Document_and_Entity_Informatio
Document and Entity Information Document and Entity Information (USD $) | 10 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Dec. 31, 2014 | Mar. 20, 2015 | Jun. 30, 2014 |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Flex Pharma, Inc. | ||
Entity Central Index Key | 1615219 | ||
Current Fiscal Year End Date | -19 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | FY | ||
Amendment Flag | FALSE | ||
Entity Common Stock, Shares Outstanding | 17,933,664 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | No | ||
Entity Public Float | $0 |
CONSOLIDATED_BALANCE_SHEET
CONSOLIDATED BALANCE SHEET (USD $) | Dec. 31, 2014 |
Current assets: | |
Cash | $33,854,153 |
Prepaid expenses and other current assets | 370,396 |
Total current assets | 34,224,549 |
Property and equipment, net | 85,144 |
Deferred IPO issuance costs | 1,074,794 |
Deferred tax assets | 50,103 |
Other assets | 50,000 |
Restricted cash | 126,808 |
Total assets | 35,611,398 |
Current liabilities: | |
Accounts payable | 578,653 |
Accrued expenses and other current liabilities | 416,524 |
Deferred tax liabilities | 50,103 |
Deferred rent, current portion | 21,881 |
Total current liabilities | 1,067,161 |
Deferred rent, net of current portion | 35,968 |
Other long term liabilities | 15,442 |
Total liabilities | 1,118,571 |
Commitments and contingencies (Note 6) | |
Stockholders' deficit: | |
Common stock, $0.0001 par value; 61,000,000 shares authorized, 5,434,301 shares issued and 2,215,711 shares outstanding at December 31, 2014 | 221 |
Additional paid-in capital | 1,472,299 |
Accumulated deficit | -8,010,860 |
Total stockholders' deficit | -6,538,340 |
Total liabilities, convertible preferred stock and stockholders' deficit | 35,611,398 |
Series A convertible preferred stock | |
Convertible preferred stock: | |
Preferred stock, carrying value | 15,637,032 |
Series B Preferred Stock | |
Convertible preferred stock: | |
Preferred stock, carrying value | $25,394,135 |
CONSOLIDATED_BALANCE_SHEET_PAR
CONSOLIDATED BALANCE SHEET (PARENTHETICAL) (USD $) | Dec. 31, 2014 |
Common stock, par value (in usd per share) | $0.00 |
Common stock, shares authorized | 61,000,000 |
Common stock, shares issued | 5,434,301 |
Common stock, shares outstanding | 2,215,711 |
Series A Preferred Stock | |
Preferred stock, par value (in usd per share) | $0.00 |
Preferred stock, authorized (shares) | 16,000,000 |
Preferred stock, issued (shares) | 15,775,221 |
Preferred stock, shares outstanding | 15,775,221 |
Preferred stock, aggregate liquidation preference | $15,755,221 |
Series B Preferred Stock | |
Preferred stock, par value (in usd per share) | $0.00 |
Preferred stock, authorized (shares) | 14,500,000 |
Preferred stock, issued (shares) | 14,078,647 |
Preferred stock, shares outstanding | 14,078,647 |
Preferred stock, aggregate liquidation preference | $25,449,970 |
CONSOLIDATED_STATEMENT_OF_OPER
CONSOLIDATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS (USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Operating expenses: | |
Research and development | $4,003,911 |
General and administrative | 4,025,895 |
Total operating expenses | 8,029,806 |
Loss from operations | -8,029,806 |
Interest income | 18,946 |
Net loss | -8,010,860 |
Comprehensive loss | -8,010,860 |
Net loss attributable to common stockholders | ($8,010,860) |
Net loss per share attributable to common stockholders - basic and diluted (in usd per share) | ($4.57) |
Weighted-average number of common shares outstanding — basic and diluted | 1,753,024 |
CONSOLIDATED_STATEMENT_OF_CONV
CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (USD $) | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Series A Preferred Stock | Series A Preferred Stock | Series B Preferred Stock | Series B Preferred Stock |
USD ($) | USD ($) | USD ($) | USD ($) | Preferred Stock | Preferred Stock | |||
USD ($) | USD ($) | |||||||
Equity, beginning balance at Feb. 25, 2014 | $0 | $0 | $0 | $0 | $0 | $0 | ||
Common stock, shares outstanding, beginning balance at Feb. 25, 2014 | 0 | |||||||
Preferred stock, shares outstanding, beginning balance at Feb. 25, 2014 | 0 | 0 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of convertible preferred stock, net of issuance costs (in shares) | 15,775,221 | 14,078,647 | ||||||
Issuance of convertible preferred stock, net of issuance costs | 15,637,032 | 25,394,135 | ||||||
Sale of restricted common stock to founders | 2,321 | 2,321 | ||||||
Vesting of restricted common stock (in shares) | 2,202,139 | |||||||
Vesting of restricted common stock | 0 | 220 | -220 | |||||
Issuance of common stock from option exercises (in shares) | 13,572 | 13,572 | ||||||
Issuance of common stock from option exercises | 8,138 | 1 | 8,137 | |||||
Stock-based compensation expense | 1,462,061 | 1,462,061 | ||||||
Net loss | -8,010,860 | -8,010,860 | ||||||
Equity, ending balance at Dec. 31, 2014 | ($6,538,340) | $221 | $1,472,299 | ($8,010,860) | $15,637,032 | $25,394,135 | ||
Preferred stock, shares outstanding, ending balance at Dec. 31, 2014 | 15,775,221 | 15,775,221 | 14,078,647 | 14,078,647 | ||||
Common stock, shares outstanding, ending balance at Dec. 31, 2014 | 2,215,711 | 2,215,711 |
CONSOLIDATED_STATEMENT_OF_CONV1
CONSOLIDATED STATEMENT OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT (PARENTHETICAL) (USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Series A Preferred Stock | |
Issuance costs | $138,189 |
Series B Preferred Stock | |
Issuance costs | $55,835 |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Operating activities | |
Net loss | ($8,010,860) |
Adjustments to reconcile net loss to net cash used in operating activities: | |
Depreciation and amortization | 11,997 |
Stock-based compensation | 1,462,061 |
Other non-cash items | 55,221 |
Changes in operating assets and liabilities: | |
Restricted cash | -126,808 |
Prepaid expenses and other current assets | -370,396 |
Other assets | -50,000 |
Accounts payable | 254,253 |
Accrued expenses | 220,375 |
Deferred rent | 57,849 |
Other long term liabilities | 15,442 |
Net cash used in operating activities | -6,480,866 |
Investing activities | |
Purchases of property and equipment | -76,141 |
Net cash used in investing activities | -76,141 |
Financing activities | |
Proceeds from sale of restricted common stock to founders | 2,321 |
Proceeds from exercise of common stock | 8,138 |
Deferred IPO issuance costs | -575,245 |
Net cash provided by financing activities | 40,411,160 |
Net increase in cash | 33,854,153 |
Cash at beginning of period | 0 |
Cash at end of period | 33,854,153 |
Supplemental cash flow information | |
Issuance of Series A convertible preferred stock in satisfaction of accounts payable | 55,221 |
Deferred IPO issuance costs in accounts payable and accrued expenses | 499,549 |
Property and equipment purchases in accrued expenses | 21,000 |
Series A Preferred Stock | |
Financing activities | |
Proceeds from issuance of convertible preferred stock, net of issuance costs | 15,581,811 |
Series B Preferred Stock | |
Financing activities | |
Proceeds from issuance of convertible preferred stock, net of issuance costs | $25,394,135 |
Organization_and_operations
Organization and operations | 10 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and operations | Organization and operations |
The Company | |
Flex Pharma, Inc. (the "Company") is a biotechnology company that was incorporated in Delaware on February 26, 2014 and has a principal place of business in Boston, Massachusetts. The Company is developing innovative and proprietary treatments for nocturnal leg cramps and and spasms associated with severe neuromuscular conditions. The Company believes that activation of certain receptors in primary sensory neurons reduces the repetitive firing, or hyperexcitability, of alpha-motor neurons, thereby preventing or reducing the frequency and intensity of muscle cramps and spasms. The Company also believes that it is the only company developing products based on this mechanism of muscle cramp and spasm inhibition. | |
The Company is subject to risks common to companies in the biotechnology industry, including, but not limited to, risks of failure of pre-clinical studies, clinical studies and clinical trials, the need to obtain marketing approval for its drug product candidates, the need to successfully commercialize and gain market acceptance of its drug product candidates and its consumer products, dependence on key personnel, protection of proprietary technology, compliance with government regulations, development by competitors of technological innovations and ability to transition from pilot-scale manufacturing to large-scale production of products. | |
Liquidity | |
The Company has incurred an accumulated deficit of $8,010,860 since February 26, 2014 (inception) through December 31, 2014, and will require substantial additional capital to fund its research and development and the launch of its consumer brand. The Company had an unrestricted cash balance of $33,854,153 at December 31, 2014. The Company believes that the net proceeds from its initial public offering ("IPO") completed in 2015, together with its existing unrestricted cash, will be sufficient to allow the Company to fund its current operating plan for at least the next 12 months. Management expects the Company to incur a loss for the foreseeable future. The Company's ability to achieve profitability in the future is dependent upon the successful development, approval and commercialization of its drug product candidates and successful commercialization of its consumer products, and achieving a level of revenues adequate to support the Company's cost structure. The Company may never achieve profitability, and unless and until it does, the Company will continue to need to raise additional capital. Management intends to fund future operations through additional private or public debt or equity offerings, and may seek additional capital through arrangements with collaborators or from other sources. There can be no assurances, however, that additional funding will be available on terms acceptable to the Company, or at all. |
Summary_of_significant_account
Summary of significant accounting policies | 10 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Summary of significant accounting policies | Summary of significant accounting policies | |
Basis of presentation and use of estimates | ||
The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, estimates related to clinical study accruals, stock-based compensation expense, and amounts of expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. | ||
The Company utilizes significant estimates and assumptions in determining the fair value of its common stock. The Company utilized various valuation methodologies in accordance with the framework of the 2004 and 2013 American Institute of Certified Public Accountants Technical Practice Aids, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that require the Company's judgment. These estimates and assumptions include a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company's common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or a sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date and materially affect the financial statements. | ||
Principles of consolidation | ||
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, TK Pharma, Inc., a Massachusetts Securities Corporation. All significant intercompany balances and transactions have been eliminated in consolidation. | ||
Segment information | ||
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assess performance. The Company and the Company's chief operating decision maker, the Company's Chief Executive Officer, view the Company's operations and manage its business as one operating segment, which is the business of developing and commercializing products for nocturnal leg cramps, spasms associated with severe neuromuscular conditions and exercise associated muscle cramps. The Company operates in only one geographic segment, the United States. | ||
Concentrations of credit risk and off-balance sheet risk | ||
Cash is a financial instrument that potentially subjects the Company to a concentration of credit risk. The Company's cash is held in accounts at a financial institution that management believes is creditworthy. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds. The Company has no financial instruments with off-balance sheet risk of loss. | ||
Deferred IPO issuance costs | ||
Deferred IPO issuance costs, which primarily consist of direct incremental legal and accounting fees relating to the Company's IPO, are capitalized. The deferred IPO issuance costs were offset against IPO proceeds upon the closing of the offering in February 2015. Approximately $1,075,000 of deferred issuance costs were incurred and capitalized as of December 31, 2014. | ||
Property and equipment | ||
Property and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred, while costs of major additions and betterments are capitalized. Upon disposal, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are as follows: | ||
Asset type | Estimated | |
useful life | ||
Computers and computer equipment | 3 years | |
Laboratory equipment | 3 years | |
Impairment of long-lived assets | ||
The Company evaluates long-lived assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value. The Company has not recognized any impairment losses through December 31, 2014. | ||
Research and development expenses | ||
Research and development costs are charged to expense as incurred in performing research and development activities. The costs include employee compensation costs, clinical study costs, external consultant costs, regulatory costs and facilities and overhead costs. Facilities and overhead costs primarily include the allocation of rent, utility and office-related expenses attributable to research and development personnel. The Company records payments made to outside vendors in advance of services performed or goods being delivered for use in research and development activities as prepaid expenses, which are expensed as services are performed or goods are delivered. | ||
Stock-based compensation expense | ||
The Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718, Compensation-Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations and comprehensive loss based on their grant date fair values. Compensation expense related to awards to employees is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. The Company accounts for stock-based compensation arrangements with non-employees based upon the fair value of the consideration received or the equity instruments issued, whichever is more reliably measurable, in accordance with the provisions of FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees. The measurement date for non-employee awards is generally the date performance of services required from the non-employee is complete, resulting in periodic adjustments to stock-based compensation expense during the vesting period for changes in the fair value of the awards. Stock-based compensation costs for non-employee service awards are recognized as services are provided, which is generally the vesting period, on a straight-line basis. The unvested portion of the awards is subject to re-measurement over the vesting period. | ||
The Company estimates the fair value of its stock options using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (a) the expected stock price volatility, (b) the expected term of the award, (c) the risk-free interest rate, (d) expected dividends and (e) the estimated fair value of the Company's common stock on the measurement date. Due to the lack of a public market for the trading of its common stock and a lack of company specific historical and implied volatility data, the Company based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. When selecting these public companies on which it has based its expected stock price volatility, the Company selected companies with comparable characteristics, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected term of the stock-based awards. The Company computes historical volatility data using the volatility for the selected companies' shares during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Due to the lack of Company specific historical option activity, the Company has estimated the expected term of its employee stock options using the "simplified" method, whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. The expected term for non-employee awards is the remaining contractual term of the option. The risk-free interest rates are based on the U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The Company has never paid, and does not expect to pay dividends in the foreseeable future. | ||
The Company is also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from its estimates. The Company records stock-based compensation expense only for those awards that are expected to vest. To the extent that actual forfeitures differ from the Company's estimates, the differences are recorded as a cumulative adjustment in the period the estimates were revised. | ||
Income taxes | ||
Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. The Company has evaluated available evidence and concluded that the Company may not realize the benefit of its deferred tax assets; therefore a valuation allowance has been established for the full amount of the deferred tax assets. | ||
The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2014, the Company does not have any significant uncertain tax positions. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. | ||
Net loss per share attributable to common stockholders | ||
Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period, determined using the treasury stock method and the if-converted method, for convertible securities, if inclusion of these is dilutive. | ||
For the period from February 26, 2014 (inception) to December 31, 2014, the Company has excluded the effects of all potentially dilutive shares, which include Series A convertible preferred stock, Series B convertible preferred stock and outstanding common stock options, from the weighted-average number of common shares outstanding as their inclusion in the computation for the period would be anti-dilutive due to the net loss per share incurred by the Company. | ||
Comprehensive loss | ||
Comprehensive loss consists of net income or loss and changes in equity during a period from transactions and other events and circumstances generated from non-owner sources. The Company's net loss equals comprehensive loss for the period presented. | ||
Recent accounting pronouncements | ||
In June 2014, the FASB issued ASU No. 2014-10 "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". Under this ASU, the definition of a development stage entity was removed from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities under GAAP. This standard is effective for annual reporting periods beginning after December 15, 2014. Early adoption is permitted for certain entities. The Company was eligible for early adoption and adopted this standard in the accompanying financial statements. | ||
In August 2014, the FASB issued ASU No. 2014-15 "Presentation of Financial Statements - Going Concern (Subtopic 205-40)". The ASU requires all entities to evaluate for the existence of conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the issuance date of the financial statements. The accounting standard is effective for interim and annual periods ending after December 15, 2016, and will not have a material impact on the consolidated financial statements, but may impact the Company's footnote disclosures. | ||
The Company believes that the impact of other recently issued standards that are not yet effective will not have a material effect on its financial position or results of operations upon adoption. | ||
Reverse stock split | ||
In January 2015, the Company effected a one-for-4.2825 reverse stock split of its issued and outstanding common stock. All share and per share amounts related to issued and outstanding common stock and outstanding options exercisable for common stock included in the Company's financial statements and notes to financial statements have been retroactively adjusted for all periods presented to reflect the reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. The conversion ratios of the Company's convertible preferred stock have also been adjusted to reflect the reverse stock split. | ||
Subsequent events | ||
The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the consolidated financial statements for potential recognition or disclosure in the consolidated financial statements. Subsequent events have been evaluated through the date these consolidated financial statements were issued for potential recognition or disclosure in the consolidated financial statements (Note 14). |
Restricted_cash
Restricted cash | 10 Months Ended |
Dec. 31, 2014 | |
Cash and Cash Equivalents [Abstract] | |
Restricted cash | Restricted cash |
As of December 31, 2014, the Company had $126,808 restricted cash of in the form of a letter of credit. The Company maintains this letter of credit as a security deposit on the lease of its office space in Boston, Massachusetts (Note 6). |
Property_and_equipment_net
Property and equipment, net | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Property, Plant and Equipment [Abstract] | ||||
Property and equipment, net | Property and equipment, net | |||
Property and equipment, net consists of the following: | ||||
31-Dec-14 | ||||
Computers and computer equipment | $ | 62,773 | ||
Laboratory equipment | 13,368 | |||
Capital in progress | 21,000 | |||
Total property and equipment | 97,141 | |||
Accumulated depreciation | (11,997 | ) | ||
Property and equipment, net | $ | 85,144 | ||
Depreciation expense was $11,997 for the period from February 26, 2014 (inception) to December 31, 2014. |
Accrued_expenses_and_other_cur
Accrued expenses and other current liabilities | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Payables and Accruals [Abstract] | ||||
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities | |||
Accrued expenses and other current liabilities consist of the following: | ||||
31-Dec-14 | ||||
Deferred IPO issuance costs | $ | 175,149 | ||
Research and development costs | 125,067 | |||
Payroll and employee-related costs | 34,218 | |||
Consumer brand-related costs | 23,635 | |||
Professional fees | 15,500 | |||
Other | 42,955 | |||
Total | $ | 416,524 | ||
Commitments_and_contingencies
Commitments and contingencies | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Commitments and contingencies | Commitments and contingencies | |||
Lease commitments | ||||
On April 29, 2014, the Company leased office space in Boston, Massachusetts under an operating lease that is scheduled to expire on August 31, 2017. Additionally, on October 21, 2014, the Company leased office space in New York, New York under an operating lease that is scheduled to expire on October 31, 2016. As of December 31, 2014, the minimum future lease payments under the Company's operating leases are as follows: | ||||
2015 | $ | 332,190 | ||
2016 | 323,190 | |||
2017 | 168,793 | |||
Total minimum lease payments | $ | 824,173 | ||
Rent expense is being recognized on a straight-line basis. The Company recorded approximately $152,000 of rent expense for the period from February 26, 2014 (inception) to December 31, 2014. | ||||
Royalty agreement | ||||
In March 2014, the Company entered into a royalty agreement with certain of its founders. Under the agreement, the Company agreed to pay the founders an aggregate royalty of 2% of gross sales of the Company's products in perpetuity. No royalty amounts were owed to the founders as of December 31, 2014. | ||||
Litigation | ||||
The Company is not a party to any litigation and does not have contingency reserves established for any litigation liabilities as of December 31, 2014. |
Convertible_preferred_stock
Convertible preferred stock | 10 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Convertible preferred stock | Convertible preferred stock |
As of December 31, 2014, the Company had authorized 16,000,000 shares of Series A convertible preferred stock ("Series A Preferred Stock"), $0.0001 par value per share, for issuance. During March, April and May 2014, the Company issued an aggregate of 15,775,221 shares of Series A Preferred Stock for $1.00 per share, resulting in net proceeds to the Company of $15,637,032, which is also the carrying value of the Series A Preferred Stock as of December 31, 2014. | |
As of December 31, 2014, the Company had authorized 14,500,000 shares of of Series B convertible preferred stock ("Series B Preferred Stock"), $0.0001 par value per share, for issuance. From July to October 2014, the Company issued an aggregate of 14,078,647 shares of Series B Preferred Stock for $1.81 per share, resulting in net proceeds to the Company of $25,394,135, which is also the carrying value of the Series B Preferred Stock as of December 31, 2014. | |
In conjunction with the Company's IPO in February 2015, all shares of the Series A and Series B Preferred Stock converted into common stock (Note 14). As of December 31, 2014, the rights and privileges of the Series A and Series B Preferred Stock were as follows: | |
Voting | |
The holders of the Series A Preferred Stock and Series B Preferred Stock are entitled to vote, together with the holders of common stock, on all matters submitted to stockholders for a vote, except with respect to matters on which Delaware General Corporation Law requires that a vote will be by a separate class. Each Series A and Series B Preferred Stock holder is entitled to the number of votes equal to the number of shares of common stock into which each preferred share is convertible at the time of such vote. The holders of the outstanding Series A and Series B Preferred Stock, voting together as a single class, are entitled to elect two directors to the Company's Board of Directors. Certain actions undertaken by the Company require approval from 75% of the holders of the outstanding Series A Preferred Stock and 60% of the Series B Preferred Stock. These actions include a liquidation, dissolution or winding up of the Company, certain amendments to the certificate of incorporation, altering the terms of the existing preferred stock and increasing the number of authorized shares of preferred stock. | |
Dividends | |
The Company shall not declare, pay or set aside any dividends unless the holders of each series of convertible preferred stock then outstanding shall receive first, or simultaneously, in the case of a dividend on common stock, on a pari passu basis, a dividend in an amount that is at least equal to the amount that would have been received by the holders of the Series A and Series B Preferred Stock had all the Series A and Series B Preferred Stock been converted to common stock. In the event of a dividend on a class of stock that is not convertible to common stock, the holders shall receive a dividend in proportion to that received by the other classes of stock. | |
Liquidation preference | |
In the event of any liquidation, dissolution, winding up of the affairs or deemed liquidation event of the Company, the holders of the then-outstanding Series A and Series B Preferred Stock are entitled to receive, on a pari passu basis, in preference to the common stock holders, an amount equal to the greater of (1) $1.00 per share of Series A Preferred Stock and $1.81 per share of Series B Preferred Stock, plus all declared but unpaid dividends, or (2) such amount per share of Series A Preferred Stock and Series B Preferred Stock payable as if converted into common stock. Any remaining assets of the Company shall be distributed ratably among the holders of common stock. If the assets or surplus funds to be distributed to the holders of the Series A and Series B Preferred Stock are insufficient to permit the payment to such holders of their full preferential amount, the assets and surplus funds legally available for distribution shall be distributed ratably among the holders of the Series A and Series B Preferred Stock, pro rata, based upon the number of shares held. | |
In the event of certain deemed liquidation events, holders of the Series A and Series B Preferred Stock may require the Company to redeem their shares at a price equal to the liquidation amount at that time. | |
Conversion | |
Each share of Series A and Series B Preferred Stock, at the option of the holder, is convertible into a number of fully paid shares of common stock as determined by dividing $1.00 for the Series A Preferred Stock and $1.81 for the Series B Preferred Stock, by the conversion price in effect at the time. The conversion price of Series A Preferred Stock and Series B Preferred Stock is $4.28 and $7.74 per share, respectively, as of December 31, 2014. The conversion price is subject to adjustment in accordance with provisions contained in the Company's certificate of incorporation. Conversion is automatic immediately upon the closing of a firm commitment underwritten public offering in which shares are sold to the public at a price of at least $8.57 per share (subject to appropriate adjustment for stock splits, stock dividends, combinations and other similar recapitalizations affecting the number of such shares issued and outstanding) for gross proceeds of at least $40,000,000, or upon the written election of 1) the holders of at least 75% of the then-outstanding shares of Series A Preferred Stock and 2) the holders of at least 60% of the then-outstanding shares of Series B Preferred Stock. | |
The Company evaluated the Series A Preferred Stock and Series B Preferred Stock and determined both should be considered "equity hosts" and not "debt hosts" as defined by ASC 815, Derivatives and Hedging. These evaluations are necessary in order to determine if any embedded features of the Series A Preferred Stock or Series B Preferred Stock require bifurcation and, therefore, separate accounting as derivative liabilities. The Company's analyses followed the "whole instrument approach," which compares the individual features against the entire preferred stock instruments which include those features. The Company's analyses were based on consideration of the Series A Preferred Stock and Series B Preferred Stock's economic characteristics and risks, and more specifically, evaluated all the stated and implied substantive terms and features, including (i) whether the Series A Preferred Stock or Series B Preferred Stock included redemption or put features, (ii) whether the preferred stockholders were entitled to dividends, (iii) the voting rights of the Series A Preferred Stock and Series B Preferred Stock and (iv) the existence and nature of any conversion rights. As a result of the Company's determination that the Series A Preferred Stock and Series B Preferred Stock are "equity hosts," the embedded conversion features do not require bifurcation as derivative liabilities. In addition, as the contingent put features described above contain gross settlement provisions, these features also do not require bifurcation as derivative liabilities. |
Common_stock
Common stock | 10 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Equity [Abstract] | |||||||
Common stock | Common stock | ||||||
As of December 31, 2014, the Company had authorized 61,000,000 shares of common stock, $0.0001 par value per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the rights and privileges of the Series A and Series B Preferred Stock. | |||||||
Restricted common stock | |||||||
In March 2014, the Company sold 4,553,415 shares of restricted common stock to the founders of the Company ("recipients"), for $0.0004 per share, for total proceeds of $1,950. In April 2014, based upon anti-dilution provisions granted to the founders, an additional 867,314 shares of restricted common stock were sold to the same founders, after which the anti-dilution provisions were terminated. The restricted common stock vested 25% upon issuance, and the remaining 75% vests ratably over four years, during which time the Company has the right to repurchase the unvested shares held by a recipient if the relationship between such recipient and the Company ceases. If the relationship terminates, the Company has 90 days to repurchase unvested shares at $0.0004. Such shares are not accounted for as outstanding until they vest. There were 2,202,139 shares of restricted common stock outstanding as of December 31, 2014. | |||||||
The following is a summary of restricted common stock activity: | |||||||
Number of | Weighted-Average | ||||||
Shares | Grant Date | ||||||
Fair Value | |||||||
Non-vested at February 26, 2014 | — | $ | — | ||||
Issued | 5,420,729 | 0.1 | |||||
Vested | (2,202,139 | ) | 0.1 | ||||
Forfeited | — | — | |||||
Non-vested at December 31, 2014 | 3,218,590 | $ | 0.1 | ||||
The total fair value of shares vested for the period from February 26, 2014 (inception) to December 31, 2014 was approximately $3,620,000. | |||||||
Shares reserved for future issuance | |||||||
The Company has reserved the following number of shares of common stock for future issuance: | |||||||
31-Dec-14 | |||||||
Vesting of restricted common stock | 3,218,590 | ||||||
Conversion of Series A Preferred Stock | 3,683,637 | ||||||
Conversion of Series B Preferred Stock | 3,287,471 | ||||||
Stock-based compensation awards | 1,189,314 | ||||||
Total | 11,379,012 | ||||||
Stockbased_compensation
Stock-based compensation | 10 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Stock-based compensation | Stock-based compensation | ||||||||||||
In March 2014, the Company adopted the Flex Pharma, Inc. 2014 Equity Incentive Plan (the "Plan"), under which it may grant incentive stock options, non-qualified stock options, restricted stock awards, restricted stock units and stock appreciation rights to purchase up to 116,754 shares of common stock. In April 2014, the Company amended the Plan to reserve for the issuance of up to 1,451,087 shares of common stock pursuant to equity awards. In September 2014, the Company further amended the Plan to reserve for the issuance of up to 2,070,200 shares of common stock pursuant to equity awards. Terms of stock award agreements, including vesting requirements, are determined by the board of directors, subject to the provisions of the Plan. For options granted from February 26, 2014 (inception) to December 31, 2014, the exercise price equaled the fair market value of the common stock as determined by the board of directors on the date of grant. As of December 31, 2014, there were 262,482 shares remaining available for the grant of stock awards under the Plan. | |||||||||||||
For the period from February 26, 2014 (inception) to December 31, 2014, the Company granted a total of 137,765 stock options to non-employee consultants and members of its Scientific Advisory Board, which are included in the following table. The options generally vest over a four-year period, and have a contractual term of ten years. The total stock-based compensation expense related to all non-employee stock options for the period from February 26, 2014 (inception) to December 31, 2014 was approximately $149,000. The following table summarizes stock option activity for employees and non-employees: | |||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | ||||||||||
Exercise Price | Remaining | Intrinsic | |||||||||||
Contractual | Value | ||||||||||||
Term (in years) | |||||||||||||
Granted | 1,020,234 | $ | 3.19 | ||||||||||
Exercised | (13,572 | ) | 0.6 | ||||||||||
Cancelled or forfeited | (79,830 | ) | 1.14 | ||||||||||
Outstanding at December 31, 2014 | 926,832 | $ | 3.4 | 9.67 | $ | 6,846,054 | |||||||
Exercisable at December 31, 2014 | 3,891 | $ | 0.6 | 9.29 | $ | 39,649 | |||||||
Vested or expected to vest at December 31, 2014 | 867,333 | $ | 3.39 | 9.66 | $ | 6,421,021 | |||||||
During the period from February 26, 2014 (inception) to December 31, 2014, the Company granted stock options to purchase an aggregate of 1,020,234 shares of its common stock with a weighted-average grant date fair value of $2.20. There were 13,572 stock options exercised with a weighted-average exercise price of $0.60 during the period from February 26, 2014 (inception) to December 31, 2014. The intrinsic value of stock options exercised during the period from February 26, 2014 (inception) to December 31, 2014 was $51,719. The intrinsic value is calculated as the difference between the fair value of the Company's common stock and the exercise price of the options at the date of exercise. | |||||||||||||
The Company estimates the fair value of each stock option award on the grant date using the Black-Scholes option-pricing model based on the following assumptions and the assumptions regarding the fair value of the underlying Common Stock on each measurement date: | |||||||||||||
Period from | |||||||||||||
February 26, 2014 | |||||||||||||
(Inception) to | |||||||||||||
December 31, | |||||||||||||
2014 | |||||||||||||
Expected volatility | 75.8% to 76.4% | ||||||||||||
Risk-free interest rate | 1.59% to 2.71% | ||||||||||||
Expected term | 6 - 10 years | ||||||||||||
Expected dividend yield | 0 | % | |||||||||||
Total stock-based compensation expense recognized for employee and non-employee restricted common stock, and stock options granted to employees and non-employees is included in the Company's statement of operations and comprehensive loss as follows: | |||||||||||||
Period from | |||||||||||||
February 26, 2014 | |||||||||||||
(Inception) to | |||||||||||||
December 31, | |||||||||||||
2014 | |||||||||||||
Research and development | $ | 648,001 | |||||||||||
General and administrative | 814,060 | ||||||||||||
Total | $ | 1,462,061 | |||||||||||
As of December 31, 2014, there was approximately $12,632,000 of total unrecognized compensation cost related to non-vested equity awards. Total unrecognized compensation cost will be adjusted for the re-measurement of non-employee awards as well as future changes in employee and non-employee forfeitures, if any. The Company expects to recognize that cost over a remaining weighted-average period of 3.27 years. |
Income_taxes
Income taxes | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Income Tax Disclosure [Abstract] | ||||
Income taxes | Income taxes | |||
For the period from February 26, 2014 (inception) to December 31, 2014, the Company did not record a current or deferred income tax expense or benefit. The Company's loss before income taxes consists solely of a domestic loss. | ||||
Deferred taxes are recognized for temporary differences between the basis of assets and liabilities for financial statement and income tax purposes. The significant components of the Company's deferred tax assets are comprised of the following: | ||||
31-Dec-14 | ||||
Deferred tax assets: | ||||
U.S. and state net operating loss carryforwards | $ | 2,708,861 | ||
Accruals and other temporary differences | 23,829 | |||
Amortization | 36,742 | |||
Stock-based compensation | 57,120 | |||
Tax credit carryforward | 87,762 | |||
Total deferred tax assets | 2,914,314 | |||
Less valuation allowance | (2,751,295 | ) | ||
Deferred tax assets | 163,019 | |||
Deferred tax liabilities: | ||||
Stock-based compensation | (162,779 | ) | ||
Depreciation | (240 | ) | ||
Accruals and other temporary differences | — | |||
Deferred tax liabilities | (163,019 | ) | ||
Net deferred tax assets | $ | — | ||
The Company has evaluated the positive and negative evidence bearing upon the realizability of its deferred tax assets. Based on the Company's operating loss, the Company has concluded that it is more likely than not that the benefit of its deferred tax assets will not be realized. Accordingly, the Company has provided a full valuation allowance against its net deferred tax assets as of December 31, 2014. The valuation allowance increased by $2,751,295 during the period from February 26, 2014 (inception) to December 31, 2014, due primarily to the generation of a net operating loss during the period. The valuation allowance is allocated to both short term and long term gross deferred tax assets, resulting in a long term deferred tax asset and a current deferred tax liability of $50,103. | ||||
A reconciliation of income tax expense computed at the statutory federal income tax rate to income taxes as reflected in the financial statements is as follows: | ||||
Period from | ||||
February 26, 2014 | ||||
(Inception) to | ||||
December 31, | ||||
2014 | ||||
Federal income tax expense at statutory rate | 35 | % | ||
State income tax, net of federal benefit | 3.7 | % | ||
Permanent differences | (0.3 | )% | ||
Stock compensation | (5.3 | )% | ||
Research credits | 1.2 | % | ||
Change in valuation allowance | (34.3 | )% | ||
Effective tax rate | 0 | % | ||
As of December 31, 2014, the Company had a U.S. federal net operating loss carryforward of approximately $6,850,000, which may be available to offset future income tax liabilities and expires in 2034. As of December 31, 2014, the Company also had a tax effected U.S. state net operating loss carryforward of approximately $481,000, which may be available to offset future income tax liabilities and expires in 2034. | ||||
Under the provisions of the Internal Revenue Code, the net operating loss and tax credit carryforwards are subject to review and possible adjustment by the Internal Revenue Service and state tax authorities. Net operating loss and tax credit carryforwards may become subject to an annual limitation in the event of certain cumulative changes in the ownership interest of significant shareholders over a three-year period in excess of 50 percent, as defined under Sections 382 and 383 of the Internal Revenue Code, respectively, as well as similar state provisions. This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or tax liabilities. The amount of the annual limitation is determined based on the value of the Company immediately prior to the ownership change. Subsequent ownership changes may further affect the limitation in future years. The Company completed financings since its inception which may have resulted in a change in control as defined by Sections 382 and 383 of the Internal Revenue Code, or could result in a change in control in the future. | ||||
The Company will recognize interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2014, the Company had no accrued interest or penalties related to uncertain tax positions and no amounts have been recognized in the Company's consolidated statement of operations and comprehensive loss. |
Net_loss_per_share
Net loss per share | 10 Months Ended | ||
Dec. 31, 2014 | |||
Earnings Per Share [Abstract] | |||
Net loss per share | Net loss per share | ||
Because the Company has reported a net loss for the period presented, diluted net loss per common share is the same as basic net loss per common share. | |||
The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding, because such securities had an antidilutive impact due to the loss reported from the period from February 26, 2014 (inception) to December 31, 2014: | |||
Period from | |||
February 26, 2014 | |||
(Inception) to | |||
December 31, | |||
2014 | |||
Series A Preferred Stock | 15,775,221 | ||
Series B Preferred Stock | 14,078,647 | ||
Options to purchase common stock | 926,832 | ||
Unvested restricted common stock | 3,218,590 | ||
Total | 33,999,290 | ||
Related_party
Related party | 10 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
Related party | Related party |
The Company licenses a portion of its office space to an entity controlled by the Company's Chief Executive Officer. Under the terms of the license, the entity is charged the same rental rate as that is charged to the Company. Either party can terminate the agreement with 90 days notice and the license expires in August 2017. During the period from February 26, 2014 (inception) to December 31, 2014, the Company received approximately $34,000 in license fees from the aforementioned related party, and such amounts received have been recorded as a reduction to rent expense. |
Quarterly_financial_informatio
Quarterly financial information (unaudited) | 10 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Quarterly financial information (unaudited) | Quarterly financial information (unaudited) | |||||||||||||||
Period from | Second Quarter | Third Quarter Ended September 31, 2014 | Fourth Quarter Ended December 31, 2014 | |||||||||||||
February 26, 2014 | Ended | |||||||||||||||
(Inception) to | June 30, | |||||||||||||||
31-Mar-14 | 2014 | |||||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | $ | 30,023 | $ | 1,099,644 | $ | 909,123 | $ | 1,965,121 | ||||||||
General and administrative | 62,700 | 1,092,665 | 1,084,240 | 1,786,290 | ||||||||||||
Total operating expenses | 92,723 | 2,192,309 | 1,993,363 | 3,751,411 | ||||||||||||
Loss from operations | (92,723 | ) | (2,192,309 | ) | (1,993,363 | ) | (3,751,411 | ) | ||||||||
Interest income | — | 2,658 | 6,926 | 9,362 | ||||||||||||
Net loss | $ | (92,723 | ) | $ | (2,189,651 | ) | $ | (1,986,437 | ) | $ | (3,742,049 | ) | ||||
Net loss per share attributable to common stockholders — basic and diluted | $ | (0.07 | ) | $ | (1.42 | ) | $ | (1.11 | ) | $ | (1.82 | ) | ||||
Weighted-average number of common shares outstanding — basic and diluted | 1,370,125 | 1,539,463 | 1,797,664 | 2,061,132 | ||||||||||||
Subsequent_events
Subsequent events | 10 Months Ended | |
Dec. 31, 2014 | ||
Subsequent Events [Abstract] | ||
Subsequent events | Subsequent events | |
The Company has completed an evaluation of all subsequent events after the balance sheet date of December 31, 2014 through the date these consolidated financial statements were issued. The Company has concluded that no subsequent events have occurred that require disclosure, except as described below. | ||
Reverse stock split | ||
In January 2015, the Company effected a one-for-4.2825 reverse stock split of its issued and outstanding common stock. All share and per share amounts related to issued and outstanding common stock and options for common stock included in the Company's financial statements and notes to financial statements have been retroactively adjusted for all periods presented to reflect the reverse stock split, including reclassifying an amount equal to the reduction in par value of common stock to additional paid-in capital. The conversion ratios of the Company's convertible preferred stock have also been adjusted to reflect the reverse stock split. | ||
Completion of initial public offering (unaudited) | ||
In February 2015, the Company closed the IPO of its common stock pursuant to a registration statement on Form S-1, as amended. An aggregate of 5,491,191 shares of common stock registered under the registration statement were sold at a price of $16.00 per share, including 91,191 shares of common stock sold by the Company pursuant to the exercise of an overallotment option granted to the underwriters in connection with the offering. Net proceeds of the IPO were approximately $79.9 million. In conjunction with this transaction, all shares of the Company’s Series A and Series B Preferred Stock were converted into 6,971,108 shares of common stock. | ||
In connection with the Company's IPO: | ||
i. | The Company's board of directors adopted and the Company's stockholders approved the 2015 Equity Incentive Plan ("2015 Plan"), which became effective immediately prior to the closing of the Company's IPO. The 2015 Plan provides for the grant of incentive stock options ("ISOs"), nonstatutory stock options, restricted stock awards, restricted stock units, stock appreciation rights, performance-based stock awards, and other stock-based awards. Additionally, the 2015 Plan provides for the grant of performance-based cash awards. ISOs may be granted only to the Company's employees. All other awards maybe granted to the Company's employees, including officers, and to non-employee directors and consultants. | |
ii. | The Company's board of directors adopted and the Company's stockholders approved the 2015 Employee Stock Purchase Plan ("the ESPP"), which became effective upon the date of execution of the underwriting agreement pursuant to which the Company's common stock was priced in connection with the IPO. |
Summary_of_significant_account1
Summary of significant accounting policies (Policies) | 10 Months Ended | |
Dec. 31, 2014 | ||
Accounting Policies [Abstract] | ||
Basis of presentation | The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("GAAP"). Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted accounting principles as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the Financial Accounting Standards Board ("FASB"). | |
Use of estimates | The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. On an ongoing basis, the Company's management evaluates its estimates, which include, but are not limited to, estimates related to clinical study accruals, stock-based compensation expense, and amounts of expenses during the reported period. The Company bases its estimates on historical experience and other market-specific or other relevant assumptions that it believes to be reasonable under the circumstances. Actual results may differ from those estimates or assumptions. | |
The Company utilizes significant estimates and assumptions in determining the fair value of its common stock. The Company utilized various valuation methodologies in accordance with the framework of the 2004 and 2013 American Institute of Certified Public Accountants Technical Practice Aids, Valuation of Privately-Held Company Equity Securities Issued as Compensation, to estimate the fair value of its common stock. Each valuation methodology includes estimates and assumptions that require the Company's judgment. These estimates and assumptions include a number of objective and subjective factors, including external market conditions affecting the biotechnology industry sector, the prices at which the Company sold shares of preferred stock, the superior rights and preferences of securities senior to the Company's common stock at the time and the likelihood of achieving a liquidity event, such as an initial public offering or a sale of the Company. Significant changes to the key assumptions used in the valuations could result in different fair values of common stock at each valuation date and materially affect the financial statements. | ||
Principles of consolidation | Principles of consolidation | |
The consolidated financial statements include the accounts of the Company and its wholly owned subsidiary, TK Pharma, Inc., a Massachusetts Securities Corporation. All significant intercompany balances and transactions have been eliminated in consolidation. | ||
Segment information | Segment information | |
Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and assess performance. The Company and the Company's chief operating decision maker, the Company's Chief Executive Officer, view the Company's operations and manage its business as one operating segment, which is the business of developing and commercializing products for nocturnal leg cramps, spasms associated with severe neuromuscular conditions and exercise associated muscle cramps. The Company operates in only one geographic segment, the United States. | ||
Concentrations of credit risk and off-balance sheet risk | Concentrations of credit risk and off-balance sheet risk | |
Cash is a financial instrument that potentially subjects the Company to a concentration of credit risk. The Company's cash is held in accounts at a financial institution that management believes is creditworthy. The Company has not experienced any credit losses in such accounts and does not believe it is exposed to any significant credit risk on these funds. The Company has no financial instruments with off-balance sheet risk of loss. | ||
Deferred IPO issuance costs | Deferred IPO issuance costs | |
Deferred IPO issuance costs, which primarily consist of direct incremental legal and accounting fees relating to the Company's IPO, are capitalized. The deferred IPO issuance costs were offset against IPO proceeds upon the closing of the offering in February 2015. | ||
Property and equipment | Property and equipment | |
Property and equipment is stated at cost, less accumulated depreciation. Maintenance and repairs that do not improve or extend the lives of the respective assets are expensed to operations as incurred, while costs of major additions and betterments are capitalized. Upon disposal, the related cost and accumulated depreciation is removed from the accounts and any resulting gain or loss is included in the results of operations. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are as follows: | ||
Asset type | Estimated | |
useful life | ||
Computers and computer equipment | 3 years | |
Laboratory equipment | 3 years | |
Impairment of long-lived assets | Impairment of long-lived assets | |
The Company evaluates long-lived assets for potential impairment when events or changes in circumstances indicate the carrying value of the assets may not be recoverable. Recoverability is measured by comparing the book values of the assets to the expected future net undiscounted cash flows that the assets are expected to generate. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the book value of the assets exceed their fair value. The Company has not recognized any impairment losses through December 31, 2014. | ||
Research and development expenses | Research and development expenses | |
Research and development costs are charged to expense as incurred in performing research and development activities. The costs include employee compensation costs, clinical study costs, external consultant costs, regulatory costs and facilities and overhead costs. Facilities and overhead costs primarily include the allocation of rent, utility and office-related expenses attributable to research and development personnel. The Company records payments made to outside vendors in advance of services performed or goods being delivered for use in research and development activities as prepaid expenses, which are expensed as services are performed or goods are delivered. | ||
Stock-based compensation expense | Stock-based compensation expense | |
The Company accounts for its stock-based compensation awards to employees and directors in accordance with FASB ASC Topic 718, Compensation-Stock Compensation ("ASC 718"). ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations and comprehensive loss based on their grant date fair values. Compensation expense related to awards to employees is recognized on a straight-line basis based on the grant date fair value over the associated service period of the award, which is generally the vesting term. The Company accounts for stock-based compensation arrangements with non-employees based upon the fair value of the consideration received or the equity instruments issued, whichever is more reliably measurable, in accordance with the provisions of FASB ASC Topic 505-50, Equity-Based Payments to Non-Employees. The measurement date for non-employee awards is generally the date performance of services required from the non-employee is complete, resulting in periodic adjustments to stock-based compensation expense during the vesting period for changes in the fair value of the awards. Stock-based compensation costs for non-employee service awards are recognized as services are provided, which is generally the vesting period, on a straight-line basis. The unvested portion of the awards is subject to re-measurement over the vesting period. | ||
The Company estimates the fair value of its stock options using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including (a) the expected stock price volatility, (b) the expected term of the award, (c) the risk-free interest rate, (d) expected dividends and (e) the estimated fair value of the Company's common stock on the measurement date. Due to the lack of a public market for the trading of its common stock and a lack of company specific historical and implied volatility data, the Company based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. When selecting these public companies on which it has based its expected stock price volatility, the Company selected companies with comparable characteristics, including enterprise value, risk profiles, position within the industry, and with historical share price information sufficient to meet the expected term of the stock-based awards. The Company computes historical volatility data using the volatility for the selected companies' shares during the equivalent period of the calculated expected term of the stock-based awards. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of its own stock price becomes available. Due to the lack of Company specific historical option activity, the Company has estimated the expected term of its employee stock options using the "simplified" method, whereby, the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. The expected term for non-employee awards is the remaining contractual term of the option. The risk-free interest rates are based on the U.S. Treasury securities with a maturity date commensurate with the expected term of the associated award. The Company has never paid, and does not expect to pay dividends in the foreseeable future. | ||
The Company is also required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from its estimates. The Company records stock-based compensation expense only for those awards that are expected to vest. To the extent that actual forfeitures differ from the Company's estimates, the differences are recorded as a cumulative adjustment in the period the estimates were revised. | ||
Income taxes | Income taxes | |
Income taxes are recorded in accordance with FASB ASC Topic 740, Income Taxes ("ASC 740"), which provides for deferred taxes using an asset and liability approach. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and the tax reporting basis of assets and liabilities and are measured using the enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. The Company provides a valuation allowance against net deferred tax assets unless, based upon the available evidence, it is more likely than not that the deferred tax assets will be realized. The Company has evaluated available evidence and concluded that the Company may not realize the benefit of its deferred tax assets; therefore a valuation allowance has been established for the full amount of the deferred tax assets. | ||
The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of December 31, 2014, the Company does not have any significant uncertain tax positions. The Company's practice is to recognize interest and/or penalties related to income tax matters in income tax expense. | ||
Net loss per share attributable to common stockholders | Net loss per share attributable to common stockholders | |
Basic net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted-average number of common shares and dilutive common stock equivalents outstanding for the period, determined using the treasury stock method and the if-converted method, for convertible securities, if inclusion of these is dilutive. | ||
For the period from February 26, 2014 (inception) to December 31, 2014, the Company has excluded the effects of all potentially dilutive shares, which include Series A convertible preferred stock, Series B convertible preferred stock and outstanding common stock options, from the weighted-average number of common shares outstanding as their inclusion in the computation for the period would be anti-dilutive due to the net loss per share incurred by the Company. | ||
Comprehensive loss | Comprehensive loss | |
Comprehensive loss consists of net income or loss and changes in equity during a period from transactions and other events and circumstances generated from non-owner sources. The Company's net loss equals comprehensive loss for the period presented. | ||
Recent accounting pronouncements | Recent accounting pronouncements | |
In June 2014, the FASB issued ASU No. 2014-10 "Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation". Under this ASU, the definition of a development stage entity was removed from the ASC, thereby removing the financial reporting distinction between development stage entities and other reporting entities under GAAP. This standard is effective for annual reporting periods beginning after December 15, 2014. Early adoption is permitted for certain entities. The Company was eligible for early adoption and adopted this standard in the accompanying financial statements. | ||
In August 2014, the FASB issued ASU No. 2014-15 "Presentation of Financial Statements - Going Concern (Subtopic 205-40)". The ASU requires all entities to evaluate for the existence of conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the issuance date of the financial statements. The accounting standard is effective for interim and annual periods ending after December 15, 2016, and will not have a material impact on the consolidated financial statements, but may impact the Company's footnote disclosures. | ||
The Company believes that the impact of other recently issued standards that are not yet effective will not have a material effect on its financial position or results of operations upon adoption. | ||
Subsequent events | Subsequent events | |
The Company considers events or transactions that occur after the balance sheet date but prior to the issuance of the consolidated financial statements for potential recognition or disclosure in the consolidated financial statements. Subsequent events have been evaluated through the date these consolidated financial statements were issued for potential recognition or disclosure in the consolidated financial statements (Note 14). |
Summary_of_significant_account2
Summary of significant accounting policies (Tables) | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Accounting Policies [Abstract] | ||||
Depreciation over estimated useful life | Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are as follows: | |||
Asset type | Estimated | |||
useful life | ||||
Computers and computer equipment | 3 years | |||
Laboratory equipment | 3 years | |||
Property and equipment, net consists of the following: | ||||
31-Dec-14 | ||||
Computers and computer equipment | $ | 62,773 | ||
Laboratory equipment | 13,368 | |||
Capital in progress | 21,000 | |||
Total property and equipment | 97,141 | |||
Accumulated depreciation | (11,997 | ) | ||
Property and equipment, net | $ | 85,144 | ||
Property_and_equipment_net_Tab
Property and equipment, net (Tables) | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Property, Plant and Equipment [Abstract] | ||||
Property and equipment, net | Depreciation is recorded using the straight-line method over the estimated useful lives of the respective assets, which are as follows: | |||
Asset type | Estimated | |||
useful life | ||||
Computers and computer equipment | 3 years | |||
Laboratory equipment | 3 years | |||
Property and equipment, net consists of the following: | ||||
31-Dec-14 | ||||
Computers and computer equipment | $ | 62,773 | ||
Laboratory equipment | 13,368 | |||
Capital in progress | 21,000 | |||
Total property and equipment | 97,141 | |||
Accumulated depreciation | (11,997 | ) | ||
Property and equipment, net | $ | 85,144 | ||
Accrued_expenses_and_other_cur1
Accrued expenses and other current liabilities (Tables) | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Payables and Accruals [Abstract] | ||||
Accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following: | |||
31-Dec-14 | ||||
Deferred IPO issuance costs | $ | 175,149 | ||
Research and development costs | 125,067 | |||
Payroll and employee-related costs | 34,218 | |||
Consumer brand-related costs | 23,635 | |||
Professional fees | 15,500 | |||
Other | 42,955 | |||
Total | $ | 416,524 | ||
Other current liabilities | Accrued expenses and other current liabilities consist of the following: | |||
31-Dec-14 | ||||
Deferred IPO issuance costs | $ | 175,149 | ||
Research and development costs | 125,067 | |||
Payroll and employee-related costs | 34,218 | |||
Consumer brand-related costs | 23,635 | |||
Professional fees | 15,500 | |||
Other | 42,955 | |||
Total | $ | 416,524 | ||
Commitments_and_contingencies_
Commitments and contingencies (Tables) | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Commitments and Contingencies Disclosure [Abstract] | ||||
Minimum future lease payments | As of December 31, 2014, the minimum future lease payments under the Company's operating leases are as follows: | |||
2015 | $ | 332,190 | ||
2016 | 323,190 | |||
2017 | 168,793 | |||
Total minimum lease payments | $ | 824,173 | ||
Common_stock_Common_stock_Tabl
Common stock Common stock (Tables) | 10 Months Ended | ||||||
Dec. 31, 2014 | |||||||
Equity [Abstract] | |||||||
Restricted common stock activity | The following is a summary of restricted common stock activity: | ||||||
Number of | Weighted-Average | ||||||
Shares | Grant Date | ||||||
Fair Value | |||||||
Non-vested at February 26, 2014 | — | $ | — | ||||
Issued | 5,420,729 | 0.1 | |||||
Vested | (2,202,139 | ) | 0.1 | ||||
Forfeited | — | — | |||||
Non-vested at December 31, 2014 | 3,218,590 | $ | 0.1 | ||||
Shares reserved for future issuance | Shares reserved for future issuance | ||||||
The Company has reserved the following number of shares of common stock for future issuance: | |||||||
31-Dec-14 | |||||||
Vesting of restricted common stock | 3,218,590 | ||||||
Conversion of Series A Preferred Stock | 3,683,637 | ||||||
Conversion of Series B Preferred Stock | 3,287,471 | ||||||
Stock-based compensation awards | 1,189,314 | ||||||
Total | 11,379,012 | ||||||
Stockbased_compensation_Tables
Stock-based compensation (Tables) | 10 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||
Summary of stock option activity | The following table summarizes stock option activity for employees and non-employees: | ||||||||||||
Shares | Weighted-Average | Weighted-Average | Aggregate | ||||||||||
Exercise Price | Remaining | Intrinsic | |||||||||||
Contractual | Value | ||||||||||||
Term (in years) | |||||||||||||
Granted | 1,020,234 | $ | 3.19 | ||||||||||
Exercised | (13,572 | ) | 0.6 | ||||||||||
Cancelled or forfeited | (79,830 | ) | 1.14 | ||||||||||
Outstanding at December 31, 2014 | 926,832 | $ | 3.4 | 9.67 | $ | 6,846,054 | |||||||
Exercisable at December 31, 2014 | 3,891 | $ | 0.6 | 9.29 | $ | 39,649 | |||||||
Vested or expected to vest at December 31, 2014 | 867,333 | $ | 3.39 | 9.66 | $ | 6,421,021 | |||||||
Schedule of fair value assumptions | The Company estimates the fair value of each stock option award on the grant date using the Black-Scholes option-pricing model based on the following assumptions and the assumptions regarding the fair value of the underlying Common Stock on each measurement date: | ||||||||||||
Period from | |||||||||||||
February 26, 2014 | |||||||||||||
(Inception) to | |||||||||||||
December 31, | |||||||||||||
2014 | |||||||||||||
Expected volatility | 75.8% to 76.4% | ||||||||||||
Risk-free interest rate | 1.59% to 2.71% | ||||||||||||
Expected term | 6 - 10 years | ||||||||||||
Expected dividend yield | 0 | % | |||||||||||
Summary of stock-based compensation expense | Total stock-based compensation expense recognized for employee and non-employee restricted common stock, and stock options granted to employees and non-employees is included in the Company's statement of operations and comprehensive loss as follows: | ||||||||||||
Period from | |||||||||||||
February 26, 2014 | |||||||||||||
(Inception) to | |||||||||||||
December 31, | |||||||||||||
2014 | |||||||||||||
Research and development | $ | 648,001 | |||||||||||
General and administrative | 814,060 | ||||||||||||
Total | $ | 1,462,061 | |||||||||||
Income_taxes_Tables
Income taxes (Tables) | 10 Months Ended | |||
Dec. 31, 2014 | ||||
Income Tax Disclosure [Abstract] | ||||
Schedule of deferred tax assets and liabilities | The significant components of the Company's deferred tax assets are comprised of the following: | |||
31-Dec-14 | ||||
Deferred tax assets: | ||||
U.S. and state net operating loss carryforwards | $ | 2,708,861 | ||
Accruals and other temporary differences | 23,829 | |||
Amortization | 36,742 | |||
Stock-based compensation | 57,120 | |||
Tax credit carryforward | 87,762 | |||
Total deferred tax assets | 2,914,314 | |||
Less valuation allowance | (2,751,295 | ) | ||
Deferred tax assets | 163,019 | |||
Deferred tax liabilities: | ||||
Stock-based compensation | (162,779 | ) | ||
Depreciation | (240 | ) | ||
Accruals and other temporary differences | — | |||
Deferred tax liabilities | (163,019 | ) | ||
Net deferred tax assets | $ | — | ||
Schedule of effective income tax rate reconciliation | A reconciliation of income tax expense computed at the statutory federal income tax rate to income taxes as reflected in the financial statements is as follows: | |||
Period from | ||||
February 26, 2014 | ||||
(Inception) to | ||||
December 31, | ||||
2014 | ||||
Federal income tax expense at statutory rate | 35 | % | ||
State income tax, net of federal benefit | 3.7 | % | ||
Permanent differences | (0.3 | )% | ||
Stock compensation | (5.3 | )% | ||
Research credits | 1.2 | % | ||
Change in valuation allowance | (34.3 | )% | ||
Effective tax rate | 0 | % |
Net_loss_per_share_Tables
Net loss per share (Tables) | 10 Months Ended | ||
Dec. 31, 2014 | |||
Earnings Per Share [Abstract] | |||
Schedule of antidilutive securities excluded from computation of earnings per share | The following potentially dilutive securities outstanding, prior to the use of the treasury stock method or if-converted method, have been excluded from the computation of diluted weighted-average shares outstanding, because such securities had an antidilutive impact due to the loss reported from the period from February 26, 2014 (inception) to December 31, 2014: | ||
Period from | |||
February 26, 2014 | |||
(Inception) to | |||
December 31, | |||
2014 | |||
Series A Preferred Stock | 15,775,221 | ||
Series B Preferred Stock | 14,078,647 | ||
Options to purchase common stock | 926,832 | ||
Unvested restricted common stock | 3,218,590 | ||
Total | 33,999,290 | ||
Quarterly_financial_informatio1
Quarterly financial information (unaudited) (Tables) | 10 Months Ended | |||||||||||||||
Dec. 31, 2014 | ||||||||||||||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Schedule of quarterly financial information | ||||||||||||||||
Period from | Second Quarter | Third Quarter Ended September 31, 2014 | Fourth Quarter Ended December 31, 2014 | |||||||||||||
February 26, 2014 | Ended | |||||||||||||||
(Inception) to | June 30, | |||||||||||||||
31-Mar-14 | 2014 | |||||||||||||||
Operating expenses: | ||||||||||||||||
Research and development | $ | 30,023 | $ | 1,099,644 | $ | 909,123 | $ | 1,965,121 | ||||||||
General and administrative | 62,700 | 1,092,665 | 1,084,240 | 1,786,290 | ||||||||||||
Total operating expenses | 92,723 | 2,192,309 | 1,993,363 | 3,751,411 | ||||||||||||
Loss from operations | (92,723 | ) | (2,192,309 | ) | (1,993,363 | ) | (3,751,411 | ) | ||||||||
Interest income | — | 2,658 | 6,926 | 9,362 | ||||||||||||
Net loss | $ | (92,723 | ) | $ | (2,189,651 | ) | $ | (1,986,437 | ) | $ | (3,742,049 | ) | ||||
Net loss per share attributable to common stockholders — basic and diluted | $ | (0.07 | ) | $ | (1.42 | ) | $ | (1.11 | ) | $ | (1.82 | ) | ||||
Weighted-average number of common shares outstanding — basic and diluted | 1,370,125 | 1,539,463 | 1,797,664 | 2,061,132 | ||||||||||||
Organization_and_operations_De
Organization and operations (Details) (USD $) | Dec. 31, 2014 | Feb. 26, 2014 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Accumulated deficit | $8,010,860 | |
Cash | $33,854,153 | $0 |
Summary_of_significant_account3
Summary of significant accounting policies - Narrative (Details) (USD $) | 10 Months Ended | 1 Months Ended |
Dec. 31, 2014 | Jan. 31, 2015 | |
segment | ||
Entity Location [Line Items] | ||
Number of operating segments | 1 | |
IPO issuance cost | $1,075,000 | |
United States | ||
Entity Location [Line Items] | ||
Number of geographic segments | 1 | |
Subsequent Event | ||
Entity Location [Line Items] | ||
Reverse stock split conversion ratio | 0.2335 |
Summary_of_significant_account4
Summary of significant accounting policies - Depreciation Over Estimated Useful Life (Details) | 12 Months Ended |
Dec. 31, 2014 | |
Computers and computer equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Laboratory equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Restricted_cash_Details
Restricted cash (Details) (USD $) | Dec. 31, 2014 |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Restricted cash | $126,808 |
Letter of Credit | |
Restricted Cash and Cash Equivalents Items [Line Items] | |
Restricted cash | $126,808 |
Property_and_equipment_net_Det
Property and equipment, net (Details) (USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Line Items] | |
Total property and equipment | $97,141 |
Accumulated depreciation | -11,997 |
Property and equipment, net | 85,144 |
Depreciation expense | 11,997 |
Computers and computer equipment | |
Property, Plant and Equipment [Line Items] | |
Total property and equipment | 62,773 |
Laboratory equipment | |
Property, Plant and Equipment [Line Items] | |
Total property and equipment | 13,368 |
Capital in progress | |
Property, Plant and Equipment [Line Items] | |
Total property and equipment | $21,000 |
Accrued_expenses_and_other_cur2
Accrued expenses and other current liabilities (Details) (USD $) | Dec. 31, 2014 |
Payables and Accruals [Abstract] | |
Research and development costs | $125,067 |
Deferred IPO issuance costs | 175,149 |
Payroll and employee-related costs | 34,218 |
Consumer brand-related costs | 23,635 |
Professional fees | 15,500 |
Other | 42,955 |
Total | $416,524 |
Commitments_and_contingencies_1
Commitments and contingencies - Minimum future lease payments (Details) (USD $) | Dec. 31, 2014 |
Commitments and Contingencies Disclosure [Abstract] | |
2015 | $332,190 |
2016 | 323,190 |
2017 | 168,793 |
Total minimum lease payments | $824,173 |
Commitments_and_contingencies_2
Commitments and contingencies - Narrative (Details) (USD $) | 1 Months Ended | 10 Months Ended |
Mar. 31, 2014 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $152,000 | |
Percent of gross sales due to related parties | 2.00% |
Convertible_preferred_stock_Na
Convertible preferred stock - Narrative (Details) (USD $) | 10 Months Ended | 12 Months Ended | 3 Months Ended | 4 Months Ended |
Dec. 31, 2014 | Dec. 31, 2014 | 31-May-14 | Oct. 31, 2014 | |
director | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, automatic conversion, minimum share price (in usd per share) | $8.57 | |||
Preferred stock, voting rights, number of directors entitled to elect | 2 | |||
Preferred stock, minimum gross proceeds that would trigger an automatic conversion | $40,000,000 | |||
Series A convertible preferred stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock, authorized (shares) | 16,000,000 | 16,000,000 | ||
Preferred stock, par value (in usd per share) | 0.0001 | $0.00 | ||
Issuance of convertible preferred stock, net of issuance costs (in shares) | 15,775,221 | |||
Convertible preferred stock, automatic conversion, minimum share price (in usd per share) | $1 | $1 | ||
Net proceeds from issuance of convertible preferred stock | 15,581,811 | 15,637,032 | ||
Preferred stock, carrying value | 15,637,032 | 15,637,032 | ||
Percent of preferred stockholders | 75.00% | 75.00% | ||
Preferred stock, liquidation preference per share (in usd per share) | 1 | $1 | ||
Preferred stock, conversion price (in usd per share) | 4.28 | $4.28 | ||
Series B Preferred Stock | ||||
Class of Stock [Line Items] | ||||
Preferred stock, authorized (shares) | 14,500,000 | 14,500,000 | ||
Preferred stock, par value (in usd per share) | 0.0001 | $0.00 | ||
Issuance of convertible preferred stock, net of issuance costs (in shares) | 14,078,647 | |||
Convertible preferred stock, automatic conversion, minimum share price (in usd per share) | $1.81 | $1.81 | ||
Net proceeds from issuance of convertible preferred stock | 25,394,135 | 25,394,135 | ||
Preferred stock, carrying value | 25,394,135 | $25,394,135 | ||
Percent of preferred stockholders | 60.00% | 60.00% | ||
Preferred stock, liquidation preference per share (in usd per share) | 1.81 | $1.81 | ||
Preferred stock, conversion price (in usd per share) | 7.74 | $7.74 |
Common_stock_Narrative_Details
Common stock - Narrative (Details) (USD $) | 1 Months Ended | 10 Months Ended | |
Apr. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2014 | |
Class of Stock [Line Items] | |||
Common stock, shares authorized | 61,000,000 | ||
Common stock, par value (in usd per share) | $0.00 | ||
Proceeds from sale of restricted common stock to founders | $2,321 | ||
Unvested restricted common stock | |||
Class of Stock [Line Items] | |||
Restricted common stock, shares sold | 867,314 | 4,553,415 | |
Restricted common stock, price per share (in usd per share) | $0.00 | ||
Proceeds from sale of restricted common stock to founders | 1,950 | ||
Restricted common stock, repurchase period | 90 days | ||
Restricted common stock, repurchase price | $0.00 | ||
Restricted common stock, shares outstanding | 2,202,139 | ||
Restricted common stock, fair value of shares vested | $3,620,000 | ||
Vests upon issuance | Unvested restricted common stock | |||
Class of Stock [Line Items] | |||
Restricted common stock, percent vested | 25.00% | ||
Vests ratably over four years | Unvested restricted common stock | |||
Class of Stock [Line Items] | |||
Restricted common stock, percent vested | 75.00% | ||
Restricted common stock, vesting period | 4 years |
Common_stock_Restricted_common
Common stock - Restricted common stock activity (Details) (Unvested restricted common stock, USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Unvested restricted common stock | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance, non-vested, number of shares | 0 |
Issued, number of shares | 5,420,729 |
Vested, number of shares | -2,202,139 |
Forfeited, number of shares | 0 |
Ending balance, non-vested, number of shares | 3,218,590 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance, non-vested, weighted average grant date fair value (in usd per share) | $0 |
Issued, weighted average grant date fair value (in usd per share) | $0.10 |
Vested, weighted average grant date fair value (in usd per share) | $0.10 |
Forfeited, weighted average grant date fair value (in usd per share) | $0 |
Ending balance, non-vested, weighted average grant date fair value (in usd per share) | $0.10 |
Common_stock_Shares_reserved_f
Common stock - Shares reserved for future issuance (Details) | Dec. 31, 2014 |
Class of Stock [Line Items] | |
Stock-based compensation awards | 1,189,314 |
Total | 11,379,012 |
Series A Preferred Stock | |
Class of Stock [Line Items] | |
Convertible Preferred Stock | 3,683,637 |
Series B Preferred Stock | |
Class of Stock [Line Items] | |
Convertible Preferred Stock | 3,287,471 |
Unvested restricted common stock | |
Class of Stock [Line Items] | |
Vesting of restricted common stock | 3,218,590 |
Stockbased_compensation_Narrat
Stock-based compensation - Narrative (Details) (USD $) | 10 Months Ended | |||
Dec. 31, 2014 | Sep. 30, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $1,462,061 | |||
Shares granted | 1,020,234 | |||
Shares granted, weighted-average grant date fair value (in usd per share) | $2.20 | |||
Shares exercised | 13,572 | |||
Shares exercised, weighted average exercise price (in usd per share) | $0.60 | |||
Stock options exercised, intrinsic value | 51,719 | |||
Unrecognized compensation cost | 12,632,000 | |||
Unrecognized compensation cost, recognition period | 3 years 3 months 7 days | |||
Non-employee Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares granted to non-employee consultants and members of the Scientific Advisory Board | 137,765 | |||
Stock options, vesting period | 4 years | |||
Stock options, contractual term | 10 years | |||
Stock-based compensation expense | $149,000 | |||
Flex Pharma, Inc. 2014 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized | 2,070,200 | 1,451,087 | 116,754 | |
Shares remaining available for grant of stock awards | 262,482 |
Stockbased_compensation_Summar
Stock-based compensation - Summary of stock option activity (Details) (USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Shares granted | 1,020,234 |
Shares exercised | -13,572 |
Shares canceled or forfeited | -79,830 |
Shares outstanding | 926,832 |
Shares exercisable | 3,891 |
Shares vested or expected to vest | 867,333 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Shares granted, weighted average exercise price (in usd per share) | $3.19 |
Shares exercised, weighted average exercise price (in usd per share) | $0.60 |
Shares canceled or forfeited, weighted average exercise price (in usd per share) | $1.14 |
Shares outstanding, weighted average exercise price (in usd per share) | $3.40 |
Shares exercisable, weighted average exercise price (in usd per share) | $0.60 |
Shares vested or expected to vest, weighted average exercise price (in usd per share) | $3.39 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Outstanding, weighted average remaining contractual term | 9 years 8 months 1 day |
Exercisable, weighted average remaining contractual term | 9 years 3 months 15 days |
Vested or expected to vest, weighted average remaining contractual term | 9 years 7 months 28 days |
Outstanding, aggregate intrinsic value | $6,846,054 |
Exercisable, aggregate intrinsic value | 39,649 |
Vested or expected to vest, aggregate intrinsic value | $6,421,021 |
Stockbased_compensation_Schedu
Stock-based compensation - Schedule of fair value assumptions (Details) (Options to purchase common stock) | 10 Months Ended |
Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate, minimum | 1.59% |
Risk-free interest rate, maximum | 2.71% |
Expected dividend yield | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 75.80% |
Expected term | 6 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 76.40% |
Expected term | 10 years |
Stockbased_compensation_Summar1
Stock-based compensation - Summary of stock-based compensation expense (Details) (USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | |
Stock-based compensation expense | $1,462,061 |
Research and Development Expense [Member] | |
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | |
Stock-based compensation expense | 648,001 |
General and Administrative Expense [Member] | |
Employee Service Share-Based Compensation Allocation of Recognized Period Costs [Line Items] | |
Stock-based compensation expense | $814,060 |
Income_taxes_Schedule_of_defer
Income taxes - Schedule of deferred tax assets and liabilities (Details) (USD $) | Dec. 31, 2014 |
Deferred tax assets: | |
U.S. and state net operating loss carryforwards | $2,708,861 |
Accruals and other temporary differences | 23,829 |
Amortization | 36,742 |
Stock-based compensation | 57,120 |
Tax credit carryforward | 87,762 |
Total deferred tax assets | 2,914,314 |
Less valuation allowance | -2,751,295 |
Deferred tax assets | 163,019 |
Deferred tax liabilities: | |
Stock-based compensation | -162,779 |
Depreciation | -240 |
Accruals and other temporary differences | 0 |
Deferred tax liabilities | 163,019 |
Net deferred tax assets | $0 |
Income_taxes_Narrative_Details
Income taxes - Narrative (Details) (USD $) | 10 Months Ended |
Dec. 31, 2014 | |
Income Taxes [Line Items] | |
Increase in valuation allowance | $2,751,295 |
Long term deferred tax asset | 50,103 |
Current deferred tax liability | 50,103 |
Penalties and interest accrued | 0 |
U.S. Federal | |
Income Taxes [Line Items] | |
Net operating loss carryforward | 6,850,000 |
U.S. State | |
Income Taxes [Line Items] | |
Net operating loss carryforward | $481,000 |
Income_taxes_Schedule_of_effec
Income taxes - Schedule of effective income tax rate reconciliation (Details) | 10 Months Ended |
Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |
Federal income tax expense at statutory rate | 35.00% |
State income tax, net of federal benefit | 3.70% |
Permanent differences | -0.30% |
Stock compensation | -5.30% |
Research credits | 1.20% |
Change in valuation allowance | -34.30% |
Effective tax rate | 0.00% |
Net_loss_per_share_Details
Net loss per share (Details) | 10 Months Ended |
Dec. 31, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 33,999,290 |
Options to purchase common stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 926,832 |
Unvested restricted common stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 3,218,590 |
Series A Preferred Stock | Preferred Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 15,775,221 |
Series B Preferred Stock | Preferred Stock | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |
Antidilutive securities excluded from computation of earnings per share | 14,078,647 |
Related_party_Details
Related party (Details) (Affiliated Entity, USD $) | 10 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Affiliated Entity | |
Related Party Transaction [Line Items] | |
License fees received | $34 |
Quarterly_financial_informatio2
Quarterly financial information (unaudited) (Details) (USD $) | 1 Months Ended | 3 Months Ended | 10 Months Ended | ||
Mar. 31, 2014 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Dec. 31, 2014 | |
Operating expenses: | |||||
Research and development | $30,023 | $1,965,121 | $909,123 | $1,099,644 | $4,003,911 |
General and administrative | 62,700 | 1,786,290 | 1,084,240 | 1,092,665 | 4,025,895 |
Total operating expenses | 92,723 | 3,751,411 | 1,993,363 | 2,192,309 | 8,029,806 |
Loss from operations | -92,723 | -3,751,411 | -1,993,363 | -2,192,309 | -8,029,806 |
Interest income | 0 | 9,362 | 6,926 | 2,658 | 18,946 |
Net loss | ($92,723) | ($3,742,049) | ($1,986,437) | ($2,189,651) | ($8,010,860) |
Net loss per share attributable to common stockholders - basic and diluted (in usd per share) | ($0.07) | ($1.82) | ($1.11) | ($1.42) | ($4.57) |
Weighted-average number of common shares outstanding b basic and diluted | 1,370,125 | 2,061,132 | 1,797,664 | 1,539,463 | 1,753,024 |
Subsequent_events_Details
Subsequent events (Details) (Subsequent Event, USD $) | 1 Months Ended | |
In Millions, except Share data, unless otherwise specified | Feb. 28, 2015 | Jan. 31, 2015 |
Subsequent Event [Line Items] | ||
Reverse stock split conversion ratio | 0.2335 | |
Net proceeds from IPO | $79.90 | |
Common stock, number of shares issued from conversion of preferred stock (in shares) | 6,971,108 | |
IPO | ||
Subsequent Event [Line Items] | ||
Common stock, shares issued | 5,491,191 | |
Common stock, price per share (in usd per share) | $16 | |
Over-Allotment Option | ||
Subsequent Event [Line Items] | ||
Common stock, shares issued | 91,191 |