Evofem Biosciences (EVFM) 10-Q 10 Nov 16 2016 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2016	Nov. 01, 2016
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2016
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q3
Trading Symbol	NEOT
Entity Registrant Name	Neothetics, Inc.
Entity Central Index Key	1,618,835
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		13,828,496

Condensed Balance Sheets (Unaud

Condensed Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 14,363,899	$ 37,748,603
Prepaid expenses and other current assets	509,420	1,976,997
Total current assets	14,873,319	39,725,600
Restricted cash	200,000	200,000
Property and equipment, net	132,514	186,372
Total assets	15,205,833	40,111,972
Current liabilities:
Accounts payable	797,227	4,017,192
Accrued clinical trial expenses	71,156	1,422,810
Other accrued expenses	563,340	903,148
Long-term debt, current portion		2,756,351
Total current liabilities	1,431,723	9,099,501
Long-term debt, net of current portion		7,205,176
Stockholders’ equity:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding
Common stock, $0.0001 par value; 300,000,000 shares authorized; 13,828,496 and 13,750,016 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively	1,382	1,374
Additional paid-in capital	137,651,010	136,637,678
Accumulated deficit	(123,878,282)	(112,831,757)
Total stockholders’ equity	13,774,110	23,807,295
Total liabilities and stockholders’ equity	$ 15,205,833	$ 40,111,972

Condensed Balance Sheets (Unau3

Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2016	Dec. 31, 2015
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	13,828,496	13,750,016
Common stock, shares outstanding	13,828,496	13,750,016

Condensed Statements of Operati

Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Operating expenses:
Research and development	$ 964,937	$ 15,211,268	$ 5,653,432	$ 27,381,864
General and administrative	905,176	1,768,935	4,407,408	5,435,543
Total operating expenses	1,870,113	16,980,203	10,060,840	32,817,407
Loss from operations	(1,870,113)	(16,980,203)	(10,060,840)	(32,817,407)
Interest income	13,935	6,035	50,078	20,352
Interest expense	(506,302)	(287,916)	(1,035,763)	(844,839)
Net loss	$ (2,362,480)	$ (17,262,084)	$ (11,046,525)	$ (33,641,894)
Net loss per share, basic and diluted	$ (0.17)	$ (1.26)	$ (0.80)	$ (2.46)
Weighted average shares used to compute basic and diluted net loss per share	13,816,464	13,702,177	13,786,207	13,683,470

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Operating activities
Net loss	$ (11,046,525)	$ (33,641,894)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	53,858	40,650
Loss on disposal of assets		6,140
Noncash interest expense on debt	100,290	162,340
Share-based compensation	970,381	1,042,014
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	1,467,577	(70,125)
Accounts payable and accrued expenses	(4,911,427)	8,124,961
Net cash used in operating activities	(13,365,846)	(24,335,914)
Investing activities
Restricted cash		(200,000)
Purchase of property and equipment		(226,128)
Net cash used in investing activities		(426,128)
Financing activities
Prepayment resulting in loan extinguishment	(9,514,058)
Principal payments on bank loan	(485,942)
Loan amendment costs	(52,400)
Proceeds from issuance of common stock from exercise of options	33,542	65,835
Proceeds from issuance of common stock from Employee Stock Purchase Plan		19,090
Net cash (used in) provided by financing activities	(10,018,858)	84,925
Net decrease in cash and cash equivalents	(23,384,704)	(24,677,117)
Cash and cash equivalents, beginning of period	37,748,603	75,947,516
Cash and cash equivalents, end of period	14,363,899	51,270,399
Supplemental disclosure of cash flow activity
Cash paid for interest	$ 664,292	$ 530,000

Organization and Basis of Prese

Organization and Basis of Presentation	9 Months Ended
	Sep. 30, 2016
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Organization and Basis of Presentation	1. Organization and Basis of Presentation Neothetics, Inc. (Neothetics or the Company) was incorporated in Delaware on February 1, 2007, under the name Lipothera, Inc. In September 2008, the Company changed its name to Lithera, Inc. In August 2014, the Company changed its name to Neothetics, Inc. The Company is a clinical-stage specialty pharmaceutical company developing therapeutics for the aesthetic market. The Company’s lead product candidate is a novel injectable treatment for localized fat reduction and body contouring. As of September 30, 2016, the Company has devoted substantially all of its efforts to product development, raising capital, and building infrastructure and has not realized revenues from its planned principal operations. The accompanying unaudited financial statements of the Company should be read in conjunction with the audited financial statements and notes thereto as of and for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K (Annual Report) filed with the Securities and Exchange Commission (SEC). The accompanying financial statements have been prepared in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying financial statements do not include all of the information and notes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements reflect all adjustments (consisting of normal recurring adjustments) that are necessary for a fair statement of the financial position, results of operations and cash flows for the interim periods presented. Interim results are not necessarily indicative of results for a full year.

Summary of Significant Accounti

Summary of Significant Accounting Policies	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Summary of Significant Accounting Policies	2. Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts. Restricted Cash Restricted cash as of September 30, 2016 and December 31, 2015 represents a $200,000 restricted money market account used to secure the standby letter of credit issued in connection with a lease amendment (see Note 5 “Debt”). Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash due to the financial position of the depository institution in which those deposits are held. Fair Value of Financial Instruments The carrying amounts of prepaid and other current assets, accounts payable and accrued expenses are reasonable estimates of their fair value because of the short maturity of these items. Property and Equipment Property and equipment, which primarily consist of office furniture and equipment and computer equipment, are stated at cost and depreciated over the estimated useful lives of the assets (three to five years) using the straight-line method. Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. While the Company's current and historical operating losses and negative cash flows are indicators of impairment, management believes that future cash flows to be received support the carrying value of its long-lived assets and, accordingly, has not recognized any impairment losses since inception . Research and Development Costs Research and development expenses consist primarily of salaries and related overhead expenses, fees paid to consultants and contract research organizations, costs related to acquiring and manufacturing clinical trial materials, and costs related to compliance with regulatory requirements. All research and development costs are charged to expense as incurred. Income Taxes The Company uses the liability method of accounting for income taxes. 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. Valuation allowances are recorded when the realizability of such deferred tax assets is not more likely than not. The guidance on accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not recognized interest and penalties in the balance sheets or statements of operations. The Company is subject to taxation in the U.S. and state jurisdictions. The Company’s tax years from inception are subject to examination by the United States and California authorities due to the carryforwards of unutilized net operating losses (NOLs) and research and development credits. Share-Based Compensation Share-based compensation expense for stock option grants, restricted stock awards and employee stock purchase plan shares is recorded at the estimated fair value of the award as of the grant date and is recognized as expense on a straight-line basis over the requisite service period of the stock-based award. The estimation of stock options, restricted stock awards and employee stock purchase plan fair value requires management to make estimates and judgments about, among other things, employee exercise behavior, forfeiture rates and volatility of the Company’s common stock. The judgments directly affect the amount of compensation expense that will be recognized. Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding during the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities, which include warrants and outstanding stock options and restricted stock awards under the stock compensation plans, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive. Nine Months Ended September 30, 2016 2015 Warrants for common stock 71,257 71,257 Common stock options and restricted stock awards issued and outstanding 1,190,913 1,509,672 1,262,170 1,580,929 Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. This pronouncement gives guidance to clarify how certain cash receipts and payments should be presented and classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the timing of adoption of this guidance and the impact of the adoption of this guidance on its condensed financial statements. In March 2016, the FASB issued ASU 2016-09 (“ASU 2016-09”), Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting for employee share-based payments, including accounting for income taxes, forfeitures, statutory tax withholding requirements, and classification on the statement of cash flows. The amendments in this ASU are effective for annual periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating the impact of adoption on its condensed financial statements. In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 requires that lessees recognize assets and liabilities for the rights and obligations for leases with a lease term of more than one year. The amendments in this ASU are effective for annual periods ending after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of adoption on its condensed financial statements. In August 2014, the FASB issued guidance codified in ASU 2014-15 (Subtopic 205-40), Presentation of Financial Statements - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The guidance requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable). Management will be required to make this evaluation for both annual and interim reporting periods and will make certain disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the entity’s ability to continue as a going concern. Substantial doubt exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term probable is used consistently with its use in ASC Topic 450, Contingencies. The guidance is effective for annual periods ending after December 15, 2016 and for interim reporting periods starting in the first quarter 2017, with early adoption permitted. The Company does not expect this guidance to have a significant impact on the consolidated financial statements and expects to adopt the standard for the annual reporting period ended December 31, 2016.

Fair Value Measurements

Fair Value Measurements	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Fair Value Measurements	3. Fair Value Measurements Fair Value of Financial Instruments The Company’s financial instruments consist of cash and cash equivalents, accounts payable, accrued expenses, including warrants issued in connection with financing arrangements, and long-term debt. Fair value estimates of these instruments are made at a specific point in time based on relevant market information. These estimates may be subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. The carrying amount of cash and cash equivalents, accounts payable, and accrued expenses are generally considered to be representative of their respective fair values because of the short-term nature of these instruments. The Company believes that the fair value of long-term debt approximates its carrying value based on the borrowing rates currently available to the Company for loans with similar terms. The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers or sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance prioritizes three levels of inputs into the following hierarchy: Level 1 — Quoted prices in active markets for identical assets or liabilities. Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Assets measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 are as follows: Fair Value Measurements at Reporting Date Using Balance as of September 30, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market fund (1) $ 14,363,899 $ 14,363,899 $ — $ — Total assets $ 14,363,899 $ 14,363,899 $ — $ — (1) Included as a component of cash and cash equivalents on accompanying balance sheet. Fair Value Measurements at Reporting Date Using Balance as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market fund (1) $ 36,752,200 $ 36,752,200 $ — $ — Total assets $ 36,752,200 $ 36,752,200 $ — $ — (1) Included as a component of cash and cash equivalents on accompanying balance sheet. There were no liabilities at fair value on a recurring basis as of September 30, 2016 or December 31, 2015.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2016
Property Plant And Equipment [Abstract]
Property and Equipment	4. Property and Equipment Property and equipment consist of the following: September 30, December 31, 2016 2015 Office furniture and equipment $ 264,838 $ 279,547 Less accumulated depreciation and amortization (132,324 ) (93,175 ) $ 132,514 $ 186,372

Debt

Debt	9 Months Ended
	Sep. 30, 2016
Debt Disclosure [Abstract]
Debt	5. Debt Loans In February 2010, the Company entered into a loan and security agreement (2010 Loan and Security Agreement) with Silicon Valley Bank (SVB), which was subsequently amended in 2012, for borrowings of $3,750,000, collateralized by all assets of the Company. In connection with the borrowings, the Company issued warrants to the bank for the purchase of a total of 64,865 shares of Series B convertible preferred stock and warrants to purchase 75,000 shares of Series C convertible preferred stock. Effective upon the IPO, this was converted to a warrant to purchase 24,419 shares of common stock at a weighted average exercise price of $9.90 and expire ten years from the date of issuance. The 2010 Loan and Security Agreement was fully paid off in June 2014. In June 2014, the Company entered into a Loan and Security Agreement (Loan Agreement) with Hercules Technology Growth Capital Inc. that provided for borrowings up to $10.0 million available to the Company in two tranches. Upon closing of the Loan Agreement, the Company borrowed $4.0 million. In October 2014, the Company entered into the first amendment of the Loan Agreement and borrowed the remaining $6.0 million available under the agreement. In connection with the Loan Agreement, in June 2014, the Company issued warrants to purchase shares of Series C convertible preferred stock equal to 4% of the amount advanced under the loan. Effective upon the IPO, this was converted to a warrant to purchase 46,838 shares of common stock at $8.54, which expires eight years after the date of issuance. The fair value of the warrants issued was $207,429, based on the fair value of such Series C warrants at the date of issuance. The warrants’ fair value and financing fees of approximately $133,000 were recorded as a debt discount. In March 2016, the Company entered into the second amendment of the Loan Agreement that provided for a prepayment of the outstanding loan carrying amount of $5.5 million with a prepayment fee of $110,000. In connection with the second amendment, the Company re-priced the outstanding warrants to purchase 46,838 shares of common stock at a new exercise price of $0.62, which will expire in September 2022 unless exercised prior to such expiration date. The Company recorded a debt discount of $9,417 associated with the fair value of the warrants issued in connection with the amendment. In addition, the Company incurred loan amendment fees and legal fees of $52,400, which the Company recorded as a debt discount. In September 2016, the Company prepaid the remaining outstanding balance under the Loan Agreement at a carrying amount of $4.0 million with a prepayment fee of $120,000 and an end of term fee of $300,000. Accordingly, the Loan Agreement was terminated on September 23, 2016. Upon termination of the Loan Agreement, the prepayment fees of $230,000 and unamortized end of term fee of $260,000 were recorded as interest expense. The Company recorded total interest expense of $506,302 and $1,035,763 related to the Loan Agreement for the three and nine months ended September 30, 2016, respectively. Letter of Credit In January 2015, the Company executed a lease amendment with LJ Gateway, LLC for new office space. In connection with this lease amendment the Company issued a stand-by letter of credit in the amount of $200,000 in lieu of a security deposit. The standby letter of credit is secured by a restricted money market account. The terms of the standby letter of credit expire in May 2020 and are subject to automatic yearly renewal prior to this date.

Stockholders' Equity

Stockholders' Equity	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Stockholders' Equity	6. Stockholders’ Equity Warrants As of September 30, 2016 and December 31, 2015, warrants to purchase 71,257 shares of common stock remain outstanding. As of September 30, 2016 and December 31, 2015 there were 24,419 warrants to purchase shares of common stock are at a weighted average exercise price of $9.90. Additionally, there were 46,838 warrants to purchase shares of common stock are at an exercise price of $0.62 at September 30, 2016 and $8.54 at December 31, 2015. Common Stock On December 1, 2015, the Company entered into a Controlled Equity Offering Sales Agreement, or Sales Agreement, with Cantor Fitzgerald, as a sales agent pursuant to which the Company may offer and sell from time to time, through Cantor Fitzgerald shares of the Company’s common stock, par value $0.0001 per share, having an aggregate offering price of up to $20.0 million. The minimum share price for this Controlled Equity Offering is selected at the discretion of the Company’s Board of Directors. Through September 30, 2016, no shares of common stock have been sold pursuant to this Sales Agreement. Stock Compensation Plans The following table summarizes the Company’s stock compensation plan activity for the nine months ended September 30, 2016: Options Outstanding Weighted Average Exercise Price Outstanding and exercisable at December 31, 2015 1,363,027 $ 3.09 Granted 563,856 $ 1.09 Exercised (78,480 ) $ 0.43 Forfeited (657,490 ) $ 2.52 Outstanding and exercisable at September 30, 2016 1,190,913 $ 2.63 The Company recognized non-cash share-based compensation expense related to its 2014 Employee Stock Purchase Plan, restricted stock awards and stock options granted to employees and directors as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 General and administrative $ 67,687 $ 257,938 $ 851,837 $ 732,255 Research and development 15,331 108,048 118,544 309,759 $ 83,018 $ 365,986 $ 970,381 $ 1,042,014 Common Stock Reserved for Future Issuance The following shares of common stock are reserved for future issuance at September 30, 2016: Warrants issued and outstanding 71,257 Stock options issued and outstanding 1,190,913 Authorized for future awards under stock compensation plans 1,956,369 Employee Stock Purchase Plan 436,175 3,654,714

Commitments

Commitments	9 Months Ended
	Sep. 30, 2016
Commitments And Contingencies Disclosure [Abstract]
Commitments	7. Commitments Operating Leases The Company entered into a noncancelable operating lease for its facilities on January 20, 2015. The lease expires in March 2020. The following table summarizes the minimum lease payments under this commitment: 2016 $ 95,631 2017 395,520 2018 410,850 2019 431,508 2020 109,293 Total $ 1,442,802

Summary of Significant Accoun13

Summary of Significant Accounting Policies (Policies)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Use of Estimates	Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Cash and Cash Equivalents	Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of 90 days or less at the date of purchase to be cash equivalents. Cash and cash equivalents include cash in readily available checking and money market accounts.
Restricted Cash	Restricted Cash Restricted cash as of September 30, 2016 and December 31, 2015 represents a $200,000 restricted money market account used to secure the standby letter of credit issued in connection with a lease amendment (see Note 5 “Debt”).
Concentrations of Credit Risk	Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains deposits in federally insured financial institutions in excess of federally insured limits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant risk on its cash due to the financial position of the depository institution in which those deposits are held.
Fair Value of Financial Instruments	Fair Value of Financial Instruments The carrying amounts of prepaid and other current assets, accounts payable and accrued expenses are reasonable estimates of their fair value because of the short maturity of these items.
Property and Equipment	Property and Equipment Property and equipment, which primarily consist of office furniture and equipment and computer equipment, are stated at cost and depreciated over the estimated useful lives of the assets (three to five years) using the straight-line method.
Impairment of Long-Lived Assets	Impairment of Long-Lived Assets Long-lived assets consist primarily of property and equipment. An impairment loss is recorded if and when events and circumstances indicate that assets might be impaired and the undiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. While the Company's current and historical operating losses and negative cash flows are indicators of impairment, management believes that future cash flows to be received support the carrying value of its long-lived assets and, accordingly, has not recognized any impairment losses since inception .
Research and Development Costs	Research and Development Costs Research and development expenses consist primarily of salaries and related overhead expenses, fees paid to consultants and contract research organizations, costs related to acquiring and manufacturing clinical trial materials, and costs related to compliance with regulatory requirements. All research and development costs are charged to expense as incurred.
Income Taxes	Income Taxes The Company uses the liability method of accounting for income taxes. 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. Valuation allowances are recorded when the realizability of such deferred tax assets is not more likely than not. The guidance on accounting for uncertainty in income taxes prescribes a recognition threshold and measurement attribute criteria for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company’s policy is to recognize interest expense and penalties related to income tax matters as a component of income tax expense. The Company has not recognized interest and penalties in the balance sheets or statements of operations. The Company is subject to taxation in the U.S. and state jurisdictions. The Company’s tax years from inception are subject to examination by the United States and California authorities due to the carryforwards of unutilized net operating losses (NOLs) and research and development credits.
Share-Based Compensation	Share-Based Compensation Share-based compensation expense for stock option grants, restricted stock awards and employee stock purchase plan shares is recorded at the estimated fair value of the award as of the grant date and is recognized as expense on a straight-line basis over the requisite service period of the stock-based award. The estimation of stock options, restricted stock awards and employee stock purchase plan fair value requires management to make estimates and judgments about, among other things, employee exercise behavior, forfeiture rates and volatility of the Company’s common stock. The judgments directly affect the amount of compensation expense that will be recognized.
Net Loss Per Share	Net Loss Per Share Basic net loss per share is calculated by dividing the net loss by the weighted average number of common shares outstanding during the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss by the weighted average number of common shares and common share equivalents outstanding during the period. Common stock equivalents are only included when their effect is dilutive. The Company’s potentially dilutive securities, which include warrants and outstanding stock options and restricted stock awards under the stock compensation plans, have been excluded from the computation of diluted net loss per share as they would be anti-dilutive. For all periods presented, there is no difference in the number of shares used to compute basic and diluted shares outstanding due to the Company’s net loss position. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive. Nine Months Ended September 30, 2016 2015 Warrants for common stock 71,257 71,257 Common stock options and restricted stock awards issued and outstanding 1,190,913 1,509,672 1,262,170 1,580,929
Recent Accounting Pronouncements	Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments. This pronouncement gives guidance to clarify how certain cash receipts and payments should be presented and classified in the statement of cash flows. The guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, and early adoption is permitted. The Company is currently evaluating the timing of adoption of this guidance and the impact of the adoption of this guidance on its condensed financial statements. In March 2016, the FASB issued ASU 2016-09 (“ASU 2016-09”), Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting for employee share-based payments, including accounting for income taxes, forfeitures, statutory tax withholding requirements, and classification on the statement of cash flows. The amendments in this ASU are effective for annual periods beginning after December 15, 2016. Early adoption is permitted. The Company is evaluating the impact of adoption on its condensed financial statements. In February 2016, the FASB issued ASU 2016-02 (“ASU 2016-02”), Leases. ASU 2016-02 requires that lessees recognize assets and liabilities for the rights and obligations for leases with a lease term of more than one year. The amendments in this ASU are effective for annual periods ending after December 15, 2018. Early adoption is permitted. The Company is evaluating the impact of adoption on its condensed financial statements. In August 2014, the FASB issued guidance codified in ASU 2014-15 (Subtopic 205-40), Presentation of Financial Statements - Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. The guidance requires management to evaluate whether there are conditions and events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the financial statements are issued (or available to be issued when applicable). Management will be required to make this evaluation for both annual and interim reporting periods and will make certain disclosures if it concludes that substantial doubt exists or when its plans alleviate substantial doubt about the entity’s ability to continue as a going concern. Substantial doubt exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The term probable is used consistently with its use in ASC Topic 450, Contingencies. The guidance is effective for annual periods ending after December 15, 2016 and for interim reporting periods starting in the first quarter 2017, with early adoption permitted. The Company does not expect this guidance to have a significant impact on the consolidated financial statements and expects to adopt the standard for the annual reporting period ended December 31, 2016.

Summary of Significant Accoun14

Summary of Significant Accounting Policies (Tables)	9 Months Ended
	Sep. 30, 2016
Accounting Policies [Abstract]
Summary of Outstanding Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share	The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive. Nine Months Ended September 30, 2016 2015 Warrants for common stock 71,257 71,257 Common stock options and restricted stock awards issued and outstanding 1,190,913 1,509,672 1,262,170 1,580,929

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	9 Months Ended
	Sep. 30, 2016
Fair Value Disclosures [Abstract]
Schedule of Assets Measured at Fair Value on a Recurring Basis	Assets measured at fair value on a recurring basis as of September 30, 2016 and December 31, 2015 are as follows: Fair Value Measurements at Reporting Date Using Balance as of September 30, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market fund (1) $ 14,363,899 $ 14,363,899 $ — $ — Total assets $ 14,363,899 $ 14,363,899 $ — $ — (1) Included as a component of cash and cash equivalents on accompanying balance sheet. Fair Value Measurements at Reporting Date Using Balance as of December 31, 2015 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market fund (1) $ 36,752,200 $ 36,752,200 $ — $ — Total assets $ 36,752,200 $ 36,752,200 $ — $ — (1) Included as a component of cash and cash equivalents on accompanying balance sheet.

Property and Equipment (Tables)

Property and Equipment (Tables)	9 Months Ended
	Sep. 30, 2016
Property Plant And Equipment [Abstract]
Summary of Property and Equipment	Property and equipment consist of the following: September 30, December 31, 2016 2015 Office furniture and equipment $ 264,838 $ 279,547 Less accumulated depreciation and amortization (132,324 ) (93,175 ) $ 132,514 $ 186,372

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	9 Months Ended
	Sep. 30, 2016
Equity [Abstract]
Summary of Stock Compensation Plan Activity	The following table summarizes the Company’s stock compensation plan activity for the nine months ended September 30, 2016: Options Outstanding Weighted Average Exercise Price Outstanding and exercisable at December 31, 2015 1,363,027 $ 3.09 Granted 563,856 $ 1.09 Exercised (78,480 ) $ 0.43 Forfeited (657,490 ) $ 2.52 Outstanding and exercisable at September 30, 2016 1,190,913 $ 2.63
Summary of Recognized Non-Cash Share-Based Compensation Expense	The Company recognized non-cash share-based compensation expense related to its 2014 Employee Stock Purchase Plan, restricted stock awards and stock options granted to employees and directors as follows: Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 General and administrative $ 67,687 $ 257,938 $ 851,837 $ 732,255 Research and development 15,331 108,048 118,544 309,759 $ 83,018 $ 365,986 $ 970,381 $ 1,042,014
Summary of Common Stock Reserved for Future Issuance	The following shares of common stock are reserved for future issuance at September 30, 2016: Warrants issued and outstanding 71,257 Stock options issued and outstanding 1,190,913 Authorized for future awards under stock compensation plans 1,956,369 Employee Stock Purchase Plan 436,175 3,654,714

Commitments (Tables)

Commitments (Tables)	9 Months Ended
	Sep. 30, 2016
Commitments And Contingencies Disclosure [Abstract]
Schedule of Future Minimum Lease Payments	The following table summarizes the minimum lease payments under this commitment: 2016 $ 95,631 2017 395,520 2018 410,850 2019 431,508 2020 109,293 Total $ 1,442,802

Organization and Basis of Pre19

Organization and Basis of Presentation - Additional Information (Details)	9 Months Ended
	Sep. 30, 2016
DELAWARE
Organization And Basis Of Presentation [Line Items]
Date of incorporation	Feb. 1, 2007

Summary of Significant Accoun20

Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)	9 Months Ended
	Sep. 30, 2016	Dec. 31, 2015
Summary Of Significant Accounting Policies [Line Items]
Restricted cash	$ 200,000	$ 200,000
Impairment of long-lived assets	0
Interest and penalties related to income tax	$ 0
Minimum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of the assets	3 years
Maximum
Summary Of Significant Accounting Policies [Line Items]
Estimated useful lives of the assets	5 years

Summary of Significant Accoun21

Summary of Significant Accounting Policies - Summary of Outstanding Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	1,262,170	1,580,929
Warrants for Common Stock
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	71,257	71,257
Common Stock Options and Restricted Stock Awards Issued and Outstanding
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from computation of earnings per share	1,190,913	1,509,672

Fair Value Measurements - Sched

Fair Value Measurements - Schedule of Assets Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets	$ 14,363,899	$ 36,752,200
Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets	14,363,899	36,752,200
Money market fund
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets	14,363,899	36,752,200
Money market fund | Quoted Prices in Active Markets for Identical Assets (Level 1)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Total assets	$ 14,363,899	$ 36,752,200

Fair Value Measurements - Addit

Fair Value Measurements - Additional Information (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Fair Value, Measurements, Recurring
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Liabilities at fair value	$ 0	$ 0

Property and Equipment - Summar

Property and Equipment - Summary of Property and Equipment (Details) - USD ($)	Sep. 30, 2016	Dec. 31, 2015
Property Plant And Equipment [Abstract]
Office furniture and equipment	$ 264,838	$ 279,547
Less accumulated depreciation and amortization	(132,324)	(93,175)
Property and equipment, net	$ 132,514	$ 186,372

Debt - Additional Information (

Debt - Additional Information (Details)

Sep. 23, 2016USD ($)

Jan. 31, 2015USD ($)

Sep. 30, 2016USD ($)shares

Mar. 31, 2016USD ($)$ / sharesshares

Oct. 31, 2014USD ($)

Jun. 30, 2014USD ($)$ / shares

Feb. 28, 2010USD ($)$ / sharesshares

Sep. 30, 2016USD ($)shares

Sep. 30, 2015USD ($)

Jun. 30, 2014USD ($)Tranche$ / shares

Sep. 30, 2016USD ($)shares

Sep. 30, 2015USD ($)

Dec. 31, 2015shares

Debt Instrument [Line Items]

Warrants issued and outstanding | shares

71,257

71,257

71,257

71,257

Prepayment of outstanding loan carrying amount

$ 9,514,058

Interest expense

$ 506,302

$ 287,916

$ 1,035,763

$ 844,839

Stand-by Letter of Credit | LJ Gateway, LLC

Debt Instrument [Line Items]

Line of credit

$ 200,000

Line of credit facility, expiration date

2020-05

2010 Loan and Security Agreement | Silicon Valley Bank

Debt Instrument [Line Items]

Line of credit facility collateralized

$ 3,750,000

Warrants issued and outstanding | shares

24,419

Warrant exercise price per share | $ / shares

$ 9.90

Warrant expiration period from date of issuance

10 years

2010 Loan and Security Agreement | Silicon Valley Bank | Series B Convertible Preferred Stock

Debt Instrument [Line Items]

Warrants issued in connection with debt | shares

64,865

2010 Loan and Security Agreement | Silicon Valley Bank | Series C Convertible Preferred Stock

Debt Instrument [Line Items]

Warrants issued in connection with debt | shares

75,000

2014 Loan and Security Agreement | Hercules Technology Growth Capital Inc

Debt Instrument [Line Items]

Maximum borrowing capacity

$ 10,000,000

$ 10,000,000

Number of tranches | Tranche

2

Amount borrowed under loan agreement

$ 6,000,000

4,000,000

Debt discount

$ 52,400

$ 133,000

$ 133,000

Prepayment of outstanding loan carrying amount

$ 4,000,000

5,500,000

Prepayment fees

$ 120,000

$ 110,000

End of term payment

$ 300,000

Loan agreement terminated date

Sep. 23, 2016

Interest expense

$ 506,302

$ 1,035,763

2014 Loan and Security Agreement | Hercules Technology Growth Capital Inc | Unamortized Term Fee

Debt Instrument [Line Items]

Interest expense

260,000

2014 Loan and Security Agreement | Hercules Technology Growth Capital Inc | Debt Prepayment Fee

Debt Instrument [Line Items]

Interest expense

$ 230,000

2014 Loan and Security Agreement | Hercules Technology Growth Capital Inc | Warrants

Debt Instrument [Line Items]

Warrants issued and outstanding | shares

46,838

Warrant exercise price per share | $ / shares

$ 0.62

$ 8.54

$ 8.54

Warrant expiration period from date of issuance

8 years

Debt discount

$ 9,417

Warrant expiration date

2022-09

2014 Loan and Security Agreement | Hercules Technology Growth Capital Inc | Series C Convertible Preferred Stock

Debt Instrument [Line Items]

Warrants issued as percentage of loan amount

4.00%

Fair value of warrants issued

$ 207,429

$ 207,429

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Details) - USD ($)	Dec. 01, 2015	Sep. 30, 2016	Dec. 31, 2015
Class Of Stock [Line Items]
Common stock shares outstanding under warrant conversion		71,257	71,257
Common stock, par value		$ 0.0001	$ 0.0001
Common stock, shares issued		13,828,496	13,750,016
Cantor Fitzgerald
Class Of Stock [Line Items]
Common stock, shares issued		0
Controlled Equity Offering Sales Agreement | Cantor Fitzgerald
Class Of Stock [Line Items]
Common stock, par value	$ 0.0001
Controlled Equity Offering Sales Agreement | Cantor Fitzgerald | Maximum
Class Of Stock [Line Items]
Aggregate offering price	$ 20,000,000
Warrants with Exercise price $9.90
Class Of Stock [Line Items]
Common stock shares outstanding under warrant conversion		24,419	24,419
Warrant exercise price per share		$ 9.90	$ 9.90
Warrants with Exercise price $0.62
Class Of Stock [Line Items]
Common stock shares outstanding under warrant conversion		46,838	46,838
Warrant exercise price per share		$ 0.62	$ 8.54

Stockholders' Equity - Summary

Stockholders' Equity - Summary of Stock Compensation Plan Activity (Details)	9 Months Ended
	Sep. 30, 2016$ / sharesshares
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Options Outstanding beginning of period | shares	1,363,027
Options Granted | shares	563,856
Options Exercised | shares	(78,480)
Options Forfeited | shares	(657,490)
Options Outstanding at end of period | shares	1,190,913
Weighted Average Exercise Price, Outstanding at beginning of period | $ / shares	$ 3.09
Weighted Average Exercise Price, Granted | $ / shares	1.09
Weighted Average Exercise Price, Exercised | $ / shares	0.43
Weighted Average Exercise Price, Forfeited | $ / shares	2.52
Weighted Average Exercise Price, Outstanding at end of period | $ / shares	$ 2.63

Stockholders' Equity - Summar28

Stockholders' Equity - Summary of Recognized Non-Cash Share-Based Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2016	Sep. 30, 2015	Sep. 30, 2016	Sep. 30, 2015
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	$ 83,018	$ 365,986	$ 970,381	$ 1,042,014
General And Administrative
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	67,687	257,938	851,837	732,255
Research And Development
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation expense	$ 15,331	$ 108,048	$ 118,544	$ 309,759

Stockholders' Equity - Summar29

Stockholders' Equity - Summary of Common Stock Reserved for Future Issuance (Details) - shares	Sep. 30, 2016	Dec. 31, 2015
Common Stock Reserved For Future Issuance [Line Items]
Total common stock reserved for future issuance	3,654,714
Stock options issued and outstanding	1,190,913	1,363,027
Authorized for future awards under stock compensation plans	1,956,369
Warrants issued and outstanding
Common Stock Reserved For Future Issuance [Line Items]
Total common stock reserved for future issuance	71,257
Stock options issued and outstanding
Common Stock Reserved For Future Issuance [Line Items]
Stock options issued and outstanding	1,190,913
Employee Stock Purchase Plan
Common Stock Reserved For Future Issuance [Line Items]
Total common stock reserved for future issuance	436,175

Commitments - Additional Inform

Commitments - Additional Information (Details)	9 Months Ended
	Sep. 30, 2016
Commitments And Contingencies Disclosure [Abstract]
Non-cancelable operating lease agreement date	Jan. 20, 2015
Lease expiration period	2020-03

Commitments - Summarized minimu

Commitments - Summarized minimum lease payments (Details)	Sep. 30, 2016USD ($)
Commitments And Contingencies Disclosure [Abstract]
2,016	$ 95,631
2,017	395,520
2,018	410,850
2,019	431,508
2,020	109,293
Future minimum lease payments under operating leases	$ 1,442,802