Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 14, 2018 | |
Entity Registrant Name | Jaguar Health, Inc. | |
Entity Central Index Key | 1,585,608 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Common stock - voting | ||
Entity Common Stock, Shares Outstanding | 24,603,104 | |
Common stock - non-voting | ||
Entity Common Stock, Shares Outstanding | 40,301,237 | |
Convertible preferred stock. | ||
Entity Common Stock, Shares Outstanding | 5,524,926 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 726,129 | $ 520,698 |
Restricted cash | 239,169 | |
Accounts receivable | 1,028,670 | 467,658 |
Other receivable | 176,391 | 1,380 |
Inventory | 2,550,034 | 2,072,817 |
Deferred offering costs | 1,255,554 | |
Prepaid expenses and other current assets | 1,765,234 | 497,373 |
Total current assets | 7,502,012 | 3,799,095 |
Land, property and equipment, net | 775,975 | 1,222,068 |
Goodwill | 5,210,821 | 5,210,821 |
Intangible assets, net | 32,132,222 | 33,397,222 |
Other assets | 501,120 | |
Total assets | 46,122,150 | 43,629,206 |
Current liabilities: | ||
Accounts payable | 6,450,354 | 7,354,932 |
Deferred collaboration revenue | 177,389 | |
Accrued expenses | 4,050,006 | 2,204,133 |
Warrant liability | 48,240 | 103,860 |
Derivative liability | 11,000 | |
Conversion option liability | 111,841 | |
Convertible notes payable, net of discount | 1,055,992 | 2,672,215 |
Notes payable, net of discount | 4,531,952 | 1,141,153 |
Current portion of long-term debt | 0 | 1,609,244 |
Total current liabilities | 16,136,544 | 15,385,767 |
Convertible long-term debt, net of discount | 10,661,026 | 10,982,437 |
Total liabilities | 26,797,570 | 26,368,204 |
Commitments and contingencies (See Note 6) | ||
Series A convertible preferred stock: $0.0001 par value, 10,000,000 shares authorized at September 30, 2018 and December 31, 2017; 5,524,926 and 0 shares issued and outstanding at September 30, 2018 and December 31, 2017; (liquidation preference of $9,199,002 at September 30, 2018) | 9,000,002 | |
Stockholders' Equity: | ||
Additional paid-in capital | 92,216,482 | 79,661,044 |
Accumulated deficit | (81,896,894) | (62,404,722) |
Total stockholders' equity | 10,324,578 | 17,261,002 |
Total liabilities, convertible preferred stock and stockholders' equity | 46,122,150 | 43,629,206 |
Common stock - voting | ||
Stockholders' Equity: | ||
Common stock value | 960 | 418 |
Common stock - non-voting | ||
Stockholders' Equity: | ||
Common stock value | $ 4,030 | $ 4,262 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Convertible preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Convertible preferred stock, shares issued | 5,524,926 | 0 |
Convertible preferred stock, shares outstanding | 5,524,926 | 0 |
Liquidation preference value | $ 9,199,002 | |
Common Stock | Common stock - voting | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 250,000,000 |
Common stock, shares issued | 9,603,103 | 4,180,484 |
Common stock, shares outstanding | 9,603,103 | 4,180,484 |
Common Stock | Common stock - non-voting | ||
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 | 40,301,237 | 42,617,893 |
Common stock, shares outstanding | 40,301,237 | 42,617,893 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue | ||||
Total revenue | $ 1,132,067 | $ 1,100,214 | $ 2,820,269 | $ 2,819,145 |
Operating expenses | ||||
Cost of product revenue | 736,733 | 206,228 | 1,808,918 | 247,135 |
Research and development | 1,481,166 | 851,608 | 3,843,918 | 3,033,851 |
Sales and marketing | 2,716,752 | 663,765 | 7,119,204 | 943,908 |
General and administrative | 2,703,628 | 3,070,702 | 8,761,776 | 8,512,195 |
Impairment of goodwill | 3,648,000 | 3,648,000 | ||
Total operating expenses | 7,638,279 | 8,440,303 | 21,533,816 | 16,385,089 |
Loss from operations | (6,506,212) | (7,340,089) | (18,713,547) | (13,565,944) |
Interest expense | (872,044) | (464,684) | (2,185,868) | (800,885) |
Other income (expense), net | 9,540 | (14,876) | 322,244 | (13,428) |
Change in fair value of warrants and conversion option liability | 26,231 | 388,800 | (119,134) | 636,121 |
Gain on Valeant settlement | 1,204,133 | 1,204,133 | ||
Loss on extinguishment of debt | (207,713) | |||
Net loss before income tax | (6,138,352) | (7,430,849) | (19,492,172) | (13,951,849) |
Income tax benefit | 12,190,693 | 12,190,693 | ||
Net income (loss) | (6,138,352) | 4,759,844 | (19,492,172) | (1,761,156) |
Deemed dividend attributable to preferred stock | (995,000) | |||
Net income (loss) attributable to common shareholders | $ (6,138,352) | $ 4,759,844 | $ (20,487,172) | $ (1,761,156) |
Net income (loss) per share, basic | $ (0.51) | $ 1.29 | $ (1.91) | $ (0.94) |
Net income (loss) per share, diluted | $ (0.51) | $ 1.11 | $ (1.91) | $ (0.94) |
Weighted-average common shares outstanding: | ||||
Basic: | 12,061,672 | 3,695,660 | 10,701,977 | 1,883,115 |
Diluted: | 12,061,672 | 4,480,235 | 10,701,977 | 1,883,115 |
Product revenue | ||||
Revenue | ||||
Total revenue | $ 1,132,067 | $ 445,665 | $ 2,642,880 | $ 581,654 |
Collaboration revenue | ||||
Revenue | ||||
Total revenue | $ 654,549 | $ 177,389 | $ 2,237,491 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY - 9 months ended Sep. 30, 2018 - USD ($) | Private Investment in Public Entities March 2018Common StockCommon stock - voting | Private Investment in Public Entities March 2018Additional Paid-in Capital | Private Investment in Public Entities March 2018Series A Preferred Stock | Private Investment in Public Entities March 2018 | Private Investment in Public Entities July 2018Common StockCommon stock - voting | Private Investment in Public Entities July 2018Additional Paid-in Capital | Private Investment in Public Entities July 2018 | Private investment in public entities with new investorsCommon StockCommon stock - voting | Private investment in public entities with new investorsAdditional Paid-in Capital | Private investment in public entities with new investors | Private investment in public entities with existing investorsCommon StockCommon stock - voting | Private investment in public entities with existing investorsAdditional Paid-in Capital | Private investment in public entities with existing investors | September 2018 L2 convertible note payableCommon StockCommon stock - voting | September 2018 L2 convertible note payableAdditional Paid-in Capital | September 2018 L2 convertible note payable | Office lease extension agreementAdditional Paid-in Capital | Office lease extension agreement | Common StockCommon stock - voting | Common StockCommon stock - non-voting | Additional Paid-in Capital | Deficit Accumulated During the Development Stage | Series A Preferred Stock | Total |
Balance at Dec. 31, 2017 | $ 418 | $ 4,262 | $ 79,661,044 | $ (62,404,722) | $ 17,261,002 | |||||||||||||||||||
Balance (in shares) at Dec. 31, 2017 | 4,180,484 | 42,617,893 | ||||||||||||||||||||||
Increase (decrease) in Stockholders' Equity (Deficit) | ||||||||||||||||||||||||
Issuance of preferred stock and common stock in a private investment in public entities | $ 196 | $ 4,999,804 | $ 9,000,002 | $ 5,000,000 | ||||||||||||||||||||
Issuance of preferred stock and common stock in a private investment in public entities (in shares) | 1,960,794 | 5,524,926 | ||||||||||||||||||||||
Beneficial conversion feature of the series A convertible preferred stock | 995,000 | $ (995,000) | 995,000 | |||||||||||||||||||||
Deemed dividend on Series A convertible preferred stock | (995,000) | 995,000 | (995,000) | |||||||||||||||||||||
Issuance of common stock in a private investment in public entities | $ 47 | $ 624,850 | $ 624,897 | $ 72 | $ 1,305,702 | $ 1,305,774 | $ 48 | $ 750,052 | $ 750,100 | $ 7 | $ 47,993 | $ 48,000 | ||||||||||||
Issuance of common stock in a private investment in public entities (in shares) | 470,781 | 716,425 | 478,853 | 75,000 | ||||||||||||||||||||
Issuance of warrants in the merger | 118,149 | 118,149 | $ 493,688 | $ 493,688 | ||||||||||||||||||||
Issuance of common stock in exchange for redemption of convertible debt | $ 96 | 1,607,325 | 1,607,421 | |||||||||||||||||||||
Issuance of common stock in exchange for redemption of convertible debt (in shares) | 956,553 | |||||||||||||||||||||||
Issuance of common stock in exchange for services | 6,425 | 6,425 | ||||||||||||||||||||||
Issuance of common stock in exchange for services (in shares) | 3,333 | |||||||||||||||||||||||
Issuance of common stock in exchange for payment of interest expense | $ 29 | 704,696 | 704,725 | |||||||||||||||||||||
Issuance of common stock in exchange for payment of interest expense (in shares) | 285,694 | |||||||||||||||||||||||
Conversion of non-voting common stock to voting common stock | $ 15 | $ (232) | 217 | |||||||||||||||||||||
Conversion of non-voting common stock to voting common stock (in shares) | 154,443 | (2,316,656) | ||||||||||||||||||||||
Issuance of common stock in lieu of interest (Kingdom) | $ 32 | 479,776 | 479,808 | |||||||||||||||||||||
Issuance of common stock in lieu of interest (Kingdom) (in shares) | 320,743 | |||||||||||||||||||||||
Issuance of warrants | $ 118,149 | $ 118,149 | $ 493,688 | $ 493,688 | ||||||||||||||||||||
Fractional common stock shares repurchased | (30) | (30) | ||||||||||||||||||||||
Stock-based compensation | 1,416,791 | 1,416,791 | ||||||||||||||||||||||
Net loss | (19,492,172) | (19,492,172) | ||||||||||||||||||||||
Balance at Sep. 30, 2018 | $ 960 | $ 4,030 | $ 92,216,482 | $ (81,896,894) | 10,324,578 | |||||||||||||||||||
Ending Balance at Sep. 30, 2018 | $ 9,000,002 | $ 9,000,002 | ||||||||||||||||||||||
Balance (in shares) at Sep. 30, 2018 | 9,603,103 | 40,301,237 | 5,524,926 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net loss | $ (19,492,172) | $ (1,761,156) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization expense | 989,116 | 326,204 |
Impairment of goodwill | 3,648,000 | |
Deferred income tax benefit | (12,190,693) | |
Interest paid on the conversion of debt to equity | 21,275 | |
Common stock issued in exchange for services rendered | 6,425 | |
Common stock issued in Napo merger for services | 151,351 | |
Loss on extinguishment of debt | 207,713 | |
Charge in relation to modification of warrants | 23,000 | |
Stock-based compensation | 1,416,791 | 630,924 |
Amortization of debt issuance costs and debt discount | 1,461,133 | 367,891 |
Change in fair value of warrants, conversion option and derivative liability | (178,461) | (637,121) |
Changes in assets and liabilities | ||
Accounts receivable | (561,012) | (457,576) |
Other receivable | (175,009) | (17,349) |
Inventory | (477,217) | 369,155 |
Prepaid expenses and other current assets | (635,622) | (256,057) |
Deferred offering costs | (1,255,554) | (231,253) |
Other non-current assets | (289,828) | 122,163 |
Due from former parent | (164,647) | |
Deferred revenue | (177,389) | 814,589 |
Deferred product revenue | (6) | |
Deferred rent | 52,665 | (1,028) |
Accounts payable | (904,577) | 4,691,363 |
Accrued expenses | 2,370,682 | (130,255) |
Total cash used in operations | (17,828,754) | (4,494,788) |
Cash Flows from Investing Activities | ||
Purchase of equipment | (6,527) | |
Cash paid in Napo merger, net of cash acquired | (1,557,340) | |
Change in restricted cash | 11,293 | |
Total cash used in investing activities | (6,527) | (1,546,047) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of long-term debt | 2,310,000 | |
Payments of long-term debt | (1,689,200) | (2,161,262) |
Proceeds from issuance of convertible debt | 500,000 | 1,700,000 |
Proceeds from the issuance of common stock through the exercise of common stock warrants | 363,334 | |
Proceeds from the issuance of convertible preferred stock net of issuance costs | 9,000,002 | |
Fractional common stock shares repurchased | (30) | |
Total Cash Provided by Financing Activities | 17,801,543 | 5,310,446 |
Net decrease in cash and cash equivalents | (33,738) | (730,389) |
Cash and restricted cash at beginning of period | 759,867 | 950,979 |
Cash and restricted cash at end of period | 726,129 | 220,590 |
Supplemental Schedule of Non-Cash Financing and Investing Activities | ||
Interest paid on long-term debt | 19,344 | 201,835 |
Deemed dividend attributable to preferred stock | 995,000 | |
Fair value of common stock issued in a merger | 25,303,859 | |
Fair value of replacement of common stock warrants issued in a merger | 630,859 | |
Fair value of replacement restricted stock units issued in a merger | 3,300,555 | |
Fair value of replacement stock options issued in a merger | 5,691 | |
September 2018 L2 convertible note payable | ||
Supplemental Schedule of Non-Cash Financing and Investing Activities | ||
Common stock issued with September 2018 Promissory Notes | $ 48,000 | |
Warrants issued with the September 2018 Promissory Notes | 118,148 | |
Private Investment in Public Entities June 2016 | ||
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 2,314,374 | |
Issuance costs associated with the issuance of common stock in a private investment in public entities | 61,781 | |
Private Investment in Public Entities June 2017 | ||
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 94,000 | |
Issuance costs associated with the issuance of common stock in a private investment in public entities | 6,000 | |
Private Investment in Public Entities July 2017 | ||
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | $ 3,000,000 | |
Private investment in public entities with new investors | ||
Cash Flows from Financing Activities | ||
Proceeds from the issuance of common stock through a stock purchase agreement | $ 1,305,774 | |
Private investment in public entities with existing investors | ||
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 750,100 | |
Private Investment in Public Entities March 2018 | ||
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 5,000,000 | |
Private Investment in Public Entities July 2018 | ||
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock | 624,897 | |
Jaguar Notes Payable | ||
Supplemental Schedule of Non-Cash Financing and Investing Activities | ||
Common stock issued as redemption of notes payable and related interest | 1,153,408 | |
Napo convertible notes | ||
Supplemental Schedule of Non-Cash Financing and Investing Activities | ||
Common stock issued as redemption of notes payable and related interest | $ 1,638,546 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash and Restricted Cash: | ||||
Cash | $ 726,129 | $ 520,698 | ||
Restricted cash | 239,169 | |||
Total cash and restricted cash | $ 726,129 | $ 759,867 | $ 220,590 | $ 950,979 |
Organization and Business
Organization and Business | 9 Months Ended |
Sep. 30, 2018 | |
Organization and Business | |
Organization and Business | 1. Organization and Business Jaguar Health, Inc. (“Jaguar”, “we” or the “Company”), formerly known as Jaguar Animal Health, Inc., 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. 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. On July 31, 2017, Jaguar completed a merger with Napo pursuant to the Agreement and Plan of Merger dated March 31, 2017 by and among Jaguar, Napo, Napo Acquisition Corporation (“Merger Sub”), and Napo's representative (the “Merger Agreement”). In accordance with the terms of the Merger Agreement, upon the completion of the merger, Merger Sub merged with and into Napo, with Napo surviving as our wholly-owned subsidiary (the “Merger” or “Napo Merger”). Immediately following the Merger, Jaguar changed its name from “Jaguar Animal Health, Inc.” to “Jaguar Health, Inc.” Napo now operates as a wholly-owned subsidiary of Jaguar focused on human health and the ongoing commercialization of Mytesi, a Napo drug product approved by the U.S. FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. The Company manages its operations through two segments—human health and animal health and is headquartered in San Francisco, California. Reverse stock-split On May 18, 2018, the stockholders of Jaguar approved at the 2018 Annual Meeting of Stockholders of the Company and the Board approved, in accordance with the authority granted by the Company's stockholders at the Annual Meeting, a 1‑for‑15 reverse stock split of the Company's issued and outstanding shares of Common Stock, effective June 1, 2018. The reverse split has been reflected in all voting common stock, warrants, and common stock option shares disclosed in these financial statements. The non-voting common stock and the convertible preferred stock were excluded from the reverse split. Liquidity and Going Concern The accompanying condensed consolidated 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 $81.9 million as of September 30, 2018. 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 the issuance date of the financial statements. The accompanying financial statements do not include any adjustments that might result from the outcome of these uncertainties. October 2018 Equity Financing In September 2018, the Company announced plans to complete a public offering of common shares and pre-funded warrants. This offering closed on October 4, 2018, pursuant to which the Company issued and sold an aggregate of 11,575,001 shares of its common stock and 3,425,000 pre-funded warrants to purchase shares of common stock. The common stock was sold at a purchase price of $0.60 per share for gross proceeds of $7.0 million, and the pre-funded warrants were sold at a purchase price of $0.59 per share for gross proceeds of $2.0 million. Actual cash received after deducting fees and expenses in connection with the offering was $8.3 million. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
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”) for interim financial information and on a basis consistent with the annual consolidated financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of the results to be expected for the year ending December 31, 2018, or for any other future annual or interim period. These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our Annual Report on Form 10‑K for the year ended December 31, 2017. There have been no material changes to the Company's significant accounting policies during the three and nine months ended September 30, 2018, as compared to the significant accounting policies described in Note 2 of the “Notes to Financial Statements” in the Company's Annual Report on Form 10‑K for the year ended December 31, 2017 except for the adoption of the new revenue recognition standard pursuant to ASC 606 as of January 1, 2018 as described in more detail below. Principles of Consolidation The condensed consolidated condensed financial statements have been prepared in accordance with US GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its wholly owned subsidiary. All inter-company transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of the accompanying condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed financial statements, and the reported amounts of revenue and expenses during the periods reported. Actual results could differ 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 as of September 30, 2018, represent $1.3 million in legal, accounting, printer and filing fees associated with the Company's October 2018 offering in which the Company issued common stock and pre-funded warrants as registered on Form S-1. The offering closed on October 4, 2018, at which time these deferred offering costs were charged to stockholders’ equity. Concentrations 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 insurance limits. The carrying value of cash approximates fair value at September 30, 2018 and December 31, 2017. In the nine months ended September 30, 2018, substantially all of the Company’s revenue has been derived from the sale of Mytesi. The Company earned Mytesi revenue primarily from three major pharmaceutical distributors in the United States, each of whom amounted to a percentage of total net revenue of at least 10%. Revenue earned from each as a percentage of total net revenue follows: Through September 30, 2018, substantially all of the Company's product revenue has been derived from the sale of Mytesi. The Company earned Mytesi revenue primarily from three major pharmaceutical distributors in the United States, each of which amounted to a percentage of total net revenue of at least 10%. Revenue earned from each as a percentage of total net revenue follow: [OPEN will get updated percentages from Veronica] Consolidated (percentage of total net sales) Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Customer 1 34 % 11 % 28 % 4 % Customer 2 28 % 9 % 28 % 3 % Customer 3 25 % 12 % 25 % 5 % 88 % 32 % 81 % 13 % The Company is subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers' financial condition and generally does not require collateral. The Company's significant pharmaceutical distributors and their related accounts receivable balance as a percentage of total accounts receivable were as follows: As of As of September 30, December 31, 2018 2017 Customer 1 35 % 30 % Customer 2 29 % 31 % Customer 3 26 % 35 % No other customer represented more than 10% of the Company's accounts receivable balances as of those dates. The Company is subject to credit risk from its inventory suppliers. The Company sources drug substance from a single supplier and drug product from a single supplier. Prepaids and other current assets and other long-term assets The $1,267,861 increase in prepaids and other current assets between December 31, 2017 and September 30, 2018 includes $777,380 of raw materials having a useful life greater than one year which will be used in future production and $225,147 of deferred rent for the Company’s office lease. The $501,120 increase in other long-term assets between December 31, 2017 and September 30, 2018 includes $289,828 of these raw materials and $211,292 in deferred rent. Goodwill and Indefinite-lived Intangible Assets Goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate that an impairment loss may have occurred. The test is based on a comparison of the reporting unit's book value to its estimated fair market value. The Company performs the annual impairment test during the fourth quarter of each fiscal year using the opening consolidated balance sheet as of the first day of the fourth quarter, with any resulting impairment recorded in the fourth quarter of the fiscal year. If the carrying value of a reporting unit's net assets exceeds its fair value, the goodwill would be considered impaired and would be reduced to its fair value. The goodwill was entirely allocated to the human health reporting unit as the goodwill relates to the Napo Merger. The Company recorded an impairment of goodwill in the three months and nine months ended September 30, 2017. The decline in market capitalization during the three months ended September 30, 2017 was determined to be a triggering event for potential goodwill impairment. Accordingly, the Company performed the goodwill impairment analysis. The Company utilized the market capitalization plus a reasonable control premium in the performance of its impairment test. The market capitalization was based on the outstanding shares and the average market share price for the 30 days prior to September 30, 2017. The Company’s analysis did not result in an impairment of goodwill in the three months and nine months ended September 30, 2018. If the market capitalization decreases in the future, a reasonable possibility exists that goodwill could be impaired in the near term and that such impairment may be material to the financial statements. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of individual reporting units and indefinite-lived intangible assets requires the Company to make assumptions and estimates regarding our future plans, as well as industry and economic conditions. These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors. If current expectations of future growth rates are not met or market factors outside of the Company’s control, such as discount rates, change significantly, this may lead to a further goodwill impairment in the future. Acquired in-process research and development (IPR&D) are intangible assets initially recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. During the development period, these assets will not be amortized as charges to earnings; instead these assets will be tested for impairment on an annual basis or more frequently if impairment indicators are identified. We booked an impairment of $2,300,000 in the year ended December 31, 2017. The impairment loss is measured based on the excess of the carrying amount over the asset's fair value. The loss resulted from the Company's termination of the clostridium dificil infection program. Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), which was adopted on January 1, 2018, using the modified retrospective method, which was elected to apply to all active contracts as of the adoption date. Application of the modified retrospective method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption, as the Company's method of recognizing revenue under ASC 606 yielded similar results to the method utilized immediately prior to adoption. Accordingly, there was no effect to each financial statement line item as a result of applying the new revenue standard. Practical Expedients, Elections, and Exemptions The Company recognizes revenue in accordance with the core principle of ASC 606 or when there is a transfer of control of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. The Company used a practical expedient available under ASC 606‑10‑65‑1(f)4 that permits it to consider the aggregate effect of all contract modifications that occurred before the beginning of the earliest period presented when identifying satisfied and unsatisfied performance obligations, transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations. The Company also used a practical expedient available under ASC 606‑10‑32‑18 that permits it to not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less. The Company has elected to treat shipping and handling activities as fulfillment costs. Additionally, the Company elected to record revenue net of sales and other similar taxes. Contracts Napo entered into a Marketing and Distribution Agreement (“M&D Agreement”) with BexR Logistix, LLC (“BexR” or “Mission Pharmacal” or “Mission”), in April 2016 to appoint BexR as its distributor with the right to market and sell, and the exclusive right to distribute Mytesi (formerly Fulyzaq) in the US. Napo sells Mytesi through Mission, who then sells Mytesi to its distributors and wholesalers — McKesson, Cardinal Health, AmerisourceBergen Drug Corporation (“ABC”), HD Smith, Smith Drug and Publix (together “Distributors”). Mission sells Mytesi to its Distributors, on behalf of Napo, under agreements executed by Mission with these Distributors and Napo abides by the terms and conditions of sales agreed to between Mission and their Distributors. Health care providers order Mytesi through pharmacies who obtain Mytesi through Mission's Distributors. Napo considers Mission as the sales agent and the Distributors of Mission as its customers. Napo retains control of Mytesi held at Mission. Mission's Distributors are our customers with respect to purchase of Mytesi. The M&D Agreement with Mission, Mission's agreement with the Distributors and the related purchase order will together meet the contract existence criteria under ASC 606‑10‑25‑1. This M&D Agreement with Mission was amended on August 15, 2018, with a termination date of January 31, 2019. Mission agreed to continue to serve as the exclusive distributor for Mytesi on a transition basis until this date. The Company is in negotiations with another agent to replace Mission as the sales agent. Jaguar's Neonorm and Botanical extract products are primarily sold to distributors, who then sell the products to the end customers. Since 2014, the Company has entered into several distribution agreements with established distributors such as Animart, Vedco, VPI, RJ Matthews, Henry Schein, and Stockmen Supply to distribute the Company's products in the United States, Japan, and China. The distribution agreements and the related purchase order together meet the contract existence criteria under ASC 606‑10‑25‑1. Jaguar sells directly to its customers without the use of an agent. Performance obligations For the products sold by each of Napo and Jaguar, the single performance obligation identified above is the Company's promise to transfer the Company's product Mytesi to Distributors based on specified payment and shipping terms in the arrangement. Product warranties are assurance type warranties that does not represent a performance obligation. Transaction price For both Jaguar and Napo, the transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring promised goods or services to a customer. The transaction price of Mytesi and Neonorm is the Wholesaler Acquisition Cost (“WAC”), net of discounts, returns, and price adjustments. The transaction price of the products represents a form of variable consideration for which the Company uses the expected value method to calculate the expected consideration the Company is entitled to. Historical results and management experience in estimating returns and discounts allows the Company to overcome the variable consideration constraints in its calculation of the expected consideration. Allocate transaction price For both Napo and Jaguar, the entire transaction price is allocated to the single performance obligation contained in each contract. Point in time recognition For both Napo and Jaguar, a single performance obligation is satisfied at a point in time, upon the free on board (“FOB”) terms of each contract when control, including title and all risks, has transferred to the customer. Disaggregation of Product Revenue Human Sales of Mytesi are recognized as revenue when the products are delivered to the wholesalers. Net revenues from the sale of Mytesi were $1,107,682 and $2,545,121 in the three and nine months ended September 2018, and $364,054 in the three and nine months ended September 30, 2017. The merger with Napo closed July 31, 2017. The Company did not recognize revenue for Mytesi sales prior to the merger with Napo. Animal The Company recognized Neonorm revenues of $24,386 and $33,611 for the three months ended September 30, 2018 and 2017, and $97,760 and $139,600 for the nine months ended September 30, 2018 and 2017, respectively. Botanical Extract revenues were nil and $48,000 in the three months ended September 30, 2018 and 2017, and nil and $78,000 in the nine months ended September 30, 2018 and 2017, respectively. Revenues are recognized upon shipment which is when title and control is transferred to the buyer . 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. 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, the Company's 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. Under the terms of the agreement, the Company received an initial non-refundable upfront payment of $2,548,689, inclusive of reimbursement of past product and development expenses of $1,048,689, which was recognized as revenue ratably over the estimated development period of one year resulting in revenue of zero and $637,200 in the three months ended September 30, 2018 and 2017, respectively, and zero and $1,734,100 in the nine months ended September 30, 2018 and 2017, respectively. On November 1, 2017, the Company received a letter from Elanco serving as formal notice of their decision to terminate the agreement by giving the Company 90 days written notice. According to the agreement, termination became effective on January 30, 2018. On September 24, 2018, the Company entered into a Distribution, License and Supply Agreement ("License Agreement") with Knight Therapeutics, Inc. ("Knight"). The License Agreement has a term of 15 years (with automatic renewals) and provides Knight with an exclusive right to commercialize current and future Jaguar human health products (including Crofelemer, Lechlemer, and any product containing a proanthocyanidin or with an anti-secretory mechanism) in Canada and Israel. In addition, Knight was granted a right of first negotiation for expansion to Latin America. Under the License Agreement, Knight is responsible for applying for and obtaining necessary regulatory approvals in the territory of Canada and Israel, as well as marketing, sales and distribution of the licensed products. Knight will pay a transfer price for all licensed products, and upon achievement of certain regulatory and sales milestones, Jaguar may receive payments from Knight in an aggregate amount of up to approxim Comprehensive Income (Loss) For all periods presented, the comprehensive income (loss) was equal to the net income (loss); therefore, a separate statement of comprehensive income (loss) is not included in the accompanying interim condensed consolidated financial statements. Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016‑02, Leases . Under this guidance, lessees will be required to recognize substantially all leases on the balance sheet as a right-of-use asset and recognize a corresponding lease liability. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statement of Operations. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Entities have the option to use certain practical expedients. Full retrospective application is prohibited. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases." These amendments affect narrow aspects of the guidance issued in the amendments in ASU 2016-02 including those regarding residual value guarantees, rate implicit in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase option, variable lease payments that depend on an index or a rate, investment tax credits, lease term and purchase option, transition guidance for amounts previously recognized in business combinations, certain transition adjustments, transition guidance for leases previously classified as capital leases under Topic 840, transition guidance for modifications to leases previously classified as direct financing or sales-type leases under Topic 840, transition guidance for sale and leaseback transactions, impairment of net investment in the lease, unguaranteed residual asset, effect of initial direct costs on rate implicit in the lease, and failed sale and leaseback transactions. The Company plans to adopt Topic 842 on January 1, 2019. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements and accompanying footnotes. The Company anticipates that implementation of Topic 842 will result in an increase in assets and liabilities and additional disclosures. The effect of adoption will depend on our current lease portfolio at time of adoption; however, upon adoption, we anticipate that our reported assets and liabilities will increase in connection with the recognition of any right-of-use assets and lease liabilities, such as the operating lease on our corporate headquarters. In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features . This new guidance addresses narrow issues identified as a result of the complexity associated with accounting for certain financial instruments with characteristics of liabilities and equity, including accounting for Down Round features. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of this accounting standard on our financial position, results of operation and cash flows. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This new guidance is effective for the Company in fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company is currently assessing the impact of this new guidance. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2018 | |
Business Combination | |
Business Combination | 3. Business Combination As discussed in Note 1, the Company completed a merger with Napo on July 31, 2017. Napo now operates as a wholly-owned subsidiary of Jaguar focused on human health and the ongoing commercialization of Mytesi, a Napo drug product approved by the U.S. FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. The merger was accounted for under the acquisition method of accounting for business combinations and Jaguar was considered to be the acquiring company. Under the acquisition method of accounting, total consideration exchanged was: (Unaudited) Fair value of Jaguar common stock $ 25,303,859 Fair value of Jaguar common stock warrants 630,859 Fair value of replacement restricted stock units 3,300,555 Fair value of replacement stock options 5,691 Cash 2,000,000 Effective settlement of receivable from Napo 464,295 Total consideration exchanged $ 31,705,259 The purchase price allocation to assets and liabilities assumed in the transaction was: Current assets $ 2,578,114 Non-current assets 396,247 Identifiable intangible assets 36,400,000 Current liabilities (4,052,180) Convertible notes payable (12,473,501) Deferred tax liability (13,181,242) Net assets acquired 9,667,438 Goodwill on acquisition 22,037,821 Total consideration $ 31,705,259 Under the acquisition method of accounting, certain identifiable assets and liabilities of Napo including identifiable intangible assets, inventory, debt and deferred revenue were recorded based on their estimated fair values as of the effective time of the Napo Merger. Tangible and other assets and liabilities were valued at their respective carrying amounts, which management believes approximated their fair values. Acquired intangible assets included Developed Technology (“DT”) related to the development and commercial processing of Mytesi™ (crofelemer 125mg delayed-release tablets), which is an antidiarrheal indicated for the symptomatic relief of noninfectious diarrhea in adult patients with HIV/AIDS on antiretroviral therapy. The DT is a definite lived asset and is being amortized over a 15‑year estimated useful life. The acquired trademarks include Mytesi product trademark, domain names, and other brand related intellectual property. Trademark is a definite lived asset and is being amortized over a 15‑year estimated useful life. The acquired IPR&D projects relate to developing the proprietary technology into a commercially viable product for the several follow-on indications related to formulations of crofelemer. Crofelemer is in development for rare disease indications for infants and children with congenital diarrheal disorders (“CDD”) and short bowel syndrome (“SBS”), and for irritable bowel syndrome (“IBS”). These indications have completed some studies of clinical testing for safety and/or proof of concept efficacy at the time of the merger and the projects were determined to have substance. IPR&D is not amortized during the development period and is tested for impairment at least annually, or more frequently if indicators of impairment are identified. The Company terminated development of the indication for C. difficile infection (“CDI”) in Q4 2017. This indication was included as part of IPR&D at the time of the merger, and an impairment loss of $2,300,000 was recorded in Q4 2017 as a result of the decision to abandon the project in favor of the prioritization of the following: Mytesi is in development for follow-on indications in cancer therapy-related diarrhea (“CTD”), an important supportive care indication for patients undergoing primary or adjuvant therapy for cancer treatment; as supportive care for post-surgical inflammatory bowel disease patients (“IBD”); and as a second-generation anti-secretory agent for use in cholera patients. These indications did not have substance at the time of the merger and were not recognized as an asset apart from goodwill. The fair value of IPR&D, trademark, and DT was determined using the income approach, which was based on probability-adjusted, discounted forecasts prepared by management. The Napo Merger resulted in $22,037,821 of goodwill relating principally to synergies expected to be achieved from the combined operations and planned growth in new markets. Goodwill has been allocated to the human health segment. As none of the goodwill, IPR&D, and developed technology acquired are expected to be deductible for income tax purposes, it was determined that a deferred income tax liability of $14,498,120 was required to reflect the book to tax differences of the merger. A deferred tax asset of $1,316,878 was accounted for as an element of consideration for the replacement share-based payment awards as the replacement awards are expected to result in a future tax deduction. The Company valued convertible debt assumed in the Napo Merger based on the value of the debt and the conversion option at $12,473,501 (see Note 8). The Company incurred total acquisition related costs of $3,554,250. The acquisition related costs includes the fair value of $151,351 for 270,270 shares of Company's common stock issued to a former creditor of Napo towards reimbursement of acquisition related costs. Acquisition related costs were expensed as incurred to general and administrative expenses in the condensed consolidated statements of operations. In September 2018, the Company received a $1.2 million payment from Valeant, in a settlement agreement with Glenmark Pharmaceuticals, Valeant Pharmaceuticals Ireland, Limited, and Salix Pharmaceuticals, related to inventory that the Company was entitled to on July 31, 2017, the date of the merger with Napo. Unaudited Proforma Information The following table provides unaudited proforma results, prepared in accordance with ASC 805, for the three and nine months ended September 30, 2017, as if Napo was acquired on January 1, 2017. Three Months Ended Nine Months Ended September 30, September 30, 2017 2017 Net sales $ 1,253,447 $ 3,894,222 Net income (loss) $ 5,281,573 $ (2,905,689) Net loss per share, basic and diluted $ 0.10 $ (0.10) The unaudited proforma results include adjustments to eliminate the interest on Napo's historical convertible debt not assumed by Jaguar and debt exchanged for Jaguar common stock, record interest on convertible debt assumed by Jaguar, eliminate Napo impairment of investment in related party, and eliminate Napo's loss from investment in related party. The Company made proforma adjustments to exclude the acquisition related costs for the three and nine months ended September 30, 2017 because such costs are nonrecurring and are directly related to the Napo Merger. Unaudited pro forma amounts are not necessarily indicative of future results. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements | |
Fair Value Measurements | 4. 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 derivative, conversion option and warrant liabilities that were measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 and indicates the fair value hierarchy of the valuation: September 30, 2018 Level 1 Level 2 Level 3 Total Warrant liability $ — $ — $ 48,240 $ 48,240 Derivative liability — — — — Conversion option liability — — — — Total fair value $ — $ — $ 48,240 $ 48,240 December 31, 2017 Level 1 Level 2 Level 3 Total Warrant liability $ — $ — $ 103,860 $ 103,860 Derivative liability — — 11,000 11,000 Conversion option liability — — 111,841 111,841 Total fair value $ — $ — $ 226,701 $ 226,701 The change in the estimated fair value of level 3 liabilities is summarized below: For the Nine Months Ended September 30, 2018 Warrant Derivative Conversion Option Liability Liability Liability Beginning value of liability $ 103,860 $ 11,000 $ 111,841 Extinguishment — — (286,595) Change in fair value of liability (55,620) (11,000) 174,754 Ending fair value of level 3 liability $ 48,240 $ — $ — Warrant Liability The warrants associated with the level 3 liability were issued in 2016. The $103,860 valuation at December 31, 2017 was computed using the Black-Scholes-Merton pricing model using a stock price of $0.14, the strike price was $0.75 per share, the expected life was 4.41 years, the volatility was 96.36% and the risk-free rate was 2.14%.The $48,240 valuation at September 30, 2018 was computed using the Black-Scholes-Merton pricing model using a stock price of $0.86, the strike price was $11.25 per share, the expected life was 3.66 years, the volatility was 131.93% and the risk-free rate was 2.90%. The resulting $55,620 gain is included in change in fair value of warrants in the statements of operations. Derivative Liability The derivative liability associated with the level 3 liability were associated with the June 2017 issuance of a convertible note payable. The Company computed fair values at the date of issuance of $15,000 and $5,000 for the repayment and the interest rate increase feature, respectively, using the Binomial Lattice Model, which was based on the generalized binomial option pricing formula. The $20,000 combined fair value was carved out and is included as a derivative liability on the Balance Sheet. The derivatives were revalued at December 31, 2017 using the same Model resulting in a combined fair value of $11,000. The derivatives were revalued again at September 30, 2018 using the same Model resulting in a combined minimal fair value. The resulting $11,000 gain is included in other income and expense in the Company's statements of operations. Conversion Option Liability In March 2017, Napo entered into an exchangeable note purchase agreement with two lenders for the funding of face amount of $1,312,500 in two $525,000 tranches of face amount $656,250. The Company assumed the notes at fair value of $1,312,500 as part of the Napo Merger. In December 2017, Napo amended the exchangeable note purchase agreement to extend the maturity of the first tranche and second tranche of notes to February 15, 2018 and April 1, 2018, respectively, increase the principal amount by 12%, and reduce the conversion price from $0.56 per share to $0.20 per share. The Company also issued 2,492,084 shares of common stock to the lenders in connection with this amendment to partially redeem $299,050 from the first tranche of the notes. The optional conversion option in the notes was bifurcated and accounted as a derivative liability at its fair value of $111,841 using the Black-Scholes-Merton model and the following criteria: stock price of $0.14 per share, conversion prices of $0.20 per share, expected life of 0.13 to 0.25 years, volatility of 86.29% to 160.78%, risk free rate of 1.28% to 1.39% and dividend rate of 0%. The $111,841 was included in conversion option liability on the balance sheet and in loss on extinguishment of debt on the statements of operations. The fair value of the conversion option liability was again revalued at March 23, 2018 using the Black-Scholes-Merton model using the following criteria: stock price of $0.21 per share, expected life of 0.11 years, volatility of 288.16%, risk free rate of 1.69% and dividend rate of 0%, resulting in an increase of $174,754 to the fair value of the conversion option liability and included in the change in fair value of warrants and conversion option liability in the statements of operations. The underlying debt was paid off in March of 2018 and the $286,595 conversion option liability was written off to other income in the statements of operations. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Components | |
Balance Sheet Components | 5. Balance Sheet Components Goodwill The change in the carrying amount of goodwill at September 30, 2018 and December 31, 2017 was as follows: September 30, December 31, 2018 2017 Beginning balance $ 5,210,821 $ — Goodwill acquired in conjunction with the Napo merger — 22,037,821 Impairment — (16,827,000) Ending balance $ 5,210,821 $ 5,210,821 Intangible assets Intangible assets at September 30, 2018 and December 31, 2017 consisted of the following: September 30, December 31, 2018 2017 Developed technology $ 25,000,000 $ 25,000,000 Accumulated developed technology amortization (1,944,445) (694,445) Developed technology, net 23,055,555 24,305,555 In process research and development 8,800,000 11,100,000 Impairment — (2,300,000) In process research and development, net 8,800,000 8,800,000 Trademarks 300,000 300,000 Accumulated trademark amortization (23,333) (8,333) Trademarks, net 276,667 291,667 Total intangible assets, net $ 32,132,222 $ 33,397,222 Amortization expense was $421,667 and $1,265,000 in the three and nine months ended September 30, 2018, respectively and $281,111 in the three and nine months ended September 30, 2017. Amortization started with the merger with Napo, which was effective July 31, 2017. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies | |
Commitments and Contingencies | 6. Commitments and Contingencies On August 28, 2018, the Company entered into an office lease extension agreement for approximately 6,311 square feet of office space in San Francisco, CA. The term of the Lease began on September 1, 2018 and will expire on September 30, 2020, unless earlier terminated in accordance therewith. The monthly base rent under the Lease is as follows: $38,392 for the first twelve months, $39,544 for the subsequent twelve months, and $40,730 for the final month. The Company will also pay an additional monthly amount for the Company’s proportionate share of the building’s operating charges. An existing shareholder provided a standby letter of credit in the amount of $475,000 to the Lessor as collateral for the full performance by the Company of all of its obligations under the Lease. In consideration of the Letter of Credit, the Company issued the existing shareholder a five-year warrant to purchase 670,586 shares of the Company’s voting common stock (see Note 7). The Warrant is exercisable on or after March 28, 2019 at an exercise price of $0.70 per share. The fair value of the warrant was determined to be $493,689 using the Black-Scholes-Merton model with the following criteria: stock price of $0.84 per share, expected life of 5 years, volatility of 132%, risk-free rate of 2.77% and dividend rate of 0%. The $493,688 fair value of the Warrant was classified in the statement of stockholders equity with an offset to deferred rent. Each month, $19,748 of this deferred rent will be recognized as non-cash rent expense. The Company recognizes rent expense on a straight-line basis over the non-cancelable lease period. Rent expense was $117,435 and $297,993 for the three and nine months ended September 30, 2018, respectively and $90,278 and $270,835 for the three and nine months ended September 30, 2017, respectively. Rent expense is included in general and administrative expense in the statements of operations. Asset transfer and transition commitment On September 25, 2017, Napo entered into the Termination, Asset Transfer and Transition Agreement dated September 22, 2017 with Glenmark Pharmaceuticals Ltd. (“Glenmark”). As a result of the agreement, Napo now controls commercial rights for Mytesi ® for all indications, territories and patient populations globally, and also holds commercial rights to the existing regulatory approvals for crofelemer in Brazil, Ecuador, Zimbabwe and Botswana. In exchange, Napo agrees to pay Glenmark 25% of any payment it receives from a third party to whom Napo grants a license or sublicense or with whom Napo partners in respect of, or sells or otherwise transfers any of the transferred assets, subject to certain exclusions, until Glenmark has received a total of $7.0 million. No payments have been made to date. Revenue sharing commitment On December 14, 2017, the Company announced its entry into a collaboration agreement with Seed Mena Businessmen Services LLC (“SEED”) for Equilevia™, the Company's non-prescription, personalized, premium product for total gut health in equine athletes. According to the terms of the Agreement, the Company will pay SEED 15% of total revenue generated from any clients or partners introduced to the Company by SEED in the form of fees, commissions, payments or revenue received by the Company or its business associates or partners, and the agreed-upon revenue percentage increases to 20% after the first million dollars of revenue. In return, SEED will provide the Company access to its existing UAE network and contacts and assist the Company with any legal or financial requirements. The agreement became effective on December 13, 2017 and will continue indefinitely until terminated by either party pursuant to the terms of the Agreement. Upon termination for any reason, the Company remains obligated to make Revenue Sharing Payments to SEED until the end of 2018. No payments have been made to date. Purchase Commitment As of September 30, 2018, the Company had issued non-cancelable purchase orders to a vendor for $1.3 million, which will be filled in the period November 2018 through December 2018. Legal Proceedings On July 20, 2017, a putative class action complaint was filed in the United States District Court, Northern District of California, Civil Action No. 3:17‑cv‑04102, by Tony Plant (the “Plaintiff”) on behalf of shareholders of the Company who held shares on September 30, 2017 and were entitled to vote at the 2017 Special Shareholders Meeting, against the Company and certain individuals who were directors as of the date of the vote (collectively, the “Defendants”), in a matter captioned Tony Plant v. Jaguar Animal Health, Inc., et al., making claims arising under Section 14(a) and Section 20(a) of the Exchange Act and Rule 14a‑9, 17 C.F.R. § 240.14a‑9, promulgated thereunder by the SEC. The claims alleged false and misleading information provided to investors in the Joint Proxy Statement/Prospectus on Form S‑4 (File No. 333‑217364) declared effective by the Commission on July 6, 2017 related to the solicitation of votes from shareholders to approve the merger and certain transactions related thereto. The Company accepted service of the complaint and summons on behalf of itself and the United States-based director Defendants on November 1, 2017. The Company has not accepted service on behalf of, and Plaintiff has not yet served, the non-U.S.-based director Defendants. On October 3, 2017, Plaintiff filed a motion seeking appointment as lead plaintiff and appointment of Monteverde & Associates PC as lead counsel. That motion was granted. Plaintiff filed an amended complaint against the Company and the United States-based director Defendants on January 10, 2018. The Defendants filed a motion to dismiss on March 12, 2018, for which oral arguments were held on June 14, 2018. The court dismissed the complaint on September 20, 2018. Plaintiff was entitled to amend the complaint within 20 days from the date of dismissal. On October 10, 2018, Plaintiff amended the complaint to focus on the Company’s commercial strategy in support of Equilevia and the related disclosure statements in the Form S-4 described above. On November 6, 2018, the Defendants moved to dismiss the second amended complaint. The Defendants argue in their motion that the complaint fails to state a claim upon which relief can be granted because the omissions and misrepresentations alleged in the complaint are immaterial as a matter of law. Plaintiff’s memorandum of law in opposition to the Defendants’ motion to dismiss is due on December 21, 2018. If the Plaintiff were able to prove its allegations in this matter and to establish the damages it asserts, then an adverse ruling could have a material impact on the Company. The Company believes that it is not probable that an asset has been impaired or a liability has been incurred as of the date of the financial statements and the amount of any potential loss is not reasonably estimable. Other than as described above, there are currently no claims or actions pending against us, the ultimate disposition of which could have a material adverse effect on our results of operations, financial condition or cash flows. Contingencies From time to time, the Company may be involved in legal proceedings (other than those noted above) 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 | 9 Months Ended |
Sep. 30, 2018 | |
Debt and Warrants | |
Debt and Warrants | 7. Debt and Warrants Convertible Notes Convertible notes at September 30, 2018 and December 31, 2017 consist of the following: September 30, December 31, 2018 2017 February 2015 convertible notes payable — 150,000 June 2017 convertible note payable 703,585 1,613,089 September 2018 L2 convertible note payable 455,000 — September 2018 Conte convertible note payable 111,250 — Napo convertible notes 10,661,026 12,153,389 $ 11,930,861 $ 13,916,478 Less: unamortized debt discount and debt issuance costs (213,843) (261,826) Net convertible notes payable obligation $ 11,717,018 $ 13,654,652 Convertible notes payable - non-current 10,661,026 10,982,437 Convertible notes payable - current $ 1,055,992 $ 2,672,215 Interest expense on the convertible notes for the three and nine months ended September 30, 2018 and 2017 follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 February 2015 convertible note nominal interest $ — $ 4,537 $ 1,479 $ 13,463 June 2017 convertible note nominal interest 14,063 43,900 47,391 44,372 June 2017 convertible note accretion of debt discount 49,564 123,362 281,825 124,708 August 2018 L2 convertible note nominal interest 17,839 — 17,839 — August 2018 Conte convertible note nominal interest 3,074 — 3,074 — Napo convertibles note nominal interest 148,077 175,798 399,270 175,798 Total interest expense on convertible debt $ 232,617 $ 347,597 $ 750,878 $ 358,341 Interest expense is classified as such in the statements of operations. February 2015 Convertible Note 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 March of 2018, the debtor agreed to accept the Company's common stock as payment for all outstanding principal and interest. And in April of 2018, the Company issued 2,034,082 shares of common stock to pay off the principal and interest balance. June 2017 Convertible Note On June 29, 2017, the Company issued a secured convertible promissory note to Chicago Venture Partners, L.P. (“CVP”) in the aggregate principal amount of $2,155,000 less an original issue discount of $425,000 and less $30,000 to cover the lender's legal fees for net cash proceeds of $1,700,000. Interest on the outstanding balance will be paid 8% per annum from the purchase price date until the balance is paid in full. The Note provides for two separate features that result in a derivative liability: 1. Repayment of mandatory default amount upon an event of default—upon the occurrence of any event of default, the lendor may accelerate the Note resulting in the outstanding balance becoming immediately due and payable in cash; and 2. Automatic increase in the interest rate on and during an event of default—during an event of default, the interest rate will increase to the lesser of 17% per annum or the maximum rate permitted under applicable law. The Company computed fair values at the date of issuance of $15,000 and $5,000 for the repayment and the interest rate increase feature, respectively, using the Binomial Lattice Model, which was based on the generalized binomial option pricing formula. The $20,000 combined fair value was carved out and is included as a derivative liability on the Balance Sheet. The derivatives were revalued at December 31, 2017 using the same Model resulting in a combined fair value of $11,000. The derivatives were revalued again at September 30, 2018 using the same Model resulting in a de minimus fair value. The resulting $11,000 gain is included in other income and expense in the Company's statements of operations. On August 2, 2018, the Company and CVP agreed to an amendment extending the maturity date to August 26, 2019, and limiting the aggregate amount that CVP is permitted to redeem on a monthly basis to $500,000, which is the maximum aggregate redemption amount for all notes outstanding with CVP. This amendment resulted in the Company accounting for the transaction as a troubled debt restructuring, under which the carrying amount of the note payable remained unchanged but interest expense is computed using a new effective rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the note. September 2018 L2 Promissory Note and Warrants On September 11, 2018 the Company entered into a Note Purchase Agreement with L2 Capital, pursuant to which the Company issued to L2 Capital a contingently convertible promissory note in the aggregate principal amount of $455,000. Net cash proceeds were $400,000, or $455,000 of principal net a discount of $55,000. The Notes bear interest at the rate of 8% per annum and mature on March 11, 2019. On October 10, 2018, the Company paid off the entire Note, including the guaranteed interest and an early-redemption premium. Concurrent to entering into the Note Purchase Agreement, the Company issued 75,000 shares of common stock and a 5-year warrant to purchase 185,417 shares of common stock, for a fair value of $100,330, to L2 Capital, at an exercise price of $0.90 per share. The warrants were recorded in additional paid-in-capital and treated as a discount to the note balance. September 2018 Conte Promissory Note and Warrants On September 11, 2018 the Company entered into a Note Purchase Agreement with an accredited investor pursuant to which the Company issued to the accredited investor a convertible promissory note in the aggregate principal amount of $111,250. Net cash proceeds received were $100,000, or $111,250 of principal less a discount of $11,250. The Notes bear interest at the rate of 8% per annum and matures on March 11, 2019. On October 10, 2018, the Company paid off the entire Note, including the guaranteed interest and an early-redemption premium. Concurrent to entering into the Note Purchase Agreement, the Company provided to the accredited investor a five-year warrant to purchase 33,918 shares of common stock, for a fair value of $17,818, at an exercise price of $1.23 per share. The warrants were recorded in additional paid-in-capital and treated as a discount to the note balance. Napo Convertible Notes March 2017 Convertible Notes In March 2017, Napo entered into an exchangeable Note Purchase Agreement with two lenders for the funding of face amount of $1,312,500 in two $525,000 tranches of face amount $656,250. The notes bear interest at 3% and mature on December 1, 2017. The Company assumed the notes at fair value of $1,312,500 as part of the Napo Merger. First Amendment to Note Purchase Agreement and Notes In December 2017, Napo amended the exchangeable note purchase agreement to extend the maturity of the first tranche and second tranche of notes to February 15, 2018 and April 1, 2018, respectively, increase the principal amount by 12%, and reduce the conversion price from $0.56 per share to $0.20 per share. The Company also issued 2,492,084 shares of common stock to the lenders in connection with this amendment to partially redeem $299,050 from the first tranche of the notes. The amended face value of the notes was $1,170,950. This amendment resulted in the Company treating the notes as having been extinguished and replaced with new notes for accounting purposes due to meeting the 10% cash flow test. The conversion option in the notes was bifurcated and accounted for as a conversion option liability at its fair value as further disclosed in Note 4. Second Amendment to Note Purchase Agreement and Notes On February 16, 2018, Napo amended the exchangeable note purchase agreement to extend the maturity date of the Second Tranche Notes from April 1, 2018 to May 1, 2018. In addition, the Company also issued 3,783,444 shares of Common Stock to the Purchasers as repayment of the remaining $435,950 aggregate principal amount and $18,063 in accrued and unpaid interest thereon. On March 23, 2018, the Company paid off the remaining $735,000 of principal and $20,699 in interest due on the second tranche debt in cash with proceeds from the March 23, 2018 equity financing. The fair value of the conversion option liability was again revalued at March 23, 2018 using the Black-Scholes-Merton model using the following criteria: stock price of $0.21 per share, expected life of 0.11 years, volatility of 288.16%, risk free rate of 1.69% and dividend rate of 0%, resulting in an increase of $174,754 to the fair value of the conversion option liability and included in the change in fair value of warrants and conversion option liability in the statements of operations. The underlying debt was paid off in March of 2018 and the $286,595 conversion option liability was written off to other income in the statements of operations. December 2016 Convertible Notes In December 2016, Napo entered into a note purchase agreement which provided for the sale of up to $12,500,000 face amount of notes and issued convertible promissory notes (the Napo December 2016 Notes) in the aggregate face amount of $2,500,000 to three lenders and received proceeds of $2,000,000 which resulted in $500,000 of original issue discount. In July 2017, Napo issued convertible promissory notes (the Napo July 2017 Notes) in the aggregate face amount of $7,500,000 to four lenders and received proceeds of $6,000,000 which resulted in $1,500,000 of original issue discount. The Napo December 2016 Notes and the Napo July 2017 Notes mature on December 30, 2019 and bear interest at 10% with interest due each six-month period after December 30, 2016. On June 30, 2017, the accrued interest of $125,338 was added to principal of the Napo December Notes, and the new principal balance became $2,625,338. Interest may be paid in cash or in the stock of Jaguar per terms of the note purchase agreement. In each one year period beginning December 30, 2016, up to one-third of the principal and accrued interest on the notes may be converted into the common stock of the merged entity at a conversion price of $0.925 per share. The Company assumed these convertible notes at fair value of $11,161,000 as part of the Napo Merger. The $1,035,661 difference between the fair value of the notes and the principal balance is being amortized over the twenty-nine (29) month period from July 31, 2017 to December 31, 2019 or $178,562 and is recorded as a contra interest expense in the statements of operations. Interest expense is paid every nine months through the issuance of common stock. On March 16, 2018, $534,775 of interest accrued through January 31, 2018 and $169,950 of certain legal expenses were paid through the issuance of 4,285,423 shares of the Company's common stock. At September 30, 2018 and December 31, 2017, the unamortized balance of the convertible note payable is $10,661,026 and $10,982,438 which are included in Convertible Long-term Debt on the balance sheet. Long-term Debt As of September 30, 2018 and December 31, 2017, the net Jaguar long-term debt obligation was as follows: September 30, December 31, 2018 2017 Debt and unpaid accrued end-of-term payment $ — $ 1,636,639 Unamortized note discount — (6,615) Unamortized debt issuance costs — (20,780) Net debt obligation $ — $ 1,609,244 Current portion of long-term debt $ — $ 1,609,244 Long-term debt, net of discount — — Total $ — $ 1,609,244 Interest expense on the Jaguar long-term debt for the three and nine months ended September 30, 2018 and 2017 was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Nominal interest $ — $ 36,906 $ 19,344 $ 183,040 Accretion of debt discount — 7,712 20,779 29,351 Accretion of end-of-term payment — 32,109 52,561 122,269 Accretion of debt issuance costs — 24,038 6,616 91,562 $ — $ 100,765 $ 99,300 $ 426,222 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 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 $600,000 on August 1, 2018 (as modified in the third amendment to the Loan Agreement). 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. 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. On July 7, 2017, the Company entered into the third amendment to the Loan Agreement upon which the Company paid $1.0 million of the outstanding loan balance, and the Lender waived the prepayment charge associated with such prepayment. The Third Amendment modified the repayment schedule providing a three-month period of interest only payments for the period from August 2017 through October 2017. On March 23, 2018, the Company paid off the remaining $689,345 of principal, $4,471 of interest, and the end-of-term payment of $600,000 in cash with proceeds from the March 23, 2018 equity financing. Notes Payable As of September 30, 2018 and December 31, 2017, the net Jaguar short-term notes payable was as follows: September 30, December 31, 2018 2017 December 2017 note payable $ 1,587,500 $ 1,587,500 February 2018 note payable 2,240,909 — March 2018 note payable 1,090,341 — $ 4,918,750 $ 1,587,500 Less: unamortized net discount and debt issuance costs (386,798) (446,347) Net convertible notes payable obligation $ 4,531,952 $ 1,141,153 Interest expense on the Jaguar short-term notes payable for the three and nine months ended September 30, 2018 and 2017 was as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Nominal interest $ 103,581 $ — $ 254,890 $ — Accretion of debt discount 541,847 — 1,080,799 — Total interest expense on convertible debt $ 645,428 $ — $ 1,335,689 $ — December 2017 Note On December 8, 2017, the Company entered into a securities purchase agreement with CVP pursuant to which the Company issued a promissory note in the aggregate principal amount of $1,587,500 for an aggregate purchase price of $1,100,000. The Note carries an original issue discount of $462,500, and the initial principal balance also includes $25,000 to cover CVP's transaction expenses. The Company will use the proceeds for general corporate purposes. The Note bears interest at the rate of 8% per annum and matures on September 8, 2018. On August 2, 2018, the Company and CVP amended the December 2017 Note agreement, extending the maturity date from September 8, 2018 to August 26, 2019, and limiting the aggregate amount that CVP is permitted to redeem on a monthly basis to $500,000, which amount is the maximum aggregate amount for the Notes collectively. This amendment resulted in the Company accounting for the transaction as a troubled debt restructuring, under which the carrying amount of the note payable remained unchanged but interest expense is computed using a new effective rate that equates the present value of the future cash payments specified by the new terms with the carrying amount of the note. The principal balance of the note is included in notes payable in the current liabilities section of the balance sheet. February 2018 Note On February 26, 2018, the Company entered into a securities purchase agreement with CVP, pursuant to which the Company issued to CVP a promissory note in the aggregate principal amount of $2,240,909 for an aggregate purchase price of $1,560,000. The Note carries an original issue discount of $655,909, and the initial principal balance also includes $25,000 to cover CVP's transaction expenses. The Company will use the proceeds for general corporate purposes and working capital. The Note bears interest at the rate of 8% per annum and matures on August 26, 2019. The balance of the note payable as of September 30, 2018 of $2,073,679 consisting of the $2,240,909 face value of the note less note discounts of $167,230, is included in notes payable in the current liabilities section of the balance sheet. March 2018 Note On March 21, 2018, the Company entered into a securities purchase agreement with CVP, pursuant to which the Company issued to CVP a promissory note in the aggregate principal amount of $1,090,341 for an aggregate purchase price of $750,000. The Note carries an original issue discount of $315,341, and the initial principal balance also includes $25,000 to cover CVP's transaction expenses. The Company will use the proceeds to fully repay certain prior secured and unsecured indebtedness. The Note bears interest at the rate of 8% per annum and matures on September 21, 2019. The balance of the note payable as of September 30, 2018 of $870,773 consisting of the $1,090,341 face value of the note less note discounts and debt issuance costs of $219,568, is included in notes payable in the current liabilities section of the balance sheet. During the three months ended September 30, 2018, it was discovered that an error was made in the accounting for the restructuring of notes payable with CVP that dated back to the three months ended March 31, 2018. The Company improperly did not account for the transaction as a debt extinguishment. This error led to the understatement of other expense by approximately $798,000 for the three months ended March 31, 2018 and the understatement of short-term notes payable by $798,000 as of March 31, 2018. This error also led to the overstatement of other expense by approximately $322,000 for the three months ended June 30, 2018 and the understatement of short term notes payable by approximately $476,000 as of June 30, 2018. The Company did not deem this error to be material to its consolidated financial statements for the first and second quarter of 2018 and corrected the error via an out of period adjustment recorded to other expense and short term notes payable in the three months ended September 30, 2018. Warrants The Company's warrant activity is summarized as follows for the nine months ended September 30, 2018 and for the year ended December 31, 2017: Nine Months Ended Year Ended September 30, December 31, 2018 2017 Beginning balance 321,314 397,904 Warrants granted 889,921 106,376 Warrants exercised — (60,553) Warrants cancelled (50,553) (122,413) Ending balance 1,160,682 321,314 |
Convertible Preferred Stock
Convertible Preferred Stock | 9 Months Ended |
Sep. 30, 2018 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | 8. Convertible Preferred Stock In March 2018, the Company entered into a stock purchase agreement with Sagard Capital Partners, L.P. pursuant to which the Company, in a private placement, agreed to issue and sell to Sagard 5,524,926 shares of the Company's series A convertible participating preferred stock, $0.0001 par value per share, for an aggregate purchase price of $9,199,002. Each share of preferred stock is initially convertible into nine shares of common stock at the option of the holder at an effective conversion price of $0.185 per share (based on an original price per Preferred Share of $1.665), provided that, at any time prior to the time the Company obtains stockholder approval, as required pursuant to Nasdaq Rule 5635(b) any conversion of Preferred Stock by a holder into shares of the Common Stock would be prohibited if, as a result of such conversion, the holder, together with such holder's attribution parties, would beneficially own more than 19.99% of the total number of shares of the Common Stock issued and outstanding after giving effect to such conversion. Subject to certain limited exceptions, the shares of Preferred Stock cannot be offered, pledged or sold by Sagard for one year from the date of issuance. The conversion price is subject to certain adjustments in the event of any stock dividend, stock split, reverse stock split, combination or other similar recapitalization. Holders of the Series A shares are entitled to participate equally and ratably with the holders of common stock shares in all dividends paid and distributions made to the holders of the common stock as if, immediately prior to each record date of the common stock, the shares of Series A then outstanding were converted into shares of common stock. In the event of any voluntary or involuntary liquidation, dissolution or winding up of the Company or deemed liquidation event, the holders of Series A shares then outstanding shall be entitled to be paid in cash out of the assets of the Company before any payment shall be made to the holders of common stock or shares of any series or class of preferred or other capital stock then outstanding that by its terms is junior to the Series A in respect of the preferences as to distributions and payments upon such liquidation event by reason of their ownership, an amount per share of Series A equal to one times the Series A original issue price. The redemption and liquidation value of the series A preferred stock is $12,738,822 and $9,199,002, respectively. If a Redemption Event occurs as of the Measurement Date (the later of April 30, 2021 and the date on which the Company files its Form 10‑Q for the three months ending March 31, 2021, but in no event later than September 30, 2021), the holders of at least a majority of the shares of Series A then outstanding may require the Company to redeem all Series A shares at a per share purchase price equal to $2.3057; any one of the following conditions can result in a Redemption Event that is not solely within the Company's control: Revenues attributable to the Mytesi product for the six-month period ended March 31, 2021 are less than $22.0 million or the average VWAP for the Company's common stock for the 30 days prior to a Measurement Date is less than $1.00. The effective conversion price is $0.185 per share while the fair value of the Company's common stock at the commitment date was $0.205 per share based on the closing price of common stock on March 23, 2018. As a result, the Company determined that there is a Beneficial Conversion Feature (“BCF”) amounting to approximately $995,000, which is computed by taking the difference between the closing price of the stock on March 23, 2018 and the conversion price multiplied by the as if converted 49,724,334 shares (5,524,926 preferred shares multiplied by the conversion factor of 9 ). The Company's Series A shares do not have a stated conversion date and are immediately convertible at the issuance date. Based on the guidance above, the Company recorded a deemed dividend charge of $995,000 for the accretion of the discount on the Series A shares. The deemed dividend was a non-cash transaction and is reflected below net loss to arrive at net loss available to common stockholders on the Company's condensed consolidated statement of operations for the nine months ended September 30, 2018. The preferred stock has been classified outside of stockholders' equity in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity | |
Stockholders' Equity | 9. Stockholders' Equity Common Stock On May 18, 2018, the stockholders of Jaguar approved at the 2018 Annual Meeting of Stockholders of the Company and the Board approved, in accordance with the authority granted by the Company's stockholders at the Annual Meeting, a 1‑for‑15 reverse stock split of the Company's issued and outstanding shares of Common Stock. On May 29, 2018, the Company filed the Certificate of Second Amendment to its Certificate Of Incorporation with the Secretary of State of the State of Delaware to effect the Reverse Stock Split, effective June 1, 2018. Also on May 18, 2018, the stockholders of the Company approved at the Annual Meeting a proposal to decrease the number of authorized shares of Common Stock to 150,000,000 shares, contingent upon the approval and effectuation of the Reverse Stock Split. On June 1, 2018, the Company filed a Certificate of Third Amendment (the “Third Amendment”) to its COI with the Secretary of State of the State of Delaware to decrease the total number of authorized shares of Common Stock so that the total number of the shares that the Company has authority to issue is 210,000,000 shares, of which 150,000,000 shares are Common Stock, 50,000,000 are non-voting common stock and 10,000,000 shares are “blank check” preferred stock. Concurrently with the consummation of the preferred stock offering as more fully discussed in Note 10, in March 2018, the Company entered into share purchase agreements with certain institutional investors pursuant to which the Company issued 1,960,783 shares of the Company's common stock in exchange for $5.0 million in cash. Pursuant to the November 24, 2017 share purchase agreement with an investor, on July 12, 2018 the Company received $624,897 in exchange for 470,781 shares of its voting common stock. As of September 30, 2018 and 2017, the Company had reserved shares of common stock for issuance as follows: September 30, September 30, 2018 2017 Options issued and outstanding 2,868,868 2,984,304 Inducement options issued and outstanding 209,531 — Options available for grant 238,172 513,385 RSUs issued and outstanding 392,904 392,923 Warrants issued and outstanding 1,160,682 443,756 Convertible notes 1,642,852 1,036,717 Total 6,513,009 5,371,085 |
Stock Incentive Plans
Stock Incentive Plans | 9 Months Ended |
Sep. 30, 2018 | |
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 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. 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. There were 33,769 option shares outstanding at September 30, 2018. 2014 Stock Incentive Plan Effective May 12, 2015, the Company adopted the Jaguar 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 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. There were 2,835,099 option shares outstanding and 238,172 option shares available for grant at September 30, 2018. Stock Options and Restricted Stock Units (“RSUs”) The following table summarizes incentive plan activity for the years ended September 30, 2018 and December 31, 2017: Weighted Weighted Average Shares Stock Average Remaining Aggregate Available Options RSUs Stock Option Contractual Life Intrinsic for Grant Outstanding Outstanding Exercise Price (Years) Value* Combined Incentive Plan Balance—December 31, 2017 3,619 229,575 392,904 $ 28.05 8.31 $ — Additional shares authorized 2,877,766 Options granted (2,767,673) 2,767,673 — Options cancelled 124,460 (128,380) — Combined Incentive Plan Balance—September 30, 2018 238,172 2,868,868 392,904 $ 5.96 9.27 $ — Options vested and exercisable—September 30, 2018 709,721 $ 12.14 3.98 $ — Options vested and expected to vest—September 30, 2018 2,644,568 $ 6.03 9.26 $ — * The weighted average grant date fair value of stock options granted was $1.84 and $0.44 per share during the nine months ended September 30, 2018 and 2017. The number of option shares that vested in the nine months ended September 30, 2018 and 2017 was 423,719 shares and 533,348 shares, respectively. The grant date weighted average fair value of option shares that vested in the nine months ended September 30, 2018 and 2017 was $475,123 and $549,453, respectively. No options were exercised in the nine months ended September 30, 2018 and 2017. 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 $0.87 on September 30, 2018 and the grant date stock option exercise price. The Company also granted 209,531 of inducement options in the nine months ended September 30, 2018 to new employees. The options are all non-statutory and were not issued from the 2014 Stock Plan. The weighted average fair value of the options was $1.34 per share. No option shares vested in the nine months ended September 30, 2018. Stock-Based Compensation The following table summarizes stock-based compensation expense related to stock options, inducement stock options and RSUs for the three and nine months ended September 30, 2018 and 2017, and are included in the statements of operations as follows: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Research and development expense $ 175,772 $ 45,009 $ 400,521 $ 168,981 Sales and marketing expense 39,210 7,938 59,762 23,307 General and administrative expense 465,112 133,807 956,508 438,636 Total $ 680,094 $ 186,754 $ 1,416,791 $ 630,924 As of September 30, 2018, the Company had $3,277,868 of unrecognized stock-based compensation expense for options, inducement options and restricted stock units outstanding, which is expected to be recognized over a weighted-average period of 2.2 years. |
Net Income (Loss) Per Share of
Net Income (Loss) Per Share of Common Stock | 9 Months Ended |
Sep. 30, 2018 | |
Net Income (Loss) Per Share of Common Stock | |
Net Income (Loss) Per Share of Common Stock | 11. Net Income (Loss) Per Share of Common Stock The following table presents the calculation of basic and diluted net income (loss) per share of common stock for the periods indicated: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income (loss) attributable to common stockholders (basic) $ (6,138,352) $ 4,759,844 $ (20,487,172) $ (1,761,156) Interest on convertible debt, net of tax — 209,149 — — Net income (loss) attributable to common stockholders - diluted $ (6,138,352) $ 4,968,993 $ (20,487,172) $ (1,761,156) Shares used to compute net income (loss) per common share - basic 12,061,672 3,695,660 10,701,977 1,883,115 Dilutive effect of warrants — 45,026 — — Dilutive effect of convertible debt — 739,550 — — Shares used to compute net income (loss) per common share - diluted 12,061,672 4,480,235 10,701,977 1,883,115 Net loss per share attributable to common stockholders - basic $ (0.51) $ 1.29 $ (1.91) $ (0.94) Net loss per share attributable to common stockholders - diluted $ (0.51) $ 1.11 $ (1.91) $ (0.94) 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. In the three months ended September 30, 2017, the convertible debt and certain warrant shares were dilutive. The rights of the holders of voting common stock and non-voting common stock are identical, except with respect to voting and conversion. Shares of Jaguar non-voting common stock have the same rights to dividend and other distributions as voting common stock. For the three months ended September 30, 2018 and the nine months ended September 30, 2018 and 2017, 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. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Segment Information | 12. Segment Information Prior to the merger with Napo, the Company managed its operations as a single segment for the purposes of assessing performance and making operating decisions. The Company reorganized its segments to reflect the change in the organizational structure resulting from the merger with Napo. Post-merger, the Company manages its operations through two reportable segments—human health and animal health. The human health segment is focused on developing and commercializing human products and the ongoing commercialization of Mytesi™, which is approved by the U.S. FDA for the symptomatic relief of noninfectious diarrhea in adults with HIV/AIDS on antiretroviral therapy. The animal health segment is focused on developing and commercializing prescription and non-prescription products for companion and production animals. The Company's reportable segments net revenues and net loss consisted of: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenue from external customers Human Health $ 1,107,682 $ 364,054 $ 2,545,121 $ 364,054 Animal Health 24,385 736,160 275,148 2,455,091 Consolidated Totals $ 1,132,067 $ 1,100,214 $ 2,820,269 $ 2,819,145 Segment profit (loss) Human Health $ (3,145,782) $ 996,493 $ (10,519,413) $ 996,493 Animal Health (2,992,570) 3,763,351 (8,972,759) (2,757,649) Consolidated Totals $ (6,138,352) $ 4,759,844 $ (19,492,172) $ (1,761,156) |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events | |
Subsequent Events | 13. Subsequent Events October 2018 Equity Financing In September 2018, the Company announced plans to complete a public offering of common shares and pre-funded warrants. This offering closed on October 4, 2018, pursuant to which the Company issued and sold an aggregate of 11,575,001 shares of its common stock and 3,425,000 pre-funded warrants to purchase shares of common stock. The common stock was sold at a purchase price of $0.60 per share for gross proceeds of $7.0 million, and the pre-funded warrants were sold at a purchase price of $0.59 per share for gross proceeds of $2.0 million. Actual cash received after deducting estimated fees and expenses in connection with the offering was $8.3 million. Standstill Agreement On October 1, 2018, and as amended October 31, 2018, the Company entered into a standstill agreement with Chicago Venture Partners, L.P. (“CVP”) with respect to the June 29, 2017, December 8, 2017, February 26, 2018 and March 21, 2018 outstanding secured promissory notes issued by the Company to CVP (collectively, the “CVP Notes”). The standstill agreement provides that (i) CVP will not make any redemptions for the amounts of September 2018 and October 2018 and will not make any redemptions prior to November 21, 2018; and that (ii) if the Company makes a $1,500,000 debt payment to CVP by November 20, 2018, then CVP will also refrain from making any redemptions in the months of November 2018, December 2018, January 2019, and February 2019. However, if the Company fails to make the $1,500,000 payment by November 20, 2018, then CVP will have the right to make up to $1,000,000 in redemptions at any time thereafter in addition to the standard $500,000 per month in redemptions beginning again on November 21, 2018. NASDAQ Notice of Delisting On November 9, 2018, the Company received a letter from the Listing Qualifications Department of The NASDAQ Stock Market LLC (“NASDAQ”) notifying the Company that its common stock did not maintain a minimum closing bid price of $1.00 per share for the preceding 30 consecutive business days as required by NASDAQ Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”). The notice has no immediate effect on the listing or trading of the Company’s common stock and the common stock will continue to trade on The NASDAQ Capital Market under the symbol “JAGX” at this time. In accordance with NASDAQ Listing Rule 5810(c)(3)(A), the Company has a grace period of 180 calendar days, or until May 8, 2019, to regain compliance with NASDAQ Listing Rule 5550(a)(2). Compliance can be achieved automatically and without further action if the closing bid price of the Company’s stock is at or above $1.00 for a minimum of 10 consecutive business days at any time during the 180-day compliance period, in which case NASDAQ will notify the Company of its compliance and the matter will be closed. The Company may be eligible for additional time to comply if it does not achieve compliance with the Minimum Bid Price Requirement by May 8, 2019. In order to be eligible for such additional time, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The NASDAQ Capital Market, with the exception of the Minimum Bid Price Requirement, and must notify NASDAQ in writing of its intention to cure the deficiency during the second compliance period. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
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”) for interim financial information and on a basis consistent with the annual consolidated financial statements, and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for a fair presentation of the periods presented. These interim financial results are not necessarily indicative of the results to be expected for the year ending December 31, 2018, or for any other future annual or interim period. These interim unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in our Annual Report on Form 10‑K for the year ended December 31, 2017. There have been no material changes to the Company's significant accounting policies during the three and nine months ended September 30, 2018, as compared to the significant accounting policies described in Note 2 of the “Notes to Financial Statements” in the Company's Annual Report on Form 10‑K for the year ended December 31, 2017 except for the adoption of the new revenue recognition standard pursuant to ASC 606 as of January 1, 2018 as described in more detail below. |
Principles of Consolidation | Principles of Consolidation The condensed consolidated condensed financial statements have been prepared in accordance with US GAAP and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) and include the accounts of the Company and its wholly owned subsidiary. All inter-company transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of the accompanying condensed financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the condensed financial statements, and the reported amounts of revenue and expenses during the periods reported. Actual results could differ 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 as of September 30, 2018, represent $1.3 million in legal, accounting, printer and filing fees associated with the Company's October 2018 offering in which the Company issued common stock and pre-funded warrants as registered on Form S-1. The offering closed on October 4, 2018, at which time these deferred offering costs were charged to stockholders’ equity. |
Concentrations | Concentrations 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 insurance limits. The carrying value of cash approximates fair value at September 30, 2018 and December 31, 2017. In the nine months ended September 30, 2018, substantially all of the Company’s revenue has been derived from the sale of Mytesi. The Company earned Mytesi revenue primarily from three major pharmaceutical distributors in the United States, each of whom amounted to a percentage of total net revenue of at least 10%. Revenue earned from each as a percentage of total net revenue follows: Through September 30, 2018, substantially all of the Company's product revenue has been derived from the sale of Mytesi. The Company earned Mytesi revenue primarily from three major pharmaceutical distributors in the United States, each of which amounted to a percentage of total net revenue of at least 10%. Revenue earned from each as a percentage of total net revenue follow: [OPEN will get updated percentages from Veronica] Consolidated (percentage of total net sales) Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Customer 1 34 % 11 % 28 % 4 % Customer 2 28 % 9 % 28 % 3 % Customer 3 25 % 12 % 25 % 5 % 88 % 32 % 81 % 13 % The Company is subject to credit risk from its accounts receivable related to its sales. The Company generally does not perform evaluations of customers' financial condition and generally does not require collateral. The Company's significant pharmaceutical distributors and their related accounts receivable balance as a percentage of total accounts receivable were as follows: As of As of September 30, December 31, 2018 2017 Customer 1 35 % 30 % Customer 2 29 % 31 % Customer 3 26 % 35 % No other customer represented more than 10% of the Company's accounts receivable balances as of those dates. The Company is subject to credit risk from its inventory suppliers. The Company sources drug substance from a single supplier and drug product from a single supplier. |
Prepaids and other current assets and other long-term assets | Prepaids and other current assets and other long-term assets The $1,267,861 increase in prepaids and other current assets between December 31, 2017 and September 30, 2018 includes $777,380 of raw materials having a useful life greater than one year which will be used in future production and $225,147 of deferred rent for the Company’s office lease. The $501,120 increase in other long-term assets between December 31, 2017 and September 30, 2018 includes $289,828 of these raw materials and $211,292 in deferred rent. |
Goodwill and Indefinite-lived Intangible Assets | Goodwill and Indefinite-lived Intangible Assets Goodwill is tested for impairment on an annual basis and in between annual tests if events or circumstances indicate that an impairment loss may have occurred. The test is based on a comparison of the reporting unit's book value to its estimated fair market value. The Company performs the annual impairment test during the fourth quarter of each fiscal year using the opening consolidated balance sheet as of the first day of the fourth quarter, with any resulting impairment recorded in the fourth quarter of the fiscal year. If the carrying value of a reporting unit's net assets exceeds its fair value, the goodwill would be considered impaired and would be reduced to its fair value. The goodwill was entirely allocated to the human health reporting unit as the goodwill relates to the Napo Merger. The Company recorded an impairment of goodwill in the three months and nine months ended September 30, 2017. The decline in market capitalization during the three months ended September 30, 2017 was determined to be a triggering event for potential goodwill impairment. Accordingly, the Company performed the goodwill impairment analysis. The Company utilized the market capitalization plus a reasonable control premium in the performance of its impairment test. The market capitalization was based on the outstanding shares and the average market share price for the 30 days prior to September 30, 2017. The Company’s analysis did not result in an impairment of goodwill in the three months and nine months ended September 30, 2018. If the market capitalization decreases in the future, a reasonable possibility exists that goodwill could be impaired in the near term and that such impairment may be material to the financial statements. Fair value determinations require considerable judgment and are sensitive to changes in underlying assumptions, estimates and market factors. Estimating the fair value of individual reporting units and indefinite-lived intangible assets requires the Company to make assumptions and estimates regarding our future plans, as well as industry and economic conditions. These assumptions and estimates include projected revenues and income growth rates, terminal growth rates, competitive and consumer trends, market-based discount rates, and other market factors. If current expectations of future growth rates are not met or market factors outside of the Company’s control, such as discount rates, change significantly, this may lead to a further goodwill impairment in the future. Acquired in-process research and development (IPR&D) are intangible assets initially recognized at fair value and classified as indefinite-lived assets until the successful completion or abandonment of the associated research and development efforts. During the development period, these assets will not be amortized as charges to earnings; instead these assets will be tested for impairment on an annual basis or more frequently if impairment indicators are identified. We booked an impairment of $2,300,000 in the year ended December 31, 2017. The impairment loss is measured based on the excess of the carrying amount over the asset's fair value. The loss resulted from the Company's termination of the clostridium dificil infection program. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), which was adopted on January 1, 2018, using the modified retrospective method, which was elected to apply to all active contracts as of the adoption date. Application of the modified retrospective method did not impact amounts previously reported by the Company, nor did it require a cumulative effect adjustment upon adoption, as the Company's method of recognizing revenue under ASC 606 yielded similar results to the method utilized immediately prior to adoption. Accordingly, there was no effect to each financial statement line item as a result of applying the new revenue standard. Practical Expedients, Elections, and Exemptions The Company recognizes revenue in accordance with the core principle of ASC 606 or when there is a transfer of control of promised goods or services to customers in an amount that reflects the consideration that the Company expects to be entitled to in exchange for those goods or services. The Company used a practical expedient available under ASC 606‑10‑65‑1(f)4 that permits it to consider the aggregate effect of all contract modifications that occurred before the beginning of the earliest period presented when identifying satisfied and unsatisfied performance obligations, transaction price, and allocating the transaction price to the satisfied and unsatisfied performance obligations. The Company also used a practical expedient available under ASC 606‑10‑32‑18 that permits it to not adjust the amount of consideration for the effects of a significant financing component if, at contract inception, the expected period between the transfer of promised goods or services and customer payment is one year or less. The Company has elected to treat shipping and handling activities as fulfillment costs. Additionally, the Company elected to record revenue net of sales and other similar taxes. Contracts Napo entered into a Marketing and Distribution Agreement (“M&D Agreement”) with BexR Logistix, LLC (“BexR” or “Mission Pharmacal” or “Mission”), in April 2016 to appoint BexR as its distributor with the right to market and sell, and the exclusive right to distribute Mytesi (formerly Fulyzaq) in the US. Napo sells Mytesi through Mission, who then sells Mytesi to its distributors and wholesalers — McKesson, Cardinal Health, AmerisourceBergen Drug Corporation (“ABC”), HD Smith, Smith Drug and Publix (together “Distributors”). Mission sells Mytesi to its Distributors, on behalf of Napo, under agreements executed by Mission with these Distributors and Napo abides by the terms and conditions of sales agreed to between Mission and their Distributors. Health care providers order Mytesi through pharmacies who obtain Mytesi through Mission's Distributors. Napo considers Mission as the sales agent and the Distributors of Mission as its customers. Napo retains control of Mytesi held at Mission. Mission's Distributors are our customers with respect to purchase of Mytesi. The M&D Agreement with Mission, Mission's agreement with the Distributors and the related purchase order will together meet the contract existence criteria under ASC 606‑10‑25‑1. This M&D Agreement with Mission was amended on August 15, 2018, with a termination date of January 31, 2019. Mission agreed to continue to serve as the exclusive distributor for Mytesi on a transition basis until this date. The Company is in negotiations with another agent to replace Mission as the sales agent. Jaguar's Neonorm and Botanical extract products are primarily sold to distributors, who then sell the products to the end customers. Since 2014, the Company has entered into several distribution agreements with established distributors such as Animart, Vedco, VPI, RJ Matthews, Henry Schein, and Stockmen Supply to distribute the Company's products in the United States, Japan, and China. The distribution agreements and the related purchase order together meet the contract existence criteria under ASC 606‑10‑25‑1. Jaguar sells directly to its customers without the use of an agent. Performance obligations For the products sold by each of Napo and Jaguar, the single performance obligation identified above is the Company's promise to transfer the Company's product Mytesi to Distributors based on specified payment and shipping terms in the arrangement. Product warranties are assurance type warranties that does not represent a performance obligation. Transaction price For both Jaguar and Napo, the transaction price is the amount of consideration to which the Company expects to collect in exchange for transferring promised goods or services to a customer. The transaction price of Mytesi and Neonorm is the Wholesaler Acquisition Cost (“WAC”), net of discounts, returns, and price adjustments. The transaction price of the products represents a form of variable consideration for which the Company uses the expected value method to calculate the expected consideration the Company is entitled to. Historical results and management experience in estimating returns and discounts allows the Company to overcome the variable consideration constraints in its calculation of the expected consideration. Allocate transaction price For both Napo and Jaguar, the entire transaction price is allocated to the single performance obligation contained in each contract. Point in time recognition For both Napo and Jaguar, a single performance obligation is satisfied at a point in time, upon the free on board (“FOB”) terms of each contract when control, including title and all risks, has transferred to the customer. Disaggregation of Product Revenue Human Sales of Mytesi are recognized as revenue when the products are delivered to the wholesalers. Net revenues from the sale of Mytesi were $1,107,682 and $2,545,121 in the three and nine months ended September 2018, and $364,054 in the three and nine months ended September 30, 2017. The merger with Napo closed July 31, 2017. The Company did not recognize revenue for Mytesi sales prior to the merger with Napo. Animal The Company recognized Neonorm revenues of $24,386 and $33,611 for the three months ended September 30, 2018 and 2017, and $97,760 and $139,600 for the nine months ended September 30, 2018 and 2017, respectively. Botanical Extract revenues were nil and $48,000 in the three months ended September 30, 2018 and 2017, and nil and $78,000 in the nine months ended September 30, 2018 and 2017, respectively. Revenues are recognized upon shipment which is when title and control is transferred to the buyer . 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. |
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, the Company's 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. Under the terms of the agreement, the Company received an initial non-refundable upfront payment of $2,548,689, inclusive of reimbursement of past product and development expenses of $1,048,689, which was recognized as revenue ratably over the estimated development period of one year resulting in revenue of zero and $637,200 in the three months ended September 30, 2018 and 2017, respectively, and zero and $1,734,100 in the nine months ended September 30, 2018 and 2017, respectively. On November 1, 2017, the Company received a letter from Elanco serving as formal notice of their decision to terminate the agreement by giving the Company 90 days written notice. According to the agreement, termination became effective on January 30, 2018. On September 24, 2018, the Company entered into a Distribution, License and Supply Agreement ("License Agreement") with Knight Therapeutics, Inc. ("Knight"). The License Agreement has a term of 15 years (with automatic renewals) and provides Knight with an exclusive right to commercialize current and future Jaguar human health products (including Crofelemer, Lechlemer, and any product containing a proanthocyanidin or with an anti-secretory mechanism) in Canada and Israel. In addition, Knight was granted a right of first negotiation for expansion to Latin America. Under the License Agreement, Knight is responsible for applying for and obtaining necessary regulatory approvals in the territory of Canada and Israel, as well as marketing, sales and distribution of the licensed products. Knight will pay a transfer price for all licensed products, and upon achievement of certain regulatory and sales milestones, Jaguar may receive payments from Knight in an aggregate amount of up to approxim |
Comprehensive Income (Loss) | Comprehensive Income (Loss) For all periods presented, the comprehensive income (loss) was equal to the net income (loss); therefore, a separate statement of comprehensive income (loss) is not included in the accompanying interim condensed consolidated financial statements. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (“ASU”) 2016‑02, Leases . Under this guidance, lessees will be required to recognize substantially all leases on the balance sheet as a right-of-use asset and recognize a corresponding lease liability. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the Consolidated Statement of Operations. Entities are required to use a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. Entities have the option to use certain practical expedients. Full retrospective application is prohibited. In July 2018, the FASB issued ASU 2018-10, "Codification Improvements to Topic 842, Leases." These amendments affect narrow aspects of the guidance issued in the amendments in ASU 2016-02 including those regarding residual value guarantees, rate implicit in the lease, lessee reassessment of lease classification, lessor reassessment of lease term and purchase option, variable lease payments that depend on an index or a rate, investment tax credits, lease term and purchase option, transition guidance for amounts previously recognized in business combinations, certain transition adjustments, transition guidance for leases previously classified as capital leases under Topic 840, transition guidance for modifications to leases previously classified as direct financing or sales-type leases under Topic 840, transition guidance for sale and leaseback transactions, impairment of net investment in the lease, unguaranteed residual asset, effect of initial direct costs on rate implicit in the lease, and failed sale and leaseback transactions. The Company plans to adopt Topic 842 on January 1, 2019. The Company is currently evaluating the impact that the adoption of ASU 2016-02 will have on its consolidated financial statements and accompanying footnotes. The Company anticipates that implementation of Topic 842 will result in an increase in assets and liabilities and additional disclosures. The effect of adoption will depend on our current lease portfolio at time of adoption; however, upon adoption, we anticipate that our reported assets and liabilities will increase in connection with the recognition of any right-of-use assets and lease liabilities, such as the operating lease on our corporate headquarters. In July 2017, the FASB issued ASU 2017-11, Accounting for Certain Financial Instruments with Down Round Features . This new guidance addresses narrow issues identified as a result of the complexity associated with accounting for certain financial instruments with characteristics of liabilities and equity, including accounting for Down Round features. The new standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of this accounting standard on our financial position, results of operation and cash flows. In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting . The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. This new guidance is effective for the Company in fiscal years beginning after December 15, 2018, including interim periods within that fiscal year. Early adoption is permitted. The Company is currently assessing the impact of this new guidance. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Customer risk | Total net revenue | |
Schedule of concentration risk | Through September 30, 2018, substantially all of the Company's product revenue has been derived from the sale of Mytesi. The Company earned Mytesi revenue primarily from three major pharmaceutical distributors in the United States, each of which amounted to a percentage of total net revenue of at least 10%. Revenue earned from each as a percentage of total net revenue follow: [OPEN will get updated percentages from Veronica] Consolidated (percentage of total net sales) Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Customer 1 34 % 11 % 28 % 4 % Customer 2 28 % 9 % 28 % 3 % Customer 3 25 % 12 % 25 % 5 % 88 % 32 % 81 % 13 % |
Credit risk | Total accounts receivable | |
Schedule of concentration risk | As of As of September 30, December 31, 2018 2017 Customer 1 35 % 30 % Customer 2 29 % 31 % Customer 3 26 % 35 % |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combination | |
Schedule of total consideration exchanged | (Unaudited) Fair value of Jaguar common stock $ 25,303,859 Fair value of Jaguar common stock warrants 630,859 Fair value of replacement restricted stock units 3,300,555 Fair value of replacement stock options 5,691 Cash 2,000,000 Effective settlement of receivable from Napo 464,295 Total consideration exchanged $ 31,705,259 |
Schedule of purchase price allocation to assets and liabilities assumed in the transaction | Current assets $ 2,578,114 Non-current assets 396,247 Identifiable intangible assets 36,400,000 Current liabilities (4,052,180) Convertible notes payable (12,473,501) Deferred tax liability (13,181,242) Net assets acquired 9,667,438 Goodwill on acquisition 22,037,821 Total consideration $ 31,705,259 |
Schedule of unaudited proforma results | Three Months Ended Nine Months Ended September 30, September 30, 2017 2017 Net sales $ 1,253,447 $ 3,894,222 Net income (loss) $ 5,281,573 $ (2,905,689) Net loss per share, basic and diluted $ 0.10 $ (0.10) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements | |
Summary of information about the derivative, conversion option and warrant liabilities that were measured at fair value on a recurring basis | September 30, 2018 Level 1 Level 2 Level 3 Total Warrant liability $ — $ — $ 48,240 $ 48,240 Derivative liability — — — — Conversion option liability — — — — Total fair value $ — $ — $ 48,240 $ 48,240 December 31, 2017 Level 1 Level 2 Level 3 Total Warrant liability $ — $ — $ 103,860 $ 103,860 Derivative liability — — 11,000 11,000 Conversion option liability — — 111,841 111,841 Total fair value $ — $ — $ 226,701 $ 226,701 |
Summary of change in the estimated fair value of level 3 liabilities | For the Nine Months Ended September 30, 2018 Warrant Derivative Conversion Option Liability Liability Liability Beginning value of liability $ 103,860 $ 11,000 $ 111,841 Extinguishment — — (286,595) Change in fair value of liability (55,620) (11,000) 174,754 Ending fair value of level 3 liability $ 48,240 $ — $ — |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Balance Sheet Components | |
Schedule of change in the carrying amount of goodwill | September 30, December 31, 2018 2017 Beginning balance $ 5,210,821 $ — Goodwill acquired in conjunction with the Napo merger — 22,037,821 Impairment — (16,827,000) Ending balance $ 5,210,821 $ 5,210,821 |
Schedule of intangible assets | September 30, December 31, 2018 2017 Developed technology $ 25,000,000 $ 25,000,000 Accumulated developed technology amortization (1,944,445) (694,445) Developed technology, net 23,055,555 24,305,555 In process research and development 8,800,000 11,100,000 Impairment — (2,300,000) In process research and development, net 8,800,000 8,800,000 Trademarks 300,000 300,000 Accumulated trademark amortization (23,333) (8,333) Trademarks, net 276,667 291,667 Total intangible assets, net $ 32,132,222 $ 33,397,222 |
Debt and Warrants (Tables)
Debt and Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt and Warrants | |
Schedule of aggregate convertible notes payable obligations | September 30, December 31, 2018 2017 February 2015 convertible notes payable — 150,000 June 2017 convertible note payable 703,585 1,613,089 September 2018 L2 convertible note payable 455,000 — September 2018 Conte convertible note payable 111,250 — Napo convertible notes 10,661,026 12,153,389 $ 11,930,861 $ 13,916,478 Less: unamortized debt discount and debt issuance costs (213,843) (261,826) Net convertible notes payable obligation $ 11,717,018 $ 13,654,652 Convertible notes payable - non-current 10,661,026 10,982,437 Convertible notes payable - current $ 1,055,992 $ 2,672,215 |
Schedule of interest expense on convertible notes | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 February 2015 convertible note nominal interest $ — $ 4,537 $ 1,479 $ 13,463 June 2017 convertible note nominal interest 14,063 43,900 47,391 44,372 June 2017 convertible note accretion of debt discount 49,564 123,362 281,825 124,708 August 2018 L2 convertible note nominal interest 17,839 — 17,839 — August 2018 Conte convertible note nominal interest 3,074 — 3,074 — Napo convertibles note nominal interest 148,077 175,798 399,270 175,798 Total interest expense on convertible debt $ 232,617 $ 347,597 $ 750,878 $ 358,341 |
Schedule of long-term debt obligation | September 30, December 31, 2018 2017 Debt and unpaid accrued end-of-term payment $ — $ 1,636,639 Unamortized note discount — (6,615) Unamortized debt issuance costs — (20,780) Net debt obligation $ — $ 1,609,244 Current portion of long-term debt $ — $ 1,609,244 Long-term debt, net of discount — — Total $ — $ 1,609,244 |
Schedule of interest expense on long-term debt | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Nominal interest $ — $ 36,906 $ 19,344 $ 183,040 Accretion of debt discount — 7,712 20,779 29,351 Accretion of end-of-term payment — 32,109 52,561 122,269 Accretion of debt issuance costs — 24,038 6,616 91,562 $ — $ 100,765 $ 99,300 $ 426,222 |
Schedule of short-term debt obligations | September 30, December 31, 2018 2017 December 2017 note payable $ 1,587,500 $ 1,587,500 February 2018 note payable 2,240,909 — March 2018 note payable 1,090,341 — $ 4,918,750 $ 1,587,500 Less: unamortized net discount and debt issuance costs (386,798) (446,347) Net convertible notes payable obligation $ 4,531,952 $ 1,141,153 |
Schedule of interest expense on short term debt | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Nominal interest $ 103,581 $ — $ 254,890 $ — Accretion of debt discount 541,847 — 1,080,799 — Total interest expense on convertible debt $ 645,428 $ — $ 1,335,689 $ — |
Summary of warrant activity | Nine Months Ended Year Ended September 30, December 31, 2018 2017 Beginning balance 321,314 397,904 Warrants granted 889,921 106,376 Warrants exercised — (60,553) Warrants cancelled (50,553) (122,413) Ending balance 1,160,682 321,314 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stockholders' Equity | |
Schedule of common reserved shares of common stock for issuance | September 30, September 30, 2018 2017 Options issued and outstanding 2,868,868 2,984,304 Inducement options issued and outstanding 209,531 — Options available for grant 238,172 513,385 RSUs issued and outstanding 392,904 392,923 Warrants issued and outstanding 1,160,682 443,756 Convertible notes 1,642,852 1,036,717 Total 6,513,009 5,371,085 |
Stock Incentive Plans (Tables)
Stock Incentive Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Stock Incentive Plans | |
Summary of incentive plan activity | Weighted Weighted Average Shares Stock Average Remaining Aggregate Available Options RSUs Stock Option Contractual Life Intrinsic for Grant Outstanding Outstanding Exercise Price (Years) Value* Combined Incentive Plan Balance—December 31, 2017 3,619 229,575 392,904 $ 28.05 8.31 $ — Additional shares authorized 2,877,766 Options granted (2,767,673) 2,767,673 — Options cancelled 124,460 (128,380) — Combined Incentive Plan Balance—September 30, 2018 238,172 2,868,868 392,904 $ 5.96 9.27 $ — Options vested and exercisable—September 30, 2018 709,721 $ 12.14 3.98 $ — Options vested and expected to vest—September 30, 2018 2,644,568 $ 6.03 9.26 $ — * |
Summary of stock-based compensation expense | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Research and development expense $ 175,772 $ 45,009 $ 400,521 $ 168,981 Sales and marketing expense 39,210 7,938 59,762 23,307 General and administrative expense 465,112 133,807 956,508 438,636 Total $ 680,094 $ 186,754 $ 1,416,791 $ 630,924 |
Net Income (Loss) Per Share o_2
Net Income (Loss) Per Share of Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Net Income (Loss) Per Share of Common Stock | |
Schedule of calculation of basic and diluted net income (loss) per common share | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Net income (loss) attributable to common stockholders (basic) $ (6,138,352) $ 4,759,844 $ (20,487,172) $ (1,761,156) Interest on convertible debt, net of tax — 209,149 — — Net income (loss) attributable to common stockholders - diluted $ (6,138,352) $ 4,968,993 $ (20,487,172) $ (1,761,156) Shares used to compute net income (loss) per common share - basic 12,061,672 3,695,660 10,701,977 1,883,115 Dilutive effect of warrants — 45,026 — — Dilutive effect of convertible debt — 739,550 — — Shares used to compute net income (loss) per common share - diluted 12,061,672 4,480,235 10,701,977 1,883,115 Net loss per share attributable to common stockholders - basic $ (0.51) $ 1.29 $ (1.91) $ (0.94) Net loss per share attributable to common stockholders - diluted $ (0.51) $ 1.11 $ (1.91) $ (0.94) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Information | |
Schedule of reportable segments net revenue and net loss | Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 Revenue from external customers Human Health $ 1,107,682 $ 364,054 $ 2,545,121 $ 364,054 Animal Health 24,385 736,160 275,148 2,455,091 Consolidated Totals $ 1,132,067 $ 1,100,214 $ 2,820,269 $ 2,819,145 Segment profit (loss) Human Health $ (3,145,782) $ 996,493 $ (10,519,413) $ 996,493 Animal Health (2,992,570) 3,763,351 (8,972,759) (2,757,649) Consolidated Totals $ (6,138,352) $ 4,759,844 $ (19,492,172) $ (1,761,156) |
Organization and Business - (De
Organization and Business - (Details) | 9 Months Ended |
Sep. 30, 2018segment | |
Organization and Business | |
Number of operations segments | 2 |
Organization and Business - Rev
Organization and Business - Reverse stock-split and Liquidity (Details) | Oct. 04, 2018USD ($)$ / sharesshares | May 18, 2018 | Sep. 30, 2018USD ($)shares | Dec. 31, 2017USD ($)shares |
Reverse stock split ratio | 0.0667 | |||
Accumulated deficit | $ (81,896,894) | $ (62,404,722) | ||
Number of pre-funded warrants issued | shares | 889,921 | 106,376 | ||
October 2018 Equity Financing | Subsequent event | ||||
Shares issued (in shares) | shares | 11,575,001 | |||
Number of pre-funded warrants issued | shares | 3,425,000 | |||
Purchase price of common stock | $ / shares | $ 0.60 | |||
Gross proceeds from issuance of common stock | $ 7,000,000 | |||
Purchase price of pre-funded warrants | $ / shares | $ 0.59 | |||
Gross proceeds from issuance of pre-funded warrants | $ 2,000,000 | |||
Actual cash received after deducting estimated fees and expenses | $ 8,300,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Concentrations (Details) - item | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Total net revenue | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 88.00% | 32.00% | 81.00% | 13.00% | |
Total net revenue | Customer 1 | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 34.00% | 11.00% | 28.00% | 4.00% | |
Total net revenue | Customer 2 | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 28.00% | 9.00% | 28.00% | 3.00% | |
Total net revenue | Customer 3 | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 25.00% | 12.00% | 25.00% | 5.00% | |
Total net revenue | Customer risk | Three major pharmaceutical distributors | |||||
Concentrations | |||||
Number of major distributors | 3 | ||||
Total net revenue | Customer risk | Three major pharmaceutical distributors | Minimum | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 10.00% | ||||
Total accounts receivable | Customer 1 | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 35.00% | 30.00% | |||
Total accounts receivable | Customer 2 | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 29.00% | 31.00% | |||
Total accounts receivable | Customer 3 | |||||
Concentrations | |||||
Concentration risk (as a percentage) | 26.00% | 35.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Prepaids and other current assets and other long-term assets (Details) | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Deferred costs | $ 1,255,554 |
Cash and non-cash increase in prepaids and other current assets | 1,267,861 |
Raw materials included in prepaids and other current assets | 777,380 |
Cash and non-cash increase in other long-term assets | 501,120 |
Raw materials included in other long-term assets | 289,828 |
Deferred rent included in other long-term assets | 211,292 |
Office lease extension agreement | |
Fair market value of the short-term portion of the warrant | $ 225,147 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Goodwill and Indefinite-lived Intangible Assets (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Dec. 31, 2017 | Dec. 31, 2017 | |
Goodwill impairment charges | ||
Impairment of long-lived intangible assets | $ 2,300,000 | $ 2,300,000 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Mytesi | ||||
Disaggregation of Product Revenue | ||||
Product revenue | $ 1,107,682 | $ 364,054 | $ 2,545,121 | $ 364,054 |
Neonorm | ||||
Disaggregation of Product Revenue | ||||
Product revenue | 24,386 | 33,611 | 97,760 | 139,600 |
Botanical Extract | ||||
Disaggregation of Product Revenue | ||||
Product revenue | $ 0 | $ 48,000 | $ 0 | $ 78,000 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Revenue Recognition - Collaboration Revenue (Details) - USD ($) | Sep. 24, 2018 | Nov. 01, 2017 | Jan. 27, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Collaboration Revenue | |||||||
Written notice period (in days) | 90 days | ||||||
Elanco | |||||||
Collaboration Revenue | |||||||
Non-refundable upfront payment received | $ 2,548,689 | ||||||
Product and development expense | $ 1,048,689 | ||||||
Estimated development period for revenue recognition (in years) | 1 year | ||||||
Collaboration revenue | $ 0 | $ 637,200 | $ 0 | $ 1,734,100 | |||
Knight | |||||||
Collaboration Revenue | |||||||
License agreement term (in years) | 15 years | ||||||
Transfer price receivable upon achievement of certain regulatory and sales milestones | $ 18,000,000 |
Business Combination - Total co
Business Combination - Total consideration exchanged (Details) - USD ($) | Jul. 31, 2017 | Sep. 30, 2017 |
Total consideration exchanged | ||
Fair value of Jaguar common stock | $ 25,303,859 | |
Fair value of Jaguar common stock warrants | 630,859 | |
Fair value of replacement restricted stock units | 3,300,555 | |
Fair value of replacement stock options | $ 5,691 | |
Deferred tax liability | $ 14,498,120 | |
Napo | ||
Total consideration exchanged | ||
Fair value of Jaguar common stock | 25,303,859 | |
Fair value of Jaguar common stock warrants | 630,859 | |
Fair value of replacement restricted stock units | 3,300,555 | |
Fair value of replacement stock options | 5,691 | |
Cash | 2,000,000 | |
Effective settlement of receivable from Napo | 464,295 | |
Total consideration exchanged | 31,705,259 | |
Deferred tax liability | $ 13,181,242 |
Business Combination - Purchase
Business Combination - Purchase price allocation to assets and liabilities assumed (Details) - USD ($) | Jul. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 |
Purchase price allocation to assets and liabilities assumed | |||||||
Deferred tax liability | $ (14,498,120) | ||||||
Goodwill on acquisition | $ 5,210,821 | $ 5,210,821 | $ 5,210,821 | $ 5,210,821 | $ 0 | ||
Impairment of long-lived intangible assets | $ 2,300,000 | $ 2,300,000 | |||||
Goodwill expected to be deductible for income tax purposes | 0 | ||||||
Deferred tax asset | 1,316,878 | ||||||
Acquisition related costs | $ 3,554,250 | ||||||
Stock issued in Napo merger for services | $ 151,351 | ||||||
Shares issued to creditors | 270,270 | ||||||
Napo | |||||||
Purchase price allocation to assets and liabilities assumed | |||||||
Current assets | 2,578,114 | ||||||
Non-current assets | 396,247 | ||||||
Identifiable intangible assets | 36,400,000 | ||||||
Current liabilities | (4,052,180) | ||||||
Convertible notes payable | (12,473,501) | ||||||
Deferred tax liability | (13,181,242) | ||||||
Net assets acquired | 9,667,438 | ||||||
Goodwill on acquisition | 22,037,821 | ||||||
Total consideration | $ 31,705,259 | ||||||
Payments from Valeant settlement agreement | $ 1,200,000 | ||||||
Napo | Developed technology | |||||||
Purchase price allocation to assets and liabilities assumed | |||||||
Estimated useful life | 15 years | ||||||
Napo | Trademarks | |||||||
Purchase price allocation to assets and liabilities assumed | |||||||
Estimated useful life | 15 years |
Business Combination - Unaudite
Business Combination - Unaudited Proforma Information (Details) - Napo - USD ($) | 3 Months Ended | 9 Months Ended |
Sep. 30, 2017 | Sep. 30, 2017 | |
Unaudited proforma results | ||
Net sales | $ 1,253,447 | $ 3,894,222 |
Net loss | $ 5,281,573 | $ (2,905,689) |
Net loss per share, basic and diluted | $ 0.10 | $ (0.10) |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Liabilities Measured on a Recurring Basis (Details) - Recurring - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Fair value of liabilities measured on a recurring basis | ||
Warrant liability | $ 48,240 | $ 103,860 |
Derivative liability | 11,000 | |
Conversion option liability | 111,841 | |
Total fair value | 48,240 | 226,701 |
Level 3 | ||
Fair value of liabilities measured on a recurring basis | ||
Warrant liability | 48,240 | 103,860 |
Derivative liability | 11,000 | |
Conversion option liability | 111,841 | |
Total fair value | $ 48,240 | $ 226,701 |
Fair Value Measurements - Estim
Fair Value Measurements - Estimated Fair Value of Warrant Liability (Details) | Mar. 23, 2018USD ($)Yitem$ / shares | Dec. 31, 2017USD ($)Yitem$ / sharesshares | Sep. 30, 2018USD ($)Y$ / shares | Dec. 31, 2017USD ($)Yitem$ / shares | Aug. 23, 2018Y$ / shares | Feb. 16, 2018USD ($) | Nov. 30, 2017$ / shares | Sep. 30, 2017USD ($) | Mar. 31, 2017USD ($)trancheLender | Dec. 31, 2016USD ($) |
Napo | Second Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Notes payable | $ 435,950 | |||||||||
Napo | Exchangeable note purchase agreement | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Number of lenders | Lender | 2 | |||||||||
Notes payable | $ 1,312,500 | |||||||||
Number of tranches | tranche | 2 | |||||||||
Value of each tranche | $ 525,000 | |||||||||
Face amount of each tranche | $ 656,250 | |||||||||
Napo | Convertible note purchase agreement | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Notes payable | $ 12,500,000 | |||||||||
Napo | Convertible note purchase agreement | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Notes payable | $ 1,170,950 | $ 1,170,950 | ||||||||
Warrant liability | ||||||||||
Change in the estimated fair value of the warrant liability | ||||||||||
Beginning value of liability | $ 103,860 | |||||||||
Ending fair value of level 3 liability | $ 103,860 | $ 48,240 | $ 103,860 | |||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Stock price (in dollars per share) | $ / shares | $ 0.1400 | $ 0.86 | $ 0.1400 | |||||||
Warrant liability | Strike price | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Warrant liability | $ / shares | 0.75 | 11.25 | 0.75 | |||||||
Warrant liability | Expected life | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Warrant liability | Y | 4.41 | 3.66 | 4.41 | |||||||
Warrant liability | Volatility | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Warrant liability | 0.9636 | 131.93 | 0.9636 | |||||||
Warrant liability | Risk free rate | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Warrant liability | 0.0214 | 2.90 | 0.0214 | |||||||
Warrant liability | Recurring | Level 3 | ||||||||||
Change in the estimated fair value of the warrant liability | ||||||||||
Beginning value of liability | $ 103,860 | |||||||||
Change in fair value of liability | (55,620) | |||||||||
Ending fair value of level 3 liability | $ 103,860 | 48,240 | $ 103,860 | |||||||
Derivative liability | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Fair value of derivative liability due to repayment of mandatory default | $ 15,000 | |||||||||
Fair value of derivative liability due to interest rate increase feature | $ 5,000 | |||||||||
Derivative liability | Recurring | Level 3 | ||||||||||
Change in the estimated fair value of the warrant liability | ||||||||||
Beginning value of liability | 11,000 | |||||||||
Change in fair value of liability | (11,000) | |||||||||
Ending fair value of level 3 liability | $ 11,000 | 11,000 | 11,000 | |||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Issuance | $ 20,000 | |||||||||
Conversion option liability | Volatility | Maximum | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 1.6078 | 1.6078 | ||||||||
Conversion option liability | Recurring | Level 3 | ||||||||||
Change in the estimated fair value of the warrant liability | ||||||||||
Beginning value of liability | 111,841 | |||||||||
Extinguishment | (286,595) | |||||||||
Change in fair value of liability | 174,754 | |||||||||
Ending fair value of level 3 liability | $ 111,841 | 111,841 | $ 111,841 | |||||||
Conversion option liability | Napo | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Stock price (in dollars per share) | $ / shares | $ 0.14 | $ 0.14 | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.20 | $ 0.20 | ||||||||
Conversion option liability | Napo | Second Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Stock price (in dollars per share) | $ / shares | $ 0.21 | $ 0.21 | ||||||||
Conversion option liability | Napo | Exchangeable note purchase agreement | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Partial redemption of convertible notes | $ 299,050 | |||||||||
Conversion option liability | Napo | Convertible note purchase agreement | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Percent of increase in the principal amount | 12.00% | 12.00% | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.20 | $ 0.20 | $ 0.56 | |||||||
Issuance of common stock in exchange for services (in shares) | shares | 2,492,084 | |||||||||
Partial redemption of convertible notes | $ 299,050 | |||||||||
Conversion option liability | Napo | Expected life | Second Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | Y | 0.11 | 0.11 | ||||||||
Conversion option liability | Napo | Expected life | Minimum | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | Y | 0.13 | 0.13 | ||||||||
Conversion option liability | Napo | Expected life | Maximum | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | Y | 0.25 | 0.25 | ||||||||
Conversion option liability | Napo | Volatility | Second Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 2.8816 | |||||||||
Conversion option liability | Napo | Volatility | Minimum | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 0.8629 | 0.8629 | ||||||||
Conversion option liability | Napo | Risk free rate | Second Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 0.0169 | |||||||||
Conversion option liability | Napo | Risk free rate | Minimum | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 0.0128 | 0.0128 | ||||||||
Conversion option liability | Napo | Risk free rate | Maximum | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 0.0139 | 0.0139 | ||||||||
Conversion option liability | Napo | Dividend rate | First Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 0 | 0 | ||||||||
Conversion option liability | Napo | Dividend rate | Second Amendment to Note Purchase Agreement and Notes | ||||||||||
Fair Value Assumptions and Methodology for Assets and Liabilities | ||||||||||
Conversion option liability | item | 0 | |||||||||
Conversion option liability | Napo | Recurring | Level 3 | Second Amendment to Note Purchase Agreement and Notes | ||||||||||
Change in the estimated fair value of the warrant liability | ||||||||||
Extinguishment | $ (286,595) | |||||||||
Change in fair value of liability | $ 174,754 | $ 174,754 |
Balance Sheet Components - Good
Balance Sheet Components - Goodwill (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Goodwill | ||||
Beginning balance | $ 5,210,821 | $ 0 | $ 0 | |
Goodwill acquired in conjunction with the Napo merger | 0 | 22,037,821 | ||
Impairment | $ (3,648,000) | $ (3,648,000) | (16,827,000) | |
Ending balance | $ 5,210,821 | $ 5,210,821 |
Balance Sheet Components - Inta
Balance Sheet Components - Intangible assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Intangible assets | ||||||
Impairment | $ (2,300,000) | $ (2,300,000) | ||||
Total intangible assets, net | $ 32,132,222 | 33,397,222 | $ 32,132,222 | 33,397,222 | ||
Amortization expense | 421,667 | $ 281,111 | 1,265,000 | $ 281,111 | ||
Developed technology | ||||||
Intangible assets | ||||||
Total intangible assets | 25,000,000 | 25,000,000 | 25,000,000 | 25,000,000 | ||
Accumulated amortization | (1,944,445) | (694,445) | (1,944,445) | (694,445) | ||
Total intangible assets, net | 23,055,555 | 24,305,555 | 23,055,555 | 24,305,555 | ||
In process research and development | ||||||
Intangible assets | ||||||
Total intangible assets | 8,800,000 | 11,100,000 | 8,800,000 | 11,100,000 | ||
Impairment | (2,300,000) | |||||
Total intangible assets, net | 8,800,000 | 8,800,000 | 8,800,000 | 8,800,000 | ||
Trademarks | ||||||
Intangible assets | ||||||
Total intangible assets | 300,000 | 300,000 | 300,000 | 300,000 | ||
Accumulated amortization | (23,333) | (8,333) | (23,333) | (8,333) | ||
Total intangible assets, net | $ 276,667 | $ 291,667 | $ 276,667 | $ 291,667 |
Commitments and Contingencies -
Commitments and Contingencies - Operating Leases (Details) | Dec. 14, 2017 | Sep. 25, 2017USD ($) | Sep. 30, 2018USD ($)Y$ / sharesshares | Sep. 30, 2017USD ($)shares | Sep. 30, 2018USD ($)Y$ / sharesshares | Sep. 30, 2017USD ($)shares | Aug. 28, 2018ft² |
Commitments and Contingencies | |||||||
Warrants to purchase (in shares) | shares | 1,642,852 | 1,036,717 | 1,642,852 | 1,036,717 | |||
Percentage of amount received to be paid to Glenmark | 25.00% | ||||||
Maximum amount to be received by Glenmark | $ 7,000,000 | ||||||
Payments made to date to Glenmark | $ 0 | ||||||
Payments made to date to SEED | $ 0 | ||||||
Non-cancelable purchase orders | $ 1,300,000 | $ 1,300,000 | |||||
Period to amend complaint from date of dismissal | 20 days | ||||||
SEED | |||||||
Commitments and Contingencies | |||||||
Percentage of revenue sharing commitment | 15.00% | ||||||
Percentage of revenue sharing commitment after first million dollars of revenue | 20.00% | ||||||
General and administrative expense | |||||||
Commitments and Contingencies | |||||||
Rent expense under non-cancelable operating lease | $ 117,435 | $ 90,278 | $ 297,993 | $ 270,835 | |||
Office lease extension agreement | |||||||
Commitments and Contingencies | |||||||
Area (in square feet) | ft² | 6,311 | ||||||
Monthly base rent for first twelve months | 38,392 | ||||||
Monthly base rent for subsequent twelve months | 39,544 | ||||||
Monthly base rent for final months | 40,730 | ||||||
Standby letter of credit received as collateral | $ 475,000 | ||||||
Term | 5 years | ||||||
Warrants to purchase (in shares) | shares | 670,586 | 670,586 | |||||
Exercise price (in dollars per share) | $ / shares | $ 0.70 | $ 0.70 | |||||
Fair value of warrant | $ 493,689 | $ 493,689 | |||||
Non-cash Rent Expense Per Month | 19,748 | ||||||
Fair value of warrants included in stockholders equity | $ 493,688 | ||||||
Office lease extension agreement | Strike price | |||||||
Commitments and Contingencies | |||||||
Warrants | $ / shares | 0.84 | 0.84 | |||||
Office lease extension agreement | Expected life | |||||||
Commitments and Contingencies | |||||||
Warrants | Y | 5 | 5 | |||||
Office lease extension agreement | Volatility | |||||||
Commitments and Contingencies | |||||||
Warrants | 132 | 132 | |||||
Office lease extension agreement | Risk free rate | |||||||
Commitments and Contingencies | |||||||
Warrants | 2.77 | 2.77 | |||||
Office lease extension agreement | Dividend rate | |||||||
Commitments and Contingencies | |||||||
Warrants | 0 | 0 |
Debt and Warrants - Convertible
Debt and Warrants - Convertible Notes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Convertible notes | |||||
Convertible notes payable, Gross | $ 11,930,861 | $ 11,930,861 | $ 13,916,478 | ||
Less: unamortized debt discount and debt issuance costs | (213,843) | (213,843) | (261,826) | ||
Net convertible notes payable obligation | 11,717,018 | 11,717,018 | 13,654,652 | ||
Convertible notes payable – non-current | 10,661,026 | 10,661,026 | 10,982,437 | ||
Convertible notes payable – current | 1,055,992 | 1,055,992 | 2,672,215 | ||
Total interest expense on convertible debt | 232,617 | $ 347,597 | 750,878 | $ 358,341 | |
February 2015 Convertible Note | |||||
Convertible notes | |||||
Convertible notes payable, Gross | 150,000 | ||||
Nominal interest | 4,537 | 1,479 | 13,463 | ||
Convertible promissory note issued June 29,2017 | |||||
Convertible notes | |||||
Convertible notes payable, Gross | 703,585 | 703,585 | 1,613,089 | ||
Nominal interest | 14,063 | 43,900 | 47,391 | 44,372 | |
Accretion of debt discount | 49,564 | 123,362 | 281,825 | 124,708 | |
September 2018 L2 convertible note payable | |||||
Convertible notes | |||||
Convertible notes payable, Gross | 455,000 | 455,000 | |||
September 2018 Conte convertible note payable | |||||
Convertible notes | |||||
Convertible notes payable, Gross | 111,250 | 111,250 | |||
Napo convertible notes | |||||
Convertible notes | |||||
Convertible notes payable, Gross | 10,661,026 | 10,661,026 | $ 12,153,389 | ||
Nominal interest | 148,077 | $ 175,798 | 399,270 | $ 175,798 | |
August 2018 L2 convertible note | |||||
Convertible notes | |||||
Nominal interest | 17,839 | 17,839 | |||
August 2018 Conte convertible note nominal interest | |||||
Convertible notes | |||||
Nominal interest | $ 3,074 | $ 3,074 |
Debt and Warrants - February 20
Debt and Warrants - February 2015 Convertible Note (Details) | 1 Months Ended | |
Apr. 30, 2018shares | Feb. 28, 2015USD ($)item | |
February 2015 Convertible Note | ||
Debt and Warrants | ||
Number of accredited investors | item | 2 | |
Notes payable | $ | $ 250,000 | |
Convertible promissory note issued to Serious Change II LP | ||
Debt and Warrants | ||
Share issued for principal and interest payment | shares | 2,034,082 |
Debt and Warrants - June 2017 C
Debt and Warrants - June 2017 Convertible Note (Details) - USD ($) | Aug. 02, 2018 | Jun. 29, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Debt and Warrants | |||||
Proceeds from issuance of convertible debt | $ 500,000 | $ 1,700,000 | |||
Derivative liability | $ 11,000 | ||||
Convertible promissory note issued June 29,2017 | |||||
Debt and Warrants | |||||
Notes payable | $ 2,155,000 | ||||
Original issue discount | 425,000 | ||||
Debt legal fee | 30,000 | ||||
Proceeds from issuance of convertible debt | $ 1,700,000 | ||||
Interest rate (as a percent) | 8.00% | ||||
Automatic increase in interest rate at the event of default | 17.00% | ||||
Maximum aggregate redemption amount | $ 500,000 | ||||
Convertible promissory note issued June 29,2017 | Other income and expense | |||||
Debt and Warrants | |||||
Change in fair value of derivative liability | $ 11,000 | ||||
Convertible promissory note issued June 29,2017 | Current liabilities | |||||
Debt and Warrants | |||||
Fair value of derivative liability due to repayment of mandatory default | 15,000 | ||||
Fair value of derivative liability due to interest rate increase feature | 5,000 | ||||
Derivative liability | $ 20,000 | $ 11,000 |
Debt and Warrants - Note Purcha
Debt and Warrants - Note Purchase Agreement (Details) - USD ($) | Sep. 11, 2018 | Jul. 12, 2018 | Mar. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 |
Convertible Promissory Notes and Common Stock Warrants [Line Items] | ||||||
Convertible notes payable, Gross | $ 11,930,861 | $ 13,916,478 | ||||
Warrants to purchase (in shares) | 1,642,852 | 1,036,717 | ||||
Common Stock | ||||||
Convertible Promissory Notes and Common Stock Warrants [Line Items] | ||||||
Shares issued (in shares) | 470,781 | 1,960,783 | ||||
September 2018 L2 convertible note payable | ||||||
Convertible Promissory Notes and Common Stock Warrants [Line Items] | ||||||
Convertible notes payable, Gross | $ 455,000 | |||||
September 2018 Conte convertible note payable | ||||||
Convertible Promissory Notes and Common Stock Warrants [Line Items] | ||||||
Convertible notes payable, Gross | $ 111,250 | |||||
Note purchase agreement | September 2018 L2 convertible note payable | ||||||
Convertible Promissory Notes and Common Stock Warrants [Line Items] | ||||||
Notes payable | $ 455,000 | |||||
Net cash proceeds | 400,000 | |||||
Convertible notes payable, Gross | 455,000 | |||||
Discount | $ 55,000 | |||||
Interest rate (as a percent) | 8.00% | |||||
Term | 5 years | |||||
Warrants to purchase (in shares) | 185,417 | |||||
Fair value of warrants | $ 100,330 | |||||
Exercise price (in dollars per share) | $ 0.90 | |||||
Note purchase agreement | September 2018 L2 convertible note payable | Common Stock | ||||||
Convertible Promissory Notes and Common Stock Warrants [Line Items] | ||||||
Shares issued (in shares) | 75,000 | |||||
Note purchase agreement | September 2018 Conte convertible note payable | ||||||
Convertible Promissory Notes and Common Stock Warrants [Line Items] | ||||||
Notes payable | $ 111,250 | |||||
Net cash proceeds | 100,000 | |||||
Convertible notes payable, Gross | 111,250 | |||||
Discount | $ 11,250 | |||||
Interest rate (as a percent) | 8.00% | |||||
Term | 5 years | |||||
Warrants to purchase (in shares) | 33,918 | |||||
Fair value of warrants | $ 17,818 | |||||
Exercise price (in dollars per share) | $ 1.23 |
Debt and Warrants - March 2017
Debt and Warrants - March 2017 Convertible Notes (Details) - Napo - Exchangeable note purchase agreement | Mar. 31, 2017USD ($)trancheLender |
Debt and Warrants | |
Number of lenders, agreement | Lender | 2 |
Notes payable | $ 1,312,500 |
Number of tranches | tranche | 2 |
Value of each tranche | $ 525,000 |
Face amount of each tranche | $ 656,250 |
Interest rate (as a percent) | 3.00% |
Fair value of notes | $ 1,312,500 |
Debt and Warrants - Amendment t
Debt and Warrants - Amendment to Note Purchase Agreement and Notes (Details) | Mar. 23, 2018USD ($)Yitem$ / shares | Feb. 16, 2018USD ($)shares | Dec. 31, 2017USD ($)item$ / sharesshares | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($)item$ / shares | Aug. 23, 2018Y$ / shares | Nov. 30, 2017$ / shares | Sep. 30, 2017shares | Dec. 31, 2016USD ($) |
Debt and Warrants | |||||||||
Shares issued to creditors | shares | 270,270 | ||||||||
Conversion option liability | Level 3 | Recurring | |||||||||
Debt and Warrants | |||||||||
Increase to the fair value of the conversion option liability | $ 174,754 | ||||||||
Conversion option liability written off | 286,595 | ||||||||
First Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | |||||||||
Debt and Warrants | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 0.20 | $ 0.20 | |||||||
Strike price (in dollars per share) | $ / shares | $ 0.14 | $ 0.14 | |||||||
First Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | Dividend rate | |||||||||
Debt and Warrants | |||||||||
Conversion option liability | item | 0 | 0 | |||||||
Second Amendment to Note Purchase Agreement and Notes | Napo | |||||||||
Debt and Warrants | |||||||||
Notes payable | $ 435,950 | ||||||||
Accrued interest on notes payable | $ 18,063 | ||||||||
Shares issued to creditors | shares | 3,783,444 | ||||||||
Principal paid | $ 735,000 | ||||||||
Interest paid | $ 20,699 | ||||||||
Second Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | |||||||||
Debt and Warrants | |||||||||
Strike price (in dollars per share) | $ / shares | $ 0.21 | $ 0.21 | |||||||
Second Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | Level 3 | Recurring | |||||||||
Debt and Warrants | |||||||||
Increase to the fair value of the conversion option liability | $ 174,754 | $ 174,754 | |||||||
Conversion option liability written off | $ 286,595 | ||||||||
Second Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | Risk free rate | |||||||||
Debt and Warrants | |||||||||
Conversion option liability | item | 0.0169 | ||||||||
Second Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | Dividend rate | |||||||||
Debt and Warrants | |||||||||
Conversion option liability | item | 0 | ||||||||
Second Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | Expected life | |||||||||
Debt and Warrants | |||||||||
Conversion option liability | Y | 0.11 | 0.11 | |||||||
Second Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | Volatility | |||||||||
Debt and Warrants | |||||||||
Conversion option liability | item | 2.8816 | ||||||||
Convertible note purchase agreement | Napo | |||||||||
Debt and Warrants | |||||||||
Notes payable | $ 12,500,000 | ||||||||
Convertible note purchase agreement | First Amendment to Note Purchase Agreement and Notes | Napo | |||||||||
Debt and Warrants | |||||||||
Notes payable | $ 1,170,950 | $ 1,170,950 | |||||||
Convertible note purchase agreement | First Amendment to Note Purchase Agreement and Notes | Conversion option liability | Napo | |||||||||
Debt and Warrants | |||||||||
Percent of increase in the principal amount | 12.00% | 12.00% | |||||||
Conversion price (in dollars per share) | $ / shares | $ 0.20 | $ 0.20 | $ 0.56 | ||||||
Issuance of common stock in exchange for services (in shares) | shares | 2,492,084 | ||||||||
Partial redemption of convertible notes | $ 299,050 |
Debt and Warrants - December 20
Debt and Warrants - December 2016 Convertible Notes (Details) - Napo | Mar. 16, 2018USD ($)shares | Jul. 31, 2017USD ($)Lender | Dec. 31, 2016USD ($)$ / sharesLender | Sep. 30, 2018USD ($) | Dec. 31, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 16, 2017USD ($) |
December 2016 Convertible Notes | |||||||
Debt and Warrants | |||||||
Notes payable | $ 2,500,000 | ||||||
Number of lenders | Lender | 3 | ||||||
Proceeds from issuance of convertible debt | $ 6,000,000 | $ 2,000,000 | |||||
Unamortized note discount | $ 500,000 | ||||||
Revised principal value of debt | $ 2,625,338 | ||||||
Annual percentage of conversion | 0.33% | ||||||
Conversion price (in dollars per share) | $ / shares | $ 0.925 | ||||||
Fair value of notes | $ 11,161,000 | ||||||
Difference between the fair value of the notes and the principal balance | $ 1,035,661 | ||||||
Amortization period of such difference amount | 29 months | ||||||
Contra interest expenses | $ 178,562 | ||||||
Interest Payable | $ 534,775 | ||||||
Debt legal fee | $ 169,950 | ||||||
Shares issued (in shares) | shares | 4,285,423 | ||||||
December 2016 Convertible Notes | Convertible Long-term Debt | |||||||
Debt and Warrants | |||||||
Unamortized balance of notes payable | $ 10,661,026 | $ 10,982,438 | |||||
Convertible note purchase agreement | |||||||
Debt and Warrants | |||||||
Notes payable | $ 12,500,000 | ||||||
Interest rate (as a percent) | 10.00% | ||||||
Debt instrument, frequency of periodic payment | six-month | ||||||
Accrued interest capitalized to principal of debt | $ 125,338 | ||||||
Convertible promissory notes, July 2017 | |||||||
Debt and Warrants | |||||||
Notes payable | $ 7,500,000 | ||||||
Number of lenders | Lender | 4 | ||||||
Unamortized note discount | $ 1,500,000 |
Debt and Warrants - Long-term D
Debt and Warrants - Long-term Debt (Details) - USD ($) | Aug. 01, 2018 | Mar. 23, 2018 | Jul. 07, 2017 | Apr. 21, 2016 | Aug. 31, 2015 | Oct. 31, 2017 | Sep. 30, 2017 | Aug. 31, 2016 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Mar. 01, 2016 |
Long-term debt | ||||||||||||
Current portion of long-term debt | $ 0 | $ 1,609,244 | ||||||||||
Interest-only payments, term | 4 months | |||||||||||
Loan and security agreement | ||||||||||||
Long-term debt | ||||||||||||
Debt and unpaid accrued end-of-term payment | 1,636,639 | |||||||||||
Unamortized note discount | $ 134,433 | 6,615 | ||||||||||
Unamortized debt issuance costs | (20,780) | |||||||||||
Total | 1,609,244 | |||||||||||
Current portion of long-term debt | $ 1,609,244 | |||||||||||
Nominal interest | $ 36,906 | 19,344 | $ 183,040 | |||||||||
Accretion of debt discount | 7,712 | 20,779 | 29,351 | |||||||||
Accretion of end-of-term payment | 32,109 | 52,561 | 122,269 | |||||||||
Accretion of debt issuance costs | 24,038 | 6,616 | 91,562 | |||||||||
Total | $ 100,765 | $ 99,300 | $ 426,222 | |||||||||
Stand-by line of credit | 8,000,000 | |||||||||||
Initial loan commitment | $ 6,000,000 | |||||||||||
Term of agreement | 3 years | |||||||||||
Interest rate (as a percent) | 9.90% | |||||||||||
Balloon amount payable on August 1, 2018 | $ 600,000 | |||||||||||
Effective interest rate | 15.00% | |||||||||||
Repayment of loan from restricted cash | $ 1,500,000 | |||||||||||
Third Amendment | ||||||||||||
Long-term debt | ||||||||||||
Repayment of loan from restricted cash | $ 1,000,000 | |||||||||||
Interest-only payments, term | 3 months | |||||||||||
Principal paid | $ 689,345 | |||||||||||
Interest paid | 4,471 | |||||||||||
Cash proceeds | $ 600,000 |
Debt and Warrants - Notes Payab
Debt and Warrants - Notes Payable (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Short-term debt | |||||
Convertible notes payable, Gross | $ 11,930,861 | $ 11,930,861 | $ 13,916,478 | ||
Less: unamortized debt discount and net issuance costs | (213,843) | (213,843) | (261,826) | ||
Net convertible notes payable obligation | 11,717,018 | 11,717,018 | 13,654,652 | ||
Total interest expense on convertible debt | 232,617 | $ 347,597 | 750,878 | $ 358,341 | |
Short-term notes payable | |||||
Short-term debt | |||||
Convertible notes payable, Gross | 4,918,750 | 4,918,750 | 1,587,500 | ||
Less: unamortized debt discount and net issuance costs | (386,798) | (386,798) | (446,347) | ||
Net convertible notes payable obligation | 4,531,952 | 4,531,952 | 1,141,153 | ||
Nominal interest | 103,581 | 254,890 | |||
Accretion of debt discount | 541,847 | 1,080,799 | |||
Total interest expense on convertible debt | 645,428 | 1,335,689 | |||
December 2017 note payable | Short-term notes payable | |||||
Short-term debt | |||||
Convertible notes payable, Gross | 1,587,500 | 1,587,500 | $ 1,587,500 | ||
February 2018 note payable | Short-term notes payable | |||||
Short-term debt | |||||
Convertible notes payable, Gross | 2,240,909 | 2,240,909 | |||
March 2018 note payable | Short-term notes payable | |||||
Short-term debt | |||||
Convertible notes payable, Gross | $ 1,090,341 | $ 1,090,341 |
Debt and Warrants - Securities
Debt and Warrants - Securities Purchase Agreement (Details) - USD ($) | Aug. 02, 2018 | Mar. 21, 2018 | Feb. 26, 2018 | Dec. 08, 2017 | Sep. 30, 2018 | Dec. 31, 2017 |
Debt and Warrants | ||||||
Convertible notes payable – current | $ 1,055,992 | $ 2,672,215 | ||||
Securities Purchase Agreement | Promissory Note, December 08, 2017 | Chicago Venture Partners, L.P. | ||||||
Debt and Warrants | ||||||
Notes payable | $ 1,587,500 | |||||
Aggregate purchase price | 1,100,000 | |||||
Original issue discount | 462,500 | |||||
Transaction expenses | $ 25,000 | |||||
Interest rate (as a percent) | 8.00% | |||||
Maximum aggregate redemption amount | $ 500,000 | |||||
Securities Purchase Agreement | February 2018 note payable | Chicago Venture Partners, L.P. | ||||||
Debt and Warrants | ||||||
Notes payable | $ 2,240,909 | |||||
Proceeds from issuance of notes payable | 1,560,000 | |||||
Original issue discount | 655,909 | |||||
Transaction expenses | $ 25,000 | |||||
Interest rate (as a percent) | 8.00% | |||||
Convertible notes payable – current | 2,073,679 | |||||
Additional financing costs | 167,230 | |||||
Securities Purchase Agreement | March 2018 note payable | Chicago Venture Partners, L.P. | ||||||
Debt and Warrants | ||||||
Notes payable | $ 1,090,341 | |||||
Proceeds from issuance of notes payable | 750,000 | |||||
Original issue discount | 315,341 | |||||
Transaction expenses | $ 25,000 | |||||
Interest rate (as a percent) | 8.00% | |||||
Convertible notes payable – current | 870,773 | |||||
Additional financing costs | $ 219,568 |
Debt and Warrants - Securitie_2
Debt and Warrants - Securities Purchase Agreement Error Corrections (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Errors in accounting | |||||||
Other expense | $ 9,540 | $ (14,876) | $ 322,244 | $ (13,428) | |||
Short-term notes payable | $ 4,531,952 | $ 4,531,952 | $ 1,141,153 | ||||
Adjustment | Restructuring of Notes Payable | Chicago Venture Partners, L.P. | |||||||
Errors in accounting | |||||||
Other expense | $ 322,000 | $ (798,000) | |||||
Short-term notes payable | $ (476,000) | $ (798,000) |
Debt and Warrants - Warrants (D
Debt and Warrants - Warrants (Details) - shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Warrant Activity | ||
Beginning balance | 321,314 | 397,904 |
Warrants granted | 889,921 | 106,376 |
Warrants exercised | (60,553) | |
Warrants cancelled | (50,553) | (122,413) |
Ending balance | 1,160,682 | 321,314 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Mar. 31, 2018 | Sep. 30, 2018 | Mar. 31, 2018 | Mar. 31, 2021 | Sep. 30, 2018 | Dec. 31, 2017 | |
Liquidation value | $ 9,199,002 | $ 9,199,002 | ||||
Convertible preferred stock, shares outstanding | 5,524,926 | 5,524,926 | 0 | |||
Deemed dividend attributable to preferred stock | $ 995,000 | |||||
Forecast | Maximum | ||||||
Product revenue | $ 22,000,000 | |||||
Average VWAP of common stock for the 30 days prior to Measurement Date | $ 1 | |||||
Series A convertible participating preferred stock | ||||||
Redemption value | $ 12,738,822 | $ 12,738,822 | ||||
Liquidation value | $ 9,199,002 | $ 9,199,002 | ||||
Redemption price per share | $ 2.3057 | $ 2.3057 | ||||
Stock price (in dollars per share) | $ 0.205 | $ 0.205 | ||||
Beneficial Conversion Feature | $ 995,000 | |||||
Issuance of common stock in exchange for redemption of convertible preferred stock (in shares) | 49,724,334 | |||||
Convertible preferred stock, shares outstanding | 5,524,926 | 5,524,926 | ||||
Deemed dividend attributable to preferred stock | $ 995,000 | $ 995,000 | ||||
Sagard Capital Partners, L.P. | Series A convertible participating preferred stock | ||||||
Conversion ratio | 9 | 9 | ||||
Effective conversion price | $ 0.185 | |||||
Original price per share | $ 1.665 | |||||
Minimum holding percent of the shares after conversion | 19.99% | |||||
Maximum period from date of issuance | 1 year | |||||
Second Amendment to Note Purchase Agreement and Notes | Sagard Capital Partners, L.P. | Series A convertible participating preferred stock | Private Placement | ||||||
Shares issued (in shares) | 5,524,926 | |||||
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | ||||
Amount of shares issued | $ 9,199,002 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | Jul. 12, 2018USD ($)shares | May 18, 2018shares | Mar. 31, 2018USD ($)shares | Sep. 30, 2018shares | Jun. 01, 2018shares | Dec. 31, 2017shares | Sep. 30, 2017shares |
Stockholders’ Equity | |||||||
Reverse stock split ratio | 0.0667 | ||||||
Shares of common stock reserved for issuance | |||||||
Options issued and outstanding | 2,868,868 | 2,984,304 | |||||
Options available for grant | 238,172 | 513,385 | |||||
RSUs issued and outstanding | 392,904 | 392,923 | |||||
Convertible notes | 1,642,852 | 1,036,717 | |||||
Total | 6,513,009 | 5,371,085 | |||||
Warrants | |||||||
Shares of common stock reserved for issuance | |||||||
Options issued and outstanding | 1,160,682 | 443,756 | |||||
Inducement options | |||||||
Shares of common stock reserved for issuance | |||||||
Options issued and outstanding | 209,531 | ||||||
Blank check preferred stock | |||||||
Stockholders’ Equity | |||||||
Common stock, shares authorized | 10,000,000 | ||||||
Common Stock | |||||||
Stockholders’ Equity | |||||||
Common stock, shares authorized | 210,000,000 | ||||||
Shares issued (in shares) | 470,781 | 1,960,783 | |||||
Net proceeds from issuance of common stock | $ | $ 624,897 | $ 5,000,000 | |||||
Common Stock | Common stock - voting | |||||||
Stockholders’ Equity | |||||||
Common stock, shares authorized | 150,000,000 | 150,000,000 | 150,000,000 | 250,000,000 | |||
Common Stock | Common stock - non-voting | |||||||
Stockholders’ Equity | |||||||
Common stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Stock Incentive Plans - Summary
Stock Incentive Plans - Summary of Stock Incentive Plans (Details) - USD ($) | May 12, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jun. 29, 2018 |
Shares Available for Grant | |||||
Ending balance (in shares) | 238,172 | 513,385 | |||
Stock Options Outstanding | |||||
Ending balance (in shares) | 2,868,868 | 2,984,304 | |||
RSUs Outstanding | |||||
Ending balance (in shares) | 392,904 | 392,923 | |||
Options vested, exercisable and expected to vest | |||||
Weighted average grant date fair value of stock options granted (in dollars per share) | $ 1.84 | $ 0.44 | |||
Number of options vested (in shares) | 423,719 | 533,348 | |||
Weighted average fair value of options vested on grant date | $ 475,123 | $ 549,453 | |||
Inducement options | |||||
Stock Options Outstanding | |||||
Options granted (in shares) | 209,531 | ||||
Ending balance (in shares) | 209,531 | ||||
Options vested, exercisable and expected to vest | |||||
Weighted average grant date fair value of stock options granted (in dollars per share) | $ 1.34 | ||||
Number of options vested (in shares) | 0 | ||||
Common Stock | |||||
Options vested, exercisable and expected to vest | |||||
Share Price | $ 0.87 | ||||
2013 Plan | |||||
Stock Incentive Plans | |||||
Option shares outstanding | 33,769 | ||||
2013 Plan | Stock options | |||||
Stock Options Outstanding | |||||
Options granted (in shares) | 0 | ||||
Ending balance (in shares) | 33,769 | ||||
2014 Plan | |||||
Stock Incentive Plans | |||||
Option shares outstanding | 2,835,099 | ||||
Shares Available for Grant | |||||
Beginning balance (in shares) | 3,619 | ||||
Additional shares authorized (in shares) | 2,877,766 | ||||
Options granted (in shares) | (2,767,673) | ||||
Options cancelled (in shares) | 124,460 | ||||
Ending balance (in shares) | 238,172 | 3,619 | |||
Stock Options Outstanding | |||||
Beginning balance (in shares) | 229,575 | ||||
Options granted (in shares) | 2,767,673 | ||||
Options cancelled (in shares) | (128,380) | ||||
Ending balance (in shares) | 2,868,868 | 229,575 | |||
RSUs Outstanding | |||||
Beginning balance (in shares) | 392,904 | ||||
Ending balance (in shares) | 392,904 | 392,904 | |||
Weighted Average Stock Option Exercise Price | |||||
Beginning balance (in dollars per share) | $ 28.05 | ||||
Ending balance (in dollars per share) | $ 5.96 | $ 28.05 | |||
Weighted Average Remaining Contractual Life (Years) | |||||
Weighted Average Remaining Contractual Life (Years) | 9 years 3 months 7 days | 8 years 3 months 22 days | |||
Options vested, exercisable and expected to vest | |||||
Options vested and exercisable (in shares) | 709,721 | ||||
Options vested and exercisable (in dollars per share) | $ 12.14 | ||||
Options vested and exercisable (in years) | 3 years 11 months 23 days | ||||
Options vested and expected to vest (in shares) | 2,644,568 | ||||
Options vested and expected to vest (in dollars per share) | $ 6.03 | ||||
Options vested and expected to vest (in years) | 9 years 3 months 4 days | ||||
Options exercised (in shares) | 0 | 0 | |||
2014 Plan | Stock options | |||||
Stock Incentive Plans | |||||
Increase in share reserve based on outstanding number of shares (as a percent) | 2.00% |
Stock Incentive Plans - Stock-B
Stock Incentive Plans - Stock-Based Compensation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Incentive Plans | ||||
Total stock-based compensation expense | $ 680,094 | $ 186,754 | $ 1,416,791 | $ 630,924 |
Research and development expense | ||||
Stock Incentive Plans | ||||
Total stock-based compensation expense | 175,772 | 45,009 | 400,521 | 168,981 |
Sales and marketing expense | ||||
Stock Incentive Plans | ||||
Total stock-based compensation expense | 39,210 | 7,938 | 59,762 | 23,307 |
General and administrative expense | ||||
Stock Incentive Plans | ||||
Total stock-based compensation expense | 465,112 | $ 133,807 | 956,508 | $ 438,636 |
Stock options and RSUs | ||||
Stock Incentive Plans | ||||
Unrecognized stock-based compensation expense | $ 3,277,868 | $ 3,277,868 | ||
Expected weighted average period to be recognized | 2 years 2 months 12 days |
Net Income (Loss) Per Share o_3
Net Income (Loss) Per Share of Common Stock - Calculation (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Calculation of basic and diluted net loss per common share | ||||
Net income (loss) attributable to common stockholders (basic) | $ (6,138,352) | $ 4,759,844 | $ (20,487,172) | $ (1,761,156) |
Interest on convertible debt, net of tax | 209,149 | |||
Net income (loss) attributable to common shareholders - diluted | $ (6,138,352) | $ 4,968,993 | $ (20,487,172) | $ (1,761,156) |
Shares used to compute net income (loss) per common share - basic | 12,061,672 | 3,695,660 | 10,701,977 | 1,883,115 |
Dilutive effects of warrants | 45,026 | |||
Dilutive effect of convertible debt | 739,550 | |||
Shares used to compute net income (loss) per common share - diluted | 12,061,672 | 4,480,235 | 10,701,977 | 1,883,115 |
Net loss per share attributable to common stockholders - basic | $ (0.51) | $ 1.29 | $ (1.91) | $ (0.94) |
Net loss per share attributable to common stockholders - diluted | $ (0.51) | $ 1.11 | $ (1.91) | $ (0.94) |
Segment Information (Details)
Segment Information (Details) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)segment | Sep. 30, 2017USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Revenue from external customers | $ 1,132,067 | $ 1,100,214 | $ 2,820,269 | $ 2,819,145 |
Segment profit (loss) | (6,138,352) | 4,759,844 | (19,492,172) | (1,761,156) |
Human Health | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from external customers | 1,107,682 | 364,054 | 2,545,121 | 364,054 |
Segment profit (loss) | (3,145,782) | 996,493 | (10,519,413) | 996,493 |
Animal Health | ||||
Segment Reporting Information [Line Items] | ||||
Revenue from external customers | 24,385 | 736,160 | 275,148 | 2,455,091 |
Segment profit (loss) | $ (2,992,570) | $ 3,763,351 | $ (8,972,759) | $ (2,757,649) |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Nov. 21, 2018 | Nov. 20, 2018 | Nov. 09, 2018 | Oct. 04, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Subsequent Events | ||||||
Number of pre-funded warrants issued | 889,921 | 106,376 | ||||
Subsequent event | ||||||
Subsequent Events | ||||||
Minimum number of consecutive business days needed to meet required minimum closing bid price | 30 days | |||||
Common stock minimum bid price required for Nasdaq listing rule | $ 1 | |||||
Grace period provided with minimum bid price to regain compliance | 180 days | |||||
Common stock minimum bid price required to regain compliance | $ 1 | |||||
Number of consecutive business days required to regain compliance | 10 days | |||||
Subsequent event | October 2018 Equity Financing | ||||||
Subsequent Events | ||||||
Shares issued (in shares) | 11,575,001 | |||||
Number of pre-funded warrants issued | 3,425,000 | |||||
Purchase price of common stock | $ 0.60 | |||||
Gross proceeds from issuance of common stock | $ 7,000,000 | |||||
Purchase price of pre-funded warrants | $ 0.59 | |||||
Gross proceeds from issuance of pre-funded warrants | $ 2,000,000 | |||||
Actual cash received after deducting estimated fees and expenses | $ 8,300,000 | |||||
Subsequent event | Standstill Agreement | Convertible promissory note issued June 29,2017 | ||||||
Subsequent Events | ||||||
Debt repayment | $ 1,500,000 | |||||
Redemption of debt | $ 500,000 | |||||
Subsequent event | Standstill Agreement | Convertible promissory note issued June 29,2017 | Fails to repay Note | ||||||
Subsequent Events | ||||||
Redemption of debt | $ 1,000,000 |