Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 09, 2020 | |
Document Information Line Items | ||
Entity Registrant Name | RELMADA THERAPEUTICS, INC. | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 16,241,526 | |
Amendment Flag | false | |
Entity Central Index Key | 0001553643 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity File Number | 000-55347 | |
Entity Incorporation, State or Country Code | NV | |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 7,544,728 | $ 36,278,519 |
Short-term investments | 115,593,750 | 80,164,823 |
Lease payments receivable – short term | 77,815 | 73,091 |
Prepaid expenses | 2,249,199 | 423,863 |
Total current assets | 125,465,492 | 116,940,296 |
Fixed assets, net of accumulated depreciation | 2,081 | 5,010 |
Other assets | 25,000 | 25,000 |
Lease payments receivable – long term | 106,868 | 165,834 |
Total assets | 125,599,441 | 117,136,140 |
Current liabilities: | ||
Accounts payable | 728,633 | 522,663 |
Accrued expenses | 2,660,824 | 824,936 |
Note payable | 110,247 | |
Total current liabilities | 3,389,457 | 1,457,846 |
Stockholders’ Equity: | ||
Preferred stock value | ||
Common stock, $0.001 par value, 50,000,000 shares authorized, 16,189,258 and 14,457,013 shares issued and outstanding, respectively | 16,189 | 14,457 |
Additional paid-in capital | 280,746,968 | 235,522,746 |
Accumulated deficit | (158,553,173) | (119,858,909) |
Total stockholders’ equity | 122,209,984 | 115,678,294 |
Total liabilities and stockholders’ equity | 125,599,441 | 117,136,140 |
Class A Convertible Preferred Stock | ||
Stockholders’ Equity: | ||
Preferred stock value |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 200,000,000 | 200,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 16,189,258 | 14,457,013 |
Common stock, shares outstanding | 16,189,258 | 14,457,013 |
Class A Convertible Preferred Stock | ||
Preferred stock, par value (in Dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 3,500,000 | 3,500,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding |
Consolidated Statements of Oper
Consolidated Statements of Operations (Unaudited) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Operating expenses: | ||||
Research and development | $ 11,237,186 | $ 1,887,367 | $ 21,068,923 | $ 6,233,214 |
General and administrative | 5,946,396 | 1,820,043 | 18,846,299 | 4,311,902 |
Total operating expenses | 17,183,582 | 3,707,410 | 39,915,222 | 10,545,116 |
Loss from operations | (17,183,582) | (3,707,410) | (39,915,222) | (10,545,116) |
Other (expenses) income: | ||||
Interest/investment income, net | 363,300 | 37,916 | 1,174,957 | 66,965 |
Realized gain (loss) on short-term investments | (86,171) | (244,972) | ||
Unrealized gain on short-term investments | 3,946 | 290,973 | ||
Total other (expenses) income | 281,075 | 37,916 | 1,220,958 | 66,965 |
Net loss | $ (16,902,507) | $ (3,669,494) | $ (38,694,264) | $ (10,478,151) |
Loss per common share – basic and diluted (in Dollars per share) | $ (1.05) | $ (0.38) | $ (2.52) | $ (1.23) |
Weighted average number of common shares outstanding – basic and diluted (in Shares) | 16,044,670 | 9,761,188 | 15,371,118 | 8,515,560 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders’ Equity (Unaudited) - USD ($) | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2018 | $ 7,441 | $ 106,280,950 | $ (104,853,710) | $ 1,434,681 |
Balance (in Shares) at Dec. 31, 2018 | 7,441,053 | |||
Stock based compensation | 394,692 | 394,692 | ||
Equity units issued for Cash | $ 379 | 1,724,621 | 1,725,000 | |
Equity units issued for Cash (in Shares) | 379,960 | |||
Shares relinquished | $ (75) | (394,335) | (394,410) | |
Shares relinquished (in Shares) | (75,848) | |||
Net loss | (2,686,065) | (2,686,065) | ||
Balance at Mar. 31, 2019 | $ 7,745 | 108,005,928 | (107,539,775) | 473,898 |
Balance (in Shares) at Mar. 31, 2019 | 7,745,165 | |||
Stock based compensation | 403,459 | 403,459 | ||
Equity units issued for Cash | $ 1,974 | 10,856,576 | 10,858,550 | |
Equity units issued for Cash (in Shares) | 1,974,487 | |||
Issuance of common stock ro cashless exercises of warrants from consultants and Series A Preferred stock warrant holder | $ 25 | (25) | ||
Issuance of common stock ro cashless exercises of warrants from consultants and Series A Preferred stock warrant holder (in Shares) | 24,991 | |||
Net loss | (4,122,592) | (4,122,592) | ||
Balance at Jun. 30, 2019 | $ 9,744 | 119,265,938 | (111,662,367) | 7,613,315 |
Balance (in Shares) at Jun. 30, 2019 | 9,744,643 | |||
Stock based compensation | 757,716 | 757,716 | ||
Purchase of common stock | $ 118 | 825,631 | 825,749 | |
Purchase of common stock (in Shares) | 117,965 | |||
Warrants exercised | $ 75 | 449,925 | 450,000 | |
Warrants exercised (in Shares) | 75,000 | |||
Net loss | (3,669,494) | (3,669,494) | ||
Balance at Sep. 30, 2019 | $ 9,937 | 121,299,210 | (115,331,861) | 5,977,286 |
Balance (in Shares) at Sep. 30, 2019 | 9,937,608 | |||
Balance at Dec. 31, 2019 | $ 14,457 | 235,522,746 | (119,858,909) | 115,678,294 |
Balance (in Shares) at Dec. 31, 2019 | 14,457,013 | |||
Stock based compensation | 5,039,362 | 5,039,362 | ||
Warrant exercised for cash | $ 447 | 3,041,726 | 3,042,173 | |
Warrant exercised for cash (in Shares) | 447,107 | |||
Cashless warrant exercise | $ 34 | (34) | ||
Cashless warrant exercise (in Shares) | 34,114 | |||
Options exercised | $ 3 | 73,017 | 73,020 | |
Options exercised (in Shares) | 2,434 | |||
Net loss | (10,673,316) | (10,673,316) | ||
Balance at Mar. 31, 2020 | $ 14,941 | 243,676,817 | (130,532,225) | 113,159,533 |
Balance (in Shares) at Mar. 31, 2020 | 14,940,668 | |||
Balance at Dec. 31, 2019 | $ 14,457 | 235,522,746 | (119,858,909) | 115,678,294 |
Balance (in Shares) at Dec. 31, 2019 | 14,457,013 | |||
Warrant exercised for cash | 7,186,306 | |||
Balance at Sep. 30, 2020 | $ 16,189 | 280,746,968 | (158,553,173) | 122,209,984 |
Balance (in Shares) at Sep. 30, 2020 | 16,189,258 | |||
Balance at Mar. 31, 2020 | $ 14,941 | 243,676,817 | (130,532,225) | 113,159,533 |
Balance (in Shares) at Mar. 31, 2020 | 14,940,668 | |||
Stock based compensation | 7,302,513 | 7,302,513 | ||
Warrant exercised for cash | $ 368 | 2,576,735 | 2,577,103 | |
Warrant exercised for cash (in Shares) | 368,364 | |||
Cashless warrant exercise | $ 2 | (2) | ||
Cashless warrant exercise (in Shares) | 1,840 | |||
Options exercised | $ 113 | 457,510 | 457,623 | |
Options exercised (in Shares) | 113,281 | |||
Equity offering, costs (net) | $ 428 | 19,854,590 | 19,855,018 | |
Equity offering, costs (net) (in Shares) | 427,700 | |||
Net loss | (11,118,441) | (11,118,441) | ||
Balance at Jun. 30, 2020 | $ 15,852 | 273,868,163 | (141,650,666) | 132,233,349 |
Balance (in Shares) at Jun. 30, 2020 | 15,851,853 | |||
Stock based compensation | 5,244,658 | 5,244,658 | ||
Warrant exercised for cash | $ 215 | 1,566,815 | 1,567,030 | |
Warrant exercised for cash (in Shares) | 214,899 | |||
Cashless warrant exercise | $ 7 | (7) | ||
Cashless warrant exercise (in Shares) | 6,521 | |||
Options exercised | $ 25 | 105,850 | 105,875 | |
Options exercised (in Shares) | 25,781 | |||
Cashless option exercised | $ 90 | (90) | ||
Cashless option exercised (in Shares) | 90,204 | |||
Equity offering, costs (net) | (38,421) | (38,421) | ||
Net loss | (16,902,507) | (16,902,507) | ||
Balance at Sep. 30, 2020 | $ 16,189 | $ 280,746,968 | $ (158,553,173) | $ 122,209,984 |
Balance (in Shares) at Sep. 30, 2020 | 16,189,258 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net loss | $ (38,694,264) | $ (10,478,151) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 2,929 | 3,263 |
Stock-based compensation | 17,586,533 | 1,555,867 |
Fair value of shares relinquished in litigation | (394,410) | |
Realized loss on short-term investments | 244,972 | |
Unrealized gain on short-term investments | (290,973) | |
Change in operating assets and liabilities: | ||
Other assets | (6,092) | |
Lease payment receivable | 54,242 | 49,896 |
Prepaid expenses | (1,825,336) | 524,967 |
Accounts payable | 205,970 | 907,657 |
Accrued expenses | 1,835,888 | (376,157) |
Net cash used in operating activities | (20,880,039) | (8,213,160) |
Cash flows from investing activities | ||
Purchase of short-term investments | (88,763,192) | |
Sale of short-term investments | 53,380,266 | |
Net cash used in investing activities | (35,382,926) | |
Cash flows from financing activities | ||
Principal payments of notes payable | (110,247) | (223,017) |
Proceeds from issuance of common stock - net | 19,816,597 | 13,409,299 |
Proceeds from options exercised for common stock | 636,518 | |
Proceeds from warrants exercised for common stock | 7,186,306 | 450,000 |
Net cash provided by financing activities | 27,529,174 | 13,636,282 |
Net (decrease)/increase in cash and cash equivalents | (28,733,791) | 5,423,122 |
Cash and cash equivalents at beginning of the period | 36,278,519 | 2,426,751 |
Cash and cash equivalents at end of the period | 7,544,728 | 7,849,873 |
Cash paid during the period for: | ||
Income taxes | ||
Interest | 2,415 | 6,959 |
Non-cash investing and financing activities: | ||
Cashless exercise of warrants for common stock | 43 | 25 |
Cashless exercise of options for common stock | 90 | |
Notes payable issued in connection with directors and officers insurance policies | $ 364,204 |
Business
Business | 9 Months Ended |
Sep. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
BUSINESS | NOTE 1 - BUSINESS Relmada Therapeutics, Inc. (Relmada or the Company, we or us) (a Nevada corporation), is a clinical-stage biotechnology company focused on the development of REL-1017 (d-methadone, dextromethadone), an N-methyl-D-aspartate (NMDA) receptor antagonist. d-methadone is a new chemical entity (NCE) that potentially addresses areas of high unmet medical need in the treatment of central nervous system (CNS) diseases and other disorders. On October 7, 2019, our application to list our common stock on the NASDAQ Capital Market was approved. On October 10, 2019, our common stock began trading on Nasdaq under our existing symbol, “RLMD.” On July 14, 2020, our common stock was uplisted to The Nasdaq Global Select Market and continues to trade under the symbol “RLMD”. On December 19, 2019, the Board of Directors of the Company approved a change to its end of fiscal year from June 30 to December 31. The change in fiscal year became effective for the Company’s 2020 fiscal year, which began on January 1, 2020 and will end December 31, 2020. In addition to the normal risks associated with a new business venture, there can be no assurance that the Company’s research and development will be successfully completed or that any product will be approved or commercially viable. The Company is subject to risks common to companies in the biotechnology industry including, but not limited to, dependence on collaborative arrangements, development by the Company or its competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, and compliance with the FDA and other governmental regulations and approval requirements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the six months ended December 31, 2019 and notes thereto contained in the Company’s Transition Report on Form 10-KT. On September 26, 2019, the Company’s Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the OTC Markets on September 30, 2019. As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share of issued and outstanding common stock, with all fractional shares rounded up to the nearest whole share, and the Company’s authorized share of common stock were reduced from 200,000,000 to 50,000,000 shares. All share and per share amounts have been retroactively restated to reflect this reverse stock split. Liquidity As shown in the accompanying financial statements, the Company incurred negative operating cash flows of $20.9 million for the nine months ended September 30, 2020 and has an accumulated deficit of $158.6 million from inception through September 30, 2020. At September 30, 2020 the Company had cash and short term investments of $123.1 million. Relmada has funded its past operations through equity raises and most recently in 2020 raised net proceeds from the sale of common stock of $19,816,597 and $7,186,306 through the exercise of warrants. The Company also raised an additional $636,518 during the nine months ended September 30, 2020 from the exercises of options. Management believes that due to the recent equity raises completed and exercises of outstanding options and warrants and the current cash position on its balance sheet, it has obtained sufficient funding to continue ongoing operations for at least 12 months from the issuance of these unaudited consolidated quarterly financial statements. Management believes that their existing cash and cash equivalents will enable them to fund operating expenses and capital expenditure requirement for at least the next 12 months. Beyond that point management will evaluate the size and scope of any subsequent trials that will affect the timing of additional financings through public or private sales of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements. Any such expenditures related to any subsequent trials will not be incurred until such additional financing is raised. Further, additional financing related to subsequent trials does not affect the Company’s conclusion that based on the cash on hand and the budgeted cash flow requirements, the Company has sufficient funds to maintain operations for at least 12 months from the issuance of these consolidated financial statements. Principles of Consolidation The unaudited consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. Risks and Uncertainties The pandemic caused by an outbreak of a new strain of coronavirus (COVID-19) has resulted, and is likely to continue to result, in significant national and global economic disruption and may adversely affect our business. Based on the Company’s current assessment, the Company does not expect any material impact on its long-term development timeline and its liquidity due to the worldwide spread of the COVID-19 virus. However, the Company is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, suppliers, industry, and workforce. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. The significant estimates are the valuation of stock-based compensation expenses and recorded amounts related to income taxes. Cash and Cash Equivalents The Company considers cash deposits and all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash deposits are held at two high-credit-quality financial institutions. The Company’s cash deposits at these institutions exceed federally insured limits. Short-term Investments The Company’s investments consist entirely of mutual funds. The securities are measured at fair value based on the net asset value (NAV). The Company adopted Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) 2016-01, Financial Instruments, for the six months ended December 31, 2019 which requires substantially all equity investments in nonconsolidated entities to be measured at fair value with recurring changes recognized in earnings, except for those accounted for using equity method accounting. Changes in fair value of the securities are recorded as part of other income on the consolidated statement of operations. Short term investment activity is presented in the investing activities section on the consolidated statement of cash flows. Patents Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. Fixed Assets Fixed assets are stated at cost less accumulated depreciation. Fixed assets are comprised of computers and software, leasehold improvements, and furniture and fixtures. Depreciation is calculated using the straight-line method over the estimated useful life of the assets. Computers and software have an estimated useful life of three years. Furniture and fixtures have an estimated useful life of approximately seven years. Leases The Company recognizes its leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. The Company’s lease consists of an operating lease for office space. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. Fair Value of Financial Instruments The Company’s financial instruments primarily include cash, short term investments, and accounts payable. Due to the short-term nature of cash and accounts payable the carrying amounts of these assets and liabilities approximate their fair value. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability (an exit price), in an orderly transaction between market participants at the reporting date. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy 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 similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company’s short-term investment instruments of $115,593,750 at September 30, 2020 are classified using Level 1 inputs within the fair value hierarchy because they are valued using NAV. Unrealized gains and losses are recorded in the consolidated statement of operations under other income. The Company recorded an unrealized gain of $290,973 included in other income for the nine months ended September 30, 2020. Income Taxes The Company accounts for income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income or expense in the period that the change is effective. Tax benefits are recognized when it is probable that the deduction will be sustained. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain. As of September 30, 2020 and December 31, 2019, the Company had recognized a valuation allowance to the full extent of the Company’s net deferred tax assets since the likelihood of realization of the benefit does not meet the more likely than not threshold. The Company files a U.S. Federal income tax return and various state returns. Uncertain tax positions taken on the Company’s tax returns will be accounted for as liabilities for unrecognized tax benefits. The Company will recognize interest and penalties, if any, related to unrecognized tax benefits in general and administrative expenses in the statements of operations. There were no liabilities recorded for uncertain tax positions at September 30, 2020 and December 31, 2019. The open tax years, subject to potential examination by the applicable taxing authority, for the Company are from June 30, 2017 forward. Research and Development Research and development costs primarily consist of research contracts for the advancement of product development, salaries and benefits, stock-based compensation, and consultants. The Company expenses all research and development costs in the period incurred. The Company makes an estimate of costs in relation to clinical study contracts. The Company analyzes the progress of studies, including the progress of clinical studies and phases, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. Stock-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period. The grant-date fair value of employee share options is estimated using the Black-Scholes option pricing model adjusted for the unique characteristics of those instruments. Loss per Common Share Basic loss per common share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted loss per common share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of options and warrants to purchase common stock. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. For the nine months ended September 30, 2020 and 2019, the potentially dilutive securities that would be anti-dilutive due to the Company’s net loss are not included in the calculation of diluted net loss per share attributable to common stockholders. The anti-dilutive securities are as follows (in common stock equivalent shares): Nine months ended September 30, September 30, Stock options 4,110,425 2,373,314 Common stock warrants 2,674,265 4,308,762 Total 6,784,690 6,682,076 Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2018, FASB issued ASU 2018-13, Fair Value Measurement – Disclosure Framework (Topic 820). In November 2018, FASB issued ASU 2018-18 – Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 Subsequent Events The Company’s management reviewed all material events through the date the financial statements were issued for subsequent event disclosure consideration. |
Prepaid Expenses
Prepaid Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expenses [Abstract] | |
PREPAID EXPENSES | NOTE 3 - PREPAID EXPENSES Prepaid expenses consisted of the following (rounded to nearest $00): September 30, December 31, Insurance $ 839,400 $ 223,600 Research and Development 1,373,500 139,200 Legal 11,000 11,000 Other 25,300 50,100 Total $ 2,249,200 $ 423,900 |
Fixed Assets
Fixed Assets | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
FIXED ASSETS | NOTE 4 - FIXED ASSETS Fixed assets, net of accumulated depreciation, consisted of the following (rounded to nearest $00): Useful lives September 30, December 31, Computer and Software 3 years $ 16,700 $ 16,700 Less: accumulated depreciation (14,600 ) (11,700 ) Fixed Assets $ 2,100 $ 5,000 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
ACCRUED EXPENSES | NOTE 5 - ACCRUED EXPENSES Accrued expenses consisted of the following (rounded to nearest $00): September 30, December 31, Research and development $ 1,111,600 $ 134,500 Professional fees 213,600 172,900 Accrued bonus 952,300 50,000 Accrued vacation 312,900 124,600 Legal settlement - 250,000 Other 70,400 92,900 Total $ 2,660,800 $ 824,900 |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTE PAYABLE | NOTE 6 - NOTE PAYABLE In June 2019, the Company entered into a note for approximately $364,200 in conjunction with a renewal of its director and officer insurance policy. The interest rate was 3.09% per annum. The note matured on April 9, 2020. At September 30, 2020 and December 31, 2019, the note payable outstanding balances were approximately $0 and $110,200, respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
STOCKHOLDERS' EQUITY | NOTE 7 - STOCKHOLDERS’ EQUITY On September 26, 2019, the Company’s Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the OTC Markets on September 30, 2019. As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share of issued and outstanding common stock, with all fractional shares rounded up to the nearest whole share, and the Company’s authorized share of common stock were reduced from 200,000,000 to 50,000,000 shares. All share and per share amounts have been retroactively restated to reflect this reverse stock split. Common Stock During the nine months ended September 30, 2020, the Company issued shares of common stock for cashless exercise of warrants. The Company also issued shares of common stock for cash exercises of warrants for proceeds of $7,186,306. During the nine months ended September 30, 2020, the Company issued shares of common stock for cashless exercise of options. During the nine months ended September 30, 2020, the Company issued shares of common stock for the exercise of options for proceeds of $636,518. On May 15, 2020, the Company entered into an Open Market Sale Agreement with Jefferies LLC, as sales agent (“Jefferies”), pursuant to which the Company may offer and sell, from time to time, through Jefferies, shares of the Company’s common stock, having an aggregate offering price of up to $75,000,000 . The Company is not obligated to sell any shares under the agreement. During the nine months ended September 30, 2020 the Company issued shares of common stock for net cash proceeds of $19,816,597 under the agreement. Options and Warrants In December 2014, the Board of Directors adopted and the shareholders approved Relmada’s 2014 Stock Option and Equity Incentive Plan, as amended (the “Plan”), which allows for the granting of common stock awards, stock appreciation rights, and incentive and nonqualified stock options to purchase shares of the Company’s common stock to designated employees, non-employee directors, and consultants and advisors. The Plan allowed for the granting of 5,152,942 options or stock awards. Stock options are exercisable generally for a period of 10 years from the date of grant and generally vest over four years. As of September 30, 2020, 1,042,520 shares were available for future grants under the Plan. As of September 30, 2020, no stock appreciation rights have been issued. The Company utilizes the Black-Scholes option pricing model to estimate the fair value of stock options and warrants. The risk-free interest rate assumptions were based upon the observed interest rates appropriate for the expected term of the equity instruments. The expected dividend yield was assumed to be zero as the Company has not paid any dividends since its inception and does not anticipate paying dividends in the foreseeable future. The expected volatility was based on historical volatility. The Company routinely reviews its calculation of volatility changes in future volatility, the Company’s life cycle, its peer group, and other factors. The Company uses the simplified method for share-based compensation to estimate the expected term for equity awards for share-based compensation in its option-pricing model. During the nine months ended September 30, 2020, the Company awarded a total of 950,000 options to employees with exercise price ranging from $28.00- $45.61 and a 10-year term vesting over 4-year period. The options have an aggregate fair value of $31.1 million calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.36%-0.83% (2) expected life of 6.25 years, (3) expected volatility of 106%-108%, and (4) zero expected dividends. At September 30, 2020, the Company has unrecognized stock-based compensation expense of approximately $67,964,000 related to unvested stock options over the weighted average remaining service period of 3.29 years. During the nine months ended September 30, 2020, the Company recognized additional compensation expense of approximately $1,500,000 related to acceleration of vesting and a nominal amount related to the modification of certain options in connection with the separation and settlement agreement with Dr. Ottavio Vitolo (see note 8). Options A summary of the changes in options during the nine months ended September 30, 2020 is as follows: Number Weighted Weighted Aggregate Outstanding and expected to vest at December 31, 2019 3,615,602 $ 19.96 9.2 $ 74,837,043 Granted 950,000 $ 39.82 9.54 $ 2,256,000 Exercised (239,865 ) $ 3.98 - $ - Forfeited (215,312 ) $ 21.57 - $ - Outstanding at September 30, 2020 4,110,425 $ 25.40 8.72 $ 61,858,297 Options exercisable at September 30, 2020 982,608 $ 13.87 7.77 $ 24,526,894 Warrants A summary of the changes in outstanding warrants during the nine months ended September 30, 2020 is as follows: Number of Weighted Outstanding and vested at December 31, 2019 3,646,872 $ 6.83 Granted 122,000 31.69 Exercised (1,081,581 ) 7.34 Forfeited (13,026 ) 16.00 Outstanding at September 30, 2020 2,674,265 $ 7.77 Warrants exercisable at September 30, 2020 2,646,141 $ 7.81 On April 1, 2020, the Company granted 120,000 warrants to consultants with exercise price of $31.59, a 5-year term and immediate vesting. The warrants have an aggregated fair value of $2.5 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 0.26% (2) expected life of 2.5 years, (3) expected volatility of 118%, and (4) zero expected dividends. On April 27, 2020, the Company granted 2,000 warrants to a consultant with exercise price of $37.67, a 5-year term and immediate vesting. The warrants have an aggregated fair value of $48 thousand that was calculated using the Black-Scholes option-pricing model. Variables used in the Black-Scholes option-pricing model include: (1) discount rate of 0.27% (2) expected life of 2.5 years, (3) expected volatility of 116%, and (4) zero expected dividends. At September 30, 2020, the Company had approximately $90,400 of unrecognized compensation expense related to outstanding warrants. At September 30, 2020 and December 31, 2019, the aggregate intrinsic value of warrants vested and outstanding was approximately $78,875,000 and $115,731,000, respectively. The following summarizes the components of stock-based compensation expense which includes stock options and warrants in the unaudited consolidated statements of operations for the nine months ended September 30, 2020 and 2019 (rounded to nearest $00): Nine Nine Research and development $ 4,635,300 $ 259,400 General and administrative 12,951,200 1,296,500 Total $ 17,586,500 $ 1,555,900 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 8 - RELATED PARTY TRANSACTIONS Effective March 6, 2020, Dr. Vitolo entered into a Separation and Severance Agreement with the Company. Pursuant to the terms of the agreement, the Company agreed to pay Dr. Vitolo severance of $200,000 in accordance with his employment contract. In addition, Dr. Vitolo’s options granted under the Company’s 2014 Stock Option and Equity Incentive Plan continued to vest until September 6, 2020. Dr. Vitolo shall have until March 6, 2021 to exercise his vested options and he shall be allowed to use a cashless exercise provision to exercise his vested options. The agreement also contains customary confidentiality, release, and non-disparagement provisions, and the Company agreed to pay accrued and unpaid salary, vacation time and attorney’s fees totaling approximately $45,000. On March 9, 2020, the Company appointed Dr. Thomas Wessel as the Company’s Executive Vice President, Head of Research and Development. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 - COMMITMENTS AND CONTINGENCIES License Agreements Wonpung On August 20, 2007, the Company entered into a License Development and Commercialization Agreement with Wonpung Mulsan Co, a shareholder of the Company. Wonpung has exclusive territorial rights in countries it selects in Asia to market up to two drugs the Company is currently developing and a right of first refusal (“ROFR”) for up to an additional five drugs that the Company may develop in the future as defined in more detail in the license agreement. If the parties cannot agree to terms of a license agreement then the Company shall be able to engage in discussions with other potential licensors. As of November 12, 2020, no discussions are active between the Company and Wonpung. The Company received an upfront license fee of $1,500,000 and will earn royalties of up to 12% of net sales for up to two licensed products it is currently developing. The licensing terms for the ROFR products are subject to future negotiations and binding arbitration. The terms of each licensing agreement will expire on the earlier of any time from 15 years to 20 years after licensing or on the date of commercial availability of a generic product to such licensed product in the licensed territory. Third Party Licensor Based upon a prior acquisition, the Company assumed an obligation to pay third parties (Dr. Charles E. Inturrisi and Dr. Paolo Manfredi – see below): (A) royalty payments up to 2% on net sales of licensed products that are not sold by sublicensee and (B) on each and every sublicense earned royalty payment received by licensee from its sublicensee on sales of license product by sublicensee, the higher of (i) 20% of the royalties received by licensee; or (ii) up to 2% of net sales of sublicensee. The Company will also make milestone payments of up to $4 or $2 million, for the first commercial sale of product in the field that has a single active pharmaceutical ingredient, and for the first commercial sale of product in the field of product that has more than one active pharmaceutical ingredient, respectively. As of September 30, 2020, the Company has not generated any revenue related to this license agreement. Inturrisi / Manfredi In January 2018, we entered into an Intellectual Property Assignment Agreement (the Assignment Agreement) and License Agreement (the License Agreement and together with the Assignment Agreement, the Agreements) with Dr. Charles E. Inturrisi and Dr. Paolo Manfredi (collectively, the Licensor). Pursuant to the Agreements, Relmada assigned its existing rights, including patents and patent applications, to d-methadone in the context of psychiatric use (the Existing Invention) to Licensor. Licensor then granted Relmada under the License Agreement a perpetual, worldwide, and exclusive license to commercialize the Existing Invention and certain further inventions regarding d-methadone. In consideration of the rights granted to Relmada under the License Agreement, Relmada paid the Licensor an upfront, non-refundable license fee of $180,000. Additionally, Relmada will pay Licensor $45,000 every three months until the earliest to occur of the following events: (i) the first commercial sale of a licensed product anywhere in the world, (ii) the expiration or invalidation of the last to expire or be invalidated of the patent rights anywhere in the world, or (iii) the termination of the License Agreement. Relmada will also pay Licensor tiered royalties with a maximum rate of 2%, decreasing to 1.75%, and 1.5% in certain circumstances, on net sales of licensed products covered under the License Agreement. Relmada will also pay Licensor tiered payments up to a maximum of 20%, and decreasing to 17.5%, and 15% in certain circumstances, of all consideration received by Relmada for sublicenses granted under the License Agreement. Legal From time to time, the Company may become involved in lawsuits and other legal proceedings that arise in the course of business. Litigation is subject to inherent uncertainties, and it is not possible to predict the outcome of litigation with total confidence. The Company is currently not aware of any legal proceedings or potential claims against it whose outcome would be likely, individually or in the aggregate, to have a material adverse effect on the Company’s business, financial condition, operating results, or cash flows. Lawsuit Brought by Former Officer On February 6, 2019, the Company entered into a settlement agreement in its previous dispute with Najib Babul, Relmada’s former President. Babul relinquished his 303,392 shares in Relmada, signed a consulting contract and Relmada committed to a $500,000 initial payment and four subsequent payments of $250,000 on March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019. The Company recorded a loss on the settlement of $1.1 million in the first quarter of 2019. On July 15, 2020, an employee of the Company filed a Complaint alleging unequal pay based on gender and other employment based claims. The Company intends to defend the lawsuit vigorously and does not expect that the lawsuit will have a material effect on its financial position. Leases and Sublease The Company’s corporate headquarters are located at 880 Third Avenue, 12th Floor, New York, New York 10022 pursuant to a lease agreement for a period of one year. As the Company’s leases consist of one lease for their corporate headquarters, which is for a period of 12 months or less. In accordance with ASC 842, Leases, the Company has elected the practical expedient and recognizes rent expense evenly over the 12 months. The monthly rent is approximately $13,800. For the nine months ended September 30, 2020 and 2019, the Company recognized lease expense of approximately $124,400 and $70,300, respectively. On June 8, 2017, the Company entered into an Amended and Restated License Agreement with Actinium. Pursuant to the terms of the agreement, Actinium will continue to license the furniture, fixtures, equipment and tenant improvements located in its office (“FFE”) for a license fee of $7,529 per month until December 8, 2022. Actinium shall have at any time during the term of this agreement the right to purchase the FFE for $496,914, less any previously paid license fees. The license of FFE qualifies as a sales-type lease. At inception, the Company derecognized the underlying assets of $493,452, recognized discounted lease payments receivable of $397,049 using the discount rate of 8.38% and recognized loss on sales-type lease of fixed assets of $96,403. For the nine months ended September 30, 2020 and 2019, the Company recognized lease income of approximately $13,500 and $17,900, respectively. As of September 30, 2020, the balance of unearned interest income was approximately $18,600. Contractual Obligations The following tables sets forth our contractual obligations for the next five years and thereafter: Total Less than 1 - 2 3 - 5 More than Office lease $ 41,400 $ 41,400 $ - $ - $ - Total obligations $ 41,400 $ 41,400 $ - $ - $ - |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 10 - SUBSEQUENT EVENTS Subsequent to September 30, 2020, 52,268 outstanding warrants were exercised for total cash proceeds of approximately $437,100. On October 25, 2020, the Company awarded a total of 25,000 options to a new employee with an exercise price of $33.34 and a 10-year term vesting over a four year period. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) for interim unaudited consolidated financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. The unaudited consolidated financial statements reflect all adjustments (consisting of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements of the Company for the six months ended December 31, 2019 and notes thereto contained in the Company’s Transition Report on Form 10-KT. On September 26, 2019, the Company’s Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the OTC Markets on September 30, 2019. As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share of issued and outstanding common stock, with all fractional shares rounded up to the nearest whole share, and the Company’s authorized share of common stock were reduced from 200,000,000 to 50,000,000 shares. All share and per share amounts have been retroactively restated to reflect this reverse stock split. |
Liquidity | Liquidity As shown in the accompanying financial statements, the Company incurred negative operating cash flows of $20.9 million for the nine months ended September 30, 2020 and has an accumulated deficit of $158.6 million from inception through September 30, 2020. At September 30, 2020 the Company had cash and short term investments of $123.1 million. Relmada has funded its past operations through equity raises and most recently in 2020 raised net proceeds from the sale of common stock of $19,816,597 and $7,186,306 through the exercise of warrants. The Company also raised an additional $636,518 during the nine months ended September 30, 2020 from the exercises of options. Management believes that due to the recent equity raises completed and exercises of outstanding options and warrants and the current cash position on its balance sheet, it has obtained sufficient funding to continue ongoing operations for at least 12 months from the issuance of these unaudited consolidated quarterly financial statements. Management believes that their existing cash and cash equivalents will enable them to fund operating expenses and capital expenditure requirement for at least the next 12 months. Beyond that point management will evaluate the size and scope of any subsequent trials that will affect the timing of additional financings through public or private sales of equity or debt securities or from bank or other loans or through strategic collaboration and/or licensing agreements. Any such expenditures related to any subsequent trials will not be incurred until such additional financing is raised. Further, additional financing related to subsequent trials does not affect the Company’s conclusion that based on the cash on hand and the budgeted cash flow requirements, the Company has sufficient funds to maintain operations for at least 12 months from the issuance of these consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The unaudited consolidated financial statements include the Company’s accounts and those of the Company’s wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Risks and Uncertainties | Risks and Uncertainties The pandemic caused by an outbreak of a new strain of coronavirus (COVID-19) has resulted, and is likely to continue to result, in significant national and global economic disruption and may adversely affect our business. Based on the Company’s current assessment, the Company does not expect any material impact on its long-term development timeline and its liquidity due to the worldwide spread of the COVID-19 virus. However, the Company is actively monitoring this situation and the possible effects on its financial condition, liquidity, operations, suppliers, industry, and workforce. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reporting period. Actual results could differ from those estimates. The significant estimates are the valuation of stock-based compensation expenses and recorded amounts related to income taxes. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers cash deposits and all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. The Company’s cash deposits are held at two high-credit-quality financial institutions. The Company’s cash deposits at these institutions exceed federally insured limits. |
Short-term Investments | Short-term Investments The Company’s investments consist entirely of mutual funds. The securities are measured at fair value based on the net asset value (NAV). The Company adopted Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) 2016-01, Financial Instruments, for the six months ended December 31, 2019 which requires substantially all equity investments in nonconsolidated entities to be measured at fair value with recurring changes recognized in earnings, except for those accounted for using equity method accounting. Changes in fair value of the securities are recorded as part of other income on the consolidated statement of operations. Short term investment activity is presented in the investing activities section on the consolidated statement of cash flows. |
Patents | Patents Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain. |
Fixed Assets | Fixed Assets Fixed assets are stated at cost less accumulated depreciation. Fixed assets are comprised of computers and software, leasehold improvements, and furniture and fixtures. Depreciation is calculated using the straight-line method over the estimated useful life of the assets. Computers and software have an estimated useful life of three years. Furniture and fixtures have an estimated useful life of approximately seven years. |
Leases | Leases The Company recognizes its leases with a term of greater than a year on the balance sheet by recording right-of-use assets and lease liabilities. Leases can be classified as either operating leases or finance leases. Operating leases will result in straight-line lease expense, while finance leases will result in front-loaded expense. The Company’s lease consists of an operating lease for office space. The Company does not recognize a lease liability or right-of-use asset on the balance sheet for short-term leases. Instead, the Company recognizes short-term lease payments as an expense on a straight-line basis over the lease term. A short-term lease is defined as a lease that, at the commencement date, has a lease term of 12 months or less and does not include an option to purchase the underlying asset that the lessee is reasonably certain to exercise. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments primarily include cash, short term investments, and accounts payable. Due to the short-term nature of cash and accounts payable the carrying amounts of these assets and liabilities approximate their fair value. Fair value is defined as the price that would be received to sell an asset, or paid to transfer a liability (an exit price), in an orderly transaction between market participants at the reporting date. A fair value hierarchy has been established for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The fair value hierarchy 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 similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. Level 3 Inputs - Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). The Company’s short-term investment instruments of $115,593,750 at September 30, 2020 are classified using Level 1 inputs within the fair value hierarchy because they are valued using NAV. Unrealized gains and losses are recorded in the consolidated statement of operations under other income. The Company recorded an unrealized gain of $290,973 included in other income for the nine months ended September 30, 2020. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Accordingly, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in the tax rate is recognized in income or expense in the period that the change is effective. Tax benefits are recognized when it is probable that the deduction will be sustained. A valuation allowance is established when it is more likely than not that all or a portion of a deferred tax asset will either expire before the Company is able to realize the benefit, or that future deductibility is uncertain. As of September 30, 2020 and December 31, 2019, the Company had recognized a valuation allowance to the full extent of the Company’s net deferred tax assets since the likelihood of realization of the benefit does not meet the more likely than not threshold. The Company files a U.S. Federal income tax return and various state returns. Uncertain tax positions taken on the Company’s tax returns will be accounted for as liabilities for unrecognized tax benefits. The Company will recognize interest and penalties, if any, related to unrecognized tax benefits in general and administrative expenses in the statements of operations. There were no liabilities recorded for uncertain tax positions at September 30, 2020 and December 31, 2019. The open tax years, subject to potential examination by the applicable taxing authority, for the Company are from June 30, 2017 forward. |
Research and Development | Research and Development Research and development costs primarily consist of research contracts for the advancement of product development, salaries and benefits, stock-based compensation, and consultants. The Company expenses all research and development costs in the period incurred. The Company makes an estimate of costs in relation to clinical study contracts. The Company analyzes the progress of studies, including the progress of clinical studies and phases, invoices received and contracted costs when evaluating the adequacy of the amount expensed and the related prepaid asset and accrued liability. |
Stock-Based Compensation | Stock-Based Compensation The Company measures the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is recognized over the period during which an employee is required to provide service in exchange for the award - the requisite service period. The grant-date fair value of employee share options is estimated using the Black-Scholes option pricing model adjusted for the unique characteristics of those instruments. |
Loss per Common Share | Loss per Common Share Basic loss per common share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted loss per common share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common share equivalents outstanding for the period determined using the treasury-stock method. Dilutive common stock equivalents are comprised of options and warrants to purchase common stock. For all periods presented, there is no difference in the number of shares used to calculate basic and diluted shares outstanding due to the Company’s net loss position. For the nine months ended September 30, 2020 and 2019, the potentially dilutive securities that would be anti-dilutive due to the Company’s net loss are not included in the calculation of diluted net loss per share attributable to common stockholders. The anti-dilutive securities are as follows (in common stock equivalent shares): Nine months ended September 30, September 30, Stock options 4,110,425 2,373,314 Common stock warrants 2,674,265 4,308,762 Total 6,784,690 6,682,076 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes In August 2018, FASB issued ASU 2018-13, Fair Value Measurement – Disclosure Framework (Topic 820). In November 2018, FASB issued ASU 2018-18 – Collaborative Arrangements (Topic 808): Clarifying the Interaction between Topic 808 and Topic 606 |
Subsequent Events | Subsequent Events The Company’s management reviewed all material events through the date the financial statements were issued for subsequent event disclosure consideration. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of anti-dilutive securities | Nine months ended September 30, September 30, Stock options 4,110,425 2,373,314 Common stock warrants 2,674,265 4,308,762 Total 6,784,690 6,682,076 |
Prepaid Expenses (Tables)
Prepaid Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Prepaid Expenses [Abstract] | |
Schedule of prepaid expenses | September 30, December 31, Insurance $ 839,400 $ 223,600 Research and Development 1,373,500 139,200 Legal 11,000 11,000 Other 25,300 50,100 Total $ 2,249,200 $ 423,900 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of fixed assets | Useful lives September 30, December 31, Computer and Software 3 years $ 16,700 $ 16,700 Less: accumulated depreciation (14,600 ) (11,700 ) Fixed Assets $ 2,100 $ 5,000 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | September 30, December 31, Research and development $ 1,111,600 $ 134,500 Professional fees 213,600 172,900 Accrued bonus 952,300 50,000 Accrued vacation 312,900 124,600 Legal settlement - 250,000 Other 70,400 92,900 Total $ 2,660,800 $ 824,900 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in options outstanding | Number Weighted Weighted Aggregate Outstanding and expected to vest at December 31, 2019 3,615,602 $ 19.96 9.2 $ 74,837,043 Granted 950,000 $ 39.82 9.54 $ 2,256,000 Exercised (239,865 ) $ 3.98 - $ - Forfeited (215,312 ) $ 21.57 - $ - Outstanding at September 30, 2020 4,110,425 $ 25.40 8.72 $ 61,858,297 Options exercisable at September 30, 2020 982,608 $ 13.87 7.77 $ 24,526,894 |
Schedule of changes in outstanding warrants | Number of Weighted Outstanding and vested at December 31, 2019 3,646,872 $ 6.83 Granted 122,000 31.69 Exercised (1,081,581 ) 7.34 Forfeited (13,026 ) 16.00 Outstanding at September 30, 2020 2,674,265 $ 7.77 Warrants exercisable at September 30, 2020 2,646,141 $ 7.81 |
Schedule of stock-based compensation expense | Nine Nine Research and development $ 4,635,300 $ 259,400 General and administrative 12,951,200 1,296,500 Total $ 17,586,500 $ 1,555,900 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of contractual obligations | Total Less than 1 - 2 3 - 5 More than Office lease $ 41,400 $ 41,400 $ - $ - $ - Total obligations $ 41,400 $ 41,400 $ - $ - $ - |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 26, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | |
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Description of reverse stock split | As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share of issued and outstanding common stock, with all fractional shares rounded up to the nearest whole share, and the Company’s authorized share of common stock were reduced from 200,000,000 to 50,000,000 shares. All share and per share amounts have been retroactively restated to reflect this reverse stock split. | |||||
Incurred negative operating cash flows | $ 20,900,000 | |||||
Accumulated deficit | $ 158,600,000 | 158,600,000 | ||||
Cash and short term investments | 123,100,000 | 123,100,000 | ||||
Received exercise of warrants | 1,567,030 | $ 2,577,103 | $ 3,042,173 | 7,186,306 | ||
Additional exercise of options | 636,518 | |||||
Short-term investments | $ 115,593,750 | 115,593,750 | $ 80,164,823 | |||
Unrealized loss | 290,973 | |||||
Warrants [Member] | ||||||
Summary of Significant Accounting Policies (Details) [Line Items] | ||||||
Proceeds from issuance of common stock | $ 19,816,597 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) - Schedule of anti-dilutive securities - shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 6,784,690 | 6,682,076 |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 4,110,425 | 2,373,314 |
Common stock warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total | 2,674,265 | 4,308,762 |
Prepaid Expenses (Details) - Sc
Prepaid Expenses (Details) - Schedule of prepaid expenses - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of prepaid expenses [Abstract] | ||
Insurance | $ 839,400 | $ 223,600 |
Research and Development | 1,373,500 | 139,200 |
Legal | 11,000 | 11,000 |
Other | 25,300 | 50,100 |
Total | $ 2,249,200 | $ 423,900 |
Fixed Assets (Details) - Schedu
Fixed Assets (Details) - Schedule of fixed assets - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Computer and Software | $ 16,700 | $ 16,700 |
Less: accumulated depreciation | (14,600) | (11,700) |
Fixed Assets | $ 2,100 | $ 5,000 |
Computer and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 3 years |
Accrued Expenses (Details) - Sc
Accrued Expenses (Details) - Schedule of accrued expenses - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Schedule of accrued expenses [Abstract] | ||
Research and development | $ 1,111,600 | $ 134,500 |
Professional fees | 213,600 | 172,900 |
Accrued bonus | 952,300 | 50,000 |
Accrued vacation | 312,900 | 124,600 |
Legal settlement | 250,000 | |
Other | 70,400 | 92,900 |
Total | $ 2,660,800 | $ 824,900 |
Note Payable (Details)
Note Payable (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
Note payable, conjunction of director and officer | $ 364,200 | ||
Note payable, interest rate per annum | 3.09% | ||
Maturity date | Apr. 9, 2020 | ||
Note payable, outstanding balance | $ 0 | $ 110,200 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) | May 15, 2020 | Apr. 02, 2020 | Mar. 09, 2020 | Apr. 27, 2020 | Sep. 26, 2019 | Sep. 30, 2020 | Jul. 22, 2020 | Dec. 31, 2019 |
Stockholders' Equity (Details) [Line Items] | ||||||||
Stockholders equity, reverse split | the Company’s Board of Directors approved a 1-for-4 reverse split of the Common Stock, which was effective on the OTC Markets on September 30, 2019. As a result of the reverse stock split, every 4 shares of issued and outstanding common stock were converted into 1 share of issued and outstanding common stock, with all fractional shares rounded up to the nearest whole share, and the Company’s authorized share of common stock were reduced from 200,000,000 to 50,000,000 shares. All share and per share amounts have been retroactively restated to reflect this reverse stock split. | |||||||
Common stock exercise options for proceeds | $ 636,518 | |||||||
Aggregate offering price | $ 75,000,000 | |||||||
Net cash proceeds | $ 19,816,597 | |||||||
Stock options exercisable period | 10 years | |||||||
Shares available for future grants (in Shares) | 1,042,520 | |||||||
Expected dividend yield assumed | $ 0 | |||||||
Employees with exercise price (in Shares) | 950,000 | |||||||
Expected life term | 6 years 3 months | |||||||
Preferred Stock, Including Additional Paid in Capital, Net of Discount | $ 0 | |||||||
Unrecognized stock-based compensation expense | $ 67,964,000 | |||||||
unvested stock options over the weighted average remaining service period | 3 years 105 days | |||||||
Recognized additional compensation expense | $ 1,500,000 | |||||||
Unrecognized compensation expense | $ 90,400 | |||||||
Minimum [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Discount rate | 0.36% | |||||||
Expected volatility rate | 106.00% | |||||||
Maximum [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Discount rate | 0.83% | |||||||
Expected volatility rate | 108.00% | |||||||
General Contractor [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Number of options granted (in Shares) | 120,000 | 2,000 | ||||||
Aggregate fair value of options | $ 2,500,000 | $ 48,000 | ||||||
Discount rate | 0.26% | 0.27% | ||||||
Expected life term | 2 years 6 months | 2 years 6 months | ||||||
Expected volatility rate | 118.00% | 116.00% | ||||||
Options exercise price (in Dollars per share) | $ 31.59 | $ 37.67 | ||||||
Expected dividends rate | 0.00% | 0.00% | ||||||
Stock Option and Equity Incentive Plan [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Number of options granted (in Shares) | 5,152,942 | |||||||
Share-based Payment Arrangement, Option [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Options awarded (in Shares) | 9 | |||||||
Aggregate fair value of options | $ 31,100,000 | |||||||
Aggregate intrinsic value of warrants vested and outstanding | $ 78,875,000 | $ 115,731,000 | ||||||
Share-based Payment Arrangement, Option [Member] | Minimum [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Exercise price (in Dollars per share) | $ 28 | |||||||
Share-based Payment Arrangement, Option [Member] | Maximum [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Exercise price (in Dollars per share) | $ 45.61 | |||||||
Common Stock [Member] | ||||||||
Stockholders' Equity (Details) [Line Items] | ||||||||
Warrants for proceeds | $ 7,186,306 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - Schedule of changes in options outstanding - Options [Member] | 9 Months Ended |
Sep. 30, 2020USD ($)$ / sharesshares | |
Stockholders' Equity (Details) - Schedule of changes in options outstanding [Line Items] | |
Number of Options, Outstanding and expected to vest, Beginning balance | 3,615,602 |
Weighted Average Exercise Price Per Share, Outstanding and expected to vest - Beginning balance (in Dollars per share) | $ / shares | $ 19.96 |
Weighted Average Remaining Contractual Term (Years), Beginning Outstanding | 9 years 73 days |
Aggregate Intrinsic Value, Outstanding and expected to vest - Beginning balance (in Dollars) | $ | $ 74,837,043 |
Number of Options, Granted | 950,000 |
Weighted Average Exercise Price Per Share, Granted | 39.82 |
Weighted Average Remaining Contractual Term (Years), Granted | 9 years 197 days |
Aggregate Intrinsic Value, Outstanding and expected to vest, Granted (in Dollars) | $ | $ 2,256,000 |
Number of Options, Exercised | (239,865) |
Weighted Average Exercise Price Per Share, Exercised (in Dollars per share) | $ / shares | $ 3.98 |
Weighted Average Remaining Contractual Term (Years), Exercised | |
Aggregate Intrinsic Value, Outstanding and expected to vest, Exercised (in Dollars) | $ | |
Number of Options, Forfeited | (215,312) |
Weighted Average Exercise Price Per Share, Forfeited (in Dollars per share) | $ / shares | $ 21.57 |
Weighted Average Remaining Contractual Term (Years), Forfeited | |
Aggregate Intrinsic Value, Outstanding and expected to vest, Forfeited (in Dollars) | $ | |
Number of Options, Outstanding, Ending balance | 4,110,425 |
Weighted Average Exercise Price Per Share, Outstanding, Ending balance (in Dollars per share) | $ / shares | $ 25.40 |
Weighted Average Remaining Contractual Term (Years), Ending Outstanding | 8 years 262 days |
Aggregate Intrinsic Value, Outstanding, Ending balance (in Dollars) | $ | $ 61,858,297 |
Number of Options, Options exercisable | 982,608 |
Weighted Average Exercise Price Per Share, Options exercisable (in Dollars per share) | $ / shares | $ 13.87 |
Weighted Average Remaining Contractual Term (Years), Options exercisable | 7 years 281 days |
Aggregate Intrinsic Value, Options exercisable (in Dollars) | $ | $ 24,526,894 |
Stockholders' Equity (Details_2
Stockholders' Equity (Details) - Schedule of changes in outstanding warrants - Warrant [Member] | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Stockholders' Equity (Details) - Schedule of changes in outstanding warrants [Line Items] | |
Number of Shares, Outstanding and vested, Beginning balance | 3,646,872 |
Weighted Average Exercise Price Per Share, Outstanding and vested, Beginning balance (in Dollars per share) | $ / shares | $ 6.83 |
Number of Shares, Granted | 122,000 |
Weighted Average Exercise Price Per Share, Granted | 31.69 |
Number of Shares, Exercised | (1,081,581) |
Weighted Average Exercise Price Per Share, Exercised | 7.34 |
Number of Shares, Forfeited | (13,026) |
Weighted Average Exercise Price Per Share, Forfeited | 16 |
Number of Shares, Outstanding and vested, Ending balance | 2,674,265 |
Weighted Average Exercise Price Per Share, Outstanding and vested, Ending balance (in Dollars per share) | $ / shares | $ 7.77 |
Number of Shares, Warrants exercisable | 2,646,141 |
Weighted Average Exercise Price Per Share, Warrants exercisable (in Dollars per share) | $ / shares | $ 7.81 |
Stockholders' Equity (Details_3
Stockholders' Equity (Details) - Schedule of stock-based compensation expense - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Stockholders' Equity (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total | $ 17,586,500 | $ 1,555,900 |
Research and development [Member] | ||
Stockholders' Equity (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total | 4,635,300 | 259,400 |
General and administrative [Member] | ||
Stockholders' Equity (Details) - Schedule of stock-based compensation expense [Line Items] | ||
Total | $ 12,951,200 | $ 1,296,500 |
Related Party Transactions (Det
Related Party Transactions (Details) - Dr. Vitolo [Member] | Mar. 06, 2020USD ($) |
Related Party Transactions (Details) [Line Items] | |
Agreement, description | Pursuant to the terms of the agreement, the Company agreed to pay Dr. Vitolo severance of $200,000 in accordance with his employment contract. In addition, Dr. Vitolo’s options granted under the Company’s 2014 Stock Option and Equity Incentive Plan continued to vest until September 6, 2020. Dr. Vitolo shall have until March 6, 2021 to exercise his vested options and he shall be allowed to use a cashless exercise provision to exercise his vested options. The agreement also contains customary confidentiality, release, and non-disparagement provisions, and the Company agreed to pay accrued and unpaid salary, vacation time and attorney’s fees totaling approximately $45,000. |
Attorneys fees | $ 45,000 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) | Feb. 06, 2019 | Jan. 31, 2018 | Jun. 08, 2017 | Aug. 20, 2007 | Sep. 30, 2020 | Sep. 30, 2019 |
Commitments and Contingencies (Details) [Line Items] | ||||||
Description of settlement agreement | the Company entered into a settlement agreement in its previous dispute with Najib Babul, Relmada’s former President. Babul relinquished his 303,392 shares in Relmada, signed a consulting contract and Relmada committed to a $500,000 initial payment and four subsequent payments of $250,000 on March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019. The Company recorded a loss on the settlement of $1.1 million in the first quarter of 2019. | |||||
Rent expense | $ 13,800 | |||||
Recognized lease expense | $ 124,400 | $ 70,300 | ||||
Licensing Agreements [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Description of rights granted to license agreement | In consideration of the rights granted to Relmada under the License Agreement, Relmada paid the Licensor an upfront, non-refundable license fee of $180,000. Additionally, Relmada will pay Licensor $45,000 every three months until the earliest to occur of the following events: (i) the first commercial sale of a licensed product anywhere in the world, (ii) the expiration or invalidation of the last to expire or be invalidated of the patent rights anywhere in the world, or (iii) the termination of the License Agreement. Relmada will also pay Licensor tiered royalties with a maximum rate of 2%, decreasing to 1.75%, and 1.5% in certain circumstances, on net sales of licensed products covered under the License Agreement. Relmada will also pay Licensor tiered payments up to a maximum of 20%, and decreasing to 17.5%, and 15% in certain circumstances, of all consideration received by Relmada for sublicenses granted under the License Agreement. | |||||
Leases and Sublease, description | the Company entered into an Amended and Restated License Agreement with Actinium. Pursuant to the terms of the agreement, Actinium will continue to license the furniture, fixtures, equipment and tenant improvements located in its office (“FFE”) for a license fee of $7,529 per month until December 8, 2022. Actinium shall have at any time during the term of this agreement the right to purchase the FFE for $496,914, less any previously paid license fees. The license of FFE qualifies as a sales-type lease. At inception, the Company derecognized the underlying assets of $493,452, recognized discounted lease payments receivable of $397,049 using the discount rate of 8.38% and recognized loss on sales-type lease of fixed assets of $96,403. For the nine months ended September 30, 2020 and 2019, the Company recognized lease income of approximately $13,500 and $17,900, respectively. As of September 30, 2020, the balance of unearned interest income was approximately $18,600. | |||||
Wonpungt [Member] | Licensing Agreements [Member] | ||||||
Commitments and Contingencies (Details) [Line Items] | ||||||
Upfront license fee | $ 1,500,000 | |||||
Net sales rate | 12.00% | |||||
Lease term, description | The terms of each licensing agreement will expire on the earlier of any time from 15 years to 20 years after licensing or on the date of commercial availability of a generic product to such licensed product in the licensed territory. | |||||
Business acquisition, description | (A) royalty payments up to 2% on net sales of licensed products that are not sold by sublicensee and (B) on each and every sublicense earned royalty payment received by licensee from its sublicensee on sales of license product by sublicensee, the higher of (i) 20% of the royalties received by licensee; or (ii) up to 2% of net sales of sublicensee. The Company will also make milestone payments of up to $4 or $2 million, for the first commercial sale of product in the field that has a single active pharmaceutical ingredient, and for the first commercial sale of product in the field of product that has more than one active pharmaceutical ingredient, respectively. As of September 30, 2020, the Company has not generated any revenue related to this license agreement. |
Commitments and Contingencies_3
Commitments and Contingencies (Details) - Schedule of contractual obligations | Sep. 30, 2020USD ($) |
Other Commitments [Line Items] | |
Total obligations | $ 41,400 |
Contractual obligations due less than 1 year | 41,400 |
Contractual obligations due in 1-2 years | |
Contractual obligations due in 3-5 years | |
Contractual obligations due in more than 5 years | |
Office lease [Member] | |
Other Commitments [Line Items] | |
Total obligations | 41,400 |
Contractual obligations due less than 1 year | 41,400 |
Contractual obligations due in 1-2 years | |
Contractual obligations due in 3-5 years | |
Contractual obligations due in more than 5 years |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | |
Oct. 25, 2020 | Sep. 30, 2020 | |
Subsequent Events (Details) [Line Items] | ||
Warrants outstanding | 52,268 | |
Total cash proceeds | $ 437,100 | |
Subsequent Event [Member] | ||
Subsequent Events (Details) [Line Items] | ||
Number of option awarded new employees | 25,000 | |
Exercise price | $ 33.34 | |
Term of stock option awarded | 10 years | |
Stock option vesting over period | 4 years |