Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 15, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | AzurRx BioPharma, Inc. | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Entity Central Index Key | 0001604191 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 21,060,055 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Trading Symbol | AZRX |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash | $ 413,858 | $ 1,114,343 |
Other receivables | 2,051,028 | 3,172,676 |
Prepaid expenses | 338,656 | 512,982 |
Total Current Assets | 2,803,542 | 4,800,001 |
Property, equipment, and leasehold improvements, net | 125,135 | 128,854 |
Other Assets: | ||
In process research & development, net | 0 | 258,929 |
License agreements, net | 0 | 311,548 |
Patents | 3,802,745 | 0 |
Goodwill | 1,887,358 | 1,924,830 |
Operating lease right-of-use assets | 288,653 | 0 |
Deposits | 49,077 | 45,233 |
Total Other Assets | 6,027,833 | 2,540,540 |
Total Assets | 8,956,510 | 7,469,395 |
Current Liabilities: | ||
Accounts payable and accrued expenses | 2,580,709 | 2,070,396 |
Accounts payable and accrued expenses - related party | 643,428 | 670,095 |
Notes payable | 160,584 | 255,032 |
Convertible debt | 1,728,442 | 0 |
Other current liabilities | 643,530 | 0 |
Total Current Liabilities | 5,756,693 | 2,995,523 |
Other liabilities | 486,492 | 0 |
Total Liabilities | 6,243,185 | 2,995,523 |
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, 2019 and December 31, 2018; liquidation preference approximates par value | 0 | 0 |
Common stock - Par value $0.0001 per share; 100,000,000 shares authorized; 18,537,958 and 17,704,925 shares issued and outstanding, respectively, at March 31, 2019 and December 31, 2018 | 1,853 | 1,771 |
Additional paid in capital | 56,134,666 | 53,139,259 |
Accumulated deficit | (52,177,801) | (47,517,046) |
Accumulated other comprehensive loss | (1,245,393) | (1,150,112) |
Total Stockholders' Equity | 2,713,325 | 4,473,872 |
Total Liabilities and Stockholders' Equity | $ 8,956,510 | $ 7,469,395 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 18,537,958 | 17,704,925 |
Common stock shares, outstanding | 18,537,958 | 17,704,925 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Research and development expenses | $ 2,118,533 | $ 1,678,029 |
General and administrative expenses | 2,485,111 | 1,916,333 |
Fair value adjustment, contingent consideration | 0 | (10,000) |
Loss from operations | (4,603,644) | (3,584,362) |
Other: | ||
Interest expense | (57,111) | (48,635) |
Total other | (57,111) | (48,635) |
Loss before income taxes | (4,660,755) | (3,632,997) |
Income taxes | 0 | 0 |
Net loss | (4,660,755) | (3,632,997) |
Other comprehensive loss: | ||
Foreign currency translation adjustment | (95,281) | 106,020 |
Total comprehensive loss | $ (4,756,036) | $ (3,526,977) |
Basic and diluted weighted average shares outstanding | 17,719,902 | 12,447,438 |
Loss per share - basic and diluted | $ (0.26) | $ (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, 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, Shares | 751 | ||||||
Common stock issued to consultants, Amount | 0 | ||||||
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 | |||
Common stock issued to Mayoly for patents, Amount | 0 | ||||||
Stock-based compensation | 29,018 | 29,018 | |||||
Restricted stock granted to employees/directors, Shares | 30,000 | ||||||
Restricted stock granted to employees/directors, 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 | |||||
Received from stockholder in relation to warrant modification | 0 | ||||||
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 |
Beginning balance, Shares at Dec. 31, 2018 | 0 | 17,704,925 | |||||
Beginning balance, Amount at Dec. 31, 2018 | $ 0 | $ 1,771 | 53,139,259 | 0 | (47,517,046) | (1,150,112) | 4,473,872 |
Common stock issued to consultants, Shares | 27,102 | ||||||
Common stock issued to consultants, Amount | $ 2 | 59,998 | 60,000 | ||||
Common stock issued to Mayoly for patents, Shares | 775,931 | ||||||
Common stock issued to Mayoly for patents, Amount | $ 77 | 1,740,882 | 1,740,959 | ||||
Stock-based compensation | 511,335 | 511,335 | |||||
Restricted stock granted to employees/directors, Shares | 30,000 | ||||||
Restricted stock granted to employees/directors, Amount | $ 3 | 296,282 | 296,285 | ||||
Convertible debt converted into common stock, Amount | 0 | ||||||
Warrant modification | 325,320 | 325,320 | |||||
Received from stockholder in relation to warrant modification | 61,590 | 61,590 | |||||
Foreign currency translation adjustment | (95,281) | (95,281) | |||||
Net loss | (4,660,755) | (4,660,755) | |||||
Ending balance, Shares at Mar. 31, 2019 | 0 | 18,537,958 | |||||
Ending balance, Amount at Mar. 31, 2019 | $ 0 | $ 1,853 | $ 56,134,666 | $ 0 | $ (52,177,801) | $ (1,245,393) | $ 2,713,325 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (4,660,755) | $ (3,632,997) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 17,114 | 14,763 |
Amortization | 561,289 | 191,681 |
Fair value adjustment, contingent consideration | 0 | (10,000) |
Stock-based compensation | 511,335 | 29,018 |
Restricted stock granted to employees/directors | 296,285 | 113,700 |
Restricted stock granted/accrued to consultants | 60,000 | 0 |
Accreted interest on convertible debt | 24,658 | 0 |
Accreted interest on debt discount - warrants | 29,104 | 46,795 |
Warrant modification | 0 | 428,748 |
Changes in assets and liabilities, net of effects of acquisition: | ||
Other receivables | (149,508) | 120,877 |
Prepaid expenses | 172,886 | 59,625 |
Right of use assets | (289,830) | 0 |
Deposits | (4,125) | 0 |
Accounts payable and accrued expenses | 514,950 | 423,523 |
Interest payable | 288,800 | 0 |
Net cash used in operating activities | (2,627,797) | (2,214,267) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (13,352) | (29,521) |
Net cash used in investing activities | (13,352) | (29,521) |
Cash flows from financing activities: | ||
Issuances of common stock | 0 | 2,324,742 |
Issuances of convertible debt | 2,000,000 | 0 |
Received from stockholder in relation to warrant modification | 61,590 | 0 |
Repayments of notes payable | (94,448) | (79,041) |
Net cash provided by financing activities | 1,967,142 | 2,245,701 |
(Decrease) increase in cash | (674,007) | 1,913 |
Effect of exchange rate changes on cash | (26,478) | (910) |
Cash, beginning balance | 1,114,343 | 573,471 |
Cash, ending balance | 413,858 | 574,474 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 3,933 | 1,840 |
Cash paid for income taxes | 0 | 0 |
Non-cash investing and financing activities: | ||
Conversion of convertible debt into common shares | 0 | 68,673 |
Common stock issued for patents purchased from Mayoly | 1,740,959 | $ 0 |
Warrant modification related to convertible debt issuance | $ 325,320 |
The Company and Basis of Presen
The Company and Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Basis of Presentation | The Company AzurRx BioPharma, Inc. (“ AzurRx Parent ProteaBio Europe SAS ABS Company The Company 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. The Company’s current product pipeline consists of two therapeutic proteins under development: MS1819-SD MS1819-SD is a yeast derived recombinant lipase for exocrine pancreatic insufficiency ( “EPI” “CP” “CF” “CFA” “FDA” “IND” OPTION Study b-Lactamase Program The Company’s b-lactamase program focuses on products with an enzymatic combination of bacterial origin for the prevention of hospital-acquired infections and antibiotic-associated diarrhea ( “AAD” Recent Developments Asset Purchase Agreement with Mayoly On March 27, 2019, the Company entered into an Asset Purchase Agreement with Mayoly (the “ Mayoly APA JDLA In accordance with the Mayoly APA, the Company provided to Mayoly the following consideration for the purchase of MS1819-SD: (i) the Company assumed certain of Mayoly’s liabilities with respect to MS1819-SD; (ii) the Company forgave all amounts currently owed to AzurRx SAS by Mayoly under the JDLA; (iii) the Company agreed to pay, within 30 days after the execution of the Mayoly APA, all amounts incurred by Mayoly for the maintenance of patents related to MS1819-SD from January 1, 2019 through the date of the Mayoly APA; (iv) the Company made an initial payment to Mayoly of €800,000, which amount was paid by the issuance of 400,481 shares of the Company’s common stock at a price of $2.29 per share (the “ Closing Payment Shares (v) the Company agreed to pay to Mayoly an additional €1,500,000, payable in a mix of cash and shares of the Company’s common stock as follows (the “ Milestone Payments 2019 Escrow Shares 2020 Escrow Shares Escrow Shares The Closing Payment Shares and the Escrow Shares were all issued upon execution of the Mayoly APA; provided however 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 (“SEC” The unaudited interim consolidated financial statements include the accounts of AzurRx and its wholly-owned subsidiary, AzurRx SAS. Intercompany transactions and balances have been eliminated upon consolidation. Going Concern Uncertainty 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 negative working capital at March 31, 2019 of approximately $2,953,000, and had an accumulated deficit of approximately $52,178,000 at March 31, 2019. The Company is dependent on obtaining, and continues to pursue, additional working capital funding from the sale of securities and debt in order to continue to execute its development plan and continue operations. Without adequate working capital, the Company may not be able to meet its obligations and continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
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, 2019 and December 31, 2018, the Company had approximately $133,984 and $754,261, 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. Leases Effective January 1, 2019, the Company adopted Accounting Standards Update ( “ASU” Equity-Based Payments to Non-Employees Equity-based payments to non-employees are measured at fair value on the grant date per ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. Research and Development Research and development costs are charged to operations when incurred and are included in operating expenses. Research and development costs consist principally of compensation of employees and consultants that perform the Company’s research activities, the fees paid to maintain the Company’s licenses, and the payments to third parties for clinical trial and additional product development and testing. 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 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. |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2019 | |
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. 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, 2019: Cash $ 413,858 $ - $ 413,858 $ - $ 413,858 Other receivables $ 2,051,028 $ - $ - $ 2,051,028 $ 2,051,028 Note payable $ 160,584 $ - $ - $ 160,584 $ 160,584 Convertible debt $ 1,728,442 $ - $ - $ 1,728,442 $ 1,728,442 At December 31, 2018: Cash $ 1,114,343 $ - $ 1,114,343 $ - $ 1,114,343 Other receivables $ 3,172,676 $ - $ - $ 3,172,676 $ 3,172,676 Note payable $ 255,032 $ - $ - $ 255,032 $ 255,032 The fair value of other receivables approximates carrying value as these consist primarily of French R&D tax credits that are normally received the following year and amounts due from our collaboration partner Mayoly, see Note 14. 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, 2019 | |
Receivables [Abstract] | |
Other Receivables | Other receivables consisted of the following: March 31, December 31, 2019 2018 R&D tax credits $ 2,038,311 $ 2,162,373 Other 12,717 1,010,303 Total other receivables $ 2,051,028 $ 3,172,676 The research and development ( “R & D” |
Property, Equipment, and Leaseh
Property, Equipment, and Leasehold Improvements | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Equipment, and Leasehold Improvements | Property, equipment and leasehold improvements consisted of the following: March 31, December 31, 2019 2018 Laboratory equipment $ 193,661 $ 190,406 Computer equipment 78,986 75,417 Office equipment 37,264 37,262 Leasehold improvements 35,711 29,163 Total property, plant and equipment 345,622 332,248 Less accumulated depreciation (220,487 ) (203,394 ) Property, plant and equipment, net $ 125,135 $ 128,854 Depreciation expense for the three months ended March 31, 2019 and December 31, 2018 was $17,114 and $14,763, respectively. Depreciation expense is included in general and administrative (“ G&A |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Patents Pursuant to the Mayoly APA entered into on March 27, 2019, in which the Company purchased all rights, title and interest in and to MS1819-SD (see Note 14), the Company recorded Patents in the amount of $3,802,745 as follows: Common stock issued at signing to Mayoly $ 1,740,959 Due to Mayoly at 12/31/19 - €400,000 449,280 Due to Mayoly at 12/31/20 - €350,000 393,120 Assumed Mayoly liabilities and forgiveness of Mayoly debt 1,219,386 $ 3,802,745 Intangible assets are as follows: March 31, December 31, 2019 2018 In process research and development $ - $ 416,600 Less accumulated amortization - (157,671 ) In process research and development, net $ - $ 258,929 License agreements $ - $ 3,398,702 Less accumulated amortization - (3,087,154 ) License agreements, net $ - $ 311,548 Patents $ 3,802,745 $ - Less accumulated amortization - - Patents, net $ 3,802,745 $ - Amortization expense for the three months ended March 31, 2019 and 2018 was $561,289 and $191,681, respectively. Amortization expense for the three months ended March 31, 2019 included $384,234 from In process research and development and License agreements written off as a result of the Mayoly APA. As of March 31, 2019, amortization expense is expected to be as follows for the next five years: 2019 $ 395,661 2020 527,548 2021 527,548 2022 527,548 2023 527,548 Goodwill is as follows: Goodwill Balance at January 1, 2018 $ 2,016,240 Foreign currency translation (91,410 ) Balance at December 31, 2018 1,924,830 Foreign currency translation (37,472 ) Balance at March 31, 2019 $ 1,887,358 |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses | Accounts payable and accrued expenses consisted of the following: March 31, December 31, 2019 2018 Trade payables $ 2,243,574 $ 1,532,110 Accrued expenses 69,930 285,061 Accrued payroll 267,205 253,225 Total accounts payable and accrued expenses $ 2,580,709 $ 2,070,396 |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Note Payable | On December 14, 2018, the Company entered into a 9-month financing agreement for its directors and officer’s liability insurance in the amount of $286,203 that bears interest at an annual rate of 5.99%. Monthly payments, including principal and interest, are $32,599 per month. The balance due under this financing agreement at March 31, 2019 was $160,584. |
Original Issue Discounted Conve
Original Issue Discounted Convertible Notes and Warrants | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Original Issue Discounted Convertible Notes and Warrants | ADEC Notes On February 14, 2019, the Company entered into a Note Purchase Agreement (the “NPA” “ADEC” “Note A” “Note B,” “Note,” “Notes” The Notes accrue interest at a rate of 10% per annum (the “Interest Rate” “2019 Tax Credit” “2020 Tax Credit” “Maturity Dates” Prior to their respective Maturity Dates, each of the Notes is convertible, at ADEC’s option, into shares of the Company’s common stock, at a conversion price equal to the principal and accrued interest due under the terms of the Notes divided by $2.50 ( “Conversion Shares” As additional consideration for entering into the NPA, pursuant to a Warrant Amendment Agreement, the Company agreed to reduce the exercise price of 1,009,565 outstanding warrants previously issued by the Company to ADEC and its affiliates (the “Warrants” In connection with the above transaction, the Company also entered into a registration rights agreement with ADEC, pursuant to which the Company agreed to file a registration statement with the Securities and Exchange Commission no later than 45 days after the closing date of February 14, 2019 in order to register, on behalf of ADEC, the Conversion Shares. ADEC subsequently agreed to extend the date to file a registration statement to April 30, 2019. The registration statement was filed on April 25, 2019. During the three months ended March 31, 2019, the Company accrued $24,658 of interest expense in connection with these convertible notes. During the three months ended March 31, 2019, the Company recorded $29,104 of interest expense in the form of amortization of debt discount related to the repriced warrants. LPC OID Debenture On April 11, 2017, the Company entered into a Note Purchase Agreement with Lincoln Park Capital Fund, LLC ( “LPC” “Debenture” On July 11, 2018, the Company paid off the remaining amount due under the terms of this Debenture in the amount of $286,529. For the three months ended March 31, 2018, the Company recorded $46,795 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, 2019 2018 Convertible debt $ 2,000,000 $ - Unamortized debt discount - revalued warrants (296,216 ) - Total convertible debt $ 1,703,784 $ - |
Other Liabilities
Other Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities [Abstract] | |
Other Liabilities | Other liabilities consisted of the following: March 31, December 31, Current 2019 2018 Due to Mayoly $ 449,280 $ - Lease liabilities 194,250 - $ 643,530 $ - March 31, December 31, Long-term 2019 2018 Due to Mayoly $ 393,120 $ - Lease liabilities 93,372 - $ 486,492 $ - |
Equity
Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Equity | On July 13, 2016, the Company amended its Certificate of Incorporation to increase the authorized shares of its common stock, $0.0001 par value, to 100,000,000 shares from 9,000,000 shares and increase the authorized shares of its preferred stock, $0.0001 par value, to 10,000,000 shares from 1,000,000 shares. Common Stock At March 31, 2019 and December 31, 2018, the Company had 18,537,958 and 17,704,925, respectively, of shares of its common stock issued and outstanding. Voting Each holder of common stock has one vote for each share held. 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, 2019 and December 31, 2018, there were no Series A Convertible Preferred Stock (“Series A Preferred”) outstanding. However, all terms of the Series A Preferred are still in effect. Restricted Stock During the three months ended March 31, 2019, 102,583 restricted shares of common stock vested with a fair value of $296,285. 58,833 of these 102,583 shares having a fair value of $178,852 vested during the three months ended March 31, 2019 due to the Company dosing the first patients in the Company's Phase II study to investigate MS1819-SD in CF patients. 30,000 of these 102,583 shares having a fair value of $72,600 vested during the three months ended March 31, 2019 and have been issued to our directors as a part of Board compensation. 13,750 of these 102,583 shares having a fair value of $44,833 vested during the three months ended March 31, 2019 due to the terms of such grants. During the three months ended March 31, 2019, the Company issued 27,102 shares of its common stock to a consultant as payment of $60,000 of accounts payable. As of March 31, 2019, the Company had unrecognized restricted common stock expense of $438,528. $337,193 of this unrecognized expense will be recognized over the average remaining vesting term of the restricted common stock of 2.04 years. $101,335 of this unrecognized expense vests upon the enrollment of the first 30 patients in a CF trial. This milestone was not considered probable at March 31, 2019. During the three months ended March 31, 2018, 61,500 |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2019 | |
WarrantsDisclosureTextBlock | |
Warrants | In February 2019, as additional consideration for issuing convertible notes with ADEC and pursuant to a Warrant Amendment Agreement, the Company agreed to reduce the exercise price of certain outstanding warrants previously issued by the Company to ADEC and its affiliates, see Note 9. Stock warrant transactions for the periods January 1 through March 31, 2019 and 2018 are as follows: Exercise Weighted Price Per Average Warrants Share Exercise Price 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 $ 5.28 Warrants outstanding and exercisable at January 1, 2019 3,112,715 $ 2.55 - $7.37 $ 4.83 Granted during the period - - - Expired during the period - - - Exercised during the period - - - Warrants outstanding and exercisable at March 31, 2019 3,112,715 $ 1.50 - $7.37 $ 3.53 Number of Weighted Average Weighted Shares Under Remaining Contract Average Exercise Price Warrants Life in Years Exercise Price $ 1.50 - $2.99 1,253,965 2.88 $ 3.00 - $3.99 636,972 3.06 $ 4.00 - $4.99 196,632 2.76 $ 5.00 - $5.99 805,476 2.88 $ 6.00 - $6.99 187,750 2.51 $ 7.00 - $7.37 31,920 1.71 Total 3,112,715 2.88 $3.53 In January 2018, the Company offered certain 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 continued 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 had other warrants modified on approximately 197,000 shares, which resulted in a charge of approximately $429,000 in January 2018. During the three months ended March 31, 2019 and 2018, no warrants were issued to non-employees. |
Stock-Based Compensation Plan
Stock-Based Compensation Plan | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
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, 2019 and 2018, no stock options were granted. During the three months ended March 31, 2019, 244,500 options vested having a fair value of $511,335 and an intrinsic value of $0. 242,000 of these options valued at $501,666 vested due to the Company having its first CF patient dosed with MS1819-SD anywhere in the world, which was achieved by the dosing of the first patient in the OPTION Study. During the three months ended March 31, 2018, 7,500 options vested having a fair value of $29,018 and an intrinsic value of $0. 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 is as follows: Number Average Remaining Contract Intrinsic of Shares Exercise Price Life in Years Value 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 $ - Stock options outstanding at January 1, 2019 994,000 $ 3.58 5.42 $ - Granted during the period - - Expired during the period - - Canceled during the period - - Exercised during the period - - Stock options outstanding at March 31, 2019 994,000 $ 3.58 5.17 $ - Exercisable at March 31, 2019 994,000 $ 3.58 5.17 $ - Non-vested stock options outstanding at January 1, 2019 244,500 $ 3.05 4.53 $ - Granted during the period - - Vested during the period (244,500 ) $ 3.05 4.53 Expired during the period - - Canceled during the period - - Exercised during the period - - Non-vested stock options outstanding at March 31, 2019 - $ - 635,067 shares of common stock were available for future issuance under the 2014 Plan as of March 31, 2019. As of March 31, 2019, the Company did not have any unrecognized stock-based compensation expense. |
Agreements
Agreements | 3 Months Ended |
Mar. 31, 2019 | |
Agreements | |
Agreements | Mayoly Agreement During the three months ended March 31, 2019 and 2018, the Company charged $403,020 and $125,986, respectively, to Mayoly under the JDLA that was in effect during both periods. On March 27, 2019, the Company entered into the Mayoly APA pursuant to which the Company purchased substantially all rights, title and interest in and to MS1819-SD, see Recent Developments above. INRA Agreement In February 2006, Mayoly and INRA TRANSFERT, on behalf of INRA and CNRS, entered into a Usage and Cross-Licensing Agreement granting Mayoly exclusive worldwide rights to exploit Yarrowia lipolytica and other lipase proteins based on their patents for use in humans. The INRA Agreement provides for the payment by Mayoly of royalties on net sales, subject to Mayoly’s right to terminate such obligation upon the payment of a lump sum specified in the agreement. Upon execution of the Mayoly APA, all rights, obligations and interests under the INRA Agreement were transferred to the Company. TransChem Sublicense On August 7, 2017, the Company entered into a Sublicense Agreement with TransChem, Inc. (“TransChem” “Licensed Patents” “Sublicense Agreement” Employment Agreements Johan (Thijs) Spoor 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. Either party may terminate Mr. Spoor’s employment at any time and for any reason, or for no reason. During the term and for a period of twelve (12) months thereafter, Mr. Spoor shall not engage in competition with the Company either directly or indirectly, in any manner or capacity. The Company will pay Mr. Spoor a base salary of $350,000 per year, which automatically increased to $425,000 per year upon the consummation of the IPO which occurred on October 11, 2016. At the sole discretion of the board of directors or the compensation committee of the board, following each calendar year of employment, Mr. Spoor shall be eligible to receive an additional cash bonus based on his attainment of certain financial, clinical development, and/or business milestones to be established annually by the board of directors or the compensation committee. 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. All of these shares vested and the $425,000 was expensed in the second and fourth quarters in 2018 due to the Company completing both milestones. On June 28, 2018, Mr. Spoor was granted 200,000 shares of restricted common stock subject to vesting conditions as follows: (i) 50% shall vest in three equal installments beginning one year from the date of issuance, and (ii) the remaining 50% shall vest as follows: one-third shall vest upon U.S. acceptance of IND for MS1819-SD, one-third upon the first dosing of a CF patient with MS1819-SD anywhere in the world, and the remaining one-third upon enrollment of the first 30 patients in a CF trial. These restricted shares had an estimated fair value at the grant date of $608,000 to be expensed when the above milestones are probable. 8,333 shares with a fair value of $25,332 vested and was expensed in the three months ended March 31, 2019 due to being earned over that time. 33,333 shares with a fair value of $101,332 vested and was expensed in the three months ended March 31, 2019 due to the first dosing of CF patients with MS1819-SD anywhere in the world. On June 28, 2018, the Board approved a 2017 annual incentive bonus pursuant to his employment agreement in the amount of $212,500. 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. All of these shares vested and the $336,500 was expensed in 2018 due to the Company completing both milestones listed above in 2018. On June 28, 2018, Mr. Shenouda was granted stock options to purchase 100,000 shares of the Company’s common stock, issuable pursuant to the 2014 Plan, subject to vesting conditions as follows: (i) 50% upon U.S. acceptance of an IND for MS1819-SD, and (ii) 50% upon the first CF patient doses with MS1819-SD anywhere in the world. These options had an estimated fair value at the grant date of $207,300 to be expensed when the above milestones are probable. 50,000 of these options having a fair value of $103,650 vested and was expensed in 2018 due to the FDA acceptance of the Company’s IND application for MS1819-SD. The remaining 50,000 options having a fair value of $103,650 vested and was expensed in the three months ended March 31, 2019 due to the first dosing of CF patients with MS1819-SD anywhere in the world. On June 28, 2018, the Board approved a 2017 annual incentive bonus pursuant to his employment agreement in the amount of $82,500. Dr. James E. Pennington On May 28, 2018, the Company entered into an employment agreement with Dr. Pennington to serve as the Company’s Chief Medical Officer. The employment agreement with Dr. Pennington provides for a base annual salary of $250,000. In addition to his salary, Dr. Pennington is eligible to receive an annual milestone bonus, awarded at the sole discretion of the Board based on his attainment of certain financial, clinical development, and/or business milestones established annually by the Board or Compensation Committee. The employment agreement is terminable by either party at any time. In the event of termination by the Company other than for cause, Dr. Pennington is entitled to three months’ severance payable over such period. In the event of termination by the Company other than for cause in connection with a Change of Control, Dr. Pennington will receive six months’ severance payable over such period. On June 28, 2018, Mr. Pennington was granted stock options to purchase 75,000 shares of the Company’s common stock, issuable pursuant to the 2014 Plan, subject to vesting conditions as follows: (i) 50% upon U.S. acceptance of an IND for MS1819-SD, and (ii) 50% upon the first CF patient doses with MS1819-SD anywhere in the world. These options had an estimated fair value at the grant date of $155,475 to be expensed when the above milestones are probable. 37,500 of these options vested and $77,738 was expensed in 2018 due to the FDA acceptance of the Company’s IND application for MS1819-SD in 2018. 37,500 of these options having a fair value of $77,738 vested and was expensed in the three months ended March 31, 2019 due to the first dosing of CF patients with MS1819-SD anywhere in the world. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | The Company adopted ASU 2016-02, Leases, as of January 1, 2019, using the modified retrospective approach. Prior year financial statements were not recast under the new standard. 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. Lease expense amounted to $50,655 and $31,227, respectively, in the three months ended March 31, 2019 and 2018. The weighted-average remaining lease term and weighted-average discount rate under operating leases at March 31, 2019 are: March 31, 2019 Lease term and discount rate Weighted-average remaining lease term 1.5 years Weighted-average discount rate 6.0 % Maturities of operating lease liabilities at March 31, 2019 are as follows: 2019 $ 152,100 2020 154,448 Total lease payments 306,548 Less imputed interest (18,926 ) Present value of lease liabilities $ 287,622 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
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, 2019 and December 31, 2018, the Company had no tax provision for either jurisdiction. At March 31, 2019 and December 31, 2018, the Company had gross deferred tax assets of approximately $13,650,000 and $12,490,000, 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 $13,650,000 and $12,490,000, respectively, has been established at March 31, 2019 and December 31, 2018. The change in the valuation allowance in the three months ended March 31, 2019 and 2018 was $1,160,000 and $925,000, respectively. At March 31, 2019, the Company has gross net operating loss (“ NOL Section 382 At March 31, 2019 and December 31, 2018, the Company had approximately $16,113,000 and $15,406,000, respectively, in net operating losses which it can carryforward indefinitely to offset against future French income. At March 31, 2019 and December 31, 2018, 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, 2019 | |
Earnings Per Share [Abstract] | |
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, 2019, diluted net loss per share did not include the effect of 3,112,715 shares of common stock issuable upon the exercise of outstanding warrants, 416,000 shares of restricted stock not yet issued, and 994,000 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, 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. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [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 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. Included in accounts payable at March 31, 2019 and December 31, 2018 is $10,000 and $50,000, respectively, for Mr. Shenouda’s services. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | April 2019 Public Offering of Common Stock On April 2, 2019, the Company completed a public offering of 1,294,930 shares of its common stock at a public offering price of $2.13 per share, resulting net proceeds of approximately $2,500,000, after deducting the selling agent fee payable to Alexander Capital, L.P. (“Alexander Capital”) and other offering expenses payable by the Company (the “April 2019 Public Offering”). The April 2019 Public Offering was completed pursuant to the terms of a Selling Agent Agreement executed by the Company and Alexander Capital on April 1, 2019. The April 2019 Public Offering was completed pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-225935) and the prospectus supplement was filed on May 1, 2019. In connection with the April 2019 Public Offering, the Company entered into a Selling Agent Agreement with Alexander Capital, pursuant to which the Company paid Alexander Capital (i) a cash fee equal to 7% of the aggregate gross proceeds of the April 2019 Public Offering, and (ii) to issue Alexander Capital warrants to purchase 38,848 shares of the Company’s common stock (the “Selling Agent Warrants”), an amount equal to 3% of the aggregate number of shares of the Company’s common stock sold in the April 2019 Public Offering. The Company also agreed to reimburse Alexander Capital for its expenses in connection with the April 2019 Public Offering on a non-accountable basis in an amount equal to 1% of the gross proceeds of the Offering and up to $50,000 for other accountable expenses. The Selling Agent Warrants will become exercisable one year from the date of issuance, expire on April 2, 2024 and have an exercise price of $2.55 per share. May 2019 Public Offering of Common Stock In May 2019, the Company completed a public offering of 1,227,167 shares of its common stock at a public offering price of $2.35 per share, resulting in net proceeds of approximately $2.55 million, after deducting the selling agent fee payable to Alexander Capital and other offering expenses payable by the Company (the “May 2019 Public Offering”). The May 2019 Public Offering was completed pursuant to the Company’s effective shelf registration statement on Form S-3 (File No. 333-225935) and the prospectus supplement was filed on May 9, 2019. In connection with the May 2019 Public Offering, the Company entered into a Selling Agent Agreement with Alexander Capital, pursuant to which the Company paid to Alexander Capital (i) a cash fee equal to 7.0% of the aggregate gross proceeds of the May 2019 Public Offering, and (ii) issued to Alexander Capital 36,815 Selling Agent Warrants, an amount equal to 3.0% of the aggregate number of shares of common stock sold in the May 2019 Public Offering. The Company also reimbursed Alexander Capital for its expenses on a non-accountable basis in an amount equal to 1.0% of the gross proceeds of the May 2019 Offering and up to $50,000 for other accountable expenses. The Selling Agent Warrants will become exercisable one year from the date of issuance, expire on May 9, 2024, and have an exercise price of $2.82 per share. |
Significant Accounting Polici_2
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
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, 2019 and December 31, 2018, the Company had approximately $133,984 and $754,261, 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. |
Leases | Effective January 1, 2019, the Company adopted Accounting Standards Update ( “ASU” |
Equity-Based Payments to Non-Employees | Equity-based payments to non-employees are measured at fair value on the grant date per ASU No. 2018-07, Improvements to Nonemployee Share-Based Payment Accounting. |
Research and Development | Research and development costs are charged to operations when incurred and are included in operating expenses. Research and development costs consist principally of compensation of employees and consultants that perform the Company’s research activities, the fees paid to maintain the Company’s licenses, and the payments to third parties for clinical trial and additional product development and testing. |
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 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. |
Fair Value Disclosures (Tables)
Fair Value Disclosures (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Financial instruments measured at fair value on a recurring basis | Fair Value Measured at Reporting Date Using Carrying Amount Level 1 Level 2 Level 3 Fair Value At March 31, 2019: Cash $ 413,858 $ - $ 413,858 $ - $ 413,858 Other receivables $ 2,051,028 $ - $ - $ 2,051,028 $ 2,051,028 Note payable $ 160,584 $ - $ - $ 160,584 $ 160,584 Convertible debt $ 1,728,442 $ - $ - $ 1,728,442 $ 1,728,442 At December 31, 2018: Cash $ 1,114,343 $ - $ 1,114,343 $ - $ 1,114,343 Other receivables $ 3,172,676 $ - $ - $ 3,172,676 $ 3,172,676 Note payable $ 255,032 $ - $ - $ 255,032 $ 255,032 |
Other Receivables (Tables)
Other Receivables (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Other receivables | March 31, December 31, 2019 2018 R&D tax credits $ 2,038,311 $ 2,162,373 Other 12,717 1,010,303 Total other receivables $ 2,051,028 $ 3,172,676 |
Property, Equipment, and Leas_2
Property, Equipment, and Leasehold Improvements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, equipment and leasehold improvements | March 31, December 31, 2019 2018 Laboratory equipment $ 193,661 $ 190,406 Computer equipment 78,986 75,417 Office equipment 37,264 37,262 Leasehold improvements 35,711 29,163 Total property, plant and equipment 345,622 332,248 Less accumulated depreciation (220,487 ) (203,394 ) Property, plant and equipment, net $ 125,135 $ 128,854 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Patents | Common stock issued at signing to Mayoly $ 1,740,959 Due to Mayoly at 12/31/19 - €400,000 449,280 Due to Mayoly at 12/31/20 - €350,000 393,120 Assumed Mayoly liabilities and forgiveness of Mayoly debt 1,219,386 $ 3,802,745 |
Intangible assets | March 31, December 31, 2019 2018 In process research and development $ - $ 416,600 Less accumulated amortization - (157,671 ) In process research and development, net $ - $ 258,929 License agreements $ - $ 3,398,702 Less accumulated amortization - (3,087,154 ) License agreements, net $ - $ 311,548 Patents $ 3,802,745 $ - Less accumulated amortization - - Patents, net $ 3,802,745 $ - |
Future amortization expense | 2019 $ 395,661 2020 527,548 2021 527,548 2022 527,548 2023 527,548 |
Goodwill | Goodwill Balance at January 1, 2018 $ 2,016,240 Foreign currency translation (91,410 ) Balance at December 31, 2018 1,924,830 Foreign currency translation (37,472 ) Balance at March 31, 2019 $ 1,887,358 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts payable and accrued expenses | March 31, December 31, 2019 2018 Trade payables $ 2,243,574 $ 1,532,110 Accrued expenses 69,930 285,061 Accrued payroll 267,205 253,225 Total accounts payable and accrued expenses $ 2,580,709 $ 2,070,396 |
Original Issue Discounted Con_2
Original Issue Discounted Convertible Notes and Warrants (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Convertible debt | March 31, December 31, 2019 2018 Convertible debt $ 2,000,000 $ - Unamortized debt discount - revalued warrants (296,216 ) - Total convertible debt $ 1,703,784 $ - |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Other Liabilities [Abstract] | |
Other liabilities | March 31, December 31, Current 2019 2018 Due to Mayoly $ 449,280 $ - Lease liabilities 194,250 - $ 643,530 $ - March 31, December 31, Long-term 2019 2018 Due to Mayoly $ 393,120 $ - Lease liabilities 93,372 - $ 486,492 $ - |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
WarrantsDisclosureTextBlock | |
Stock warrant transactions | Exercise Weighted Price Per Average Warrants Share Exercise Price 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 $ 5.28 Warrants outstanding and exercisable at January 1, 2019 3,112,715 $ 2.55 - $7.37 $ 4.83 Granted during the period - - - Expired during the period - - - Exercised during the period - - - Warrants outstanding and exercisable at March 31, 2019 3,112,715 $ 1.50 - $7.37 $ 3.53 |
Warrants by exercise price | Number of Weighted Average Weighted Shares Under Remaining Contract Average Exercise Price Warrants Life in Years Exercise Price $ 1.50 - $2.99 1,253,965 2.88 $ 3.00 - $3.99 636,972 3.06 $ 4.00 - $4.99 196,632 2.76 $ 5.00 - $5.99 805,476 2.88 $ 6.00 - $6.99 187,750 2.51 $ 7.00 - $7.37 31,920 1.71 Total 3,112,715 2.88 $3.53 |
Stock-Based Compensation Plan (
Stock-Based Compensation Plan (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Stock option activity | Number Average Remaining Contract Intrinsic of Shares Exercise Price Life in Years Value 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 $ - Stock options outstanding at January 1, 2019 994,000 $ 3.58 5.42 $ - Granted during the period - - Expired during the period - - Canceled during the period - - Exercised during the period - - Stock options outstanding at March 31, 2019 994,000 $ 3.58 5.17 $ - Exercisable at March 31, 2019 994,000 $ 3.58 5.17 $ - Non-vested stock options outstanding at January 1, 2019 244,500 $ 3.05 4.53 $ - Granted during the period - - Vested during the period (244,500 ) $ 3.05 4.53 Expired during the period - - Canceled during the period - - Exercised during the period - - Non-vested stock options outstanding at March 31, 2019 - $ - |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Operating lease information | March 31, 2019 Lease term and discount rate Weighted-average remaining lease term 1.5 years Weighted-average discount rate 6.0 % |
Maturities of operating lease liabilities | 2019 $ 152,100 2020 154,448 Total lease payments 306,548 Less imputed interest (18,926 ) Present value of lease liabilities $ 287,622 |
The Company and Basis of Pres_2
The Company and Basis of Presentation (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
State of incorporation | Delaware | |
Date of incorporation | Jan. 30, 2014 | |
Accumulated deficit | $ (52,177,801) | $ (47,517,046) |
Significant Accounting Polici_3
Significant Accounting Policies and Recent Accounting Pronouncements (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Cash in excess of FDIC limit | $ 133,984 | $ 754,261 |
Fair Value Disclosures (Details
Fair Value Disclosures (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Cash | $ 413,858 | $ 1,114,343 |
Other receivables | 2,051,028 | 3,172,676 |
Notes payable | 160,584 | 255,032 |
Convertible debt | 1,728,442 | 0 |
Level 1 | ||
Cash | 0 | 0 |
Other receivables | 0 | 0 |
Notes payable | 0 | 0 |
Convertible debt | 0 | |
Level 2 | ||
Cash | 413,858 | 1,114,343 |
Other receivables | 0 | 0 |
Notes payable | 0 | 0 |
Convertible debt | 0 | |
Level 3 | ||
Cash | 0 | 0 |
Other receivables | 2,051,028 | 3,172,676 |
Notes payable | 160,584 | $ 255,032 |
Convertible debt | $ 1,728,442 |
Other Receivables (Details)
Other Receivables (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
R&D tax credits | $ 2,038,311 | $ 2,162,373 |
Other | 12,717 | 1,010,303 |
Other receivables | $ 2,051,028 | $ 3,172,676 |
Property, Equipment, and Leas_3
Property, Equipment, and Leasehold Improvements (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Property, equipment and leasehold improvements, gross | $ 345,622 | $ 332,248 |
Less accumulated depreciation | (220,487) | (203,394) |
Property, equipment and leasehold improvements, net | 125,135 | 128,854 |
Laboratory Equipment | ||
Property, equipment and leasehold improvements, gross | 193,661 | 75,417 |
Computer Equipment | ||
Property, equipment and leasehold improvements, gross | 78,986 | 37,262 |
Office Equipment | ||
Property, equipment and leasehold improvements, gross | 37,264 | 190,406 |
Leasehold Improvements | ||
Property, equipment and leasehold improvements, gross | $ 35,711 | $ 29,163 |
Property, Equipment, and Leas_4
Property, Equipment, and Leasehold Improvements (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 17,114 | $ 14,763 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Patents | $ 3,802,745 | $ 0 |
Common stock issued at signing to Mayoly | ||
Patents | 1,740,959 | |
Due to Mayoly at 12/31/19 | ||
Patents | 449,280 | |
Due to Mayoly at 12/31/20 | ||
Patents | 393,120 | |
Assumed Mayoly liabilties and forgiveness of Mayoly debt | ||
Patents | $ 1,219,386 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill (Details 1) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
License Agreements | ||
Intangible assets, gross | $ 0 | $ 416,600 |
Less accumulated amortization | 0 | (157,671) |
Intangible assets, net | 0 | 258,929 |
In Process Research and Development | ||
Intangible assets, gross | 0 | 3,398,702 |
Less accumulated amortization | 0 | (3,087,154) |
Intangible assets, net | 0 | 311,548 |
Patents | ||
Intangible assets, gross | 3,802,745 | 0 |
Less accumulated amortization | 0 | 0 |
Intangible assets, net | $ 3,802,745 | $ 0 |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill (Details 2) | Mar. 31, 2019USD ($) |
Amortization expense | |
2019 | $ 395,661 |
2020 | 527,548 |
2021 | 527,548 |
2022 | 527,548 |
2023 | $ 527,548 |
Intangible Assets and Goodwil_5
Intangible Assets and Goodwill (Details 3) - USD ($) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, beginning | $ 1,924,830 | $ 2,016,240 |
Foreign currency translation | (37,472) | (91,410) |
Goodwill, ending | $ 1,887,358 | $ 1,924,830 |
Intangible Assets and Goodwil_6
Intangible Assets and Goodwill (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 561,289 | $ 191,681 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Trade payables | $ 2,243,574 | $ 1,532,110 |
Accrued expenses | 69,930 | 285,061 |
Accrued payroll | 267,205 | 253,225 |
Total accounts payable and accrued expenses | $ 2,580,709 | $ 2,070,396 |
Original Issue Discounted Con_3
Original Issue Discounted Convertible Notes and Warrants (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Convertible debt, gross | $ 2,000,000 | $ 0 |
Unamortized debt discount - revalued warrants | (296,216) | 0 |
Convertible debt, net | $ 1,728,442 | $ 0 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Other Liabilities [Abstract] | ||
Due to Mayoly, current | $ 449,280 | $ 0 |
Lease liabilities, current | 194,250 | 0 |
Other liabilities, current | 643,530 | 0 |
Due to Mayoly, long-term | 393,120 | 0 |
Lease liabilities, long-term | 93,372 | 0 |
Other liabilities, long-term | $ 486,492 | $ 0 |
Equity (Details Narrative)
Equity (Details Narrative) - shares | Mar. 31, 2019 | Dec. 31, 2018 |
Equity [Abstract] | ||
Common stock shares, outstanding | 18,537,958 | 17,704,925 |
Warrants (Details)
Warrants (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Warrants issued and exercisable, beginning | 3,112,715 | 3,371,385 |
Granted | 0 | 0 |
Expired | 0 | 0 |
Exercised | 0 | (503,070) |
Warrants issued and exercisable, ending | 3,112,715 | 2,868,315 |
Exercise price granted | $ .00 | $ .00 |
Exercise price expired | .00 | .00 |
Exercise price exercised | .00 | 2.50 |
Weighted average exercise price, beginning | 4.83 | 5.28 |
Weighted average exercise price, granted | .00 | .00 |
Weighted average exercise price warrants, expired | .00 | .00 |
Weighted average exercise price warrants, exercised | .00 | 2.50 |
Weighted average exercise price, ending | 4.83 | 5.28 |
Minimum | ||
Exercise price outstanding, beginning | 2.55 | 3.17 |
Exercise price outstanding, ending | 1.50 | 3.17 |
Maximum | ||
Exercise price outstanding, beginning | 7.37 | 7.37 |
Exercise price outstanding, ending | $ 7.37 | $ 7.37 |
Warrants (Details 1)
Warrants (Details 1) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Number of shares under warrants | 3,112,715 |
Weighted average remaining contract life in years | 2 years 10 months 17 days |
Weighted average exercise price | $ / shares | $ 3.53 |
Warrant 1 | |
Exercise price | $1.50 - $2.99 |
Number of shares under warrants | 1,253,965 |
Weighted average remaining contract life in years | 2 years 10 months 17 days |
Warrant 2 | |
Exercise price | $3.00 - $3.99 |
Number of shares under warrants | 636,972 |
Weighted average remaining contract life in years | 3 years 22 days |
Warrant 3 | |
Exercise price | $4.00 - $4.99 |
Number of shares under warrants | 196,632 |
Weighted average remaining contract life in years | 2 years 9 months 4 days |
Warrant 4 | |
Exercise price | $5.00 - $5.99 |
Number of shares under warrants | 805,476 |
Weighted average remaining contract life in years | 2 years 10 months 17 days |
Warrant 5 | |
Exercise price | $6.00 - $6.99 |
Number of shares under warrants | 187,750 |
Weighted average remaining contract life in years | 2 years 6 months 4 days |
Warrant 6 | |
Exercise price | $7.00 - $7.37 |
Number of shares under warrants | 31,920 |
Weighted average remaining contract life in years | 1 year 8 months 16 days |
Stock-Based Compensation Plan_2
Stock-Based Compensation Plan (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stock Option | ||
Number of Options Outstanding, Beginning | 994,000 | 545,000 |
Number of Options Granted | 0 | 0 |
Number of Options Expired | 0 | 0 |
Number of Options Exercised | 0 | 0 |
Number of Options Outstanding, Ending | 994,000 | 545,000 |
Number of Options Exercisable | 994,000 | 165,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ 3.58 | $ 4.05 |
Weighted Average Exercise Price Granted | .00 | .00 |
Weighted Average Exercise Price Expired | .00 | .00 |
Weighted Average Exercise Price Exercised | .00 | .00 |
Weighted Average Exercise Price Outstanding, Ending | 3.58 | 4.05 |
Weighted Average Exercise Price Exercisable | $ 3.58 | $ 4.48 |
Weighted Average Remaining Contract Life in Years, Beginning | 5 years 5 months 1 day | 7 years 1 month 17 days |
Weighted Average Remaining Contract Life in Years, Ending | 5 years 2 months 1 day | 6 years 10 months 20 days |
Weighted Average Remaining Contract Life in Years Exercisable | 5 years 2 months 1 day | 8 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 |
Non-vested Stock Option | ||
Number of Options Outstanding, Beginning | 244,500 | 387,500 |
Number of Options Granted | 0 | 0 |
Number of Options Vested | (244,500) | 7,500 |
Number of Options Expired | 0 | 0 |
Number of Options Exercised | 0 | 0 |
Number of Options Outstanding, Ending | 0 | 380,000 |
Weighted Average Exercise Price Outstanding, Beginning | $ 3.05 | $ 3.89 |
Weighted Average Exercise Price Granted | .00 | .00 |
Weighted Average Exercise Price Vested | 3.05 | 4.48 |
Weighted Average Exercise Price Expired | .00 | .00 |
Weighted Average Exercise Price Exercised | .00 | .00 |
Weighted Average Exercise Price Outstanding, Ending | $ .00 | $ 3.87 |
Weighted Average Remaining Contract Life in Years, Beginning | 4 years 6 months 11 days | 6 years 4 months 20 days |
Weighted Average Remaining Contract Life in Years, Ending | 4 years 6 months 11 days | 6 years 4 months 20 days |
Weighted Average Remaining Contract Life in Years Exercisable | 6 years 11 days | |
Aggregate Intrinsic Value Outstanding, Beginning | $ 0 | $ 0 |
Aggregate Intrinsic Value Vested | 0 | 0 |
Aggregate Intrinsic Value Outstanding, Ending | 0 | 0 |
Aggregate Intrinsic Value Exercisable | $ 0 | $ 0 |
Leases (Details)
Leases (Details) | Mar. 31, 2019 |
Leases [Abstract] | |
Weighted-average remaining lease term | 1 year 6 months |
Weighted-average discount rate | 6.00% |
Leases (Details 1)
Leases (Details 1) | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 152,100 |
2020 | 154,448 |
Total lease payments | 306,548 |
Less: imputed interest | (18,926) |
Present value of lease liabilities | $ 287,622 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Leases [Abstract] | ||
Lease expense | $ 50,655 | $ 31,227 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Gross deferred tax asset | $ 13,650,000 | $ 12,490,000 | |
Deferred tax asset valuation allowance | (13,650,000) | (12,490,000) | |
Net operating loss carry-forwards | 16,113,000 | $ 15,406,000 | |
Change in valuation allowance | $ 1,160,000 | $ 925,000 |
Net Loss per Common Share (Deta
Net Loss per Common Share (Details Narrative) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Warrants | ||
Anti-dilutive shares excluded from earnings per share | 2,112,715 | 2,868,315 |
Stock Option | ||
Anti-dilutive shares excluded from earnings per share | 416,000 | 545,000 |
Convertible Debt | ||
Anti-dilutive shares excluded from earnings per share | 994,000 | 74,000 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts payable | $ 2,580,709 | $ 2,070,396 |
JIST | ||
Accounts payable | 478,400 | 478,400 |
RHMS | ||
Accounts payable | 38,453 | 38,453 |
Consultant | ||
Accounts payable | $ 10,000 | $ 50,000 |