Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 15, 2017 | |
Document and Entity Information | ||
Entity Registrant Name | AzurRx BioPharma, Inc. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Amendment Flag | false | |
Entity Central Index Key | 1,604,191 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 9,631,088 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash | $ 531,931 | $ 1,773,525 |
Other receivables | 1,010,963 | 961,038 |
Prepaid expenses | 207,162 | 229,411 |
Total Current Assets | 1,750,056 | 2,963,974 |
Property, equipment, and leasehold improvements, net | 141,358 | 151,622 |
Other Assets: | ||
In process research & development, net | 298,501 | 301,531 |
License agreements, net | 1,401,632 | 1,534,487 |
Goodwill | 1,797,292 | 1,767,550 |
Deposits | 34,901 | 34,678 |
Total Other Assets | 3,532,326 | 3,638,246 |
Total Assets | 5,423,740 | 6,753,842 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 1,696,747 | 1,471,280 |
Accounts payable and accrued expenses - related party | 870,931 | 707,181 |
Notes payable | 77,855 | 155,187 |
Interest payable | 7,192 | 7,192 |
Total Current Liabilities | 2,652,725 | 2,340,840 |
Contingent consideration | 1,300,000 | 1,200,000 |
Total Liabilities | 3,952,725 | 3,540,840 |
Stockholders' Equity: | ||
Convertible preferred stock - Par value $0.0001 per share; 10,000,000 shares authorized and 0 shares outstanding at March 31, 2017 and December 31, 2016; liquidation preference approximates par value at March 31, 2017 and December 31, 2016 | 0 | 0 |
Common stock - Par value $0.0001 per share; 100,000,000 shares authorized and 9,631,088 shares outstanding at March 31, 2017 and December 31, 2016 | 963 | 963 |
Additional paid in capital | 28,566,653 | 27,560,960 |
Accumulated deficit | (25,696,412) | (22,887,046) |
Accumulated other comprehensive loss | (1,400,189) | (1,461,875) |
Total Stockholders' Equity | 1,471,015 | 3,213,002 |
Total Liabilities and Stockholders' Equity | $ 5,423,740 | $ 6,753,842 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock shares, par value | $ 0.0001 | $ 0.0001 |
Preferred stock shares, authorized | 10,000,000 | 10,000,000 |
Preferred stock shares, outstanding | 0 | 0 |
Common stock shares, par value | $ 0.0001 | $ 0.0001 |
Common stock shares, authorized | 100,000,000 | 100,000,000 |
Common stock shares, outstanding | 9,631,088 | 9,631,088 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Statement [Abstract] | ||
Research and development expenses | $ 534,137 | $ 685,575 |
General & administrative expenses | 2,174,355 | 661,641 |
Fair value adjustment, contingent consideration | 100,000 | 0 |
Loss from operations | (2,808,492) | (1,347,216) |
Other: | ||
Interest expense | (874) | (713,680) |
Fair value adjustment, warrants | 0 | 69,576 |
Total other | (874) | (644,104) |
Loss before income taxes | (2,809,366) | (1,991,320) |
Income taxes | 0 | 0 |
Net loss | (2,809,366) | (1,991,320) |
Other comprehensive loss: | ||
Foreign currency translation adjustment | 61,686 | 194,596 |
Total comprehensive loss | $ (2,747,680) | $ (1,796,724) |
Basic and diluted weighted average shares outstanding | 9,631,088 | 4,725,879 |
Loss per share - basic and diluted | $ (0.29) | $ (0.42) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning Balance, Shares at Dec. 31, 2015 | 71 | 4,296,979 | ||||
Beginning Balance, Amount at Dec. 31, 2015 | $ 3,479,000 | $ 430 | $ 2,532,188 | $ (8,295,384) | $ (1,346,064) | $ (3,629,830) |
Preferred stock converted into common stock, Shares | (35) | 853,778 | ||||
Preferred stock converted into common stock, Amount | $ (1,715,000) | $ 85 | 1,714,915 | 0 | ||
Warrants issued | 7,048 | 7,048 | ||||
Foreign currency translation adjustment | 194,596 | 194,596 | ||||
Net loss | (1,991,320) | (1,991,320) | ||||
Ending Balance, Shares at Mar. 31, 2016 | 36 | 5,150,757 | ||||
Ending Balance, Amount at Mar. 31, 2016 | $ 1,764,000 | $ 515 | 4,254,151 | (10,286,705) | (1,151,468) | (5,419,507) |
Beginning Balance, Shares at Dec. 31, 2016 | 0 | 9,631,088 | ||||
Beginning Balance, Amount at Dec. 31, 2016 | $ 0 | $ 963 | 27,560,960 | (22,887,046) | (1,461,875) | 3,213,002 |
Stock-based compensation | 522,315 | 522,315 | ||||
Restricted stock granted | 81,060 | 81,060 | ||||
Warrants issued | 402,318 | 402,318 | ||||
Foreign currency translation adjustment | 61,686 | 61,686 | ||||
Net loss | (2,809,366) | (2,809,366) | ||||
Ending Balance, Shares at Mar. 31, 2017 | 0 | 9,631,088 | ||||
Ending Balance, Amount at Mar. 31, 2017 | $ 0 | $ 963 | $ 28,566,653 | $ (25,696,412) | $ (1,400,189) | $ 1,471,015 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (2,809,366) | $ (1,991,320) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 10,597 | 10,845 |
Amortization | 166,188 | 171,997 |
Fair value adjustment, warrants | 0 | (69,576) |
Fair value adjustment, contingent consideration | 100,000 | 0 |
Stock-based compensation | 522,315 | 0 |
Restricted stock granted to consultants | 81,060 | 0 |
Warrants issued to consultants | 402,318 | 7,048 |
Accreted interest on convertible debt | 0 | 348,610 |
Accreted interest on debt discount - warrants | 0 | 362,378 |
Changes in assets and liabilities, net of effects of acquisition: | ||
Other receivables | (32,260) | 45,859 |
Prepaid expenses | 22,380 | (36,353) |
Accounts payable and accrued expenses | 371,338 | 511,274 |
Interest payable | 0 | 2,692 |
Net cash used in operating activities | (1,165,430) | (636,546) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (585) | (936) |
Net cash used in investing activities | (585) | (936) |
Cash flows from financing activities: | ||
Repayments of notes payable | (77,332) | 0 |
Issuances of convertible debt | 0 | 225,000 |
Net cash (used in) provided by financing activities | (77,332) | 225,000 |
Decrease in cash | (1,243,347) | (412,482) |
Effect of exchange rate changes on cash | 1,753 | (150) |
Cash, beginning balance | 1,773,525 | 581,668 |
Cash, ending balance | 531,931 | 169,036 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 874 | 0 |
Cash paid for income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Conversion of preferred shares into common shares by Protea | $ 0 | $ 1,715,000 |
The Company, Basis of Presentat
The Company, Basis of Presentation, and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Text Block [Abstract] | |
The Company, Basis of Presentation, and Recent Accounting Pronouncements | The Company AzurRx BioPharma, Inc. (“AzurRx” or “Parent”) was incorporated on January 30, 2014 in the State of Delaware. In June 2014, the Company acquired 100% of the issued and outstanding capital stock of AzurRx BioPharma SAS (formerly “ProteaBio Europe SAS”), a company incorporated in October 2008 under the laws of France that had been a wholly-owned subsidiary of Protea Biosciences, Inc., or Protea Sub, in turn a wholly-owned subsidiary of Protea Biosciences Group, Inc., a publicly-traded company. AzurRx and its wholly-owned subsidiary, AzurRx Europe SAS, are collectively referred to as the “Company.” AzurRx, through its AzurRx Europe SAS subsidiary, is engaged in the research and development of non-systemic biologics for the treatment of patients with gastrointestinal disorders. Non-systemic biologics are non-absorbable drugs that act locally without reaching the systemic circulation, i.e. the intestinal lumen, skin or mucosa. The Company’s current product pipeline consists of two therapeutic proteins under development: ● MS1819 - a recombinant (synthetic) lipase, an enzyme derived from a specialized yeast, which breaks apart fats. Lipases are required to treat patients whose pancreases don’t work anymore in a condition known as exocrine pancreatic insufficiency (EPI) which usually arises from chronic pancreatitis (CP) or cystic fibrosis (CF). ● AZ1101- a recombinant (synthetic) enzyme which is being developed to prevent hospital-acquired infections which come from resistant bacterial strains caused by parenteral (intra-venous) administration of b-lactam antibiotics, as well as prevention of antibiotic-associated diarrhea (AAD). Basis of Presentation The accompanying unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In our opinion, the accompanying unaudited interim consolidated financial statements include all adjustments, consisting of normal recurring adjustments, which are necessary to present fairly our financial position, results of operations, and cash flows. The consolidated balance sheet at December 31, 2016, has been derived from audited financial statements of that date. The unaudited interim consolidated results of operations are not necessarily indicative of the results that may occur for the full fiscal year. Certain information and footnote disclosure normally included in financial statements prepared in accordance with U.S. GAAP have been omitted pursuant to instructions, rules, and regulations prescribed by the United States Securities and Exchange Commission. We believe that the disclosures provided herein are adequate to make the information presented not misleading when these unaudited interim consolidated financial statements are read in conjunction with the audited financial statements and notes previously distributed in our 2016 Annual Report Form 10-K. The unaudited interim consolidated financial statements include the accounts of AzurRx and its wholly-owned subsidiary, AzurRx Europe SAS (collectively, the “Company”). Intercompany transactions and balances have been eliminated upon consolidation. The accompanying unaudited interim consolidated financial statements have been prepared as if the Company will continue as a going concern. The Company has incurred significant operating losses and negative cash flows from operations since inception, had a working capital deficiency at March 31, 2017 of approximately $903,000 and had an accumulated deficit of approximately $25,696,000. The Company believes that its cash on hand will sustain its operations until September 2017. The Company is dependent on obtaining, and continues to pursue, the necessary funding from outside sources, including obtaining additional funding from the sale of securities in order to continue their operations. Without adequate funding, the Company may not be able to meet its obligations. Management believes these conditions raise substantial doubt about its ability to continue as a going concern through May 2018. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Use of Estimates The accompanying unaudited interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and include certain estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements (including goodwill, intangible assets and contingent consideration), and the reported amounts of revenues and expenses during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates. Concentrations Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally-insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC insurance limits. At March 31, 3017 and December 31, 2016, the Company had approximately $87,000 and $1,279,000, respectively, in one account in the U.S. in excess of these limits. The Company has not experienced any losses to date resulting from this practice. The Company also has exposure to currency risk as its subsidiary in France has a functional currency in Euros. Foreign Currency Translation For foreign subsidiaries with operations denominated in a foreign currency, assets and liabilities are translated to U.S. dollars, which is the functional currency, at year-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the year. Gains and losses from translation adjustments are accumulated in a separate component of shareholders’ equity (deficit). Recent Accounting Pronouncements In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the subsequent measurement of goodwill impairment. The new guidance eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by reducing the goodwill balance by the difference between the carrying value and the reporting unit’s fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. The Company does not believe that the adoption of this pronouncement will have a material impact on its consolidated financial statements. In March 2016, the FASB issued an Accounting Standards Update (“ASU”) which simplifies several aspects of the accounting for share based payments, including the income tax consequences and classification on the statement of cash flows. Under the new standard, all excess tax benefits and deficiencies will be recognized as income tax expense or benefit in the income statement. Additionally, excess tax benefits will be classified as an operating activity on the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. The amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement must be applied prospectively, and entities can elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective or retrospective transition method. The adoption of this pronouncement does not have a material impact on the Company’s unaudited interim consolidated financial statements. The Company has recorded a valuation allowance to offset the benefit of its gross net operating loss carryforwards and therefore has no tax provision. In February 2016, the FASB issued an ASU which requires lessees to recognize lease assets and lease liabilities arising from operating leases on the balance sheet. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018 using a modified retrospective approach, with early adoption permitted. The Company is currently evaluating the standard to determine the impact of its adoption on its unaudited interim consolidated financial statements. The Company would have to capitalize its operating leases on its balance sheet. In November 2015, the FASB issued an ASU that requires all deferred tax liabilities and assets to be classified as noncurrent on the balance sheet. This ASU is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption permitted. In addition, this guidance can be applied either prospectively or retrospectively to all periods presented. This currently has no impact on the Company’s unaudited interim consolidated financial statements as the Company’s deferred tax assets have a full valuation allowance. In May 2014, the FASB issued an ASU which supersedes the most current revenue recognition requirements. The new revenue recognition standard requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers in an amount that reflects the consideration which the entity expects to be entitled to in exchange for those goods or services. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual periods after December 31, 2016. The Company is still in its startup phase and is not generating revenues at this time; therefore, this standard will have no impact on its consolidated financial statements until such time as revenues are generated. When revenues are generated, the Company will evaluate the standard to determine the impact of its adoption on its unaudited interim consolidated financial statements. |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Fair value is the price that would be received from the sale of an asset or paid to transfer a liability assuming an orderly transaction in the most advantageous market at the measurement date. U.S. GAAP establishes a hierarchical disclosure framework that prioritizes and ranks the level of observability of inputs used in measuring fair value. At March 31, 2017 and December 31, 2016, the Company had Level 3 instruments consisting of contingent consideration in connection with the Protea Europe SAS acquisition, see Note 6. The following tables summarize the Company’s financial instruments measured at fair value on a recurring basis: Fair Value Measurements at Reporting Date Using Total Level 1 Level 2 Level 3 At March 31, 2017: Contingent Consideration $ 1,300,000 $ - $ - $ 1,300,000 At December 31, 2016: Contingent Consideration $ 1,200,000 $ - $ - $ 1,200,000 The following table provides a reconciliation of the fair value of liabilities using Level 3 significant unobservable inputs: Contingent Consideration Balance at December 31, 2016 $ 1,200,000 Change in fair value 100,000 Balance at March 31, 2017 $ 1,300,000 The contingent consideration was valued by incorporating a series of Black-Scholes Option Pricing Models (“BSM”) into a discounted cash flow framework. Significant unobservable inputs used in this calculation at March 31, 2017 and December 31, 2016 included projected net sales over a period of patent exclusivity (8 years), discounted by the Company’s weighted average cost of capital (33.0% and 30.2%, respectively), the contractual hurdle amount of $100 million that replaces the strike price input in the traditional BSM, asset volatility (73% and 71%, respectively), that replaces the equity volatility in the traditional BSM, risk-free rates (ranging from 1.3% to 2.3% and 1.6% to 2.4%, respectively), and an option-adjusted spread (1.2% and 1.3%, respectively) that is applied to these payments to account for the payer’s risk and arrive at a fair value of the expected payment. The fair value of the Company's other receivables and notes payable are as follows: Carrying Fair Value Measured at Reporting Date Using Fair Amount Level 1 Level 2 Level 3 Value At March 31, 2017: Other Receivables $ 1,010,963 $ - $ - $ 1,010,963 $ 1,010,963 Notes Payable $ 77,855 $ - $ - $ 77,855 $ 77,855 At December 31, 2016: Other Receivables $ 961,038 $ - $ - $ 961,038 $ 961,038 Notes Payable $ 155,187 $ - $ - $ 155,187 $ 155,187 The fair value of Other Receivables approximates carrying value as these consist primarily of French R&D tax credits that are normally received within 9 months of year end and amounts due from collaboration partner Mayoly, see Note 14. The fair value of Notes Payable approximates carrying value due to the terms of such instruments and applicable interest rates. The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities approximate fair value due to their short maturities. |
Other Receivables
Other Receivables | 3 Months Ended |
Mar. 31, 2017 | |
Other Receivables | |
Other Receivables | Other receivables consisted of the following: March 31, December 31, 2017 2016 Research & development tax credits $ 771,065 $ 758,305 Other 239,898 202,733 $ 1,010,963 $ 961,038 The research & development tax credits are refundable tax credits for research conducted in France. Other is primarily amounts due from collaboration partner Mayoly, see Note 15, and non-income tax related items from French government entities. |
Property, Equipment, and Leaseh
Property, Equipment, and Leasehold Improvements | 3 Months Ended |
Mar. 31, 2017 | |
Property Equipment And Leasehold Improvements | |
Property, Equipment, and Leasehold Improvements | Property, equipment and leasehold improvements consisted of the following: March 31, December 31, 2017 2016 Laboratory Equipment $ 165,611 $ 165,611 Computer Equipment 20,474 19,718 Office Equipment 28,830 29,006 Leasehold Improvements 29,163 29,163 244,078 243,498 Less accumulated depreciation (102,720 ) (91,876 ) $ 141,358 $ 151,622 Depreciation expense for the three months ended March 31, 2017 and 2016 was $10,597 and $10,845, respectively. Depreciation expense is included in General and Administrative (“G&A”) expenses. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets And Goodwill | |
Intangible Assets and Goodwill | Intangible assets are as follows: March 31, December 31, 2017 2016 In Process research & development $ 388,997 $ 382,560 Less accumulated amortization (90,496 ) (81,029 ) $ 298,501 $ 301,531 License agreements $ 3,173,507 $ 3,120,991 Less accumulated amortization (1,771,875 ) (1,586,504 ) $ 1,401,632 $ 1,534,487 Amortization expense for the three months ended March 31, 2017 and 2016 was $166,188 and $171,997, respectively. Amortization expense is included in G&A expenses. As of March 31, 2017, amortization expense is expected to be as follows for the next 5 years: 2017 $ 500,338 2018 667,118 2019 323,321 2020 32,416 2021 32,416 Goodwill is as follows: Balance at December 31, 2016 $ 1,767,650 Foreign currency translation 29,642 Balance at March 31, 2017 $ 1,797,292 |
Contingent Consideration
Contingent Consideration | 3 Months Ended |
Mar. 31, 2017 | |
Contingent Consideration | |
Contingent Consideration | On June 13, 2014, the Company completed a stock purchase agreement (the “SPA”) with Protea Biosciences Group, Inc. (“Protea Group”). Pursuant to the SPA, the Company is obligated to pay Protea certain contingent consideration in U.S. dollars upon the satisfaction of certain events, including (a) a onetime milestone payment of $2,000,000 due within (10) days of receipt of the first approval by the Food and Drug Administration (“FDA”) of a New Drug Application (“NDA”) or Biologic License Application (“BLA”) for a Business Product (as such term is defined in the SPA). (b) royalty payments equal to 2.5% of net sales of Business Product up to $100,000,000 and 1.5% of net sales of Business Product in excess of $100,000,000 and (c) ten percent (10%) of the Transaction Value (as defined in the SPA) received in connection with a sale or transfer of the pharmaceutical development business of Protea Europe, see Note 2. |
Accounts Payable
Accounts Payable | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Payable | |
Accounts Payable | Accounts payable and accrued expenses consisted of the following: March 31, December 31, 2017 2016 Trade payables $ 1,341,930 $ 1,072,358 Accrued expenses 98,750 73,750 Accrued payroll 256,067 325,172 $ 1,696,747 $ 1,471,280 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2017 | |
Convertible Promissory Notes | |
Notes Payable | On October 11, 2016, the Company entered into a 9-month financing agreement for its Directors and Officers Liability insurance in the amount of $232,000 that bears interest at an annual rate of 2.7%. Monthly payments including principal and interest are $26,069 per month. Notes Payable at March 31, 2017 and December 31, 2016 was $77,855 and $155,487, respectively. |
Original Issue Discounted Conve
Original Issue Discounted Convertible Notes and Warrants | 3 Months Ended |
Mar. 31, 2017 | |
Original Issue Discounted Convertible Notes | |
Original Issue Discounted Convertible Notes and Warrants | On March 31, 2016, the Company issued original issue discounted convertible notes at 92% of the principal amount of the notes due on November 4, 2016 with a conversion price of $4.65 per share, issued 39,446 new warrants with a strike price of $5.58 per share, and adjusted the strike price to $5.58 share on 528,046 warrants. On the IPO Date, these notes converted into 2,642,160 shares of common stock. The Company accounted for the warrant feature of the notes by recording a warrant liability based upon the fair value of the warrants on the dates of issuance. The warrant liability was adjusted to the fair value at March 31, 2016 by recording a fair value adjustment of $69,576. There were no original issues discounted convertible notes outstanding at December 31, 2016. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Equity | Common Stock At March 31, 2017 and December 31, 2016, the Company had issued and outstanding 9,631,088 shares of its common stock. Stock Option Plan The Company’s board of directors and stockholders have adopted and approved the Amended and Restated 2014 Omnibus Equity Incentive Plan (the “2014 Plan”), which took effect on May 12, 2014. During the three months ended March 31, 2017 and 2016, the Company granted 190,000 and 0, respectively, of stock options under the 2014 Plan, see Note 12. Series A Convertible Preferred Stock At March 31, 2017 and December 31, 2016, there were no Series A outstanding and all terms of the Series A are still in effect. Restricted Stock During the three months ended March 31, 2017 and 2016, there were 21,000 shares and 0 shares, respectively, of restricted stock granted but not yet issued with a value of $81,060 and $0, respectively. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2017 | |
WarrantsAbstract | |
Warrants | Stock warrant transactions for the three months ended March 31, 2017 and 2016 were as follows: Exercise Price Per Weighted Average Warrants Share Exercise Price Warrants outstanding and exercisable at January 1, 2016 662,474 $ 7.37 $ 7.37 Granted during the period 44,705 $ 5.58 $ 5.58 Expired during the period - - - Exercised during the period - - - Warrants outstanding and exercisable at March 31, 2016 707,179 $ 5.58 - 7.37 $ 5.84 Warrants outstanding and exercisable at January 1, 2017 1,858,340 $ 4.76 - $7.37 $ 5.66 Granted during the period 200,000 $ 5.50 - $6.50 $ 6.25 Expired during the period - - - Exercised during the period - - - Warrants outstanding and exercisable at March 31, 2017 2,058,340 $ 4.76 - $7.37 $ 5.72 Weighted Average Number of Shares Remaining Contract Weighted Average Exercise Price Under Warrants Life in Years Exercise Price $ 4.76 32,376 3.40 $ 5.50 767,540 4.56 $ 5.58 959,101 4.12 $ 6.50 150,000 4.47 $ 6.60 48,000 4.54 $ 7.37 101,323 3.69 Total warrants 2,058,340 4.29 $5.72 During the three months ended March 31, 2017, 200,000 warrants were issued to consultants. 166,667 of these warrants vested in the three months ended March 31, 2017 with a value of $402,318. This amount was included in G&A expenses. The remaining 33,333 of these warrants will vest in the 2nd quarter of 2017. During the three months ended March 31, 2016, 5,260 warrants were issued to consultants that vested immediately with a value of $7,048. This amount was included in G&A expenses. The weighted average fair value of warrants granted to non-employees during the three months ended March 31, 2017 and 2016 were $2.47 and $1.34. The fair values were estimated on the grant dates using the Black-Scholes option-pricing model with the following weighted-average assumptions: March 31, March 31, 2017 2016 Expected life (in years) 5 5 Volatility 90 % 118 % Risk-free interest rate 1.90% - 1.92 % 1.28 % Dividend yield - % - % The expected term of the warrants is based on the actual term of the warrants. Volatility is based on the historical volatility of several public entities that are similar to the Company. The Company bases volatility this way because it does not have sufficient historical transactions in its own shares on which to solely base expected volatility. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at the grant date. The Company has not historically declared any dividends and does not expect to in the future. |
Stock-Based Compensation Plan
Stock-Based Compensation Plan | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based Compensation Plan | |
Stock-Based Compensation Plan | Under the 2014 Plan, the fair value of options granted is estimated on the grant date using the Black-Scholes option valuation model. This valuation model for stock-based compensation expense requires the Company to make assumptions and judgments about the variables used in the calculation, including the expected term (weighted-average period of time that the options granted are expected to be outstanding), the volatility of the common stock price and the assumed risk-free interest rate. The Company recognizes stock-based compensation expense for only those shares expected to vest over the requisite service period of the award. No compensation cost is recorded for options that do not vest and the compensation cost from vested options, whether forfeited or not, is not reversed. During the three months ended March 31, 2017, 190,000 stock options were granted with an exercise price of $4.48 and a life of 10 years. 135,000 of these options vested in the three months ended March 31, 2017. The weighted average fair value of stock options granted to employees during the three months ended March 31, 2017 was $3.87. The fair values were estimated on the grant dates using the Black-Scholes option-pricing model with the following weighted-average assumptions: Expected life (in years) 10 Volatility 90 % Risk-free interest rate 2.48 % Dividend yield — % The expected term of the options is based on expected future employee exercise behavior. Volatility is based on the historical volatility of several public entities that are similar to the Company. The Company bases volatility this way because it does not have sufficient historical transactions in its own shares on which to solely base expected volatility. The risk-free interest rate is based on the U.S. Treasury rates at the date of grant with maturity dates approximately equal to the expected term at the grant date. The Company has not historically declared any dividends and does not expect to in the future. During the three months ended March 31, 2016, no stock options were granted. The Company realized no income tax benefit from stock option exercises in each of the periods presented due to recurring losses and valuation allowances. Stock option activity under the Plan is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Life in Years Aggregate Intrinsic Value Stock options outstanding at January 1, 2017 - - Granted during the period 190,000 $ 4.48 9.85 $ - Expired during the period - - Exercised during the period - - Stock options outstanding at March 31, 2017 190,000 $ 4.48 9.85 $ - Exercisable at March 31, 2017 135,000 $ 4.48 9.85 $ - 568,109 options are available for future grant. During the three months ending March 31, 2017, 135,000 options vested having a fair value of $522,315. As of March 31, 2017, the Company had unrecognized stock-based compensation expense of $212,795 related to stock options that will be recognized over the average remaining vesting term of the options of 1.85 years. |
Interest Expense
Interest Expense | 3 Months Ended |
Mar. 31, 2017 | |
Interest Expense [Abstract] | |
Interest Expense | During the three months ended March 31, 2017 and 2016, the Company incurred $874 and $713,680, respectively, of interest expense. During the three months ended March 31, 2017 and 2016, $0 and $710,988, respectively, of this amount was in connection with the convertible notes issued by the Company in the form of accretion of original issue debt discount and amortization of debt discount related to the warrants. During the three months ended March 31, 2017 and 2016, the Company incurred $0 and $2,693, respectively, of interest expense in connection with promissory notes issued by the Company. During the three months ended March 31, 2017 and 2016, the Company also incurred $874 and $0, respectively, of miscellaneous interest expense. |
Agreements
Agreements | 3 Months Ended |
Mar. 31, 2017 | |
Agreements | |
Agreements | Mayoly Agreement During the three months ended March 31, 2017 and 2016, the Company was reimbursed $253,419 and $0, respectively, from Mayoly under the Mayoly Agreement. The Mayoly Agreement includes a €1,000,000 payment due to Mayoly upon the U.S. FDA approval of MS1819. At this time, based on management’s assessment of ASC Topic 450, Contingencies, the Company has not recorded any contingent liability related to this payment. Employment Agreement On January 3, 2016, the Company entered into an employment agreement with its President and Chief Executive Officer, Johan Spoor. The employment agreement provides for a term expiring January 2, 2019. Mr. Spoor was granted 100,000 shares of restricted common stock. Subject to any required consents from third parties, Mr. Spoor shall also be entitled to 380,000 10-year stock options pursuant to the 2014 Plan. As of March 31, 2017, 100,000 options have been granted. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2017 | |
Leases [Abstract] | |
Leases | The Company leases its office and research facilities under operating leases which are subject to various rent provisions and escalation clauses expiring at various dates through 2020. The escalation clauses are indeterminable and considered not material and have been excluded from minimum future annual rental payments. Rental expense, which is calculated on a straight-line basis, amounted to $34,027 and $30,555, respectively, in the three months ended March 31, 2017 and 2016. Minimum future annual rental payments are as follows: 2017 (balance of the year) $ 79,838 2018 $ 71,468 2019 $ 71,468 2020 $ 71,468 2021 $ - |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes | |
Income Taxes | The Company is subject to taxation at the federal level in both the United States and France and at the state level in the United States. At March 31, 2017 and December 31, 2016, the Company had no tax provision for both jurisdictions. At March 31, 2017 and December 31, 2016, the Company had gross deferred tax assets of approximately $9,039,000 and $7,875,000, respectively. As the Company cannot determine that it is more likely than not that the Company will realize the benefit of the deferred tax asset, a valuation allowance of approximately $9,039,000 and $7,875,000, respectively, has been established at March 31, 2017 and December 31, 2016. At March 31, 2017, the Company has gross net operating loss carry-forwards for U.S. federal and state income tax purposes of approximately $10,635,000 and $10,744,000, respectively, which expire in the years 2034 through 2037. At March 31, 2017 and December 31, 2016, the Company has approximately $9,139,000 and $8,374,000, respectively, in net operating losses which it can carryforward indefinitely to offset against future French income. At March 31, 2017 and 2016, the Company had taken no uncertain tax positions that would require disclosure under ASC 740, Accounting for Income Taxes. |
Net Loss per Common Share
Net Loss per Common Share | 3 Months Ended |
Mar. 31, 2017 | |
Net Loss Per Common Share | |
Net Loss per Common Share | At March 31, 2017, diluted net loss per share did not include the effect of 2,058,340 shares of common stock issuable upon the exercise of outstanding warrants and 190,000 shares of common stock issuable upon the exercise of outstanding options, as their effect would be antidilutive during the periods prior to conversion. At March 31, 2016, diluted net loss per share did not include the effect of 707,179 shares of common stock issuable upon the exercise of outstanding warrants. 1,715,063 shares of common stock issuable upon the conversion of promissory notes and convertible debt. and 878,171 shares of common stock issuable upon the conversion of the Series A, as their effect would be antidilutive. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure Text Block [Abstract] | |
Related Party Transactions | During the year ended December 31, 2015, the Company employed the services of JIST Consulting (“JIST”), a company controlled by Johan M. Spoor, the Company’s current chief executive officer and president, as a consultant for business strategy, financial modeling, and fundraising. Included in accounts payable at both March 31, 2017 and December 31, 2016 is $508,300 for JIST relating to Mr. Spoor’s services. Mr. Spoor received no other compensation from the Company other than as specified in his employment agreement. During the year ended December 31, 2015, the Company's President, Christine Rigby-Hutton, was employed through Rigby-Hutton Management Services (“RHMS”). Ms. Rigby-Hutton resigned from the Company effective April 20, 2015. Included in accounts payable at both March 31, 2017 and December 31, 2016 is $38,453 for RHMS for Ms. Rigby-Hutton’s services. From October 1, 2015 through December 31, 2015, the Company used the services of Edward Borkowski, a member of the Board of Directors and the Company’s audit committee chair, as a financial consultant. Included in accounts payable at March 31, 2017 and December 31, 2016 is $90,000 for Mr. Borkowski’s services. In July 2016, the Company granted 45,000 shares of restricted stock to Board member Mr. Borkowski and 30,000 shares of restricted stock to each of Board members Messrs. Shenouda and Riddell. The shares of restricted stock will be issued as follows: (i) 50% upon the first commercial sale in the United States of MS1819, and (ii) 50% upon our total market capitalization exceeding $1 billion dollars for 20 consecutive trading days, in each case subject to the earlier determination of a majority of the Board. Starting on October 1, 2016, the Company has used the services of Maged Shenouda, a member of the Board of Directors, as a financial consultant. Expense recorded in G&A expense in the accompanying statements of operations related to Mr. Shenouda for the three months ended March 31, 2017 and 2016 was $30,000 and $0, respectively. Included in accounts payable at March 31, 2017 and December 31, 2016 is $100,000 and $70,000, respectively, for Mr. Shenouda’s services. On February 3, 2017, the Board granted 30,000 options each to Board members Borkowksi, Shenouda, and Riddell with a total value of $348,210 of which $135,415 was earned and charged to expense in the three months ended March 31, 2017. On February 3, 2017, the Board granted 100,000 immediately vesting options to Mr. Spoor with a value of $386,900 which was charged to expense in the three months ended March 31, 2017. During the three months ended March 31, 2017, the Company accrued $7,500 each for Board members Borkowksi, Shenouda, and Riddell and $2,500 for new Board member Mr. Charles Casamento. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | On April 11, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which the Company issued to LPC a 12% Senior Secured Original Issue Discount Convertible Debenture in the principal amount of $1.0 million with an original issue discount of $120,000 (the “Debenture”). The principal and original issue discount of $1.12 million due under the terms of the Debenture are due on the earlier to occur of (i) November 10, 2017 or (ii) on the fifth business day following the receipt by the Company or its wholly-owned subsidiary, AzurRx Europe SAS (“AES”), of certain tax credits that the Company is expected to receive prior to November 10, 2017 (the “Tax Credit”) (the “Maturity Date”). The Company has the option to extend the Maturity Date to July 11, 2018, conditioned on the receipt of the Tax Credit by the Company or AES prior to November 10, 2017 (“Extension Option”). The principal amount of the Debenture is convertible into shares of the Company’s common stock at LPC’s option, at a conversion price equal to $3.872 (“Conversion Price”). Provided certain conditions are satisfied, the Company may, at its option, force conversion of the Debentures for an amount equal to 100% of the principal amount of the Debenture. In connection with the issuance of the Debenture, the Company issued to LPC a warrant giving LPC the right to purchase 164,256 shares of the Company’s Common Stock at an exercise price of $4.2592 per share (“Warrant”). In the event the Company exercises its Extension Option, the Company is obligated to issue an additional Warrant to LPC to purchase 164,256 shares of the Company’s Common Stock; provided that the exercise price of such additional Warrant shall be equal to 110% of the average closing price of the Company’s Common Stock for the ten consecutive trading days prior to the date of issuance. The Warrants will terminate five years after the date of issuance. The proceeds received will be allocated based on the relative fair value of the Debenture and the Warrants, which will effectively increase the discount on the notes. The Debenture will be further evaluated for any beneficial conversion feature. The Warrants will be recorded as additional paid in capital. The obligations under the Debenture are guaranteed by AES, as well as a security agreement providing LPC with a secured interest in the Tax Credit. The Company also entered into a Registration Rights Agreement granting LPC certain registration rights with respect to the shares of Common Stock issuable upon conversion of the Debenture, and upon exercise of the Warrants. We have evaluated subsequent events, through the filing date and noted no additional subsequent events that are reasonably likely to impact the financial statements. |
The Company, Basis of Present26
The Company, Basis of Presentation, and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Significant Accounting Policies Policies | |
Use of Estimates | The accompanying unaudited interim consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America, and include certain estimates and assumptions which affect the reported amounts of assets and liabilities at the date of the financial statements (including goodwill, intangible assets and contingent consideration), and the reported amounts of revenues and expenses during the reporting period, including contingencies. Accordingly, actual results may differ from those estimates. |
Concentrations | Financial instruments that potentially expose the Company to concentrations of credit risk consist of cash. The Company primarily maintains its cash balances with financial institutions in federally-insured accounts in the U.S. The Company may from time to time have cash in banks in excess of FDIC insurance limits. At March 31, 3017 and December 31, 2016, the Company had approximately $87,000 and $1,279,000, respectively, in one account in the U.S. in excess of these limits. The Company has not experienced any losses to date resulting from this practice. The Company also has exposure to currency risk as its subsidiary in France has a functional currency in Euros. |
Foreign Currency Translation | For foreign subsidiaries with operations denominated in a foreign currency, assets and liabilities are translated to U.S. dollars, which is the functional currency, at year-end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the year. Gains and losses from translation adjustments are accumulated in a separate component of shareholders’ equity (deficit). |
Recent Accounting Pronouncements | In January 2017, the Financial Accounting Standards Board (“FASB”) issued guidance to simplify the subsequent measurement of goodwill impairment. The new guidance eliminates the two-step process that required identification of potential impairment and a separate measure of the actual impairment. Goodwill impairment charges, if any, would be determined by reducing the goodwill balance by the difference between the carrying value and the reporting unit’s fair value (impairment loss is limited to the carrying value). This standard is effective for annual or any interim goodwill impairment tests beginning after December 15, 2019. The Company does not believe that the adoption of this pronouncement will have a material impact on its consolidated financial statements. In March 2016, the FASB issued an Accounting Standards Update (“ASU”) which simplifies several aspects of the accounting for share based payments, including the income tax consequences and classification on the statement of cash flows. Under the new standard, all excess tax benefits and deficiencies will be recognized as income tax expense or benefit in the income statement. Additionally, excess tax benefits will be classified as an operating activity on the statement of cash flows. This ASU is effective for annual and interim periods beginning after December 15, 2016 and early adoption is permitted. The amendments requiring recognition of excess tax benefits and tax deficiencies in the income statement must be applied prospectively, and entities can elect to apply the amendments related to the presentation of excess tax benefits on the statement of cash flows using either a prospective or retrospective transition method. The adoption of this pronouncement does not have a material impact on the Company’s unaudited interim consolidated financial statements. The Company has recorded a valuation allowance to offset the benefit of its gross net operating loss carryforwards and therefore has no tax provision. In February 2016, the FASB issued an ASU which requires lessees to recognize lease assets and lease liabilities arising from operating leases on the balance sheet. This ASU is effective for annual and interim reporting periods beginning after December 15, 2018 using a modified retrospective approach, with early adoption permitted. The Company is currently evaluating the standard to determine the impact of its adoption on its unaudited interim consolidated financial statements. The Company would have to capitalize its operating leases on its balance sheet. In November 2015, the FASB issued an ASU that requires all deferred tax liabilities and assets to be classified as noncurrent on the balance sheet. This ASU is effective for annual and interim reporting periods beginning after December 15, 2016, with early adoption permitted. In addition, this guidance can be applied either prospectively or retrospectively to all periods presented. This currently has no impact on the Company’s unaudited interim consolidated financial statements as the Company’s deferred tax assets have a full valuation allowance. In May 2014, the FASB issued an ASU which supersedes the most current revenue recognition requirements. The new revenue recognition standard requires entities to recognize revenue in a way that depicts the transfer of goods or services to customers in an amount that reflects the consideration which the entity expects to be entitled to in exchange for those goods or services. This guidance is effective for annual and interim reporting periods beginning after December 15, 2017, with early adoption permitted for annual periods after December 31, 2016. The Company is still in its startup phase and is not generating revenues at this time; therefore, this standard will have no impact on its consolidated financial statements until such time as revenues are generated. When revenues are generated, the Company will evaluate the standard to determine the impact of its adoption on its unaudited interim consolidated financial statements. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Significant Accounting Policies Tables | |
Financial instruments measured at fair value on a recurring basis | Fair Value Measurements at Reporting Date Using Total Level 1 Level 2 Level 3 At March 31, 2017: Contingent Consideration $ 1,300,000 $ - $ - $ 1,300,000 At December 31, 2016: Contingent Consideration $ 1,200,000 $ - $ - $ 1,200,000 |
Fair value of liabilities using Level 3 significant unobservable inputs | Contingent Consideration Balance at December 31, 2016 $ 1,200,000 Change in fair value 100,000 Balance at March 31, 2017 $ 1,300,000 |
Fair value of other receivables, convertible debt, and loans payable | Carrying Fair Value Measured at Reporting Date Using Fair Amount Level 1 Level 2 Level 3 Value At March 31, 2017: Other Receivables $ 1,010,963 $ - $ - $ 1,010,963 $ 1,010,963 Notes Payable $ 77,855 $ - $ - $ 77,855 $ 77,855 At December 31, 2016: Other Receivables $ 961,038 $ - $ - $ 961,038 $ 961,038 Notes Payable $ 155,187 $ - $ - $ 155,187 $ 155,187 |
Other Receivables (Tables)
Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Other Receivables Tables | |
Other receivables | March 31, December 31, 2017 2016 Research & development tax credits $ 771,065 $ 758,305 Other 239,898 202,733 $ 1,010,963 $ 961,038 |
Property, Equipment, and Leas29
Property, Equipment, and Leasehold Improvements (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property Equipment And Leasehold Improvements Tables | |
Property, equipment and leasehold improvements | March 31, December 31, 2017 2016 Laboratory Equipment $ 165,611 $ 165,611 Computer Equipment 20,474 19,718 Office Equipment 28,830 29,006 Leasehold Improvements 29,163 29,163 244,078 243,498 Less accumulated depreciation (102,720 ) (91,876 ) $ 141,358 $ 151,622 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Intangible Assets And Goodwill Tables | |
Intangible assets | March 31, December 31, 2017 2016 In Process research & development $ 388,997 $ 382,560 Less accumulated amortization (90,496 ) (81,029 ) $ 298,501 $ 301,531 License agreements $ 3,173,507 $ 3,120,991 Less accumulated amortization (1,771,875 ) (1,586,504 ) $ 1,401,632 $ 1,534,487 |
Future amortization expense | 2017 $ 500,338 2018 667,118 2019 323,321 2020 32,416 2021 32,416 |
Goodwill | Balance at December 31, 2016 $ 1,767,650 Foreign currency translation 29,642 Balance at March 31, 2017 $ 1,797,292 |
Accounts Payable (Tables)
Accounts Payable (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accounts Payable Tables | |
Accounts payable and accrued expenses | March 31, December 31, 2017 2016 Trade payables $ 1,341,930 $ 1,072,358 Accrued expenses 98,750 73,750 Accrued payroll 256,067 325,172 $ 1,696,747 $ 1,471,280 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Warrants Tables | |
Stock warrant transactions | Exercise Price Per Weighted Average Warrants Share Exercise Price Warrants outstanding and exercisable at January 1, 2016 662,474 $ 7.37 $ 7.37 Granted during the period 44,705 $ 5.58 $ 5.58 Expired during the period - - - Exercised during the period - - - Warrants outstanding and exercisable at March 31, 2016 707,179 $ 5.58 - 7.37 $ 5.84 Warrants outstanding and exercisable at January 1, 2017 1,858,340 $ 4.76 - $7.37 $ 5.66 Granted during the period 200,000 $ 5.50 - $6.50 $ 6.25 Expired during the period - - - Exercised during the period - - - Warrants outstanding and exercisable at March 31, 2017 2,058,340 $ 4.76 - $7.37 $ 5.72 |
Warrants by exercise price | Weighted Average Number of Shares Remaining Contract Weighted Average Exercise Price Under Warrants Life in Years Exercise Price $ 4.76 32,376 3.40 $ 5.50 767,540 4.56 $ 5.58 959,101 4.12 $ 6.50 150,000 4.47 $ 6.60 48,000 4.54 $ 7.37 101,323 3.69 Total warrants 2,058,340 4.29 $5.72 |
Assumptions | March 31, March 31, 2017 2016 Expected life (in years) 5 5 Volatility 90 % 118 % Risk-free interest rate 1.90% - 1.92 % 1.28 % Dividend yield - % - % |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Stock-based Compensation Plan Tables | |
Assumptions | Expected life (in years) 10 Volatility 90 % Risk-free interest rate 2.48 % Dividend yield — % |
Stock option activity | Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contract Life in Years Aggregate Intrinsic Value Stock options outstanding at January 1, 2017 - - Granted during the period 190,000 $ 4.48 9.85 $ - Expired during the period - - Exercised during the period - - Stock options outstanding at March 31, 2017 190,000 $ 4.48 9.85 $ - Exercisable at March 31, 2017 135,000 $ 4.48 9.85 $ - |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Leases [Abstract] | |
Minimum future annual rental payments | 2017 (balance of the year) $ 79,838 2018 $ 71,468 2019 $ 71,468 2020 $ 71,468 2021 $ - |
The Company, Basis of Present35
The Company, Basis of Presentation, and Recent Accounting Pronouncements (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Dec. 31, 2016 | |
Company And Basis Of Presentation Details Narrative | ||
State of incorporation | Delaware | |
Date of incorporation | Jan. 30, 2014 | |
Working capital deficiency | $ 903,000 | |
Accumulated deficit | (25,696,412) | $ (22,887,046) |
Cash in excess of FDIC limit | $ 87,000 | $ 1,279,000 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Contingent Consideration | $ 1,300,000 | $ 1,200,000 |
Level 1 | ||
Contingent Consideration | 0 | 0 |
Level 2 | ||
Contingent Consideration | 0 | 0 |
Level 3 | ||
Contingent Consideration | $ 1,300,000 | $ 1,200,000 |
Fair Value Disclosures (Detai37
Fair Value Disclosures (Details 1) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Significant Accounting Policies Details 3 | |
Contingent consideration, beginning | $ 1,200,000 |
Change in fair value | 100,000 |
Contingent consideration, ending | $ 1,300,000 |
Fair Value Disclosures (Detai38
Fair Value Disclosures (Details 2) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Other receivables | $ 1,010,963 | $ 961,038 |
Notes Payable | 77,855 | 155,187 |
Fair Value | ||
Other receivables | 1,010,963 | 961,038 |
Notes Payable | 77,855 | 155,187 |
Level 1 | ||
Other receivables | 0 | 0 |
Notes Payable | 0 | 0 |
Level 2 | ||
Other receivables | 0 | 0 |
Notes Payable | 0 | 0 |
Level 3 | ||
Other receivables | 1,010,963 | 961,038 |
Notes Payable | $ 77,855 | $ 155,187 |
Other Receivables (Details)
Other Receivables (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Other Receivables Details | ||
Research & development tax credits | $ 771,065 | $ 758,305 |
Other | 239,898 | 202,733 |
Other receivables | $ 1,010,963 | $ 961,038 |
Property, Equipment, and Leas40
Property, Equipment, and Leasehold Improvements (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Property, equipment and leasehold improvements, gross | $ 244,078 | $ 243,498 |
Less accumulated depreciation | (102,720) | (91,876) |
Property, equipment and leasehold improvements, net | 141,358 | 151,622 |
Laboratory Equipment | ||
Property, equipment and leasehold improvements, gross | 165,611 | 165,611 |
Computer Equipment | ||
Property, equipment and leasehold improvements, gross | 20,474 | 19,718 |
Office Equipment | ||
Property, equipment and leasehold improvements, gross | 28,830 | 29,006 |
Leasehold Improvements | ||
Property, equipment and leasehold improvements, gross | $ 29,163 | $ 29,163 |
Property, Equipment, and Leas41
Property, Equipment, and Leasehold Improvements (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Property Equipment And Leasehold Improvements Details Narrative | ||
Depreciation expense | $ 10,597 | $ 10,845 |
Intangible Assets and Goodwil42
Intangible Assets and Goodwill (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
In Process Research and Development | ||
Intangible assets, gross | $ 388,997 | $ 382,560 |
Less accumulated amortization | (90,496) | (81,029) |
Intangible assets, net | 298,501 | 301,531 |
License Agreements | ||
Intangible assets, gross | 3,173,507 | 3,120,991 |
Less accumulated amortization | (1,771,875) | (1,586,504) |
Intangible assets, net | $ 1,401,632 | $ 1,534,487 |
Intangible Assets and Goodwil43
Intangible Assets and Goodwill (Details 1) | Mar. 31, 2017USD ($) |
Amortization expense | |
2,017 | $ 500,338 |
2,018 | 667,118 |
2,019 | 323,321 |
2,020 | 32,416 |
2,121 | $ 32,416 |
Intangible Assets and Goodwil44
Intangible Assets and Goodwill (Details 2) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Intangible Assets And Goodwill Details 1 | |
Goodwill, beginning | $ 1,767,550 |
Foreign currency translation | 29,642 |
Goodwill, ending | $ 1,797,292 |
Intangible Assets and Goodwil45
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Intangible Assets And Goodwill Details Narrative | ||
Amortization expense | $ 166,188 | $ 171,997 |
Accounts Payable (Details)
Accounts Payable (Details) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Accounts Payable Details | ||
Trade payables | $ 1,341,930 | $ 1,072,358 |
Accrued expenses | 98,750 | 73,750 |
Accrued payroll | 256,067 | 325,172 |
Accounts payable, net | $ 1,696,747 | $ 1,471,280 |
Convertible Promissory Notes (D
Convertible Promissory Notes (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Convertible Promissory Notes Details Narrative | ||
Notes payable | $ 77,855 | $ 155,187 |
Equity (Details Narrative)
Equity (Details Narrative) - shares | Mar. 31, 2017 | Dec. 31, 2016 |
Equity Details Narrative | ||
Common stock shares, outstanding | 9,631,088 | 9,631,088 |
Warrants (Details)
Warrants (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Warrants Details | ||
Warrants issued and exercisable, beginning | 1,858,340 | 662,474 |
Granted | 200,000 | 44,705 |
Expired | 0 | 0 |
Exercised | 0 | 0 |
Warrants issued and exercisable, ending | 2,058,340 | 707,179 |
Weighted average exercise price, beginning | $ 5.66 | $ 7.37 |
Weighted average exercise price, Granted | 6.25 | 5.58 |
Weighted average exercise price warrants, Expired | 0 | 0 |
Weighted average exercise price warrants, Exercised | 0 | 0 |
Weighted average exercise price, ending | $ 5.72 | $ 5.84 |
Warrants (Details 1)
Warrants (Details 1) | 3 Months Ended |
Mar. 31, 2017$ / sharesshares | |
Number of shares under warrants | shares | 2,058,340 |
Weighted average remaining contract life in years | 4 years 3 months 14 days |
Weighted average exercise price | $ / shares | $ 5.72 |
Warrant 1 | |
Exercise price | $ / shares | $ 4.76 |
Number of shares under warrants | shares | 32,376 |
Weighted average remaining contract life in years | 3 years 4 months 24 days |
Warrant 2 | |
Exercise price | $ / shares | $ 5.50 |
Number of shares under warrants | shares | 767,540 |
Weighted average remaining contract life in years | 4 years 6 months 22 days |
Warrant 3 | |
Exercise price | $ / shares | $ 5.58 |
Number of shares under warrants | shares | 959,101 |
Weighted average remaining contract life in years | 4 years 1 month 13 days |
Warrant 4 | |
Exercise price | $ / shares | $ 6.50 |
Number of shares under warrants | shares | 150,000 |
Weighted average remaining contract life in years | 4 years 5 months 19 days |
Warrant 5 | |
Exercise price | $ / shares | $ 6.60 |
Number of shares under warrants | shares | 48,000 |
Weighted average remaining contract life in years | 4 years 6 months 14 days |
Warrant 6 | |
Exercise price | $ / shares | $ 7.37 |
Number of shares under warrants | shares | 101,323 |
Weighted average remaining contract life in years | 3 years 8 months 8 days |
Warrants (Details 2)
Warrants (Details 2) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Expected life (in years) | 5 years | 5 years |
Volatility | 90.00% | 118.00% |
Risk-free interest rate | 1.28% | |
Dividend yield | 0.00% | 0.00% |
Minimum | ||
Risk-free interest rate | 1.90% | |
Maximum | ||
Risk-free interest rate | 1.92% |
Stock-Based Compensation Plan52
Stock-Based Compensation Plan (Details) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Expected life (in years) | 5 years | 5 years |
Volatility | 90.00% | 118.00% |
Risk-free interest rate | 1.28% | |
Dividend yield | 0.00% | 0.00% |
Stock Option | ||
Expected life (in years) | 10 years | |
Volatility | 90.00% | |
Risk-free interest rate | 2.48% | |
Dividend yield | 0.00% |
Stock-Based Compensation Plan53
Stock-Based Compensation Plan (Details 1) | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Notes to Financial Statements | |
Number of Options Outstanding, Beginning | shares | 0 |
Number of Options Granted | shares | 190,000 |
Number of Options Expired | shares | 0 |
Number of Options Exercised | shares | 0 |
Number of Options Outstanding, Ending | shares | 190,000 |
Number of Options Exercisable | shares | 135,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ 0 |
Weighted Average Exercise Price Granted | 4.48 |
Weighted Average Exercise Price Expired | 0 |
Weighted Average Exercise Price Exercised | 0 |
Weighted Average Exercise Price Outstanding, Ending | 4.48 |
Weighted Average Exercise Price Exercisable | $ 4.48 |
Weighted Average Remaining Contract Life in Years, Beginning | 9 years 10 months 6 days |
Weighted Average Remaining Contract Life in Years, Ending | 9 years 10 months 6 days |
Weighted Average Remaining Contract Life in Years Exercisable | 9 years 10 months 6 days |
Aggregate Intrinsic Value Outstanding, Beginning | $ | $ 0 |
Aggregate Intrinsic Value Granted | $ 0 |
Aggregate Intrinsic Value Outstanding, Ending | $ | $ 0 |
Aggregate Intrinsic Value Exercisable | $ | $ 0 |
Interest Expense (Details Narra
Interest Expense (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Interest expense | $ 874 | $ 713,680 |
Convertible Notes [Member] | ||
Interest expense | $ 0 | $ 710,988 |
Leases (Details)
Leases (Details) | Mar. 31, 2017USD ($) |
Leases [Abstract] | |
2017 (balance of the year) | $ 79,838 |
2,018 | 71,468 |
2,019 | 71,468 |
2,020 | 71,468 |
2,021 | $ 0 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Mar. 31, 2017 | Dec. 31, 2016 |
Gross deferred tax asset | $ 9,039,000 | $ 7,875,000 |
Deferred tax asset valuation allowance | (9,039,000) | (7,875,000) |
Net operating loss carry-forwards | 9,139,000 | $ 8,374,000 |
State | ||
Net operating loss carry-forwards | 10,635,000 | |
Federal | ||
Net operating loss carry-forwards | $ 10,744,000 |
Net Loss per Common Share (Deta
Net Loss per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Warrants | ||
Anti-dilutive shares excluded from earnings per share | 2,058,340 | 707,179 |
Stock Option | ||
Anti-dilutive shares excluded from earnings per share | 190,000 | |
Convertible Debt | ||
Anti-dilutive shares excluded from earnings per share | 1,715,063 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
General & administrative expenses | $ 2,174,355 | $ 661,641 | |
Accounts payable | 1,696,747 | $ 1,471,280 | |
RHMS | |||
Accounts payable | 38,453 | 38,453 | |
JIST | |||
Accounts payable | 0 | 508,300 | |
Consultant [Member] | |||
General & administrative expenses | 100,000 | $ 70,000 | |
Accounts payable | $ 90,000 | $ 90,000 |