Document_and_Entity_Informatio
Document and Entity Information | 6 Months Ended | |
Dec. 31, 2014 | Feb. 09, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | ContraVir Pharmaceuticals, Inc. | |
Entity Central Index Key | 1583771 | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -24 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 22,273,397 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q2 |
CONDENSED_BALANCE_SHEETS
CONDENSED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
Current Assets: | ||
Cash | $8,791,543 | $1,817,757 |
Prepaid expenses | 59,736 | 164,421 |
Total Current Assets | 8,851,279 | 1,982,178 |
Property and equipment, net | 62,092 | 14,526 |
Other assets | 51,344 | 4,200 |
Total Assets | 8,964,715 | 2,000,904 |
Current Liabilities: | ||
Accounts payable | 114,410 | 243,896 |
Accrued expenses | 246,542 | 207,915 |
Due to Synergy | 6,928 | |
Total Current Liabilities | 360,952 | 458,739 |
Derivative financial instruments, at estimated fair value-warrants | 4,475,345 | |
Total Liabilities | 360,952 | 4,934,084 |
Stockholder's Equity: | ||
Common stock, par value of $.0001 per share. Authorized 120,000,000 shares, issued and outstanding 22,273,397 and 18,479,279 shares at December 31, 2014 and June 30, 2014, respectively | 2,228 | 1,848 |
Additional paid-in capital | 12,742,365 | 2,486,309 |
Accumulated deficit | -14,840,830 | -5,421,337 |
Total Stockholders' Equity (Deficit) | 8,603,763 | -2,933,180 |
Total Liabilities and Stockholders' Equity | 8,964,715 | 2,000,904 |
Convertible preferred stock | ||
Stockholder's Equity: | ||
Convertible preferred stock | ||
Series A convertible preferred stock | ||
Stockholder's Equity: | ||
Convertible preferred stock | 9,500,000 | |
Series B convertible preferred stock | ||
Stockholder's Equity: | ||
Convertible preferred stock | $1,200,000 |
CONDENSED_BALANCE_SHEETS_PAREN
CONDENSED BALANCE SHEETS (PARENTHETICAL) (USD $) | Dec. 31, 2014 | Jun. 30, 2014 |
Common stock, par value (in dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 22,273,397 | 18,479,279 |
Common stock, shares outstanding | 22,273,397 | 18,479,279 |
Convertible preferred stock | ||
Convertible preferred stock, par/stated value (in dollars per share) | $0.00 | $0.00 |
Convertible preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Series A convertible preferred stock | ||
Convertible preferred stock, par/stated value (in dollars per share) | $10 | |
Convertible preferred stock, shares issued | 950,000 | 0 |
Convertible preferred stock, shares outstanding | 950,000 | 0 |
Series B convertible preferred stock | ||
Convertible preferred stock, shares issued | 120,000 | 0 |
Convertible preferred stock, shares outstanding | 120,000 | 0 |
CONDENSED_STATEMENTS_OF_OPERAT
CONDENSED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Costs and Expenses: | ||||
Research and development | $1,823,657 | $9,208 | $2,207,714 | $22,846 |
General and administrative | 1,280,788 | 154,067 | 1,979,238 | 320,780 |
Loss from Operations | -3,104,445 | -163,275 | -4,186,952 | -343,626 |
Interest expense | -4,880 | -6,591 | ||
Change in fair value of derivative instruments-warrants | -387,898 | |||
Total Other Loss | -4,880 | -387,898 | -6,591 | |
Net loss | -3,104,445 | -168,155 | -4,574,850 | -350,217 |
Series A and B convertible preferred stock beneficial conversion feature accreted as a dividend | -4,844,643 | -4,844,643 | ||
Net loss attributable to common stockholders | ($7,949,088) | ($168,155) | ($9,419,493) | ($350,217) |
Weighted Average Common Shares Outstanding | ||||
Basic and Diluted (in shares) | 22,273,397 | 9,000,000 | 21,242,387 | 9,000,000 |
Net Loss per Common Share | ||||
Basic and Diluted (in dollars per share) | ($0.36) | ($0.02) | ($0.44) | ($0.04) |
CONDENSED_STATEMENT_OF_CHANGES
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (USD $) | Series A convertible preferred stock | Series B convertible preferred stock | Common Stock | Additional Paid in Capital | Accumulated Deficit | Total |
Preferred Stock | Preferred Stock | |||||
Balance at Jun. 30, 2014 | $1,848 | $2,486,309 | ($5,421,337) | ($2,933,180) | ||
Balance (in shares) at Jun. 30, 2014 | 18,479,279 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Stock based compensation expense | 511,072 | 511,072 | ||||
Stock options granted in excess of authorized limit | -81,689 | -81,689 | ||||
Reversal of stock option liability upon increase in authorized number of shares | 119,167 | 119,167 | ||||
Restricted common shares issued in exchange of warrants | 380 | 4,862,863 | 4,863,243 | |||
Restricted common shares issued in exchange of warrants (in shares) | 3,794,118 | |||||
Issuance of shares | 9,500,000 | 9,500,000 | ||||
Issuance of shares (in shares) | 950,000 | |||||
Issuance of shares | 1,200,000 | 1,200,000 | ||||
Issuance of shares (in shares) | 120,000 | |||||
Net loss for the period | -4,574,850 | -4,574,850 | ||||
Beneficial conversion feature accreted as a deemed dividend | 4,844,643 | -4,844,643 | -4,844,643 | |||
Balance at Dec. 31, 2014 | $9,500,000 | $1,200,000 | $2,228 | $12,742,365 | ($14,840,830) | $8,603,763 |
Balance (in shares) at Dec. 31, 2014 | 950,000 | 120,000 | 22,273,397 |
CONDENSED_STATEMENTS_OF_CASH_F
CONDENSED STATEMENTS OF CASH FLOW (USD $) | 6 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Cash Flows From Operating Activities: | ||
Net loss | ($4,574,850) | ($350,217) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation expense | 511,072 | 852 |
Cost of license as research and development expense | 1,200,000 | |
Change in fair value of derivative instruments-warrants | 387,898 | |
Interest expense on note payable to parent | 4,553 | |
Depreciation expense | 6,619 | |
Changes in operating assets and liabilities: | ||
Accounts payable, accrued expenses and due to Synergy | 57,539 | 16,923 |
Prepaid expenses and other assets | -60,309 | -5,552 |
Total Adjustments | 2,102,819 | 16,776 |
Net cash used in Operating Activities | -2,472,031 | -333,441 |
Cash Flows From Investing Activities: | ||
Additions to property and equipment | -54,183 | |
Net cash used in Investing Activities | -54,183 | |
Cash Flows From Financing Activities: | ||
Issuance of preferred stock | 9,500,000 | |
Borrowings under demand note payable to Synergy | 250,000 | |
Net cash provided by Financing Activities | 9,500,000 | 250,000 |
Net increase (decrease) in cash | 6,973,786 | -83,441 |
Cash at beginning of period | 1,817,757 | 86,716 |
Cash at end of period | 8,791,543 | 3,275 |
Supplementary disclosure of non cash transactions: | ||
Cash paid for interest | 2,038 | |
Deemed dividend on preferred stock beneficial conversion feature | 4,844,643 | |
Value of warrants exchanged for common stock | $4,863,243 |
Business_Overview
Business Overview | 6 Months Ended |
Dec. 31, 2014 | |
Business Overview | |
Business Overview | 1. Business Overview |
ContraVir Pharmaceuticals Inc. (“ContraVir” or the “Company”) is a biopharmaceutical company focused primarily on the clinical development of FV-100 to treat herpes zoster (HZ), or shingles, which is an infection caused by the reactivation of varicella zoster virus (VZV) or “chickenpox”, and CMX157 to treat Hepatitis B (HBV). | |
Separation from Synergy Pharmaceuticals Inc. | |
On August 8, 2013, Synergy Pharmaceuticals Inc. (“Synergy”) announced that it intended to separate its FV-100 assets from the remainder of its businesses through a pro rata distribution of the common stock of the entity holding the assets and liabilities associated with the FV-100 product candidate. ContraVir was incorporated for the purpose of holding such businesses as a wholly owned subsidiary of Synergy. | |
On January 28, 2014, the Synergy board of directors approved the distribution of the 9,000,000 issued and outstanding shares of ContraVir’s common stock currently held by Synergy on the basis of 0.0986 shares of our common stock for each share of Synergy common stock held on the record date. On January 28, 2014, Synergy declared a dividend of ContraVir common stock. On the distribution date of February 18, 2014, Synergy stockholders of record as of the close of business on February 6, 2014 received .0986 shares of ContraVir common stock for every 1 share of Synergy common stock they held. Fractional shares were not issued. Synergy stockholders received cash in lieu of fractional shares. | |
ContraVir is no longer a wholly owned subsidiary of Synergy. | |
Convertible Preferred Share Issuances | |
On October 14, 2014, December 23, 2014 and February 10, 2015, the Company, issued an aggregate of 980,000 shares of Convertible Series A preferred shares at a stated value of $10.00 per share, generating gross proceeds of approximately $9,800,000. See Note 4 for the terms of the Preferred Shares and accounting of these transactions. | |
On December 17, 2014, the Company entered into a license agreement with Chimerix, Inc. and issued 120,000 shares of Series B Convertible Preferred Stock (the “Series B”) in connection with the license of CMX157 from Chimerix for further clinical development and commercialization. See Note 4 for the terms of the Preferred Shares and accounting of this transaction and Note 9 for license related information. | |
Basis_of_Presentation_and_Goin
Basis of Presentation and Going Concern | 6 Months Ended | |||
Dec. 31, 2014 | ||||
Basis of Presentation and Going Concern | ||||
Basis of Presentation and Going Concern | 2. Basis of Presentation and Going Concern | |||
The audited financial statements as of and for the six months ended December 31, 2014 have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and United States generally accepted accounting principles (“GAAP”). In the opinion of management, the accompanying unaudited financial statements for the three months ended December 31, 2014 and the three and six months ended December 31, 2013 include all adjustments, which include only normal recurring adjustments, necessary to present fairly ContraVir’s financial information. | ||||
The unaudited financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and United States generally accepted accounting principles (“GAAP”) for interim reporting. In the opinion of management, the accompanying unaudited financial statements include all adjustments, which include only normal recurring adjustments, necessary to present fairly ContraVir’s interim financial information. | ||||
Going Concern | ||||
As of December 31, 2014, ContraVir had $8.8 million in cash. Net cash used in operating activities was $2.4 million for the six months ended December 31, 2014. Net loss for the six months ended December 31, 2014 was $4.6 million. As of December 31, 2014, ContraVir had working capital of $8.5 million. The Company expects to incur losses for the next several years as it expands its research, development and clinical trials of FV-100. The Company is unable to predict the extent of any future losses or when the Company will become profitable, if at all. | ||||
The financial statements as of December 31, 2014 and June 30, 2014 have been prepared under the assumption that the Company will continue as a going concern. Due to the Company’s recurring and expected continuing losses from operations, the Company has concluded there is substantial doubt in the Company’s ability to continue as a going concern without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. | ||||
The Company will be required to raise additional capital to continue the development and commercialization of current product candidates and to continue to fund operations at the current cash expenditure levels. The Company cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company raises additional funds by issuing equity securities, its stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business. If the Company is unable to raise additional capital when required or an acceptable terms, the Company may have to (i) significantly delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize its self on unfavorable terms. | ||||
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 expenses during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates. | ||||
Cash | ||||
As of December 31, 2014 and June 30, 2014, the amount of cash was approximately $8.8 million and $1.8 million, respectively, consisting of checking accounts held at U.S. commercial banks. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced losses related to these balances. | ||||
Fair Value of Financial Instruments | ||||
ASC Topic 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. | ||||
ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three-tier fair value hierarchy that distinguishes among the following: | ||||
· | Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. | |||
· | Level 2—Valuations based on 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 and models for which all significant inputs are observable, either directly or indirectly. | |||
· | Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | |||
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | ||||
Financial instruments consist of cash, accounts payable and derivative instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short term nature, except for derivative instruments, which were marked to market at the end of each reporting period. See Note 4 for additional information. | ||||
Warrants | ||||
The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of certain warrants, deemed to be derivative instruments, was recorded as a derivative liability under the provisions of FASB ASC 815 Derivatives and Hedging (“ASC 815”) upon issuance. Subsequently the liability was adjusted to fair value as of each reporting period and the changes in fair value of derivative liabilities was recorded in the consolidated statement of operations under the caption “Change in fair value of derivative liabilities.” | ||||
The fair value of warrants deemed to be derivative instruments was determined using Binomial option-pricing model using varying assumptions regarding volatility of our common share price, remaining life of the warrant, and risk-free interest rates at each period end. The Company thus used model-derived valuations where significant value drivers were unobservable to third parties to determine the fair value and accordingly classify such warrants in Level 3 per ASC 820. At June 30, 2014, the fair value of such warrants was $4,475,345 which was classified as a long term derivative liability on our balance sheets. As of December 31, 2014, these warrants were exchanged for common stock of the Company. (See Note 4). | ||||
Property, equipment and depreciation | ||||
As of December 31, 2014 and June 30, 2014, ContraVir had $62,092 and $14,526 respectively, of property and equipment, consisting primarily of computer equipment. Expenditures for additions, renewals and improvements are capitalized at cost. Depreciation is computed on a straight-line method based on the estimated useful lives of the related assets. The estimated useful lives of the depreciable assets are 2 to 5 years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives, or the remaining term of the lease, which-ever is shorter. Expenditures for repairs and maintenance are charged to operations as incurred. ContraVir will periodically evaluate whether current events or circumstances indicate that the carrying value of its depreciable assets may not be recoverable. There were no adjustment to the carrying value of property and equipment at December 31, 2014, and June 30, 2014. | ||||
Income Taxes | ||||
ContraVir has not filed any Federal tax returns as of yet due to being newly formed in May 2013. The amount of any tax liability that could arise since inception is undetermined at this time, however, the Company believes that because it has sustained losses since inception, the amount of any tax liability, if any, that could arise would be immaterial to the ContraVir’s financial statements. Any interest or penalties would be recorded in its statement of operations within other income (expense). ContraVir recorded a valuation allowance against any deferred tax assets upon the filing of its tax returns to the extent that it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. As a result there are no income tax benefits reflected in the consolidated statements of operations to offset pre-tax losses. | ||||
Contingencies | ||||
In the normal course of business, ContraVir is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, and tax matters. In accordance with FASB ASC Topic 450, Accounting for Contingencies, (“ASC 450”), ContraVir records accruals for such loss contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. ContraVir, in accordance with this guidance, does not recognize gain contingencies until realized. | ||||
Research and Development | ||||
Research and development costs, which include expenditures in connection with an in-house research and development laboratory, salaries and staff costs, application and filing for regulatory approval of proposed products, purchased in-process research and development, license costs, regulatory and scientific consulting fees, as well as contract research, insurance and FDA consultants, are accounted for in accordance with ASC Topic 730-10-55-2, Research and Development, (“ASC 730”). Also, as prescribed by this guidance, patent filing and maintenance expenses are considered legal in nature and therefore classified as general and administrative expense, if any. | ||||
ContraVir does not currently have any commercial biopharmaceutical products, and does not expect to have such for several years if at all. Accordingly our research and development costs are expensed as incurred. While certain of our research and development costs may have future benefits, our policy of expensing all research and development expenditures is predicated on the fact that ContraVir has no history of successful commercialization of product candidates to base any estimate of the number of future periods that would be benefited. | ||||
Also as prescribed by ASC 730, Research and Development non-refundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. As the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided, the deferred amounts would be recognized as an expense. ContraVir had no recorded prepaid research and development costs as of December 31, 2014 and June 30, 2014. | ||||
Loss Per Share | ||||
Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC Topic 260”) for all periods presented. In accordance with this guide, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. Due to the net losses incurred, all stock equivalents were anti-dilutive, thus, basic and dilutive net loss per share are the same. | ||||
Recent_Accounting_Pronouncemen
Recent Accounting Pronouncements | 6 Months Ended |
Dec. 31, 2014 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements |
In August 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, which defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures if there is substantial doubt about its ability to continue as a going concern. The pronouncement is effective for annual reporting periods ending after December 15, 2016 with early adoption permitted. The Company early adopted this guidance as of September 30, 2014, which did not have a material impact on the Company’s financial statements. | |
Stockholders_Equity_and_Deriva
Stockholder's Equity and Derivative Liability | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stockholder's Equity (Deficit) and Derivative Liability | ||||||||||||||
Stockholder's' Equity (Deficit) and Derivative Liability | 4. Stockholder’s Equity and Derivative Liability | |||||||||||||
Warrants | ||||||||||||||
On February 4, 2014, ContraVir entered into a securities purchase agreement with accredited investors for gross proceeds of $3,225,000 in a private placement and incurred expenses of approximately $15,000 related to this placement. The Company sold 9,485,294 units to the investors with each unit consisting of one share of our common stock and one warrant to purchase an additional one half share of our common stock. The purchase price paid by the investor was $0.34 for each unit. The warrants expire after six years and are exercisable at $0.37 per share. Based upon the criteria contained in ASC Topic 815-40, the Company has determined that the warrants issued in connection with this financing transaction must be recorded as derivative liabilities upon issuance and marked to market on a quarterly basis in the Company’s statement of operations. Upon the issuance of these warrants the fair value of $879,557 was recorded as derivative liability warrants. | ||||||||||||||
On August 20, 2014, ContraVir , consummated its offer (the “Offer”) to exchange an aggregate 4,742,648 outstanding common stock purchase warrants (the “Warrants”) owned by the February 4, 2014 investors in the Company for an aggregate 3,794,118 shares of restricted common stock. The Warrants were revalued on August 20, 2014, immediately prior to conversion increasing the liability by $387,898 to $4,863,243 which was recorded on the change in fair value of derivative instruments-warrants on the statement of operations. The liability was extinguished when the restricted shares were issued that had a fair value of $4,552,924 (using $1.20 per share, which was the stock price on August 20, 2014) by recording the offset to additional paid in capital. | ||||||||||||||
The following table sets forth the components of changes in the ContraVir’s derivative financial instruments liability balance for the periods indicated: | ||||||||||||||
Date | Description | Warrants | Derivative | |||||||||||
Instrument | ||||||||||||||
Liability | ||||||||||||||
7/1/14 | Balance of derivative financial instruments liability | 4,742,648 | $ | 4,475,345 | ||||||||||
Change in fair value of warrants immediately prior to conversion, recognized as change in fair value of derivative instruments-warrants in the statement of operations | — | 387,898 | ||||||||||||
Amounts reclassified to additional paid-in capital | 4,742,648 | (4,863,243 | ) | |||||||||||
12/31/14 | Balance of derivative financial instruments liability | — | $ | — | ||||||||||
ContraVir’s warrants contained a price protection clause which variable term required the Company to use a binomial model to determine fair value. The range of assumptions used to determine the fair value of the warrants on August 20, 2014 was as follows: | ||||||||||||||
August 20, 2014 | ||||||||||||||
Estimated fair value of ContraVir common stock | $ | |||||||||||||
1.20 | ||||||||||||||
Expected warrant term (years) | 5.46 years | |||||||||||||
Risk-free interest rate | 1.75 | % | ||||||||||||
Expected volatility | 88 | % | ||||||||||||
Dividend yield | — | |||||||||||||
In the Binomial model, the assumption for estimated fair value of the stock was based on a Black-Scholes based apportionment of the unit price paid for the shares and warrants issued in ContraVir’s recent private placement, which resulting stock prices were deemed to be arms-length negotiated prices. Because the ContraVir has a limited trading history in its common stock, the Company based expected volatility on that of comparable public development stage biotechnology companies. The warrants have a transferability provision and based on guidance provided in SAB 107 for instruments issued with such a provision, ContraVir used the full contractual term as the expected term of the warrants. The risk free rate is based on the U.S. Treasury security rates for maturities consistent with the expected remaining term of the warrants. | ||||||||||||||
ContraVir Fair Value Measurements | ||||||||||||||
The following table presents the Company’s liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of June 30, 2014. There are no such derivative liabilities as of December 31, 2014. | ||||||||||||||
Description | Balance as of | Quoted Prices | Significant | Significant | ||||||||||
June 30. 2014 | in Active | Other | Unobservable | |||||||||||
Markets for | Observable | Inputs | ||||||||||||
Identical | Inputs | (Level 3) | ||||||||||||
Assets and | (Level 2) | |||||||||||||
Liabilities | ||||||||||||||
(Level 1) | ||||||||||||||
Derivative liabilities related to Warrants | $ | 4,475,345 | $ | — | $ | — | $ | (4,475,345 | ) | |||||
The unrealized gains or losses on the derivative liabilities are recorded as a change in fair value of derivative liabilities-warrants in the Company’s statement of operations. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, the Company reviews the assets and liabilities that are subject to ASC Topic 815-40. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments which trade infrequently and therefore have little or no price transparency are classified as Level 3. | ||||||||||||||
Series A and Series B Convertible Preferred Stock | ||||||||||||||
On October 14, 2014, the Company’s Board of Directors authorized the sale and issuance of up to 1,250,000 shares of Series A Convertible Preferred Stock (the “Series A”). Also on October 14, 2014, the Company closed a private offering of the Series A and issued 900,000 shares of Series A preferred shares at a stated value of $10.00 per share, generating gross proceeds of approximately $9,000,000. The Company has also granted the purchaser of the Series A the option to purchase up to an additional 350,000 shares of Series A prior to February 28, 2015. The purchaser elected to purchase an additional 50,000 and 30,000 shares on December 23, 2014 and February 10, 2015 generating, an additional gross proceeds of $500,000 and $300,000, respectively. | ||||||||||||||
On December 15, 2014, the Company’s Board of Directors authorized the issuance of 120,000 shares of Series B Convertible Preferred Stock (the “Series B”) in connection with the Company’s exclusive license agreement with Chimerix, Inc., entered into December 17, 2014. (See License Agreement footnote 9). The stated and estimated value of these shares was $10.00 per share based on calculating the value of the series B on a converted-basis less the discount received on the conversion price compared to the stock price on date of issuance. | ||||||||||||||
There are no stated dividends, redemption features or registration rights associated with the Series A and B. The Series A and B have voting rights on an as converted basis. Each share of the Series A and B is convertible at the option of the holder into the number of shares of common stock determined by dividing the stated value of such share by the conversion price that is subject to adjustment. The Series A conversion price is currently $0.48 and the Series B conversion price is currently $1.12, based on 70% of the five day average common share price preceding the date of settlement. If the Company sells common stock or equivalents at an effective price per share that is lower than the conversion price, the Preferred holders conversion price may be reduced to the lower conversion price. This subsequent adjustment provision does not require the conversion option to be bifurcated as the features of the preferred instrument and the conversion option are equity-like, but rather a beneficial conversion feature exists. The preferred stock is automatically convertible into common stock in the event of a fundamental transaction to the Company. Based on these facts, the Series A and B are classified as permanent equity. | ||||||||||||||
Beneficial Conversion Feature- Series A and Series B Preferred Stock | ||||||||||||||
Each share of Series A is convertible into shares of common stock, at any time at the option of the holder at a conversion price of $0.48 per share. On October 14, 2014 and December 23, 2014, the date of issuances of the Series A, the publicly traded common stock prices were $0.65 and $2.09 per share, respectively. Each share of Series B are convertible into shares of common stock at any time at the option of the holder at a conversion price of $1.12 per share, On December 17, 2014, the date of the Series B agreement, the publicly traded common stock price was $1.79 per share. | ||||||||||||||
Based on the guidance in ASC 470-20-20, the Company determined that a beneficial conversion feature exists, as the effective conversion price for the Series A and Series B preferred shares at issuance was less than the fair value of the common stock into which the preferred shares are convertible. A beneficial conversion feature based on the intrinsic value of the date of issuances for the Series A and Series B shares was $4.8 million and the preferred stock was further discounted by this amount. The beneficial conversion amount of $4.8 million was then accreted back to the preferred stock as a dividend charged to accumulated deficit as the preferred stock was 100% convertible immediately. | ||||||||||||||
Accounting_for_SharedBased_Pay
Accounting for Shared-Based Payments | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accounting for Shared-Based Payments | ||||||||||||||
Accounting for Shared-Based Payments | 5. Accounting for Shared-Based Payments | |||||||||||||
ASC Topic 718 “Compensation—Stock Compensation” requires companies to measure the cost of employee services received in exchange for the award of equity instruments based on the estimated fair value of the award at the date of grant. The expense is to be recognized over the period during which an employee is required to provide services in exchange for the award. | ||||||||||||||
ContraVir accounts for stock options issued to non-employees based on the fair value of the stock option, if that value is more reliably measurable than the fair value of the consideration or services received. The Company accounts for stock options issued and vesting to non-employees in accordance with ASC Topic 505-50 “Equity -Based Payment to Non-Employees” and accordingly the value of the stock compensation to non-employees is based upon the measurement date as determined at either a) the date at which a performance commitment is reached, or b) at the date at which the necessary performance to earn the equity instruments is complete. Accordingly the fair value of these options is being “marked to market” quarterly until the measurement date is determined. | ||||||||||||||
ASC Topic 718 requires that cash flows resulting from tax deductions in excess of the cumulative compensation cost recognized for options exercised (excess tax benefits) be classified as cash inflows from financing activities and cash outflows from operating activities. Due to ContraVir’s accumulated deficit position, no excess tax benefits have been recognized. ContraVir accounts for stock options granted to employees and non-employees based on the fair market value of the instrument, using the Black-Scholes option pricing model based on assumptions for expected stock price volatility, term of the option, risk-free interest rate and expected dividend yield, at the grant date. | ||||||||||||||
On June 3, 2013, ContraVir adopted the 2013 Equity Incentive Plan (the “Plan”). Stock options granted under the Plan typically will vest after three years of continuous service from the grant date and will have a contractual term of ten years. ContraVir has reserved 6,500,000 shares of common stock issuable pursuant to the Plan. As of September 30, 2014 the Company had issued 841,270 options over the authorized number of options in the Plan. As per ASC Topic 815-40, the options were accounted for as liabilities and recorded at fair value with the changes in fair value being recorded in the Company’s statement of operations. Stockholder and Board approval was obtained on October 11, 2014, to increase the number of authorized shares. Immediately prior to approval, the liability was revalued, and an additional expense was recorded. Upon approval, the cumulative liability of $119,167 was reversed into additional paid in capital. | ||||||||||||||
ContraVir recorded the following stock based compensation expense for the periods shown: | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2013 | ||||||||||||
(Unaudited) | (Unaudited) | 2014 | (Unaudited) | |||||||||||
General and administrative | $ | 269,912 | $ | 71 | $ | 361,916 | $ | 71 | ||||||
Research and development | 129,148 | 781 | 149,156 | 781 | ||||||||||
Total stock based compensation expense | $ | 399,060 | $ | 852 | $ | 511,072 | $ | 852 | ||||||
A summary of stock option activity and of changes in stock options outstanding under the Plan is presented below: | ||||||||||||||
Number of | Exercise Price | Weighted Average | Intrinsic | Weighted Average | ||||||||||
Options | Per Share | Exercise Price | Value | Remaining | ||||||||||
Per Share | Contractual Term | |||||||||||||
Balance outstanding, July 1, 2014 | 2,341,270 | $0.11- $2.37 | $ | 1.61 | $ | 633,200 | 2.95 years | |||||||
Granted | 1,327,308 | $1.50 – 2.20 | $ | 1.53 | $ | 913,662 | — | |||||||
Exercised | — | — | — | — | — | |||||||||
Forfeited | 40,000 | $0.11 – 2.35 | $ | 1.30 | — | — | ||||||||
Balance outstanding, December 31, 2014 | 3,628,578 | $0.11 – 2.37 | $ | 1.59 | $ | 2,429,502 | 2.65 years | |||||||
Exercisable at December 31, 2014 | 294,665 | $0.11 – 0.37 | $ | 0.31 | $ | 561,943 | ||||||||
There were 1,327,308 options granted during the six months ended December 31, 2014. As of December 31, 2014, the unrecognized compensation cost related to authorized non-vested stock options outstanding, net of expected forfeitures, was approximately $4.0 million to be recognized over a weighted-average remaining vesting period of approximately 2.65 years. | ||||||||||||||
The following weighted-average assumptions were used in the Black-Scholes valuation model to estimate fair value of stock option awards during the periods indicated. | ||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Stock price | $1.50 – 2.20 | $ | ||||||||||||
0.11 | ||||||||||||||
Risk-free interest rate | 1.81% - 2.29% | 2.40 | % | |||||||||||
Dividend yield | — | — | ||||||||||||
Expected volatility | 88 | % | 90 | % | ||||||||||
Expected term (in years) | 6 – 10 years | 6 years | ||||||||||||
Weighted average grant date fair value | $ | $ | ||||||||||||
2.17 | 0.08 | |||||||||||||
Stock Price—Effective February 27, 2014, the grant date stock price as of the closing market price of the Company’s common stock is used based on the date of grant. Prior to that date, there was no public market for the stock. Management believed that the best alternative indication of stock value is what Synergy paid for the FV-100 Product, in an arms-length transaction, to BMS on August 17, 2012, or $1,000,000. Thus $1,000,000 divided by the 9,000,000 shares then outstanding resulted in a stock price of $0.11 per share. | ||||||||||||||
Risk-free interest rate—Based on the daily yield curve rates for U.S. Treasury obligations with maturities which correspond to the expected term of the Company’s stock options. | ||||||||||||||
Dividend yield—ContraVir has not paid any dividends on common stock since its inception and does not anticipate paying dividends on its common stock in the foreseeable future. | ||||||||||||||
Expected volatility—Because ContraVir has a limited trading history in its common stock, the Company based expected volatility on that of comparable public development stage biotechnology companies. | ||||||||||||||
Expected term—ContraVir has had no stock options exercised since inception. The expected option term represents the period that stock-based awards are expected to be outstanding based on the simplified method provided in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment , (“SAB No. 107”), which averages an award’s weighted-average vesting period and expected term for “plain vanilla” share options. Under SAB No. 107, options are considered to be “plain vanilla” if they have the following basic characteristics: (i) granted “at-the-money”; (ii) exercisability is conditioned upon service through the vesting date; (iii) termination of service prior to vesting results in forfeiture; (iv) limited exercise period following termination of service; and (v) options are non-transferable and non-hedgeable. | ||||||||||||||
In December 2007, the SEC issued SAB No. 110, Share-Based Payment, (“SAB No. 110”). SAB No. 110 was effective January 1, 2008 and expresses the views of the Staff of the SEC with respect to extending the use of the simplified method, as discussed in SAB No. 107, in developing an estimate of the expected term of “plain vanilla” share options in accordance with ASC Topic 718. The Company will use the simplified method until it has the historical data necessary to provide a reasonable estimate of expected life in accordance with SAB No. 107, as amended by SAB No. 110. For the expected term, the Company has “plain-vanilla” stock options, and therefore used a simple average of the vesting period and the contractual term for options granted as permitted by SAB No. 107. | ||||||||||||||
Forfeitures—ASC Topic 718 requires forfeitures to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. ContraVir estimated future unvested option forfeitures based on the historical experience of its former parent. | ||||||||||||||
Income_Taxes
Income Taxes | 6 Months Ended |
Dec. 31, 2014 | |
Income Taxes | |
Income Taxes | 6. Income Taxes |
ContraVir records a valuation allowance against deferred tax assets to the extent that it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Due to the substantial doubt related to ContraVir’s ability to continue as a going concern and utilize its deferred tax assets, a valuation allowance for the full amount of the deferred tax assets has been established at December 31, 2014 and June 30, 2014. As a result of this valuation allowance there are no income tax benefits reflected in the accompanying statements of operations to offset pre-tax losses. | |
ContraVir has no uncertain tax positions subject to examination by the relevant tax authorities as of December 31, 2014 and June 30, 2014 because no tax returns have yet been filed. ContraVir will file U.S. and state income tax returns in jurisdictions with varying statutes of limitations. | |
Due_to_Synergy
Due to Synergy | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Due to Synergy | ||||||||
Due to Synergy | 7. Due to Synergy | |||||||
On July 8, 2013, ContraVir entered into a Shared Services Agreement, as amended and restated August 5, 2013, with Synergy, effective May 16, 2013. Under the Shared Services Agreement, Synergy provided and/or made available to the Company various administrative, financial, accounting, insurance, office, information technology and other services to be provided by, or on behalf of, Synergy, together with such other services as reasonably requested by the Company. In consideration for such services, the Company paid fees to Synergy for the services provided, and those fees will generally be in amounts intended to allow the party providing services to recover all of its direct and indirect costs incurred in providing those services. The personnel performing services under the Shared Services Agreement are employees and/or independent contractors of Synergy and were not under our direction or control. These personnel costs were based upon the actual percentages of time spent by Synergy personnel performing services for the Company under the Shared Services Agreement. ContraVir reimburses Synergy for direct out-of-pocket costs incurred by Synergy for third party services provided to the Company. Effective April 1, 2014, ContraVir terminated the Shared Services Agreement with Synergy. As of December 31, 2014, there were no remaining payments due under the Shared Services Agreement with Synergy. | ||||||||
As of December 31, 2014 and June 30, 2014, the balances due to Synergy on shared services and allocated expenses are comprised of the following amounts: | ||||||||
December 31, 2014 | June 30, 2014 | |||||||
Temporary labor | — | 1,454 | ||||||
Rent, utilities, and property taxes | — | 5,474 | ||||||
Total Shared Services | $ | — | $ | 6,928 | ||||
Loss_per_Share
Loss per Share | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Loss per Share | ||||||||||||||
Loss per Share | 8. Loss per Share | |||||||||||||
Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC Topic 260”) for all periods presented. In accordance with ASC Topic 260, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. In addition, the net loss attributable to common stockholders’ is adjusted for the preferred stock deemed dividends related to the beneficial conversion feature on this instrument for the periods in which the preferred stock is outstanding. The following table sets forth the computation of basic and diluted net loss per share for the periods indicated: | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, 2014 | December 31, | December 31, | ||||||||||||
2013 | 2013 | |||||||||||||
(Unaudited) | (Unaudited) | December 31, 2014 | (Unaudited) | |||||||||||
Numerator: | ||||||||||||||
Net loss | $ | (3,104,445 | ) | $ | (168,155 | ) | $ | (4,574,850 | ) | $ | (350,217 | ) | ||
Preferred stock deemed dividend | (4,844,643 | ) | — | (4,844,643 | ) | — | ||||||||
Net loss attributable to common stockholders | $ | (7,949,088 | ) | $ | (168,155 | ) | $ | (9,419,493 | ) | $ | (350,217 | ) | ||
Denominator: | ||||||||||||||
Weighted average common shares outstanding | 22,273,397 | 9,000,000 | 21,242,387 | 9,000,000 | ||||||||||
Net loss per share of common stock—basic and diluted | $ | (0.36 | ) | $ | (0.02 | ) | $ | (0.44 | ) | $ | (0.04 | ) | ||
The following outstanding securities at December 31, 2014 and 2013 have been excluded from the computation of diluted weighted shares outstanding, as they would have been anti-dilutive: | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2013 | ||||||||||||
(Unaudited) | (Unaudited) | 2014 | (Unaudited) | |||||||||||
Common shares issuable upon conversion of Series A preferred stock | 19,791,667 | — | 19,791,667 | — | ||||||||||
Common shares issuable upon conversion of Series B preferred stock | 1,071,429 | — | 1,071,429 | — | ||||||||||
Stock options | 3,628,578 | 204,000 | 3,628,578 | 204,000 | ||||||||||
Total | 24,491,674 | 204,000 | 24,491,674 | 204,000 | ||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 6 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | |||||
Commitments and Contingencies | 9. Commitments and Contingencies | ||||
License Agreement with Chimerix, Inc. | |||||
On December 17, 2014, the Company entered into an exclusive license agreement with Chimerix, Inc. (“Chimerix”) pursuant to which the Company has licensed CMX157 from Chimerix for further clinical development and commercialization. CMX157 is a highly potent analog of the antiviral drug tenofovir DF (Viread®). Under the terms of the agreement, ContraVir licensed CMX157 from Chimerix in exchange for an upfront payment consisting of 120,000 shares of ContraVir Series B Convertible Preferred Stock. In addition, Chimerix is eligible to receive up to approximately $20 million in clinical, regulatory and initial commercial milestone payments in the United States and Europe, as well as royalties and additional milestone payments based on commercial sales in those territories. Either party may terminate the License Agreement upon the occurrence of a material breach by the other party (subject to standard cure periods), or upon certain events involving the bankruptcy or insolvency of the other party. The Company may also terminate the License Agreement without cause on a country by country basis upon sixty days’ prior written notice to Chimerix. | |||||
The fair value of the Series B shares exchanged for the license was determined to be $10 a share (See Note 4) or $1.2 million. The cost of the license was classified as a research and development expense in the amount of $1.2 million as the compound is early stage, has not yet reached technological feasibility and has no alternative use. | |||||
Contractual Obligations | |||||
In August 2014, we entered into a new lease for new corporate office space in Edison, New Jersey. The following table summarizes annual rentals for each of the following fiscal years ended June 30: | |||||
2015 | $ | 62,017 | |||
2016 | 125,993 | ||||
2017 | 128,132 | ||||
2018 | 130,270 | ||||
2019 | 132,409 | ||||
Thereafter | 11,049 | ||||
Total | 589,870 | ||||
We do not have any other material contractual obligations. | |||||
Subsequent_events
Subsequent events | 6 Months Ended |
Dec. 31, 2014 | |
Subsequent events. | |
Subsequent events | 10. Subsequent events |
Employment Agreements | |
On January 13, 2015, the Company entered into an executive agreement with John Sullivan-Bolyai, M.D., MPH, effective January 19, 2015, under which he will serve as Chief Medical Officer of the Company. Pursuant to the terms of his new employment agreement, Dr. Sullivan-Bolyai will receive an annual salary of $320,000. He also received 135,000 options with an exercise price of $2.45 which vest over three years. He is eligible to receive a cash bonus of up to 25% of his base salary upon achievement of performance milestones. If Dr. Sullivan-Bolyai’s employment is terminated without cause or for good reason (as defined in his employment agreement), he will be entitled to receive a severance payment equal to base salary for nine months from date of termination in addition to any earned but unpaid salary and bonus. | |
Preferred Share Issuance | |
On February 10, 2015, the purchaser of the Series A elected to purchase an additional 30,000 available shares, in accordance with their option to purchase additional shares, generating gross proceeds of $300,000, under the same terms and conditions noted in Note 4. As described in Note 4, a beneficial conversion feature is present at the date of the agreement, as the Company’s common share price on that date was $4.50, as compared to the $0.48 conversion price of the Series A. The Company will recognize a charge to additional paid-in capital and retained earnings of $300,000 related to the Series A, related to this contingent beneficial conversion feature at the time of issuance. | |
Basis_of_Presentation_and_Goin1
Basis of Presentation and Going Concern (Policies) | 6 Months Ended | |||
Dec. 31, 2014 | ||||
Basis of Presentation and Going Concern | ||||
Basis of Presentation | The audited financial statements as of and for the six months ended December 31, 2014 have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and United States generally accepted accounting principles (“GAAP”). In the opinion of management, the accompanying unaudited financial statements for the three months ended December 31, 2014 and the three and six months ended December 31, 2013 include all adjustments, which include only normal recurring adjustments, necessary to present fairly ContraVir’s financial information. | |||
The unaudited financial statements have been prepared following the requirements of the Securities and Exchange Commission (“SEC”) and United States generally accepted accounting principles (“GAAP”) for interim reporting. In the opinion of management, the accompanying unaudited financial statements include all adjustments, which include only normal recurring adjustments, necessary to present fairly ContraVir’s interim financial information. | ||||
Going Concern | Going Concern | |||
As of December 31, 2014, ContraVir had $8.8 million in cash. Net cash used in operating activities was $2.4 million for the six months ended December 31, 2014. Net loss for the six months ended December 31, 2014 was $4.6 million. As of December 31, 2014, ContraVir had working capital of $8.5 million. The Company expects to incur losses for the next several years as it expands its research, development and clinical trials of FV-100. The Company is unable to predict the extent of any future losses or when the Company will become profitable, if at all. | ||||
The financial statements as of December 31, 2014 and June 30, 2014 have been prepared under the assumption that the Company will continue as a going concern. Due to the Company’s recurring and expected continuing losses from operations, the Company has concluded there is substantial doubt in the Company’s ability to continue as a going concern without additional capital becoming available to attain further operating efficiencies and, ultimately, to generate revenue. Our financial statements do not include any adjustments that might result from the outcome of this uncertainty. | ||||
The Company will be required to raise additional capital to continue the development and commercialization of current product candidates and to continue to fund operations at the current cash expenditure levels. The Company cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company raises additional funds by issuing equity securities, its stockholders may experience significant dilution. Any debt financing, if available, may involve restrictive covenants that impact our ability to conduct business. If the Company is unable to raise additional capital when required or an acceptable terms, the Company may have to (i) significantly delay, scale back or discontinue the development and/or commercialization of one or more product candidates; (ii) seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; or (iii) relinquish or otherwise dispose of rights to technologies, product candidates or products that we would otherwise seek to develop or commercialize its self on unfavorable terms. | ||||
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 expenses during the reporting period. Changes in estimates and assumptions are reflected in reported results in the period in which they become known. Actual results could differ from those estimates. | ||||
Cash | Cash | |||
As of December 31, 2014 and June 30, 2014, the amount of cash was approximately $8.8 million and $1.8 million, respectively, consisting of checking accounts held at U.S. commercial banks. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced losses related to these balances. | ||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | |||
ASC Topic 820, Fair Value Measurement (ASC 820), establishes a fair value hierarchy for instruments measured at fair value that distinguishes between assumptions based on market data (observable inputs) and the Company’s own assumptions (unobservable inputs). Observable inputs are inputs that market participants would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing the asset or liability, and are developed based on the best information available in the circumstances. | ||||
ASC 820 identifies fair value as the exchange price, or exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a three-tier fair value hierarchy that distinguishes among the following: | ||||
· | Level 1—Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. | |||
· | Level 2—Valuations based on 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 and models for which all significant inputs are observable, either directly or indirectly. | |||
· | Level 3—Valuations based on inputs that are unobservable and significant to the overall fair value measurement. | |||
To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. | ||||
Financial instruments consist of cash, accounts payable and derivative instruments. These financial instruments are stated at their respective historical carrying amounts, which approximate fair value due to their short term nature, except for derivative instruments, which were marked to market at the end of each reporting period. See Note 4 for additional information. | ||||
Warrants | Warrants | |||
The Company has issued common stock warrants in connection with the execution of certain equity financings. The fair value of certain warrants, deemed to be derivative instruments, was recorded as a derivative liability under the provisions of FASB ASC 815 Derivatives and Hedging (“ASC 815”) upon issuance. Subsequently the liability was adjusted to fair value as of each reporting period and the changes in fair value of derivative liabilities was recorded in the consolidated statement of operations under the caption “Change in fair value of derivative liabilities.” | ||||
The fair value of warrants deemed to be derivative instruments was determined using Binomial option-pricing model using varying assumptions regarding volatility of our common share price, remaining life of the warrant, and risk-free interest rates at each period end. The Company thus used model-derived valuations where significant value drivers were unobservable to third parties to determine the fair value and accordingly classify such warrants in Level 3 per ASC 820. At June 30, 2014, the fair value of such warrants was $4,475,345 which was classified as a long term derivative liability on our balance sheets. As of December 31, 2014, these warrants were exchanged for common stock of the Company. (See Note 4). | ||||
Property, equipment and depreciation | Property, equipment and depreciation | |||
As of December 31, 2014 and June 30, 2014, ContraVir had $62,092 and $14,526 respectively, of property and equipment, consisting primarily of computer equipment. Expenditures for additions, renewals and improvements are capitalized at cost. Depreciation is computed on a straight-line method based on the estimated useful lives of the related assets. The estimated useful lives of the depreciable assets are 2 to 5 years. Leasehold improvements are amortized using the straight-line method over their estimated useful lives, or the remaining term of the lease, which-ever is shorter. Expenditures for repairs and maintenance are charged to operations as incurred. ContraVir will periodically evaluate whether current events or circumstances indicate that the carrying value of its depreciable assets may not be recoverable. There were no adjustment to the carrying value of property and equipment at December 31, 2014, and June 30, 2014. | ||||
Income Taxes | Income Taxes | |||
ContraVir has not filed any Federal tax returns as of yet due to being newly formed in May 2013. The amount of any tax liability that could arise since inception is undetermined at this time, however, the Company believes that because it has sustained losses since inception, the amount of any tax liability, if any, that could arise would be immaterial to the ContraVir’s financial statements. Any interest or penalties would be recorded in its statement of operations within other income (expense). ContraVir recorded a valuation allowance against any deferred tax assets upon the filing of its tax returns to the extent that it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. As a result there are no income tax benefits reflected in the consolidated statements of operations to offset pre-tax losses. | ||||
Contingencies | Contingencies | |||
In the normal course of business, ContraVir is subject to loss contingencies, such as legal proceedings and claims arising out of its business, that cover a wide range of matters, including, among others, government investigations, shareholder lawsuits, product and environmental liability, and tax matters. In accordance with FASB ASC Topic 450, Accounting for Contingencies, (“ASC 450”), ContraVir records accruals for such loss contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. ContraVir, in accordance with this guidance, does not recognize gain contingencies until realized. | ||||
Research and Development | Research and Development | |||
Research and development costs, which include expenditures in connection with an in-house research and development laboratory, salaries and staff costs, application and filing for regulatory approval of proposed products, purchased in-process research and development, license costs, regulatory and scientific consulting fees, as well as contract research, insurance and FDA consultants, are accounted for in accordance with ASC Topic 730-10-55-2, Research and Development, (“ASC 730”). Also, as prescribed by this guidance, patent filing and maintenance expenses are considered legal in nature and therefore classified as general and administrative expense, if any. | ||||
ContraVir does not currently have any commercial biopharmaceutical products, and does not expect to have such for several years if at all. Accordingly our research and development costs are expensed as incurred. While certain of our research and development costs may have future benefits, our policy of expensing all research and development expenditures is predicated on the fact that ContraVir has no history of successful commercialization of product candidates to base any estimate of the number of future periods that would be benefited. | ||||
Also as prescribed by ASC 730, Research and Development non-refundable advance payments for goods or services that will be used or rendered for future research and development activities should be deferred and capitalized. As the related goods are delivered or the services are performed, or when the goods or services are no longer expected to be provided, the deferred amounts would be recognized as an expense. ContraVir had no recorded prepaid research and development costs as of December 31, 2014 and June 30, 2014. | ||||
Loss Per Share | Loss Per Share | |||
Basic and diluted net loss per share is presented in conformity with ASC Topic 260, Earnings per Share, (“ASC Topic 260”) for all periods presented. In accordance with this guide, basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. Due to the net losses incurred, all stock equivalents were anti-dilutive, thus, basic and dilutive net loss per share are the same. | ||||
Stockholders_Equity_and_Deriva1
Stockholder's Equity and Derivative Liability (Tables) | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Stockholder's Equity (Deficit) and Derivative Liability | ||||||||||||||
Schedule of changes in derivative financial instruments liability balance | ||||||||||||||
Date | Description | Warrants | Derivative | |||||||||||
Instrument | ||||||||||||||
Liability | ||||||||||||||
7/1/14 | Balance of derivative financial instruments liability | 4,742,648 | $ | 4,475,345 | ||||||||||
Change in fair value of warrants immediately prior to conversion, recognized as change in fair value of derivative instruments-warrants in the statement of operations | — | 387,898 | ||||||||||||
Amounts reclassified to additional paid-in capital | 4,742,648 | (4,863,243 | ) | |||||||||||
12/31/14 | Balance of derivative financial instruments liability | — | $ | — | ||||||||||
Schedule of range of assumptions used to determine fair value of warrants | ||||||||||||||
August 20, 2014 | ||||||||||||||
Estimated fair value of ContraVir common stock | $ | |||||||||||||
1.20 | ||||||||||||||
Expected warrant term (years) | 5.46 years | |||||||||||||
Risk-free interest rate | 1.75 | % | ||||||||||||
Expected volatility | 88 | % | ||||||||||||
Dividend yield | — | |||||||||||||
Schedule of fair value of liabilities recognized at fair value on recurring basis | ||||||||||||||
Description | Balance as of | Quoted Prices | Significant | Significant | ||||||||||
June 30. 2014 | in Active | Other | Unobservable | |||||||||||
Markets for | Observable | Inputs | ||||||||||||
Identical | Inputs | (Level 3) | ||||||||||||
Assets and | (Level 2) | |||||||||||||
Liabilities | ||||||||||||||
(Level 1) | ||||||||||||||
Derivative liabilities related to Warrants | $ | 4,475,345 | $ | — | $ | — | $ | (4,475,345 | ) | |||||
Accounting_for_SharedBased_Pay1
Accounting for Shared-Based Payments (Tables) | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Accounting for Shared-Based Payments | ||||||||||||||
Schedule of stock based compensation expense | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2013 | ||||||||||||
(Unaudited) | (Unaudited) | 2014 | (Unaudited) | |||||||||||
General and administrative | $ | 269,912 | $ | 71 | $ | 361,916 | $ | 71 | ||||||
Research and development | 129,148 | 781 | 149,156 | 781 | ||||||||||
Total stock based compensation expense | $ | 399,060 | $ | 852 | $ | 511,072 | $ | 852 | ||||||
Summary of stock option activity and of changes in stock options outstanding under the Plan | ||||||||||||||
Number of | Exercise Price | Weighted Average | Intrinsic | Weighted Average | ||||||||||
Options | Per Share | Exercise Price | Value | Remaining | ||||||||||
Per Share | Contractual Term | |||||||||||||
Balance outstanding, July 1, 2014 | 2,341,270 | $0.11- $2.37 | $ | 1.61 | $ | 633,200 | 2.95 years | |||||||
Granted | 1,327,308 | $1.50 – 2.20 | $ | 1.53 | $ | 913,662 | — | |||||||
Exercised | — | — | — | — | — | |||||||||
Forfeited | 40,000 | $0.11 – 2.35 | $ | 1.30 | — | — | ||||||||
Balance outstanding, December 31, 2014 | 3,628,578 | $0.11 – 2.37 | $ | 1.59 | $ | 2,429,502 | 2.65 years | |||||||
Exercisable at December 31, 2014 | 294,665 | $0.11 – 0.37 | $ | 0.31 | $ | 561,943 | ||||||||
Schedule of weighted-average assumptions used to estimate fair value of stock option awards | ||||||||||||||
Six Months Ended | Six Months Ended | |||||||||||||
December 31, 2014 | December 31, 2013 | |||||||||||||
Stock price | $1.50 – 2.20 | $ | ||||||||||||
0.11 | ||||||||||||||
Risk-free interest rate | 1.81% - 2.29% | 2.40 | % | |||||||||||
Dividend yield | — | — | ||||||||||||
Expected volatility | 88 | % | 90 | % | ||||||||||
Expected term (in years) | 6 – 10 years | 6 years | ||||||||||||
Weighted average grant date fair value | $ | $ | ||||||||||||
2.17 | 0.08 | |||||||||||||
Due_to_Synergy_Tables
Due to Synergy (Tables) | 6 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Due to Synergy | ||||||||
Schedule of balances due to Synergy on shared services and allocated expenses | ||||||||
December 31, 2014 | June 30, 2014 | |||||||
Temporary labor | — | 1,454 | ||||||
Rent, utilities, and property taxes | — | 5,474 | ||||||
Total Shared Services | $ | — | $ | 6,928 | ||||
Loss_per_Share_Tables
Loss per Share (Tables) | 6 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Loss per Share | ||||||||||||||
Schedule of computation of basic and diluted net loss per share | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, 2014 | December 31, | December 31, | ||||||||||||
2013 | 2013 | |||||||||||||
(Unaudited) | (Unaudited) | December 31, 2014 | (Unaudited) | |||||||||||
Numerator: | ||||||||||||||
Net loss | $ | (3,104,445 | ) | $ | (168,155 | ) | $ | (4,574,850 | ) | $ | (350,217 | ) | ||
Preferred stock deemed dividend | (4,844,643 | ) | — | (4,844,643 | ) | — | ||||||||
Net loss attributable to common stockholders | $ | (7,949,088 | ) | $ | (168,155 | ) | $ | (9,419,493 | ) | $ | (350,217 | ) | ||
Denominator: | ||||||||||||||
Weighted average common shares outstanding | 22,273,397 | 9,000,000 | 21,242,387 | 9,000,000 | ||||||||||
Net loss per share of common stock—basic and diluted | $ | (0.36 | ) | $ | (0.02 | ) | $ | (0.44 | ) | $ | (0.04 | ) | ||
Schedule of outstanding securities excluded from the computation of diluted weighted shares outstanding | ||||||||||||||
Three months ended | Six months ended | |||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||
2014 | 2013 | 2013 | ||||||||||||
(Unaudited) | (Unaudited) | 2014 | (Unaudited) | |||||||||||
Common shares issuable upon conversion of Series A preferred stock | 19,791,667 | — | 19,791,667 | — | ||||||||||
Common shares issuable upon conversion of Series B preferred stock | 1,071,429 | — | 1,071,429 | — | ||||||||||
Stock options | 3,628,578 | 204,000 | 3,628,578 | 204,000 | ||||||||||
Total | 24,491,674 | 204,000 | 24,491,674 | 204,000 | ||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 6 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | |||||
Schedule of annual rentals for corporate office space | The following table summarizes annual rentals for each of the following fiscal years ended June 30: | ||||
2015 | $ | 62,017 | |||
2016 | 125,993 | ||||
2017 | 128,132 | ||||
2018 | 130,270 | ||||
2019 | 132,409 | ||||
Thereafter | 11,049 | ||||
Total | 589,870 | ||||
Business_Overview_Details
Business Overview (Details) (USD $) | 6 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 4 Months Ended | 0 Months Ended | ||||||
Dec. 31, 2014 | Oct. 14, 2014 | Dec. 31, 2014 | Dec. 18, 2014 | Dec. 31, 2014 | Feb. 10, 2015 | Dec. 23, 2014 | Feb. 10, 2015 | Dec. 17, 2014 | Feb. 18, 2014 | Jan. 28, 2014 | Dec. 15, 2014 | |
Convertible Preferred Share Issuances | ||||||||||||
Gross proceeds from sale of stock | $9,500,000 | |||||||||||
Estimated fair value recorded as research and development expense | 1,200,000 | |||||||||||
Series A convertible preferred stock | ||||||||||||
Convertible Preferred Share Issuances | ||||||||||||
Shares authorized | 1,250,000 | |||||||||||
Convertible preferred stock, stated value (in dollars per share) | $10 | $10 | $10 | $10 | $10 | $10 | $10 | |||||
Additional number of shares available for purchase by the underwriters | 350,000 | |||||||||||
Conversion price (in dollars per share) | $0.48 | $0.48 | ||||||||||
Series B convertible preferred stock | ||||||||||||
Convertible Preferred Share Issuances | ||||||||||||
Shares authorized | 120,000 | |||||||||||
Convertible preferred stock, stated value (in dollars per share) | 10 | $10 | ||||||||||
Conversion price (in dollars per share) | $1.12 | $1.12 | ||||||||||
Preferred Stock | Series A convertible preferred stock | ||||||||||||
Convertible Preferred Share Issuances | ||||||||||||
Shares issued (in shares) | 950,000 | 900,000 | 30,000 | 50,000 | 980,000 | |||||||
Gross proceeds from sale of stock | 9,000,000 | 300,000 | 500,000 | 9,800,000 | ||||||||
Preferred Stock | Series B convertible preferred stock | ||||||||||||
Convertible Preferred Share Issuances | ||||||||||||
Issuance of shares (in shares) | 120,000 | 120,000 | ||||||||||
Synergy | ||||||||||||
Separation from Synergy Pharmaceuticals Inc. | ||||||||||||
Number of shares approved for distribution by Synergy's board of directors for distribution to its stockholders | 9,000,000 | |||||||||||
Number of shares approved for distribution to Synergy's shareholders for each share of common stock held | $0.10 | |||||||||||
Number of shares distributed to Synergy's shareholders for each share of common stock held | 0.0986 |
Basis_of_Presentation_and_Goin2
Basis of Presentation and Going Concern (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2014 | Jun. 30, 2013 | |
Going Concern | ||||||
Cash | $8,791,543 | $3,275 | $8,791,543 | $3,275 | $1,817,757 | $86,716 |
Net cash used in operating activities | 2,472,031 | 333,441 | ||||
Net Income (Loss) Attributable to Parent | -3,104,445 | -168,155 | -4,574,850 | -350,217 | ||
Working capital | 8,500,000 | 8,500,000 | ||||
Cash | ||||||
Cash | $8,791,543 | $3,275 | $8,791,543 | $3,275 | $1,817,757 | $86,716 |
Basis_of_Presentation_and_Goin3
Basis of Presentation and Going Concern (Details 2) (USD $) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Jun. 30, 2014 | |
Warrants | ||
Derivative Liability, Noncurrent | $4,475,345 | |
Property, equipment and depreciation | ||
Property and equipment, consisting primarily of computer equipment | 62,092 | 14,526 |
Income Taxes | ||
Income tax benefits | 0 | 0 |
Research and Development | ||
Prepaid research and development costs | $0 | $0 |
Minimum | ||
Property, equipment and depreciation | ||
Estimated useful life | 2 years | |
Maximum | ||
Property, equipment and depreciation | ||
Estimated useful life | 5 years |
Stockholders_Equity_and_Deriva2
Stockholder's Equity and Derivative Liability (Details) (USD $) | 0 Months Ended | |
Feb. 04, 2014 | Jun. 30, 2014 | |
Stockholders' Deficit | ||
Derivative liabilities related to Warrants | $4,475,345 | |
Derivative Instrument Liability | Warrants | ||
Stockholders' Deficit | ||
Derivative liabilities related to Warrants | 4,475,345 | |
February 4, 2014 Securities Purchase Agreement | ||
Stockholders' Deficit | ||
Gross proceeds from sale of units in a private placement | 3,225,000 | |
Expenses related to private placement | 15,000 | |
Number of units sold (in shares) | 9,485,294 | |
Number of shares included in each unit | 1 | |
Number of warrants included in each unit (in shares) | 1 | |
Number of shares called by warrant | 0.5 | |
Purchase price (in dollars per unit) | 0.34 | |
Expiration term of warrant | 6 years | |
Exercise price of warrants (in dollars per share) | $0.37 | |
February 4, 2014 Securities Purchase Agreement | Derivative Instrument Liability | Warrants | ||
Stockholders' Deficit | ||
Derivative liabilities related to Warrants | $879,557 |
Stockholders_Equity_and_Deriva3
Stockholder's Equity and Derivative Liability (Details 2) (USD $) | 6 Months Ended | 0 Months Ended | |||||
Dec. 31, 2014 | Aug. 20, 2014 | Feb. 10, 2015 | Dec. 23, 2014 | Dec. 17, 2014 | Oct. 14, 2014 | Dec. 31, 2013 | |
Derivative financial instruments liability | |||||||
Fair Value Restricted Stock | 4,552,924 | ||||||
Share Price | 1.2 | $4.50 | $2.09 | $1.79 | $0.65 | $0.11 | |
Components of changes in derivative financial instruments liability | |||||||
Balance at the beginning of the period | 4,475,345 | ||||||
Change in fair value of warrants immediately prior to conversion, recognized as change in fair value of derivative instruments-warrants in the statement of operations | 387,898 | ||||||
Common Stock | |||||||
Derivative financial instruments liability | |||||||
Restricted common shares issued in exchange of warrants (in shares) | 3,794,118 | 3,794,118 | |||||
Derivative Instrument Liability | Warrants | |||||||
Derivative financial instruments liability | |||||||
Share Price | 1.2 | ||||||
Components of changes in derivative financial instruments liability | |||||||
Balance at the beginning of the period (in shares) | 4,742,648 | ||||||
Balance at the beginning of the period | 4,475,345 | ||||||
Change in fair value of warrants immediately prior to conversion, recognized as change in fair value of derivative instruments-warrants in the statement of operations | 387,898 | 387,898 | |||||
Amounts reclassified to additional paid-in capital (in shares) | 4,742,648 | ||||||
Amounts reclassified to additional paid-in capital | ($4,863,243) | -4,863,243 |
Stockholders_Equity_and_Deriva4
Stockholder's Equity and Derivative Liability (Details 3) (USD $) | 0 Months Ended | |||||
Aug. 20, 2014 | Feb. 10, 2015 | Dec. 23, 2014 | Dec. 17, 2014 | Oct. 14, 2014 | Dec. 31, 2013 | |
Range of assumptions used to determine the fair value of the warrants | ||||||
Estimated fair value of ContraVir common stock (in dollars per share) | $1.20 | $4.50 | $2.09 | $1.79 | $0.65 | $0.11 |
Derivative Instrument Liability | Warrants | ||||||
Range of assumptions used to determine the fair value of the warrants | ||||||
Estimated fair value of ContraVir common stock (in dollars per share) | $1.20 | |||||
Expected warrant term (years) | 5 years 5 months 16 days | |||||
Risk-free interest rate (as a percent) | 1.75% | |||||
Expected volatility (as a percent) | 88.00% |
Stockholders_Equity_and_Deriva5
Stockholder's Equity and Derivative Liability (Details 4) (USD $) | Jun. 30, 2014 |
Derivative Financial Instruments | |
Derivative liabilities related to Warrants | $4,475,345 |
Derivative Instrument Liability | Warrants | |
Derivative Financial Instruments | |
Derivative liabilities related to Warrants | 4,475,345 |
Recurring basis | Significant Unobservable Inputs (Level3) | Derivative Instrument Liability | Warrants | |
Derivative Financial Instruments | |
Derivative liabilities related to Warrants | 4,475,345 |
Recurring basis | Total Fair Value | Derivative Instrument Liability | Warrants | |
Derivative Financial Instruments | |
Derivative liabilities related to Warrants | $4,475,345 |
Stockholders_Equity_and_Deriva6
Stockholder's Equity and Derivative Liability (Details 5) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 4 Months Ended | |||||||
Dec. 31, 2014 | Dec. 31, 2014 | Oct. 14, 2014 | Dec. 31, 2014 | Dec. 18, 2014 | Dec. 31, 2014 | Feb. 10, 2015 | Dec. 23, 2014 | Feb. 10, 2015 | Dec. 17, 2014 | Aug. 20, 2014 | Dec. 31, 2013 | Dec. 15, 2014 | |
Series A and Series B Convertible Preferred Stock | |||||||||||||
Gross proceeds from sale of stock | $9,500,000 | ||||||||||||
Stock price (in dollars per share) | $0.65 | $4.50 | $2.09 | $4.50 | $1.79 | $1.20 | $0.11 | ||||||
Charge to retained earnings related to beneficial conversion feature | 4,844,643 | 4,844,643 | |||||||||||
Series A convertible preferred stock | |||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||
Shares authorized | 1,250,000 | ||||||||||||
Convertible preferred stock, stated value (in dollars per share) | $10 | $10 | $10 | $10 | $10 | $10 | $10 | $10 | |||||
Additional number of shares available for purchase by the underwriters | 350,000 | ||||||||||||
Conversion price (in dollars per share) | $0.48 | $0.48 | |||||||||||
Percentage of five day average common share price used as basis for conversion price | 70.00% | ||||||||||||
Series B convertible preferred stock | |||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||
Shares authorized | 120,000 | ||||||||||||
Convertible preferred stock, stated value (in dollars per share) | $10 | $10 | |||||||||||
Conversion price (in dollars per share) | $1.12 | $1.12 | |||||||||||
Percentage of five day average common share price used as basis for conversion price | 70.00% | ||||||||||||
Preferred Stock | Series A convertible preferred stock | |||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||
Shares issued (in shares) | 950,000 | 900,000 | 30,000 | 50,000 | 980,000 | ||||||||
Gross proceeds from sale of stock | 9,000,000 | 300,000 | 500,000 | 9,800,000 | |||||||||
Additional Paid in Capital | |||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||
Charge to retained earnings related to beneficial conversion feature | -4,844,643 | ||||||||||||
Additional Paid in Capital | Series A and Series B preferred stock | |||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||
Charge to additional paid-in capital related to beneficial conversion feature | 4,800,000 | ||||||||||||
Accumulated Deficit | |||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||
Charge to retained earnings related to beneficial conversion feature | 4,844,643 | ||||||||||||
Accumulated Deficit | Series A and Series B preferred stock | |||||||||||||
Series A and Series B Convertible Preferred Stock | |||||||||||||
Charge to retained earnings related to beneficial conversion feature | $4,800,000 |
Accounting_for_SharedBased_Pay2
Accounting for Shared-Based Payments (Details) (USD $) | 0 Months Ended | 3 Months Ended | 6 Months Ended | 10 Months Ended | 12 Months Ended | |||
Oct. 11, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Jun. 30, 2014 | Sep. 30, 2014 | |
Accounting for Shared-Based Payments | ||||||||
Excess tax benefits recognized (in dollars) | $0 | |||||||
Number of shares of common stock reserved for issuance, pursuant to the Plan | 6,500,000 | 6,500,000 | 6,500,000 | |||||
Number of options issued over authorized options (in shares) | 841,270 | |||||||
Reversal of liability into additional paid in capital | 119,167 | |||||||
Stock based compensation expense | ||||||||
Total stock based compensation expense (in dollars) | 399,060 | 852 | 511,072 | 852 | ||||
General and administrative | ||||||||
Stock based compensation expense | ||||||||
Total stock based compensation expense (in dollars) | 269,912 | 71 | 361,916 | 71 | ||||
Research and development | ||||||||
Stock based compensation expense | ||||||||
Total stock based compensation expense (in dollars) | 129,148 | 781 | 149,156 | 781 | ||||
Stock options | ||||||||
Accounting for Shared-Based Payments | ||||||||
Vesting period for stock options granted under the Plan | 3 years | |||||||
Contractual term of stock options | 10 years | |||||||
Number of Options | ||||||||
Balance outstanding at the beginning of the period (in shares) | 2,341,270 | |||||||
Granted (in shares) | 1,327,308 | |||||||
Exercised (in shares) | 0 | |||||||
Forfeited (in shares) | 40,000 | |||||||
Balance outstanding at the end of the period (in shares) | 3,628,578 | 3,628,578 | 3,628,578 | 2,341,270 | ||||
Exercisable at the end of the period | 294,665 | 294,665 | 294,665 | |||||
Weighted Average Exercise Price Per Share | ||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $1.61 | |||||||
Granted (in dollars per share) | $1.53 | |||||||
Forfeited (in dollars per share) | $1.30 | |||||||
Balance outstanding at the end of the period (in dollars per share) | $1.59 | $1.59 | $1.59 | $1.61 | ||||
Exercisable at the end of the period | $0.31 | $0.31 | $0.31 | |||||
Intrinsic Value | ||||||||
Balance outstanding at the beginning of the period (in dollars) | 633,200 | |||||||
Granted (in dollars) | 913,662 | |||||||
Balance outstanding at the end of the period (in dollars) | 2,429,502 | 2,429,502 | 2,429,502 | 633,200 | ||||
Exercisable at the end of the period | 561,943 | 561,943 | 561,943 | |||||
Weighted Average Remaining Contractual Term (in years) | ||||||||
Balance outstanding at the beginning of the period | 2 years 7 months 24 days | 2 years 11 months 12 days | ||||||
Balance outstanding at the end of the period | 2 years 7 months 24 days | 2 years 11 months 12 days | ||||||
Unrecognized compensation cost related to non-vested stock options outstanding | ||||||||
Unrecognized compensation cost related to non-vested stock (in dollars) | $4,000,000 | $4,000,000 | $4,000,000 | |||||
Weighted average remaining vesting period over which unrecognized compensation is expected to be recognized | 2 years 7 months 24 days | |||||||
Stock options | Minimum | ||||||||
Exercise Price Per Share | ||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $0.11 | $0.11 | ||||||
Granted (in dollars per share) | $1.50 | |||||||
Forfeited (in dollars per share) | $0.11 | |||||||
Balance outstanding at the end of the period (in dollars per share) | $0.11 | $0.11 | ||||||
Exercisable at the end of the period | $0.11 | $0.11 | $0.11 | |||||
Stock options | Maximum | ||||||||
Exercise Price Per Share | ||||||||
Balance outstanding at the beginning of the period (in dollars per share) | $2.37 | $2.37 | ||||||
Granted (in dollars per share) | $2.20 | |||||||
Forfeited (in dollars per share) | $2.35 | |||||||
Balance outstanding at the end of the period (in dollars per share) | $2.37 | $2.37 | ||||||
Exercisable at the end of the period | $0.37 | $0.37 | $0.37 |
Accounting_for_SharedBased_Pay3
Accounting for Shared-Based Payments (Details 2) (USD $) | 0 Months Ended | 6 Months Ended | 10 Months Ended | |||||||
Aug. 17, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Feb. 10, 2015 | Dec. 23, 2014 | Dec. 17, 2014 | Oct. 14, 2014 | Aug. 20, 2014 | Jun. 30, 2014 | |
Weighted-average assumptions to determine fair value of stock option awards | ||||||||||
Stock price (in dollars per share) | $0.11 | $4.50 | $2.09 | $1.79 | $0.65 | $1.20 | ||||
Shares outstanding (in shares) | 22,273,397 | 9,000,000 | 22,273,397 | 18,479,279 | ||||||
Synergy | ||||||||||
Weighted-average assumptions to determine fair value of stock option awards | ||||||||||
Amount Synergy paid for FV-100 Product (in dollars) | $1,000,000 | |||||||||
Stock options | ||||||||||
Weighted-average assumptions to determine fair value of stock option awards | ||||||||||
Stock price (in dollars per share) | $0.11 | |||||||||
Risk-free interest rate (as a percent) | 2.40% | |||||||||
Expected volatility (as a percent) | 88.00% | 90.00% | ||||||||
Expected term (in years) | 6 years | |||||||||
Weighted average grant date fair value (in dollars per share) | $2.17 | $0.08 | ||||||||
Stock options exercised (in shares) | 0 | |||||||||
Stock options | Minimum | ||||||||||
Weighted-average assumptions to determine fair value of stock option awards | ||||||||||
Stock price (in dollars per share) | $1.50 | 1.5 | ||||||||
Risk-free interest rate (as a percent) | 1.81% | |||||||||
Expected term (in years) | 6 years | |||||||||
Stock options | Maximum | ||||||||||
Weighted-average assumptions to determine fair value of stock option awards | ||||||||||
Stock price (in dollars per share) | $2.20 | 2.2 | ||||||||
Risk-free interest rate (as a percent) | 2.29% | |||||||||
Expected term (in years) | 10 years |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 6 Months Ended | 12 Months Ended |
Dec. 31, 2014 | Jun. 30, 2014 | |
Income Taxes | ||
Income tax benefits | $0 | $0 |
Amount of uncertain tax positions | $0 | $0 |
Due_to_Synergy_Details
Due to Synergy (Details) (USD $) | Jun. 30, 2014 |
Due to Synergy | |
Total Shared Services | $6,928 |
Synergy | |
Due to Synergy | |
Total Shared Services | 6,928 |
Synergy | Temporary labor | |
Due to Synergy | |
Total Shared Services | 1,454 |
Synergy | Rent, utilities, and property taxes | |
Due to Synergy | |
Total Shared Services | $5,474 |
Loss_per_Share_Details
Loss per Share (Details) (USD $) | 3 Months Ended | 6 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | |
Numerator | ||||
Net loss | ($3,104,445) | ($168,155) | ($4,574,850) | ($350,217) |
Preferred stock deemed dividend | -4,844,643 | -4,844,643 | ||
Net loss attributable to common stockholders | ($7,949,088) | ($168,155) | ($9,419,493) | ($350,217) |
Denominator | ||||
Weighted average common shares outstanding (in shares) | 22,273,397 | 9,000,000 | 21,242,387 | 9,000,000 |
Net loss per share of common stock-basic and diluted (in dollars per share) | ($0.36) | ($0.02) | ($0.44) | ($0.04) |
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 24,491,674 | 204,000 | 24,491,674 | 204,000 |
Series A convertible preferred stock | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 19,791,667 | 19,791,667 | ||
Series B convertible preferred stock | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 1,071,429 | 1,071,429 | ||
Stock options | ||||
Securities excluded from the computation of diluted weighted shares outstanding | ||||
Anti-dilutive securities (in shares) | 3,628,578 | 204,000 | 3,628,578 | 204,000 |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 6 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Dec. 17, 2014 | Feb. 10, 2015 | Dec. 23, 2014 | Oct. 14, 2014 | Dec. 15, 2014 | |
License Agreement | ||||||
Cost of license as research and development expense | $1,200,000 | |||||
Series A convertible preferred stock | ||||||
License Agreement | ||||||
Convertible preferred stock, stated value (in dollars per share) | $10 | $10 | $10 | $10 | ||
Stated value of preferred stock issued | 9,500,000 | |||||
Series B convertible preferred stock | ||||||
License Agreement | ||||||
Convertible preferred stock, stated value (in dollars per share) | $10 | $10 | ||||
Stated value of preferred stock issued | 1,200,000 | |||||
License Agreement | Chimerix, Inc. | ||||||
License Agreement | ||||||
Upfront payment (in shares) | 120,000 | |||||
Maximum payments to be made for clinical, regulatory and initial commercial milestones | 20,000,000 | |||||
Minimum prior written notice period in order to terminate agreement | 60 days | |||||
Cost of license as research and development expense | 1,200,000 | |||||
License Agreement | Chimerix, Inc. | Series B convertible preferred stock | ||||||
License Agreement | ||||||
Stated value of preferred stock issued | $1,200,000 |
Commitments_and_Contingencies_2
Commitments and Contingencies (Details 2) (USD $) | Dec. 31, 2014 |
Commitments and Contingencies | |
2015 | $62,017 |
2016 | 125,993 |
2017 | 128,132 |
2018 | 130,270 |
2019 | 132,409 |
Thereafter | 11,049 |
Total | $589,870 |
Subsequent_events_Details
Subsequent events (Details) (USD $) | 3 Months Ended | 6 Months Ended | 0 Months Ended | 3 Months Ended | 0 Months Ended | 4 Months Ended | 0 Months Ended | ||||
Dec. 31, 2014 | Dec. 31, 2014 | Oct. 14, 2014 | Dec. 31, 2014 | Feb. 10, 2015 | Dec. 23, 2014 | Feb. 10, 2015 | Jan. 19, 2015 | Dec. 17, 2014 | Aug. 20, 2014 | Dec. 31, 2013 | |
Preferred Share Issuance | |||||||||||
Issuance of shares | $9,500,000 | ||||||||||
Share Price | $0.65 | 4.5 | 2.09 | 4.5 | $1.79 | $1.20 | $0.11 | ||||
Charge to retained earnings related to beneficial conversion feature | 4,844,643 | 4,844,643 | |||||||||
Series A convertible preferred stock | |||||||||||
Preferred Share Issuance | |||||||||||
Conversion price (in dollars per share) | $0.48 | $0.48 | |||||||||
Preferred Stock | Series A convertible preferred stock | |||||||||||
Preferred Share Issuance | |||||||||||
Shares issued (in shares) | 950,000 | 900,000 | 30,000 | 50,000 | 980,000 | ||||||
Issuance of shares | 9,500,000 | ||||||||||
Additional Paid in Capital | |||||||||||
Preferred Share Issuance | |||||||||||
Charge to retained earnings related to beneficial conversion feature | -4,844,643 | ||||||||||
Accumulated Deficit | |||||||||||
Preferred Share Issuance | |||||||||||
Charge to retained earnings related to beneficial conversion feature | 4,844,643 | ||||||||||
Stock options | |||||||||||
Employment Agreements | |||||||||||
Granted (in shares) | 1,327,308 | ||||||||||
Vesting period | 3 years | ||||||||||
Preferred Share Issuance | |||||||||||
Share Price | $0.11 | ||||||||||
Subsequent event | Preferred Stock | Series A convertible preferred stock | |||||||||||
Preferred Share Issuance | |||||||||||
Shares issued (in shares) | 30,000 | ||||||||||
Issuance of shares | 300,000 | ||||||||||
Subsequent event | Additional Paid in Capital | Series A convertible preferred stock | |||||||||||
Preferred Share Issuance | |||||||||||
Charge to additional paid-in capital related to beneficial conversion feature | 300,000 | ||||||||||
Subsequent event | Accumulated Deficit | Series A convertible preferred stock | |||||||||||
Preferred Share Issuance | |||||||||||
Charge to retained earnings related to beneficial conversion feature | 300,000 | ||||||||||
Subsequent event | Chief Medical Officer | Stock options | |||||||||||
Employment Agreements | |||||||||||
Granted (in shares) | 135,000 | ||||||||||
Exercise price (in dollars per share) | $2.45 | ||||||||||
Vesting period | 3 years | ||||||||||
Subsequent event | Employment Agreement | Chief Medical Officer | |||||||||||
Employment Agreements | |||||||||||
Annual salary under terms of agreement | $320,000 | ||||||||||
Maximum bonus as a percentage of base salary | 25.00% | ||||||||||
Period employee entitled to receiving severance payment from date of termination under terms of agreement | 9 months |