9 Meters Biopharma (NMTRQ) 10-Q 14 Aug 18 2018 Q2 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 07, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Entity Registrant Name	INNOVATE BIOPHARMACEUTICALS, INC.
Entity Central Index Key	1,551,986
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	INNT
Entity Common Stock, Shares Outstanding (in shares)		25,787,437

Condensed Balance Sheets

Condensed Balance Sheets - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Current Assets:
Cash and cash equivalents	$ 10,663,434	$ 355,563
Prepaid expenses	244,390	161,844
Deferred offering costs	0	159,795
Due from related party	0	75,000
Total current assets	10,907,824	752,202
Property and equipment, net	45,371	40,707
Other assets	5,580	5,580
Total assets	10,958,775	798,489
Current liabilities:
Accounts payable	3,347,614	2,658,637
Accrued expenses	0	1,180,225
Note payable, net of debt discount	4,151,985	0
Convertible promissory notes, net	0	8,329,045
Convertible promissory notes, related party, net	0	244,816
Accrued interest	0	560,380
Total current liabilities	7,499,599	12,973,103
Commitments and contingencies (Note 8)
Stockholders’ equity (deficit)
Common stock - $0.0001 par value, 350,000,000 and 250,000,000 shares authorized; 25,695,602 and 11,888,240 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively	2,570	11,888
Additional paid-in-capital	43,181,593	7,167,189
Accumulated deficit	(39,724,987)	(19,353,691)
Total stockholders’ equity (deficit)	3,459,176	(12,174,614)
Total liabilities and stockholders’ equity (deficit)	$ 10,958,775	$ 798,489

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Common Stock, Par or Stated Value Per Share	$ 0.0001	$ 0.0001
Common Stock, Shares Authorized	350,000,000	250,000,000
Common Stock, Shares, Issued	25,695,602	11,888,240
Common Stock, Shares, Outstanding	25,695,602	11,888,240

Condensed Statements of Operati

Condensed Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Operating expenses:
Research and development	$ 1,243,221	$ 1,129,733	$ 7,601,225	$ 2,465,236
General and administrative	2,132,850	1,561,106	8,299,463	4,141,832
Total operating expenses	3,376,071	2,690,839	15,900,688	6,607,068
Loss from operations	(3,376,071)	(2,690,839)	(15,900,688)	(6,607,068)
Other income (expense):
Interest income	54,637	0	85,129	0
Interest expense	(894,118)	(99,483)	(4,555,737)	(171,130)
Total other income (expense), net	(839,481)	(99,483)	(4,470,608)	(171,130)
Loss before income taxes	(4,215,552)	(2,790,322)	(20,371,296)	(6,778,198)
Benefit from (provision for) income taxes	0	0	0	0
Net loss	$ (4,215,552)	$ (2,790,322)	$ (20,371,296)	$ (6,778,198)
Net loss per common share, basic and diluted	$ (0.16)	$ (0.23)	$ (0.87)	$ (0.57)
Weighted-average common shares, basic and diluted	25,695,171	11,888,240	23,481,834	11,888,240

Condensed Statements of Stockho

Condensed Statements of Stockholders’ Equity (Deficit) - USD ($)	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Stock Subscription Receivable
Balance (in shares) at Dec. 31, 2016		11,888,240
Balance at Dec. 31, 2016	$ (6,587,554)	$ 11,888	$ 1,148,457	$ (7,747,874)	$ (25)
Stockholders' Equity [Roll Forward]
Payment of stock subscription receivable	25				25
Share-based compensation	6,018,732		6,018,732
Net loss	(11,605,817)			(11,605,817)
Balance (in shares) at Dec. 31, 2017		11,888,240
Balance at Dec. 31, 2017	$ (12,174,614)	$ 11,888	7,167,189	(19,353,691)	0
Stockholders' Equity [Roll Forward]
Number of shares, options granted	0
Change in par value from $0.001 to $0.0001		$ (10,699)	10,699
Issuance of shares as a result of reverse recapitalization (in shares)		1,864,808
Issuance of shares as a result of reverse recapitalization	$ (978,674)	$ 186	(978,860)
Issuance of common stock (in shares)		7,111,631
Issuance of common stock	16,137,661	$ 711	16,136,950
Warrants issued with common stock	1,995,000		1,995,000
Warrants issued to placement agents	913,000		913,000
Stock issuance costs	(2,568,079)		(2,568,079)
Conversion of convertible debt and accrued interest (in shares)		4,827,001
Conversion of convertible debt and accrued interest	9,229,819	$ 483	9,229,336
Beneficial conversion feature	3,077,887		3,077,887
Share-based compensation	8,186,000		8,186,000
Exercise of warrants (in shares)		3,922
Exercise of warrants	12,472	$ 1	12,471
Net loss	(20,371,296)			(20,371,296)
Balance (in shares) at Jun. 30, 2018		25,695,602
Balance at Jun. 30, 2018	$ 3,459,176	$ 2,570	$ 43,181,593	$ (39,724,987)	$ 0

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Cash flows from operating activities
Net loss	$ (4,215,552)	$ (2,790,322)	$ (20,371,296)	$ (6,778,198)	$ (11,605,817)
Adjustments to reconcile net loss to net cash used in operating activities:
Share-based compensation			8,186,000	3,472,900
Accrued interest on convertible promissory notes			25,578	150,988
Amortization of debt discount	700,000		1,171,985	20,142
Depreciation			9,279	1,674
Beneficial conversion feature			3,077,887	0
Changes in operating assets and liabilities:
Prepaid expenses and other assets			(70,074)	(10,220)
Accounts payable			(289,697)	564,255
Accrued expenses			(1,020,430)	524,246
Net cash used in operating activities			(9,280,768)	(2,054,213)
Cash flows from investing activities
Purchase of property and equipment			(13,943)	(1,600)
Loan payments from related party			75,000	0
Net cash provided by (used in) investing activities			61,057	(1,600)
Cash flows from financing activities
Borrowings from note payable			3,000,000	0
Payments of note payable issuance costs			(20,000)	0
Borrowings from convertible promissory notes			345,000	1,700,000
Principal payments of convertible promissory notes			(275,000)	0
Proceeds from issuance of common stock and warrants			18,132,661	0
Payment of stock issuance costs			(1,495,284)	0
Payment of deferred offering costs			(159,795)	0
Payment of stock subscription receivable			0	25
Net cash provided by financing activities			19,527,582	1,700,025
Net increase (decrease) in cash and cash equivalents			10,307,871	(355,788)
Cash and cash equivalents as of beginning of period			355,563	360,811	360,811
Cash and cash equivalents as of end of period	$ 10,663,434	$ 5,023	10,663,434	5,023	$ 355,563
Supplemental disclosure of cash flow information
Cash paid during the period for interest			280,287	0
Supplemental disclosure of noncash financing activities
Conversion of convertible notes and accrued interest to common stock			9,229,336	0
Assumption of liabilities from reverse recapitalization transaction			978,674	0
Warrants issued to placement agents			913,000	0
Receivable for warrants exercised			$ 12,472	$ 0

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Description Innovate Biopharmaceuticals, Inc. (the “Company” or “Innovate”) is a clinical-stage biopharmaceutical company developing novel medicines for autoimmune and inflammatory diseases with unmet medical needs. The Company’s pipeline includes drug candidates for celiac disease, nonalcoholic steatohepatitis (NASH), Crohn’s, and ulcerative colitis. On January 29, 2018, Monster Digital, Inc. (“Monster”) and privately held Innovate Biopharmaceuticals Inc. (“Private Innovate”) completed a reverse recapitalization in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated July 3, 2017, as amended (the “Merger Agreement”), by and among Monster, Monster Merger Sub, Inc. (“Merger Sub”) and Private Innovate. In connection with the transaction, Private Innovate changed its name to IB Pharmaceuticals Inc. (“IB Pharmaceuticals”). Pursuant to the Merger Agreement, Merger Sub merged with and into IB Pharmaceuticals with IB Pharmaceuticals surviving as the wholly owned subsidiary of Monster (the “Merger”). Immediately following the Merger, Monster changed its name to Innovate Biopharmaceuticals, Inc. (“Innovate”). On March 29, 2018, IB Pharmaceuticals was merged into Innovate and ceased to exist. Monster, a Delaware corporation (formed in November 2010), and its subsidiary SDJ Technologies, Inc. (“SDJ”), was an importer of high-end memory storage products, flash memory and action sports cameras marketed and sold under the Monster Digital brand name acquired under a long-term licensing agreement with Monster, Inc. In September 2017, Monster incorporated MD Holding Co, Inc. (“MDH”), a Delaware corporation, and transferred all of the businesses and assets of Monster, including all shares of SDJ and those liabilities of Monster not assumed by Innovate pursuant to the Merger to MDH. In January 2018, the name of MDH was changed to NLM Holding Co., Inc. On January 29, 2018, prior to the Merger, Private Innovate completed an equity financing (the “Equity Issuance”). See Note 3. Basis of Presentation The unaudited condensed interim financial statements as of June 30, 2018 and for the three and six months then ended, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary for a fair statement of the balance sheets, operating results, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Operating results for the three and six months ended June 30, 2018 , are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018 . Certain information and footnote disclosure normally included in the annual financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. The Company’s financial position, results of operations and cash flows are presented in U.S. Dollars. Upon the closing of the Merger, the outstanding shares of Private Innovate were exchanged for shares of common stock of Monster at an exchange ratio of one share of Private Innovate common stock to 0.37686604 shares of Monster common stock (the “Exchange Ratio”). All common share amounts and per share amounts have been adjusted to reflect this Exchange Ratio, which was effected upon the Merger. The Merger has been accounted for as a reverse recapitalization. Prior to the Merger, Monster spun-out all of its pre-merger business assets and liabilities before it acquired Private Innovate. The owners and management of Private Innovate have actual or effective voting and operating control of the combined company. In the Merger transaction, Monster is the accounting acquiree and Private Innovate is the accounting acquirer. A reverse recapitalization is equivalent to the issuance of stock by the private operating company for the net monetary assets of the accounting acquiree accompanied by a recapitalization with accounting similar to that resulting from a reverse acquisition, except that no goodwill or intangible assets are recorded. Immediately prior to the effective time of the Merger, Monster effected a reverse stock split at a ratio of one new share for every ten shares of its common stock outstanding. In connection with the Merger, 1,864,808 shares of the Company’s common stock were transferred to the existing Monster stockholders and the Company assumed approximately $1.0 million in liabilities from Monster for certain transaction costs and tail insurance coverage for its directors and officers, which were recorded as a reduction of additional paid-in-capital. The accompanying unaudited financial statements and related notes reflect the historical results of Private Innovate prior to the Merger and of the combined company following the Merger, and do not include the historical results of Monster prior to the completion of the Merger. These financial statements and related notes should be read in conjunction with the audited financial statements of Private Innovate for the year ended December 31, 2017 , included in the Company’s Form 8-K/A filed with the SEC on April 18, 2018, and Monster’s audited consolidated financial statements and related notes thereto for the year ended December 31, 2017 , included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , filed with the SEC on March 14, 2018, as amended. There have been no material changes to the Company’s significant accounting policies during the three and six months ended June 30, 2018 and 2017 , as compared to the significant accounting policies disclosed in Note 1 of the financial statements of Private Innovate for the years ended December 31, 2017 and 2016 . However, the following accounting policies are the most critical in fully understanding the Company’s financial condition and results of operations. Business Risks The Company faces risks associated with biopharmaceutical companies whose products are in the early stages of development. These risks include, among others, the Company’s need for additional financing to achieve key development milestones, the need to defend intellectual property rights, and the dependence on key members of management. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Areas of the financial statements where estimates may have the most significant effect include accrued expenses, share-based compensation, deferred compensation, valuation allowance for income tax assets and management’s assessment of the Company’s ability to continue as a going concern. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could differ from these estimates. Accrued Expenses The Company incurs periodic expenses such as research and development, salaries, and professional fees. An adjusting entry to accrue expenses is necessary when expenses have been incurred by the Company prior to them being invoiced. When a vendor’s invoice is not received, the Company is required to estimate its accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice monthly in arrears for services performed or when contractual milestones are met. The Company estimates accrued expenses as of each balance sheet date based on facts and circumstances known at that time. Accrued expenses consisted of the following: June 30, 2018 December 31, 2017 Compensation and benefits $ — $ 1,065,225 Other — 115,000 Total $ — $ 1,180,225 Research and Development Research and development expenses consist of costs incurred to further the Company’s research and development activities and include salaries and related employee benefits, manufacturing of pharmaceutical active ingredients and drug products, costs associated with clinical trials, nonclinical activities, regulatory activities, research-related overhead expenses and fees paid to expert consultants, external service providers and contract research organizations which conduct certain research and development activities on behalf of the Company. Costs incurred in the research and development of products are charged to research and development expense as incurred. Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of vendors’ progress towards completion of specific tasks, using data such as patient enrollment, clinical site activations or information provided by vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services were performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed. The estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made. Share-Based Compensation The Company measures compensation cost for share-based payment awards granted to employees and non-employee directors at fair value using the Black-Scholes option-pricing model. Compensation expense is recognized on a straight-line basis over the service period for awards expected to vest. Share-based compensation cost related to share-based payment awards granted to non-employees is adjusted each reporting period for changes in the fair value of the Company’s stock until the measurement date. The measurement date is generally considered to be the date when all services have been rendered or the date that options are fully vested. Patent Costs Costs associated with the submission of patent applications are expensed as incurred given the uncertainty of the future economic benefits of the patents. Patent and patent related legal and administrative costs included in general and administrative expenses were approximately $161,000 and $92,000 for the three months ended June 30, 2018 and 2017 , and $309,000 and $235,000 for the six months ended June 30, 2018 and 2017 , respectively. Net Loss Per Share The Company calculates net loss per share as a measurement of the Company’s performance while giving effect to all dilutive potential common shares that were outstanding during the reporting period. As the Company had a net loss for all periods presented, the inclusion of common stock options or other similar instruments would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted earnings per share are the same. For the three and six months ended June 30, 2018 and 2017 , 8.5 million and 6.5 million potentially dilutive securities related to warrants and stock options issued and outstanding have been excluded from the computation of diluted weighted shares outstanding because the effect would be anti-dilutive. The potentially dilutive securities consisted of the following: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 2018 2017 2018 2017 Options outstanding under the Private Innovate 2015 Stock Incentive Plan 6,428,577 6,509,824 6,428,577 6,509,824 Warrants issued at an exercise price of $2.54 349,555 — 349,555 — Warrants issued at an exercise price of $3.18 1,698,245 — 1,698,245 — Total 8,476,377 6,509,824 8,476,377 6,509,824 Segments Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates and manages its business as one operating segment and all of the Company’s operations are in North America. Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-2, Leases (Topic 842) (“ASU 2016-2”). The provisions of ASU 2016-2 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in a similar manner as under existing guidance for operating leases. ASU 2016-2 supersedes the previous lease standard, Topic 840, Leases . The guidance is effective for public companies with annual periods and interim periods within those annual periods beginning after December 15, 2018, and is expected to be effective for the Company for the year ending December 31, 2019. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The provisions of ASU 2016-15 address eight specific cash flow issues and how those certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows , and other Topics. The guidance is effective for public companies with annual periods and interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018 and the adoption of this standard did not have a material impact on the Company’s financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018, and the adoption of this standard did not have a material impact on the Company’s financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The standard is effective for the Company beginning with the first quarter of 2019 with early adoption permitted. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s financial statements.

LIQUIDITY AND GOING CONCERN

LIQUIDITY AND GOING CONCERN	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Liquidity and Going Concern	LIQUIDITY AND GOING CONCERN The accompanying financial statements have been prepared on a basis which assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. There is substantial doubt that the Company will continue as a going concern for at least 12 months following the date these financial statements are issued without additional financing, based on the Company’s limited operating history and recurring operating losses. As we continue to progress our research programs, we will need substantial additional funding to support our planned and future operating activities. Management’s plans with regard to these matters include entering into strategic partnerships or seeking additional debt or equity financing arrangements or a combination of these activities. The failure to obtain sufficient financing or strategic partnerships could adversely affect the Company’s ability to achieve its business objectives and continue as a going concern. The accompanying financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

MERGER AND FINANCING

MERGER AND FINANCING	6 Months Ended
	Jun. 30, 2018
Business Combinations [Abstract]
Merger and Financing	MERGER AND FINANCING As noted above, on January 29, 2018, Private Innovate and Monster completed the Merger in accordance with the terms of the Merger Agreement. Pursuant to the Merger Agreement, Merger Sub merged with and into IB Pharmaceuticals, with IB Pharmaceuticals surviving as the wholly owned subsidiary of Monster. Immediately following the Merger, Monster changed its name to Innovate Biopharmaceuticals, Inc. On March 29, 2018, IB Pharmaceuticals was merged into Innovate and ceased to exist. Immediately prior to the closing of the Merger, accredited investors purchased shares of common stock of Private Innovate in a private placement for gross proceeds of approximately $18.1 million , or $16.5 million , net of approximately $1.6 million in placement agent fees and expenses (the “Equity Issuance”). Additionally, Private Innovate issued five -year warrants to each cash purchaser of common stock, or an aggregate of approximately 1.4 million warrants, with an exercise price of $3.18 after giving effect to the Exchange Ratio. The Company calculated the fair value of the warrants issued utilizing the Black-Scholes option pricing model with the following assumptions; expected dividend yield of 0.0% , expected stock price volatility of 84.8% , risk free rate of 2.5% , and term of 5.0 years. The proceeds were allocated between common stock and warrants utilizing the relative fair value method with the allocated warrant value of approximately $2.0 million recorded as additional paid-in-capital. Private Innovate also issued 349,555 five -year warrants with an exercise price of $2.54 and 279,862 five -year warrants with an exercise price of $3.18 (after giving effect to the Exchange Ratio) to the respective placement agents and their affiliates. The Company calculated the fair value of the warrants issued utilizing the Black-Scholes option pricing model with the following assumptions; expected dividend yield of 0.0% , expected stock price volatility of 84.8% , risk free rate of 2.5% , and term of 5.0 years. The total value for these warrants approximated $913,000 and was recorded as stock issuance costs and additional paid-in-capital. Concurrently with the Equity Issuance, convertible promissory notes issued by Private Innovate in the aggregate principal amount of approximately $8.6 million plus accrued interest of $582,000 were converted into shares of Private Innovate common stock at a price per share of $0.72 , prior to the Exchange Ratio (the “Conversion”), which reflected a 25% discount relative to the shares issued pursuant to the Equity Issuance (the “Conversion Discount”). The Conversion Discount represented a beneficial conversion feature of approximately $3.1 million which was recorded as a charge to interest expense and a credit to additional paid-in capital.

NOTE PAYABLE

NOTE PAYABLE	6 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Note Payable	NOTE PAYABLE On January 29, 2018, the Company entered into a Note Purchase Agreement and Senior Note Payable (“Note”) with a lender. The principal amount of the Note is $4.8 million (“Principal”). The Note was issued at a discount of $1.8 million and net of $20,000 for financing costs, for total proceeds of $2.98 million . The Note matures on September 30, 2018 (“Maturity Date”); however, the Maturity Date may be extended at the option of the lender under certain circumstances as outlined in the Note. Interest on the Note accrues from January 29, 2018, at a rate of 12.5% per annum and quarterly payments of interest only are due beginning on March 30, 2018 , and compound quarterly. Upon the Maturity Date of the Note, the Company is required to pay the lender an amount representing 105% of all outstanding Principal, accrued and unpaid interest, and any unpaid late charges, if applicable. The Note contains redemption features and certain non-financial covenants and penalties to the Company in the case of certain events of default, as defined in the Note. The Company is currently in compliance with the covenants of the Note. The Note payable consists of the following: June 30, 2018 Note payable $ 4,800,000 Less debt discount (648,015 ) Total $ 4,151,985 Amortization of debt discount recorded as interest expense was approximately $0.7 million and $1.2 million for the three and six months ended June 30, 2018, respectively.

LICENSE AGREEMENTS

LICENSE AGREEMENTS	6 Months Ended
	Jun. 30, 2018
Disclosure Of License Agreements [Abstract]
License Agreements	LICENSE AGREEMENTS During 2016 the Company entered into a license agreement (the “Alba License”) with Alba Therapeutics Corporation (“Alba”) to obtain the rights to certain intellectual property relating to larazotide acetate and related compounds. The Company’s initial area of focus for these assets relates to the treatment of celiac disease. These assets are now referred to as INN-202 by the Company. Upon execution of the Alba License, the Company paid Alba a non-refundable license fee of $0.5 million . In addition, the Company is required to make milestone payments to Alba upon the achievement of certain clinical and regulatory milestones totaling up to $1.5 million and payments upon regulatory approval and commercial sales of a licensed product totaling up to $150 million , which is based on sales ranging from $100 million to $1.5 billion . Upon the Company paying Alba $2.5 million for the first commercial sale of a licensed product, the Alba License becomes perpetual and irrevocable. Upon the achievement of net sales in a year exceeding $ 1.5 billion , the Alba License also becomes milestone fee free. The Alba License provides Alba with certain termination rights; including failure of the Company to use Commercially Reasonable Efforts to develop the licensed products. During 2013, the Company entered into an exclusive license agreement with Seachaid Pharmaceuticals, Inc. (the “Seachaid Agreement”) to further develop and commercialize the licensed product, the compound known as APAZA. This product is now referred to as INN-108 by the Company. The agreement shall continue in effect on a country-by-country basis, unless terminated sooner in accordance with the termination provisions of the agreement, until the expiration of the royalty term for such product and such country. The royalty term for each such product and such country shall continue until the earlier of the expiration of certain patent rights (as defined in the agreement) or the date that the sales for one or more generic equivalents makes up a certain percentage of sales in an applicable country during a calendar year. The Company was required to make an initial, non-refundable payment under the Seachaid Agreement in the amount of $0.2 million . The agreement also calls for milestone payments totaling up to $6.0 million to be paid when certain clinical and regulatory milestones are met. There are also commercialization milestone payments ranging from $1.0 million to $2.5 million depending on net sales of the products in a single calendar year, followed by royalty payments in the single digits based on net product sales. During 2014, the Company entered into an Asset Purchase Agreement with Repligen Corporation (“Repligen”) to acquire Repligen’s RG-1068 program for the development of Secretin for the Pancreatic Imaging Market and Magnetic Resonance Cholangiopancreatography. This program is now referred to as INN-329 by the Company. As consideration for the Asset Purchase Agreement, the Company agreed to make a non-refundable cash payment on the date of the agreement and future royalty payments consisting of a percentage between five and fifteen of annual net sales, with the royalty payment percentage increasing as annual net sales increase. The royalty payments are made on a product-by-product and country-by-country basis and the obligation to make the payments expires with respect to each country upon the later of (i) the expiration of regulatory exclusivity for the product in that country or (ii) ten years after the first commercial sale in that country. The royalty amount is subject to reduction in certain situations, such as the entry of generic competition in the market.

STOCKHOLDERS_ EQUITY

STOCKHOLDERS’ EQUITY	6 Months Ended
	Jun. 30, 2018
Stockholders' Equity Note [Abstract]
Stockholders' Equity	STOCKHOLDERS’ EQUITY The Company’s authorized capital stock consists of 360 million shares of capital stock, par value $0.0001 per share, of which 350 million shares are designated as common stock and 10 million shares are designated as preferred stock. The holders of the Company’s common stock (i) have equal ratable rights to dividends from funds legally available, therefore, when, as and if declared by the Company’s board of directors; (ii) are entitled to share in all the Company’s assets available for distribution to holders of common stock upon liquidation, dissolution or winding up of the Company’s affairs; (iii) do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions or rights; and (iv) are entitled to one non-cumulative vote per share on all matters on which stockholders may vote.

SHARE-BASED COMPENSATION

SHARE-BASED COMPENSATION	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-Based Compensation	SHARE-BASED COMPENSATION Upon consummation of the Merger, the Company has two stock option plans in existence. The Monster Digital, Inc. 2012 Omnibus Incentive Plan (“Omnibus Plan”) and the Innovate 2015 Stock Incentive Plan (“Private Innovate Plan”). As of June 30, 2018 , there were options to purchase 1,683 shares of Innovate common stock outstanding under the Omnibus Plan and 4,505 shares available for future grants under the Omnibus Plan. As of June 30, 2018 , all of the options outstanding were fully vested and the weighted average exercise price was $45.00 per share. There was no unrecognized compensation expense related to the Omnibus Plan as of June 30, 2018 . As of June 30, 2018 , there were options to purchase 6,428,577 shares of Innovate common stock outstanding under the Private Innovate Plan and 1,108,744 shares available for issuance under the Private Innovate Plan; however, the Company does not intend to issue any additional awards from the Private Innovate Plan. The terms of the option agreements are determined by the Company’s board of directors. The Company’s awards vest based on the terms in the agreements with some awards vesting immediately and others vesting typically over a period of three to four years with options typically having a term of ten years. The Company utilizes the Black-Scholes option pricing model to value awards under the option plans. Key valuation assumptions include: • Expected dividend yield. The expected dividend is assumed to be zero as the Company has never paid dividends and has no current plans to pay any dividends on the Company’s common stock. • Expected stock-price volatility. As the Company’s common stock has a limited trading history as a public company, the expected volatility is derived from the average historical volatilities of publicly traded companies within the Company’s industry that the Company considers to be comparable to the Company’s business over a period approximately equal to the expected term. • Risk-free interest rate. The risk-free interest rate is based on the U.S. Treasury yield in effect at the time of grant for zero coupon U.S. Treasury notes with maturities approximately equal to the expected term. • Expected term. The expected term represents the period that the stock-based awards are expected to be outstanding. The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term for employees because of a lack of sufficient data. Therefore, the Company estimates the expected term by using the simplified method provided by the Securities and Exchange Commission. The simplified method calculates the expected term as the average of the time-to-vesting and the contractual life of the options. The expected term for non-employees is the contractual life of the option. The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted or re-measured for the periods presented were as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Expected dividend yield 0% 0% 0% 0% Expected stock-price volatility 67% – 68% 76% 67% – 72% 69% –76% Risk-free interest rate 2.8% – 2.9% 2.2% – 2.3% 2.7% – 2.9% 2.0% – 2.4% Term of options 8.7 – 9.3 9.7 – 10.0 8.7 – 9.5 5.0 – 10.0 The following table summarizes stock option activity under the Private Innovate Plan: Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Life (in years) Outstanding at December 31, 2017 6,843,296 $ 1.56 $ 6,617,433 9.04 Options granted — — — — Options forfeited (414,719 ) 2.08 — — Options exercised — — — — Outstanding at June 30, 2018 6,428,577 1.53 141,694,679 8.24 Exercisable at June 30, 2018 5,396,755 1.44 119,438,461 8.14 Vested and expected to vest at June 30, 2018 6,366,229 $ 1.52 $ 140,355,814 8.23 The weighted average grant date fair value of options granted was $1.79 and $1.60 during the three and six months ended June 30, 2017 . There were no options granted during the three and six months ended June 30, 2018 . Share-based compensation expense recognized in the Company’s financial statements was as follows: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 2018 2017 2018 2017 Research and development $ (334,000 ) $ 367,600 $ 5,417,000 $ 1,313,400 General and administrative 150,000 718,100 2,769,000 2,159,500 Total share-based compensation $ (184,000 ) $ 1,085,700 $ 8,186,000 $ 3,472,900 The adjustment to research and development expense for the three months ended June 30, 2018, resulted from the remeasurement of non-employee options during the period. As of June 30, 2018 , there was approximately $8.5 million of total unrecognized compensation cost related to unvested stock-based compensation arrangements. This cost is expected to be recognized over a weighted average period of 2.7 years . The Private Innovate Plan provides for accelerated vesting under certain change-of-control transactions.

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	COMMITMENTS AND CONTINGENCIES Employment Agreements Prior to March 11, 2018, the Company was party to employment agreements with certain executives of the Company. Under the terms of these agreements, the Company agreed to pay the executives certain payments upon the achievement of financial milestone events. These milestone events were based on total debt or equity funding received by the Company. During the three and six months ended June 30, 2017 , the initial funding milestone was reached and the executives in the aggregate were paid $145,000 in accordance with the terms of these agreements. During January 2018, additional financial milestone events were achieved through the Merger and Equity Issuance events and the Company paid these executives approximately $1.1 million in accordance with the agreements, which was included in accrued expenses as of December 31, 2017 . On March 11, 2018, the Company entered into amended and restated executive employment agreements with the executives and new executive employment agreements with certain new executives (the “Executive Agreements”). The Executive Agreements provide an annual base salary and the opportunity to participate in the Company’s equity compensation, employee benefit and bonus plans once they are established and approved by the Company’s board of directors. The Executive Agreements contain severance provisions if the executives are terminated under certain conditions that would provide the executive with 12 months of their base salary and up to 12 months of continuation of health insurance benefits. Office Lease In October 2017, the Company entered into a three -year lease for office space that expires on September 30, 2020 . Base annual rent is $60,000 , or $5,000 per month. The first two months of rent were paid in advance upon lease signing and the next ten months of rent were paid in advance on November 30, 2017. Beginning with month thirteen , monthly payments of $5,000 will be paid in advance of the one day of each month of the remaining term. A security deposit of $5,000 was paid in October 2017. The lease contains a two -year renewal option. Legal The Company is not currently involved in any legal matters arising in the normal course of business. From time to time, the Company could become involved in disputes and various litigation matters that arise in the normal course of business. These may include disputes and lawsuits related to intellectual property, licensing, contract law and employee relations matters. Periodically, the Company reviews the status of significant matters, if any exist, and assesses its potential financial exposure. If the potential loss from any claim or legal claim is considered probable and the amount can be estimated, the Company accrues a liability for the estimated loss. Legal proceedings are subject to uncertainties, and the outcomes are difficult to predict; therefore, accruals are based on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	6 Months Ended
	Jun. 30, 2018
Subsequent Events [Abstract]
Subsequent Events	SUBSEQUENT EVENTS The Company has evaluated subsequent events through August 14, 2018 , the date these financial statements were available for issuance, and has determined that there were no events which have occurred that would require adjustment to or disclosure in these financial statements.

SUMMARY OF SIGNIFICANT ACCOUN16

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Basis of Accounting	Basis of Presentation The unaudited condensed interim financial statements as of June 30, 2018 and for the three and six months then ended, have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial reporting. These financial statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary for a fair statement of the balance sheets, operating results, and cash flows for the periods presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Operating results for the three and six months ended June 30, 2018 , are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018 . Certain information and footnote disclosure normally included in the annual financial statements prepared in accordance with GAAP have been omitted in accordance with the SEC’s rules and regulations for interim reporting. The Company’s financial position, results of operations and cash flows are presented in U.S. Dollars. Upon the closing of the Merger, the outstanding shares of Private Innovate were exchanged for shares of common stock of Monster at an exchange ratio of one share of Private Innovate common stock to 0.37686604 shares of Monster common stock (the “Exchange Ratio”). All common share amounts and per share amounts have been adjusted to reflect this Exchange Ratio, which was effected upon the Merger. The Merger has been accounted for as a reverse recapitalization. Prior to the Merger, Monster spun-out all of its pre-merger business assets and liabilities before it acquired Private Innovate. The owners and management of Private Innovate have actual or effective voting and operating control of the combined company. In the Merger transaction, Monster is the accounting acquiree and Private Innovate is the accounting acquirer. A reverse recapitalization is equivalent to the issuance of stock by the private operating company for the net monetary assets of the accounting acquiree accompanied by a recapitalization with accounting similar to that resulting from a reverse acquisition, except that no goodwill or intangible assets are recorded. Immediately prior to the effective time of the Merger, Monster effected a reverse stock split at a ratio of one new share for every ten shares of its common stock outstanding. In connection with the Merger, 1,864,808 shares of the Company’s common stock were transferred to the existing Monster stockholders and the Company assumed approximately $1.0 million in liabilities from Monster for certain transaction costs and tail insurance coverage for its directors and officers, which were recorded as a reduction of additional paid-in-capital. The accompanying unaudited financial statements and related notes reflect the historical results of Private Innovate prior to the Merger and of the combined company following the Merger, and do not include the historical results of Monster prior to the completion of the Merger. These financial statements and related notes should be read in conjunction with the audited financial statements of Private Innovate for the year ended December 31, 2017 , included in the Company’s Form 8-K/A filed with the SEC on April 18, 2018, and Monster’s audited consolidated financial statements and related notes thereto for the year ended December 31, 2017 , included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 , filed with the SEC on March 14, 2018, as amended. There have been no material changes to the Company’s significant accounting policies during the three and six months ended June 30, 2018 and 2017 , as compared to the significant accounting policies disclosed in Note 1 of the financial statements of Private Innovate for the years ended December 31, 2017 and 2016 . However, the following accounting policies are the most critical in fully understanding the Company’s financial condition and results of operations.
Business Risks	Business Risks The Company faces risks associated with biopharmaceutical companies whose products are in the early stages of development. These risks include, among others, the Company’s need for additional financing to achieve key development milestones, the need to defend intellectual property rights, and the dependence on key members of management.
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the financial statements. Areas of the financial statements where estimates may have the most significant effect include accrued expenses, share-based compensation, deferred compensation, valuation allowance for income tax assets and management’s assessment of the Company’s ability to continue as a going concern. Changes in the facts or circumstances underlying these estimates could result in material changes and actual results could differ from these estimates.
Accrued Expenses	Accrued Expenses The Company incurs periodic expenses such as research and development, salaries, and professional fees. An adjusting entry to accrue expenses is necessary when expenses have been incurred by the Company prior to them being invoiced. When a vendor’s invoice is not received, the Company is required to estimate its accrued expenses. This process involves reviewing quotations and contracts, identifying services that have been performed on the Company’s behalf and estimating the level of service performed and the associated cost incurred for the service when the Company has not yet been invoiced or otherwise notified of the actual cost. The majority of the Company’s service providers invoice monthly in arrears for services performed or when contractual milestones are met. The Company estimates accrued expenses as of each balance sheet date based on facts and circumstances known at that time.
Research and Development Expense	Research and Development Research and development expenses consist of costs incurred to further the Company’s research and development activities and include salaries and related employee benefits, manufacturing of pharmaceutical active ingredients and drug products, costs associated with clinical trials, nonclinical activities, regulatory activities, research-related overhead expenses and fees paid to expert consultants, external service providers and contract research organizations which conduct certain research and development activities on behalf of the Company. Costs incurred in the research and development of products are charged to research and development expense as incurred. Costs for preclinical studies and clinical trial activities are recognized based on an evaluation of vendors’ progress towards completion of specific tasks, using data such as patient enrollment, clinical site activations or information provided by vendors regarding their actual costs incurred. Payments for these activities are based on the terms of individual contracts and payment timing may differ significantly from the period in which the services were performed. The Company determines accrual estimates through reports from and discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed. The estimates of accrued expenses as of each balance sheet date are based on the facts and circumstances known at the time. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made.
Share-based Compensation, Option and Incentive Plans Policy	Share-Based Compensation The Company measures compensation cost for share-based payment awards granted to employees and non-employee directors at fair value using the Black-Scholes option-pricing model. Compensation expense is recognized on a straight-line basis over the service period for awards expected to vest. Share-based compensation cost related to share-based payment awards granted to non-employees is adjusted each reporting period for changes in the fair value of the Company’s stock until the measurement date. The measurement date is generally considered to be the date when all services have been rendered or the date that options are fully vested.
Patent Costs	Patent Costs Costs associated with the submission of patent applications are expensed as incurred given the uncertainty of the future economic benefits of the patents. Patent and patent related legal and administrative costs included in general and administrative expenses were approximately $161,000 and $92,000 for the three months ended June 30, 2018 and 2017 , and $309,000 and $235,000 for the six months ended June 30, 2018 and 2017 , respectively.
Earnings Per Share	Net Loss Per Share The Company calculates net loss per share as a measurement of the Company’s performance while giving effect to all dilutive potential common shares that were outstanding during the reporting period. As the Company had a net loss for all periods presented, the inclusion of common stock options or other similar instruments would be anti-dilutive. Therefore, the weighted average shares used to calculate both basic and diluted earnings per share are the same. For the three and six months ended June 30, 2018 and 2017 , 8.5 million and 6.5 million potentially dilutive securities related to warrants and stock options issued and outstanding have been excluded from the computation of diluted weighted shares outstanding because the effect would be anti-dilutive.
Segment Reporting	Segments Operating segments are defined as components of an enterprise engaging in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company operates and manages its business as one operating segment and all of the Company’s operations are in North America.
New Accounting Pronouncements	Recent Accounting Pronouncements In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-2, Leases (Topic 842) (“ASU 2016-2”). The provisions of ASU 2016-2 set out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for in a similar manner as under existing guidance for operating leases. ASU 2016-2 supersedes the previous lease standard, Topic 840, Leases . The guidance is effective for public companies with annual periods and interim periods within those annual periods beginning after December 15, 2018, and is expected to be effective for the Company for the year ending December 31, 2019. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The provisions of ASU 2016-15 address eight specific cash flow issues and how those certain cash receipts and cash payments are presented and classified in the statement of cash flows under Topic 230, Statement of Cash Flows , and other Topics. The guidance is effective for public companies with annual periods and interim periods within those annual periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018 and the adoption of this standard did not have a material impact on the Company’s financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting, which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The standard is effective for interim and annual reporting periods beginning after December 15, 2017, with early adoption permitted. The Company adopted this standard effective January 1, 2018, and the adoption of this standard did not have a material impact on the Company’s financial statements. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting. ASU 2018-07 expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The standard is effective for the Company beginning with the first quarter of 2019 with early adoption permitted. The Company is currently evaluating the impact that the implementation of this standard will have on the Company’s financial statements.

SUMMARY OF SIGNIFICANT ACCOUN17

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	6 Months Ended
	Jun. 30, 2018
Accounting Policies [Abstract]
Schedule of Accrued Liabilities	Accrued expenses consisted of the following: June 30, 2018 December 31, 2017 Compensation and benefits $ — $ 1,065,225 Other — 115,000 Total $ — $ 1,180,225
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share	The potentially dilutive securities consisted of the following: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 2018 2017 2018 2017 Options outstanding under the Private Innovate 2015 Stock Incentive Plan 6,428,577 6,509,824 6,428,577 6,509,824 Warrants issued at an exercise price of $2.54 349,555 — 349,555 — Warrants issued at an exercise price of $3.18 1,698,245 — 1,698,245 — Total 8,476,377 6,509,824 8,476,377 6,509,824

NOTE PAYABLE (Tables)

NOTE PAYABLE (Tables)	6 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Schedule of Short-term Debt	The Note payable consists of the following: June 30, 2018 Note payable $ 4,800,000 Less debt discount (648,015 ) Total $ 4,151,985

SHARE-BASED COMPENSATION (Table

SHARE-BASED COMPENSATION (Tables)	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	The material factors incorporated in the Black-Scholes model in estimating the fair value of the options granted or re-measured for the periods presented were as follows: Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Expected dividend yield 0% 0% 0% 0% Expected stock-price volatility 67% – 68% 76% 67% – 72% 69% –76% Risk-free interest rate 2.8% – 2.9% 2.2% – 2.3% 2.7% – 2.9% 2.0% – 2.4% Term of options 8.7 – 9.3 9.7 – 10.0 8.7 – 9.5 5.0 – 10.0
Share-based Compensation, Activity	The following table summarizes stock option activity under the Private Innovate Plan: Number of Shares Weighted-Average Exercise Price Aggregate Intrinsic Value Weighted-Average Remaining Contractual Life (in years) Outstanding at December 31, 2017 6,843,296 $ 1.56 $ 6,617,433 9.04 Options granted — — — — Options forfeited (414,719 ) 2.08 — — Options exercised — — — — Outstanding at June 30, 2018 6,428,577 1.53 141,694,679 8.24 Exercisable at June 30, 2018 5,396,755 1.44 119,438,461 8.14 Vested and expected to vest at June 30, 2018 6,366,229 $ 1.52 $ 140,355,814 8.23
Schedule of Employee Service Share-based Compensation, Allocation of Recognized Period Costs	Share-based compensation expense recognized in the Company’s financial statements was as follows: Three Months Ended June 30, 2018 Six Months Ended June 30, 2018 2018 2017 2018 2017 Research and development $ (334,000 ) $ 367,600 $ 5,417,000 $ 1,313,400 General and administrative 150,000 718,100 2,769,000 2,159,500 Total share-based compensation $ (184,000 ) $ 1,085,700 $ 8,186,000 $ 3,472,900

SUMMARY OF SIGNIFICANT ACCOUN20

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Accrued Expenses (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Compensation and benefits	$ 0	$ 1,065,225
Other	0	115,000
Total	$ 0	$ 1,180,225

SUMMARY OF SIGNIFICANT ACCOUN21

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Narrative (Details)	Jan. 29, 2018USD ($)shares	Jun. 30, 2018USD ($)shares	Jun. 30, 2017USD ($)shares	Jun. 30, 2018USD ($)shares	Jun. 30, 2017USD ($)shares
Significant Accounting Policies Disclosure [Line Items]
Exchange ratio in connection with merger	0.37686604
Reverse stock split ratio	one new share for every ten shares
General and administrative expense | $		$ 2,132,850	$ 1,561,106	$ 8,299,463	$ 4,141,832
Antidilutive securities excluded from computation of earnings per share | shares		8,476,377	6,509,824	8,476,377	6,509,824
Pantent Costs
Significant Accounting Policies Disclosure [Line Items]
General and administrative expense | $		$ 161,000	$ 92,000	$ 309,000	$ 235,000
Monster Digital, Inc
Significant Accounting Policies Disclosure [Line Items]
Equity interest issued or issuable (in shares) | shares	1,864,808
Liabilities assumed | $	$ 1,000,000
Employee Stock Option
Significant Accounting Policies Disclosure [Line Items]
Antidilutive securities excluded from computation of earnings per share | shares		8,500,000	6,500,000	8,500,000	6,500,000

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Potential Dilutive Securities (Details) - $ / shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	8,476,377	6,509,824	8,476,377	6,509,824
Stock Compensation Plan
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	6,428,577	6,509,824	6,428,577	6,509,824
Private Innovate Plan, Warrants Exercised At $2.54 | Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	349,555	0	349,555	0
Exercise price of warrants or rights	$ 2.54		$ 2.54
Private Innovate Plan, Warrants Exercised At $3.18 | Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	1,698,245	0	1,698,245	0
Exercise price of warrants or rights	$ 3.18		$ 3.18

MERGER AND FINANCING (Details)

MERGER AND FINANCING (Details) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Business Acquisition [Line Items]
Proceeds from issuance of common stock	$ 18,132,661	$ 0
Net proceeds from issuance of common stock after deducting stock issuance costs	16,500,000
Placement agent fees	$ 1,600,000
Warrant term	5 years
Number of warrants issued	1,400,000
Expected dividend rate	0.00%
Expected volatility rate	84.80%
Risk free interest rate	2.50%
Warrants issued with common stock	$ 1,995,000
Warrants issued to placement agents	$ 913,000
Warrant
Business Acquisition [Line Items]
Exercise price of warrants or rights	$ 3.18
Placement Agent
Business Acquisition [Line Items]
Warrant term	5 years
Number of warrants issued to placement agents	349,555
Placement Agent | Warrant
Business Acquisition [Line Items]
Exercise price of warrants or rights	$ 2.54
Affiliates
Business Acquisition [Line Items]
Warrant term	5 years
Number of warrants issued to affiliates	279,862
Affiliates | Warrant
Business Acquisition [Line Items]
Exercise price of warrants or rights	$ 3.18
Convertible Promissory Notes
Business Acquisition [Line Items]
Original debt amount	$ 8,600,000
Conversion price	$ 0.72
Conversion discount percentage	25.00%
Beneficial conversion feature	$ 3,100,000
Accured Interest
Business Acquisition [Line Items]
Original debt amount	$ 582,000

NOTE PAYABLE (Details)

NOTE PAYABLE (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Total	$ 4,151,985	$ 0
Note Purchase Agreement and Senior Note Payable
Debt Instrument [Line Items]
Note payable	4,800,000
Less debt discount	(648,015)
Total	$ 4,151,985

NOTE PAYABLE - Narrative (Detai

NOTE PAYABLE - Narrative (Details) - USD ($)	3 Months Ended	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Jun. 30, 2017
Debt Instrument [Line Items]
Proceeds from notes payable		$ 3,000,000	$ 0
Amortization of debt discount	$ 700,000	1,171,985	$ 20,142
Note Purchase Agreement and Senior Note Payable
Debt Instrument [Line Items]
Note payable	4,800,000	4,800,000
Unamortized discount	$ 1,800,000	1,800,000
Financing costs		20,000
Proceeds from notes payable		$ 2,980,000
Note maturity date		Sep. 30, 2018
Debt interest rate	12.50%	12.50%
Date of first required payment		Mar. 30, 2018

LICENSE AGREEMENTS (Details)

LICENSE AGREEMENTS (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2016	Dec. 31, 2013
Assets Sold under Agreements to Repurchase [Line Items]
Milestone fee free sales target value		$ 1,500
Minimum
Assets Sold under Agreements to Repurchase [Line Items]
Royaltee payment percentage	5.00%
Maximum
Assets Sold under Agreements to Repurchase [Line Items]
Royaltee payment percentage	15.00%
Alba Agreement
Assets Sold under Agreements to Repurchase [Line Items]
License fees		0.5
Milestone payment		1.5
License and services revenue		150
Sales range minimum		100
Sales range maximum		1,500
License costs		$ 2.5
Seachaid Agreement
Assets Sold under Agreements to Repurchase [Line Items]
License fees			$ 0.2
Milestone payment			6
Sales range minimum			1
Sales range maximum			$ 2.5

STOCKHOLDERS_ EQUITY (Details)

STOCKHOLDERS’ EQUITY (Details) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Stockholders' Equity Note [Abstract]
Capital stock authorized	360,000,000
Common stock, par or stated value per share	$ 0.0001	$ 0.0001
Common stock, shares authorized	350,000,000	250,000,000
Preferred stock, shares authorized	10,000,000
Preferred stock, par or stated value per share	$ 0.0001

SHARE-BASED COMPENSATION (Detai

SHARE-BASED COMPENSATION (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Expected dividend yield	0.00%	0.00%	0.00%	0.00%
Expected stock-price volatility		76.00%
Minimum
Risk-free interest rate	2.80%	2.20%	2.70%	2.00%
Term of options	8 years 8 months 12 days	9 years 8 months 12 days	8 years 8 months 12 days	5 years
Expected stock-price volatility	67.00%		67.00%	69.00%
Maximum
Risk-free interest rate	2.90%	2.30%	2.90%	2.40%
Term of options	9 years 3 months 18 days	10 years	9 years 6 months	10 years
Expected stock-price volatility	68.00%		72.00%	76.00%

SHARE-BASED COMPENSATION - Stoc

SHARE-BASED COMPENSATION - Stock Option Activity (Details) - USD ($)	3 Months Ended	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Jun. 30, 2018	Dec. 31, 2017
Number of Shares
Number of shares, beginning balance		6,843,296
Number of shares, options granted		0
Number of shares, options forfeited		(414,719)
Number of shares, options exercised		0
Number of shares, ending balance	6,428,577	6,428,577	6,843,296
Number of shares, exercisable	5,396,755	5,396,755
Number of shares, vested and expected to vest	6,366,229	6,366,229
Weighted-Average Exercise Price
Weighted-average exercise price, beginning balance		$ 1.56
Weighted-average exercise price, options granted	$ 0	0
Weighted-average exercise price, options forfeited		2.08
Weighted-average exercise price, ending balance	1.53	1.53	$ 1.56
Weighted-average exercise price, exercisable	1.44	1.44
Weighted-average exercise price, vested and expected to vest	$ 1.52	$ 1.52
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Aggregate intrinsic value, beginning balance		$ 6,617,433
Aggregate intrinsic value, ending balance	$ 141,694,679	141,694,679	$ 6,617,433
Aggregate intrinsic value, exercisable	119,438,461	119,438,461
Aggregate intrinsic value, vested and expected to vest	$ 140,355,814	$ 140,355,814
Weighted-average remaining contractual life, outstanding (in years)		8 years 2 months 25 days	9 years 15 days
Weighted-average remaining contractual life, exercisable (in years)		8 years 1 month 20 days
Weighted-average remaining contractual life, vested and expected to vest (in years)		8 years 2 months 23 days

SHARE-BASED COMPENSATION - Narr

SHARE-BASED COMPENSATION - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options outstanding	6,428,577		6,428,577		6,843,296
Expiration period			10 years
Weighted-average grant date fair value of options granted		$ 1.79		$ 1.60
Weighted-average exercise price, options granted	$ 0		$ 0
Unrecognized compensation cost	$ 8.5		$ 8.5
Weighted-average period for recognizing cost			2 years 8 months
Omnibus Incentive Plan 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options outstanding	1,683		1,683
Options available for future grants	4,505		4,505
Weighted-average exercise price, options granted			$ 45
Private Innovate 2015 Stock Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock, options outstanding	6,428,577		6,428,577
Options available for future grants	1,108,744		1,108,744
Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			4 years

SHARED-BASED COMPENSATION - Fin

SHARED-BASED COMPENSATION - Financial Statements (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense	$ (184,000)	$ 1,085,700	$ 8,186,000	$ 3,472,900
Research and Development Expense
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense	(334,000)	367,600	5,417,000	1,313,400
General and Administrative Expense
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Allocated share-based compensation expense	$ 150,000	$ 718,100	$ 2,769,000	$ 2,159,500

COMMITMENTS AND CONTINGENCIES -

COMMITMENTS AND CONTINGENCIES - Narrative (Details) - USD ($)	1 Months Ended		6 Months Ended
	Jan. 31, 2018	Oct. 31, 2017	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Payments to executives	$ 1,100,000		$ 145,000
Term of contract		3 years
Lease expiration date			Sep. 30, 2020
Operating lease, monthly rental payments		$ 60,000
Operating lease annual rental payments		5,000
Security deposit		$ 5,000
Renewal term		2 years