Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 14, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | AzurRx BioPharma, Inc. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Amendment Flag | false | |
Entity Central Index Key | 1,604,191 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 16,762,395 | |
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 | 2,018 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 574,474 | $ 573,471 |
Other receivables | 1,015,345 | 1,104,134 |
Prepaid expenses | 216,126 | 274,963 |
Total Current Assets | 1,805,945 | 1,952,568 |
Property, equipment, and leasehold improvements, net | 148,777 | 133,987 |
Other Assets: | ||
In process research & development, net | 306,659 | 307,591 |
License agreements, net | 883,878 | 1,038,364 |
Goodwill | 2,071,356 | 2,016,240 |
Deposits | 31,331 | 30,918 |
Total Other Assets | 3,293,224 | 3,393,113 |
Total Assets | 5,247,946 | 5,479,668 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 1,797,221 | 1,187,234 |
Accounts payable and accrued expenses - related party | 699,411 | 868,105 |
Notes payable | 80,139 | 159,180 |
Convertible debt | 235,487 | 257,365 |
Interest payable | 7,192 | 7,192 |
Total Current Liabilities | 2,819,450 | 2,479,076 |
Contingent consideration | 1,330,000 | 1,340,000 |
Total Liabilities | 4,149,450 | 3,819,076 |
Stockholders' Equity: | ||
Convertible preferred stock - Par value $0.0001 per share; 10,000,000 shares authorized and 0 shares issued and outstanding at March 31, 2018 and December 31, 2017; liquidation preference approximates par value | 0 | 0 |
Common stock - Par value $0.0001 per share; 100,000,000 shares authorized; 12,602,395 and 12,042,574 shares issued and outstanding, respectively, at March 31, 2018 and December 31, 2017 | 1,260 | 1,205 |
Additional paid in capital | 39,563,357 | 37,669,601 |
Subscriptions receivable | 0 | (1,071,070) |
Accumulated deficit | (37,616,426) | (33,983,429) |
Accumulated other comprehensive loss | (849,695) | (955,715) |
Total Stockholders' Equity | 1,098,496 | 1,660,592 |
Total Liabilities and Stockholders' Equity | $ 5,247,946 | $ 5,479,668 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
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, issued | 0 | 0 |
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, issued | 12,602,395 | 12,042,574 |
Common stock shares, outstanding | 12,602,395 | 12,042,574 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Research and development expenses | $ 1,678,029 | $ 534,137 |
General & administrative expenses | 1,916,333 | 2,174,355 |
Fair value adjustment, contingent consideration | (10,000) | 100,000 |
Loss from operations | (3,584,362) | (2,808,492) |
Other: | ||
Interest expense | (48,635) | (874) |
Total other | (48,635) | (874) |
Loss before income taxes | (3,632,997) | (2,809,366) |
Income taxes | 0 | 0 |
Net loss | (3,632,997) | (2,809,366) |
Other comprehensive loss: | ||
Foreign currency translation adjustment | 106,020 | 61,686 |
Total comprehensive loss | $ (3,526,977) | $ (2,747,680) |
Basic and diluted weighted average shares outstanding | 12,447,438 | 9,631,088 |
Loss per share - basic and diluted | $ (0.29) | $ (0.29) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity (Deficit) - USD ($) | Convertible Preferred Stock | Common Stock | Additional Paid-In Capital | Subscriptions Receivable | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total |
Beginning Balance, Shares at Dec. 31, 2016 | 0 | 9,631,088 | |||||
Beginning Balance, Amount at Dec. 31, 2016 | $ 0 | $ 963 | $ 27,560,960 | $ 0 | $ (22,887,046) | $ (1,461,875) | $ 3,213,002 |
Stock-based compensation | 522,315 | 522,315 | |||||
Restricted stock granted to consultants, Amount | 81,060 | 81,060 | |||||
Warrants issued to investment bankers/consultants | 402,318 | 402,318 | |||||
Warrant modification | 0 | ||||||
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 | 0 | (25,696,412) | (1,400,189) | 1,471,015 |
Beginning Balance, Shares at Dec. 31, 2017 | 0 | 12,042,574 | |||||
Beginning Balance, Amount at Dec. 31, 2017 | $ 0 | $ 1,205 | 37,669,601 | (1,071,070) | (33,983,429) | (955,715) | 1,660,592 |
Common stock issued to consultants | 751 | ||||||
Common stock issued for warrant exercises, Shares | 503,070 | ||||||
Common stock issued for warrant exercises, Amount | $ 49 | 1,253,623 | 1,071,070 | 2,324,742 | |||
Stock-based compensation | 29,018 | 29,018 | |||||
Restricted stock granted to consultants, Shares | 30,000 | ||||||
Restricted stock granted to consultants, Amount | $ 3 | 113,697 | 113,700 | ||||
Convertible debt converted into common stock, Shares | 26,000 | ||||||
Convertible debt converted into common stock, Amount | $ 3 | 68,670 | 68,673 | ||||
Warrant modification | 428,748 | (428,748) | |||||
Foreign currency translation adjustment | 106,020 | 106,020 | |||||
Net loss | (3,632,997) | (3,632,997) | |||||
Ending Balance, Shares at Mar. 31, 2018 | 0 | 12,602,395 | |||||
Ending Balance, Amount at Mar. 31, 2018 | $ 0 | $ 1,260 | $ 39,563,357 | $ 0 | $ (37,616,426) | $ (849,695) | $ 1,098,496 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (3,632,997) | $ (2,809,366) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 14,763 | 10,597 |
Amortization | 191,681 | 166,188 |
Fair value adjustment, contingent consideration | (10,000) | 100,000 |
Stock-based compensation | 29,018 | 522,315 |
Restricted stock granted to employees/directors | 113,700 | 0 |
Restricted stock granted to consultants | 0 | 81,060 |
Warrants issued to consultants | 0 | 402,318 |
Accreted interest on convertible debt | 46,795 | 0 |
Warrant modification | 428,748 | 0 |
Changes in assets and liabilities, net of effects of acquisition: | ||
Other receivables | 120,877 | (32,260) |
Prepaid expenses | 59,625 | 22,380 |
Accounts payable and accrued expenses | 423,523 | 371,338 |
Net cash used in operating activities | (2,214,267) | (1,165,430) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (29,521) | (585) |
Net cash used in investing activities | (29,521) | (585) |
Cash flows from financing activities: | ||
Issuances of common stock | 2,324,742 | 0 |
Repayments of notes payable | (79,041) | (77,332) |
Net cash provided by financing activities | 2,245,701 | (77,332) |
Increase (decrease) in cash | 1,913 | (1,243,347) |
Effect of exchange rate changes on cash | (910) | 1,753 |
Cash, beginning balance | 573,471 | 1,773,525 |
Cash, ending balance | 574,474 | 531,931 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 1,840 | 874 |
Cash paid for income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Conversion of convertible debt into common shares | $ 68,673 | $ 0 |
The Company, Basis of Presentat
The Company, Basis of Presentation, and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block [Abstract] | |
The Company, Basis of Presentation, and Recent Accounting Pronouncements | The Company AzurRx BioPharma, Inc. (“ AzurRx Parent ProteaBio Europe SAS AES Company AzurRx, through its AES 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, i.e. the intestinal lumen, skin or mucosa, without reaching an individual’s systemic circulation. Our current product pipeline consists of two therapeutic programs under development, each of which are described below: MS1819-SD MS1819-SD is a yeast derived recombinant lipase for exocrine pancreatic insufficiency (“ EPI CP CF Yarrowia lipolytica B-Lactamase Program The Company’s b-lactamase program focuses on products with an n enzymatic combination of bacterial origin for the prevention of hospital-acquired infections and antibiotic-associated diarrhea (“ AAD IND FDA Recent Developments Public Offering of Common Stock On May 3, 2018, the Company completed an underwritten, public offering of 4,160,000 shares of its common stock, par value $0.0001 per share, at a public offering price per share of $2.50, resulting in gross proceeds of $10.4 million (the “ May 2018 Public Offering Oppenheimer The May 2018 Public Offering was conducted pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-221275), filed with the SEC on November 1, 2017, and declared effective on November 17, 2017, including the base prospectus dated November 1, 2017 included therein and the related prospectus supplement, and a registration statement on Form S-3 filed pursuant to Rule 462(b) of the Securities Act of 1933, as amended (the “ Securities Act In addition to the underwriting discount received by Oppenheimer, the Company also issued unregistered warrants to Oppenheimer to purchase up to 208,000 shares of its common stock (the “ Underwriter Warrants Basis of Presentation and Principles of Consolidation 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 The unaudited interim consolidated financial statements include the accounts of AzurRx and its wholly-owned subsidiary, AzurRx Europe SAS. Intercompany transactions and balances have been eliminated upon consolidation. The accompanying 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 negative working capital at March 31, 2018 of approximately $1,014,000, and had an accumulated deficit of approximately $37,616,000 at March 31, 2018. The Company currently believes that its cash on hand will sustain its operations until July 2019. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies And Recent Accounting Pronouncements | |
Significant Accounting Policies and Recent Accounting Pronouncements | Use of Estimates The accompanying consolidated financial statements are prepared in conformity with U.S. GAAP 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, 2018 and December 31, 2017, the Company had approximately $197,757 and $78,859, 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 foreign currency risk as its subsidiary in France has a functional currency in Euros. Equity-Based Payments to Non-Employees The Company accounts for equity instruments, including restricted stock, stock options and warrants, issued to non-employees in accordance with authoritative guidance for equity-based payments to non-employees. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of theequity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of (i) the date of grant if nonforfeitable and fully vested, or (ii) the date the non-employee's performance is completed and there is no further associated performance commitment. The fair value of unvested equity instruments granted to non-employees is re-measured at each reporting date, and the resulting change in value, if any, is recognized as expense during the period the related services are rendered. The expense is recognized in the same manner as if we had paid cash for the services provided by the non-employees. Research and Development Research and development (“ R&D 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 period end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the periods presented. Gains and losses from translation adjustments are accumulated in a separate component of shareholders’ equity. Recent Accounting Pronouncements In July 2017, the Financial Accounting Standards Board (“ FASB ASU In January 2017, the 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 believes that the adoption of this pronouncement will not have an impact on the Company’s measurement of goodwill impairment. 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 believes that the adoption of this pronouncement will not have a material impact on the Company's financial statements. We believe that the most significant changes relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for office space and research facilities. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, to mainly change the accounting for investments in equity securities and financial liabilities carried at fair value as well as to modify the presentation and disclosure requirements for financial instruments. The ASU is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. Adoption of the ASU is retrospective with a cumulative adjustment to retained earnings or accumulated deficit as of the adoption date. The Company believes that the adoption of this pronouncement will not have an impact on the Company’s financial statements. 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. 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 follow the provisions of the new standard. |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 and December 31, 2017, the Company had Level 3 instruments consisting of contingent consideration in connection with the Protea Europe SAS acquisition, see Note 7. 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, 2018: Contingent consideration $ 1,330,000 $ - $ - $ 1,330,000 At December 31, 2017: Contingent consideration $ 1,340,000 $ - $ - $ 1,340,000 The following table provides a reconciliation of the fair value of liabilities using Level 3 significant unobservable inputs: Contingent Consideration Balance at December 31, 2017 $ 1,340,000 Change in fair value (10,000 ) Balance at March 31, 2018 $ 1,330,000 The contingent consideration was valued by incorporating a series of Black-Scholes Option Pricing Models (“ BSM The fair value of the Company's financial instruments are as follows: Fair Value Measured at Reporting Date Using Carrying Amount Level 1 Level 2 Level 3 Fair Value At March 31, 2018: Cash $ 574,474 $ - $ 574,474 $ - $ 574,474 Other receivables $ 1,015,345 $ - $ - $ 1,015,345 $ 1,015,345 Notes payable $ 80,139 $ - $ - $ 80,139 $ 80,139 Convertible debt $ 235,487 $ - $ - $ 286,529 $ 286,529 At December 31, 2017: Cash $ 573,471 $ - $ 573,471 $ - $ 573,471 Other receivables $ 1,104,134 $ - $ - $ 1,104,134 $ 1,104,134 Notes payable $ 159,180 $ - $ - $ 159,180 $ 159,180 Convertible debt $ 257,365 $ - $ - $ 387,201 $ 387,201 The fair value of other receivables approximates carrying value as these consist primarily of French R&D tax credits that are normally received within nine months from year end and amounts due from our collaboration partner Laboratoires Mayoly Spindler SAS (“ Mayoly The fair value of note payable approximates carrying value due to the terms of such instruments and applicable interest rates. The fair value of convertible debt is based on the par value plus accrued interest through the date of reporting due to the terms of such instruments and interest rates, or the current interest rates of similar instruments. |
Other Receivables
Other Receivables | 3 Months Ended |
Mar. 31, 2018 | |
Other Receivables | |
Other Receivables | Other receivables consisted of the following: March 31, December 31, 2018 2017 R&D tax credits $ 986,649 $ 954,897 Other 28,696 149,237 Total other receivables $ 1,015,345 $ 1,104,134 The R&D tax credits are refundable tax credits for research conducted in France. Other consists primarily of 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, 2018 | |
Property Equipment And Leasehold Improvements | |
Property, Equipment, and Leasehold Improvements | Property, equipment and leasehold improvements consisted of the following: March 31, December 31, 2018 2017 Laboratory equipment $ 188,558 $ 165,611 Computer equipment 50,972 44,364 Office equipment 36,334 36,334 Leasehold improvements 29,163 29,163 Total property, plant and equipment 305,027 275,472 Less accumulated depreciation (156,250 ) (141,485 ) Property, plant and equipment, net $ 148,777 $ 133,987 Depreciation expense for the three months ended March 31, 2018 and 2017 was $14,763 and $10,597, respectively. Depreciation expense is included in general and administrative (“ G&A |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets And Goodwill | |
Intangible Assets and Goodwill | Intangible assets are as follows: March 31, December 31, 2018 2017 In process research and development $ 448,314 $ 436,385 Less accumulated amortization (141,655 ) (128,794 ) In process research and development, net $ 306,659 $ 307,591 License agreements $ 3,657,425 $ 3,560,107 Less accumulated amortization (2,773,547 ) (2,521,743 ) License agreements, net $ 883,878 $ 1,038,364 Amortization expense for the three months ended March 31, 2018 and 2017 was $191,681 and $166,188, respectively. As of March 31, 2018, amortization expense is expected to be as follows for the next five years: 2018 (balance of year) $ 576,633 2019 372,623 2020 37,359 2021 37,359 2022 37,359 2023 37,359 Goodwill is as follows: Goodwill Balance at December 31, 2017 $ 2,016,240 Foreign currency translation 55,116 Balance at March 31, 2018 $ 2,071,356 |
Contingent Consideration
Contingent Consideration | 3 Months Ended |
Mar. 31, 2018 | |
Contingent Consideration | |
Contingent Consideration | On June 13, 2014, the Company executed a stock purchase agreement (the “ SPA Protea Group FDA NDA BLA |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2018 | |
Accounts Payable | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: March 31, December 31, 2018 2017 Trade payables $ 1,382,170 $ 705,041 Accrued expenses 290,810 262,200 Accrued payroll 124,241 219,993 Total accounts payable and accrued expenses $ 1,797,221 $ 1,187,234 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2018 | |
Convertible Promissory Notes | |
Notes Payable | On October 30, 2017, the Company entered into a nine-month financing agreement for its directors and officer’s liability insurance in the amount of $237,137 that bears interest at an annual rate of 5.537%. Monthly payments, including principal and interest, are $26,960 per month. The balance due under this financing agreement at March 31, 2018 and December 31, 2017 was $80,139 and $159,180, respectively. |
Original Issue Discounted Conve
Original Issue Discounted Convertible Notes and Warrants | 3 Months Ended |
Mar. 31, 2018 | |
Original Issue Discounted Convertible Notes | |
Original Issue Discounted Convertible Notes and Warrants | LPC OID Debenture On April 11, 2017, the Company entered into a Note Purchase Agreement with Lincoln Park Capital Fund, LLC (“ LPC “Debenture” “Tax Credit” LPC Series A Warrant On November 10, 2017, the Company and LPC modified the Debenture to extend the Maturity Date to November 29, 2017, subject to the Company’s right to extend the Maturity Date to July 11, 2018 (the “Extension Option” LPC Series B Warrant The principal and original issue discount 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 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. For the three months ended March 31, 2018 and 2017, the Company recorded $46,795 and $0, respectively, of interest expense related to the amortization of the debt discount related to the warrant features of the Debenture. Convertible Debt consisted of: March 31, December 31, 2018 2017 Convertible debt $ 261,008 $ 352,713 Accreted OID interest 25,521 34,488 Unamortized debt discount - warrants (51,042 ) (129,836 ) Total convertible debt $ 235,487 $ 257,365 |
Equity
Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Equity | Common Stock At March 31, 2018 and December 31, 2017, the Company had 12,602,395 and 12,042,574, respectively, of shares of its common stock issued and outstanding. 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 Series A Convertible Preferred Stock At March 31, 2018 and December 31, 2017, 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, 2018, 61,500 As of March 31, 2018, the Company had unrecognized restricted common stock expense of $612,197. $187,197 of this unrecognized expense will be recognized over the average remaining vesting term of the restricted common stock of 2.40 years. $425,000 of this unrecognized expense vests (i) 75% upon an FDA acceptance of an Investigational New Drug (“IND” During the three months ended March 31, 2017, 21,000 On July 24, 2017, the Company entered into a consulting agreement that includes a grant of 40,000 restricted shares of common stock to the consultant contingent upon the approval of the Board, which as of May 14, 2018 has not yet been granted. On January 2, 2018, the Company entered into a consulting agreement that includes a grant of 43,000 restricted shares of common stock to the consultant contingent upon the approval of the Board, which as of May 14-1, 2018 has not yet been granted. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2018 | |
Warrants Abstract | |
Warrants | In January 2018, the Company offered warrant holders the opportunity to exercise their warrants at a reduced strike price of $2.50, and if so elected, would also have the opportunity to reprice other warrants that they continue to hold unexercised to $3.25. The offer, which was effective January 12, 2018, was for the repricing only and did not modify the life of the warrants. Warrant holders of approximately 503,000 shares exercised their warrants and also had other warrants modified on approximately 197,000 shares, which resulted in a charge of approximately $429,000 in the three months ended March 31, 2018. Cash proceeds on the exercise of these warrants as well as the stock subscriptions as of December 31, 2017 of $1,071,070 amounted to approximately $2,300,000 in January 2018. Stock warrant transactions for the periods January 1 through March 31, 2018 and 2017 are as follows: Exercise Weighted Price Per Average Warrants Share Exercise Price 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 outstanding and exercisable at January 1, 2018 3,371,385 $ 3.17 - $7.37 $ 5.28 Granted during the period - - - Expired during the period - - - Exercised during the period (503,070 ) $ 2.50 $ 2.50 Warrants outstanding and exercisable at March 31, 2018 2,868,315 $ 3.17 - $7.37 $ 5.02 Number of Weighted Average Weighted Shares Under Remaining Contract Average Exercise Price Warrants Life in Years Exercise Price $ 3.00 - $3.99 636,972 4.06 $ 4.00 - $4.99 196,632 3.76 $ 5.00 - $5.99 1,815,041 3.72 $ 6.00 - $6.99 187,750 3.51 $ 7.00 - $7.37 31,920 2.71 Total 2,868,315 3.77 $ 5.02 During the three months ended March 31, 2018, no warrants were issued to non-employees. 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 weighted average fair value of warrants granted to non-employees during the three months ended March 31, 2017 was $2.47. The fair value was estimated on the grant dates using the Black-Scholes option-pricing model with the following weighted-average assumptions: March 31, 2017 Expected life (in years) 5 Volatility 90 % Risk-free interest rate 1.90% - 1.92 % 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, 2018 | |
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, 2018, no stock options were granted. During the three months ended March 31, 2018, 7,500 options vested having a fair value of $29,018. 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 having a fair value of $522,315. 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: March 31, 2017 Expected life (in years) 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. 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 2014 Plan for the periods January 1 through March 31, 2017 and 2018 is as follows: Weighted Weighted Average Aggregate Number Average Remaining Contract Intrinsic of Shares Exercise Price Life in Years 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 $ - Non-vested stock options outstanding at January 1, 2017 - - Granted during the period 55,000 $ 4.48 9.85 $ - Expired during the period - - Exercised during the period - - Non-vested stock options outstanding at March 31, 2017 55,000 $ 4.48 9.85 $ - Stock options outstanding at January 1, 2018 545,000 $ 4.05 7.13 $ - Granted during the period - - Expired during the period - - Exercised during the period - - Stock options outstanding at March 31, 2018 545,000 $ 4.05 6.89 $ - Exercisable at March 31, 2018 165,000 $ 4.48 8.85 $ - Non-vested stock options outstanding at January 1, 2018 387,500 $ 3.89 6.39 $ - Granted during the period - - Vested during the period 7,500 $ 4.48 6.39 $ - Expired during the period - - Exercised during the period - - Non-vested stock options outstanding at March 31, 2018 380,000 $ 3.87 6.03 $ - 639,471 shares were available for future issuance under the 2014 Plan as of March 31, 2018. As of March 31, 2018, the Company had unrecognized stock-based compensation expense of $976,375. $96,725 of this unrecognized expense will be recognized over the average remaining vesting term of the options of 0.85 years. $879,650 of this unrecognized expense vests (i) 75% upon FDA acceptance of a U.S. IND application for MS1819-SD, and (ii) 25% upon the Company completing a Phase IIa clinical trial for MS1819-SD. As of March 31, 2018, the probability of these milestones being reached could not be determined. |
Interest Expense
Interest Expense | 3 Months Ended |
Mar. 31, 2018 | |
Interest Expense [Abstract] | |
Interest Expense | During the three months ended March 31, 2018 and 2017, the Company incurred $48,635 and $874, respectively, of interest expense. During the three months ended March 31, 2018 and 2017, $46,795 and $0, respectively, of this amount was in connection with the convertible notes issued by the Company in the form of amortization of debt discount related to the warrants. During the three months ended March 31, 2018 and 2017, the Company also incurred $1,840 and $874, respectively, of miscellaneous interest expense. |
Agreements
Agreements | 3 Months Ended |
Mar. 31, 2018 | |
Agreements | |
Agreements | TransChem Sublicense Agreement On August 7, 2017, the Company entered into a Sublicense Agreement with TransChem, Inc. (“TransChem” “Licensed Patents” “Sublicense Agreement” Mayoly Agreement During the three months ended March 31, 2018 and 2017, the Company was reimbursed $125,986 and $253,419, 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-SD. 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 Agreements Johan (Thijs) Spoor On January 3, 2016, the Company entered into an employment agreement with its President and Chief Executive Officer, Johan (Thijs) Spoor. The employment agreement provides for a term expiring January 2, 2019. Mr. Spoor was originally entitled to 380,000 10-year stock options pursuant to the 2014 Plan. In the first quarter of 2017, 100,000 options having a value of $386,900 were granted and expensed. On September 29, 2017, Mr. Spoor was granted 100,000 shares of restricted common stock subject to vesting conditions as follows: (i) 75% upon FDA acceptance of a U.S. IND application for MS1819-SD, and (ii) 25% upon the Company completing a Phase IIa clinical trial for MS1819-SD, in satisfaction of the Company’s obligation to issue the additional 280,000 options to Mr. Spoor described above, with an estimated fair value at the grant date of $425,000 to be expensed when the probability of these milestones can be determined.. Also on September 29, 2017, the Board approved a 2016 annual incentive bonus equal to 40% of Mr. Spoor’s current base salary pursuant to his employment agreement in the amount of $170,000. Maged Shenouda On September 26, 2017, the Company entered into an employment agreement with Maged Shenouda, a member of the Company’s Board of Directors, pursuant to which Mr. Shenouda serves as the Company’s Chief Financial Officer. Mr. Shenouda’s employment agreement provides for the issuance of stock options to purchase 100,000 shares of the Company’s common stock, issuable pursuant to the 2014 Plan. These options will vest as follows so long as Mr. Shenouda is serving as either Executive Vice-President of Corporate Development or as Chief Financial Officer (i) 75% upon FDA acceptance of a U.S. IND application for MS1819-SD, and (ii) 25% upon the Company completing a Phase IIa clinical trial for MS1819-SD. The option is exercisable for $4.39 per share and will expire on September 25, 2027. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2018 | |
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 $31,227 and $34,027, respectively, in the three months ended March 31, 2018 and 2017. Minimum future annual rental payments are as follows: 2018 (balance of the year) $ 90,768 2019 $ 77,833 2020 $ 69,793 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018 and December 31, 2017, the Company had no tax provision for either jurisdictions. The Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act”), which was signed into law on December 22, 2017, has resulted in significant changes to the U.S. corporate income tax system. These changes include a federal statutory rate reduction from 35% to 21% and the elimination or reduction in the deductibility of certain credits and limitations, such as net operating losses, interest expense, and executive compensation. The federal statutory rate reduction took effect on January 1, 2018. On December 22, 2017, Staff Accounting Bulletin No. 118 (“SAB 118”) was issued to address the application of U.S. GAAP in situations when a registrant does not have the necessary information available, prepared, or analyzed (including computations) in reasonable detail to complete the accounting for certain income tax effects of the 2017 Tax Act. In accordance with SAB 118, the Company continues to evaluate the impact of the 2017 Tax Act, which may impact its current conclusions. At March 31, 2018 and December 31, 2017, the Company had gross deferred tax assets of approximately $10,843,000 and $9,918,000, 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 $10,843,000 and $9,918,000, respectively, has been established at March 31, 2018 and December 31, 2017. At March 31, 2018, the Company has gross net operating loss (“ NOL Section 382 At March 31, 2018 and December 31, 2017, the Company had approximately $14,487,000 and $12,374,000, respectively, in net operating losses which it can carryforward indefinitely to offset against future French income. At March 31, 2018 and December 31, 2017, 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, 2018 | |
Net Loss Per Common Share | |
Net Loss per Common Share | Basic net loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share reflect, in periods in which they have a dilutive effect, the impact of common shares issuable upon exercise of stock options and warrants and conversion of convertible debt that are not deemed to be anti-dilutive. The dilutive effect of the outstanding stock options and warrants is computed using the treasury stock method. At March 31, 2018, diluted net loss per share did not include the effect of 2,868,315 shares of common stock issuable upon the exercise of outstanding warrants, 545,000 shares of common stock issuable upon the exercise of outstanding options, and 74,000 shares of common stock issuable upon the conversion of convertible debt as their effect would be antidilutive during the periods prior to conversion. 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Disclosure Text Block [Abstract] | |
Related Party Transactions | During the year ended December 31, 2015, the Company employed the services of JIST Consulting (“ JIST During the year ended December 31, 2015, the Company's President, Christine Rigby-Hutton, was employed through Rigby-Hutton Management Services (“ RHMS From October 1, 2015 through December 31, 2015, the Company used the services of Edward Borkowski, a member of our Board of Directors and the Company’s Audit Committee Chair, as a financial consultant. Included in accounts payable at December 31, 2017 is $90,000 for Mr. Borkowski’s services. This amount was paid to Mr. Borkowski in the three months ended March 31, 2018. Starting on October 1, 2016 until his appointment as the Company’s Chief Financial Officer on September 25, 2017, the Company used the services of Maged Shenouda 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, 2018 and 2017 was $0 and $30,000, respectively. Included in accounts payable at March 31, 2018 and December 31, 2017 is $50,000 and $70,000, respectively, for Mr. Shenouda’s services. |
Significant Accounting Polici26
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Significant Accounting Policies Policies | |
Use of Estimates | The accompanying consolidated financial statements are prepared in conformity with U.S. GAAP 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, 2018 and December 31, 2017, the Company had approximately $197,757 and $78,859, 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 foreign currency risk as its subsidiary in France has a functional currency in Euros. |
Equity-Based Payments to Non-Employees | The Company accounts for equity instruments, including restricted stock, stock options and warrants, issued to non-employees in accordance with authoritative guidance for equity-based payments to non-employees. All transactions in which goods or services are received in exchange for equity instruments are accounted for based on the fair value of the consideration received or the fair value of theequity instrument issued, whichever is more reliably measurable. The measurement date of the fair value of the equity instrument issued is the earlier of (i) the date of grant if nonforfeitable and fully vested, or (ii) the date the non-employee's performance is completed and there is no further associated performance commitment. The fair value of unvested equity instruments granted to non-employees is re-measured at each reporting date, and the resulting change in value, if any, is recognized as expense during the period the related services are rendered. The expense is recognized in the same manner as if we had paid cash for the services provided by the non-employees. |
Research and development | Research and development (“ R&D |
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 period end exchange rates. Income and expense items are translated at average rates of exchange prevailing during the periods presented. Gains and losses from translation adjustments are accumulated in a separate component of shareholders’ equity. |
Recent Accounting Pronouncements | In July 2017, the Financial Accounting Standards Board (“ FASB ASU In January 2017, the 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 believes that the adoption of this pronouncement will not have an impact on the Company’s measurement of goodwill impairment. 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 believes that the adoption of this pronouncement will not have a material impact on the Company's financial statements. We believe that the most significant changes relate to the recognition of new right-of-use assets and lease liabilities on the balance sheet for office space and research facilities. In January 2016, the FASB issued ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, to mainly change the accounting for investments in equity securities and financial liabilities carried at fair value as well as to modify the presentation and disclosure requirements for financial instruments. The ASU is effective for interim and annual periods beginning after December 15, 2017, with early adoption permitted. Adoption of the ASU is retrospective with a cumulative adjustment to retained earnings or accumulated deficit as of the adoption date. The Company believes that the adoption of this pronouncement will not have an impact on the Company’s financial statements. 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. 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 follow the provisions of the new standard. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
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, 2018: Contingent consideration $ 1,330,000 $ - $ - $ 1,330,000 At December 31, 2017: Contingent consideration $ 1,340,000 $ - $ - $ 1,340,000 |
Fair value of liabilities using Level 3 significant unobservable inputs | Contingent Consideration Balance at December 31, 2017 $ 1,340,000 Change in fair value (10,000 ) Balance at March 31, 2018 $ 1,330,000 |
Fair value of other receivables, convertible debt, and loans payable | Fair Value Measured at Reporting Date Using Carrying Amount Level 1 Level 2 Level 3 Fair Value At March 31, 2018: Cash $ 574,474 $ - $ 574,474 $ - $ 574,474 Other receivables $ 1,015,345 $ - $ - $ 1,015,345 $ 1,015,345 Notes payable $ 80,139 $ - $ - $ 80,139 $ 80,139 Convertible debt $ 235,487 $ - $ - $ 286,529 $ 286,529 At December 31, 2017: Cash $ 573,471 $ - $ 573,471 $ - $ 573,471 Other receivables $ 1,104,134 $ - $ - $ 1,104,134 $ 1,104,134 Notes payable $ 159,180 $ - $ - $ 159,180 $ 159,180 Convertible debt $ 257,365 $ - $ - $ 387,201 $ 387,201 |
Other Receivables (Tables)
Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Other Receivables Tables | |
Other receivables | March 31, December 31, 2018 2017 R&D tax credits $ 986,649 $ 954,897 Other 28,696 149,237 Total other receivables $ 1,015,345 $ 1,104,134 |
Property, Equipment, and Leas29
Property, Equipment, and Leasehold Improvements (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Property Equipment And Leasehold Improvements Tables | |
Property, equipment and leasehold improvements | March 31, December 31, 2018 2017 Laboratory equipment $ 188,558 $ 165,611 Computer equipment 50,972 44,364 Office equipment 36,334 36,334 Leasehold improvements 29,163 29,163 Total property, plant and equipment 305,027 275,472 Less accumulated depreciation (156,250 ) (141,485 ) Property, plant and equipment, net $ 148,777 $ 133,987 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Intangible Assets And Goodwill Tables | |
Intangible assets | March 31, December 31, 2018 2017 In process research and development $ 448,314 $ 436,385 Less accumulated amortization (141,655 ) (128,794 ) In process research and development, net $ 306,659 $ 307,591 License agreements $ 3,657,425 $ 3,560,107 Less accumulated amortization (2,773,547 ) (2,521,743 ) License agreements, net $ 883,878 $ 1,038,364 |
Future amortization expense | 2018 (balance of year) $ 576,633 2019 372,623 2020 37,359 2021 37,359 2022 37,359 2023 37,359 |
Goodwill | Goodwill Balance at December 31, 2017 $ 2,016,240 Foreign currency translation 55,116 Balance at March 31, 2018 $ 2,071,356 |
Accounts Payable and Accrued 31
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounts Payable Tables | |
Accounts payable and accrued expenses | March 31, December 31, 2018 2017 Trade payables $ 1,382,170 $ 705,041 Accrued expenses 290,810 262,200 Accrued payroll 124,241 219,993 Total accounts payable and accrued expenses $ 1,797,221 $ 1,187,234 |
Original Issue Discounted Con32
Original Issue Discounted Convertible Notes and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Original Issue Discounted Convertible Notes And Warrants Tables | |
Convertible debt | March 31, December 31, 2018 2017 Convertible debt $ 261,008 $ 352,713 Accreted OID interest 25,521 34,488 Unamortized debt discount - warrants (51,042 ) (129,836 ) Total convertible debt $ 235,487 $ 257,365 |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Warrants Tables | |
Stock warrant transactions | Exercise Weighted Price Per Average Warrants Share Exercise Price 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 outstanding and exercisable at January 1, 2018 3,371,385 $ 3.17 - $7.37 $ 5.28 Granted during the period - - - Expired during the period - - - Exercised during the period (503,070 ) $ 2.50 $ 2.50 Warrants outstanding and exercisable at March 31, 2018 2,868,315 $ 3.17 - $7.37 $ 5.02 |
Warrants by exercise price | Number of Weighted Average Weighted Shares Under Remaining Contract Average Exercise Price Warrants Life in Years Exercise Price $ 3.00 - $3.99 636,972 4.06 $ 4.00 - $4.99 196,632 3.76 $ 5.00 - $5.99 1,815,041 3.72 $ 6.00 - $6.99 187,750 3.51 $ 7.00 - $7.37 31,920 2.71 Total 2,868,315 3.77 $ 5.02 |
Assumptions | March 31, 2017 Expected life (in years) 5 Volatility 90 % Risk-free interest rate 1.90% - 1.92 % Dividend yield — % |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Stock-based Compensation Plan Tables | |
Assumptions | March 31, 2017 Expected life (in years) Volatility 90 % Risk-free interest rate 2.48 % Dividend yield — % |
Stock option activity | Weighted Weighted Average Aggregate Number Average Remaining Contract Intrinsic of Shares Exercise Price Life in Years 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 $ - Non-vested stock options outstanding at January 1, 2017 - - Granted during the period 55,000 $ 4.48 9.85 $ - Expired during the period - - Exercised during the period - - Non-vested stock options outstanding at March 31, 2017 55,000 $ 4.48 9.85 $ - Stock options outstanding at January 1, 2018 545,000 $ 4.05 7.13 $ - Granted during the period - - Expired during the period - - Exercised during the period - - Stock options outstanding at March 31, 2018 545,000 $ 4.05 6.89 $ - Exercisable at March 31, 2018 165,000 $ 4.48 8.85 $ - Non-vested stock options outstanding at January 1, 2018 387,500 $ 3.89 6.39 $ - Granted during the period - - Vested during the period 7,500 $ 4.48 6.39 $ - Expired during the period - - Exercised during the period - - Non-vested stock options outstanding at March 31, 2018 380,000 $ 3.87 6.03 $ - |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Leases [Abstract] | |
Minimum future annual rental payments | 2018 (balance of the year) $ 90,768 2019 $ 77,833 2020 $ 69,793 |
The Company, Basis of Present36
The Company, Basis of Presentation, and Recent Accounting Pronouncements (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Company And Basis Of Presentation Details Narrative | ||
State of incorporation | Delaware | |
Date of incorporation | Jan. 30, 2014 | |
Accumulated deficit | $ (37,616,426) | $ (33,983,429) |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Contingent Consideration | $ 1,330,000 | $ 1,340,000 |
Level 1 | ||
Contingent Consideration | 1,330,000 | 1,340,000 |
Level 2 | ||
Contingent Consideration | 0 | 0 |
Level 3 | ||
Contingent Consideration | $ 0 | $ 0 |
Fair Value Disclosures (Detai38
Fair Value Disclosures (Details 1) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Significant Accounting Policies Details 3 | |
Contingent consideration, beginning | $ 1,340,000 |
Change in fair value | (10,000) |
Contingent consideration, ending | $ 1,330,000 |
Fair Value Disclosures (Detai39
Fair Value Disclosures (Details 2) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Cash | $ 574,474 | $ 573,471 |
Other receivables | 1,015,345 | 1,104,134 |
Notes Payable | 80,139 | 159,180 |
Convertible debt | 235,487 | 257,365 |
Level 1 | ||
Cash | 0 | 0 |
Other receivables | 0 | 0 |
Notes Payable | 0 | 0 |
Convertible debt | 0 | 0 |
Level 2 | ||
Cash | 574,474 | 573,471 |
Other receivables | 0 | 0 |
Notes Payable | 0 | 0 |
Convertible debt | 0 | 0 |
Level 3 | ||
Cash | 0 | 0 |
Other receivables | 1,015,345 | 1,104,134 |
Notes Payable | 80,139 | 159,180 |
Convertible debt | $ 286,529 | $ 387,201 |
Other Receivables (Details)
Other Receivables (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Other Receivables Details | ||
R&D tax credits | $ 986,649 | $ 954,897 |
Other | 28,696 | 149,237 |
Other receivables | $ 1,015,345 | $ 1,104,134 |
Property, Equipment, and Leas41
Property, Equipment, and Leasehold Improvements (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Property, equipment and leasehold improvements, gross | $ 305,027 | $ 275,472 |
Less accumulated depreciation | (156,250) | (141,485) |
Property, equipment and leasehold improvements, net | 148,777 | 133,987 |
Laboratory Equipment | ||
Property, equipment and leasehold improvements, gross | 188,558 | 165,611 |
Computer Equipment | ||
Property, equipment and leasehold improvements, gross | 50,972 | 44,364 |
Office Equipment | ||
Property, equipment and leasehold improvements, gross | 36,334 | 36,334 |
Leasehold Improvements | ||
Property, equipment and leasehold improvements, gross | $ 29,163 | $ 29,163 |
Property, Equipment, and Leas42
Property, Equipment, and Leasehold Improvements (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Property Equipment And Leasehold Improvements Details Narrative | ||
Depreciation expense | $ 14,763 | $ 10,597 |
Intangible Assets and Goodwil43
Intangible Assets and Goodwill (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
In Process Research and Development | ||
Intangible assets, gross | $ 448,314 | $ 3,560,107 |
Less accumulated amortization | (141,655) | (2,521,743) |
Intangible assets, net | 306,659 | 1,038,364 |
License Agreements | ||
Intangible assets, gross | 3,657,425 | 436,385 |
Less accumulated amortization | (2,773,547) | (128,794) |
Intangible assets, net | $ 883,878 | $ 307,591 |
Intangible Assets and Goodwil44
Intangible Assets and Goodwill (Details 1) | Mar. 31, 2018USD ($) |
Amortization expense | |
2,018 | $ 576,633 |
2,019 | 372,623 |
2,020 | 37,359 |
2,021 | 37,359 |
2,022 | 37,359 |
2023 (first three months) | $ 37,359 |
Intangible Assets and Goodwil45
Intangible Assets and Goodwill (Details 2) | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Intangible Assets And Goodwill Details 1 | |
Goodwill, beginning | $ 2,016,240 |
Foreign currency translation | 55,116 |
Goodwill, ending | $ 2,071,356 |
Intangible Assets and Goodwil46
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Intangible Assets And Goodwill Details Narrative | ||
Amortization expense | $ 191,681 | $ 166,188 |
Accounts Payable and Accrued 47
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts Payable Details | ||
Trade payables | $ 1,382,170 | $ 705,041 |
Accrued expenses | 290,810 | 262,200 |
Accrued payroll | 124,241 | 219,993 |
Accounts payable, net | $ 1,797,221 | $ 1,187,234 |
Original Issue Discounted Con48
Original Issue Discounted Convertible Notes and Warrants (Details) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018 | Dec. 31, 2017 | |
Original Issue Discounted Convertible Notes And Warrants Details | ||
Convertible Debt | $ 261,008 | $ 352,713 |
Accreted OID Interest | 25,521 | 34,488 |
Unamortized Debt Discount - Warrants | (51,042) | (129,836) |
Convertible Debt, Net | $ 235,487 | $ 257,365 |
Equity (Details Narrative)
Equity (Details Narrative) - shares | Mar. 31, 2018 | Dec. 31, 2017 |
Equity Details Narrative | ||
Common stock shares, outstanding | 12,602,395 | 12,042,574 |
Warrants (Details)
Warrants (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Warrants issued and exercisable, beginning | 3,371,385 | 1,858,340 |
Granted | 0 | 200,000 |
Expired | 0 | 0 |
Exercised | (503,070) | 0 |
Warrants issued and exercisable, ending | 2,868,315 | 2,058,340 |
Exercise Price Exercised | $ 2.5 | |
Weighted average exercise price, beginning | 5.28 | $ 5.66 |
Weighted average exercise price, Granted | 6.25 | |
Weighted average exercise price warrants, Exercised | 2.5 | |
Weighted average exercise price, ending | 5.02 | 5.72 |
Minimum | ||
Exercise Price Outstanding, Beginning | 3.17 | 4.76 |
Exercise Price Granted | 5.50 | |
Exercise Price Outstanding, Ending | 3.17 | 4.76 |
Maximum | ||
Exercise Price Outstanding, Beginning | 7.37 | 7.37 |
Exercise Price Granted | 6.50 | |
Exercise Price Outstanding, Ending | $ 7.37 | $ 7.37 |
Warrants (Details 1)
Warrants (Details 1) | 3 Months Ended |
Mar. 31, 2018$ / sharesshares | |
Number of shares under warrants | 2,868,315 |
Weighted average remaining contract life in years | 3 years 9 months 7 days |
Weighted average exercise price | $ / shares | $ 5.02 |
Warrant 1 | |
Exercise price | $3.00 - $3.99 |
Number of shares under warrants | 636,972 |
Weighted average remaining contract life in years | 4 years 22 days |
Warrant 2 | |
Exercise price | $4.00 - $4.99 |
Number of shares under warrants | 196,632 |
Weighted average remaining contract life in years | 3 years 9 months 4 days |
Warrant 3 | |
Exercise price | $5.00 - $5.99 |
Number of shares under warrants | 1,815,041 |
Weighted average remaining contract life in years | 3 years 8 months 19 days |
Warrant 4 | |
Exercise price | $6.00 - $6.99 |
Number of shares under warrants | 187,750 |
Weighted average remaining contract life in years | 3 years 6 months 4 days |
Warrant 5 | |
Exercise price | $7.00 - $7.37 |
Number of shares under warrants | 31,920 |
Weighted average remaining contract life in years | 2 years 8 months 16 days |
Warrants (Details 2)
Warrants (Details 2) | 3 Months Ended |
Mar. 31, 2018 | |
Expected life (in years) | 5 years |
Volatility | 90.00% |
Dividend yield | 0.00% |
Minimum | |
Risk-free interest rate | 1.90% |
Maximum | |
Risk-free interest rate | 1.92% |
Stock-Based Compensation Plan53
Stock-Based Compensation Plan (Details) | 3 Months Ended |
Mar. 31, 2018 | |
Expected life (in years) | 5 years |
Volatility | 90.00% |
Dividend yield | 0.00% |
Minimum | |
Risk-free interest rate | 1.90% |
Maximum | |
Risk-free interest rate | 1.92% |
Stock Option | |
Volatility | 90.00% |
Risk-free interest rate | 2.48% |
Dividend yield | 0.00% |
Stock-Based Compensation Plan54
Stock-Based Compensation Plan (Details 1) - USD ($) | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Number of Options Outstanding, Beginning | 387,500 | 0 | |
Number of Options Granted | 0 | 55,000 | |
Number of Options Vested | 7,500 | ||
Number of Options Expired | 0 | 0 | |
Number of Options Exercised | 0 | 0 | |
Number of Options Outstanding, Ending | 380,000 | 55,000 | |
Weighted Average Exercise Price Outstanding, Beginning | $ 3.89 | $ 0 | |
Weighted Average Exercise Price Granted | 0 | 4.48 | |
Weighted Average Exercise Price Vested | 4.48 | ||
Weighted Average Exercise Price Expired | 0 | 0 | |
Weighted Average Exercise Price Exercised | 0 | 0 | |
Weighted Average Exercise Price Outstanding, Ending | $ 3.87 | $ 4.48 | |
Weighted Average Remaining Contract Life in Years, Beginning | 6 years 4 months 20 days | 9 years 10 months 6 days | |
Weighted Average Remaining Contract Life in Years, Ending | 6 years 4 months 20 days | ||
Weighted Average Remaining Contract Life in Years Exercisable | 6 years 11 days | 9 years 10 months 6 days | |
Aggregate Intrinsic Value Outstanding, Beginning | $ 0 | $ 0 | |
Aggregate Intrinsic Value Outstanding, Ending | 0 | $ 0 | |
Aggregate Intrinsic Value Exercisable | $ 0 | $ 0 | |
Stock Option | |||
Number of Options Outstanding, Beginning | 545,000 | 0 | |
Number of Options Granted | 0 | 190,000 | |
Number of Options Expired | 0 | 0 | |
Number of Options Exercised | 0 | 0 | |
Number of Options Outstanding, Ending | 545,000 | 190,000 | |
Number of Options Exercisable | 165,000 | 135,000 | |
Weighted Average Exercise Price Outstanding, Beginning | $ 4.05 | $ 0 | |
Weighted Average Exercise Price Granted | 0 | 4.48 | |
Weighted Average Exercise Price Expired | 0 | 0 | |
Weighted Average Exercise Price Exercised | 0 | 0 | |
Weighted Average Exercise Price Outstanding, Ending | 4.05 | 4.48 | |
Weighted Average Exercise Price Exercisable | $ 4.48 | $ 4.48 | |
Weighted Average Remaining Contract Life in Years, Beginning | 7 years 1 month 17 days | 9 years 10 months 6 days | |
Weighted Average Remaining Contract Life in Years, Ending | 6 years 10 months 20 days | 9 years 10 months 6 days | |
Weighted Average Remaining Contract Life in Years Exercisable | 8 years 10 months 6 days | 9 years 10 months 6 days | |
Aggregate Intrinsic Value Outstanding, Beginning | $ 0 | $ 0 | |
Aggregate Intrinsic Value Outstanding, Ending | 0 | 0 | |
Aggregate Intrinsic Value Exercisable | $ 0 | $ 0 |
Interest Expense (Details Narra
Interest Expense (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Interest expense | $ 48,635 | $ 874 |
Convertible Notes [Member] | ||
Interest expense | $ 46,795 | $ 0 |
Leases (Details)
Leases (Details) | Mar. 31, 2018USD ($) |
Leases [Abstract] | |
2018 (balance of the year) | $ 90,768 |
2,019 | 77,833 |
2,020 | $ 69,793 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Income Taxes Details Narrative | ||
Gross deferred tax asset | $ 10,843,000 | $ 9,918,000 |
Deferred tax asset valuation allowance | (10,843,000) | (9,918,000) |
Net operating loss carry-forwards | $ 16,431,000 | $ 15,000,000 |
Net Loss per Common Share (Deta
Net Loss per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Warrants | ||
Anti-dilutive shares excluded from earnings per share | 2,868,315 | 2,058,340 |
Stock Option | ||
Anti-dilutive shares excluded from earnings per share | 545,000 | 19,000 |
Convertible Debt | ||
Anti-dilutive shares excluded from earnings per share | 74,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Mar. 31, 2018 | Dec. 31, 2017 |
Accounts payable | $ 1,797,221 | $ 1,187,234 |
RHMS | ||
Accounts payable | 38,453 | 38,453 |
JIST | ||
Accounts payable | $ 478,400 | 478,400 |
Consultant [Member] | ||
Accounts payable | $ 90,000 |