Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 15, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | Jaguar Animal Health, Inc. | |
Entity Central Index Key | 1,585,608 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 14,440,608 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
CONDENSED BALANCE SHEETS
CONDENSED BALANCE SHEETS - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 1,205,061 | $ 950,979 |
Restricted cash | 21,192 | 511,293 |
Accounts receivable | 4,963 | |
Other receivable | 288,166 | |
Due from former parent | 221,422 | 299,648 |
Inventory | 392,640 | 412,754 |
Deferred offering costs | 65,078 | 72,710 |
Prepaid expenses | 387,912 | 302,694 |
Total current assets | 2,581,471 | 2,555,041 |
Property and equipment, net | 870,914 | 885,945 |
Other assets | 122,163 | 122,163 |
Total assets | 3,574,548 | 3,563,149 |
Current liabilities: | ||
Accounts payable | 1,465,494 | 517,000 |
Deferred collaboration revenue | 2,088,989 | |
Deferred product revenue | 208,258 | 224,454 |
Convertible notes payable | 150,000 | 150,000 |
Accrued expenses | 1,266,347 | 582,522 |
Warrant liability | 1,252,620 | 799,201 |
Current portion of long-term debt | 1,994,015 | 1,919,675 |
Total current liabilities | 8,425,723 | 4,192,852 |
Long-term debt, net of discount | 1,332,703 | 1,817,526 |
Deferred rent | 7,114 | 6,956 |
Total liabilities | 9,765,540 | 6,017,334 |
Commitments and Contingencies (See Note 6) | ||
Stockholders' Deficit: | ||
Preferred stock: $0.0001 par value, 10,000,000 shares authorized at March 31, 2017 and December 31, 2016; no shares issued and outstanding at March 31, 2017 and December 31, 2016. | ||
Common stock: $0.0001 par value, 50,000,000 shares authorized at March 31, 2017 and December 31, 2016; 14,424,128 and 14,007,132 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively. | 1,443 | 1,401 |
Additional paid-in capital | 38,959,031 | 37,980,522 |
Accumulated deficit | (45,151,466) | (40,436,108) |
Total stockholders' deficit | (6,190,992) | (2,454,185) |
Total liabilities, convertible preferred stock and stockholders' deficit | $ 3,574,548 | $ 3,563,149 |
CONDENSED BALANCE SHEETS (Paren
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
CONDENSED BALANCE SHEETS | ||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 14,424,128 | 14,007,132 |
Common stock, shares outstanding | 14,424,128 | 14,007,132 |
CONDENSED STATEMENTS OF OPERATI
CONDENSED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue | ||
Product revenue | $ 74,544 | $ 38,146 |
Collaboration revenue | 747,866 | |
Total revenue | 822,410 | 38,146 |
Operating Expenses | ||
Cost of product revenue | 16,145 | 18,368 |
Research and development expense | 1,255,452 | 1,751,741 |
Sales and marketing expense | 122,912 | 164,413 |
General and administrative expense | 3,303,503 | 1,788,385 |
Total operating expenses | 4,698,012 | 3,722,907 |
Loss from operations | (3,875,602) | (3,684,761) |
Interest expense | (180,072) | (284,236) |
Other income/(expense) | 1,448 | (15,207) |
Change in fair value of warrants | (453,419) | |
Loss on extinguishment of debt | (207,713) | |
Net loss and comprehensive loss | $ (4,715,358) | $ (3,984,204) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.33) | $ (0.43) |
Weighted-average common shares outstanding, basic and diluted (in shares) | 14,157,351 | 9,307,354 |
CONDENSED STATEMENT OF CHANGES
CONDENSED STATEMENT OF CHANGES IN COMMON STOCK, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) | Secondary public offeringCommon Stock | Secondary public offeringAdditional paid-in capital | Secondary public offering | Private Investment in Public Entities June 2016Common Stock | Private Investment in Public Entities June 2016Additional paid-in capital | Private Investment in Public Entities June 2016 | Private Investment in Public EntitiesCommon Stock | Private Investment in Public EntitiesAdditional paid-in capital | Private Investment in Public Entities | Private Investment in Public Entities October 2016Common Stock | Private Investment in Public Entities October 2016Additional paid-in capital | Private Investment in Public Entities October 2016 | Private Investment in Public Entities November 2016Common Stock | Private Investment in Public Entities November 2016Additional paid-in capital | Private Investment in Public Entities November 2016 | Common Stock | Additional paid-in capital | Accumulated deficit | Total |
Balance at Dec. 31, 2015 | $ 812 | $ 30,100,613 | $ (25,702,328) | $ 4,399,097 | |||||||||||||||
Balance (in shares) at Dec. 31, 2015 | 8,124,923 | ||||||||||||||||||
Increase (decrease) in Stockholders' Equity (Deficit) | |||||||||||||||||||
Issuance of common stock in a secondary public offering, net of discounts and commissions of $373,011 and offering costs of $496,887 February 2016 | $ 200 | $ 4,129,902 | $ 4,130,102 | ||||||||||||||||
Issuance of common stock in a secondary public offering ,net of discounts and commissions of $373,011 and offering costs of $496,887 February 2016 (in shares) | 2,000,000 | ||||||||||||||||||
Issuance of common stock in a private investment in public entities offering, net of offering costs of $105,398 and $7,632. | $ 203 | $ 2,571,099 | $ 2,571,302 | ||||||||||||||||
Issuance of common stock in a private investment in public entities offering, net of offering costs of $105,398 and $7,632.(in shares) | 2,027,490 | ||||||||||||||||||
Issuance of common stock in a private investment in public entities offering October 2016 | $ 17 | $ 149,983 | $ 150,000 | ||||||||||||||||
Issuance of common stock in a private investment in public entities offering October 2016 (in shares) | 170,455 | ||||||||||||||||||
Issuance of common stock and equity warrants in a private investment in public entities offering, net of warrant liability of $700,001 and net of offering costs of $96,833 November 2016 | $ 167 | $ 203,000 | $ 203,167 | ||||||||||||||||
Shares issued (in shares) | 1,666,668 | ||||||||||||||||||
Stock-based compensation | 717,927 | 717,927 | |||||||||||||||||
Warrants, issued in conjunction with debt extinguishment | 108,000 | 108,000 | |||||||||||||||||
Issuance of common stock in exchange for vested restricted stock units | $ 2 | (2) | |||||||||||||||||
Issuance of common stock in exchange for vested restricted stock units (in shares) | 17,596 | ||||||||||||||||||
Net and comprehensive loss | (14,733,780) | (14,733,780) | |||||||||||||||||
Balance at Dec. 31, 2016 | $ 1,401 | 37,980,522 | (40,436,108) | (2,454,185) | |||||||||||||||
Balance (in shares) at Dec. 31, 2016 | 14,007,132 | ||||||||||||||||||
Increase (decrease) in Stockholders' Equity (Deficit) | |||||||||||||||||||
Issuance of common stock in a private investment in public entities offering, net of offering costs of $105,398 and $7,632. | $ 42 | $ 542,760 | $ 542,802 | ||||||||||||||||
Issuance of common stock in a private investment in public entities offering, net of offering costs of $105,398 and $7,632.(in shares) | 416,996 | ||||||||||||||||||
Stock-based compensation | 228,036 | 228,036 | |||||||||||||||||
Warrants, issued in conjunction with debt extinguishment | 207,713 | 207,713 | |||||||||||||||||
Net and comprehensive loss | (4,715,358) | (4,715,358) | |||||||||||||||||
Balance at Mar. 31, 2017 | $ 1,443 | $ 38,959,031 | $ (45,151,466) | $ (6,190,992) | |||||||||||||||
Balance (in shares) at Mar. 31, 2017 | 14,424,128 |
CONDENSED STATEMENT OF CHANGES6
CONDENSED STATEMENT OF CHANGES IN COMMON STOCK, CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (Parenthetical) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Stock Transactions, Parenthetical Disclosures | ||
Warrant liability | $ 1,252,620 | $ 799,201 |
Common Stock | Secondary public offering | ||
Stock Transactions, Parenthetical Disclosures | ||
Underwriting discounts and commissions | 373,011 | |
Offering costs | 496,887 | |
Common Stock | Private Investment in Public Entities | ||
Stock Transactions, Parenthetical Disclosures | ||
Offering costs | $ 7,632 | |
Common Stock | Private Investment in Public Entities June 2016 | ||
Stock Transactions, Parenthetical Disclosures | ||
Offering costs | 105,398 | |
Common Stock | Private Investment in Public Entities November 2016 | ||
Stock Transactions, Parenthetical Disclosures | ||
Offering costs | 96,833 | |
Warrant liability | $ 700,001 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash Flows from Operating Activities | ||
Net loss | $ (4,715,358) | $ (3,984,204) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation expense | 15,031 | 7,878 |
Loss on extinguishment of debt | 207,713 | |
Stock-based compensation | 228,036 | 103,542 |
Amortization of debt issuance costs and debt discount | 96,772 | 131,123 |
Change in fair value of warrants | 453,419 | |
Changes in assets and liabilities | ||
Accounts receivable - trade | 4,963 | 43,071 |
Other receivable | (288,166) | |
Inventory | 20,114 | (39,760) |
Prepaid expenses | (85,218) | (301,660) |
Deferred offering costs | 7,632 | |
Due from parent | 78,226 | 653 |
Deferred collaboration revenue | 2,088,989 | |
Deferred product revenue | (16,196) | 27,129 |
Deferred rent | 158 | 1,660 |
License fee payable | (425,000) | |
Accounts payable | 931,340 | 101,629 |
Accrued expenses | 683,825 | (193,919) |
Total cash used in operations | (288,720) | (4,527,858) |
Cash Flows from Investing Activities | ||
Purchase of equipment | (85,723) | |
Change in restricted cash | 490,101 | 178,740 |
Total cash provided by investing activities | 490,101 | 93,017 |
Cash Flows from Financing Activities | ||
Repayment of long-term debt | (490,101) | (178,740) |
Proceeds from issuance of common stock in follow-on secondary public offering | 5,000,000 | |
Total Cash Provided by Financing Activities | 52,701 | 3,951,362 |
Net increase (decrease) in cash and cash equivalents | 254,082 | (483,479) |
Cash and cash equivalents, beginning of period | 950,979 | 7,697,531 |
Cash and cash equivalents, end of period | 1,205,061 | 7,214,052 |
Secondary public offering | ||
Cash Flows from Financing Activities | ||
Deferred offering costs | $ (869,898) | |
Private Investment in Public Entities | ||
Cash Flows from Financing Activities | ||
Deferred offering costs | (7,632) | |
Proceeds from issuance of common stock in a private investment in public entities | $ 550,434 |
Organization and Business
Organization and Business | 3 Months Ended |
Mar. 31, 2017 | |
Organization and Business | |
Organization and Business | 1. Organization and Business Jaguar Animal Health, Inc. (“Jaguar” or the “Company”) was incorporated on June 6, 2013 (inception) in Delaware. The Company was a majority-owned subsidiary of Napo Pharmaceuticals, Inc. (“Napo” or the “Former Parent”) until the close of the Company’s initial public offering on May 18, 2015. The Company was formed to develop and commercialize first-in-class gastrointestinal products for companion and production animals and horses. The Company’s first commercial product, Neonorm Calf, was launched in 2014 and Neonorm Foal was launched in the first quarter of 2016. In September of 2016, the Company began selling the Croton lechleri botanical extract (the “botanical extract”) to an exclusive distributor for use in pigs in China. The Company’s activities are subject to significant risks and uncertainties, including failing to secure additional funding in order to timely compete the development and commercialization of products. The Company operates in one segment and is headquartered in San Francisco, California. On June 11, 2013, Jaguar issued 2,666,666 shares of common stock to Napo in exchange for cash and services. On July 1, 2013, Jaguar entered into an employee leasing and overhead agreement (the “Service Agreement”) with Napo, under which Napo agreed to provide the Company with the services of certain Napo employees for research and development and the general administrative functions of the Company. On January 27, 2014, Jaguar executed an intellectual property license agreement with Napo pursuant to which Napo transferred fixed assets and development materials, and licensed intellectual property and technology to Jaguar. On February 28, 2014, the Service Agreement terminated and the associated employees became employees of Jaguar effective March 1, 2014. See Note 9 for additional information regarding the capital contributions and Note 4 for the Service Agreement and license agreement details. Effective July 1, 2016, Napo agreed to reimburse the Company for the use of the Company’s employee’s time and related expenses, including rent and a fixed overhead amount to cover office supplies and copier use (Note 4). On October 6, 2016, Jaguar signed a non-binding letter of intent (“LOI”) with Napo potentially to merge the two companies. On February 8, 2017, the Company announced that it had entered into a binding agreement of terms (the “Agreement”) to merge with Napo. On March 31, 2017, Jaguar entered a definitive merger agreement with Napo. The transaction was approved by the unanimous vote of independent and disinterested members of each of Jaguar’s and Napo’s Board of Directors. Napo will operate as a wholly-owned subsidiary of Jaguar, focused on human health. The binding financial terms of the merger include a 3-to-1 Napo-to-Jaguar value ratio to calculate the relative ownership of the combined entity. As of January 31, 2017, Napo owned approximately 19% of Jaguar’s outstanding shares of common stock. The Agreement sets forth the financial terms of the merger and customary conditions to closing, which include but are not limited to completion of due diligence, receipt of a fairness opinion, and stockholder and other approvals. Additionally, the financial terms of the merger and conditions to closing include provisions that (i) Napo’s secured convertible debt shall not exceed $11.3 million and its unsecured debt shall not exceed $6.2 million, and (ii) a third party will invest $3.0 million in the Company for approximately four million shares of newly issued common stock of the Company with the investment proceeds loaned to Napo immediately prior to the consummation of the merger. The merger agreement provides that if the merger fails to close for any reason on or prior to July 31, 2017, other than as a result directly or indirectly of (x) lack of stockholder approval by either party or (y) Napo (i) failing to perform in accordance with the terms and conditions of the Agreement or the merger documents or (ii) failing to abide by or breaching the provisions or representations, warranties and covenants of the Agreement or the merger documents, then, on or before the close of business on August 7, 2017, the Company will be required to issue 2,000,000 shares of its restricted common stock to Napo. On April 18, 2017, the Company filed the preliminary registration statement Form S-4 with the Securities and Exchange Commission for the acquisition of Napo through a merger. Liquidity The accompanying financial statements have been prepared assuming the Company will continue as a going concern. The Company has incurred recurring operating losses since inception and has an accumulated deficit of $45,151,466 as of March 31, 2017. The Company expects to incur substantial losses in future periods. Further, the Company’s future operations are dependent on the success of the Company’s ongoing development and commercialization efforts, as well as the securing of additional financing. There is no assurance that profitable operations, if ever achieved, could be sustained on a continuing basis. The Company plans to finance its operations and capital funding needs through equity and/or debt financing, collaboration arrangements with other entities, as well as revenue from future product sales. However, there can be no assurance that additional funding will be available to the Company on acceptable terms on a timely basis, if at all, or that the Company will generate sufficient cash from operations to adequately fund operating needs or ultimately achieve profitability. If the Company is unable to obtain an adequate level of financing needed for the long-term development and commercialization of its products, the Company will need to curtail planned activities and reduce costs. Doing so will likely have an adverse effect on the Company’s ability to execute on its business plan. These matters raise substantial doubt about the ability of the Company to continue in existence as a going concern within one year after issuance date of the financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties. In June 2016, the Company entered into a common stock purchase agreement with a private investor (the “CSPA”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the investor is committed to purchase up to an aggregate of $15.0 million of the Company’s common stock over the approximately 30-month term of the agreement. As of March 31, 2017 the Company sold 2,444,486 shares for cash proceeds of $3,227,134. The CSPA limits the number of shares that the Company can sell thereunder to 2,027,490 shares, which equals 19.99% of the Company’s outstanding shares as of the date of the CSPA (such limit, the “19.99% exchange cap”), unless either (i) the Company obtains stockholder approval to issue more than such 19.99% exchange cap or (ii) the average price paid for all shares of the Company’s common stock issued under the CSPA is equal to or greater than $1.32 per share (the closing price on the date the CSPA was signed), in either case in compliance with Nasdaq Listing Rule 5635(d). The Company held its 2017 Annual Meeting on May 8, 2017. At the 2017 Annual Meeting, the Company’s stockholders voted on the approval, pursuant to Nasdaq Listing Rule 5635(d), of the issuance of an additional 3,555,514 shares of the Company’s common stock under the CSPA, which when combined with the 2,444,486 shares that the Company has already sold pursuant to the CSPA, equals an aggregate of 6,000,000 shares. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its financial statements and the accompanying notes. The accounting policies that reflect the Company’s more significant estimates and judgments and that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results are valuation of stock options; valuation of warrant liabilities; impairment of long lived assets; useful lives for depreciation; valuation adjustments for excess and obsolete inventory; deferred taxes and valuation allowances on deferred tax assets; evaluation and measurement of contingencies; and recognition of revenue — to capture the estimate driving the period over which Elanco revenue is being recognized. Those estimates could change, and as a result, actual results could differ materially from those estimates. Deferred Offering Costs Deferred offering costs are costs incurred in filings of registration statements with the Securities and Exchange Commission. These deferred offering costs are offset against proceeds received upon the closing of the offerings. Deferred costs of $65,078 and $72,710 as of March 31, 2017 and December 31, 2016, respectively, include legal, accounting and filing fees associated with the Company’s registration of unissued shares in the CSPA. Concentration of Credit Risk and Cash and Cash Equivalents Cash is the financial instrument that potentially subjects the Company to a concentration of credit risk as cash is deposited with a bank and cash balances are generally in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The carrying value of cash approximates fair value at March 31, 2017 and December 31, 2016. Fair Values The Company’s financial instruments include, cash and cash equivalents, accounts payable, accrued expenses, amounts due to Napo, the former parent, warrant liabilities, and debt. Cash is reported at fair value. The recorded carrying amount of accounts payable, accrued expenses and amounts due to Napo approximates their fair value due to their short-term nature. The carrying value of the interest-bearing debt approximates fair value based upon the borrowing rates currently available to the Company for bank loans with similar terms and maturities. See Note 3 for the fair value measurements, and Note 7 for the fair value of the Company’s warrant liabilities. Restricted Cash On August 18, 2015, the Company entered into a long-term loan and security agreement with a lender for up to $8.0 million, which provided for an initial loan commitment of $6.0 million. The loan agreement required the Company to maintain a base minimum cash balance of $4.5 million until the Company met certain milestones and/or when the Company begins making principal payments. On December 22, 2015, the Company achieved certain milestones and the base minimum cash balance was reduced to $3.0 million. Aggregate principal payments of $2,978,808 further reduced the restricted cash balance to $21,192 as of March 31, 2017. Restricted cash has been classified within current assets as restrictions were fully released on April 1, 2017. Inventories Inventories are stated at the lower of cost or market. The Company calculates inventory valuation adjustments when conditions indicate that market is less than cost due to physical deterioration, usage, obsolescence, reductions in estimated future demand or reduction in selling price. Inventory write-downs are measured as the difference between the cost of inventory and market. There have been no write-downs to date. Property and Equipment Equipment is stated at cost, less accumulated depreciation. Equipment begins to be depreciated when it is placed into service. Depreciation is calculated using the straight-line method over the estimated useful lives of 3 to 10 years. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their estimated useful lives. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in income (loss) from operations. Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment to determine whether indicators of impairment may exist that warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. Should an impairment exist, the impairment loss would be measured based on the excess of the carrying amount over the asset’s fair value. The Company has not recognized any impairment losses through March 31, 2017. Research and Development Expense Research and development expense consists of expenses incurred in performing research and development activities including related salaries, clinical trial and related drug and non-drug product costs, contract services and other outside service expenses. Research and development expense is charged to operating expense in the period incurred. Revenue Recognition Product Revenue Sales of Neonorm Calf and Foal to distributors are made under agreements that may provide distributor price adjustments and rights of return under certain circumstances. Until the Company develops sufficient sales history and pipeline visibility, revenue and costs of distributor sales will be deferred until products are sold by the distributor to the distributor’s customers. Revenue recognition depends on notification either directly from the distributor that product has been sold to the distributor’s customer, when the Company has access to the data. Deferred revenue on shipments to distributors reflect the estimated effects of distributor price adjustments, if any, and the estimated amount of gross margin expected to be realized when the distributor sells through product purchased from the Company. Company sales to distributors are invoiced and included in accounts receivable and deferred revenue upon shipment. Inventory is relieved and revenue recognized upon shipment by the distributor to their customer. The Company had Neonorm revenues of $44,544 and $38,146 for the three months ended March 31, 2017 and 2016. Sales of Botanical Extract are recognized as revenue when delivered to the customer. The Company had Botanical Extract revenues of $30,000 and $0 in the three months ended March 31, 2017 and 2016. Collaboration Revenue On January 27, 2017, the Company entered into a licensing, development, co-promotion and commercialization agreement with Elanco US Inc. (“Elanco”) to license, develop and commercialize Canalevia (“Licensed Product”), our drug product candidate under investigation for treatment of acute and chemotherapy-induced diarrhea in dogs, and other drug product formulations of crofelemer for treatment of gastrointestinal diseases, conditions and symptoms in cats and other companion animals. The Company grants Elanco exclusive global rights to Canalevia, a product whose active pharmaceutical ingredient is sustainably isolated and purified from the Croton lechleri tree, for use in companion animals. Pursuant to the Elanco Agreement, Elanco will have exclusive rights globally outside the U.S. and co-exclusive rights with the Company in the U.S. to direct all marketing, advertising, promotion, launch and sales activities related to the Licensed Products. Under the terms of the Elanco Agreement, the Company received an initial upfront payment of $2,548,689 and will receive additional payments upon achievement of certain development, regulatory and sales milestones in an aggregate amount of up to $61.0 million payable throughout the term of the Elanco Agreement, as well as product development expense reimbursement, and royalty payments on global sales. The Elanco Agreement specifies that the Company will supply the Licensed Products to Elanco, and that the parties will agree to set a minimum sales requirement that Elanco must meet to maintain exclusivity. Elanco will reimburse the Company for certain development and regulatory expenses related to our planned target animal safety study and the completion of the Canalevia field study for acute diarrhea in dogs. The Company has $288,166 of unreimbursed expenses as of March 31, 2017, which is included on the Company’s balance sheet. The Company included the $288,166 in collaboration revenue in the three months ended March 31, 2017 which is included in the Company’s statements of operations and comprehensive loss. The $2,548,689 total of the upfront payment is recognized as revenue ratably over the estimated development period of one year resulting in $459,700 in collaboration revenue in the three months ended March 31, 2017 and is included in the Company’s statements of operations and comprehensive loss. The difference of $2,088,989 is included in deferred collaboration revenue and the uncollected $288,166 of unreimbursed expenses is included in other receivables in on the Company’s balance sheet. The Company recognizes revenue in accordance with ASC 605 “Revenue Recognition”, subtopic ASC 605-25 “ Revenue with Multiple Element Arrangements “ and subtopic ASC 605-28 “ Revenue Recognition-Milestone Method “, which provides accounting guidance for revenue recognition for arrangements with multiple deliverables and guidance on defining the milestone and determining when the use of the milestone method of revenue recognition for research and development transactions is appropriate, respectively. For multiple-element arrangements, each deliverable within a multiple deliverable revenue arrangement is accounted for as a separate unit of accounting if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis and (2) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. If a deliverable in a multiple element arrangement is not deemed to have a stand-alone value, consideration received for such a deliverable is recognized ratably over the term of the arrangement or the estimated performance period, and it will be periodically reviewed based on the progress of the related product development plan. The effect of a change made to an estimated performance period and therefore revenue recognized ratably would occur on a prospective basis in the period that the change was made. The Company recognizes revenue under its licensing, development, co-promotion and commercialization agreement from milestone payments when: (i) the milestone event is substantive and its achievability has substantive uncertainty at the inception of the agreement, and (ii) it does not have ongoing performance obligations related to the achievement of the milestone earned. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (a) is commensurate with either the Company’s performance subsequent to the inception of the arrangement to achieve the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from the Company’s performance subsequent to the inception of the arrangement to achieve the milestone, (b) relates solely to past performance, and (c) is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. The Company records revenue related to the reimbursement of costs incurred under the collaboration agreement where the company acts as principal, controls the research and development activities and bears credit risk. Under the agreement, the Company is reimbursed for associated out-of-pocket costs and for certain employee costs. The gross amount of these pass-through costs is reported in revenue in the accompanying statements of operations and comprehensive loss, while the actual expense for which the Company is reimbursed are reflected as research and development costs. Determining whether and when some of these revenue recognition criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue the Company will report. Changes in assumptions or judgments or changes to the elements in an arrangement could cause a material increase or decrease in the amount of revenue that the Company reports in a particular period. Stock-Based Compensation The Company’s 2013 Equity Incentive Plan and 2014 Stock Incentive Plan (see Note 10) provides for the grant of stock options, restricted stock and restricted stock unit awards. The Company measures stock awards granted to employees and directors at fair value on the date of grant and recognizes the corresponding compensation expense of the awards, net of estimated forfeitures, over the requisite service periods, which correspond to the vesting periods of the awards. The Company issues stock awards with only service-based vesting conditions, and records compensation expense for these awards using the straight-line method. The Company uses the grant date fair market value of its common stock to value both employee and non-employee options when granted. The Company revalues non-employee options each reporting period using the fair market value of the Company’s common stock as of the last day of each reporting period. Classification of Securities The Company applies the principles of ASC 480-10 “Distinguishing Liabilities from Equity” and ASC 815-40 “Derivatives and Hedging—Contracts in Entity’s Own Equity” to determine whether financial instruments such as warrants should be classified as liabilities or equity and whether beneficial conversion features exist. Financial instruments such as warrants that are evaluated to be classified as liabilities are fair valued upon issuance and are remeasured at fair value at subsequent reporting periods with the resulting change in fair value recorded in other income/(expense). The fair value of warrants is estimated using the Black Scholes Merton model and requires the input of subjective assumptions including expected stock price volatility and expected life. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. Comprehensive Loss Comprehensive loss is defined as changes in stockholders’ equity (deficit) exclusive of transactions with owners (such as capital contributions and distributions). For the three months ended March 31, 2017 and 2016 there was no difference between net loss and comprehensive loss. Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company is an animal health company focused on developing and commercializing prescription and non-prescription products for companion and production animals. Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted-average number of common shares, including potential dilutive shares of common stock assuming the dilutive effect of potential dilutive securities. For periods in which the Company reports a net loss, diluted net loss per common share is the same as basic net loss per common share, because their impact would be anti-dilutive to the calculation of net loss per common share. Diluted net loss per common share is the same as basic net loss per common share for the three months ended March 31, 2017 and 2016. Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows: Restricted Cash, or ASU 2016-18, that will require entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances. ASU 2016-18 becomes effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. Any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The adoption of this standard is not expected to have an impact on the Company’s financial position or results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses the following cash flow issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years and are effective for all other entities for fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of ASU No. 2016-15 on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee stock-based payment transactions. The areas for simplification in ASU No. 2016-09 include the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Effective January 1, 2017, the Company adopted ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Among other requirements, the new guidance requires all tax effects related to share-based payments at settlement (or expiration) to be recorded through the income statement. Previously, tax benefits in excess of compensation cost (“windfalls”) were recorded in equity, and tax deficiencies (“shortfalls”) were recorded in equity to the extent of previous windfalls, and then to the income statement. Under the new guidance, the windfall tax benefit is to be recorded when it arises, subject to normal valuation allowance considerations. The adoption of this standard did not have any impact to the Statement of Operations or the Statement of Cash Flows for the three-month periods ended March 31, 2016 or 2017. As of December 31, 2016, the Company had no unrecognized deferred tax assets related to excess tax benefits, and as such, there was no cumulative-effect adjustment to the beginning accumulated deficit. Additionally, the treatment of forfeitures has not changed as the Company is electing to continue its current process of estimating the number of forfeitures. As such, this has no cumulative effect on accumulated deficit. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which replaces the current lease accounting standard. ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the new standard on its financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2017 and allows for prospective or retrospective application. The Company currently anticipates utilizing the full retrospective method of adoption allowed by the standard, in order to provide for comparative results in all periods presented, and plans to adopt the standard as of January 1, 2018. The Company is currently evaluating the new guidance, however it does not believe the impact will be significant. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements ASC 820 “Fair Value Measurements,” defines fair value, establishes a framework for measuring fair value under generally accepted accounting principles and enhances disclosures about fair value measurements. Fair value is defined under ASC 820 as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value under ASC 820 must maximize the use of observable inputs and minimize the use of unobservable inputs. The standard describes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following: · Level 1—Quoted prices in active markets for identical assets or liabilities; · Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data; and · Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. The following table presents information about the Company’s warrant liabilities that were measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 and indicates the fair value hierarchy of the valuation: Level 1 Level 2 Level 3 Total As of March 31, 2017 Warrant Liability $ — $ — $ $ Level 1 Level 2 Level 3 Total As of December 31, 2016 Warrant Liability $ — $ — $ $ The change in the estimated fair value of level 3 liabilities is summarized below: Beginning Change in Ending Fair Value of Fair Value of Value of Level 3 Level 3 Level 3 Liability Liability Liability For the three months ended March 31, 2017 $ $ $ For the three months ended March 31, 2016 $ — $ — $ — The warrants were issued in 2016 and were originally valued on November 29, 2016 using the Black-Scholes-Merton model with the following assumptions: stock price of $0.69, exercise price of $0.75, term of 5.5 years expiring May 2022, volatility of 71.92%, dividend yield of 0%, and risk-free interest rate of 1.87%. The warrants were revalued at December 31, 2016 using the Black-Scholes-Merton model with the following assumptions: stock price of $0.716, exercise price of $0.75, term of 5.41 years expiring May 2022, volatility of 73.62%, dividend yield of 0%, and risk-free interest rate of 2.0%. The warrants were revalued at March 31, 2017 using the Black-Scholes-Merton model with the following assumptions: stock price of $1.00, exercise price of $0.75, term of 5.16 years expiring May 2022, volatility of 78.33%, dividend yield of 0%, and risk-free interest rate of 1.95%. The change in the fair value of the level 3 warrant liability is reflected in the statement of operations and comprehensive loss for the three months ended March 31, 2017. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions | |
Related Party Transactions | 4. Related Party Transactions Due from former parent The Company was a majority-owned subsidiary of Napo until May 18, 2015, the date of the Company’s IPO. Additionally, Lisa A. Conte, Chief Executive Officer of the Company, is also the Interim Chief Executive Officer of Napo Pharmaceuticals, Inc. The Company has total outstanding receivables (payables) from former parent (“Napo”) at March 31, 2017 and December 31, 2016 as follows: March 31, December 31, 2017 2016 Due from former parent $ $ Royalty payable to former parent ) ) Net receivable (payable) to former parent $ $ Due from former parent Employee leasing and overhead allocation Effective July 1, 2016, Napo agreed to reimburse the Company for the use of the Company’s employee’s time and related expenses, including rent and a fixed overhead amount to cover office supplies and copier use. The balance of unpaid employee leasing charges due from Napo was $277,529 at December 31, 2016. The total amount of such services was $407,267 and Napo remitted $465,625 for the three months ended March 31, 2017. The remaining unpaid balance of $219,171 is included in due from former parent in current assets on the Company’s balance sheet. Other transactions The Company periodically makes purchases on behalf of Napo, primarily including travel expenses and investor relations expenses. The balance of unpaid non-employee leasing charges due from Napo was $22,290 at December 31, 2016. The total amount of such purchases was $5,376 and Napo remitted $25,408 in the three months ended March 31, 2017. The remaining unpaid balance of $2,258 is included in due from former parent in current assets on the Company’s balance sheet. Royalty payable to former parent and license fee payable to former parent and related agreement On July 11, 2013, Jaguar entered into an option to license Napo’s intellectual property and technology (the “Option Agreement”). Under the Option Agreement, upon the payment of $100,000 in July 2013, the Company obtained an option for a period of two years to execute an exclusive worldwide license to Napo’s intellectual property and technology to use for the Company’s animal health business. The option price was creditable against future license fees to be paid to Napo under the License Agreement (as defined below). In January 2014, the Company exercised its option and entered into a license agreement (the “License Agreement”) with Napo for an exclusive worldwide license to Napo’s intellectual property and technology to permit the Company to develop, formulate, manufacture, market, use, offer for sale, sell, import, export, commercialize and distribute products for veterinary treatment uses and indications for all species of animals. The Company was originally obligated to pay a one-time non-refundable license fee of $2,000,000, less the option fee of $100,000. At the Company’s option, the license fee could have been paid in common stock. In January 2015, the License Agreement was amended to decrease the one-time non-refundable license fee payable from $2,000,000 to $1,750,000 in exchange for acceleration of the payment of the fee. Given that Napo is a significant shareholder of the Company, the abatement of the license fee amount has been recorded as a capital contribution in the accompanying condensed financial statements. The Company paid the final $425,000 in the three months ended March 31, 2016. Milestone payments aggregating $3,150,000 may also be due to Napo based on regulatory approvals of various veterinary products. In addition to the milestone payments, the Company will owe Napo an 8% royalty on annual net sales of products derived from the Croton lechleri tree, up to $30,000,000 and then, a royalty of 10% on annual net sales of $30,000,000 or more. Additionally, if any other products are developed, the Company will owe Napo a 2% royalty on annual net sales of pharmaceutical prescription products that are not derived from Croton lechleri and a 1% royalty on annual net sales of non-prescription products that are not derived from Croton lechleri . The royalty term expires at the longer of 10 years from the first sale of each individual product or when there is no longer a valid patent claim covering any of the products and a competitive product has entered the market. However, because an IPO of at least $10,000,000 was consummated prior to December 31, 2015, the royalty was reduced to 2% of annual net sales of its prescription products derived from Croton lechleri and 1% of net sales of its non-prescription products derived from Croton lechleri and no milestone payment will be due and no royalties will be owed on any additional products developed. The Company had unpaid royalties of $171 at December 31, 2016, which are netted with other receivables due from former parent in current assets in the Company’s balance sheet. The Company incurred $284 in royalties in the three months ended March 31, 2017, which are included in sales and marketing expense in the Company’s statement of operations and comprehensive loss, and paid $447 to Napo in the three months ended March 31, 2017. The remaining balance of unpaid royalties of $7 are netted with other receivables due from the former parent and are included in current assets in the Company’s balance sheet. The Company may, at its sole discretion, elect to remit any milestone payments and/or royalties in the form of the Company’s common stock. In addition to receiving a License Agreement to Napo’s intellectual property and technology, the License also transferred to the Company certain materials and equipment. Raw materials of $1.2 million transferred from Napo were included in research and development expense on the statements of operations and comprehensive loss during the year ended December 31, 2014. Equipment of $811,087 related to the License is included in property and equipment on the Company’s balance sheet at March 31, 2017 and December 31, 2016 at the cost paid by Napo, which approximates fair value. The Company has agreed under the License Agreement to defend, indemnify and hold Napo, its affiliates, and the officers, directors, employees, consultants and contractors of Napo harmless from and against any losses, costs, damages, liabilities, fees and expenses arising out of any third-party claim related to the Company’s gross negligence, breach of covenants or the manufacture, sale or use of the product or products. |
Balance Sheet Components
Balance Sheet Components | 3 Months Ended |
Mar. 31, 2017 | |
Balance Sheet Components | |
Balance Sheet Components | 5. Balance Sheet Components Property and Equipment Property and equipment at March 31, 2017 and December 31, 2016 consisted of the following: March 31, December 31, 2017 2016 Lab equipment $ $ Clinical equipment Software Total property and equipment at cost Accumulated Depreciation ) ) Property and Equipment, net $ $ Depreciation and amortization expense was $15,031 and $7,878 in the three months ended March 31, 2017 and 2016 and was included in the statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2017 2016 Depreciation - Lab Equipment - research and development expense $ $ Depreciation - Clinical Equipment - research and development expense Depreciation - Software - general and administrative expense Total Depreciation Expense $ $ Accrued Expenses Accrued expenses at March 31, 2017 and December 31, 2016 consist of the following: March 31, December 31, 2017 2016 Accrued compensation and related: Accrued vacation $ $ Accrued payroll — Accrued payroll tax Accrued interest Accrued clinical — Accrued legal costs Accrued audit Accrued other Total $ $ |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies Operating Leases Effective July 1, 2015, the Company leases its San Francisco, California headquarters under a non-cancelable sub-lease agreement that expires August 31, 2018. The Company provided cash deposits of $122,163, consisting of a security deposit of $29,539 and prepayment of the last three months of the lease of $92,623, which are included in other assets on the Company’s balance sheet. Future minimum lease payments under non-cancelable operating leases as of March 31, 2017 are as follows: Years ending December 31, Amount 2017 - April through December $ 2018 Total minimum lease payments $ The Company recognizes rent expense on a straight-line basis over the non-cancelable lease period. Rent expense under the non-cancelable operating lease was $90,278 for the three months ended March 31, 2017 and 2016. Rent expense is included in general and administrative expense in the Company’s statements of operations and comprehensive loss. Contract Manufacturing Commitment Effective June 26, 2014 the Company entered into a technology transfer and commercial manufacturing agreement (the “Transfer Agreement”) with a contract manufacturer in Italy (the “Manufacturer”), whereby the Company and the Manufacturer will cooperate to develop and refine the manufacturing process for the Company’s prescription and non-prescription products. Pursuant to the Transfer Agreement, the Company was to make prepayments to the Manufacturer as follows: (1) a start-up fee of €500,000, €250,000 of which was to be paid at the earlier to occur of September 15, 2014 or the closing date of an initial public offering and €250,000 of which was to be paid at the time of installation and qualification of the Company’s equipment at their facility, (2) related to the technology transfer, €620,000, €310,000 of which was paid subsequent to the signature of the Transfer Agreement and €310,000 of which was to be paid after the delivery of a final study report, (3) for design of a portion of the Manufacturer’s facility, €100,000 was to be paid within five days of the signature of the Transfer Agreement, and (4) a €300,000 bonus fee payable in two equal installments, the first of which is due by the end of March 2015, with the remainder paid by the end of December 2015. The first €150,000 of the bonus fee payable was paid in May 2015. Additionally, the Transfer Agreement stipulated that the Company was to pay the Manufacturer an aggregate of €500,000 upon the delivery of agreed-upon levels of satisfactory product. Further, the Company issued the Manufacturer warrants to purchase 16,666 shares of common stock with an exercise price of 90% of the initial public offering price, amended to $6.30 in March 2015. Effective February 12, 2015, March 25, 2015 and July 15, 2015 the Company entered into amendments delaying payments to the Manufacturer as follows: (i) the €500,000 start-up fee was due by the end of April 2015 and has been paid during the year ended December 31, 2015, (ii) related to the technology transfer, of the remaining €310,000, €215,000 was due April 2015 and €95,000 was due June 30, 2015, both of which were paid during the year ended December 31, 2015, (iii) related to the design of a portion of the Manufacturer’s facility, the payment has increased to €170,000, €150,000 of which was due at the end of April 2015 and €20,000 was due on June 30, 2015, both of which have been paid during the year ended December 31, 2015 (iv) the fees linked to the deliverables are now due €250,000 on December 31, 2015 and €250,000 on March 31, 2016, 2015, (v) the bonus fee payable of €300,000, €150,000 was due at the end of April 2015 and has been paid during the year ended December 31, 2015 and €150,000 due at December 31, 2015. In May 2015, the Company entered into a Memorandum of Understanding (“MOU”) with the contract manufacturer and paid the start-up fee of €500,000 and the technology transfer fee of €215,000. In accordance with the terms of the Memorandum of Understanding, the Manufacturer will supply 400Kg of the Company’s API at no cost in anticipation of the future deduction by December 2015. The final € 250,000 was paid on March 29, 2016. In December 2015, we entered into an amendment to our technology transfer and commercial manufacturing agreement with our contract manufacturer in Italy delaying a €150,000 bonus fee payment which was originally due on December 31, 2015 to March 31, 2016. On April 4, 2016, the Company further amended the payment date to June 30, 2016. The Company paid the final €150,000 bonus fee on July 15, 2016. The Company expensed the total cost of the contract ratably over the estimated life of the contract, or the total amount paid if greater. As of March 31, 2016, the amortized costs exceeded amounts paid by $170,850, which were included in accrued manufacturing costs in accrued liabilities in the Company’s balance sheet. Debt Obligations See Note 7—Debt and Warrants. Contingencies From time to time, the Company may be involved in legal proceedings arising in the ordinary course of business. The Company believes there is no litigation pending that could have, individually or in the aggregate, a material adverse effect on the financial position, results of operations or cash flows. |
Debt and Warrants
Debt and Warrants | 3 Months Ended |
Mar. 31, 2017 | |
Debt and Warrants | |
Debt and Warrants | 7. Debt and Warrants Convertible Notes and Warrants 2013 Convertible Notes From July through September 2013, the Company issued four convertible promissory notes (collectively the “Notes”) for gross aggregate proceeds of $525,000 to various third-party lenders. The Notes bore interest at 8% per annum. The Notes automatically matured and the entire outstanding principal amount, together with accrued interest, was due and payable in cash at the earlier of July 8, 2015 (the “Maturity Date”) or ten business days after the date of consummation of the initial closing of a first equity round of financing. The Company consummated a first equity round of financing prior to the Maturity Date with a pre-money valuation of greater than $3.0 million, and, accordingly, principal and accrued interest was converted into shares of common stock at 75% of the purchase price paid by such equity investors. These notes were all converted to common stock in February 2014 upon the issuance of the convertible preferred stock. In February 2014, in connection with the first equity round of financing and issuance of the Series A convertible preferred stock, the noteholders exercised their option to convert their Notes into 207,664 shares of common stock and accrued interest was paid in cash to the noteholders. The accreted interest expense related to the discount on the Notes was $1,443 for the period from January 1, 2014 to the conversion date of the Notes. Upon conversion, the entire remaining debt discount of $4,071 was recorded as interest expense. In connection with the Notes, the Company issued warrants to the noteholders, which became exercisable to purchase an aggregate of 207,664 shares of common stock as of the issuance of the first equity round of financing (the “Warrants”). The Warrants have a $2.53 exercise price, are fully exercisable from the initial date of the first equity round of financing, and have a five-year term subsequent to that date. 2014 Convertible Notes On June 2, 2014, pursuant to a convertible note purchase agreement, the Company issued convertible promissory notes in the aggregate principal amount of $300,000 to two accredited investors, including a convertible promissory note for $200,000 to a board member to which Series A preferred stock was sold. These notes accrued interest at 3% per annum and automatically were to mature on June 1, 2015. The Company has unpaid accrued interest of $8,507, which is included in accrued liabilities in the balance sheet. All interest was to be paid in cash upon maturity. No interest was incurred for the three months ended March 31, 2017 and 2016. Upon the closing of the IPO, the outstanding principal amount automatically converted into 53,571 shares common stock at $5.60, as amended in March 2015. Upon issuance, the Company analyzed the beneficial nature of the conversion terms and determined that a beneficial conversion feature (“BCF”) existed because the effective conversion price on issuance of the notes was less than the fair value at the time of the issuance. The Company calculated the value of the BCF using the intrinsic method and recorded a BCF of $75,000 as a discount to notes payable and to additional paid-in capital. The full amount of the BCF was amortized to interest expense by the end of May 2015 when the notes were converted to equity. On July 16, 2014, pursuant to a convertible note purchase agreement, the Company issued a convertible promissory note in the principal amount of $150,000 to an accredited investor. This note accrued interest at 3% per annum and automatically was to mature on June 1, 2015. The Company has unpaid accrued interest of $3,711, which is included in accrued liabilities in the balance sheet. All interest was to be paid in cash upon maturity. No interest was incurred for the three months ended March 31, 2017 and 2016. Upon the closing of the IPO, the outstanding principal amount automatically converted into 26,785 shares of common stock at $5.60, as amended in March 2015. Upon issuance, the Company analyzed the beneficial nature of the conversion terms and determined that a BCF existed because the effective conversion price was less than the fair value at the time of the issuance. The Company calculated the value of the BCF using the intrinsic method and recorded a BCF of $37,500 as a discount to the notes payable and to additional paid-in capital. The full amount of the BCF was amortized to interest expense by the end of May 2015 when the notes were converted to equity. In connection with the Transfer Agreement (Note 6) the Company issued fully vested and immediately exercisable warrants to the Manufacturer to purchase 16,666 shares of common stock at 90% of the IPO price, amended to $6.30 in March 2015, for a period of five years. The fair value of the warrants, $37,840, was recorded as research and development expense and additional paid-in capital in June 2014. The warrants were originally valued using the Black-Scholes model with the following assumptions: stock price of $4.83, exercise price of $4.35, term of five years, volatility of 49%, dividend yield of 0%, and risk-free interest rate of 1.64%. On December 23, 2014, pursuant to a convertible note purchase agreement, the Company issued convertible promissory notes in the aggregate principal amount of $650,000 to three accredited investors, including a convertible promissory note for $250,000 to the same board member to which the June 2, 2014 $200,000 convertible promissory note was issued and to which Series A preferred stock was sold. These notes accrued interest at 12% per annum and became payable within thirty days following the IPO. The Company has unpaid accrued interest of is $30,132, which is included in accrued liabilities in the balance sheet. All interest was to be paid in cash upon maturity. No interest expense was accrued for the three months ended March 31, 2017 and 2016. Upon consummation of the Company’s IPO, the noteholders converted the notes into 116,070 shares of common stock at a conversion price equal to 80% of the IPO price, amended to $5.60 in March 2015. In connection with these notes, the Company also issued the lenders a fully vested warrant to purchase shares of the Company’s common stock at an exercise price equal to 80% of the IPO price, amended to $5.60 in March 2015. These warrants entitle the noteholders to purchase 58,035 shares of common stock. The fair value of the warrants, $147,943, was recorded as a debt discount and liability at December 23, 2014. The Company fully amortized the discount by the end of May 2015 when the notes were converted to equity. The warrants were originally valued using the Black-Scholes model with the following assumptions: stock price of $4.59, exercise price of $4.15, term of three years expiring December 2017, volatility of 49%, dividend yield of 0%, and risk-free interest rate of 1.10%. Based on the circumstances, the value derived using the Black-Scholes model approximated that which would be obtained using a lattice model. The debt discount was amortized as interest expense over the one hundred ninety days from issuance of the notes through their first maturity date of July 31, 2015, beginning in January 2015. The Company analyzed the beneficial nature of the conversion terms and determined that a BCF existed because the effective conversion price was less than the fair value at the time of the issuance. The Company calculated the value of the BCF using the intrinsic method. A BCF of $502,057 was recorded as a discount to the notes payable and to additional paid-in capital. The full amount of the BCF was amortized to interest expense by the end of May 2015 when the notes were converted to equity. 2015 Convertible Notes In February 2015, the Company issued convertible promissory notes to two accredited investors in the aggregate principal amount of $250,000. These notes were issued pursuant to the convertible note purchase agreement dated December 23, 2014. In connection with the issuance of the notes, the Company issued the lenders warrants to purchase 22,320 shares at $5.60 per share, which expire December 31, 2017. Principal and interest of $103,912 was paid in May 2015 for $100,000 of these notes. The Company analyzed the beneficial nature of the conversion terms and determined that a BCF existed because the effective conversion price was less than the fair value at the time of the issuance. The Company calculated the value of the BCF using the intrinsic method. A BCF of for the full face value was recorded as a discount to the notes payable and to additional paid-in capital. The full amount of the BCF was amortized to interest expense by the end of June 2015. Extinguishment of debt The remaining outstanding note of $150,000 is payable to the investor at an effective simple interest rate of 12% per annum, and was due in full on July 31, 2016. On July 28, 2016, the Company entered into an amendment to delay the repayment of the principal and related interest under the terms of the remaining note from July 31, 2016 to October 31, 2016. On November 8, 2016, the Company entered into an amendment to extend the maturity date of the remaining note from October 31, 2016 to January 1, 2017. In exchange for the extension of the maturity date, on November 8, 2016, the Company’s board of directors granted the lender a warrant to purchase 120,000 shares of the Company’s common stock for $0.01 per share. The warrant is exercisable at any time on or before July 28, 2022, the expiration date of the warrant. The amendment and related warrant issuance resulted in the Company treating the debt as having been extinguished and replaced with new debt for accounting purposes due to meeting the 10% cash flow test. The Company calculated a loss on the extinguishment of debt of $108,000, or the equivalent to the fair value of the warrants granted, which is included in other expense in the Company’s statements of operations and comprehensive loss in the three months ended December 31, 2017. On January 31, 2017, the Company entered into an amendment to extend the maturity date of the remaining note from January 1, 2017 to January 1, 2018. In exchange for the extension of the maturity date, on January 31, 2017, the Company’s board of directors granted the lender a warrant to purchase 370,916 shares of the Company’s common stock for $0.51 per share. The warrant is exercisable at any time on or before January 31, 2019, the expiration date of the warrant. The amendment and related warrant issuance resulted in the Company treating the debt as having been extinguished and replaced with new debt for accounting purposes due to meeting the 10% cash flow test. The Company calculated a loss on the extinguishment of debt of $207,713, or the equivalent to the fair value of the warrants granted, which is included in other expense in the Company’s statements of operations and comprehensive loss in the three months ended March 31, 2017. The $150,000 note is included in notes payable in current liabilities on the Company’s balance sheet. The Company has unpaid accrued interest of $38,367 and $33,929, which is included in accrued liabilities on the Company’s balance sheet as of March 31, 2017 and December 31, 2016, respectively, and incurred $4,438 and $4,488 in interest expense in the three months ended March 31, 2017 and 2016, respectively. In March 2015, the Company entered into a non-binding letter of intent with an investor. In connection therewith, the investor paid the Company $1.0 million. At March 31, 2015, the Company had recorded this amount as a loan advance on the balance sheet. In April 2015, the investor purchased $1.0 million of convertible promissory notes from the Company, the terms of which provided that such notes were to be converted into shares of the Company’s common stock upon the closing of an IPO at a conversion price of $5.60 per share. In connection with the purchase of the notes, the Company issued the investor a warrant to purchase 89,285 shares at $5.60 per share, which expires December 31, 2017. The notes accrued simple interest of 12% per annum and, upon consummation of the Company’s IPO in May 2015, converted into 178,571 shares of the Company’s common stock. The Company analyzed the beneficial nature of the conversion terms and determined that a BCF existed because the effective conversion price was less than the fair value at the time of the issuance. The Company calculated the value of the BCF using the intrinsic method. A BCF of for the full face value was recorded as a discount to the notes payable and to additional paid-in capital. The full amount of the BCF was amortized to interest expense by the end of June 2015. While the note was converted to equity, the Company has not yet remitted the related accrued interest of $17,753, which is included in accrued liabilities in the Company’s balance sheet. No interest expense was accrued in the three months ended March 31, 2017 and 2016. The total convertible notes payable obligation was $150,000 as of March 31, 2017 and 2016, and interest expense on the convertible notes for the three months ended March 31, 2017 and 2016 was $4,438 and $4,488, respectively. Interest payable on the convertible notes at March 31, 2017 and December 31, 2016 was $98,486 and $94,048, respectively. Notes Payable—Bridge Loans On October 30, 2014, the Company entered into a standby bridge financing agreement with two lenders, which was amended and restated on December 3, 2014, which provided a loan commitment in the aggregate principal amount of $1.0 million (the “Bridge”). Proceeds to the Company were net of a $100,000 debt discount under the terms of the Bridge and net of $104,000 of debt issuance costs. This debt discount and debt issuance costs were recorded as interest expense using the effective interest method, over the six month term of the Bridge. The Bridge became payable upon the IPO. The Bridge was repaid in May 2015, including interest thereon in an amount of $1,321,600. In connection with the Bridge, the lenders were granted warrants to purchase 178,569 shares of the Company’s common stock determined by dividing $1.0 million by the exercise price of 80% of the IPO price, amended to $5.60 in March 2015. The fair value of the warrants, $505,348, was originally recorded as a debt discount and liability at December 3, 2014. The warrants were originally valued using the Black-Scholes model with the following assumptions: stock price of $5.01, exercise price of $5.23, term of five years expiring December 2019, volatility of 63%, dividend yield of 0%, and risk-free interest rate of 1.61%. Based on the circumstances, the value derived using the Black-Scholes model approximated that which would be obtained using a lattice model. The debt discount was recorded as interest expense over the six month term of the Bridge. The Company fully extinguished the debt and accrued interest in May 2015. Standby Line of Credit In August 2014, the Company entered into a standby line of credit with an accredited investor for up to $1.0 million pursuant to a Line of Credit and Loan Agreement dated August 26, 2014. In connection with the entry into the standby line of credit, the Company issued the lender a fully vested warrant to purchase 33,333 shares of common stock at an exercise price equal to 80% of the IPO price, amended to $5.60 in March 2015, which expires in August 2016. The fair value of the warrants, $114,300, was recorded as interest expense and additional paid-in capital in August 2014. The warrants were originally valued using the Black-Scholes model with the following assumptions: stock price of $8.00, exercise price of $6.40, term of two years, volatility of 52%, dividend yield of 0%, and risk-free interest rate of 0.52%. The line of credit expired on March 31, 2015 and there were no drawdowns under the facility. The warrants expired in August 2016. Long-term Debt In August 2015, the Company entered into a loan and security agreement with a lender for up to $8.0 million, which provided for an initial loan commitment of $6.0 million. The loan agreement requires the Company to maintain $4.5 million of the proceeds in cash, which may be reduced or eliminated on the achievement of certain milestones. An additional $2.0 million is available contingent on the achievement of certain further milestones. The agreement has a term of three years, with interest only payments through February 29, 2016. Thereafter, principal and interest payments will be made with an interest rate of 9.9%. Additionally, there will be a balloon payment of $560,000 on August 1, 2018. This amount is being recognized over the term of the loan agreement and the effective interest rate, considering the balloon payment, is 15.0%. Proceeds to the Company were net of a $134,433 debt discount under the terms of the loan agreement. This debt discount is being recorded as interest expense, using the interest method, over the term of the loan agreement. Under the agreement, the Company is entitled to prepay principal and accrued interest upon five days prior notice to the lender. In the event of prepayment, the Company is obligated to pay a prepayment charge. If such prepayment is made during any of the first twelve months of the loan agreement, the prepayment charge will be (a) during such time as the Company is required to maintain a minimum cash balance, 2% of the minimum cash balance amount plus 3% of the difference between the amount being prepaid and the minimum cash balance, and (b) after such time as the Company is no longer required to maintain a minimum cash balance, 3% of the amount being prepaid. If such prepayment is made during any time after the first twelve months of the loan agreement, 1% of the amount being prepaid. On April 21, 2016, the loan and security was amended upon which the Company repaid $1.5 million of the debt out of restricted cash. The amendment modified the repayment amortization schedule providing a four-month period of interest only payments for the period from May through August 2016. As of March 31, 2017 and December 31, 2016, the net long-term debt obligation was as follows: March 31, December 31, 2017 2016 Debt and unpaid accrued end-of-term payment $ $ Unamortized note discount ) ) Unamortized debt issuance costs ) ) Net debt obligation $ $ Current portion of long-term debt $ $ Long-term debt, net of discount Total $ $ Future principal payments under the long-term debt are as follows: Years ending December 31 Amount 2017 - April through December $ 2018 Total future principal payments 2018 end-of-term payment Less: unaccreted end-of-term payment at March 31, 2017 ) Debt and unpaid accrued end-of-term payment $ The debt obligation includes an end-of-term payment of $560,000, which accretes over the life of the loan as interest expense. As a result of the debt discount and the end-of-term payment, the effective interest rate for the loan differs from the contractual rate. Interest expense on the long-term debt for the years ended March 31, 2017 and 2016 was as follows: Three months ended March 31, 2017 2016 Nominal Interest $ $ Amortization of debt issuance costs Accretion of end-of-term payment Debt issuance costs $ $ At the IPO, the Company’s outstanding warrants to purchase convertible preferred stock were all converted to warrants to purchase common stock. Warrants On November 22, 2016, the Company entered into a Securities Purchase Agreement, or the 2016 Purchase Agreement, with certain institutional investors, pursuant to which the Company sold securities to such investors in a private placement transaction, which we refer to herein as the 2016 Private Placement. In the 2016 Private Placement, the Company sold an aggregate of 1,666,668 shares of the Company’s common stock at a price of $0.60 per share for gross proceeds of approximately $1.0 million. The investors in the 2016 Private Placement also received (i) warrants to purchase up to an aggregate of 1,666,668 shares of the Company’s common stock, at an exercise price of $0.75 per share, or the Series A Warrants, and the Placement Agent received warrants to purchase 133,333 shares of our common stock in lieu of cash for service fees with the same terms as the investors; (ii) warrants to purchase up to an aggregate 1,666,668 shares of the Company’s common stock, at an exercise price of $0.90 per share, or the Series B Warrants, and (iii) warrants to purchase up to an aggregate 1,666,668 shares of our common stock, at an exercise price of $1.00 per share, or the Series C Warrants and, together with the Series A Warrants and the Series B Warrants, the 2016 Warrants. The warrants were granted in three series with different terms. The warrants were valued using the Black-Scholes-Merton warrant pricing model as follows: · Series A Warrants and Placement Agent Warrants: 1,666,668 warrant shares with a strike price of $0.75 per share and an expiration date of May 29, 2022; and 133,333 warrant shares to the placement agent with a strike price of $0.75 and an expiration date of May 29, 2022; the expected life is 5.5 years, the volatility is 71.92% and the risk free rate is 1.87% in valuing these warrants. · Series B Warrants: 1,666,668 warrant shares with a strike price of $0.90 per share and an expiration date of November 29, 2017; the expected life is one year, the volatility is 116.65% and the risk free rate is 0.78% in valuing these warrants. · Series C Warrants: 1,666,668 warrant shares with a strike price of $1.00 per share and an expiration date of May 29, 2018; the expected life is 1.5 years, the volatility is 116.92% and the risk free rate is 0.94%. The warrant valuation date was November 29, 2016 and the closing price of $0.69 per share was used in determining the fair value of the warrants. The series A warrants and placement agent warrants were valued at $756,001 and were classified as a warrant liability in the Company’s balance sheet. The series A warrants and placement agent warrants were revalued on December 31, 2016 at $799,201 which is included in the Company’s balance sheet, and the $43,200 increase is included in the Company’s statements of operations and comprehensive loss. The stock price was $0.716, the strike price was $0.75 per share, the expected life was 5.41 years, the volatility was 73.62% and the risk free rate was 2.0%. The series A warrants and placement agent warrants were revalued on March 31, 2017 at $1,252,620 which is included in the Company’s balance sheet, and the $453,419 increase is included in the Company’s statements of operations and comprehensive loss. The stock price was $1.00, the strike price was $0.75 per share, the expected life was 5.16 years, the volatility was 78.33% and the risk free rate was 1.95%. The series B and C warrants were classified as equity, and as such were not subject to revaluation at year end. Costs incurred in connection with the issuance were allocated based on the relative fair values of the Series A and the Series B and C warrants. The Company’s warrant activity is summarized as follows: Three Months Ended Year Ended March 31, December 31, 2017 2016 Beginning balance Warrants granted Warrants cancelled — ) Ending balance |
Redeemable Convertible Preferre
Redeemable Convertible Preferred Stock | 3 Months Ended |
Mar. 31, 2017 | |
Redeemable Convertible Preferred Stock | |
Redeemable Convertible Preferred Stock | 8. Redeemable Convertible Preferred Stock In February, April and May of 2014, the Company issued 3,015,902 shares of convertible preferred stock in exchange for $6,777,338. The redemption value of the convertible preferred stock was $9.0 million. The differences between the respective redemption values/liquidation preference and carrying values are being accreted over the period from the date of issuance to the earliest possible redemption date, February 2017. The Company has recorded accretion of $263,060 for the year ended December 31, 2015. Costs incurred in connection with the issuance of Series A redeemable convertible preferred stock during the year ended December 31, 2014 were $119,097 which have been recorded as a reduction to the carrying amounts of convertible preferred stock and are being accreted to the carrying value of the applicable preferred stock to the redemption date. The Company has recorded accretion of $83,334 for the year ended December 31, 2015. On May 18, 2015, the Company completed its IPO. In connection with the IPO, all of the Company’s 3,015,902 outstanding shares of convertible preferred stock were automatically converted into 2,010,596 shares of common stock. Prior to this conversion event, Convertible Preferred Stock had been classified outside of stockholders’ deficit in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Stockholders' Equity | 9. Stockholders’ Equity Common Stock The Company’s second amended and restated certificate of incorporation authorizes the Company to issue 50,000,000 shares of common stock $0.0001 par value. The holders of common stock are entitled to one vote for each share of common stock held at all meetings of stockholders. The number of authorized shares of common stock may be increased or decreased by the affirmative vote of the holders of shares of capital stock of the Company representing a majority of the votes represented by all shares (including Preferred Stock) entitled to vote. On May 18, 2015, the Company completed an initial public offering (“IPO”) of its common stock. In connection with its IPO, the Company issued and sold 2,860,000 shares of common stock at a price to the public of $7.00 per share. As a result of the IPO, the Company received $15.9 million in net proceeds, after deducting underwriting discounts and commissions of $1.2 million and offering expenses of $2.9 million ($3.3 million including non-cash offering expenses) payable by the Company. In connection with the IPO, the Company’s outstanding shares of convertible preferred stock were automatically converted into 2,010,596 shares of common stock and the Company’s outstanding warrants to purchase convertible preferred stock were all converted to warrants to purchase common stock. In February 2016, the Company completed a secondary public offering of its common stock. In connection with its secondary public offering, the Company issued and sold 2,000,000 shares of common stock at a price to the public of $2.50 per share. As a result of the secondary public offering, the Company received $4.1 million in net proceeds, after deducting underwriting discounts and commissions of $373,011 and offering expenses of $496,887. In June 2016, the Company entered into a common stock purchase agreement with a private investor (the “CSPA”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the investor is committed to purchase up to an aggregate of $15.0 million of the Company’s common stock over the approximately 30-month term of the agreement. Upon execution of the CSPA, the Company sold 222,222 shares of its common stock to the investor at $2.25 per share for net proceeds of $394,534, reflecting gross proceeds of $500,000 and offering expenses of $105,398. In consideration for entering into the CSPA, the Company issued 456,667 shares of its common stock to the investor. Concurrently with entering into the CSPA, the Company also entered into a registration rights agreement with the investor (the “Registration Agreement”), in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended, the sale of the shares of the Company’s common stock that have been and may be issued to the investor under the CSPA. On June 22, 2016 and September 22, 2016, the Company filed registration statements on Form S-1 (File Nos. 333-212173 and 333-213751) pursuant to the terms of the Registration Agreement, which registration statements were declared effective on July 8, 2016 and October 5, 2016, respectively. In the year ended December 31, 2016, pursuant to the CSPA, the Company sold an additional 1,348,601 shares of the Company’s common stock in exchange for $2,176,700 of cash proceeds. And in the three months ended March 31, 2017, the Company sold another 416,996 shares of the Company’s common stock in exchange for $550,434 of cash proceeds. Of the $15.0 million available under the CSPA, the Company has received $3,227,134 as of March 31, 2017. The CSPA limits the number of shares that the Company can sell thereunder to 2,027,490 shares, which equals 19.99% of the Company’s outstanding shares as of the date of the CSPA (such limit, the “19.99% exchange cap”), unless either (i) the Company obtains stockholder approval to issue more than such 19.99% exchange cap or (ii) the average price paid for all shares of the Company’s common stock issued under the CSPA is equal to or greater than $1.32 per share (the closing price on the date the CSPA was signed), in either case in compliance with Nasdaq Listing Rule 5635(d). The Company held its 2017 Annual Meeting on May 8, 2017. At the 2017 Annual Meeting, the Company’s stockholders voted on the approval, pursuant to Nasdaq Listing Rule 5635(d), of the issuance of an additional 3,555,514 shares of the Company’s common stock under the CSPA, which when combined with the 2,444,486 shares that the Company has already sold pursuant to the CSPA, equals an aggregate of 6,000,000 shares. In October 2016, the Company entered into a Common Stock Purchase Agreement with an existing private investor. Upon execution of the agreement the Company sold 170,455 shares of its common stock in exchange for $150,000 in cash proceeds. On November 22, 2016, the Company entered into a Securities Purchase Agreement, or the 2016 Purchase Agreement, with certain institutional investors, pursuant to which the Company sold securities to such investors in a private placement transaction, which is referred to herein as the 2016 Private Placement. In the 2016 Private Placement, the Company sold an aggregate of 1,666,668 shares of its common stock at a price of $0.60 per share for net proceeds of $677,224 or gross proceeds of approximately $1.0 million less $322,777 in issuance costs. The investors in the 2016 Private Placement also received (i) warrants to purchase up to an aggregate of 1,666,668 shares of our common stock, at an exercise price of $0.75 per share, or the Series A Warrants, (ii) warrants to purchase up to an aggregate 1,666,668 shares of our common stock, at an exercise price of $0.90 per share, or the Series B Warrants, and (iii) warrants to purchase up to an aggregate 1,666,668 shares of our common stock, at an exercise price of $1.00 per share, or the Series C Warrants and, together with the Series A Warrants and the Series B Warrants, the 2016 Warrants. The issuance costs were allocated to common stock, series A warrants, and Series B and C warrants based on the relative fair value of each: Instruments Fair Value % Allocation Issuance Costs Common Stock $ % $ Warrants (Series A) % Warrants (Series B and C) % Total $ % $ Common stock of a net $106,000 (fair value less issuance costs) was included in equity in the company’s balance sheet. Series A warrants of $756,001, consisting of the series A warrants of $700,001 and the series A placement agent warrants of $56,000, are included in current liabilities in the company’s balance sheet and the $225,944 of issuance cost was expensed and is in general and administrative expense on the company’s statement of operations and comprehensive loss. Series B and C warrants of a net $97,167 (fair value less issuance costs) were classified in equity in the company’s balance sheet. In exchange for the extension of the maturity date of the outstanding 2015 Convertible Note, on, November 8, 2016, the Company’s board of directors granted the lender a warrant to purchase 120,000 shares of the Company’s common stock for $0.01 per share. The warrant is exercisable at any time on or before July 28, 2022, the expiration date of the warrant. The amendment and related warrant issuance resulted in the Company treating the debt as having been extinguished and replaced with new debt for accounting purposes due to meeting the 10% cash flow test. The Company calculated a loss on the extinguishment of debt of $108,000, or the equivalent to the fair value of the warrants granted, which is included in other expense in the Company’s statements of operations and comprehensive loss. The warrants were valued on November 8, 2016 using the Black-Scholes-Merton model with the following assumptions: stock price of $0.91, exercise price of $0.01, term of 5.72 years expiring July 2022, volatility of 70.35%, dividend yield of 0%, and risk-free interest rate of 1.45%. As of March 31, 2017 and 2016, the Company had reserved shares of common stock for issuance as follows: March 31, March 31, 2017 2016 Options issued and outstanding Options available for grant RSUs issued and outstanding Warrants issued and outstanding Convertible notes Total Preferred Stock The Company’s second amended and restated certificate of incorporation authorizes the Company to issue 10,000,000 shares of preferred stock $0.0001 par value. No shares of preferred stock were issued or outstanding at March 31, 2017 or December 31, 2016. |
Stock Incentive Plans
Stock Incentive Plans | 3 Months Ended |
Mar. 31, 2017 | |
Stock Incentive Plans | |
Stock Incentive Plans | 10. Stock Incentive Plans 2013 Equity Incentive Plan Effective November 1, 2013, the Company’s board of directors and sole stockholder adopted the Jaguar Animal Health, Inc. 2013 Equity Incentive Plan (the “2013 Plan”). The 2013 Plan allows the Company’s board of directors to grant stock options, restricted stock awards and restricted stock unit awards to employees, officers, directors and consultants of the Company. As of December 31, 2013, the Company had reserved 300,000 shares of its common stock for issuance under the 2013 Plan. In April 2014, the board of directors amended the 2013 Plan to increase the shares reserved for issuance to 847,533 shares. Following the effective date of the IPO and after effectiveness of any grants under the 2013 Plan that were contingent on the IPO, no additional stock awards will be granted under the 2013 Plan. Outstanding grants continue to be exercisable, however any unissued shares under the plan and any forfeitures of outstanding options do not rollover to the 2014 Stock Incentive Plan. 2014 Stock Incentive Plan Effective May 12, 2015, the Company adopted the Jaguar Animal Health, Inc. 2014 Stock Incentive Plan (“2014 Plan”). The 2014 Plan provides for the grant of options, restricted stock and restricted stock units to eligible employees, directors and consultants to purchase the Company’s common stock. The Company reserved 333,333 shares of common stock for issuance pursuant to the 2014 Plan. On January 1, 2017 and 2016, the Company added 280,142 and 162,498 shares to the option pool in accordance with the 2014 Plan that provides for automatic share increases on the first day of each fiscal year in the amount of 2% of the outstanding number of shares of the Company’s common stock on last day of the preceding calendar year. The 2014 Plan replaces the 2013 Plan except that all outstanding options under the 2013 Plan remain outstanding until exercised, cancelled or until they expire. In July 2015, the Company amended the 2014 Plan reserving an additional 550,000 shares under the plan contingent upon approval by the Company’s stockholders at the June 2016 annual stockholders meeting. In June 2016, the Company amended the 2014 Plan once again, modifying the increase from 550,000 shares to 1,550,000 shares, which was approved at the 2016 annual stockholders meeting. Stock Options and Restricted Stock Units (“RSUs”) The following table summarizes incentive plan activity for the three months ended March 31, 2017: Shares Stock Options RSUs Weighted Weighted Average Aggregate Combined Incentive Plan Balance—December 31, 2016 $ $ — 2014 Stock Incentive Plan Activity: Additional shares authorized Options granted ) Options cancelled ) Combined Incentive Plan Balance—March 31, 2017 $ $ Options vested and exercisable—March 31, 2017 $ $ Options vested and expected to vest—March 31, 2017 $ $ There was no option activity related to the 2013 Equity Incentive Plan in the three months ended March 31, 2017. The weighted average grant date fair value of stock options granted was $0.46 during the three months ended March 31, 2017. No options were granted in the same period in 2016. The number of option shares that vested in the three months ended March 31, 2017 and 2016 was 185,005 shares and 61,944 shares, respectively. The grant date weighted average fair value of option shares that vested in the three months ended March 31, 2017 and 2016 was $185,646 and $92,557, respectively. No options were exercised in the three months ended March 31, 2017 or 2016. The intrinsic value is computed as the options granted multiplied by the difference between the fair market value of the Company’s common stock of $1.00 on March 31, 2017 and the grant date stock option exercise price. The Company granted RSUs in 2014 and 2015 under the 2013 Equity Incentive Plan. The units granted vest upon the occurrence of both a liquidity event and satisfaction of the service-based requirement. The time-based vesting provides that 50% of the RSU will vest on January 1, 2016 and the remaining 50% vest on July 1, 2017. The Company began recording stock-based compensation expense relating to the RSU grants effective May 18, 2015, the date of the Company’s initial public offering, and the date the liquidity condition was met. The stock-based compensation expense is based on the grant date fair value which is the equivalent to the fair market value on the date of grant, and is amortized over the vesting period using the straight-line method, net of estimated forfeitures. On January 1, 2016, the Company issued 17,546 shares of its common stock in exchange for 27,768 vested and released RSUs, net of 10,172 RSU shares used to pay withholding taxes. Stock-Based Compensation The following table summarizes stock-based compensation expense related to stock options and RSUs for the three months ended March 31, 2017 and 2016, and are included in the statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2017 2016 Research and development expense $ $ Sales and marketing expense General and administrative expense Total $ $ As of March 31, 2017, the Company had $1,129,007 of unrecognized stock-based compensation expense for options and restricted stock units outstanding, which is expected to be recognized over a weighted-average period of 1.94 years. The estimated grant-date fair value of employee stock options was calculated using the Black-Scholes option-pricing model. There were no grants to Company employees in the three months ended March 31, 2016. Three months ended March 31, 2017 2016 Weighted-average volatility % — Weighted-average expected term (years) — Risk-free interest rate % — Expected dividend yield — — The estimated grant-date fair value of non-employee stock options was calculated using the Black-Scholes option-pricing model. Although there were no grants to non-employees in the three months ended March 31, 2017 or 2016, the option granted on September 8, 2015 was revalued using the following assumptions: Three months ended March 31, 2017 2016 Weighted-average volatility — % Weighted-average expected term (years) — Risk-free interest rate — % Expected dividend yield — — |
Net Loss Per Share Attributable
Net Loss Per Share Attributable to Common Stockholders | 3 Months Ended |
Mar. 31, 2017 | |
Net Loss Per Share Attributable to Common Stockholders | |
Net Loss Per Share Attributable to Common Stockholders | 11. Net Loss Per Share Attributable to Common Stockholders The following table presents the calculation of basic and diluted net loss per common share for the three months ended March 31, 2017 and 2016: March 31, March 31, 2017 2016 Net loss attributable to common shareholders $ ) $ ) Shares used to compute net loss per common share, basic and diluted Net loss per share attributable to common shareholders, basic and diluted $ ) $ ) Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common shares and common share equivalents outstanding for the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities which include stock options, convertible preferred stock and common stock warrants have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. The following outstanding common stock equivalents have been excluded from diluted net loss per common share for the three months ended March 31, 2017 and 2016 because their inclusion would be anti-dilutive: March 31, March 31, 2017 2016 Options issued and outstanding Warrants to purchase common stock Restricted stock units Total |
401(k) Plan
401(k) Plan | 3 Months Ended |
Mar. 31, 2017 | |
401(k) Plan | |
401(k) Plan | 12. 401(k) Plan The Company sponsors a 401(k) defined contribution plan covering all employees. There were no employer contributions to the plan from plan inception through March 31, 2017. |
Commercialization Agreement
Commercialization Agreement | 3 Months Ended |
Mar. 31, 2017 | |
Commercialization Agreement | |
Commercialization Agreement | 13. Commercialization Agreement On January 27, 2017, the Company entered into a licensing, development, co-promotion and commercialization agreement with Elanco US Inc. (“Elanco”) to license, develop and commercialize Canalevia (“Licensed Product”), our drug product candidate under investigation for treatment of acute and chemotherapy-induced diarrhea in dogs, and other drug product formulations of crofelemer for treatment of gastrointestinal diseases, conditions and symptoms in cats and other companion animals. The Company grants Elanco exclusive global rights to Canalevia, a product whose active pharmaceutical ingredient is sustainably isolated and purified from the Croton lechleri tree, for use in companion animals. Pursuant to the Elanco Agreement, Elanco will have exclusive rights globally outside the U.S. and co-exclusive rights with the Company in the U.S. to direct all marketing, advertising, promotion, launch and sales activities related to the Licensed Products. Under the terms of the Elanco Agreement, the Company received an initial upfront payment of $2,548,689 and will receive additional payments upon achievement of certain development, regulatory and sales milestones in an aggregate amount of up to $61.0 million payable throughout the term of the Elanco Agreement, as well as product development expense reimbursement, and royalty payments on global sales. The Elanco Agreement specifies that the Company will supply the Licensed Products to Elanco, and that the parties will agree to set a minimum sales requirement that Elanco must meet to maintain exclusivity. Elanco will reimburse the Company for certain development and regulatory expenses related to our planned target animal safety study and the completion of the Canalevia field study for acute diarrhea in dogs. The Company has $288,166 of unreimbursed expenses as of March 31, 2017, which is included on the Company’s balance sheet. The Company included the $288,166 in collaboration revenue in the three months ended March 31, 2017 which is included in the Company’s statements of operations and comprehensive loss. The $2,548,689 total of the upfront payment is recognized as revenue ratably over the estimated development period of one year resulting in $459,700 in collaboration revenue in the three months ended March 31, 2017 and is included in the Company’s statements of operations and comprehensive loss. The difference of $2,088,989 is included in deferred collaboration revenue and the uncollected $288,166 of unreimbursed expenses is included in other receivables in on the Company’s balance sheet. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events | |
Subsequent Events | 14. Subsequent Events The Company completed an evaluation of the impact of subsequent events through May 15, 2017, the date these financial statements were issued. Merger Agreement On February 8, 2017, the Company announced that it had entered into a binding agreement of terms (the “Agreement”) to merge with Napo Pharmaceuticals, Inc., the Company’s former parent. The transaction was approved by the unanimous vote of independent and disinterested members of each of Jaguar’s and Napo’s Board of Directors. Napo will operate as a wholly-owned subsidiary of Jaguar, focused on human health. The binding financial terms of the merger include a 3-to-1 Napo-to-Jaguar value ratio to calculate the relative ownership of the combined entity. As of January 31, 2017, Napo owned approximately 19% of Jaguar’s outstanding shares of common stock. The Agreement sets forth the financial terms of the merger and customary conditions to closing, which include but are not limited to completion of due diligence, receipt of a fairness opinion, and stockholder and other approvals. Additionally, the financial terms of the merger and conditions to closing include provisions that (i) Napo’s secured convertible debt shall not exceed $11.3 million and its unsecured debt shall not exceed $6.2 million, and (ii) a third party will invest $3.0 million in the Company for approximately four million shares of newly issued common stock of the Company with the investment proceeds loaned to Napo immediately prior to the consummation of the merger. The Agreement also provides that if the merger fails to close for any reason on or prior to July 31, 2017, other than as a result directly or indirectly of (x) lack of stockholder approval by either party or (y) Napo (i) failing to perform in accordance with the terms and conditions of the Agreement or (ii) failing to abide by or breaching the provisions or representations, warranties and covenants of the Agreement or the merger documents, then, on or before the close of business on August 7, 2017, the Company will be required to issue 2,000,000 shares of its restricted common stock to Napo. On April 18, 2017, the Company filed the preliminary registration statement Form S-4 with the Securities and Exchange Commission for the acquisition of Napo through a merger. CSPA On May 11 and 12, 2017, pursuant to the CSPA, the Company sold an additional 16,480 shares of the Company’s common stock in exchange for $12,629 of cash proceeds. |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the Company’s management to make judgments, assumptions and estimates that affect the amounts reported in its financial statements and the accompanying notes. The accounting policies that reflect the Company’s more significant estimates and judgments and that the Company believes are the most critical to aid in fully understanding and evaluating its reported financial results are valuation of stock options; valuation of warrant liabilities; impairment of long lived assets; useful lives for depreciation; valuation adjustments for excess and obsolete inventory; deferred taxes and valuation allowances on deferred tax assets; evaluation and measurement of contingencies; and recognition of revenue — to capture the estimate driving the period over which Elanco revenue is being recognized. Those estimates could change, and as a result, actual results could differ materially from those estimates. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs are costs incurred in filings of registration statements with the Securities and Exchange Commission. These deferred offering costs are offset against proceeds received upon the closing of the offerings. Deferred costs of $65,078 and $72,710 as of March 31, 2017 and December 31, 2016, respectively, include legal, accounting and filing fees associated with the Company’s registration of unissued shares in the CSPA. |
Concentration of Credit Risk and Cash and Cash Equivalents | Concentration of Credit Risk and Cash and Cash Equivalents Cash is the financial instrument that potentially subjects the Company to a concentration of credit risk as cash is deposited with a bank and cash balances are generally in excess of Federal Deposit Insurance Corporation (“FDIC”) insurance limits. The carrying value of cash approximates fair value at March 31, 2017 and December 31, 2016. |
Fair Values | Fair Values The Company’s financial instruments include, cash and cash equivalents, accounts payable, accrued expenses, amounts due to Napo, the former parent, warrant liabilities, and debt. Cash is reported at fair value. The recorded carrying amount of accounts payable, accrued expenses and amounts due to Napo approximates their fair value due to their short-term nature. The carrying value of the interest-bearing debt approximates fair value based upon the borrowing rates currently available to the Company for bank loans with similar terms and maturities. See Note 3 for the fair value measurements, and Note 7 for the fair value of the Company’s warrant liabilities. |
Restricted Cash | Restricted Cash On August 18, 2015, the Company entered into a long-term loan and security agreement with a lender for up to $8.0 million, which provided for an initial loan commitment of $6.0 million. The loan agreement required the Company to maintain a base minimum cash balance of $4.5 million until the Company met certain milestones and/or when the Company begins making principal payments. On December 22, 2015, the Company achieved certain milestones and the base minimum cash balance was reduced to $3.0 million. Aggregate principal payments of $2,978,808 further reduced the restricted cash balance to $21,192 as of March 31, 2017. Restricted cash has been classified within current assets as restrictions were fully released on April 1, 2017. |
Inventories | Inventories Inventories are stated at the lower of cost or market. The Company calculates inventory valuation adjustments when conditions indicate that market is less than cost due to physical deterioration, usage, obsolescence, reductions in estimated future demand or reduction in selling price. Inventory write-downs are measured as the difference between the cost of inventory and market. There have been no write-downs to date. |
Property and Equipment | Property and Equipment Equipment is stated at cost, less accumulated depreciation. Equipment begins to be depreciated when it is placed into service. Depreciation is calculated using the straight-line method over the estimated useful lives of 3 to 10 years. Expenditures for repairs and maintenance of assets are charged to expense as incurred. Costs of major additions and betterments are capitalized and depreciated on a straight-line basis over their estimated useful lives. Upon retirement or sale, the cost and related accumulated depreciation of assets disposed of are removed from the accounts and any resulting gain or loss is included in income (loss) from operations. |
Long-Lived Assets | Long-Lived Assets The Company regularly reviews the carrying value and estimated lives of all of its long-lived assets, including property and equipment to determine whether indicators of impairment may exist that warrant adjustments to carrying values or estimated useful lives. The determinants used for this evaluation include management’s estimate of the asset’s ability to generate positive income from operations and positive cash flow in future periods as well as the strategic significance of the assets to the Company’s business objectives. Should an impairment exist, the impairment loss would be measured based on the excess of the carrying amount over the asset’s fair value. The Company has not recognized any impairment losses through March 31, 2017. |
Research and Development Expense | Research and Development Expense Research and development expense consists of expenses incurred in performing research and development activities including related salaries, clinical trial and related drug and non-drug product costs, contract services and other outside service expenses. Research and development expense is charged to operating expense in the period incurred. |
Revenue Recognition | Revenue Recognition Product Revenue Sales of Neonorm Calf and Foal to distributors are made under agreements that may provide distributor price adjustments and rights of return under certain circumstances. Until the Company develops sufficient sales history and pipeline visibility, revenue and costs of distributor sales will be deferred until products are sold by the distributor to the distributor’s customers. Revenue recognition depends on notification either directly from the distributor that product has been sold to the distributor’s customer, when the Company has access to the data. Deferred revenue on shipments to distributors reflect the estimated effects of distributor price adjustments, if any, and the estimated amount of gross margin expected to be realized when the distributor sells through product purchased from the Company. Company sales to distributors are invoiced and included in accounts receivable and deferred revenue upon shipment. Inventory is relieved and revenue recognized upon shipment by the distributor to their customer. The Company had Neonorm revenues of $44,544 and $38,146 for the three months ended March 31, 2017 and 2016. Sales of Botanical Extract are recognized as revenue when delivered to the customer. The Company had Botanical Extract revenues of $30,000 and $0 in the three months ended March 31, 2017 and 2016. |
Collaboration Revenue | Collaboration Revenue On January 27, 2017, the Company entered into a licensing, development, co-promotion and commercialization agreement with Elanco US Inc. (“Elanco”) to license, develop and commercialize Canalevia (“Licensed Product”), our drug product candidate under investigation for treatment of acute and chemotherapy-induced diarrhea in dogs, and other drug product formulations of crofelemer for treatment of gastrointestinal diseases, conditions and symptoms in cats and other companion animals. The Company grants Elanco exclusive global rights to Canalevia, a product whose active pharmaceutical ingredient is sustainably isolated and purified from the Croton lechleri tree, for use in companion animals. Pursuant to the Elanco Agreement, Elanco will have exclusive rights globally outside the U.S. and co-exclusive rights with the Company in the U.S. to direct all marketing, advertising, promotion, launch and sales activities related to the Licensed Products. Under the terms of the Elanco Agreement, the Company received an initial upfront payment of $2,548,689 and will receive additional payments upon achievement of certain development, regulatory and sales milestones in an aggregate amount of up to $61.0 million payable throughout the term of the Elanco Agreement, as well as product development expense reimbursement, and royalty payments on global sales. The Elanco Agreement specifies that the Company will supply the Licensed Products to Elanco, and that the parties will agree to set a minimum sales requirement that Elanco must meet to maintain exclusivity. Elanco will reimburse the Company for certain development and regulatory expenses related to our planned target animal safety study and the completion of the Canalevia field study for acute diarrhea in dogs. The Company has $288,166 of unreimbursed expenses as of March 31, 2017, which is included on the Company’s balance sheet. The Company included the $288,166 in collaboration revenue in the three months ended March 31, 2017 which is included in the Company’s statements of operations and comprehensive loss. The $2,548,689 total of the upfront payment is recognized as revenue ratably over the estimated development period of one year resulting in $459,700 in collaboration revenue in the three months ended March 31, 2017 and is included in the Company’s statements of operations and comprehensive loss. The difference of $2,088,989 is included in deferred collaboration revenue and the uncollected $288,166 of unreimbursed expenses is included in other receivables in on the Company’s balance sheet. The Company recognizes revenue in accordance with ASC 605 “Revenue Recognition”, subtopic ASC 605-25 “ Revenue with Multiple Element Arrangements “ and subtopic ASC 605-28 “ Revenue Recognition-Milestone Method “, which provides accounting guidance for revenue recognition for arrangements with multiple deliverables and guidance on defining the milestone and determining when the use of the milestone method of revenue recognition for research and development transactions is appropriate, respectively. For multiple-element arrangements, each deliverable within a multiple deliverable revenue arrangement is accounted for as a separate unit of accounting if both of the following criteria are met: (1) the delivered item or items have value to the customer on a standalone basis and (2) for an arrangement that includes a general right of return relative to the delivered item(s), delivery or performance of the undelivered item(s) is considered probable and substantially in our control. If a deliverable in a multiple element arrangement is not deemed to have a stand-alone value, consideration received for such a deliverable is recognized ratably over the term of the arrangement or the estimated performance period, and it will be periodically reviewed based on the progress of the related product development plan. The effect of a change made to an estimated performance period and therefore revenue recognized ratably would occur on a prospective basis in the period that the change was made. The Company recognizes revenue under its licensing, development, co-promotion and commercialization agreement from milestone payments when: (i) the milestone event is substantive and its achievability has substantive uncertainty at the inception of the agreement, and (ii) it does not have ongoing performance obligations related to the achievement of the milestone earned. Milestone payments are considered substantive if all of the following conditions are met: the milestone payment (a) is commensurate with either the Company’s performance subsequent to the inception of the arrangement to achieve the milestone or the enhancement of the value of the delivered item or items as a result of a specific outcome resulting from the Company’s performance subsequent to the inception of the arrangement to achieve the milestone, (b) relates solely to past performance, and (c) is reasonable relative to all of the deliverables and payment terms (including other potential milestone consideration) within the arrangement. The Company records revenue related to the reimbursement of costs incurred under the collaboration agreement where the company acts as principal, controls the research and development activities and bears credit risk. Under the agreement, the Company is reimbursed for associated out-of-pocket costs and for certain employee costs. The gross amount of these pass-through costs is reported in revenue in the accompanying statements of operations and comprehensive loss, while the actual expense for which the Company is reimbursed are reflected as research and development costs. Determining whether and when some of these revenue recognition criteria have been satisfied often involves assumptions and judgments that can have a significant impact on the timing and amount of revenue the Company will report. Changes in assumptions or judgments or changes to the elements in an arrangement could cause a material increase or decrease in the amount of revenue that the Company reports in a particular period. |
Stock-Based Compensation | Stock-Based Compensation The Company’s 2013 Equity Incentive Plan and 2014 Stock Incentive Plan (see Note 10) provides for the grant of stock options, restricted stock and restricted stock unit awards. The Company measures stock awards granted to employees and directors at fair value on the date of grant and recognizes the corresponding compensation expense of the awards, net of estimated forfeitures, over the requisite service periods, which correspond to the vesting periods of the awards. The Company issues stock awards with only service-based vesting conditions, and records compensation expense for these awards using the straight-line method. The Company uses the grant date fair market value of its common stock to value both employee and non-employee options when granted. The Company revalues non-employee options each reporting period using the fair market value of the Company’s common stock as of the last day of each reporting period. |
Classification of Securities | Classification of Securities The Company applies the principles of ASC 480-10 “Distinguishing Liabilities from Equity” and ASC 815-40 “Derivatives and Hedging—Contracts in Entity’s Own Equity” to determine whether financial instruments such as warrants should be classified as liabilities or equity and whether beneficial conversion features exist. Financial instruments such as warrants that are evaluated to be classified as liabilities are fair valued upon issuance and are remeasured at fair value at subsequent reporting periods with the resulting change in fair value recorded in other income/(expense). The fair value of warrants is estimated using the Black Scholes Merton model and requires the input of subjective assumptions including expected stock price volatility and expected life. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in the financial statements or in the Company’s tax returns. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. Changes in deferred tax assets and liabilities are recorded in the provision for income taxes. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent it believes, based upon the weight of available evidence, that it is more likely than not that all or a portion of deferred tax assets will not be realized, a valuation allowance is established through a charge to income tax expense. Potential for recovery of deferred tax assets is evaluated by estimating the future taxable profits expected and considering prudent and feasible tax planning strategies. The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination by the taxing authorities. If the tax position is deemed more-likely-than-not to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The provision for income taxes includes the effects of any resulting tax reserves, or unrecognized tax benefits, that are considered appropriate, as well as the related net interest and penalties. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as changes in stockholders’ equity (deficit) exclusive of transactions with owners (such as capital contributions and distributions). For the three months ended March 31, 2017 and 2016 there was no difference between net loss and comprehensive loss. |
Segment Data | Segment Data The Company manages its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company is an animal health company focused on developing and commercializing prescription and non-prescription products for companion and production animals. |
Basic and Diluted Net Loss Per Common Share | Basic and Diluted Net Loss Per Common Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders for the period by the weighted-average number of common shares outstanding during the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders for the period by the weighted-average number of common shares, including potential dilutive shares of common stock assuming the dilutive effect of potential dilutive securities. For periods in which the Company reports a net loss, diluted net loss per common share is the same as basic net loss per common share, because their impact would be anti-dilutive to the calculation of net loss per common share. Diluted net loss per common share is the same as basic net loss per common share for the three months ended March 31, 2017 and 2016. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In November 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows: Restricted Cash, or ASU 2016-18, that will require entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows. As a result, entities will no longer present transfers between cash and cash equivalents and restricted cash and restricted cash equivalents in the statement of cash flows. When cash, cash equivalents, restricted cash and restricted cash equivalents are presented in more than one line item on the balance sheet, the new guidance requires a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet. This reconciliation can be presented either on the face of the statement of cash flows or in the notes to the financial statements. Entities will also have to disclose the nature of their restricted cash and restricted cash equivalent balances. ASU 2016-18 becomes effective for fiscal years beginning after December 15, 2017, and interim periods within those years, with early adoption permitted. Any adjustments must be reflected as of the beginning of the fiscal year that includes that interim period. The adoption of this standard is not expected to have an impact on the Company’s financial position or results of operations. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses the following cash flow issues: (1) debt prepayment or debt extinguishment costs; (2) settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing; (3) contingent consideration payments made after a business combination; (4) proceeds from the settlement of insurance claims; (5) proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies; (6) distributions received from equity method investees; (7) beneficial interests in securitization transactions; and (8) separately identifiable cash flows and application of the predominance principle. The amendments in this ASU are effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years and are effective for all other entities for fiscal years beginning after December 15, 2018 and interim periods within fiscal years beginning after December 15, 2019. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of the adoption of ASU No. 2016-15 on our consolidated financial statements. In March 2016, the FASB issued ASU No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting, which simplifies several aspects of the accounting for employee stock-based payment transactions. The areas for simplification in ASU No. 2016-09 include the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Effective January 1, 2017, the Company adopted ASU No. 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. Among other requirements, the new guidance requires all tax effects related to share-based payments at settlement (or expiration) to be recorded through the income statement. Previously, tax benefits in excess of compensation cost (“windfalls”) were recorded in equity, and tax deficiencies (“shortfalls”) were recorded in equity to the extent of previous windfalls, and then to the income statement. Under the new guidance, the windfall tax benefit is to be recorded when it arises, subject to normal valuation allowance considerations. The adoption of this standard did not have any impact to the Statement of Operations or the Statement of Cash Flows for the three-month periods ended March 31, 2016 or 2017. As of December 31, 2016, the Company had no unrecognized deferred tax assets related to excess tax benefits, and as such, there was no cumulative-effect adjustment to the beginning accumulated deficit. Additionally, the treatment of forfeitures has not changed as the Company is electing to continue its current process of estimating the number of forfeitures. As such, this has no cumulative effect on accumulated deficit. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which replaces the current lease accounting standard. ASU 2016-02 establishes a right-of-use (“ROU”) model that requires a lessee to record a ROU asset and a lease liability on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the statements of operations. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. The Company is currently evaluating the impact of the new standard on its financial statements. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers.” The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry-specific guidance. The core principle of the new standard is that revenue should be recognized to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard is effective for annual reporting periods beginning after December 15, 2017 and allows for prospective or retrospective application. The Company currently anticipates utilizing the full retrospective method of adoption allowed by the standard, in order to provide for comparative results in all periods presented, and plans to adopt the standard as of January 1, 2018. The Company is currently evaluating the new guidance, however it does not believe the impact will be significant. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Measurements | |
Summary of information about the warrant liability that is measured at fair value on a recurring basis | Level 1 Level 2 Level 3 Total As of March 31, 2017 Warrant Liability $ — $ — $ $ Level 1 Level 2 Level 3 Total As of December 31, 2016 Warrant Liability $ — $ — $ $ |
Summary of change in the estimated fair value of level 3 liabilities | Beginning Change in Ending Fair Value of Fair Value of Value of Level 3 Level 3 Level 3 Liability Liability Liability For the three months ended March 31, 2017 $ $ $ For the three months ended March 31, 2016 $ — $ — $ — |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions | |
Summary of outstanding receivables (payables) from former parent ("Napo") | March 31, December 31, 2017 2016 Due from former parent $ $ Royalty payable to former parent ) ) Net receivable (payable) to former parent $ $ |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Balance Sheet Components | |
Schedule of property and equipment | March 31, December 31, 2017 2016 Lab equipment $ $ Clinical equipment Software Total property and equipment at cost Accumulated Depreciation ) ) Property and Equipment, net $ $ |
Schedule of depreciation expense | Three Months Ended March 31, 2017 2016 Depreciation - Lab Equipment - research and development expense $ $ Depreciation - Clinical Equipment - research and development expense Depreciation - Software - general and administrative expense Total Depreciation Expense $ $ |
Schedule of accrued expenses | March 31, December 31, 2017 2016 Accrued compensation and related: Accrued vacation $ $ Accrued payroll — Accrued payroll tax Accrued interest Accrued clinical — Accrued legal costs Accrued audit Accrued other Total $ $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments under noncancelable operating leases | Future minimum lease payments under non-cancelable operating leases as of March 31, 2017 are as follows: Years ending December 31, Amount 2017 - April through December $ 2018 Total minimum lease payments $ |
Debt and Warrants (Tables)
Debt and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Debt and Warrants | |
Schedule of net long-term debt obligation | March 31, December 31, 2017 2016 Debt and unpaid accrued end-of-term payment $ $ Unamortized note discount ) ) Unamortized debt issuance costs ) ) Net debt obligation $ $ Current portion of long-term debt $ $ Long-term debt, net of discount Total $ $ |
Schedule of future principal payments under the long-term debt | Years ending December 31 Amount 2017 - April through December $ 2018 Total future principal payments 2018 end-of-term payment Less: unaccreted end-of-term payment at March 31, 2017 ) Debt and unpaid accrued end-of-term payment $ |
Schedule of interest expense on long-term debt | Three months ended March 31, 2017 2016 Nominal Interest $ $ Amortization of debt issuance costs Accretion of end-of-term payment Debt issuance costs $ $ |
Summary of warrant activity | Three Months Ended Year Ended March 31, December 31, 2017 2016 Beginning balance Warrants granted Warrants cancelled — ) Ending balance |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity | |
Schedule of issuance costs were allocated to common stock, Series A warrants, and Series B and C warrants | Instruments Fair Value % Allocation Issuance Costs Common Stock $ % $ Warrants (Series A) % Warrants (Series B and C) % Total $ % $ |
Schedule of common reserved shares of common stock for issuance | March 31, March 31, 2017 2016 Options issued and outstanding Options available for grant RSUs issued and outstanding Warrants issued and outstanding Convertible notes Total |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Summary of incentive plan activity | Shares Stock Options RSUs Weighted Weighted Average Aggregate Combined Incentive Plan Balance—December 31, 2016 $ $ — 2014 Stock Incentive Plan Activity: Additional shares authorized Options granted ) Options cancelled ) Combined Incentive Plan Balance—March 31, 2017 $ $ Options vested and exercisable—March 31, 2017 $ $ Options vested and expected to vest—March 31, 2017 $ $ |
Summary of stock-based compensation expense | Three Months Ended March 31, 2017 2016 Research and development expense $ $ Sales and marketing expense General and administrative expense Total $ $ |
Employee stock options | |
Schedule of estimated grant-date fair value of stock options calculated using the Black-Scholes option-pricing model | Three months ended March 31, 2017 2016 Weighted-average volatility % — Weighted-average expected term (years) — Risk-free interest rate % — Expected dividend yield — — |
Non-employee stock options | |
Schedule of estimated grant-date fair value of stock options calculated using the Black-Scholes option-pricing model | Three months ended March 31, 2017 2016 Weighted-average volatility — % Weighted-average expected term (years) — Risk-free interest rate — % Expected dividend yield — — |
Net Loss Per Share Attributab30
Net Loss Per Share Attributable to Common Stockholders (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Net Loss Per Share Attributable to Common Stockholders | |
Schedule of calculation of basic and diluted net loss per common share | March 31, March 31, 2017 2016 Net loss attributable to common shareholders $ ) $ ) Shares used to compute net loss per common share, basic and diluted Net loss per share attributable to common shareholders, basic and diluted $ ) $ ) |
Schedule of common stock equivalents excluded from the calculation of diluted net loss per common share | March 31, March 31, 2017 2016 Options issued and outstanding Warrants to purchase common stock Restricted stock units Total |
Organization and Business (Deta
Organization and Business (Details) | Aug. 07, 2017shares | May 12, 2017USD ($)shares | Feb. 08, 2017shares | Jan. 31, 2017USD ($)shares | Nov. 22, 2016USD ($) | Oct. 06, 2016company | Jun. 11, 2013shares | Oct. 31, 2016USD ($)shares | Jun. 30, 2016USD ($)shares | May 31, 2017shares | Jun. 30, 2017shares | Mar. 31, 2017USD ($)segment$ / sharesshares | Jun. 30, 2017shares | Dec. 31, 2016USD ($)shares |
Number of segments | segment | 1 | |||||||||||||
Number of companies to merge under letter of intent (LOI) | company | 2 | |||||||||||||
Liquidity | ||||||||||||||
Accumulated deficit | $ (45,151,466) | $ (40,436,108) | ||||||||||||
Restricted common stock | ||||||||||||||
Stock issuable by the entity, if failing to abide of binding agreement (in shares) | shares | 2,000,000 | 2,000,000 | ||||||||||||
Private investment | ||||||||||||||
Liquidity | ||||||||||||||
Shares issued (in shares) | shares | 3,555,514 | 3,555,514 | 2,444,486 | 6,000,000 | ||||||||||
Proceeds from issuance of common stock | $ 3,227,134 | |||||||||||||
Maximum number of shares company is permitted to issue | shares | 2,027,490 | |||||||||||||
Maximum number of shares company is permitted to issue (as a percent) | 19.99% | |||||||||||||
Share price required to issue shares more than permitted number (in dollars per share) | $ / shares | $ 1.32 | |||||||||||||
Common Stock | ||||||||||||||
Amount of shares issued | $ 106,000 | |||||||||||||
Common Stock | Private investment | ||||||||||||||
Amount of shares issued | $ 500,000 | |||||||||||||
Liquidity | ||||||||||||||
Term of stock purchase agreement | 30 months | |||||||||||||
Shares issued (in shares) | shares | 16,480 | 170,455 | 222,222 | 416,996 | 1,348,601 | |||||||||
Proceeds from issuance of common stock | $ 12,629 | $ 150,000 | $ 394,534 | $ 550,434 | $ 2,176,700 | |||||||||
Common Stock | Private investment | Maximum | ||||||||||||||
Liquidity | ||||||||||||||
Value of common stock that may be sold to a private investor | $ 15,000,000 | |||||||||||||
Napo | ||||||||||||||
Merger Stock Conversion Ratio | 33.33 | |||||||||||||
Percentage of voting interests (as a percent) | 19.00% | |||||||||||||
Maximum amount of unsecured debt | $ 6,200,000 | |||||||||||||
Napo | Common Stock | ||||||||||||||
Amount of shares issued | $ 3,000,000 | |||||||||||||
Liquidity | ||||||||||||||
Shares issued (in shares) | shares | 4,000,000 | |||||||||||||
Service Agreement | Napo | ||||||||||||||
Number of shares issued in exchange for cash and services | shares | 2,666,666 | |||||||||||||
Convertible debt | Napo | ||||||||||||||
Maximum amount of secured convertible debt | $ 11,300,000 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Deferred Offering Costs (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Deferred Financing Costs | ||
Deferred Offering Costs | $ 65,078 | $ 72,710 |
IPO | ||
Deferred Financing Costs | ||
Deferred Offering Costs | $ 65,078 | $ 72,710 |
Summary of Significant Accoun33
Summary of Significant Accounting Policies - Restricted Cash and Inventories (Details) - USD ($) | Apr. 21, 2016 | Aug. 18, 2015 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 22, 2015 |
Restricted Cash | |||||
Maximum borrowing capacity | $ 8,000,000 | ||||
Initial loan commitment | 6,000,000 | ||||
Base minimum cash balance | $ 4,500,000 | $ 3,000,000 | |||
Repayment of loan from restricted cash | $ 1,500,000 | $ 2,978,808 | |||
Restricted cash, current | 21,192 | $ 511,293 | |||
Inventories | |||||
Inventory write-downs | $ 0 |
Summary of Significant Accoun34
Summary of Significant Accounting Policies - Property and Equipment and Long-Lived Assets (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Asset Impairment Charges | |
Impairment losses | $ 0 |
Equipment | Minimum | |
Property and Equipment | |
Property, Plant and Equipment, Useful Life | 3 years |
Equipment | Maximum | |
Property and Equipment | |
Property, Plant and Equipment, Useful Life | 10 years |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenue Recognition | ||
Revenues | $ 822,410 | $ 38,146 |
Neonorm | ||
Revenue Recognition | ||
Revenues | 44,544 | 38,146 |
Botanical Extract | ||
Revenue Recognition | ||
Revenues | $ 30,000 | $ 0 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Collaboration Revenue (Details) - USD ($) | Jan. 27, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Collaboration Revenue | |||
Estimated development period for revenue recognition (in years) | 1 year | ||
Deferred collaboration revenue | $ 2,088,989 | ||
Accounting Standards Update 2016-09 | |||
Collaboration Revenue | |||
Unrecognized deferred tax assets | $ 0 | ||
Cumulative-effect adjustment | $ 0 | ||
Elanco | |||
Collaboration Revenue | |||
Initial upfront payment received | $ 2,548,689 | ||
Additional payment receivable upon achievement | $ 61,000,000 | ||
Unreimbursed expenses | 288,166 | ||
Upfront payment and expense reimbursement recognized as revenue | $ 2,548,689 | ||
Estimated development period for revenue recognition (in years) | 1 year | ||
Collaboration revenue recognized from unreimbursed expenses | $ 288,166 | ||
Collaboration revenue recognized from upfront payment and expense reimbursement | 459,700 | ||
Deferred collaboration revenue | $ 2,088,989 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Liabilities Measured on a Recurring Basis (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Fair value of liabilities measured on a recurring basis | ||
Warrant liability | $ 1,252,620 | $ 799,201 |
Recurring | ||
Fair value of liabilities measured on a recurring basis | ||
Warrant liability | 1,252,620 | 799,201 |
Recurring | Level 3 | ||
Fair value of liabilities measured on a recurring basis | ||
Warrant liability | $ 1,252,620 | $ 799,201 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value of Warrant Liability (Details) - USD ($) | Nov. 29, 2016 | Nov. 08, 2016 | Mar. 31, 2017 | Dec. 31, 2016 |
Change in the estimated fair value of the warrant liability | ||||
Beginning value of warrant liability | $ 799,201 | |||
Change in Fair Value of Level 3 Liability | 453,419 | |||
Ending Fair value of warrant liability | $ 1,252,620 | $ 799,201 | ||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||
Stock price | $ 0.69 | $ 0.91 | $ 1 | $ 0.716 |
Exercise price | $ 0.75 | $ 0.01 | $ 0.75 | $ 0.75 |
Term | 5 years 6 months | 5 years 8 months 19 days | 5 years 1 month 28 days | 5 years 4 months 28 days |
Volatility (as a percent) | 71.92% | 70.35% | 78.33% | 73.62% |
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% |
Risk-free interest rate (as a percent) | 1.87% | 1.45% | 1.95% | 2.00% |
Recurring | ||||
Change in the estimated fair value of the warrant liability | ||||
Beginning value of warrant liability | $ 799,201 | |||
Ending Fair value of warrant liability | 1,252,620 | $ 799,201 | ||
Level 3 | Recurring | ||||
Change in the estimated fair value of the warrant liability | ||||
Beginning value of warrant liability | 799,201 | |||
Change in Fair Value of Level 3 Liability | 453,419 | |||
Ending Fair value of warrant liability | $ 1,252,620 | $ 799,201 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Napo | ||
Related Party Transactions | ||
Due from former parent | $ 221,429 | $ 299,819 |
Royalty payable to former parent | (7) | (171) |
Net receivable (payable) to former parent | 221,422 | 299,648 |
Napo | Service Agreement | ||
Related Party Transactions | ||
Remittance from related party | 465,625 | |
Outstanding receivables | 219,171 | 277,529 |
Napo | Purchase transactions | ||
Related Party Transactions | ||
Remittance from related party | 25,408 | |
Outstanding receivables | 2,258 | $ 22,290 |
Napo | Service Agreement | ||
Related Party Transactions | ||
Amount of share employee services | 407,267 | |
Napo | Purchase transactions | ||
Related Party Transactions | ||
Amount of share employee services | $ 5,376 |
Related Party Transactions - Ro
Related Party Transactions - Royalty payable to former parent and license fee payable to former parent and related agreement (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||||
Jan. 31, 2015 | Jan. 31, 2014 | Jul. 31, 2013 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | |
Commercialization Agreement | ||||||
Property and equipment, net | $ 870,914 | $ 885,945 | ||||
Napo | Option Agreement | ||||||
Commercialization Agreement | ||||||
License fees paid | $ 100,000 | |||||
Term of agreement | 2 years | |||||
Napo | License Agreement | ||||||
Commercialization Agreement | ||||||
License fees paid | 425,000 | |||||
Payment obligation of one-time non-refundable license fee | $ 1,750,000 | $ 2,000,000 | ||||
Option fee | 100,000 | |||||
Milestone payments due | $ 3,150,000 | |||||
Royalty expiration term from the first sale of each individual product | 10 years | |||||
Minimum proceeds from IPO prior to December 31, 2015, required for royalty reduction | $ 10,000,000 | |||||
Milestone payments due in the event of minimum proceeds from IPO | $ 0 | |||||
Napo | License Agreement | Property and equipment | ||||||
Commercialization Agreement | ||||||
Property and equipment, net | 811,087 | $ 811,087 | ||||
Napo | License Agreement | General and administrative expense | ||||||
Commercialization Agreement | ||||||
Royalties incurred | 284 | |||||
Royalties paid | 447 | |||||
Unpaid royalties | $ 7 | |||||
Napo | License Agreement | Research and development expense | ||||||
Commercialization Agreement | ||||||
Property and equipment, net | $ 1,200,000 | |||||
Products derived from Croton Lechleri | Napo | License Agreement | ||||||
Commercialization Agreement | ||||||
Royalty rate for net sales below revenue base (as a percent) | 8.00% | |||||
Net product sales upon which royalty rate increases | $ 30,000,000 | |||||
Royalty rate for net sales above revenue base (as a percent) | 10.00% | |||||
Royalties payments due in the event of minimum proceeds from IPO | $ 0 | |||||
Prescription products derived from Croton Lechleri | Napo | License Agreement | ||||||
Commercialization Agreement | ||||||
Royalty rate in the event of an IPO in excess of a specified amount | 2.00% | |||||
Nonprescription products derived from Croton Lechleri | Napo | License Agreement | ||||||
Commercialization Agreement | ||||||
Royalty rate in the event of an IPO in excess of a specified amount | 1.00% | |||||
Pharmaceutical prescription products not derived from Croton Lechleri | Napo | License Agreement | ||||||
Commercialization Agreement | ||||||
Royalty on annual net sales of products (as a percent) | 2.00% | |||||
Nonprescription products not derived from Croton Lechleri | Napo | License Agreement | ||||||
Commercialization Agreement | ||||||
Royalty on annual net sales of products (as a percent) | 1.00% |
Balance Sheet Components - Prop
Balance Sheet Components - Property and Equipment (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Property and Equipment | |||
Property, Plant and Equipment, Gross | $ 938,594 | $ 938,594 | |
Accumulated Depreciation | (67,680) | (52,649) | |
Property and Equipment, net | 870,914 | 885,945 | |
Depreciation and amortization expense | 15,031 | $ 7,878 | |
Lab Equipment | |||
Property and Equipment | |||
Property, Plant and Equipment, Gross | 811,087 | 811,087 | |
Lab Equipment | Research and development expense | |||
Property and Equipment | |||
Depreciation and amortization expense | 6,568 | 6,568 | |
Clinical Equipment | |||
Property and Equipment | |||
Property, Plant and Equipment, Gross | 64,870 | 64,870 | |
Clinical Equipment | Research and development expense | |||
Property and Equipment | |||
Depreciation and amortization expense | 3,243 | 1,165 | |
Software | |||
Property and Equipment | |||
Property, Plant and Equipment, Gross | 62,637 | $ 62,637 | |
Software | General and administrative expense | |||
Property and Equipment | |||
Depreciation and amortization expense | $ 5,220 | $ 145 |
Balance Sheet Components - Accr
Balance Sheet Components - Accrued Expenses (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued compensation and related: | ||
Accrued vacation | $ 229,944 | $ 223,769 |
Accrued payroll | 2,692 | |
Accrued payroll tax | 21,843 | 20,140 |
Total of accrued compensation and related | 251,787 | 246,601 |
Accrued interest | 124,242 | 123,982 |
Accrued clinical | 36,725 | |
Accrued legal costs | 855,397 | 92,500 |
Accrued audit | 20,000 | 37,000 |
Accrued other | 14,921 | 45,714 |
Total | $ 1,266,347 | $ 582,522 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) - USD ($) | Jul. 01, 2015 | Jun. 30, 2017 | Mar. 31, 2016 | Mar. 31, 2017 |
Commitments and Contingencies | ||||
Cash deposits under non-cancelable sub-lease agreement | $ 122,163 | |||
Security deposit under non-cancelable sub-lease agreement | 29,539 | |||
Future minimum lease payments under non-cancellable operating leases | ||||
2017 - April through December | $ 273,365 | |||
2,018 | 245,327 | |||
Total minimum lease payments | $ 518,692 | |||
Other assets | ||||
Commitments and Contingencies | ||||
Prepayment of last three months lease payments | $ 92,623 | |||
General and administrative expense | ||||
Commitments and Contingencies | ||||
Rent expense under non-cancelable operating lease | $ 90,278 | $ 90,278 |
Commitments and Contingencies44
Commitments and Contingencies - Contract Manufacturing Commitment (Details) | Jul. 15, 2016EUR (€) | Mar. 29, 2016EUR (€) | Jun. 26, 2014EUR (€)itemshares | May 31, 2015EUR (€) | Apr. 30, 2015EUR (€) | Mar. 31, 2016USD ($) | Dec. 31, 2016EUR (€)item | Dec. 31, 2015EUR (€) | Mar. 31, 2017shares | Nov. 22, 2016$ / shares | Nov. 08, 2016$ / shares | Mar. 31, 2016EUR (€)shares | Jun. 30, 2015EUR (€) | Mar. 31, 2015$ / shares | Mar. 31, 2015EUR (€) | Mar. 25, 2015EUR (€) |
Commitments and Contingencies | ||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 69,869 | 26,785 | ||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 1 | $ 0.01 | ||||||||||||||
Accrued Liabilities | ||||||||||||||||
Commitments and Contingencies | ||||||||||||||||
Contract amortization costs included in accrued liabilities | $ | $ 170,850 | |||||||||||||||
Transfer Agreement | Manufacturer | ||||||||||||||||
Commitments and Contingencies | ||||||||||||||||
Prepayment of start-up fee | € 500,000 | € 500,000 | € 500,000 | |||||||||||||
Prepayment of start-up fee which is to be paid at the earlier to occur of September 15, 2014 or the closing date of an initial public offering | 250,000 | |||||||||||||||
Prepayment of start-up fee which is to be paid at the time of installation and qualification of the Company's equipment | 250,000 | |||||||||||||||
Prepayment related to technology transfer | 620,000 | 215,000 | ||||||||||||||
Prepayment related to technology transfer which is to be paid within five days of the signature of the Transfer Agreement | 310,000 | |||||||||||||||
Prepayment related to technology transfer which is to be paid after the delivery of a final study report | 310,000 | |||||||||||||||
Prepayment for design of a portion of the Manufacturer's facility which is to be paid within five days of the signature of the Transfer Agreement | € 100,000 | |||||||||||||||
Period within which prepayment for design of a portion of the Manufacturer's facility is payable from signature of the Transfer Agreement | 5 days | |||||||||||||||
Bonus fee payable | € 300,000 | € 150,000 | ||||||||||||||
Number of installments | item | 2 | |||||||||||||||
Bonus fee paid | € 150,000 | € 150,000 | € 150,000 | 150,000 | ||||||||||||
Aggregate amount payable to Manufacturer upon the delivery of agreed-upon levels of satisfactory product pursuant to the agreement | € 500,000 | € 250,000 | € 250,000 | € 250,000 | ||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 16,666 | |||||||||||||||
Exercise price as a percentage of initial public offering price | 90.00% | |||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 6.30 | |||||||||||||||
Remaining balance due related to prepayment of technology transfer | € 310,000 | |||||||||||||||
Increase in prepayment for design of portion of manufacturer facility payable within specified days of signature of agreement | 170,000 | |||||||||||||||
Transfer Agreement | API | ||||||||||||||||
Commitments and Contingencies | ||||||||||||||||
Amount of product supplied at no cost (in Kg) | item | 400 | |||||||||||||||
Payments made | € 250,000 | |||||||||||||||
Amendment to Transfer Agreement first portion due | Manufacturer | ||||||||||||||||
Commitments and Contingencies | ||||||||||||||||
Prepayment related to technology transfer | € 215,000 | |||||||||||||||
Payments related to design of a portion of manufacturing facility | € 150,000 | |||||||||||||||
Amendment to Transfer Agreement second portion due | Manufacturer | ||||||||||||||||
Commitments and Contingencies | ||||||||||||||||
Prepayment related to technology transfer | € 95,000 | |||||||||||||||
Payments related to design of a portion of manufacturing facility | € 20,000 |
Debt and Warrants - Debt (Detai
Debt and Warrants - Debt (Details) | Aug. 01, 2018USD ($) | Jan. 31, 2017USD ($)$ / sharesshares | Nov. 29, 2016$ / shares | Nov. 08, 2016USD ($)$ / sharesshares | Apr. 21, 2016USD ($) | Aug. 18, 2015USD ($) | Dec. 23, 2014USD ($)item$ / sharesshares | Dec. 03, 2014USD ($)$ / shares | Oct. 30, 2014USD ($)item | Jul. 16, 2014USD ($)$ / sharesshares | Jun. 26, 2014USD ($)$ / sharesshares | Jun. 26, 2014USD ($)$ / sharesshares | Jun. 02, 2014USD ($)item$ / sharesshares | Aug. 31, 2015USD ($) | May 31, 2015USD ($)shares | Apr. 30, 2015$ / sharesshares | Mar. 31, 2015USD ($)$ / sharesshares | Feb. 28, 2015USD ($)item$ / sharesshares | Aug. 31, 2014USD ($)$ / sharesshares | Feb. 28, 2014USD ($)shares | Feb. 28, 2014USD ($) | Mar. 31, 2017USD ($)$ / sharesshares | Mar. 31, 2016USD ($)shares | Sep. 30, 2013USD ($)item$ / sharesshares | Aug. 31, 2016 | Dec. 31, 2016USD ($)$ / shares | Nov. 22, 2016$ / shares | Jul. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 22, 2015USD ($) | Jun. 30, 2015USD ($) |
Debt and Warrants | |||||||||||||||||||||||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||||||||||||||||||||
Interest expense | $ 180,072 | $ 284,236 | |||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 69,869 | 26,785 | |||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.01 | $ 1 | |||||||||||||||||||||||||||||
Loss on extinguishment of debt | $ 108,000 | $ 207,713 | |||||||||||||||||||||||||||||
Notes payable | $ 150,000 | ||||||||||||||||||||||||||||||
Interest payable on long-term debt | $ 38,367 | $ 33,929 | |||||||||||||||||||||||||||||
Term | 5 years 6 months | 5 years 8 months 19 days | 5 years 1 month 28 days | 5 years 4 months 28 days | |||||||||||||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 0.69 | $ 0.91 | $ 1 | $ 0.716 | |||||||||||||||||||||||||||
Volatility (as a percent) | 71.92% | 70.35% | 78.33% | 73.62% | |||||||||||||||||||||||||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||||||||||||||||
Risk-free interest rate (as a percent) | 1.87% | 1.45% | 1.95% | 2.00% | |||||||||||||||||||||||||||
Stand-by line of credit | $ 8,000,000 | ||||||||||||||||||||||||||||||
Initial loan commitment | 6,000,000 | ||||||||||||||||||||||||||||||
Proceeds required to be maintained in cash | $ 4,500,000 | $ 3,000,000 | |||||||||||||||||||||||||||||
Repayment of loan from restricted cash | $ 1,500,000 | $ 2,978,808 | |||||||||||||||||||||||||||||
Interest-only payments, term | 4 months | ||||||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||||||
Current portion of long-term debt | 1,994,015 | $ 1,919,675 | |||||||||||||||||||||||||||||
Long-term debt, net of discount | 1,332,703 | 1,817,526 | |||||||||||||||||||||||||||||
Future principal payments of debt | |||||||||||||||||||||||||||||||
2017 - April through December | 1,541,946 | ||||||||||||||||||||||||||||||
2,018 | 1,479,246 | ||||||||||||||||||||||||||||||
Total future principal payments | 3,021,192 | ||||||||||||||||||||||||||||||
2018 end-of-term-payment | 560,000 | ||||||||||||||||||||||||||||||
Total | 3,581,192 | ||||||||||||||||||||||||||||||
Less: unaccreted end-of-term payment at December 31, 2016 | (128,318) | ||||||||||||||||||||||||||||||
Debt and unpaid accrued end-of-term payment | 3,452,874 | ||||||||||||||||||||||||||||||
Short-term debt | |||||||||||||||||||||||||||||||
Notes payable | $ 150,000 | ||||||||||||||||||||||||||||||
Net debt obligation | 150,000 | 150,000 | |||||||||||||||||||||||||||||
Interest payable on convertible notes payable | 124,242 | 123,982 | |||||||||||||||||||||||||||||
Investor | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Interest payable on long-term debt | $ 17,753 | ||||||||||||||||||||||||||||||
Transfer Agreement | Manufacturer | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 16,666 | 16,666 | |||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 6.30 | ||||||||||||||||||||||||||||||
Exercise price as a percentage of initial public offering price | 90.00% | 90.00% | |||||||||||||||||||||||||||||
Warrants to purchase common stock | Transfer Agreement | Manufacturer | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 6.30 | ||||||||||||||||||||||||||||||
Term | 5 years | ||||||||||||||||||||||||||||||
Warrants to purchase common stock | Common Stock | Transfer Agreement | Manufacturer | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 16,666 | 16,666 | |||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 4.35 | $ 4.35 | |||||||||||||||||||||||||||||
Exercise price as a percentage of initial public offering price | 90.00% | 90.00% | |||||||||||||||||||||||||||||
Term | 5 years | ||||||||||||||||||||||||||||||
Fair value of warrants | $ 37,840 | $ 37,840 | |||||||||||||||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 4.83 | $ 4.83 | |||||||||||||||||||||||||||||
Volatility (as a percent) | 49.00% | ||||||||||||||||||||||||||||||
Dividend yield (as a percent) | 0.00% | ||||||||||||||||||||||||||||||
Risk-free interest rate (as a percent) | 1.64% | ||||||||||||||||||||||||||||||
Standby bridge financing agreement | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 178,569 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.23 | ||||||||||||||||||||||||||||||
Term | 5 years | ||||||||||||||||||||||||||||||
Fair value of warrants | $ 505,348 | ||||||||||||||||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 5.01 | ||||||||||||||||||||||||||||||
Volatility (as a percent) | 63.00% | ||||||||||||||||||||||||||||||
Dividend yield (as a percent) | 0.00% | ||||||||||||||||||||||||||||||
Risk-free interest rate (as a percent) | 1.61% | ||||||||||||||||||||||||||||||
Number of lenders | item | 2 | ||||||||||||||||||||||||||||||
Aggregate principal amount of bridge financing | $ 1,000,000 | ||||||||||||||||||||||||||||||
Interest Paid | $ 1,321,600 | ||||||||||||||||||||||||||||||
Value to be divided by IPO exercise price to determine number of warrants granted | $ 1,000,000 | ||||||||||||||||||||||||||||||
Standby bridge financing agreement | IPO | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.60 | ||||||||||||||||||||||||||||||
Exercise price as a percentage of initial public offering price | 80.00% | ||||||||||||||||||||||||||||||
Standby bridge financing agreement | Interest Expense | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Unamortized note discount | $ 100,000 | ||||||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||||||
Unamortized note discount | (100,000) | ||||||||||||||||||||||||||||||
Debt Issuance Cost | 104,000 | ||||||||||||||||||||||||||||||
Short-term debt | |||||||||||||||||||||||||||||||
Unamortized note discount | (100,000) | ||||||||||||||||||||||||||||||
Debt issuance costs | $ 104,000 | ||||||||||||||||||||||||||||||
Convertible promissory notes | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Number of convertible promissory notes issued | item | 2 | 4 | |||||||||||||||||||||||||||||
Gross aggregate proceeds | $ 525,000 | ||||||||||||||||||||||||||||||
Interest rate (as a percent) | 8.00% | ||||||||||||||||||||||||||||||
Number of business days after the date of consummation of the initial closing of a first equity round of financing, when the debt instrument is due | 10 days | ||||||||||||||||||||||||||||||
Pre-money valuation threshold amount | $ 3,000,000 | ||||||||||||||||||||||||||||||
Number of shares issued for notes converted | shares | 178,571 | 207,664 | |||||||||||||||||||||||||||||
Interest expense | 4,438 | $ 4,488 | |||||||||||||||||||||||||||||
Amortization of debt discount | $ 4,071 | $ 1,443 | |||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 22,320 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.60 | ||||||||||||||||||||||||||||||
Notes payable | $ 250,000 | ||||||||||||||||||||||||||||||
Interest payable on long-term debt | 98,486 | 94,048 | |||||||||||||||||||||||||||||
Principal and interest paid on debt | $ 103,912 | ||||||||||||||||||||||||||||||
Retirement of convertible promissory notes | $ 100,000 | ||||||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||||||
Nominal interest | 4,438 | 4,488 | |||||||||||||||||||||||||||||
Amortization of debt discount | $ 4,071 | $ 1,443 | |||||||||||||||||||||||||||||
Short-term debt | |||||||||||||||||||||||||||||||
Notes payable | $ 250,000 | ||||||||||||||||||||||||||||||
Net debt obligation | 150,000 | 150,000 | |||||||||||||||||||||||||||||
Nominal interest | 4,438 | 4,488 | |||||||||||||||||||||||||||||
Convertible promissory notes | Investor | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 89,285 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.60 | ||||||||||||||||||||||||||||||
Investment Warrants Expiration Date | Dec. 31, 2017 | ||||||||||||||||||||||||||||||
Convertible promissory notes | Dechra Pharmaceuticals PLC | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Notes payable | $ 1,000,000 | ||||||||||||||||||||||||||||||
Interest payable on long-term debt | 0 | 0 | |||||||||||||||||||||||||||||
Short-term debt | |||||||||||||||||||||||||||||||
Notes payable | $ 1,000,000 | ||||||||||||||||||||||||||||||
Convertible promissory notes | Warrants to purchase common stock | Common Stock | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Exercise price as a percentage of purchase price paid by equity investors when pre-money valuation threshold amount is achieved | 75.00% | ||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 207,664 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 2.53 | ||||||||||||||||||||||||||||||
Warrant term | 5 years | ||||||||||||||||||||||||||||||
Convertible promissory notes issued June 2, 2014 | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.00% | ||||||||||||||||||||||||||||||
Number of shares issued for notes converted | shares | 53,571 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.60 | ||||||||||||||||||||||||||||||
Notes payable | $ 300,000 | ||||||||||||||||||||||||||||||
Interest payable on long-term debt | 0 | 0 | $ 8,507 | ||||||||||||||||||||||||||||
Number of accredited investors | item | 2 | ||||||||||||||||||||||||||||||
Aggregate principal amount issued to board member to which Series A preferred stock was sold | $ 200,000 | ||||||||||||||||||||||||||||||
Beneficial conversion feature | 75,000 | ||||||||||||||||||||||||||||||
Short-term debt | |||||||||||||||||||||||||||||||
Notes payable | $ 300,000 | ||||||||||||||||||||||||||||||
Convertible promissory note issued July 16, 2014 | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Interest rate (as a percent) | 3.00% | ||||||||||||||||||||||||||||||
Number of shares issued for notes converted | shares | 26,785 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.60 | ||||||||||||||||||||||||||||||
Notes payable | $ 150,000 | ||||||||||||||||||||||||||||||
Interest payable on long-term debt | 0 | 0 | 3,711 | ||||||||||||||||||||||||||||
Beneficial conversion feature | 37,500 | ||||||||||||||||||||||||||||||
Short-term debt | |||||||||||||||||||||||||||||||
Notes payable | $ 150,000 | ||||||||||||||||||||||||||||||
Convertible note purchase agreement | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Gross aggregate proceeds | $ 650,000 | ||||||||||||||||||||||||||||||
Interest rate (as a percent) | 12.00% | ||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 58,035 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 4.15 | $ 5.60 | |||||||||||||||||||||||||||||
Interest payable on long-term debt | 0 | 0 | $ 30,132 | ||||||||||||||||||||||||||||
Number of accredited investors | item | 3 | ||||||||||||||||||||||||||||||
Aggregate principal amount issued to board member to which Series A preferred stock was sold | $ 250,000 | ||||||||||||||||||||||||||||||
Beneficial conversion feature | $ 502,057 | ||||||||||||||||||||||||||||||
Term | 3 years | ||||||||||||||||||||||||||||||
Fair value of warrants | $ 147,943 | ||||||||||||||||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 4.59 | ||||||||||||||||||||||||||||||
Volatility (as a percent) | 49.00% | ||||||||||||||||||||||||||||||
Dividend yield (as a percent) | 0.00% | ||||||||||||||||||||||||||||||
Risk-free interest rate (as a percent) | 1.10% | ||||||||||||||||||||||||||||||
Convertible note purchase agreement | IPO | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Number of shares issued for notes converted | shares | 116,070 | ||||||||||||||||||||||||||||||
Exercise price as a percentage of initial public offering price | 80.00% | 5.60% | |||||||||||||||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 5.60 | ||||||||||||||||||||||||||||||
Line of credit and loan agreement | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 33,333 | ||||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 5.60 | $ 6.40 | |||||||||||||||||||||||||||||
Exercise price as a percentage of initial public offering price | 80.00% | ||||||||||||||||||||||||||||||
Term | 2 years | ||||||||||||||||||||||||||||||
Fair value of warrants | $ 114,300 | ||||||||||||||||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 8 | ||||||||||||||||||||||||||||||
Volatility (as a percent) | 52.00% | ||||||||||||||||||||||||||||||
Dividend yield (as a percent) | 0.00% | ||||||||||||||||||||||||||||||
Risk-free interest rate (as a percent) | 0.52% | ||||||||||||||||||||||||||||||
Drawdown amount | $ 0 | ||||||||||||||||||||||||||||||
Line of credit and loan agreement | Maximum | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Stand-by line of credit | $ 1,000,000 | ||||||||||||||||||||||||||||||
Loan and security agreement | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Interest rate (as a percent) | 9.90% | ||||||||||||||||||||||||||||||
Unamortized note discount | $ 134,433 | 30,816 | 42,493 | ||||||||||||||||||||||||||||
Stand-by line of credit | 8,000,000 | ||||||||||||||||||||||||||||||
Initial loan commitment | 6,000,000 | ||||||||||||||||||||||||||||||
Proceeds required to be maintained in cash | 4,500,000 | ||||||||||||||||||||||||||||||
Additional borrowing capacity contingent on achievement of milestones | $ 2,000,000 | ||||||||||||||||||||||||||||||
Term of agreement | 3 years | ||||||||||||||||||||||||||||||
Effective interest rate | 15.00% | ||||||||||||||||||||||||||||||
Prior notification period required for pre-payment of principal and accrued interest (in days) | 5 days | ||||||||||||||||||||||||||||||
Long-term debt | |||||||||||||||||||||||||||||||
Debt and unpaid accrued end-of-term payment | 3,452,874 | 3,894,320 | |||||||||||||||||||||||||||||
Unamortized note discount | $ (134,433) | (30,816) | (42,493) | ||||||||||||||||||||||||||||
Unamortized debt issuance costs | (95,340) | (114,626) | |||||||||||||||||||||||||||||
Total | 3,326,718 | 3,737,201 | |||||||||||||||||||||||||||||
Current portion of long-term debt | 1,994,015 | 1,919,675 | |||||||||||||||||||||||||||||
Long-term debt, net of discount | 1,332,703 | 1,817,526 | |||||||||||||||||||||||||||||
End-of-term payment | 560,000 | ||||||||||||||||||||||||||||||
Nominal interest | 78,861 | 148,626 | |||||||||||||||||||||||||||||
Amortization of debt issuance costs | 11,678 | 18,411 | |||||||||||||||||||||||||||||
Accretion of end-of-term payment | 48,655 | 76,696 | |||||||||||||||||||||||||||||
Debt Issuance Cost | 36,439 | 36,016 | |||||||||||||||||||||||||||||
Total | 175,633 | 279,749 | |||||||||||||||||||||||||||||
Short-term debt | |||||||||||||||||||||||||||||||
Unamortized note discount | $ (134,433) | (30,816) | $ (42,493) | ||||||||||||||||||||||||||||
Nominal interest | 78,861 | 148,626 | |||||||||||||||||||||||||||||
Debt issuance costs | 36,439 | 36,016 | |||||||||||||||||||||||||||||
Total | $ 175,633 | $ 279,749 | |||||||||||||||||||||||||||||
Loan and security agreement | Forecast | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Balloon amount payable on August 1, 2018 | $ 560,000 | ||||||||||||||||||||||||||||||
Loan and security agreement | Prepayment during the first twelve months member | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Prepayment charge during first twelve months of loan when a minimum cash balance is required as a percent of minimum cash balance | 2.00% | ||||||||||||||||||||||||||||||
Prepayment charge during first twelve months of loan when a minimum cash balance is required as a percent of difference between amount being prepaid and minimum cash balance | 3.00% | ||||||||||||||||||||||||||||||
Prepayment charge during first twelve months of loan when no minimum cash balance is required as a percent of amount being prepaid | 3.00% | ||||||||||||||||||||||||||||||
Loan and security agreement | Prepayment after the first twelve months member | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Prepayment charge as a percent of amount being prepaid | 1.00% | ||||||||||||||||||||||||||||||
Convertible promissory note issued to Serious Change II LP | |||||||||||||||||||||||||||||||
Debt and Warrants | |||||||||||||||||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 370,916 | 120,000 | |||||||||||||||||||||||||||||
Exercise price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||||||||||||||||||||
Loss on extinguishment of debt | $ 207,713 | ||||||||||||||||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 0.51 |
Debt and Warrants - Warrants (D
Debt and Warrants - Warrants (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 | Nov. 29, 2016 | Nov. 22, 2016 | Nov. 08, 2016 | Mar. 31, 2017 | Dec. 31, 2016 | Mar. 31, 2016 |
Debt and Warrants | ||||||||
Share issue price (in dollars per share) | $ 1 | $ 0.716 | $ 0.69 | $ 0.91 | $ 1 | $ 0.716 | ||
Warrant Activity | ||||||||
Number of warrants issued to purchase shares of common stock (in shares) | 69,869 | 69,869 | 26,785 | |||||
Strike price (in dollars per share) | $ 1 | $ 0.01 | ||||||
Expected life | 5 years 6 months | 5 years 8 months 19 days | 5 years 1 month 28 days | 5 years 4 months 28 days | ||||
Volatility (as a percent) | 71.92% | 70.35% | 78.33% | 73.62% | ||||
Closing price (in dollars per share) | $ 0.69 | |||||||
Risk-free interest rate (as a percent) | 1.87% | 1.45% | 1.95% | 2.00% | ||||
Revaluation of warrant liability | $ 453,419 | |||||||
Warrants outstanding at beginning of period | 5,968,876 | 748,872 | ||||||
Issuances | 370,916 | 5,253,337 | ||||||
Cancellations | (33,333) | |||||||
Warrants outstanding at end of period | 6,339,792 | 5,968,876 | 6,339,792 | 5,968,876 | ||||
Series A warrants and placement agent warrants | ||||||||
Debt and Warrants | ||||||||
Share issue price (in dollars per share) | $ 1 | $ 0.716 | $ 1 | $ 0.716 | ||||
Warrant Activity | ||||||||
Strike price (in dollars per share) | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.75 | |||
Expected life | 5 years 1 month 28 days | 5 years 4 months 28 days | 5 years 6 months | |||||
Volatility (as a percent) | 78.33% | 73.62% | 71.92% | |||||
Risk-free interest rate (as a percent) | 1.95% | 2.00% | 1.87% | |||||
Warrant liability | $ 1,252,620 | $ 799,201 | $ 756,001 | $ 1,252,620 | $ 799,201 | |||
Revaluation of warrant liability | $ 453,419 | $ 43,200 | ||||||
Series A Warrants | ||||||||
Warrant Activity | ||||||||
Number of warrants issued to purchase shares of common stock (in shares) | 1,666,668 | |||||||
Strike price (in dollars per share) | $ 0.75 | |||||||
Warrant liability | $ 756,001 | |||||||
Placement agent Warrants | ||||||||
Warrant Activity | ||||||||
Number of warrants issued to purchase shares of common stock (in shares) | 133,333 | |||||||
Series B warrants | ||||||||
Warrant Activity | ||||||||
Number of warrants issued to purchase shares of common stock (in shares) | 1,666,668 | |||||||
Strike price (in dollars per share) | $ 0.90 | |||||||
Expected life | 1 year | |||||||
Volatility (as a percent) | 116.65% | |||||||
Risk-free interest rate (as a percent) | 0.78% | |||||||
Series C warrants | ||||||||
Warrant Activity | ||||||||
Number of warrants issued to purchase shares of common stock (in shares) | 1,666,668 | |||||||
Strike price (in dollars per share) | $ 1 | |||||||
Expected life | 1 year 6 months | |||||||
Volatility (as a percent) | 116.92% | |||||||
Risk-free interest rate (as a percent) | 0.94% | |||||||
2016 Private Placement | ||||||||
Debt and Warrants | ||||||||
Shares issued (in shares) | 1,666,668 | |||||||
Share issue price (in dollars per share) | $ 0.60 | |||||||
Amount of shares issued | $ 1,000,000 |
Redeemable Convertible Prefer47
Redeemable Convertible Preferred Stock (Details) - USD ($) | May 18, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | May 31, 2014 | Apr. 30, 2014 | Feb. 28, 2014 |
Redeemable Convertible Preferred Stock | ||||||
Preferred shares issued | 3,015,902 | 3,015,902 | 3,015,902 | |||
Liquidation preference | $ 6,777,338 | |||||
Redemption value | $ 9,000,000 | |||||
Accretion of deemed dividend | $ 263,060 | |||||
Common Stock | ||||||
Redeemable Convertible Preferred Stock | ||||||
Issuance of common stock upon conversion (in shares) | 2,010,596 | |||||
Common Stock | IPO | ||||||
Redeemable Convertible Preferred Stock | ||||||
Issuance of common stock upon conversion (in shares) | 2,010,596 | |||||
Series A redeemable convertible preferred stock | ||||||
Redeemable Convertible Preferred Stock | ||||||
Issuance costs incurred | $ 119,097 | |||||
Accretion of issuance costs | $ 83,334 | |||||
Preferred shares outstanding | 3,015,902 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | May 12, 2017USD ($)shares | Mar. 31, 2017USD ($)$ / sharesshares | Jan. 31, 2017USD ($)$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Nov. 29, 2016USD ($)$ / shares | Nov. 22, 2016USD ($)$ / sharesshares | Nov. 08, 2016USD ($)$ / sharesshares | May 18, 2015USD ($)$ / sharesshares | Oct. 31, 2016USD ($)shares | Jun. 30, 2016USD ($)$ / sharesshares | Feb. 29, 2016USD ($)$ / sharesshares | May 31, 2017shares | Jun. 30, 2017shares | Mar. 31, 2017USD ($)item$ / sharesshares | Jun. 30, 2017shares | Dec. 31, 2016USD ($)$ / sharesshares | Mar. 31, 2016shares |
Stockholders' Equity | |||||||||||||||||
Common stock, shares authorized | shares | 50,000,000 | 50,000,000 | 50,000,000 | 50,000,000 | |||||||||||||
Common stock par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Number of voting rights entitled for each share of common stock held | item | 1 | ||||||||||||||||
Share issue price (in dollars per share) | $ / shares | $ 1 | 0.716 | $ 0.69 | $ 0.91 | $ 1 | 0.716 | |||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 69,869 | 69,869 | 26,785 | ||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 1 | $ 0.01 | |||||||||||||||
Loss on extinguishment of debt | $ 108,000 | $ 207,713 | |||||||||||||||
Issuance costs of equity and warrants | |||||||||||||||||
Total | $ 1,000,001 | ||||||||||||||||
% Allocation | 100.00% | ||||||||||||||||
Total | $ 322,777 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Share Price | $ / shares | $ 1 | 0.716 | 0.69 | $ 0.91 | $ 1 | 0.716 | |||||||||||
Exercise price | $ / shares | $ 0.75 | $ 0.75 | $ 0.75 | $ 0.01 | $ 0.75 | $ 0.75 | |||||||||||
Term | 5 years 6 months | 5 years 8 months 19 days | 5 years 1 month 28 days | 5 years 4 months 28 days | |||||||||||||
Volatility (as a percent) | 71.92% | 70.35% | 78.33% | 73.62% | |||||||||||||
Dividend yield (as a percent) | 0.00% | 0.00% | 0.00% | 0.00% | |||||||||||||
Risk-free interest rate (as a percent) | 1.87% | 1.45% | 1.95% | 2.00% | |||||||||||||
Preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | 10,000,000 | 10,000,000 | |||||||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
Preferred stock, shares issued | shares | 0 | 0 | 0 | 0 | |||||||||||||
Preferred stock, shares outstanding | shares | 0 | 0 | 0 | 0 | |||||||||||||
Shares of common stock reserved for issuance | |||||||||||||||||
Options issued and outstanding | shares | 2,528,650 | 2,571,220 | 2,528,650 | 2,571,220 | 894,766 | ||||||||||||
Options available for grant | shares | 362,700 | 39,988 | 362,700 | 39,988 | 269,331 | ||||||||||||
RSUs issued and outstanding | shares | 20,789 | 20,789 | 20,789 | 20,789 | 20,789 | ||||||||||||
Warrants issued and outstanding | shares | 6,339,792 | 6,339,792 | 748,872 | ||||||||||||||
Convertible notes | shares | 69,869 | 69,869 | 26,785 | ||||||||||||||
Total | shares | 9,321,800 | 9,321,800 | 1,960,543 | ||||||||||||||
Convertible promissory note issued to Serious Change II LP | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Share issue price (in dollars per share) | $ / shares | $ 0.51 | ||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 370,916 | 120,000 | |||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 0.01 | ||||||||||||||||
Loss on extinguishment of debt | $ 207,713 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Share Price | $ / shares | $ 0.51 | ||||||||||||||||
Shares of common stock reserved for issuance | |||||||||||||||||
Convertible notes | shares | 370,916 | 120,000 | |||||||||||||||
2016 Private Placement | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Shares issued (in shares) | shares | 1,666,668 | ||||||||||||||||
Share issue price (in dollars per share) | $ / shares | $ 0.60 | ||||||||||||||||
Net proceeds from issuance of common stock | $ 677,224 | ||||||||||||||||
Amount of shares issued | 1,000,000 | ||||||||||||||||
Issuance costs of equity and warrants | |||||||||||||||||
Common stock issuance costs (allocated) | $ 322,777 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Share Price | $ / shares | $ 0.60 | ||||||||||||||||
Private investment | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Shares issued (in shares) | shares | 3,555,514 | 3,555,514 | 2,444,486 | 6,000,000 | |||||||||||||
Share price required to issue shares more than permitted number (in dollars per share) | $ / shares | $ 1.32 | ||||||||||||||||
Maximum number of shares company is permitted to issue | shares | 2,027,490 | ||||||||||||||||
Maximum number of shares company is permitted to issue (as a percent) | 19.99% | ||||||||||||||||
Net proceeds from issuance of common stock | $ 3,227,134 | ||||||||||||||||
Common Stock | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Share issue price (in dollars per share) | $ / shares | $ 1 | $ 1 | |||||||||||||||
Amount of shares issued | $ 106,000 | ||||||||||||||||
Issuance of common stock upon conversion (in shares) | shares | 2,010,596 | ||||||||||||||||
Issuance costs of equity and warrants | |||||||||||||||||
Fair value of common stock | $ 156,522 | ||||||||||||||||
% Allocation | 16.00% | ||||||||||||||||
Common stock issuance costs (allocated) | $ 50,522 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Share Price | $ / shares | 1 | $ 1 | |||||||||||||||
Common Stock | IPO | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Shares issued (in shares) | shares | 2,860,000 | ||||||||||||||||
Shares issued (price per share) | $ / shares | $ 7 | ||||||||||||||||
Net proceeds from initial public offering | $ 15,900,000 | ||||||||||||||||
Underwriting discounts and commissions | 1,200,000 | ||||||||||||||||
Offering expenses | 2,900,000 | ||||||||||||||||
Non-cash offering expenses | $ 3,300,000 | ||||||||||||||||
Issuance of common stock upon conversion (in shares) | shares | 2,010,596 | ||||||||||||||||
Common Stock | Private investment | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Term of stock purchase agreement | 30 months | ||||||||||||||||
Shares issued (in shares) | shares | 16,480 | 170,455 | 222,222 | 416,996 | 1,348,601 | ||||||||||||
Private Offering Price (in dollars per share) | $ / shares | $ 2.25 | ||||||||||||||||
Net proceeds from issuance of common stock | $ 12,629 | $ 150,000 | $ 394,534 | $ 550,434 | $ 2,176,700 | ||||||||||||
Amount of shares issued | 500,000 | ||||||||||||||||
Offering expenses | $ 105,398 | ||||||||||||||||
Shares issued to a private investor in payment of underwriting discounts and commissions | shares | 456,667 | ||||||||||||||||
Common Stock | Secondary public offering | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Shares issued (in shares) | shares | 2,000,000 | ||||||||||||||||
Shares issued (price per share) | $ / shares | $ 2.50 | ||||||||||||||||
Net proceeds from initial public offering | $ 4,100,000 | ||||||||||||||||
Underwriting discounts and commissions | 373,011 | 373,011 | |||||||||||||||
Offering expenses | $ 496,887 | $ 496,887 | |||||||||||||||
Common Stock | Maximum | Private investment | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Value of common stock that may be sold to a private investor | $ 15,000,000 | ||||||||||||||||
Series A warrants and placement agent warrants | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Share issue price (in dollars per share) | $ / shares | 1 | $ 0.716 | $ 1 | $ 0.716 | |||||||||||||
Strike price (in dollars per share) | $ / shares | 0.75 | 0.75 | $ 0.75 | 0.75 | 0.75 | ||||||||||||
Issuance costs of equity and warrants | |||||||||||||||||
Fair value of warrants | $ 56,000 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Share Price | $ / shares | $ 1 | $ 0.716 | $ 1 | $ 0.716 | |||||||||||||
Term | 5 years 1 month 28 days | 5 years 4 months 28 days | 5 years 6 months | ||||||||||||||
Volatility (as a percent) | 78.33% | 73.62% | 71.92% | ||||||||||||||
Risk-free interest rate (as a percent) | 1.95% | 2.00% | 1.87% | ||||||||||||||
Warrant liability | $ 1,252,620 | $ 799,201 | $ 756,001 | $ 1,252,620 | $ 799,201 | ||||||||||||
Series A Warrants | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 1,666,668 | ||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 0.75 | ||||||||||||||||
Issuance costs of equity and warrants | |||||||||||||||||
Fair value of warrants | $ 700,001 | ||||||||||||||||
% Allocation | 70.00% | ||||||||||||||||
Warrants issuance costs (allocated) | $ 225,944 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Warrant liability | $ 756,001 | ||||||||||||||||
Shares of common stock reserved for issuance | |||||||||||||||||
Convertible notes | shares | 1,666,668 | ||||||||||||||||
Series B warrants | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 1,666,668 | ||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 0.90 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Term | 1 year | ||||||||||||||||
Volatility (as a percent) | 116.65% | ||||||||||||||||
Risk-free interest rate (as a percent) | 0.78% | ||||||||||||||||
Shares of common stock reserved for issuance | |||||||||||||||||
Convertible notes | shares | 1,666,668 | ||||||||||||||||
Warrants (Series B and C) | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Amount of shares issued | $ 97,167 | ||||||||||||||||
Issuance costs of equity and warrants | |||||||||||||||||
Fair value of warrants | $ 143,478 | ||||||||||||||||
% Allocation | 14.00% | ||||||||||||||||
Warrants issuance costs (allocated) | $ 46,311 | ||||||||||||||||
Series C warrants | |||||||||||||||||
Stockholders' Equity | |||||||||||||||||
Number of warrants issued to purchase shares of common stock (in shares) | shares | 1,666,668 | ||||||||||||||||
Strike price (in dollars per share) | $ / shares | $ 1 | ||||||||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | |||||||||||||||||
Term | 1 year 6 months | ||||||||||||||||
Volatility (as a percent) | 116.92% | ||||||||||||||||
Risk-free interest rate (as a percent) | 0.94% | ||||||||||||||||
Shares of common stock reserved for issuance | |||||||||||||||||
Convertible notes | shares | 1,666,668 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Stock Incentive Plans (Details) - USD ($) | May 12, 2015 | Jun. 30, 2016 | Jul. 31, 2015 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2013 | Jan. 01, 2017 | Nov. 29, 2016 | Nov. 08, 2016 | Jan. 01, 2016 | Apr. 30, 2014 |
Shares Available for Grant | ||||||||||||
Beginning balance (in shares) | 39,988 | |||||||||||
Ending balance (in shares) | 362,700 | 269,331 | 39,988 | |||||||||
Stock Options Outstanding | ||||||||||||
Beginning balance (in shares) | 2,571,220 | |||||||||||
Options Exercised (in shares) | 0 | 0 | ||||||||||
Ending balance (in shares) | 2,528,650 | 894,766 | 2,571,220 | |||||||||
Aggregate Intrinsic Value, outstanding | $ 53,824 | |||||||||||
RSUs Outstanding | ||||||||||||
Beginning balance (in shares) | 20,789 | |||||||||||
Ending balance (in shares) | 20,789 | 20,789 | 20,789 | |||||||||
Weighted Average Stock Option Exercise Price | ||||||||||||
Beginning balance (in dollars per share) | $ 2.52 | |||||||||||
Ending balance (in dollars per share) | $ 2.53 | $ 2.52 | ||||||||||
Weighted Average Remaining Contractual Life (Years) | ||||||||||||
Weighted Average Remaining Contractual Life (Years) | 8 years 8 months 16 days | 8 years 9 months 7 days | ||||||||||
Options vested, exercisable and expected to vest | ||||||||||||
Options vested and exercisable (in shares) | 1,107,583 | |||||||||||
Options vested and exercisable (in dollars per share) | $ 3.36 | |||||||||||
Options vested and exercisable (in years) | 8 years 18 days | |||||||||||
Options vested and expected to vest (in shares) | 2,237,254 | |||||||||||
Options vested and expected to vest (in dollars per share) | $ 2.55 | |||||||||||
Options vested and expected to vest (in years) | 8 years 7 months 28 days | |||||||||||
Weighted average grant date fair value of stock options granted (in dollars per share) | $ 0.46 | $ 0 | ||||||||||
Number of options vested (in shares) | 185,005 | 61,944 | ||||||||||
Fair value of options vested on grant date | $ 185,646 | $ 92,557 | ||||||||||
Aggregate Intrinsic Value ,outstanding | 3,872 | |||||||||||
Aggregate Intrinsic Value ,outstanding | $ 45,912 | |||||||||||
Share Price | $ 1 | $ 0.716 | $ 0.69 | $ 0.91 | ||||||||
Stock options | ||||||||||||
Stock Options Outstanding | ||||||||||||
Options Exercised (in shares) | 0 | |||||||||||
Common Stock | ||||||||||||
Options vested, exercisable and expected to vest | ||||||||||||
Share Price | $ 1 | |||||||||||
2013 Plan | ||||||||||||
Stock Options Outstanding | ||||||||||||
Options Granted (in shares) | 0 | |||||||||||
2013 Plan | Stock options | ||||||||||||
Stock Incentive Plans | ||||||||||||
Number of shares reserved for issuance | 300,000 | 847,533 | ||||||||||
Shares Available for Grant | ||||||||||||
Shares Authorized (in shares) | 300,000 | 847,533 | ||||||||||
Stock Options Outstanding | ||||||||||||
Options Granted (in shares) | 0 | |||||||||||
2014 Plan | ||||||||||||
Stock Incentive Plans | ||||||||||||
Additional shares authorized (in shares) | 280,142 | |||||||||||
Stock Options Outstanding | ||||||||||||
Options Granted (in shares) | 18,000 | |||||||||||
Options Cancelled (in shares) | (60,570) | |||||||||||
Weighted Average Stock Option Exercise Price | ||||||||||||
Options Granted (in dollars per share) | $ 0.71 | |||||||||||
Options Cancelled (in dollars per share) | $ 1.67 | |||||||||||
2014 Plan | Stock options | ||||||||||||
Stock Incentive Plans | ||||||||||||
Number of shares reserved for issuance | 333,333 | |||||||||||
Increase in shares reserve based on outstanding number of shares | 280,142 | 162,498 | ||||||||||
Additional shares authorized (in shares) | 1,550,000 | 550,000 | ||||||||||
Increase in share reserve based on outstanding number of shares (as a percent) | 2.00% | |||||||||||
Shares Available for Grant | ||||||||||||
Shares Authorized (in shares) | 333,333 |
Stock Incentive Plans - Restric
Stock Incentive Plans - Restricted Units (Details) - shares | Jul. 01, 2017 | Jan. 01, 2016 |
Stock Incentive Plans | ||
Issuance of common stock in exchange for vested restricted stock units (in shares) | 17,546 | |
Restricted stock units | ||
Stock Incentive Plans | ||
RSUs, vested and released, gross (in shares) | 27,768 | |
RSU shares used to pay withholding taxes (in shares) | 10,172 | |
2013 Plan | Restricted stock units | ||
Stock Incentive Plans | ||
Vesting (as a percent) | 50.00% | |
2013 Plan | Restricted stock units | Forecast | ||
Stock Incentive Plans | ||
Vesting (as a percent) | 50.00% |
Stock Incentive Plans - Stock-B
Stock Incentive Plans - Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Stock Incentive Plans | ||
Total stock-based compensation expense | $ 228,036 | $ 103,542 |
Research and development expense | ||
Stock Incentive Plans | ||
Total stock-based compensation expense | 65,799 | 25,333 |
Selling and marketing expense | ||
Stock Incentive Plans | ||
Total stock-based compensation expense | 7,658 | 8,681 |
General and administrative expense | ||
Stock Incentive Plans | ||
Total stock-based compensation expense | 154,579 | $ 69,528 |
Stock options and RSUs | ||
Stock Incentive Plans | ||
Unrecognized stock-based compensation expense | $ 1,129,007 | |
Expected weighted average period to be recognized | 1 year 11 months 9 days | |
Employee stock options | ||
Stock Incentive Plans | ||
Options Granted (in shares) | 0 | |
Estimated grant-date fair value of stock options calculated using the Black-Scholes option-pricing model | ||
Weighted-average volatility (as a percent) | 74.26% | |
Weighted-average expected term (in years) | 5 years 9 months 26 days | |
Risk-free interest rate (as a percent) | 1.98% | |
Non-employee stock options | ||
Stock Incentive Plans | ||
Options Granted (in shares) | 0 | 0 |
Estimated grant-date fair value of stock options calculated using the Black-Scholes option-pricing model | ||
Weighted-average volatility (as a percent) | 78.51% | |
Weighted-average expected term (in years) | 9 years 5 months 9 days | |
Risk-free interest rate (as a percent) | 1.74% |
Net Loss Per Share Attributab52
Net Loss Per Share Attributable to Common Stockholders- Calculation (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Calculation of basic and diluted net loss per common share | ||
Net loss attributable to common stockholders | $ (4,715,358) | $ (3,984,204) |
Shares used to compute net loss per common share, basic and diluted (in shares) | 14,157,351 | 9,307,354 |
Net loss per share attributable to common shareholders, basic and diluted | $ (0.33) | $ (0.43) |
Net Loss Per Share Attributab53
Net Loss Per Share Attributable to Common Stockholders- Excluded From Calculation (Details) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Outstanding common stock equivalents have been excluded from diluted net loss per common share | ||
Outstanding common stock equivalents have been excluded from diluted net loss per common share (in shares) | 8,889,231 | 1,664,427 |
Options issued and outstanding | ||
Outstanding common stock equivalents have been excluded from diluted net loss per common share | ||
Outstanding common stock equivalents have been excluded from diluted net loss per common share (in shares) | 2,528,650 | 894,766 |
Warrants to purchase common stock | ||
Outstanding common stock equivalents have been excluded from diluted net loss per common share | ||
Outstanding common stock equivalents have been excluded from diluted net loss per common share (in shares) | 6,339,792 | 748,872 |
Restricted stock units | ||
Outstanding common stock equivalents have been excluded from diluted net loss per common share | ||
Outstanding common stock equivalents have been excluded from diluted net loss per common share (in shares) | 20,789 | 20,789 |
401(k) Plan (Details)
401(k) Plan (Details) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
401(k) Plan | |
Employer contributions to the plan | $ 0 |
Commercialization Agreement (De
Commercialization Agreement (Details) - USD ($) | Jan. 27, 2017 | Mar. 31, 2017 |
Commercialization Agreement | ||
Estimated development period for revenue recognition (in years) | 1 year | |
Deferred collaboration revenue | $ 2,088,989 | |
Elanco | ||
Commercialization Agreement | ||
Initial upfront payment received | $ 2,548,689 | |
Additional payment receivable upon achievement | 61,000,000 | |
Unreimbursed expenses | 288,166 | |
Upfront payment and expense reimbursement recognized as revenue | $ 2,548,689 | |
Estimated development period for revenue recognition (in years) | 1 year | |
Collaboration revenue recognized from unreimbursed expenses | $ 288,166 | |
Collaboration revenue recognized from upfront payment and expense reimbursement | 459,700 | |
Deferred collaboration revenue | $ 2,088,989 | |
Elanco | Maximum | ||
Commercialization Agreement | ||
Additional payment receivable upon achievement | $ 61,000,000 |
Subsequent Events (Details)
Subsequent Events (Details) | Aug. 07, 2017shares | May 12, 2017USD ($)shares | Feb. 08, 2017shares | Jan. 31, 2017USD ($)shares | Nov. 22, 2016USD ($) | Oct. 31, 2016USD ($)shares | Jun. 30, 2016USD ($)shares | May 31, 2017shares | Jun. 30, 2017shares | Mar. 31, 2017USD ($)shares | Jun. 30, 2017shares | Dec. 31, 2016USD ($)shares |
Restricted common stock | ||||||||||||
Subsequent Event | ||||||||||||
Stock issuable by the entity, if failing to abide of binding agreement (in shares) | shares | 2,000,000 | 2,000,000 | ||||||||||
Common Stock | ||||||||||||
Subsequent Event | ||||||||||||
Amount of shares issued | $ 106,000 | |||||||||||
Private investment | ||||||||||||
Subsequent Event | ||||||||||||
Shares issued (in shares) | shares | 3,555,514 | 3,555,514 | 2,444,486 | 6,000,000 | ||||||||
Proceeds from issuance of common stock | $ 3,227,134 | |||||||||||
Private investment | Common Stock | ||||||||||||
Subsequent Event | ||||||||||||
Amount of shares issued | $ 500,000 | |||||||||||
Shares issued (in shares) | shares | 16,480 | 170,455 | 222,222 | 416,996 | 1,348,601 | |||||||
Proceeds from issuance of common stock | $ 12,629 | $ 150,000 | $ 394,534 | $ 550,434 | $ 2,176,700 | |||||||
Napo | ||||||||||||
Subsequent Event | ||||||||||||
Merger Stock Conversion Ratio | 33.33 | |||||||||||
Napo | ||||||||||||
Subsequent Event | ||||||||||||
Merger Stock Conversion Ratio | 33.33 | |||||||||||
Percentage of voting interests (as a percent) | 19.00% | |||||||||||
Maximum amount of unsecured debt | $ 6,200,000 | |||||||||||
Napo | Common Stock | ||||||||||||
Subsequent Event | ||||||||||||
Amount of shares issued | $ 3,000,000 | |||||||||||
Shares issued (in shares) | shares | 4,000,000 | |||||||||||
Napo | Convertible debt | ||||||||||||
Subsequent Event | ||||||||||||
Maximum amount of secured convertible debt | $ 11,300,000 |