances of the Fifth Note in January and February 2019. These warrants were valued at $285,234. Proceeds of $145,974 (of which all was for non-related party) were allocated to issuance cost based on the relative fair value of these warrants. These issuance costs were being amortized over 24-months but were accelerated as a result of the Company’s IPO closing, resulting in the entire balance of $145,974 being expensed during the nine months ended September 30, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies On April 5, 2012, the Company entered into a Patent and Technology License Agreement with The University of Texas M.D. Anderson Cancer Center (“MD Anderson”). Pursuant to the agreement, the Company obtained a royalty-bearing, worldwide, exclusive license to intellectual property including patent rights related to the patents and technology the Company uses. Under the agreement, Soliton agreed to pay a nonrefundable license documentation fee 30 days after the effective date of the agreement. Additionally, Soliton agreed to pay a nonrefundable annual maintenance fee starting on the third anniversary of the effective date of the agreement, which escalates each anniversary. Additionally, the Company agreed to a running royalty percentage of net sales. The Company also agreed to make certain milestone and sublicensing payments, including a $250,000 milestone payment made in June 2019 after the Company received U.S. Food & Drug Administration ("FDA") clearance for our RAP device for tattoo removal. MD Anderson has the right to terminate the agreement upon advanced notice in the event of a default by Soliton. The agreement will expire upon the expiration of the licensed intellectual property. The rights obtained by the Company pursuant to the agreement are made subject to the rights of the U.S. government to the extent that the technology covered by the licensed intellectual property was developed under a funding agreement between MD Anderson and the U.S. government. All out-of-pocket expenses incurred by MD Anderson in filing, prosecuting and maintaining the licensed patents have been and shall continue to be assumed by the Company. As the inventor of the intellectual property licensed from MD Anderson, Dr. Capelli, the Company's Chief Executive Officer, is entitled to 50% of the license income (which is determined after MD Anderson recoups any costs associated therewith) that the Company is required to pay to MD Anderson pursuant to the Company's license agreement with MD Anderson. Leases The Company leases space for its corporate office. The lease agreement provides for a 5 year term beginning on July 15, 2015, for rent payments of $7,867 per month. Total rent expense under this office space lease arrangement for each of the three months ended September 30, 2019 and 2018 was $23,602 and $24,157, respectively. Total rent expense for the nine months ended September 30, 2019 and 2018 was $71,918 and $65,108, respectively. Future minimum lease payments as of September 30, 2019 were as follows: Year Ending December 31, Amount 2019 $ 25,988 2020 106,153 2021 35,751 Total future minimum lease payments $ 167,892 Letters of Credit The Company has an irrevocable letter of credit which supports its obligations to pay or perform according to the requirements of an underlying agreement with a certain vendor. Such letter of credit has an initial term of one year, renews automatically for an additional year and can only be modified or canceled with the approval of the beneficiary. As of September 30, 2019, the letter of credit was not used. Legal Proceedings In the normal course of business, from time-to-time, the Company may be subject to claims in legal proceedings. However, the Company does not believe it is currently a party to any pending legal actions. Notwithstanding, legal proceedings are subject-to inherent uncertainties, and an unfavorable outcome could include monetary damages, and in such event, could result in a material adverse impact on the Company's business, financial position, results of operations or cash flows. |
Stockholders' Deficit
Stockholders' Deficit | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Deficit | Stockholders’ Deficit Preferred Stock Until amending the Company's certificate of incorporation in February 2019, the Company was authorized to issue 2,534,766 shares of preferred stock with a par value of $0.001 per share with such designation, rights, and preferences as may be determined from time-to-time by the Company's Board. As of September 30, 2019 and December 31, 2018, there were 0 and 416,666 Series A preferred stock and 0 and 2,118,100 Series B preferred stock issued and outstanding, respectively. Dividends accrued at a rate of 8.00% per annum based on $4.80 per Series A preferred share, the dividends were cumulative but non-compounding. The Series B preferred stock had similar rights as Series A preferred stock except that the dividends were based on $6.61 per Series B preferred share and Series B preferred stock was convertible into common stock at a rate of $6.61 divided by a conversion price initially set at $6.61. As of the Company’s IPO date of February 19, 2019 and December 31, 2018, accrued dividends for preferred stock were $4,773,480 and $4,613,261, respectively. The holder of the Series A and Series B preferred stock agreed to convert the preferred stock into common stock upon the completion of the Company's IPO. The holders of the Company’s outstanding shares of preferred stock agreed to waive the adjustment to the conversion price of the preferred stock upon the issuances of the Third and Fourth Note. On February 19, 2019, all outstanding shares of Series A and Series B preferred stock and accrued dividends on these shares were converted into 2,534,766 and 954,696 shares of common stock upon the closing of the Company’s IPO. The Company amended its articles of incorporation on February 19, 2019 to no longer have preferred shares authorized under the amended certificate of incorporation. Adoption of 2012 Long Term Incentive Plan In November 2012, the Company’s Board and stockholders adopted the 2012 Long Term Incentive Plan (the “2012 Stock Plan”). The 2012 Stock Plan is designed to enable the Company to offer employees, officers, directors and consultants, as defined, an opportunity to acquire a proprietary interest in the Company. The types of awards that may be granted under the 2012 Stock Plan include stock options, stock appreciation rights, restricted stock, and other stock-based awards subject to limitations under applicable law. All awards are subject to approval by the Company’s Board. The 2012 Stock Plan reserves shares of common stock for issuance in accordance with the 2012 Stock Plan’s terms. Total number of shares reserved and available for issuance under the plan is 789,745 shares. As of September 30, 2019, 14,745 shares remained under the 2012 Stock Plan. The Company does not intend to utilize the 2012 Stock Plan and instead intends to utilize the 2018 Stock Plan. Adoption of 2018 Stock Plan In June 2018, the Company’s Board and stockholders adopted the 2018 Stock Plan. The 2018 Stock Plan is designed to enable the Company to offer employees, officers, directors and consultants, as defined, an opportunity to acquire a proprietary interest in the Company. The types of awards that may be granted under the 2018 Stock Plan include stock options, stock appreciation rights, restricted stock, and other stock-based awards subject to limitations under applicable law. All awards are subject to approval by the Company’s Board. The 2018 Stock Plan reserves shares of common stock for issuance in accordance with the 2018 Stock Plan’s terms. Total number of shares reserved and available for issuance under the plan is 3,400,000 shares. As of September 30, 2019, 571,450 shares remained available for grant under the 2018 Stock Plan. Restricted Stock Restricted stock activity for the nine months ended September 30, 2019 is summarized as follows: Number of Weighted- Outstanding at December 31, 2018 127,500 $ 3.21 Outstanding at Granted 200,000 11.54 Outstanding at Vested (156,666) 4.76 Outstanding at Outstanding at September 30, 2019 170,834 $ 11.54 On May 8, 2019, the Company granted and issued 200,000 shares of restricted common stock to three consultants in connection with the provision of services pursuant to agreements entered into in April 2019. The consultants were each accredited investors. 25,000 shares vested within four months of the approval date of the agreement. The remaining 175,000 shares vest over 42 months, beginning on September 19, 2019. As of September 30, 2019, 29,166 shares have vested and 170,834 remain unvested. During the three months ended September 30, 2019 and 2018, the Company recorded $166,289 and $142,634, respectively, in stock-based compensation for the restricted shares previously issued. During the nine months ended September 30, 2019 and 2018, the Company recorded $763,320 and $427,902, respectively, in stock-based compensation for the restricted shares previously issued. As of September 30, 2019, there was $1,809,135 of unrecognized compensation expense related to restricted shares. Stock Options The following table summarizes stock option activities for the nine months ended September 30, 2019: Number of Weighted Weighted Aggregate Outstanding, December 31, 2018 2,235,000 $ 1.74 9.44 $ 23,100 Granted 608,550 5.70 Exercised — — Cancelled — — Outstanding, September 30, 2019 2,843,550 $ 2.59 8.85 $ 23,040,551 Exercisable, September 30, 2019 767,125 $ 1.73 8.86 $ 6,876,323 On July 10, 2019, the Company granted 19,000 options to purchase shares of its common stock with a term of 10 years and vesting 25.00% annually over a four During the nine months ended September 30, 2019, the Company granted certain individuals options to purchase 608,550 shares of the Company’s common stock with an average exercise price of $5.70 per share, for a term of 10 years, and a vesting period ranging from 25.00% per year over 120 days to 25.00% per quarter over 1 year. The options have an aggregated grant date fair value of $2,446,102 that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate ranging from 1.76% to 2.53% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life ranging from 5.27 to 6.25 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility ranging from 84.3% to 85.1% based on the historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock ranging from $1.75 to $17.50 per share. All options issued and outstanding are being amortized over their respective vesting periods. During the three months ended September 30, 2019 and 2018, the Company recorded option expense of $495,437 and $171,330, respectively. During the nine months ended September 30, 2019 and 2018, the Company recorded stock option expense of $1,096,480 and $233,303, respectively. The unrecognized compensation expense at September 30, 2019 was $3,670,583. Warrants On April 20, 2018, the Company issued warrants to purchase 79,350 shares of common stock at an exercise price of $1.75. The warrants expire on April 20, 2023. The warrants were issued to a placement agent in connection with notes issued under the Fourth Note. On June 8, 2018, the Company issued warrants to purchase 12,000 shares of common stock at an exercise price of $1.75. The warrants expire on June 8, 2023. The warrants were issued to a placement agent in connection with notes issued under the Fourth Note. From October through December 2018, the Company issued warrants to purchase 685,000 shares of common stock at an exercise price of $1.75. The warrants expire 5 years from the date of issuance. In addition, the Company issued warrants to purchase 300,000 shares of common stock at an exercise price of $1.75 on various dates in January and February of 2019. The warrants were issued to investors in connection with notes issued under the Fifth Note. On February 19, 2019, the Company issued warrants to the underwriters of the Company's IPO to purchase 152,081 shares of common stock at an exercise price of $6.00. The warrants expire five The grant date fair value of these 1,228,431 warrants was $1,636,232, which was determined utilizing the Black-Scholes option pricing model. Variables used in the Black-Scholes option-pricing model include (1) discount rate in the range of 2.5% to 2.8% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected term of 5 years based on the term of the warrants, (3) expected volatility of 84% to 85% based on the historical volatility of comparable companies' stock, (4) no expected dividends, and (5) fair value of the Company's stock at $1.67 per share for warrants issued prior to the IPO, a value determined by the Company's Board after reviewing and considering, among other factors, a valuation report issued by an independent appraisal firm, or the fair market value of the Company's stock at the closing of its' IPO on February 19, 2019 of $4.87 for warrants on that day. The fair value amount was included in discounts on convertible notes payable and was amortized over the life of the convertible notes payable. As a result of the Company’s IPO closing on February 19, 2019, all $664,953 of unamortized discount on convertible notes payable was accelerated and recorded as expense. On June 16, 2019, the Company entered into a private offering with certain institutional and accredited investors for the sale by the Company in a private placement of 675,000 units (each a “June Unit”), each June Unit consisting of (i) one share of its common stock, and (ii) 0.7 of a warrant (a total of 472,500) to purchase one share of common stock (each a “June Warrant”). The June Warrants included in the June Units are exercisable at a price of $16.00 per share commencing on the date of issuance and will expire 5 years from the effective date of the registration statement pursuant to which the resale of the shares of common stock underlying the June Warrants are registered, or August 23, 2024. The Company estimates the net proceeds from the closing of the sale of the June Units on June 19, 2019 was approximately $8,600,000 after deducting the placement agent fees and estimated offering expenses payable by the Company. The grant date fair value of these 472,500 June Warrants was $4,420,503, which was determined utilizing the Black-Scholes option pricing model. Variables used in the Black-Scholes option-pricing model include (1) discount rate of 1.85% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected term of 5 years based on the term of the warrants, (3) expected volatility of 85% based on the historical volatility of comparable companies' stock, (4) no expected dividends, and (5) fair value of the Company's stock at $14.30 per share. The fair value amount was included in additional paid-in-capital as a deal cost. The following table summarizes warrant activity for the nine months ended September 30, 2019: Number of Weighted Weighted Aggregate Outstanding, December 31, 2018 776,350 $ 1.75 4.80 $ — Granted 924,581 9.73 Exercised (644,028) 2.15 5,500,609 Forfeited (cashless exercise) (168,570) 4.06 Outstanding, September 30, 2019 888,333 $ 9.33 4.46 $ 1,208,572 Exercisable, September 30, 2019 888,333 $ 9.33 4.46 $ 1,208,572 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsOn October 10, 2019, the Company entered into a private placement of 485,250 units (each an “October Unit”) of common stock issued at $12.88 per October Unit for total gross proceeds of $6,250,020. Each October Unit consisting of (i) one share of the Company’s common stock, and (ii) 1.1 of a warrant to purchase one share of common stock (each an “October Warrant”). The October Warrants included in the October Units are exercisable at a price of $12.88 per share commencing on the date of issuance and will expire 5 years from the date of issuance. The Company estimates the net proceeds from the closing of the sale of the October Units on October 11, 2019 was approximately $5,700,000 after deducting the placement agent fees and estimated offering expenses payable by the Company.The grant date fair value of these 533,775 October Warrants was $4,537,648, which was determined utilizing the Black-Scholes option pricing model. Variables used in the Black-Scholes option-pricing model include (1) discount rate of 1.59% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected term of 5 years based on the term of the warrants, (3) expected volatility of 82.92% based on the historical volatility of comparable companies' stock, (4) no expected dividends, and (5) fair value of the Company's stock at $12.88 per share. |
Description of the Business a_2
Description of the Business and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Initial Public Offering | Initial Public OfferingOn February 19, 2019, the Company consummated its initial public offering (“IPO”). In the IPO, the Company sold a total of 2,172,591 shares of common stock at a purchase price of $5.00 per share for gross proceeds of $10,862,955 and net proceeds of approximately $9,700,000. In connection with the closing of the IPO, the Company's convertible notes (and related accrued interest) of $11,784,987 were initially converted into 6,825,391 shares of the Company's common stock, accrued dividends of $4,773,480 were converted into 954,696 shares of the Company's common stock, and preferred stock, both Series A and Series B, was converted into 2,534,766 shares of the Company's common stock. In addition, 127,500 shares of unvested restricted grants were immediately vested upon the completion of the IPO. Total shares of common stock outstanding at the closing of the IPO amounted to 14,613,000. Upon the closing of the IPO, certain notes were to be automatically converted according to their terms into the Company’s common stock to the extent and provided that certain holders of these notes are not permitted to convert such notes to the extent that the holders or any of its affiliates would beneficially own in excess of 4.99% of the Company’s common stock after such conversion. Due to this 4.99% limitation, principal representing $47,781 of these notes remained outstanding and were converted into 273,034 shares of its common stock in August and September 2019 when the conversion did not result in the holders and any of its affiliates owning more than 4.99% of the Company's outstanding common shares. |
Private Investment in Public Equity Offering | Private Investment in Public Equity Offering On June 16, 2019, the Company entered into a private offering with certain institutional and accredited investors for the sale by the Company of 675,000 units (each a “June Unit”) of common stock issued at $14.00 per June Unit for total gross proceeds of $9,450,000. Each June Unit consisted of (i) one share of the Company’s common stock, and (ii) 0.7 of a warrant to purchase one share of common stock (each a “June Warrant”). The offering price of the June Units was $14.00 per Unit. The June Warrants included in the June Units are exercisable at a price of $16.00 per share commencing on the date of issuance and will expire 5 years from the effective date of the registration statement pursuant to which the resale of the shares of common stock underlying the June Warrants are registered, or August 23, 2024. The Company estimates the net proceeds from the closing of the sale of the June Units on June 19, 2019 was approximately $8,600,000 after deducting the placement agent fees and estimated offering expenses payable by the Company. |
Going Concern | Going Concern The Company is an early stage and emerging growth company and has not generated any revenues to date. As such, the Company is subject to all of the risks associated with early stage and emerging growth companies. Since inception, the Company has incurred losses and negative cash flows from operating activities. For the three and nine months ended September 30, 2019 and 2018, the Company incurred net losses of $4,294,897 and $2,978,621, respectively, and $10,476,776 and $6,895,374, respectively, and for the nine months ended September 30, 2019 and 2018, had net cash flows used in operating activities of $9,033,513 and $3,726,305, respectively. At September 30, 2019, the Company had an accumulated deficit of $52,768,270, working capital of $6,172,954 and cash, cash equivalents and restricted cash of $8,708,641. The Company does not expect to experience positive cash flows from operating activities in the near future, if at all. The Company anticipates incurring operating losses for the next several years as it completes the development of its products and seeks requested regulatory clearances to market such products. These factors raise substantial doubt about the Company's ability to continue as a going concern within one year after the date the financial statements are issued. The accompanying financial statements have been prepared on a going concern basis and do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. The Company’s cash, cash equivalents and restricted cash on hand of $8,708,641 as of September 30, 2019 and subsequent closing of approximately $5,700,000 in net proceeds from the Company's private placement with certain institutional and accredited investors on October 11, 2019 are sufficient to fund the Company's operations through the third quarter of 2020 but not beyond. The Company also believes it will need to raise additional capital in order to continue to execute its business plan, including obtaining additional regulatory clearance for its products currently under development and commercializing and generating revenues from products under development. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company. A failure to raise sufficient capital will adversely impact the Company’s ability to meet its financial obligations as they become due and payable and to achieve its intended business objectives. If the Company is unable to raise sufficient additional funds, it will have to scale back its operations. |
Basis of Presentation | Basis of Presentation The accompanying condensed interim financial statements are unaudited. These unaudited interim financial statements have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC") for interim financial information. Accordingly, they do not include all the information and notes required by U.S. Generally Accepted Accounting Principles ("GAAP") for complete financial statements. These unaudited condensed interim financial statements should be read in conjunction with the audited financial statements and accompanying notes as found in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC on March 29, 2019. In the opinion of management, the unaudited condensed interim financial statements reflect all the adjustments (consisting of normal recurring adjustments) necessary to state fairly the Company’s financial position, results of operations and cash flows for the interim periods presented. The interim results of operations are not necessarily indicative of the results that may occur for the full fiscal year. The December 31, 2018 balance sheet included herein was derived from the audited financial statements, but does not include all disclosures, including notes, required by GAAP for complete financial statements. |
Segments | Segments The Company operates in one reportable segment based on management’s view of its business for purposes of evaluating performance and making operating decisions. |
Use of Estimates in Financial Statement Presentation | Use of Estimates in Financial Statement Presentation The preparation of these financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. The Company's significant estimates and assumptions include valuation of equity related instruments, estimates of work performed by outside consultants, depreciable lives of long-lived assets (including property and equipment and intangible assets), and the valuation allowance related to deferred taxes. Some of these judgments can be subjective and complex, and, consequently, actual results could differ from those estimates. Although the Company believes that its estimates and assumptions are reasonable, they are based upon information available at the time the estimates and assumptions were made. Actual results could differ from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The Company considers all highly liquid accounts with original maturities of three months or less to be cash equivalents or restricted cash. The Company participates in an insured cash sweep program through its bank that sweeps cash balances exceeding the FDIC insured limit of $250,000 into multiple accounts. Periodically in the ordinary course of business, the Company may carry cash balances at financial institutions in excess of the insured limits of $250,000. Restricted cash consists of amounts held in deposit with the Company’s bank to collateralize a letter of credit which supports the Company's obligations to pay or perform according to the requirements of an underlying agreement with a certain vendor. Such letter of credit has an initial term of one year, renews automatically and can only be modified or canceled with the approval of the beneficiary. As of September 30, 2019, the letter of credit was not used. |
Property and Equipment | Property and Equipment Property and equipment are stated at historical cost and depreciated on a straight-line basis over the estimated useful lives, generally three five |
Intangible Assets | Intangible Assets Intangible assets include trademarks. At September 30, 2019 and December 31, 2018, the Company had trademarks of $89,521 and $84,942, respectively. The Company no longer amortizes trademarks with indefinite useful lives, rather, such assets are required to be tested for impairment at least annually or sooner if events or changes in circumstances indicate that the asset may be impaired. Amortization expense for each of the three months ended September 30, 2019 and 2018 was $0, and for the nine months ended September 30, 2019 and 2018 was $0 and $376, respectively. |
Long-Lived Assets | Long-Lived Assets The Company evaluates its long-lived assets, including equipment and intangible assets, for impairment whenever events or changes in circumstances indicate that the carrying value of these assets may not be recoverable. Recoverability of these assets is measured by comparison of the carrying amount of each asset to the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the asset is considered impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets . |
Deferred Rent | Deferred Rent Deferred rent is recorded and amortized to the extent the total minimum rental payments allocated to the current period on a straight-line basis differ from the cash payments required. |
Convertible Debt | Convertible Debt When conversion terms related to convertible debt would be triggered by future events not controlled by the Company, the Company accounts for the conversion feature as contingent conversion options. Recognition of the intrinsic value of the conversion option is recognized only upon the occurrence of a triggering event. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price which would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-tier fair value hierarchy which prioritizes the inputs used in the valuation methodologies, as follows: Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. At September 30, 2019 and December 31, 2018, the carrying amounts of the Company's financial instruments, including cash and cash equivalents, restricted cash and accounts payable, approximate their respective fair value due to the short-term nature of these instruments. At September 30, 2019 and December 31, 2018, the Company does not have any assets or liabilities required to be measured at fair value on a recurring basis. |
Deferred Direct IPO Issuance Costs - Offering | Deferred Direct IPO Issuance Costs – Offering The Company had capitalized offering costs of $276,560, consisting of legal, accounting and other fees and costs related to the IPO, which were reclassified to additional paid-in capital ("APIC") as a reduction of the proceeds upon the closing of the IPO in February 2019. |
Warrants to Purchase Common Stock | Warrants to Purchase Common Stock The Company issued warrants to purchase shares of common stock related to (i) bridge notes issued prior to its IPO, (ii) private investment public equity ("PIPE") deals, and (iii) as part of underwriter compensation in 2019 and 2018. The Company accounted for such warrants in accordance with Accounting Standards Codification (ASC) Topic 480-10, Distinguishing Liabilities from Equity , which identifies three categories of freestanding financial instruments that are required to be accounted for as a liability. Based on this guidance, the Company determined, for each issuance, that its warrants did not need to be accounted for as a liability. Accordingly, the warrants were classified as equity and are not subject to remeasurement at each balance sheet date. In addition, the Company accounts for issuance costs of warrants issued with debt instruments in accordance with ASC 470-20, Debt with Conversion and Other Options , which states proceeds from the sale of a debt instrument with stock purchase warrants (detachable call options) are allocated to elements based on the relative fair values of the debt instrument without the warrants and of the warrants themselves at time of issuance. The portion of the proceeds so allocated to the warrants are accounted for as paid-in capital. The remainder of the proceeds are allocated to the debt instrument, which may result in a discount or premium. On July 1, 2019, the Company filed a Registration Statement on Form S-1 to register for resale the common stock underlying the June Units sold with the Company's June 2019 private offering. Related registration rights agreements are accounted for in accordance with Topic ASC Topic 450-20, Loss Contingencies , which requires measurement of the contingent liability when an entity would be required to deliver shares under a registration payment arrangement, the transfer of consideration is probable and the number of shares to be delivered can be reasonably estimated. Accordingly, there is no liability under the payment arrangement requiring disclosure or recognition. The fair value of warrants is estimated using the Black-Scholes option pricing model, based on the market value of the underlying common stock at the measurement dates, the contractual terms of the warrants, risk-free interest rates and expected volatility of the price of the underlying common stock. There are no expected dividends. |
Research and Development Expenses | Research and Development Expenses Research and development expenses are recognized as incurred and include the costs related to the Company's various contract research service providers, suppliers, engineering studies, supplies, outsourced testing and consulting, clinical costs, patent costs and salaries and related costs of employees working directly on research activities. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense includes the estimated fair value of equity awards vested during the reporting period. The expense for equity awards vested during the reporting period is determined based upon the grant date fair value of the award and is recognized as expense over the applicable vesting period of the stock award using either the straight-line method or the accelerated method, depending on the vesting structure, and is included in general and administrative expenses. |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial reporting and the tax bases of reported assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company must then assess the likelihood that the resulting deferred tax assets will be realized. A valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. Tax rate changes are reflected in income during the period such changes are enacted. The Company's tax years ending December 31, 2016 and thereafter remain subject to examination by the tax authorities. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of deferred assets will not be realized. The ultimate realization of the deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company has recorded a full valuation allowance against its net total deferred tax assets as of September 30, 2019 and December 31, 2018 because management determined that it is not more-likely-than not that those assets will be realized. Accordingly, there was no income tax benefit for all periods presented. Management has evaluated and concluded that there were no material uncertain tax positions requiring recognition in the Company's financial statement as of September 30, 2019. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date. The Company classifies interest expense and any related penalties related to income tax uncertainties as a component of income tax expense. No interest or penalties have been recognized for the three and nine months ended September 30, 2019 and 2018. |
Net Loss per Common Share | Net Loss per Common Share Basic net loss per common share is computed by dividing net loss available to common stockholders by the weighted-average number of common shares outstanding during the period. Diluted net loss per common share is determined using the weighted-average number of common shares outstanding during the period, adjusted for the dilutive effect of common stock equivalents. The Company's unvested stock awards that contain non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities and are contemplated in the computations of basic and diluted earnings or loss per share. These securities do not participate in losses and accordingly no such allocation has been made in the periods presented. In periods when losses are reported, the weighted-average number of common shares outstanding excludes common stock equivalents, because their inclusion would be anti-dilutive. As of September 30, 2019, potentially dilutive securities included options to purchase 2,843,550 common shares, warrants to purchase 888,333 common shares and unvested restricted stock of 170,834 shares. As of September 30, 2018, potentially dilutive securities included options to purchase 2,235,000 common shares, preferred stock convertible to 2,534,766 common shares, warrants to purchase 91,350 common shares, accrued preferred stock dividend convertible at a price determined by the Company's Board of Directors (the "Board") (the Company also had the option to pay the accrued preferred stock dividend in cash), unvested restricted stock of 227,500 shares, respectively, and notes and accrued interest convertible to common shares upon a future financing. |
JOBS Act Accounting Election | JOBS Act Accounting Election The Company is an emerging growth company ("EGC"), as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-EGCs but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised, and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an EGC nor an EGC which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. |
Subsequent Events | Subsequent Events The Company’s management reviewed all material events through the date that the financial statements were issued for subsequent event disclosure consideration. See Note 7 and elsewhere in the notes to the financial statements for additional information. |
Recent Accounting Standards | Recent Accounting Standards In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02, “Leases (Topic 842)” , which establishes a right-of-use (“ROU”) model requiring a lessee to recognize a ROU asset and a lease liability for all leases with terms greater-than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. This guidance is currently effective, for public EGC companies like the Company, for fiscal years beginning after December 15, 2020 and may include interim periods within those fiscal years. The modified retrospective transition approach applies to leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company has the option to instead apply the provisions at the effective date without adjusting the comparative periods presented. The Company is currently evaluating the impact of this guidance on its financial position, results of operations, and cash flows. In June 2018, the FASB issued ASU No. 2018-07, “Compensation Stock Compensation (Topic 718), Improvements to Non-Employee Share-Based Payment Accounting.” Under legacy guidance, the accounting for non-employee share-based payments differs from that applied to employee awards, particularly with regard to the measurement date and the impact of performance conditions. ASU No. 2018-7 provides that existing employee guidance will apply to non-employee share-based transactions (as long as the transaction is not effectively a form of financing), with the exception of specific guidance related to the attributions of compensation cost. The cost of non-employee awards will continue to be recorded as if the grantor had paid cash for the goods or services. In addition, the contractual term will be able to be used in lieu of an expected term in the option-pricing model for non-employee awards. The Company adopted the standard as of January 1, 2019 and it did not have an impact on the Company's financial statements, as non-employee stock compensation is nominal relative to the Company's total expenses for the three and nine months ended September 30, 2019. The Company does not believe that any other recently issued effective standards, or standards issued but not yet effective, if adopted, would have a material effect on the accompanying financial statements. Reclassifications In certain instances, amounts reported in prior years' consolidated financial statements have been reclassified to conform to the current financial statement presentation. Such reclassifications had an effect on previously reported cash flows between operating and financing activities. |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Summary of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following: September 30, December 31, Prepaid insurance $ 171,539 $ 9,453 Other prepaids and receivables 26,733 1,080 Total prepaid expenses and other current assets $ 198,272 $ 10,533 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property and equipment consisted of the following: September 30, December 31, Computer equipment and software $ 115,911 $ 105,704 Research and development equipment 244,480 244,480 Lab equipment 780,000 780,000 Leasehold improvements 271,124 242,167 Furniture 19,893 19,893 Subtotal 1,431,408 1,392,244 Less: accumulated depreciation (524,099) (378,004) Total property and equipment, net $ 907,309 $ 1,014,240 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future minimum lease payments as of September 30, 2019 were as follows: Year Ending December 31, Amount 2019 $ 25,988 2020 106,153 2021 35,751 Total future minimum lease payments $ 167,892 |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Nonvested Restricted Stock Shares Activity | Restricted stock activity for the nine months ended September 30, 2019 is summarized as follows: Number of Weighted- Outstanding at December 31, 2018 127,500 $ 3.21 Outstanding at Granted 200,000 11.54 Outstanding at Vested (156,666) 4.76 Outstanding at Outstanding at September 30, 2019 170,834 $ 11.54 |
Stock Option Activity | The following table summarizes stock option activities for the nine months ended September 30, 2019: Number of Weighted Weighted Aggregate Outstanding, December 31, 2018 2,235,000 $ 1.74 9.44 $ 23,100 Granted 608,550 5.70 Exercised — — Cancelled — — Outstanding, September 30, 2019 2,843,550 $ 2.59 8.85 $ 23,040,551 Exercisable, September 30, 2019 767,125 $ 1.73 8.86 $ 6,876,323 |
Warrants Activity | The following table summarizes warrant activity for the nine months ended September 30, 2019: Number of Weighted Weighted Aggregate Outstanding, December 31, 2018 776,350 $ 1.75 4.80 $ — Granted 924,581 9.73 Exercised (644,028) 2.15 5,500,609 Forfeited (cashless exercise) (168,570) 4.06 Outstanding, September 30, 2019 888,333 $ 9.33 4.46 $ 1,208,572 Exercisable, September 30, 2019 888,333 $ 9.33 4.46 $ 1,208,572 |
Description of the Business a_3
Description of the Business and Summary of Significant Accounting Policies (Details Textual) | Oct. 10, 2019USD ($)$ / sharesshares | Jun. 19, 2019$ / sharesshares | Jun. 16, 2019USD ($)$ / sharesshares | Feb. 19, 2019USD ($)shares$ / shares | Sep. 30, 2019USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Sep. 30, 2019USD ($)segment$ / sharesshares | Sep. 30, 2018USD ($)shares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Number of operating segments | segment | 1 | |||||||||||||
Issuance of shares during period, new issues (in shares) | 2,172,591 | |||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 5 | |||||||||||||
Gross proceeds from issuance of common stock | $ | $ 9,450,000 | $ 10,862,955 | ||||||||||||
Net proceeds from issuance of common stock | $ | 9,700,000 | |||||||||||||
Convertible notes debt amount | $ | $ 11,784,987 | |||||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 6,825,391 | |||||||||||||
Amount of conversion of accrued dividends into common stock | $ | $ 4,773,480 | |||||||||||||
Shares conversion of accrued dividends into common stock (in shares) | 954,696 | |||||||||||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock (in shares) | 2,534,766 | |||||||||||||
Shares vested in period (in shares) | 127,500 | |||||||||||||
Common stock shares outstanding (in shares) | 14,613,000 | 16,405,062 | 16,405,062 | 1,998,056 | ||||||||||
Threshold percentage of stock ownership after conversion | 4.99% | |||||||||||||
Convertible debt principal | $ | $ 47,781 | |||||||||||||
Convertible number of equity instruments (percentage) | 273,034 | |||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 9.33 | $ 9.33 | $ 1.75 | |||||||||||
Net loss | $ | $ (4,294,897) | $ (2,973,534) | $ (3,208,345) | $ (2,978,621) | $ (2,565,089) | $ (1,351,665) | $ (10,476,776) | $ (6,895,374) | ||||||
Net cash provided by (used in) operating activities | $ | (9,033,513) | (3,726,305) | ||||||||||||
Accumulated deficit | $ | (52,768,270) | (52,768,270) | $ (42,131,275) | |||||||||||
Working capital | $ | 6,172,954 | 6,172,954 | ||||||||||||
Cash balance | $ | 8,708,641 | 8,708,641 | ||||||||||||
Stockholders' equity attributable to parent | $ | 7,182,147 | $ 10,766,186 | $ 4,411,740 | (17,591,758) | $ (14,607,100) | $ (12,026,707) | 7,182,147 | (17,591,758) | (19,557,885) | $ (10,500,595) | ||||
Amortization of intangible assets | $ | 0 | $ 0 | 0 | $ 376 | ||||||||||
Offering costs | $ | 276,560 | 276,560 | ||||||||||||
Income tax penalties and interest expense | $ | 0 | $ 0 | ||||||||||||
Amount of options to purchase (in shares) | 2,843,550 | 2,235,000 | ||||||||||||
Amount of warrants to purchase (in shares) | 888,333 | 91,350 | ||||||||||||
Amount of unvested restricted stock (in shares) | 170,834 | 227,500 | ||||||||||||
Conversion of Preferred Stock into Common Stock | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Issuance of common shares for extinguishment of preferred shares (in shares) | 2,534,766 | |||||||||||||
Trademarks | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Gross finite-lived intangible assets total | $ | $ 89,521 | $ 89,521 | $ 84,942 | |||||||||||
Minimum | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Property, plant and equipment useful life | 3 years | |||||||||||||
Maximum | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Property, plant and equipment useful life | 5 years | |||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Number of securities called by each warrant or right (in shares) | 1 | |||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 16 | $ 14 | ||||||||||||
Term of warrants and rights outstanding | 5 years | |||||||||||||
Total proceeds from issuance or sale of equity | $ | $ 8,600,000 | |||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Subsequent Event | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Gross proceeds from issuance of common stock | $ | $ 6,250,020 | |||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 12.88 | |||||||||||||
Term of warrants and rights outstanding | 5 years | |||||||||||||
Private Investment in Public Equity Offering | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Purchase price (in dollars per share) | $ / shares | $ 14 | |||||||||||||
Number of units issued (in shares) | 675,000 | |||||||||||||
Number of common stock per unit (in shares) | 1 | |||||||||||||
Number of warrants per unit (in shares) | 0.7 | 0.7 | ||||||||||||
Number of securities called by each warrant or right (in shares) | 1 | |||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 16 | |||||||||||||
Term of warrants and rights outstanding | 5 years | |||||||||||||
Private Investment in Public Equity Offering | Subsequent Event | ||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||||||||||||
Number of units issued (in shares) | 485,250 | |||||||||||||
Number of common stock per unit (in shares) | 1 | |||||||||||||
Number of warrants per unit (in shares) | 1.1 | |||||||||||||
Number of securities called by each warrant or right (in shares) | 1 | |||||||||||||
Total proceeds from issuance or sale of equity | $ | $ 5,700,000 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid insurance | $ 171,539 | $ 9,453 |
Other prepaids and receivables | 26,733 | 1,080 |
Total prepaid expenses and other current assets | $ 198,272 | $ 10,533 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,431,408 | $ 1,392,244 |
Less: accumulated depreciation | (524,099) | (378,004) |
Total property and equipment, net | 907,309 | 1,014,240 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 115,911 | 105,704 |
Research and development equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 244,480 | 244,480 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 780,000 | 780,000 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 271,124 | 242,167 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 19,893 | $ 19,893 |
Property and Equipment (Detai_2
Property and Equipment (Details Textual) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | ||||
Depreciation expense | $ 73,347 | $ 30,028 | $ 146,095 | $ 89,945 |
Convertible Notes Payable (Deta
Convertible Notes Payable (Details Textual) - USD ($) | Sep. 30, 2019 | Feb. 19, 2019 | Feb. 15, 2019 | Dec. 21, 2018 | Aug. 31, 2018 | Aug. 10, 2018 | Aug. 07, 2018 | Feb. 13, 2018 | Jan. 25, 2018 | Jan. 08, 2018 | Dec. 26, 2017 | Dec. 01, 2017 | Nov. 09, 2017 | Nov. 01, 2017 | Feb. 28, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Sep. 30, 2019 | Feb. 13, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Jun. 08, 2018 | Apr. 20, 2018 | Apr. 17, 2018 |
Convertible notes debt amount | $ 11,784,987 | |||||||||||||||||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 6,825,391 | |||||||||||||||||||||||||
Threshold percentage of stock ownership after conversion | 4.99% | |||||||||||||||||||||||||
Convertible debt principal | $ 47,781 | |||||||||||||||||||||||||
Convertible number of equity instruments (percentage) | 273,034 | |||||||||||||||||||||||||
Number of securities called by warrants (in shares) | 1,228,431 | |||||||||||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ 9.33 | $ 9.33 | $ 9.33 | $ 1.75 | ||||||||||||||||||||||
Warrants outstanding | $ 1,636,232 | |||||||||||||||||||||||||
Cash paid for interest (non-convertible notes payable - related and non-related party) | $ 20,038 | $ 0 | ||||||||||||||||||||||||
Amortization of debt discount | $ 664,953 | $ 44,921 | ||||||||||||||||||||||||
Warrant Issued Under Fourth Note | ||||||||||||||||||||||||||
Number of securities called by warrants (in shares) | 91,350 | 91,350 | 91,350 | 12,000 | 79,350 | |||||||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ 1.75 | $ 1.75 | $ 1.75 | $ 1.75 | $ 1.75 | |||||||||||||||||||||
Warrants outstanding | $ 103,006 | $ 103,006 | $ 103,006 | |||||||||||||||||||||||
Unamortized discount remaining | 74,532 | 74,532 | 74,532 | |||||||||||||||||||||||
Warrant Issued with Fifth Note | ||||||||||||||||||||||||||
Number of securities called by warrants (in shares) | 1 | |||||||||||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ 1.75 | |||||||||||||||||||||||||
Term of warrants and rights outstanding | 5 years | |||||||||||||||||||||||||
Warrants Issued in Connection with Fifth Note | ||||||||||||||||||||||||||
Warrants issued during period (in shares) | 300,000 | 300,000 | 685,000 | |||||||||||||||||||||||
Value of warrants issued during period | $ 775,616 | |||||||||||||||||||||||||
First Note | Convertible Debt | A Single Related Party | Conversion of Convertible Debt to Common Stock | ||||||||||||||||||||||||||
Convertible notes debt amount | $ 5,000,000 | $ 5,000,000 | $ 5,000,000 | |||||||||||||||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 1,585,086 | |||||||||||||||||||||||||
Debt conversion accrued interest amount | $ 944,063 | |||||||||||||||||||||||||
Second Note | Convertible Debt | ||||||||||||||||||||||||||
Percentage of subsequent equity stock price | 75.00% | |||||||||||||||||||||||||
Percentage of stock price, fully-diluted common shares | 85.00% | |||||||||||||||||||||||||
Interest rate, stated percentage | 8.25% | |||||||||||||||||||||||||
Interest rate maturity | 12.00% | |||||||||||||||||||||||||
Proceeds from issuance of long-term debt | $ 375,000 | $ 250,000 | $ 250,000 | $ 250,000 | $ 375,000 | $ 400,000 | $ 1,900,000 | |||||||||||||||||||
Maximum borrowing capacity of debt agreement | $ 1,900,000 | |||||||||||||||||||||||||
Second Note | Convertible Debt | A Single Related Party | ||||||||||||||||||||||||||
Face amount of principal | 1,900,000 | 1,900,000 | $ 1,900,000 | |||||||||||||||||||||||
Second Note | Convertible Debt | A Single Related Party | Conversion of Convertible Debt to Common Stock | ||||||||||||||||||||||||||
Convertible notes debt amount | $ 1,900,000 | |||||||||||||||||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 566,235 | |||||||||||||||||||||||||
Debt conversion accrued interest amount | $ 223,368 | |||||||||||||||||||||||||
Third Note | Convertible Debt | ||||||||||||||||||||||||||
Threshold percentage of stock ownership after conversion | 4.99% | |||||||||||||||||||||||||
Interest rate, stated percentage | 10.00% | |||||||||||||||||||||||||
Maximum borrowing capacity of debt agreement | $ 500,000 | |||||||||||||||||||||||||
Conversion price of common stock (in dollars per share) | $ 0.175 | |||||||||||||||||||||||||
Third Note | Convertible Debt | Non-related Party Investors | ||||||||||||||||||||||||||
Face amount of principal | $ 250,000 | 250,000 | 250,000 | |||||||||||||||||||||||
Third Note | Convertible Debt | Conversion of Convertible Debt to Common Stock | Non-related Party Investors | ||||||||||||||||||||||||||
Convertible notes debt amount | $ 47,781 | $ 452,219 | ||||||||||||||||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 3,106,068 | 273,034 | 2,833,034 | |||||||||||||||||||||||
Debt conversion accrued interest amount | $ 43,562 | |||||||||||||||||||||||||
Third Note | Convertible Debt | A Single Related Party | ||||||||||||||||||||||||||
Face amount of principal | $ 250,000 | $ 250,000 | 250,000 | |||||||||||||||||||||||
Third Note | Convertible Debt | A Single Related Party | Conversion of Convertible Debt to Common Stock | ||||||||||||||||||||||||||
Convertible notes debt amount | 500,000 | |||||||||||||||||||||||||
Fourth Note | Convertible Debt | ||||||||||||||||||||||||||
Interest rate, stated percentage | 10.00% | |||||||||||||||||||||||||
Maximum borrowing capacity of debt agreement | 3,000,000 | 3,000,000 | 3,000,000 | |||||||||||||||||||||||
Face amount of principal | $ 3,000,000 | |||||||||||||||||||||||||
Conversion price of common stock (in dollars per share) | $ 1.75 | |||||||||||||||||||||||||
Issuance costs | 163,760 | 163,760 | 163,760 | |||||||||||||||||||||||
Net issuance costs remaining | 118,492 | 118,492 | 118,492 | |||||||||||||||||||||||
Fourth Note | Convertible Debt | Non-related Party Investors | ||||||||||||||||||||||||||
Face amount of principal | 1,728,000 | 1,728,000 | 1,728,000 | |||||||||||||||||||||||
Fourth Note | Convertible Debt | Conversion of Convertible Debt to Common Stock | Non-related Party Investors | ||||||||||||||||||||||||||
Convertible notes debt amount | $ 3,000,000 | |||||||||||||||||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 1,841,036 | |||||||||||||||||||||||||
Debt conversion accrued interest amount | $ 221,775 | |||||||||||||||||||||||||
Fourth Note | Convertible Debt | Investor | ||||||||||||||||||||||||||
Face amount of principal | 1,272,000 | 1,272,000 | 1,272,000 | |||||||||||||||||||||||
Fifth Note | Convertible Debt | ||||||||||||||||||||||||||
Unamortized discount remaining | $ 664,953 | |||||||||||||||||||||||||
Fifth Note | Non-convertible Promissory Notes | ||||||||||||||||||||||||||
Interest rate, stated percentage | 10.00% | |||||||||||||||||||||||||
Proceeds from issuance of long-term debt | $ 125,000 | |||||||||||||||||||||||||
Maximum borrowing capacity of debt agreement | $ 985,000 | $ 485,000 | ||||||||||||||||||||||||
Net issuance costs remaining | 285,234 | 285,234 | 285,234 | 363,748 | ||||||||||||||||||||||
Additional borrowing capacity | $ 300,000 | $ 200,000 | ||||||||||||||||||||||||
Proceeds from (repayments of) notes payable | $ 985,000 | |||||||||||||||||||||||||
Cash paid for interest (non-convertible notes payable - related and non-related party) | $ 20,038 | |||||||||||||||||||||||||
Amortization of debt discount | 325,955 | |||||||||||||||||||||||||
Fifth Note | Non-convertible Promissory Notes | Non-related Party Investors | ||||||||||||||||||||||||||
Net issuance costs remaining | 145,974 | 145,974 | 145,974 | 297,325 | ||||||||||||||||||||||
Unamortized discount remaining | $ 145,974 | $ 145,974 | $ 145,974 | |||||||||||||||||||||||
Fifth Note | Non-convertible Promissory Notes | Related Party | ||||||||||||||||||||||||||
Proceeds from issuance of long-term debt | $ 860,000 | $ 125,000 | ||||||||||||||||||||||||
Net issuance costs remaining | $ 66,423 |
Commitments and Contingencies_2
Commitments and Contingencies (Details Textual) - USD ($) | Jul. 15, 2015 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Payments for milestones | $ 250,000 | |||||
Percentage of license income entitlement | 50.00% | |||||
Office Space Lease Arrangement | ||||||
Term of contract | 5 years | |||||
Monthly payments for rent | $ 7,867 | |||||
Rent expense | $ 23,602 | $ 24,157 | $ 71,918 | $ 65,108 |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Lease Payments (Details) | Sep. 30, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 25,988 |
2020 | 106,153 |
2021 | 35,751 |
Total future minimum lease payments | $ 167,892 |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Textual) | Sep. 19, 2019 | Jul. 10, 2019$ / sharesshares | Jun. 19, 2019$ / sharesshares | Jun. 16, 2019USD ($)$ / sharesshares | May 08, 2019shares | Feb. 19, 2019USD ($)$ / sharesshares | Feb. 14, 2019shares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Sep. 30, 2018USD ($) | Jan. 31, 2019$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Jun. 08, 2018$ / sharesshares | Apr. 20, 2018$ / sharesshares | Nov. 30, 2012shares |
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||||||
Grants of restricted stock in period (in shares) | 19,000 | ||||||||||||||||
Shares vested in period (in shares) | 127,500 | ||||||||||||||||
Award vesting period | 4 years | ||||||||||||||||
Granted (in shares) | 608,550 | ||||||||||||||||
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | $ 17.50 | $ 5.70 | |||||||||||||||
Expiration term period | 10 years | ||||||||||||||||
Award vesting rights, percentage | 25.00% | ||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 4.87 | ||||||||||||||||
Number of securities called by warrants (in shares) | 1,228,431 | ||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 9.33 | $ 9.33 | $ 9.33 | $ 1.75 | |||||||||||||
Warrants outstanding | $ | $ 1,636,232 | ||||||||||||||||
Private Investment in Public Equity Offering | |||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 16 | ||||||||||||||||
Term of warrants and rights outstanding | 5 years | ||||||||||||||||
Number of units issued (in shares) | 675,000 | ||||||||||||||||
Number of common stock per unit (in shares) | 1 | ||||||||||||||||
Number of warrants per unit (in shares) | 0.7 | 0.7 | |||||||||||||||
Number of securities called by each warrant or right (in shares) | 1 | ||||||||||||||||
Proceeds from sale of units | $ | $ 8,600,000 | ||||||||||||||||
Convertible Debt | Fifth Note | |||||||||||||||||
Unamortized discount remaining | $ | $ 664,953 | ||||||||||||||||
Measurement Input, Expected Term | |||||||||||||||||
Warrants outstanding, measurement input | 5 | ||||||||||||||||
Measurement Input, Expected Dividend Payment | |||||||||||||||||
Warrants outstanding, measurement input | 0 | ||||||||||||||||
Measurement Input, Share Price | |||||||||||||||||
Warrants outstanding, measurement input | 1.67 | ||||||||||||||||
Warrant Issued Under Fourth Note | |||||||||||||||||
Number of securities called by warrants (in shares) | 91,350 | 91,350 | 91,350 | 12,000 | 79,350 | ||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 1.75 | $ 1.75 | $ 1.75 | $ 1.75 | $ 1.75 | ||||||||||||
Warrants outstanding | $ | $ 103,006 | $ 103,006 | $ 103,006 | ||||||||||||||
Unamortized discount remaining | $ | $ 74,532 | $ 74,532 | $ 74,532 | ||||||||||||||
Fifth Note | |||||||||||||||||
Number of securities called by warrants (in shares) | 300,000 | 685,000 | |||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 1.75 | $ 1.75 | |||||||||||||||
Term of warrants and rights outstanding | 5 years | ||||||||||||||||
Warrants Issued to Underwriters | |||||||||||||||||
Number of securities called by warrants (in shares) | 152,081 | ||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 6 | ||||||||||||||||
Term of warrants and rights outstanding | 5 years | ||||||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | |||||||||||||||||
Number of securities called by warrants (in shares) | 472,500 | ||||||||||||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 16 | $ 14 | |||||||||||||||
Term of warrants and rights outstanding | 5 years | ||||||||||||||||
Warrants outstanding | $ | $ 4,420,503 | ||||||||||||||||
Number of securities called by each warrant or right (in shares) | 1 | ||||||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Measurement Input, Discount Rate | |||||||||||||||||
Warrants outstanding, measurement input | 0.0185 | ||||||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Measurement Input, Expected Term | |||||||||||||||||
Warrants outstanding, measurement input | 5 | ||||||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Measurement Input, Price Volatility | |||||||||||||||||
Warrants outstanding, measurement input | 0.85 | ||||||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Measurement Input, Expected Dividend Payment | |||||||||||||||||
Warrants outstanding, measurement input | 0 | ||||||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Measurement Input, Share Price | |||||||||||||||||
Warrants outstanding, measurement input | 14.30 | ||||||||||||||||
Minimum | Measurement Input, Discount Rate | |||||||||||||||||
Warrants outstanding, measurement input | 0.025 | ||||||||||||||||
Minimum | Measurement Input, Price Volatility | |||||||||||||||||
Warrants outstanding, measurement input | 0.84 | ||||||||||||||||
Maximum | Measurement Input, Discount Rate | |||||||||||||||||
Warrants outstanding, measurement input | 0.028 | ||||||||||||||||
Maximum | Measurement Input, Price Volatility | |||||||||||||||||
Warrants outstanding, measurement input | 0.85 | ||||||||||||||||
Restricted Stock | |||||||||||||||||
Grants of restricted stock in period (in shares) | 200,000 | ||||||||||||||||
Shares vested in period (in shares) | 29,166 | 156,666 | |||||||||||||||
Unvested shares remaining (in shares) | 170,834 | 170,834 | 170,834 | 127,500 | |||||||||||||
Stock-based compensation expense | $ | $ 166,289 | $ 142,634 | $ 763,320 | $ 427,902 | |||||||||||||
Unamortized expense remaining | $ | 1,809,135 | $ 1,809,135 | $ 1,809,135 | ||||||||||||||
Restricted Stock | Share-based Payment Arrangement, Tranche One | |||||||||||||||||
Shares vested in period (in shares) | 25,000 | ||||||||||||||||
Award vesting period | 120 days | ||||||||||||||||
Restricted Stock | Share-based Payment Arrangement, Tranche Two | |||||||||||||||||
Shares vested in period (in shares) | 175,000 | ||||||||||||||||
Award vesting period | 4 months | ||||||||||||||||
Share-based Payment Arrangement, Option | |||||||||||||||||
Stock-based compensation expense | $ | 495,437 | $ 171,330 | $ 1,096,480 | $ 233,303 | |||||||||||||
Unamortized expense remaining | $ | $ 3,670,583 | $ 3,670,583 | $ 3,670,583 | ||||||||||||||
Expiration term period | 10 years | ||||||||||||||||
Aggregate grant date fair value | $ | $ 2,446,102 | ||||||||||||||||
Fair value assumptions, expected dividend payments | $ | $ 0 | ||||||||||||||||
Share-based Payment Arrangement, Option | Minimum | |||||||||||||||||
Fair value assumptions discount rate | 1.76% | ||||||||||||||||
Fair value assumptions, expected term | 5 years 3 months 7 days | ||||||||||||||||
Fair value assumptions, expected volatility rate | 84.30% | ||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 1.75 | $ 1.75 | $ 1.75 | ||||||||||||||
Share-based Payment Arrangement, Option | Maximum | |||||||||||||||||
Fair value assumptions discount rate | 2.53% | ||||||||||||||||
Fair value assumptions, expected term | 6 years 3 months | ||||||||||||||||
Fair value assumptions, expected volatility rate | 85.10% | ||||||||||||||||
Share price (in dollars per share) | $ / shares | $ 17.50 | $ 17.50 | $ 17.50 | ||||||||||||||
Share-based Payment Arrangement, Option | Share-based Payment Arrangement, Tranche One | |||||||||||||||||
Award vesting period | 42 months | ||||||||||||||||
Award vesting rights, percentage | 25.00% | ||||||||||||||||
Share-based Payment Arrangement, Option | Share-based Payment Arrangement, Tranche Two | |||||||||||||||||
Award vesting period | 1 year | ||||||||||||||||
Award vesting rights, percentage | 25.00% | ||||||||||||||||
Three Consultants | Restricted Stock | |||||||||||||||||
Grants of restricted stock in period (in shares) | 200,000 | ||||||||||||||||
Certain Individuals | |||||||||||||||||
Granted (in shares) | 608,550 | ||||||||||||||||
Grants in period, weighted average exercise price (in dollars per share) | $ / shares | $ 5.70 | ||||||||||||||||
2012 Long Term Incentive Plan | |||||||||||||||||
Common stock, capital shares reserved for future issuance (in shares) | 789,745 | ||||||||||||||||
Number of shares remaining (in shares) | 14,745 | 14,745 | 14,745 | ||||||||||||||
2018 Stock Plan | |||||||||||||||||
Common stock, capital shares reserved for future issuance (in shares) | 3,400,000 | 3,400,000 | 3,400,000 | ||||||||||||||
Number of shares remaining (in shares) | 571,450 | 571,450 | 571,450 | ||||||||||||||
Conversion of Preferred Stock To Common Stock | |||||||||||||||||
Issuance of common shares for extinguishment of preferred shares (in shares) | 2,534,766 | ||||||||||||||||
Conversion of Accrued Dividends Into Common Stock | |||||||||||||||||
Issuance of common shares for extinguishment of preferred shares (in shares) | 954,696 | ||||||||||||||||
Series A Preferred Stock | |||||||||||||||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Preferred stock issued (in shares) | 0 | 0 | 0 | 416,666 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | 416,666 | |||||||||||||
Preferred stock dividend rate, percentage | 8.00% | ||||||||||||||||
Preferred stock dividend rate, (in dollars per share) | $ / shares | $ 4.80 | ||||||||||||||||
Series B Preferred Stock | |||||||||||||||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||||||||||
Preferred stock issued (in shares) | 0 | 0 | 0 | 2,118,100 | |||||||||||||
Preferred stock, shares outstanding (in shares) | 0 | 0 | 0 | 2,118,100 | |||||||||||||
Preferred stock dividend rate, (in dollars per share) | $ / shares | $ 6.61 | ||||||||||||||||
Preferred stock conversion price (in dollars per share) | $ / shares | $ 6.61 | $ 6.61 | $ 6.61 | ||||||||||||||
Dividends payable for preferred stock | $ | $ 4,773,480 | $ 4,613,261 |
Stockholders' Deficit - Restric
Stockholders' Deficit - Restricted Stock (Details) - $ / shares | Jul. 10, 2019 | Feb. 19, 2019 | Sep. 30, 2019 | Sep. 30, 2019 |
Granted (in shares) | (19,000) | |||
Granted (in dollars per share) | $ 11.54 | |||
Vested (in shares) | (127,500) | |||
Restricted Stock | ||||
Outstanding (in shares) | 127,500 | |||
Outstanding (in dollars per share) | $ 3.21 | |||
Granted (in shares) | (200,000) | |||
Vested (in shares) | (29,166) | (156,666) | ||
Vested (in dollars per share) | $ 4.76 | |||
Outstanding (in shares) | 170,834 | 170,834 | ||
Outstanding (in dollars per share) | $ 11.54 | $ 11.54 |
Stockholders' Deficit - Stock O
Stockholders' Deficit - Stock Options (Details) - USD ($) | Jul. 10, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Equity [Abstract] | |||
Outstanding (in shares) | 2,235,000 | ||
Granted (in shares) | 608,550 | ||
Exercised (in shares) | 0 | ||
Cancelled (in shares) | 0 | ||
Outstanding (in shares) | 2,843,550 | 2,235,000 | |
Exercisable (in shares) | 767,125 | ||
Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 1.74 | ||
Granted (in dollars per share) | $ 17.50 | 5.70 | |
Exercised (in dollars per share) | 0 | ||
Cancelled (in dollars per share) | 0 | ||
Outstanding, Weighted Average Exercise Price (in dollars per share) | 2.59 | $ 1.74 | |
Exercisable (in dollars per share) | $ 1.73 | ||
Outstanding, Weighted Average Remaining Life (Year) | 8 years 10 months 6 days | 9 years 5 months 8 days | |
Exercisable, Weighted Average Remaining Life (Year) | 8 years 10 months 9 days | ||
Outstanding, Aggregate Intrinsic Value | $ 23,040,551 | $ 23,100 | |
Exercisable, Aggregate Intrinsic Value | $ 6,876,323 |
Stockholders' Deficit - Warrant
Stockholders' Deficit - Warrants (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2019 | Dec. 31, 2018 | |
Equity [Abstract] | ||
Warrants Outstanding (in shares) | 776,350 | |
Warrants Granted (in shares) | 924,581 | |
Warrants Exercised (in shares) | (644,028) | |
Warrant forfeited (cashless exercise), shares (in shares) | (168,570) | |
Warrants Outstanding (in shares) | 888,333 | 776,350 |
Warrants Exercisable (in shares) | 888,333 | |
Warrants Outstanding, Weighted Average Exercise Price (in dollars per share) | $ 1.75 | |
Warrants Granted, Weighted Average Exercise Price (in dollars per share) | 9.73 | |
Warrants Exercised, Weighted Average Exercise Price (in dollars per share) | 2.15 | |
Warrants Forfeited (cashless exercise), Weighted Average Exercise Price (in dollars per share) | 4.06 | |
Warrants Outstanding, Weighted Average Exercise Price (in dollars per share) | 9.33 | $ 1.75 |
Warrants Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 9.33 | |
Warrants Outstanding, Weighted Average Remaining Contractual Term (Year) | 4 years 5 months 15 days | 4 years 9 months 18 days |
Warrant Exercisable, Weighted Average Remaining Contractual Term (Year) | 4 years 5 months 15 days | |
Warrants Outstanding, Aggregate Intrinsic Value | $ 0 | |
Warrants Exercised, Aggregate Intrinsic Value | 5,500,609 | |
Warrants Outstanding, Aggregate Intrinsic Value | 1,208,572 | $ 0 |
Warrants Exercisable, Aggregate Intrinsic Value | $ 1,208,572 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) | Oct. 10, 2019USD ($)$ / sharesshares | Jun. 19, 2019$ / sharesshares | Jun. 16, 2019USD ($)$ / sharesshares | Feb. 19, 2019USD ($) | Sep. 30, 2019$ / shares | Dec. 31, 2018$ / shares |
Subsequent Event [Line Items] | ||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 9.33 | $ 1.75 | ||||
Gross proceeds from issuance of common stock | $ | $ 9,450,000 | $ 10,862,955 | ||||
Warrants outstanding | $ | $ 1,636,232 | |||||
Warrants Issued in Private Investment in Public Equity Offering | ||||||
Subsequent Event [Line Items] | ||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 16 | $ 14 | ||||
Number of securities called by each warrant or right (in shares) | 1 | |||||
Term of warrants and rights outstanding | 5 years | |||||
Total proceeds from issuance or sale of equity | $ | $ 8,600,000 | |||||
Warrants outstanding | $ | $ 4,420,503 | |||||
Warrants Issued in Private Investment in Public Equity Offering | Measurement Input, Discount Rate | ||||||
Subsequent Event [Line Items] | ||||||
Warrants outstanding, measurement input | 0.0185 | |||||
Warrants Issued in Private Investment in Public Equity Offering | Measurement Input, Price Volatility | ||||||
Subsequent Event [Line Items] | ||||||
Warrants outstanding, measurement input | 0.85 | |||||
Warrants Issued in Private Investment in Public Equity Offering | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 12.88 | |||||
Gross proceeds from issuance of common stock | $ | $ 6,250,020 | |||||
Term of warrants and rights outstanding | 5 years | |||||
Warrants outstanding | $ | $ 4,537,648 | |||||
Warrants Issued in Private Investment in Public Equity Offering | Subsequent Event | Measurement Input, Discount Rate | ||||||
Subsequent Event [Line Items] | ||||||
Warrants outstanding, measurement input | 0.0159 | |||||
Warrants Issued in Private Investment in Public Equity Offering | Subsequent Event | Measurement Input, Price Volatility | ||||||
Subsequent Event [Line Items] | ||||||
Warrants outstanding, measurement input | 0.8292 | |||||
Private Investment in Public Equity Offering | ||||||
Subsequent Event [Line Items] | ||||||
Number of units issued (in shares) | 675,000 | |||||
Exercise price of warrants or rights (in dollars per share) | $ / shares | $ 16 | |||||
Number of securities called by each warrant or right (in shares) | 1 | |||||
Number of warrants per unit (in shares) | 0.7 | 0.7 | ||||
Term of warrants and rights outstanding | 5 years | |||||
Private Investment in Public Equity Offering | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Number of units issued (in shares) | 485,250 | |||||
Number of securities called by each warrant or right (in shares) | 1 | |||||
Number of warrants per unit (in shares) | 1.1 | |||||
Total proceeds from issuance or sale of equity | $ | $ 5,700,000 | |||||
Private Investment in Public Equity Offering | October Warrants | Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Number of units issued (in shares) | 533,775 |