Cover
Cover - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 12, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38815 | ||
Entity Registrant Name | SOLITON, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 36-4729076 | ||
Entity Address, Address Line One | 5304 Ashbrook Drive | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77081 | ||
City Area Code | 844 | ||
Local Phone Number | 705-4866 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | SOLY | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 85,911,296 | ||
Entity Common Stock, Shares Outstanding | 21,199,943 | ||
Entity Central Index Key | 0001548187 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 31,557 | $ 11,876 |
Restricted cash | 200 | 200 |
Total cash, cash equivalents and restricted cash | 31,757 | 12,076 |
Inventory | 353 | 0 |
Prepaid expenses and other current assets | 141 | 96 |
Total current assets | 32,251 | 12,172 |
Property and equipment, net of accumulated depreciation | 1,413 | 848 |
Intangible assets, net of accumulated amortization | 114 | 98 |
Other assets | 23 | 23 |
Total assets | 33,801 | 13,141 |
Current liabilities: | ||
Accounts payable | 1,008 | 1,338 |
Accrued and other current liabilities | 1,812 | 1,528 |
Total current liabilities | 2,820 | 2,866 |
Commitments and contingencies (see Note 6) | ||
Stockholders’ equity (deficit): | ||
Common stock, $0.001 par value, 100,000,000 authorized, 21,189,943 shares issued and outstanding at December 31, 2020 and 16,932,184 shares issued and outstanding at December 31, 2019 | 21 | 17 |
Additional paid-in capital | 101,544 | 66,301 |
Accumulated deficit | (70,584) | (56,043) |
Total stockholders’ equity | 30,981 | 10,275 |
Total liabilities and stockholders’ equity | $ 33,801 | $ 13,141 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 21,189,943 | 16,932,184 |
Common stock, shares outstanding (in shares) | 21,189,943 | 16,932,184 |
Statements of Operations
Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Revenue | $ 0 | $ 0 |
Operating expenses: | ||
Research and development | 4,631,000 | 4,679,000 |
Sales and marketing | 1,023,000 | 189,000 |
Depreciation expense | 292,000 | 217,000 |
General and administrative expenses | 8,457,000 | 7,858,000 |
Write-down of intangible assets and equipment | 291,000 | 0 |
Total operating expenses | 14,694,000 | 12,943,000 |
Loss from operations | (14,694,000) | (12,943,000) |
Other (expense) income: | ||
Interest expense | 0 | (823,000) |
Other income | 153,000 | 14,000 |
Total other expense | 153,000 | (809,000) |
Loss before income taxes | (14,541,000) | (13,752,000) |
Income tax expense | 0 | 0 |
Net loss | 14,541,000 | 13,752,000 |
Accrued dividends to Series A and Series B preferred stockholders | 0 | (160,000) |
Net loss attributable to common stockholders | $ (14,541,000) | $ (13,912,000) |
Net loss per common share, basic and diluted | $ (0.77) | $ (1) |
Weighted average number of common shares outstanding, basic and diluted | 18,955,861 | 13,841,884 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity (Deficit) - USD ($) shares in Thousands, $ in Thousands | Total | June Private Investment in Public Equity Offering | October Private Investment in Public Equity Offering | Stock Issuance, Excluding PIPE Deal | June 2020 Offering | Preferred StockSeries A Preferred Stock | Preferred StockSeries B Preferred Stock | Common Stock | Common StockJune Private Investment in Public Equity Offering | Common StockOctober Private Investment in Public Equity Offering | Common StockStock Issuance, Excluding PIPE Deal | Common StockJune 2020 Offering | Additional Paid-In Capital | Additional Paid-In CapitalJune Private Investment in Public Equity Offering | Additional Paid-In CapitalOctober Private Investment in Public Equity Offering | Additional Paid-In CapitalStock Issuance, Excluding PIPE Deal | Additional Paid-In CapitalJune 2020 Offering | Accumulated Deficit |
Balance (in shares) at Dec. 31, 2018 | 417 | 2,118 | 1,998 | |||||||||||||||
Balance at Dec. 31, 2018 | $ (19,558) | $ 0 | $ 2 | $ 2 | $ 22,569 | $ (42,131) | ||||||||||||
Stock-based compensation | 2,488 | 2,488 | ||||||||||||||||
Debt discount on convertible notes and notes payable – issuance of warrants | 146 | 146 | ||||||||||||||||
Payment of deferred direct issuance costs | (186) | (186) | ||||||||||||||||
Issuance of common shares for extinguishment of preferred shares (in shares) | (417) | (2,118) | ||||||||||||||||
Issuance of common shares for extinguishment of preferred shares | $ (2) | |||||||||||||||||
Issuance of common shares for extinguishment of preferred shares (in shares) | 2,535 | |||||||||||||||||
Issuance of common shares for extinguishment of preferred shares | $ 2 | |||||||||||||||||
Issuance of common shares for extinguishment of preferred shares | 0 | |||||||||||||||||
Issuance of common shares for extinguishment of convertible debt (in shares) | 7,098 | |||||||||||||||||
Issuance of common shares for extinguishment of convertible debt | 11,833 | $ 7 | 11,826 | |||||||||||||||
Issuance of common shares for extinguishment of dividends payable (in shares) | 955 | |||||||||||||||||
Issuance of common shares for extinguishment of dividends payable | 4,774 | $ 1 | 4,773 | |||||||||||||||
Issuance of common stock (in shares) | 2,173 | 675 | 485 | 886 | ||||||||||||||
Issuance of common shares | 9,873 | $ 8,644 | $ 5,739 | $ 0 | $ 2 | $ 1 | $ 1 | $ 1 | 9,871 | $ 8,643 | $ 5,738 | $ (1) | ||||||
Issuance of common shares for accelerated vesting (in shares) | 128 | |||||||||||||||||
Issuance of common shares for accelerated vesting | 0 | |||||||||||||||||
Accrued preferred dividends | (160) | (160) | ||||||||||||||||
Net loss | (13,752) | (13,752) | ||||||||||||||||
Debt forgiveness | 434 | 434 | ||||||||||||||||
Balance (in shares) at Dec. 31, 2019 | 0 | 0 | 16,933 | |||||||||||||||
Balance at Dec. 31, 2019 | 10,275 | $ 0 | $ 0 | $ 17 | 66,301 | (56,043) | ||||||||||||
Stock-based compensation | 3,201 | 3,201 | ||||||||||||||||
Debt discount on convertible notes and notes payable – issuance of warrants | 0 | |||||||||||||||||
Issuance of common stock (in shares) | 40 | 4,217 | ||||||||||||||||
Issuance of common shares | $ 0 | $ 32,046 | $ 4 | $ 32,042 | ||||||||||||||
Accrued preferred dividends | 0 | |||||||||||||||||
Net loss | (14,541) | (14,541) | ||||||||||||||||
Debt forgiveness | 0 | |||||||||||||||||
Balance (in shares) at Dec. 31, 2020 | 0 | 0 | 21,190 | |||||||||||||||
Balance at Dec. 31, 2020 | $ 30,981 | $ 0 | $ 0 | $ 21 | $ 101,544 | $ (70,584) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (14,541) | $ (13,752) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 292 | 217 |
Stock-based compensation | 3,201 | 2,488 |
Write-down of intangible assets and equipment | 291 | 0 |
Amortization of debt discount | 0 | 665 |
Changes in operating assets – (Increase)/Decrease: | ||
Inventory | (353) | 0 |
Prepaid expenses and other current assets | (45) | (86) |
Changes in operating liabilities – Increase/(Decrease): | ||
Accounts payable | (625) | (370) |
Accrued liabilities | 283 | 76 |
Accrued interest – non-related party | 0 | 11 |
Accrued interest – related party | 0 | 146 |
NET CASH USED IN OPERATING ACTIVITIES: | (11,497) | (10,605) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Payments for the purchase of property and equipment | (834) | (830) |
Payments for acquisition of intangibles | (34) | (13) |
NET CASH USED IN INVESTING ACTIVITIES: | (868) | (843) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Payment of non-convertible notes payable and accrued interest - related party and non- related party | 0 | (1,005) |
Proceeds from the issuance of non-convertible notes payable - non-related party | 0 | 300 |
Proceeds from issuance of common shares, net of costs | 32,046 | 24,096 |
NET CASH PROVIDED BY FINANCING ACTIVITIES: | 32,046 | 23,391 |
Net increase in cash, cash equivalents and restricted cash | 19,681 | 11,943 |
Cash, cash equivalents and restricted cash, beginning of period | 12,076 | 133 |
Cash, cash equivalents and restricted cash, end of period | 31,757 | 12,076 |
Supplemental cash flow disclosures: | ||
Cash paid for interest | 0 | 20 |
Non-cash investing and financing activities: | ||
Accrued direct issuance costs – offering | 0 | (277) |
Additions to property and equipment included in accounts payable | 295 | 0 |
Capital contributions – debt forgiveness | 0 | 434 |
Accrued preferred dividends | 0 | 160 |
Debt discount on convertible notes and notes payable – issuance of warrants | 0 | 146 |
Issuance of common stock for extinguishment of convertible note payable - related party and non-related party | 0 | 11,833 |
Issuance of common stock for extinguishment of dividends payable | 0 | 4,773 |
Issuance of common stock for extinguishment of preferred stock A and preferred stock B | $ 0 | $ 3 |
Organization and Nature of Busi
Organization and Nature of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business Soliton, Inc. (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 its proprietary Rapid Acoustic Pulse ("RAP") technology platform. The Company is a pre-revenue stage company with its first products being developed for the removal of tattoos and the reduction of cellulite. The Company received clearance from the U.S. Food & Drug Administration ("FDA") for its tattoo removal indication in June of 2019 and for temporary improvement in the appearance of cellulite in January 2021. The Company is based in Houston, Texas. Upon completion of the development of its products and regulatory clearances to market such products, the Company anticipates revenue will be driven by the sale of its RAP console and disposable cartridges to dermatologists, plastic surgeons and other physician offices, as well as medi-spas under the supervision of a doctor. Material Uncertainties The Company is an early stage and emerging growth company ("EGC") 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 years ended December 31, 2020 and 2019, the Company incurred net losses of $14.5 million and $13.8 million, respectively, and had net cash flows used in operating activities of $11.5 million and $10.6 million, respectively. At December 31, 2020, the Company had an accumulated deficit of $70.6 million, positive working capital of $29.4 million and cash of $31.8 million. The Company does not expect to experience positive cash flows from operating activities in the near future and anticipates incurring operating losses for the next few years as it supports the commercial launch of its products and continues to invest in research and development for additional indications in the Company's pipeline. The Company expects its cash, cash equivalents and restricted cash on hand of $31.8 million as of December 31, 2020 will be sufficient to fund the Company's operations into the third quarter of 2022 but not beyond. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The accompanying annual financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). During the year ended December 31, 2020, the Company evaluated all costs presented as research and development ("R&D") costs and determined that the patent costs were related to activities similar to those described in ASC 730-10-55-2(i). Accordingly, the Company concluded the activities did not meet the definition of R&D activities. The amount of patent costs included in the R&D line of the Company's Statement of Operations for each of the years ended December 31, 2020 and 2019 were $0.4 million. The Company evaluated the effect of these errors in classification under ASC 250, " Accounting Changes and Error Corrections ", Staff Accounting Bulletin ("SAB") No. 108, " Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements " and SAB No. 99, " Materiality ". The errors did not materially misstate any previously issued financial statements. The Company considered both quantitative and qualitative characteristics of the errors and required corrections and determined it was not necessary to restate the financial statements or unaudited interim period financial statements that were previously issued. The Company reclassified the 2019 amounts to general and administrative expenses and will reclassify comparative 2020 amounts to conform to 2021 amounts in prospective interim period 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 and accompanying notes 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 estimated work performed but not yet billed by contract manufacturers, engineers and research organizations, the valuation of equity related instruments, depreciable lives of long-lived assets, the valuation allowance related to deferred taxes and the valuation of stock-based compensation awards. 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. The coronavirus disease (“COVID-19”) pandemic has negatively impacted, and may continue to negatively impact, the macroeconomic environment in the United States and globally, including our business, financial condition and results of operations. Due to the evolving and uncertain nature of COVID-19, it is reasonably possible that it could materially impact our estimates, particularly those that require consideration of forecasted financial information, in the near to medium term. These estimates relate to certain accounts including, but not limited to, the valuation allowance related to deferred taxes, intangible assets, and other long-lived assets. The magnitude of the impact will depend on numerous evolving factors that we may not be able to accurately predict, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer and provider behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19. 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. The Company participates in an insured cash sweep program through its bank that sweeps cash balances exceeding the FDIC insured limit of $0.25 million 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 $0.25 million. 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 December 31, 2020, the letter of credit was not used. Inventory Inventory is valued at the lower of cost or net realizable value using the first-in, first-out ("FIFO") method. Inventory consists of raw materials purchased by the Company and held offsite by a vendor. As of December 31, 2020 and 2019, the Company had inventory of $0.4 million and $0.0 million, respectively. Property and Equipment Property and equipment are stated at historical cost and depreciated on a straight-line basis over their estimated useful lives, generally three Intangible Assets Intangible assets include trademarks. At December 31, 2020 and 2019, the Company had trademarks of $0.1 million. The Company does not amortize 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. During the year ended December 31, 2020, the Company wrote down a trademark, included in the write-down of intangible assets and equipment line item in the accompanying statement of operations, with net book value of $19.7 thousand. Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be realizable or at a minimum annually during the fourth quarter of the year. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying value to determine if an impairment of such asset is necessary. The effect of any impairment would be to expense the difference between the fair value of such asset and its carrying value. 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. 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, is 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 identical or 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 spreads, 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 December 31, 2020 and 2019, the carrying amounts of the Company's financial instruments, including cash, cash equivalents and restricted cash, and accounts payable, approximate their respective fair value due to the short-term nature of these instruments. At December 31, 2020 and 2019, the Company does not have any assets or liabilities required to be measured at fair value on a recurring basis. Warrants to Purchase Common Stock The Company evaluates the terms of warrants to determine the appropriate accounting and classification pursuant to ASC Topic 480, Distinguishing Liabilities from Equity , ASC Topic 505, Equity , ASC Topic 815, Derivatives and Hedging , and ASC Topic 718, Stock-based Compensation . The Company issued warrants to purchase shares of common stock related to (i) bridge notes issued prior to its IPO, (ii) private investment in public equity ("PIPE") deals, and (iii) as part of underwriter compensation in 2019 and 2018. 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. 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. Equity classified warrants issued to non-employees in exchange for services are accounted for in accordance with ASC 718 which requires all stock-based payments be recognized in the consolidated statements of operations based on their fair value. 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 historical volatility of comparable companies' stock. There are no expected dividends. Components of our Results of Operations and Financial Condition Operating expenses The Company classifies its operating expenses into four categories: (i) research and development; (ii) sales and marketing; (iii) general and administrative; and (iv) depreciation . Research and development Research and development expenses consist primarily of: • costs incurred to conduct research, such as animal research; • costs related to the design and development of our technology, including fees paid to contract engineering firms and contract manufacturers; • salaries and expenses, including stock-based compensation, related to our employees primarily engaged in research and development activities; • fees paid to clinical consultants, clinical trial sites and vendors, including clinical research organizations, in preparation for clinical trials and our applications with the FDA; and • costs related to filings with regulatory agencies. The Company records accrued expenses for estimated costs of its research and development activities conducted by third-party service providers, which include the conducting of pre-clinical studies, preparation for and conducting of clinical trials, contract engineering and design activities, and other development costs. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and it includes these costs in accrued liabilities in the balance sheets and within research and development expense in the statements of operations as they are incurred. These costs are a significant component of our research and development expenses. The Company records accrued expenses for these costs based on the estimated amount of work completed and in accordance with agreements established with these third parties. The Company estimates the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. The Company makes significant judgments and estimates in determining the accrued balance in each reporting period. As actual costs become known, the Company adjusts its accrued estimates. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed may vary from its estimates and could result in the Company reporting amounts that are too high or too low in any particular period. The Company's accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations, engineering firms and other third-party service providers. To date, there have been no material differences from its accrued expenses to actual expenses. The Company expects its research and development expenses to increase in the future as it advances its product into and through clinical trials, pursues additional regulatory approvals of its product in the United States, and continues commercial development of its RAP device and replaceable cartridge. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for the Company's technology may be affected by a variety of factors including: the quality of its product, early clinical data, investment in its clinical program, competition, manufacturing capability and commercial viability. The Company may not succeed in achieving all necessary regulatory approvals for any of its product candidates. As a result of the uncertainties discussed above, the Company is unable to determine the duration and completion costs of its research and development process or when and to what extent, if any, it will generate revenue from the commercialization and sale of its device. Sales and marketing Sales and marketing expenses consist of marketing, conferences, web development, advisory boards and other miscellaneous expenses. The salaries and expenses of our personnel primarily engaged in sales, marketing and customer service functions are included in sales and marketing expense. As we commercialize, we expect our sales and marketing expense to increase due to the anticipated growth of our business and related infrastructure as well as expanding our sales, marketing and support personnel. The Company recognizes expenses to develop advertising materials as they are incurred. General and administrative General and administrative expenses consist of personnel related costs, which include salaries, as well as the costs of professional services, such as accounting and legal, facilities, information technology, stock-based compensation for general and administrative personnel, insurance, travel costs, other administrative expenses and patent costs. The Company expects its general and administrative expense to increase due to the anticipated growth of its business and related infrastructure as well as accounting, insurance, investor relations and other costs associated with being a public company. Depreciation Depreciation expense consists of depreciation on the Company's property and equipment. The Company depreciates its assets over their estimated useful lives. The Company estimates research and development equipment and lab equipment to have a five three three . Stock-Based Compensation Stock-based compensation transactions are recognized as compensation expense in the statements of operations based on their fair values on the date of the grant. The expense for equity awards expected to vest is recognized 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, research and development or sales and marketing expenses, depending upon the classification of the grantee. We estimate the fair value of options granted using the Black-Scholes option pricing model. This estimate uses assumptions regarding a number of inputs that require us to make significant estimates and judgments. Because we are a new publicly traded common stock, the expected volatility assumption was based on industry peer information. Forfeitures are recognized as they are incurred. 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. All of the Company's tax years 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 December 31, 2020 and 2019 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 statements as of December 31, 2020. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date. The Company's policy is to classify 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 in 2020 and 2019. 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 December 31, 2020, potentially dilutive securities included options to purchase 3,919,550 common shares, unvested restricted stock of 308,344 shares and warrants to purchase 1,324,608 common shares. As of December 31, 2019, potentially dilutive securities included options to purchase 2,883,550 common shares, unvested restricted stock of 158,336 shares and warrants to purchase 1,374,608 common shares. JOBS Act Accounting Election The Company is an 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-emerging growth companies 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 as discussed in Note 9. Recent Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), which establishes a right-of-use (“ROU”) model requiring a lessee to recognize an 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. ASC 842 was originally effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020 with early adoption permitted. Since issuing ASC 842, the FASB has delayed the effective date of ASC 842 for private companies to fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Given the Company's status as an EGC, the Company will adopt ASC 842 in accordance with the private company guidance. 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. 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 the prior year 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 investing activities and previously reported expenses between research and development expenses and general and administrative expenses. |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2020 | |
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 (in thousands) : December 31, 2020 December 31, 2019 Prepaid insurance $ 49 $ 94 Other prepaids and receivables 92 2 Total prepaid expenses and other current assets $ 141 $ 96 At December 31, 2020, other prepaids and receivables largely included payments made to vendors for work that has not yet been completed, payments made as a result of listing requirements for public companies and prepaid software subscriptions. |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following (in thousands) : December 31, December 31, Computer equipment and software $ 171 $ 127 Construction in progress 710 — Research and development equipment 248 245 Lab equipment 390 780 Tooling 366 — Leasehold improvements 271 271 Furniture 20 20 Subtotal 2,176 1,443 Less: accumulated depreciation (763) (595) Total property and equipment $ 1,413 $ 848 As of December 31, 2020 and 2019, the Company had $0.3 million and $0.7 million, respectively, of lab equipment, net, in the field at clinical trial sites and held by a vendor for final testing. Depreciation of this equipment started when it was placed in service in June 2019. During the year ended December 31, 2020, the Company wrote-down lab equipment by $0.3 million and included it in the write-down of intangible assets and equipment line item in the accompanying statement of operations. Depreciation expense for the years ended December 31, 2020 and 2019 was $0.3 million and $0.2 million, respectively. |
Notes Payable
Notes Payable | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Notes Payable | Notes PayableIn connection with the closing of the IPO on February 19, 2019, convertible notes (and related accrued interest) of $11.8 million were converted into 6,825,391 shares of the Company's common stock. Certain notes automatically converted, according to their terms, into common stock. Certain holders were 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 limitation, principal representing $47.8 thousand of these notes remained and was later converted into 273,034 shares of the Company's 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. All remaining debt instruments were settled at the closing of the IPO. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
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 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, the Company agreed to pay a nonrefundable license documentation fee in the high-five digits 30 days after the effective date of the agreement. Additionally, the Company agreed to pay a nonrefundable annual maintenance fee starting on the third anniversary of the effective date of the agreement, which escalates each anniversary and is currently in the mid-five digits. Additionally, the Company agreed to a running royalty percentage of net sales in the mid-single digits. The Company also agreed to make certain milestone payments in the low to mid-six digits and sublicensing payments, including a $0.25 million milestone payment made in June 2019 after the Company received U.S. Food & Drug Administration ("FDA") clearance for our RAP device for tattoo removal. The specific patents initially subject to the agreement expire between 2031 and 2032. MD Anderson has the right to terminate the agreement upon advanced notice in the event of a default by the Company. 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. To the extent that is the case, the Company's license agreement with, and the intellectual property rights it has licensed from MD Anderson, are subject to such a funding agreement and any superior rights that the U.S. government may have with respect to the licensed intellectual property. Therefore, there is a risk that the intellectual property rights the Company has licensed from MD Anderson may be non-exclusive or void if a funding agreement related to the licensed technology between MD Anderson and the U.S. government does exist and depending on the terms of such an agreement. Notwithstanding the foregoing, the Company does not believe our RAP technology received any federal funding. 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. For the years ended December 31, 2020 and 2019, the Company paid $0.1 million and $0.3 million, respectively, for expenses related to this agreement, including a $0.25 million milestone payment made in June 2019 after the Company received FDA clearance for its RAP device for tattoo removal. As the inventor of the intellectual property licensed from MD Anderson, Dr. Capelli, the Company's Chief Science 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. For the years ended December 31, 2020 and 2019, Dr. Capelli received $37.5 thousand and $0.2 million, respectively, from MD Anderson. In addition, Dr. Capelli is entitled to 50% of the proceeds (after the recoupment of any costs associated therewith) from the sale by MD Anderson of 175,000 shares issued to MD Anderson in connection with the license agreement. On November 20, 2019, the Company entered into a cooperative development addendum ("Addendum") to its engineering and development services master agreement with Emphysys, Inc. ("Emphysys”). The Addendum states that Emphysys will provide the Company with engineering and design services related to shockwave technology for use in dermatology and aesthetics fields for a 36 month period ending July 1, 2022. During the term of the Addendum, the Company agreed to certain minimum annual expenditures. If the Company fails to spend such minimum annual amounts or if the Company terminates the Addendum without cause, the Company will be required to pay Emphysys an early termination fee of no more than $0.4 million. In the event that all or substantially all of the stock or assets of either party are sold then, at the request of other party, the Addendum may be terminated (without the requirement to pay a termination fee) and the obligation of Emphysys to provide future services to the Company shall terminate. Pursuant to the Addendum, with certain exceptions, Emphysys covenanted that it will not perform or agree to perform services with any company other than Soliton in the area of arc-discharge driven acoustical shockwave generation for medical dermatological or aesthetic dermatological indications during the term of the Addendum or any extension thereof, and for a period of six months after the termination of the Addendum. On March 6, 2020, the Company entered into a manufacturing service agreement (the "Agreement") with Sanmina Corporation ("Sanmina"). The Agreement states that Sanmina will provide the Company with certain manufactured products for a one year period, with pricing adjusted for material variations of market prices for components, parts and raw material, including variations resulting from allocations, shortages or tariffs. In addition, pricing will be based on the forecasted volumes provided by the Company and the projected inventory turns as agreed by both parties. Either party may terminate the Agreement or an order under the Agreement for default, if the other party materially breaches the Agreement; provided, however, no termination shall occur until thirty days after the defaulting party is notified in writing of the material breach and has failed to cure or give adequate assurances of performance within the thirty day period after notice of material breach. In addition, the Company may terminate the Agreement for any reason upon thirty days’ prior written notice and may terminate any order under the Agreement for any reason upon 120 days’ (before scheduled shipment) prior written notice. Sanmina may terminate the Agreement for any reason upon ninety days’ notice. In the event the Agreement or an order under the Agreement is terminated for any reason other than a breach by Sanmina, the Company is required to pay Sanmina termination charges equal to (i) the contract price for all finished product existing at the time of termination; (ii) Sanmina’s cost (including labor, components and applicable mark-ups per the pricing model) for all work in process; and (iii) the cost of components ordered by Sanmina pursuant to the Agreement. Purchase Commitments As of December 31, 2020 the Company had purchase obligations of $2.6 million to Emphysys. This commitment is for services used in the ordinary course of business and does not represent excess commitments or loss contracts. The remaining minimum purchase obligations were $1.0 million and $1.6 million, respectively, for the 12 month periods ending June 30, 2021 and June 30, 2022. Lease Commitments The Company leases space for its corporate office, which provides for an original 63 month term beginning on February 1, 2016, with initial rent payments of $7.9 thousand per month that escalate annually to a maximum of $8.9 thousand per month through the expiration of the agreement. On September 15, 2020, the Company entered into a 12 month extension of its corporate office lease. Total rent expense under this office space lease arrangement for the years ended December 31, 2020 and 2019 was $0.1 million and $0.1 million, respectively. Future minimum lease payments under the operating leases as of December 31, 2020 were $0.1 million through the lease term ending in April 2022. 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 December 31, 2020, 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. Employment Agreements The Company has agreements with certain employees to provide certain benefits in the event of termination where the base salary and certain other benefits would aggregate $2.9 million using the rate of compensation in effect at December 31, 2020. |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' (Deficit) Equity | Stockholders’ (Deficit) Equity Initial Public Offering On February 19, 2019, the Company consummated its initial public offering (“IPO”), selling a total of 2,172,591 shares of common stock at a purchase price of $5.00 per share for gross proceeds of $10.9 million and net proceeds of $9.7 million. In connection with the closing of the IPO, convertible notes (and related accrued interest) of $11.8 million were converted into 6,825,391 shares of common stock, accrued dividends of $4.8 million were converted into 954,696 shares of common stock, and preferred stock, both Series A and Series B, were converted into 2,534,766 shares of common stock. In addition, 127,500 shares of unvested restricted stock 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 allowed; notes were not permitted to convert 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 $47.8 thousand of these notes remained outstanding and were converted into 273,034 shares of the Company's common stock in August and September 2019 when the conversion did not result in the holders and any of its affiliates to own more than 4.99% of the Company's outstanding common shares. PIPE Offerings 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”) issued at $14.00 per June Unit for total gross proceeds of $9.5 million. Each June Unit consisted of (i) one share of its common stock, and (ii) a warrant to purchase 0.7 shares (a total of 472,500) of common stock (each a “June Warrant”) (collectively, "June PIPE"). 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 on August 23, 2024. 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. The Company's net proceeds from the closing of the sale of the June Units on June 19, 2019 were $8.6 million after deducting the placement agent fees and offering expenses payable by the Company. On October 10, 2019, the Company entered into a second private placement of 485,250 units (each an “October Unit”) issued at $12.88 per October Unit for total gross proceeds of $6.3 million. Each October Unit consisted of (i) one share of the Company’s common stock, and (ii) a warrant to purchase 1.1 shares (a total of 533,775) of common stock (each an “October Warrant”) (collectively, "October PIPE"). 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 on October 10, 2024. On November 8, 2019, the Company filed a Registration Statement on Form S-1 to register for resale the common stock underlying the October Units sold with the Company's October 2019 private offering. The Company's net proceeds from the closing of the sale of the October Units on October 11, 2019 were $5.7 million after deducting the placement agent fees and offering expenses payable by the Company. Public Offering On June 30, 2020, the Company completed its June 2020 Common Stock Offering (the "June 2020 Offering") of 4,216,868 shares of common stock for total gross proceeds of $35.0 million. The shares of Company common stock were sold at a public offering price of $8.30 per share and were purchased by the underwriters from the Company at a price of $7.719 per share. Net proceeds from the sale of the common stock on June 30, 2020 were $32.0 million after deducting underwriting discounts and offering expenses. 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 4,150,000 shares. As of December 31, 2020, 45,450 shares remained available for grant under the 2018 Stock Plan. Restricted Stock Restricted stock activity for the years ended December 31, 2020 and 2019 is summarized as follows: Number of Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2018 127,500 $ 3.21 Granted 200,000 11.54 Vested (169,164) 5.26 Unvested at December 31, 2019 158,336 $ 11.54 Granted 200,000 7.16 Vested (49,992) 11.54 Unvested at December 31, 2020 308,344 $ 8.70 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 4 months of the approval date of the agreement. The remaining 175,000 shares vest over 42 months, beginning on September 19, 2019. As of December 31, 2020, 91,656 shares have vested and 108,344 remain unvested. On October 30, 2020, the Company granted 200,000 shares of restricted common stock to the Company's Chief Executive Officer in connection with his employee agreement. The shares vest 25% on each anniversary date of the agreement, as long as the executive remains employed with the Company and fully vest upon a change of control. As of December 31, 2020, 200,000 shares remain unvested. During the years ended December 31, 2020 and 2019, the Company recorded $0.6 million and $0.9 million, respectively, in stock-based compensation for the restricted shares previously issued. As of December 31, 2020, there was $2.5 million of unrecognized stock-based compensation expense related to restricted shares with a weighted-average remaining expense period of 3.31 years. Stock Options The following table summarizes stock option activities for the years ended December 31, 2020 and 2019: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (in Years) Aggregate Intrinsic Value Outstanding, December 31, 2018 2,235,000 $ 1.74 9.44 $ 23,100 Granted 648,550 6.03 — — Outstanding, December 31, 2019 2,883,550 2.70 8.62 $ 23,861,981 Granted 1,036,000 9.38 — — Outstanding, December 31, 2020 3,919,550 $ 4.47 8.11 $ 13,095,054 Exercisable, December 31, 2020 1,627,425 $ 2.47 7.59 $ 8,696,368 During the year ended December 31, 2020, the Company granted certain individuals options to purchase 1,036,000 shares of common stock with an average exercise price of $9.38 per share, with contractual terms ranging from 1 to 10 years, and vesting periods that include 8.33% monthly over 1 year, 100% on 1 year anniversary date and 25% per year over 4 years. The options have an aggregate grant date fair value of $7.0 million that was calculated using the Black-Scholes option pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rates ranging from 0.1% to 1.6% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected lives ranging from 5.50 years to 6.25 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility ranging from 83.1% to 83.4% based on the historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair values of the Company's stock ranging from $6.44 to $13.50 per share. In January 2019, certain individuals agreed to the extinguishment of $0.5 million in deferred compensation, including $0.4 million for individuals still with the Company, that had been earned through September 30, 2018 and was to be repaid out of the proceeds from the Company's IPO. In recognition of this extinguishment of deferred compensation, during the three months ended March 31, 2019, the Company granted these individuals options to purchase 401,750 shares of the Company’s common stock with an exercise price of $1.75 per share, for a term of 10 years, and a vesting period of 25% per quarter over one year. The options have an aggregated grant date fair value of $0.5 million that was calculated using the Black-Scholes option pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rate of 2.53% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 5.27 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility of 84.3% based on the historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock at $1.67 per share which value was determined by the Company's Board after reviewing and considering, among other factors, a valuation report issued by an independent appraisal firm. In addition, during the year ended December 31, 2019, the Company granted certain individuals options to purchase 246,800 shares of the Company’s common stock with an average exercise price of $13.00 per share, for a term of 10 years, and a vesting period ranging from one year to 25% per year over four years. The options have an aggregated grant date fair value of $2.8 million that was calculated using the Black-Scholes option pricing model. Variables used in the Black-Scholes option pricing model include: (1) discount rates ranging from 1.65% to 2.12% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected lives ranging from 5.50 to 6.25 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility ranging from 82.99% to 85.06% 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 $5.73 to $17.50 per share. All options issued and outstanding are being amortized over their respective vesting periods. During the years ended December 31, 2020 and 2019, the Company recorded $2.6 million and $1.6 million, respectively, of stock-based compensation expense for options. The unrecognized stock-based compensation expense at December 31, 2020 was $7.9 million with a weighted-average remaining expense period of 2.39 years. Warrants In January and February 2019, the Company issued warrants to purchase 300,000 shares of common stock at an exercise price of $1.75 on various dates. The warrants were issued to investors in connection with debt issued prior to the IPO and resulting settlements of debt. 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 years from the date of issuance. The total grant date fair value of the 452,081 warrants was $0.8 million, which was determined utilizing the Black-Scholes option pricing model. Variables used in the Black-Scholes option pricing model include (1) discount rates in the range of 2.47% to 2.80% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected term of five years based on the term of the warrants, (3) expected volatilities of 84.09% to 84.45% 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. As a result of the Company’s IPO closing on February 19, 2019, $0.7 million of unamortized issuance costs were accelerated and recorded as expense, including $0.1 million for costs associated with convertible notes, $0.1 million for warrants issued in connection with the convertible notes and $0.5 million for warrants issued in connection with non-convertible notes issued prior to the IPO. Warrants issued to underwriters in connection with the IPO were treated as deal costs. 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”) issued at $14.00 per June Unit for total gross proceeds of $9.5 million. Each June Unit consisted of (i) one share of its common stock, and (ii) a warrant to purchase 0.7 shares (a total of 472,500) of common stock (each a “June Warrant”) (collectively, "June PIPE"). 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 on August 23, 2024. 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. The Company's net proceeds from the closing of the sale of the June Units on June 19, 2019 were $8.6 million after deducting the placement agent fees and offering expenses payable by the Company. The grant date fair value of the 472,500 June Warrants was $4.4 million, 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 five years based on the term of the warrants, (3) expected volatility of 84.94% 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. On October 10, 2019, the Company entered into a second private placement of 485,250 units (each an “October Unit”) issued at $12.88 per October Unit for total gross proceeds of $6.3 million. Each October Unit consisted of (i) one share of the Company’s common stock, and (ii) a warrant to purchase 1.1 shares (a total of 533,775) of common stock (each an “October Warrant”) (collectively, "October PIPE"). 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 on October 10, 2024. On November 8, 2019, the Company filed a Registration Statement on Form S-1 to register for resale the common stock underlying the October Units sold with the Company's October 2019 private offering. The Company's net proceeds from the closing of the sale of the October Units on October 11, 2019 were $5.7 million after deducting the placement agent fees and offering expenses payable by the Company. The grant date fair value of the 533,775 October Warrants was $4.5 million, 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 five 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. The fair value amount of the warrants from the two PIPE transactions were included in additional paid-in capital as deal costs. The following table summarizes warrant activities for the years ended December 31, 2020 and 2019: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, December 31, 2018 776,350 $ 1.75 4.80 $ — Granted 1,458,356 10.88 — — Exercised (685,900) 2.12 — 6,073,855 Forfeited (cashless exercise) (174,198) 3.99 — — Outstanding, December 31, 2019 1,374,608 $ 10.97 4.43 $ 13,591 Exercised (40,891) 1.75 — 247,799 Forfeited (cashless exercise) (9,109) 1.75 — — Outstanding December 31, 2020 1,324,608 $ 11.32 3.44 $ — Exercisable, December 31, 2020 1,324,608 $ 11.32 3.44 $ — |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company files U.S. federal and various U.S. state income tax returns. Due to the Company’s losses, there was no income tax expense for the years ended December 31, 2020 and 2019. The income tax provision differs from the amount using the statutory federal income tax rate of 21% for 2020 and 2019 for the following reasons (in thousands) : December 31, December 31, Amount % Amount % Tax benefit at the U.S. federal statutory rate $ (3,054) (21.00) % $ (2,888) (21.00) % Tax rate change — — — — % Permanent differences 5 0.03 % 25 0.18 % Return to provision (5) (0.03) % (25) (0.18) % Valuation allowance 3,054 21.00 % 2,888 21.00 % Effective income tax rate $ — — % $ — — % The effective income tax rate varied from the statutory rate in 2020 and 2019 primarily due to the increase in the valuation allowance. Deferred tax assets and liabilities consist of the following (in thousands) : December 31, December 31, Assets related to: Accounts payable and accrued liabilities $ 592 $ 588 Stock-based compensation 1,137 — Net operating losses and start-up costs 11,785 9,891 Total deferred tax assets 13,514 10,479 Valuation allowance for deferred tax assets (13,351) (10,297) Net deferred tax 163 182 Liabilities related to: Accounts receivable and prepaid expenses (30) (20) Depreciation and amortization (133) (162) Net deferred tax liabilities (163) (182) Net deferred tax assets $ — $ — As of December 31, 2020, the Company’s filed tax returns include federal net operating loss (“NOL”) carryforwards of $56.1 million, including an NOL carryforward of $11.2 million for the year ended December 31, 2020. In addition, $24.6 million of this NOL carryforward begins expiring in 2032 through 2037. Under the new Tax Cuts and Jobs Act from 2018, carryforwards do not expire, but can only offset 80% of taxable income in the year the loss carryforward is used. The Company has recorded a full valuation allowance against its net total deferred tax assets as of December 31, 2020 and 2019 because management determined that it is not more likely than not that those assets will be realized. 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. During the year ended December 31, 2020 and 2019, the valuation allowance increased by $3.1 million and $2.9 million, respectfully, due to additional net operating losses. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 21, 2021, the Company entered into a collaborative agreement with the United States Navy to further study the impact of the RAP device on the treatment of keloid and hypertrophic scars. The Company plans to initiate this study in the first half of 2021. Also on January 21, 2021, the Company's Board granted certain individuals options to purchase 38,750 shares of common stock with an exercise price of $9.74 per share, a contractual term of 10 years and a vesting period of 25% per year over 4 years. Additionally, the Company's Board granted certain individuals and members of management options to purchase 372,900 shares of common stock subject to shareholder approval of the increase in the shares subject to the 2018 Stock Plan with an exercise price of $9.74 per share, a contractual term of 10 years, and vesting periods of 25% per year over 4 years. The options issued and fully approved had an aggregated grant date fair value of $0.3 million that was calculated using the Black-Scholes option pricing model. The options subject to shareholder approval had an aggregated grant date fair value of $2.7 million that was calculated using the Black-Scholes option pricing model. Variables used in the Black-Scholes option pricing model include: (1) a discount rate of 0.19% based on the daily yield curve rates for U.S. Treasury obligations, (2) expected life of 6.25 years based on the simplified method (vesting plus contractual term divided by two), (3) expected volatility of 88.90% based on the historical volatility of comparable companies' stock, (4) no expected dividends and (5) fair market value of the Company's stock of $9.74 per share. The options subject to shareholder approval will be valued using the Black-Scholes option pricing model upon shareholder approval. On January 29, 2021, the FDA provided a 510(k) clearance for the Company's RAP device for temporary improvement in the appearance of cellulite. On March 1, 2021, the Company entered into amendments to its amended and restated employment agreements dated February 25, 2019 with Lori Bisson, our chief financial officer, and Joe Tanner, our chief operating officer, pursuant to which the Company agreed to amend the severance period set forth in the employment agreements to 12 months from 9 months, and pursuant to which such officers agreed to extend the length of their non-solicitation and non-competition periods after termination from 9 months to 12 months. On March 1, 2021, the Company adopted an executive severance plan (the “Severance Plan”) for each of the Company's executives with the title of vice president or above that do not have an employment agreement that provides severance benefits. Under the Severance Plan, if the Company terminates an executive other than for cause or good reason, each as defined in the Severance Plan, the executive will receive certain severance benefits for 6 months. As a condition to receiving these severance benefits, the executive is required to execute a release of claims agreement in favor of the Company. Although the Company has the right to amend or terminate the Severance Plan, the Company may not do so in any manner that diminishes any benefits being paid to an executive at the time of such amendment or termination. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying annual financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). During the year ended December 31, 2020, the Company evaluated all costs presented as research and development ("R&D") costs and determined that the patent costs were related to activities similar to those described in ASC 730-10-55-2(i). Accordingly, the Company concluded the activities did not meet the definition of R&D activities. The amount of patent costs included in the R&D line of the Company's Statement of Operations for each of the years ended December 31, 2020 and 2019 were $0.4 million. The Company evaluated the effect of these errors in classification under ASC 250, " Accounting Changes and Error Corrections ", Staff Accounting Bulletin ("SAB") No. 108, " Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements " and SAB No. 99, " Materiality ". The errors did not materially misstate any previously issued financial statements. The Company considered both quantitative and qualitative characteristics of the errors and required corrections and determined it was not necessary to restate the financial statements or unaudited interim period financial statements that were previously issued. The Company reclassified the 2019 amounts to general and administrative expenses and will reclassify comparative 2020 amounts to conform to 2021 amounts in prospective interim period 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 and accompanying notes 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 estimated work performed but not yet billed by contract manufacturers, engineers and research organizations, the valuation of equity related instruments, depreciable lives of long-lived assets, the valuation allowance related to deferred taxes and the valuation of stock-based compensation awards. 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. The coronavirus disease (“COVID-19”) pandemic has negatively impacted, and may continue to negatively impact, the macroeconomic environment in the United States and globally, including our business, financial condition and results of operations. Due to the evolving and uncertain nature of COVID-19, it is reasonably possible that it could materially impact our estimates, particularly those that require consideration of forecasted financial information, in the near to medium term. These estimates relate to certain accounts including, but not limited to, the valuation allowance related to deferred taxes, intangible assets, and other long-lived assets. The magnitude of the impact will depend on numerous evolving factors that we may not be able to accurately predict, including the duration and extent of the pandemic, the impact of federal, state, local and foreign governmental actions, consumer and provider behavior in response to the pandemic and such governmental actions, and the economic and operating conditions that we may face in the aftermath of COVID-19. |
Cash and Cash Equivalents | 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. The Company participates in an insured cash sweep program through its bank that sweeps cash balances exceeding the FDIC insured limit of $0.25 million 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 $0.25 million. 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 December 31, 2020, the letter of credit was not used. |
Inventory | Inventory Inventory is valued at the lower of cost or net realizable value using the first-in, first-out ("FIFO") method. Inventory consists of raw materials purchased by the Company and held offsite by a vendor. As of December 31, 2020 and 2019, the Company had inventory of $0.4 million and $0.0 million, respectively. |
Property and Equipment | Property and Equipment Property and equipment are stated at historical cost and depreciated on a straight-line basis over their estimated useful lives, generally three |
Intangible Assets | Intangible Assets Intangible assets include trademarks. At December 31, 2020 and 2019, the Company had trademarks of $0.1 million. The Company does not amortize 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. During the year ended December 31, 2020, the Company wrote down a trademark, included in the write-down of intangible assets and equipment line item in the accompanying statement of operations, with net book value of $19.7 thousand. |
Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be realizable or at a minimum annually during the fourth quarter of the year. If an evaluation is required, the estimated future undiscounted cash flows associated with the asset are compared to the asset’s carrying value to determine if an impairment of such asset is necessary. The effect of any impairment would be to expense the difference between the fair value of such asset and its carrying value. |
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. |
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, is 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 identical or 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 spreads, 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 December 31, 2020 and 2019, the carrying amounts of the Company's financial instruments, including cash, cash equivalents and restricted cash, and accounts payable, approximate their respective fair value due to the short-term nature of these instruments. At December 31, 2020 and 2019, the Company does not have any assets or liabilities required to be measured at fair value on a recurring basis. |
Warrants | Warrants to Purchase Common Stock The Company evaluates the terms of warrants to determine the appropriate accounting and classification pursuant to ASC Topic 480, Distinguishing Liabilities from Equity , ASC Topic 505, Equity , ASC Topic 815, Derivatives and Hedging , and ASC Topic 718, Stock-based Compensation . The Company issued warrants to purchase shares of common stock related to (i) bridge notes issued prior to its IPO, (ii) private investment in public equity ("PIPE") deals, and (iii) as part of underwriter compensation in 2019 and 2018. 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. 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. Equity classified warrants issued to non-employees in exchange for services are accounted for in accordance with ASC 718 which requires all stock-based payments be recognized in the consolidated statements of operations based on their fair value. 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 historical volatility of comparable companies' stock. There are no expected dividends. |
Research and development | Research and development Research and development expenses consist primarily of: • costs incurred to conduct research, such as animal research; • costs related to the design and development of our technology, including fees paid to contract engineering firms and contract manufacturers; • salaries and expenses, including stock-based compensation, related to our employees primarily engaged in research and development activities; • fees paid to clinical consultants, clinical trial sites and vendors, including clinical research organizations, in preparation for clinical trials and our applications with the FDA; and • costs related to filings with regulatory agencies. The Company records accrued expenses for estimated costs of its research and development activities conducted by third-party service providers, which include the conducting of pre-clinical studies, preparation for and conducting of clinical trials, contract engineering and design activities, and other development costs. The Company records the estimated costs of research and development activities based upon the estimated amount of services provided but not yet invoiced and it includes these costs in accrued liabilities in the balance sheets and within research and development expense in the statements of operations as they are incurred. These costs are a significant component of our research and development expenses. The Company records accrued expenses for these costs based on the estimated amount of work completed and in accordance with agreements established with these third parties. The Company estimates the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. The Company makes significant judgments and estimates in determining the accrued balance in each reporting period. As actual costs become known, the Company adjusts its accrued estimates. Although the Company does not expect its estimates to be materially different from amounts actually incurred, its understanding of the status and timing of services performed may vary from its estimates and could result in the Company reporting amounts that are too high or too low in any particular period. The Company's accrued expenses are dependent, in part, upon the receipt of timely and accurate reporting from clinical research organizations, engineering firms and other third-party service providers. To date, there have been no material differences from its accrued expenses to actual expenses. The Company expects its research and development expenses to increase in the future as it advances its product into and through clinical trials, pursues additional regulatory approvals of its product in the United States, and continues commercial development of its RAP device and replaceable cartridge. The process of conducting the necessary clinical research to obtain regulatory approval is costly and time-consuming. The actual probability of success for the Company's technology may be affected by a variety of factors including: the quality of its product, early clinical data, investment in its clinical program, competition, manufacturing capability and commercial viability. The Company may not succeed in achieving all necessary regulatory approvals for any of its product candidates. As a result of the uncertainties discussed above, the Company is unable to determine the duration and completion costs of its research and development process or when and to what extent, if any, it will generate revenue from the commercialization and sale of its device. |
Sales and marketing and General and administrative | Sales and marketing Sales and marketing expenses consist of marketing, conferences, web development, advisory boards and other miscellaneous expenses. The salaries and expenses of our personnel primarily engaged in sales, marketing and customer service functions are included in sales and marketing expense. As we commercialize, we expect our sales and marketing expense to increase due to the anticipated growth of our business and related infrastructure as well as expanding our sales, marketing and support personnel. The Company recognizes expenses to develop advertising materials as they are incurred. General and administrative General and administrative expenses consist of personnel related costs, which include salaries, as well as the costs of professional services, such as accounting and legal, facilities, information technology, stock-based compensation for general and administrative personnel, insurance, travel costs, other administrative expenses and patent costs. The Company expects its general and administrative expense to increase due to the anticipated growth of its business and related infrastructure as well as accounting, insurance, investor relations and other costs associated with being a public company. |
Depreciation and amortization | Depreciation Depreciation expense consists of depreciation on the Company's property and equipment. The Company depreciates its assets over their estimated useful lives. The Company estimates research and development equipment and lab equipment to have a five three three . |
Share-based Compensation | Stock-Based Compensation Stock-based compensation transactions are recognized as compensation expense in the statements of operations based on their fair values on the date of the grant. The expense for equity awards expected to vest is recognized 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, research and development or sales and marketing expenses, depending upon the classification of the grantee. We estimate the fair value of options granted using the Black-Scholes option pricing model. This estimate uses assumptions regarding a number of inputs that require us to make significant estimates and judgments. Because we are a new publicly traded common stock, the expected volatility assumption was based on industry peer information. Forfeitures are recognized as they are incurred. |
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. All of the Company's tax years 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 December 31, 2020 and 2019 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 statements as of December 31, 2020. The Company does not expect any significant changes in the unrecognized tax benefits within twelve months of the reporting date. The Company's policy is to classify 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 in 2020 and 2019. |
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 |
JOBS Act Accounting Election | JOBS Act Accounting Election The Company is an 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-emerging growth companies 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 as discussed in Note 9. |
Recent Accounting Standards | Recent Accounting Standards In February 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2016-02, Leases (Topic 842) ("ASC 842"), which establishes a right-of-use (“ROU”) model requiring a lessee to recognize an 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. ASC 842 was originally effective for fiscal years beginning after December 15, 2019, and interim periods beginning after December 15, 2020 with early adoption permitted. Since issuing ASC 842, the FASB has delayed the effective date of ASC 842 for private companies to fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Given the Company's status as an EGC, the Company will adopt ASC 842 in accordance with the private company guidance. 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. 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 | Reclassifications In certain instances, amounts reported in the prior year 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 investing activities and previously reported expenses between research and development expenses and general and administrative expenses. |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Prepaid expenses and other current assets consisted of the following (in thousands) : December 31, 2020 December 31, 2019 Prepaid insurance $ 49 $ 94 Other prepaids and receivables 92 2 Total prepaid expenses and other current assets $ 141 $ 96 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property and equipment consisted of the following (in thousands) : December 31, December 31, Computer equipment and software $ 171 $ 127 Construction in progress 710 — Research and development equipment 248 245 Lab equipment 390 780 Tooling 366 — Leasehold improvements 271 271 Furniture 20 20 Subtotal 2,176 1,443 Less: accumulated depreciation (763) (595) Total property and equipment $ 1,413 $ 848 |
Stockholders' (Deficit) Equity
Stockholders' (Deficit) Equity (Tables) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Summary of Nonvested Restricted Stock Shares Activity | Restricted stock activity for the years ended December 31, 2020 and 2019 is summarized as follows: Number of Shares Weighted-Average Grant Date Fair Value Unvested at December 31, 2018 127,500 $ 3.21 Granted 200,000 11.54 Vested (169,164) 5.26 Unvested at December 31, 2019 158,336 $ 11.54 Granted 200,000 7.16 Vested (49,992) 11.54 Unvested at December 31, 2020 308,344 $ 8.70 | |
Summary of Stock Option Activity | The following table summarizes stock option activities for the years ended December 31, 2020 and 2019: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Life (in Years) Aggregate Intrinsic Value Outstanding, December 31, 2018 2,235,000 $ 1.74 9.44 $ 23,100 Granted 648,550 6.03 — — Outstanding, December 31, 2019 2,883,550 2.70 8.62 $ 23,861,981 Granted 1,036,000 9.38 — — Outstanding, December 31, 2020 3,919,550 $ 4.47 8.11 $ 13,095,054 Exercisable, December 31, 2020 1,627,425 $ 2.47 7.59 $ 8,696,368 | |
Summary of Warrant Activity | The following table summarizes warrant activities for the years ended December 31, 2020 and 2019: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in Years) Aggregate Intrinsic Value Outstanding, December 31, 2018 776,350 $ 1.75 4.80 $ — Granted 1,458,356 10.88 — — Exercised (685,900) 2.12 — 6,073,855 Forfeited (cashless exercise) (174,198) 3.99 — — Outstanding, December 31, 2019 1,374,608 $ 10.97 4.43 $ 13,591 Exercised (40,891) 1.75 — 247,799 Forfeited (cashless exercise) (9,109) 1.75 — — Outstanding December 31, 2020 1,324,608 $ 11.32 3.44 $ — Exercisable, December 31, 2020 1,324,608 $ 11.32 3.44 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Income Tax Rate Reconciliation | The income tax provision differs from the amount using the statutory federal income tax rate of 21% for 2020 and 2019 for the following reasons (in thousands) : December 31, December 31, Amount % Amount % Tax benefit at the U.S. federal statutory rate $ (3,054) (21.00) % $ (2,888) (21.00) % Tax rate change — — — — % Permanent differences 5 0.03 % 25 0.18 % Return to provision (5) (0.03) % (25) (0.18) % Valuation allowance 3,054 21.00 % 2,888 21.00 % Effective income tax rate $ — — % $ — — % |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following (in thousands) : December 31, December 31, Assets related to: Accounts payable and accrued liabilities $ 592 $ 588 Stock-based compensation 1,137 — Net operating losses and start-up costs 11,785 9,891 Total deferred tax assets 13,514 10,479 Valuation allowance for deferred tax assets (13,351) (10,297) Net deferred tax 163 182 Liabilities related to: Accounts receivable and prepaid expenses (30) (20) Depreciation and amortization (133) (162) Net deferred tax liabilities (163) (182) Net deferred tax assets $ — $ — |
Organization and Nature of Bu_2
Organization and Nature of Business - Narrative (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020USD ($)segment | Dec. 31, 2019USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | segment | 1 | |
Net loss | $ (14,541) | $ (13,752) |
Net cash used in operating activities | (11,497) | (10,605) |
Accumulated deficit | (70,584) | (56,043) |
Working capital | 29,400 | |
Cash | $ 31,757 | $ 12,076 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Research and development | $ 4,631,000 | $ 4,679,000 |
Inventory | 353,000 | 0 |
Write-off of intangible assets | 291,000 | 0 |
Interest or penalties recognized | $ 0 | 0 |
Lab equipment | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Property and equipment, useful life (in years) | 5 years | |
Computer equipment and software | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Property and equipment, useful life (in years) | 3 years | |
Furniture | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Property and equipment, useful life (in years) | 3 years | |
Patents | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Research and development | $ 400,000 | |
Trademarks | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Intangible assets, gross | 100,000 | $ 100,000 |
Write-off of intangible assets | $ 19,700 | |
Employee Stock Option | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Antidilutive securities excluded from computation of EPS (in shares) | 3,919,550 | 2,883,550 |
Restricted Stock | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Antidilutive securities excluded from computation of EPS (in shares) | 308,344 | 158,336 |
Convertible Debt Securities | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Antidilutive securities excluded from computation of EPS (in shares) | 1,324,608 | 1,374,608 |
Minimum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Property and equipment, useful life (in years) | 3 years | |
Maximum | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Property and equipment, useful life (in years) | 5 years |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid insurance | $ 49 | $ 94 |
Other prepaids and receivables | 92 | 2 |
Total prepaid expenses and other current assets | $ 141 | $ 96 |
Property and Equipment - Schedu
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 2,176 | $ 1,443 |
Less: accumulated depreciation | (763) | (595) |
Total property and equipment | 1,413 | 848 |
Computer equipment and software | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 171 | 127 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 710 | 0 |
Research and development equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 248 | 245 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 390 | 780 |
Tooling | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 366 | 0 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 271 | 271 |
Furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 20 | $ 20 |
Property and Equipment - Narrat
Property and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Gain (loss) on write down of property plant equipment | $ (0.3) | |
Depreciation expense | 0.3 | $ 0.2 |
Lab equipment | ||
Property, Plant and Equipment [Line Items] | ||
Lab equipment held for testing | $ 0.3 | $ 0.7 |
Notes Payable - Narrative (Deta
Notes Payable - Narrative (Details) | Feb. 19, 2019USD ($)shares | Feb. 19, 2019USD ($) | Feb. 19, 2019USD ($) |
Debt Disclosure [Abstract] | |||
Debt conversion, original amount | $ 11,800,000 | ||
Converted debt, shares issued (in shares) | shares | 6,825,391 | ||
Percentage of stock ownership after conversion | 4.99% | ||
Convertible debt | $ 47,800 | $ 47,800 | $ 47,800 |
Convertible debt instrument, number of equity instruments | 273,034 | 273,034 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) | Sep. 15, 2020 | Feb. 19, 2019 | Feb. 01, 2016 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Nov. 20, 2019 |
Payments for milestones | $ 250,000 | ||||||
Percentage of license income entitlement | 50.00% | ||||||
License income | $ 37,500 | $ 200,000 | |||||
Issuance of common stock (in shares) | 2,172,591 | ||||||
Operating lease term (in years) | 36 months | ||||||
Penalty termination fee payment | $ 400,000 | ||||||
Purchase obligation | 2,600,000 | ||||||
Purchase obligation due in 2021 | 1,000,000 | ||||||
Purchase obligation due in 2022 | 1,600,000 | ||||||
Term of extension | 12 months | ||||||
Rent expense | 100,000 | 100,000 | |||||
Lease payments due | 100,000 | ||||||
Postemployment benefits liability | 2,900,000 | ||||||
Office Space Lease Arrangement | |||||||
Operating lease term (in years) | 63 months | ||||||
Monthly lease payment | $ 7,900 | ||||||
Office Space Lease Arrangement | Maximum | |||||||
Monthly lease payment | $ 8,900 | ||||||
MD Anderson | |||||||
Payment for expenses related to agreement | $ 100,000 | $ 300,000 | |||||
Issuance of common stock (in shares) | 175,000 |
Stockholders' (Deficit) Equit_2
Stockholders' (Deficit) Equity - Initial Public Offering and Pipe Offerings (Details) - USD ($) | Jun. 30, 2020 | Oct. 10, 2019 | Jun. 16, 2019 | Feb. 19, 2019 | Feb. 19, 2019 | Feb. 19, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of common shares for IPO, net of costs (in shares) | 2,172,591 | ||||||||
Stock issued during period (in dollars per share) | $ 5 | $ 5 | $ 5 | ||||||
Proceeds from issuance of common stock | $ 9,500,000 | $ 10,900,000 | $ 32,046,000 | $ 24,096,000 | |||||
Net proceeds from issuance of common stock | 9,700,000 | ||||||||
Debt conversion, original amount | 11,800,000 | ||||||||
Converted debt, shares issued (in shares) | 6,825,391 | ||||||||
Amount of accrued dividends converted to common stock | $ 4,800,000 | ||||||||
Conversion of accrued dividends into common stock, shares issued (in shares) | 954,696 | ||||||||
Shares vested (in shares) | 127,500 | ||||||||
Common stock, shares outstanding (in shares) | 14,613,000 | 14,613,000 | 14,613,000 | 21,189,943 | 16,932,184 | ||||
Percentage of stock ownership after conversion | 4.99% | ||||||||
Convertible debt | $ 47,800 | $ 47,800 | $ 47,800 | ||||||
Convertible debt instrument, number of equity instruments | 273,034 | 273,034 | |||||||
Exercise price of warrants (in dollars per share) | $ 11.32 | $ 10.97 | $ 1.75 | ||||||
Number of shares of common stock to be called by each warrant (in shares) | 533,775 | 452,081 | 452,081 | 452,081 | |||||
Warrants Issued in Private Investment in Public Equity Offering | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Proceeds from issuance of common stock | $ 6,300,000 | ||||||||
Exercise price of warrants (in dollars per share) | $ 12.88 | $ 14 | |||||||
Number of shares of common stock to be called by each warrant (in shares) | 472,500 | ||||||||
Private Investment in Public Equity Offering | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of units issued | 485,250 | 675,000 | |||||||
Exercise price of warrants (in dollars per share) | $ 16 | ||||||||
Number of common stock per unit | 1 | 1 | |||||||
Number of warrants per unit | 1.1 | 0.7 | |||||||
Proceeds from warrant exercises | $ 8,600,000 | ||||||||
Proceeds From Private Investment In Public Equity Offering | $ 5,700,000 | ||||||||
June 2020 Offering | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuance of common shares for IPO, net of costs (in shares) | 4,216,868 | ||||||||
Stock issued during period (in dollars per share) | $ 8.30 | ||||||||
Proceeds from issuance of common stock | $ 35,000,000 | ||||||||
Net proceeds from issuance of common stock | $ 32,000,000 | ||||||||
Sale of stock, price per share (in usd per share) | $ 7.719 | ||||||||
Conversion of Preferred Stock into Common Stock | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Incremental common shares attributable to dilutive effect of conversion of preferred stock | 2,534,766 |
Stockholders' (Deficit) Equit_3
Stockholders' (Deficit) Equity (Details Textual) | Oct. 30, 2020shares | Jun. 30, 2020USD ($) | Oct. 10, 2019USD ($)$ / sharesshares | Sep. 19, 2019 | Jun. 16, 2019USD ($)$ / sharesshares | May 08, 2019shares | Feb. 19, 2019USD ($)$ / sharesshares | Jan. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2020USD ($)$ / sharesshares | Feb. 28, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares |
Shares vested (in shares) | 127,500 | ||||||||||||
Granted (in shares) | 1,036,000 | 648,550 | |||||||||||
Granted, weighted average exercise price (in dollars per share) | $ / shares | $ 9.38 | $ 6.03 | |||||||||||
Share price (in dollars per share) | $ / shares | $ 4.87 | ||||||||||||
Deferred compensation expense | $ | $ 500,000 | $ 7,900,000 | |||||||||||
Number of shares of common stock to be called by each warrant (in shares) | 533,775 | 452,081 | |||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 11.32 | $ 10.97 | $ 11.32 | $ 1.75 | |||||||||
Warrant term (in years) | 5 years | ||||||||||||
Warrants outstanding | $ | $ 4,500,000 | $ 800,000 | |||||||||||
Proceeds from issuance of common stock | $ | $ 9,500,000 | 10,900,000 | $ 32,046,000 | $ 24,096,000 | |||||||||
Private Investment in Public Equity Offering | |||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 16 | ||||||||||||
Number of units issued | 485,250 | 675,000 | |||||||||||
Number of common stock per unit | 1 | 1 | |||||||||||
Number of warrants per unit | 1.1 | 0.7 | |||||||||||
Proceeds from warrant exercises | $ | $ 8,600,000 | ||||||||||||
Proceeds from private investment in public equity offering | $ | $ 5,700,000 | ||||||||||||
June 2020 Offering | |||||||||||||
Proceeds from issuance of common stock | $ | $ 35,000,000 | ||||||||||||
Convertible Debt | Fifth Note | |||||||||||||
Unamortized discount | $ | 700,000 | ||||||||||||
Warrants Issued With Non-Convertible Notes Prior To IPO | Fifth Note | |||||||||||||
Unamortized discount | $ | 500,000 | ||||||||||||
Convertible Notes Payable | Fifth Note | |||||||||||||
Unamortized discount | $ | 100,000 | ||||||||||||
Warrants Issued With Convertible Notes | Fifth Note | |||||||||||||
Unamortized discount | $ | $ 100,000 | ||||||||||||
Discount Rate | |||||||||||||
Measurement input | 0.0159 | ||||||||||||
Expected Dividend Payment | |||||||||||||
Measurement input | $ | 0 | ||||||||||||
Share Price | |||||||||||||
Measurement input | 12.88 | 1.67 | |||||||||||
Fifth Note | |||||||||||||
Number of shares of common stock to be called by each warrant (in shares) | 300,000 | 300,000 | |||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 1.75 | $ 1.75 | |||||||||||
Warrants Issued to Underwriters | |||||||||||||
Number of shares of common stock to be called by each warrant (in shares) | 152,081 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 6 | ||||||||||||
Warrant term (in years) | 5 years | ||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | |||||||||||||
Number of shares of common stock to be called by each warrant (in shares) | 472,500 | ||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 12.88 | $ 14 | |||||||||||
Warrants outstanding | $ | $ 4,400,000 | ||||||||||||
Proceeds from issuance of common stock | $ | $ 6,300,000 | ||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Discount Rate | |||||||||||||
Measurement input | 0.0185 | ||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Expected Term | |||||||||||||
Measurement input | 5 | ||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Price Volatility | |||||||||||||
Measurement input | 0.8494 | ||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Expected Dividend Payment | |||||||||||||
Measurement input | 0 | ||||||||||||
Warrants Issued in Private Investment in Public Equity Offering | Share Price | |||||||||||||
Measurement input | 14.30 | ||||||||||||
Minimum | Discount Rate | |||||||||||||
Measurement input | 0.0247 | ||||||||||||
Minimum | Price Volatility | |||||||||||||
Measurement input | 0.8292 | 0.8409 | |||||||||||
Maximum | Discount Rate | |||||||||||||
Measurement input | 0.0280 | ||||||||||||
Maximum | Price Volatility | |||||||||||||
Measurement input | 0.8445 | ||||||||||||
Restricted Stock | |||||||||||||
Grants in period (in shares) | 200,000 | 200,000 | |||||||||||
Shares vested (in shares) | 49,992 | 169,164 | |||||||||||
Shares that immediately vested upon completion of IPO (in shares) | 308,344 | 158,336 | 308,344 | 127,500 | |||||||||
Unamortized expense related to restricted stock grant | $ | $ 2,500,000 | $ 2,500,000 | |||||||||||
Cost not yet recognized, period for recognition | 3 years 3 months 21 days | ||||||||||||
Stock-based compensation expense | $ | $ 600,000 | $ 900,000 | |||||||||||
Restricted Stock | Share-based Payment Arrangement, Tranche One | |||||||||||||
Shares vested (in shares) | 25,000 | ||||||||||||
Restricted Stock | Share-based Payment Arrangement, Tranche Two | |||||||||||||
Shares vested (in shares) | 175,000 | ||||||||||||
Vesting period (in years) | 4 months | ||||||||||||
Employee Stock Option | |||||||||||||
Cost not yet recognized, period for recognition | 2 years 4 months 20 days | ||||||||||||
Expiration period (in years) | 10 years | 10 years | |||||||||||
Fair value of options | $ | $ 500,000 | $ 7,000,000 | $ 2,800,000 | ||||||||||
Discount rate | 2.53% | ||||||||||||
Expected life (in years) | 5 years 3 months 7 days | ||||||||||||
Expected volatility rate | 84.30% | ||||||||||||
Expected dividends | $ | $ 0 | 0 | |||||||||||
Stock-based compensation expense | $ | $ 2,600,000 | $ 1,600,000 | |||||||||||
Employee Stock Option | Minimum | |||||||||||||
Expiration period (in years) | 1 year | ||||||||||||
Discount rate | 0.10% | 1.65% | |||||||||||
Expected life (in years) | 5 years 6 months | 5 years 6 months | |||||||||||
Expected volatility rate | 83.10% | 82.99% | |||||||||||
Share price (in dollars per share) | $ / shares | $ 1.67 | $ 6.44 | $ 5.73 | $ 6.44 | |||||||||
Employee Stock Option | Maximum | |||||||||||||
Expiration period (in years) | 10 years | ||||||||||||
Discount rate | 1.60% | 2.12% | |||||||||||
Expected life (in years) | 6 years 3 months | 6 years 3 months | |||||||||||
Expected volatility rate | 83.40% | 85.06% | |||||||||||
Share price (in dollars per share) | $ / shares | $ 13.50 | $ 17.50 | $ 13.50 | ||||||||||
Employee Stock Option | Share-based Payment Arrangement, Tranche One | |||||||||||||
Vesting period (in years) | 42 months | 1 year | 1 year | ||||||||||
Employee Stock Option | Share-based Payment Arrangement, Tranche One | Minimum | |||||||||||||
Award vesting rights, percentage | 8.33% | ||||||||||||
Employee Stock Option | Share-based Payment Arrangement, Tranche One | Maximum | |||||||||||||
Award vesting rights, percentage | 25.00% | ||||||||||||
Employee Stock Option | Share-based Payment Arrangement, Tranche Two | |||||||||||||
Vesting period (in years) | 4 years | ||||||||||||
Award vesting rights, percentage | 25.00% | 25.00% | |||||||||||
Employee Stock Option | Share-based Payment Arrangement, Tranche Two | Maximum | |||||||||||||
Vesting period (in years) | 4 years | ||||||||||||
Three Consultants | Restricted Stock | |||||||||||||
Grants in period (in shares) | 200,000 | ||||||||||||
Shares vested (in shares) | 91,656 | ||||||||||||
Shares that immediately vested upon completion of IPO (in shares) | 108,344 | 108,344 | |||||||||||
Chief Executive Officer | Restricted Stock | |||||||||||||
Grants in period (in shares) | 200,000 | ||||||||||||
Shares that immediately vested upon completion of IPO (in shares) | 200,000 | 200,000 | |||||||||||
Award vesting rights, percentage | 25.00% | ||||||||||||
Certain Individuals | |||||||||||||
Granted (in shares) | 401,750 | 1,036,000 | 246,800 | ||||||||||
Granted, weighted average exercise price (in dollars per share) | $ / shares | $ 1.75 | $ 9.38 | $ 13 | ||||||||||
Deferred compensation expense | $ | $ 400,000 | ||||||||||||
2018 Stock Plan | |||||||||||||
Shares reserved and available for issuance (in shares) | 4,150,000 | 4,150,000 | |||||||||||
Shares remaining available for grant (in shares) | 45,450 | 45,450 |
Stockholders' (Deficit) Equit_4
Stockholders' (Deficit) Equity - Restricted Stock (Details) - $ / shares | Feb. 19, 2019 | Dec. 31, 2020 | Dec. 31, 2019 |
Number of Shares | |||
Vested (in shares) | (127,500) | ||
Weighted-Average Grant Date Fair Value | |||
Granted (in dollars per share) | $ 7.16 | $ 11.54 | |
Restricted Stock | |||
Number of Shares | |||
Outstanding beginning balance (in shares) | 158,336 | 127,500 | |
Vested (in shares) | (49,992) | (169,164) | |
Granted (in shares) | 200,000 | 200,000 | |
Outstanding ending balance (in shares) | 308,344 | 158,336 | |
Weighted-Average Grant Date Fair Value | |||
Weighted-Average Grant Date Fair Value, beginning balance (in dollars per share) | $ 11.54 | $ 3.21 | |
Vested (in dollars per share) | 11.54 | 5.26 | |
Weighted-Average Grant Date Fair Value, ending balance (in dollars per share) | $ 8.70 | $ 11.54 |
Stockholders' (Deficit) Equit_5
Stockholders' (Deficit) Equity - Stock Options (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Number of Shares | |||
Outstanding, Number of Shares, beginning of period (in shares) | 2,883,550 | 2,235,000 | |
Granted (in shares) | 1,036,000 | 648,550 | |
Outstanding, Number of Shares, end of period (in shares) | 3,919,550 | 2,883,550 | 2,235,000 |
Exercisable, Number of Shares (in shares) | 1,627,425 | ||
Weighted Average Exercise Price | |||
Outstanding, Weighted Average Exercise Price, beginning of period (in dollars per share) | $ 2.70 | $ 1.74 | |
Granted, Weighted Average Exercise Price (in dollars per share) | 9.38 | 6.03 | |
Outstanding, Weighted Average Exercise Price, end of period (in dollars per share) | 4.47 | $ 2.70 | $ 1.74 |
Exercisable, Weighted Average Exercise Price (in dollars per share) | $ 2.47 | ||
Outstanding, Weighted Average Remaining Life (Year) | 8 years 1 month 9 days | 8 years 7 months 13 days | 9 years 5 months 8 days |
Exercisable, Weighted Average Remaining Life (Year) | 7 years 7 months 2 days | ||
Outstanding, Aggregate Intrinsic Value | $ 13,095,054 | $ 23,861,981 | $ 23,100 |
Exercisable, Aggregate Intrinsic Value | $ 8,696,368 |
Stockholders' (Deficit) Equit_6
Stockholders' (Deficit) Equity - Warrants (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |||
Warrant outstanding, shares (in shares) | 1,374,608 | 776,350 | |
Warrant granted, shares (in shares) | 1,458,356 | ||
Warrant exercised, shares (in shares) | (40,891) | (685,900) | |
Warrant forfeited (cashless exercise), shares (in shares) | (9,109) | (174,198) | |
Warrant outstanding, shares (in shares) | 1,324,608 | 1,374,608 | 776,350 |
Warrant exercisable, shares (in shares) | 1,324,608 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Weighted Average Exercise Price [Roll Forward] | |||
Warrant outstanding, weighted average exercise price (in dollars per share) | $ 10.97 | $ 1.75 | |
Warrant granted, weighted average exercise price (in dollars per share) | 10.88 | ||
Warrant exercised, weighted average exercise price (in dollars per share) | 1.75 | 2.12 | |
Warrant forfeited (cashless exercise), weighted average exercise price (in dollars per share) | 1.75 | 3.99 | |
Warrant outstanding, weighted average exercise price (in dollars per share) | 11.32 | $ 10.97 | $ 1.75 |
Warrant exercisable, weighted average exercise price (in dollars per share) | $ 11.32 | ||
Warrant outstanding, weighted average remaining contractual term (Year) | 3 years 5 months 8 days | 4 years 5 months 4 days | 4 years 9 months 18 days |
Warrant exercisable, weighted average remaining contractual term (Year) | 3 years 5 months 8 days | ||
Warrant outstanding, aggregate intrinsic value | $ 0 | $ 13,591 | $ 0 |
Warrant exercised, aggregate intrinsic value | 247,799 | ||
Warrant exercisable, aggregate intrinsic value | $ 0 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Income tax expense | $ 0 | $ 0 |
Statutory federal income tax rate | 21.00% | 21.00% |
Federal net operating loss carryforwards | $ 56,100,000 | |
Additional net operating loss carryforwards | 11,200,000 | |
Federal net operating loss carryforwards subject to expiration | 24,600,000 | |
Increase in valuation allowance | $ 3,100,000 | $ 2,900,000 |
Income Taxes - Income Tax Recon
Income Taxes - Income Tax Reconciliation (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Tax benefit at the U.S. federal statutory rate, amount | $ (3,054,000) | $ (2,888,000) |
Tax benefit at the U.S. federal statutory rate, percent | (21.00%) | (21.00%) |
Tax rate change, amount | $ 0 | $ 0 |
Tax rate change, percent | 0.00% | 0.00% |
Permanent differences, amount | $ 5,000 | $ 25,000 |
Permanent differences, percent | 0.03% | 0.18% |
Return to provision, amount | $ (5,000) | $ (25,000) |
Return to provision, percent | (0.03%) | (0.18%) |
Valuation allowance, amount | $ 3,054,000 | $ 2,888,000 |
Valuation allowance, percent | 21.00% | 21.00% |
Effective income tax rate, amount | $ 0 | $ 0 |
Effective income tax rate, percent | 0.00% | 0.00% |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets related to: | ||
Accounts payable and accrued liabilities | $ 592 | $ 588 |
Stock-based compensation | 1,137 | 0 |
Net operating losses and start-up costs | 11,785 | 9,891 |
Total deferred tax assets | 13,514 | 10,479 |
Valuation allowance for deferred tax assets | (13,351) | (10,297) |
Net deferred tax | 163 | 182 |
Liabilities related to: | ||
Accounts receivable and prepaid expenses | (30) | (20) |
Depreciation and amortization | (133) | (162) |
Net deferred tax liabilities | (163) | (182) |
Net deferred tax assets | $ 0 | $ 0 |
Subsequent Events - Narrative (
Subsequent Events - Narrative (Details) - USD ($) | Mar. 01, 2021 | Feb. 28, 2021 | Jan. 21, 2021 | Jan. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 19, 2019 |
Granted (in shares) | 1,036,000 | 648,550 | |||||
Granted, weighted average exercise price (in dollars per share) | $ 9.38 | $ 6.03 | |||||
Share price (in dollars per share) | $ 4.87 | ||||||
Subsequent Event | |||||||
Expected dividends | $ 0 | ||||||
Severance period | 9 months | 12 months | |||||
Non-solicitation and non-competition period | 12 months | 9 months | |||||
Executive severance benefits period | 6 months | ||||||
Employee Stock Option | |||||||
Expiration period (in years) | 10 years | 10 years | |||||
Fair value of options | $ 500,000 | $ 7,000,000 | $ 2,800,000 | ||||
Discount rate | 2.53% | ||||||
Expected life (in years) | 5 years 3 months 7 days | ||||||
Expected volatility rate | 84.30% | ||||||
Expected dividends | $ 0 | $ 0 | |||||
Employee Stock Option | Subsequent Event | |||||||
Expiration period (in years) | 10 years | ||||||
Award vesting rights, percentage | 25.00% | ||||||
Vesting period (in years) | 4 years | ||||||
Fair value of options | $ 300,000 | ||||||
Discount rate | 0.19% | ||||||
Expected life (in years) | 6 years 3 months | ||||||
Expected volatility rate | 88.90% | ||||||
Share price (in dollars per share) | $ 9.74 | ||||||
Employee Stock Option | Subsequent Event | 2018 Stock Plan | |||||||
Expiration period (in years) | 10 years | ||||||
Award vesting rights, percentage | 25.00% | ||||||
Vesting period (in years) | 4 years | ||||||
Certain Individuals | |||||||
Granted (in shares) | 401,750 | 1,036,000 | 246,800 | ||||
Granted, weighted average exercise price (in dollars per share) | $ 1.75 | $ 9.38 | $ 13 | ||||
Certain Individuals | Subsequent Event | |||||||
Granted (in shares) | 38,750 | ||||||
Granted, weighted average exercise price (in dollars per share) | $ 9.74 | ||||||
Certain Individuals | Subsequent Event | 2018 Stock Plan | |||||||
Granted (in shares) | 372,900 | ||||||
Granted, weighted average exercise price (in dollars per share) | $ 9.74 |