Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the notes thereto. S ignificant estimates affecting amounts reported or disclosed in the consolidated financial statements include, but not limited to, the measurement of the Series D 2X liquidation preference, assumptions used in estimating the fair value of warrants issued in connection with the Merger, the useful lives of property and equipment, the recoverability of long-lived assets, preclinical and clinical trial accruals, assumptions used in estimating the fair value of stock-based compensation expense and other contingencies. The Company’s assumptions regarding the measurement of the Series D 2X liquidation preference and stock-based compensation are more fully described in Note 5 — Fair Value of Financial Instruments and Note 11 — Stock-based Compensation, respectively. 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 and adjusts when facts and circumstances dictate. The estimates are the basis for making judgments about the carrying values of assets and liabilities and recorded expenses that are not readily apparent from other sources. As future events and their effects cannot be determined with precision, actual results may materially differ from those estimates or assumptions. Segment Reporting Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, who is the Chief Executive Offer (CEO) of the Company, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. Deposits in the Company’s checking and time deposit accounts are maintained in federally insured financial institutions in excess of federally insured limits. The Company invests in funds through a major U.S. bank and is exposed to credit risk in the event of default to the extent of amounts recorded on the consolidated balance sheets. The Company has not experienced any losses in such accounts and believes it is not exposed to significant concentrations of credit risk on its cash, cash equivalents and restricted cash balances due to the financial position of the depository institutions in which these deposits are held. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents consists of readily available cash in checking and money market accounts. Restricted cash consists of cash held in monthly time deposit accounts, which are collateral for the Company’s credit cards and facility leases. The following table provides a reconciliation of cash, cash equivalents and restricted cash, reported within the consolidated statements of cash flows (in thousands): Years Ended December 31, 2018 2017 Cash and cash equivalents $ 1,330 $ 1,211 Restricted cash 431 490 Total cash, cash equivalents and restricted cash presented in the consolidated statements of cash flows $ 1,761 $ 1,701 Fair Value of Financial Instruments The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, that are required to be recorded at fair value, the Company considers the principal or most advantageous market in which to transact and the market-based risk. The Company applies fair value accounting for all assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. The valuation of assets and liabilities are subject to fair value measurements using a three-tiered approach and fair value measurement is classified and disclosed by the Company in one of the following three categories: Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2: Quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability; Level 3: Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported by little or no market activity). The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents, restricted cash, accounts payable, note payable, accrued expenses and accrued compensation approximate their fair values due to their short-term nature. As of December 31, 2018 and 2017 , based on the borrowing rate currently available to the Company for loans with similar terms, which is considered a Level 2 input, the Company believes the fair value of the Flex Note (as defined below) approximates its carrying value. Property and Equipment Property and equipment generally consist of research equipment, computer equipment and software and office furniture, and are recorded at cost and depreciated over the estimated useful lives of the assets (generally three to five years ) using the straight-line method. Leasehold improvements are stated at cost and are amortized on a straight-line basis over the lesser of the remaining term of the related lease or the estimated useful lives of the assets. Repairs and maintenance costs are charged to expense as incurred and improvements and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheets and any resulting gain or loss is reflected in the consolidated statements of operations in the period realized. Impairment of Long-lived Assets The Company reviews property and equipment for impairment on an annual basis and whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. An impairment loss would be recognized when estimated future undiscounted cash flows relating to the asset or asset group are less than its carrying amount. An impairment loss is measured as the amount by which the carrying amount of an asset or asset group exceeds its fair value. While the Company’s current and historical operating losses and negative cash flows are possible indicators of impairment, management believes that future cash flows to be generated by these assets support the carrying value of its long-lived assets and, accordingly, did not recognize any impairment losses during the years ended December 31, 2018 and 2017 . Clinical Trial Accruals As part of the process of preparing our financial statements, we are required to estimate expenses resulting from our obligations under contracts with vendors, clinical research organizations (CROs), consultants and under clinical site agreements relating to conducting our clinical trials. The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company's objective is to reflect the appropriate clinical trial expenses in our consolidated financial statements by recording those expenses in the period in which services are performed and efforts are expended. The Company accounts for these expenses according to the progress of the clinical trial as measured by patient progression and the timing of various aspects of the trial. Management determines accrual estimates through financial models and discussions with applicable personnel and outside service providers as to the progress of clinical trials. During a clinical trial, the Company adjusts the clinical expense recognition if actual results differ from its estimates. The Company makes estimates of accrued expenses as of each balance sheet date based on the facts and circumstances known at that time. The Company’s clinical trial accruals are partially dependent upon accurate reporting by CROs and other third-party vendors. Although the Company does not expect its estimates to differ materially from actual amounts incurred, the Company’s understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in reporting amounts that are too high or too low for any period. For the years ended December 31, 2018 and 2017 there were no material adjustments to the Company’s prior period estimates of accrued expenses for clinical trials. Fair Value of Series D and Series D 2X Liquidation Preference Prior to completion of the Merger, the Company valued its Series D redeemable convertible preferred stock (Series D) and Series D 2X liquidation preference in accordance with Accounting Standards Codification (ASC) No. 815 — Derivatives and Hedging , using a probability-weighted expected return model (PWERM), which is sensitive to changes in assumptions regarding the timing of additional financings, potential exit scenarios and revisions in our financial forecast. Changes in any one of the assumptions could have had a material impact on the estimated fair value of the Series D and Series D 2X liquidation preference. Management used the most reliably available information at each issuance of Series D to determine the fair value of the Series D and at each valuation date to determine the fair value of the Series D 2X liquidation preference. Due to the nature of the assumptions and the sensitive nature of the PWERM, management could not reliably provide sensitivity analysis around the impact of changes in assumptions utilized in the PWERM used to estimate the fair value of the Series D and Series D 2X liquidation preference. Convertible Preferred Stock Prior to the Merger, the Company’s Series A, Series B, Series C-1, Series C convertible preferred stock and Series D were classified as temporary equity instead of stockholders’ deficit in accordance with authoritative guidance for the classification and measurement of potentially redeemable securities, as the shares were conditionally redeemable at the holder’s option and upon certain change in control events that are outside the Company’s control, including liquidation, sale, or transfer of control of the Company. Upon completion of the Merger, the Company's Series A, Series B, Series C-1, Series C convertible preferred stock and Series D were converted into common stock. Fair Value of Warrants The fair value of the WIM and Invesco Warrants (as defined below) issued in connection with the Merger were determined using the Black-Scholes-Merton (BSM) option-pricing model based on the applicable assumptions, which include the warrants exercise price, time to expiration, expected volatility of our peer group, risk-free interest rate and expected dividend. Research and Development R&D expenses include the costs associated with the Company’s R&D activities, including, but not limited to, payroll and personnel-related expenses, stock-based compensation expense, materials, laboratory supplies, clinical studies and outside services. R&D costs are expensed as incurred, except when accounting for nonrefundable advance payments for goods or services not yet received. These payments, if any, are capitalized at the time of payment and expensed as the related goods are delivered or the services are performed. Patent Expenses The Company expenses all costs incurred relating to patent applications (including direct application fees, and the legal and consulting expenses related to making such applications) and such costs are included in general and administrative expenses in the consolidated statements of operations. Stock-based Compensation Stock-based compensation expense for equity instruments issued to employees, nonemployee directors and consultants is measured based on estimating the fair value of each stock option on the date of grant using the BSM option-pricing model. Expensing The following table summarizes the Company’s stock-based awards expensing policies for employees and nonemployees: Employees and Nonemployee Consultants After Adopting ASU 2018-07 Nonemployee Consultants Prior to Adopting ASU 2018-07 Service only condition Straight-line based on the grant date fair value Re-value at each reporting date through the service commitment date Performance criterion is probable of being met: Service criterion is complete Recognize the grant date fair value of the award(s) once the performance criterion is considered probable of occurrence Re-value the award(s) once the performance criterion is considered probable of occurrence and recognize expense for the then fair value of the award(s) Service criterion is not complete Expense using an accelerated multiple-option approach (1) over the remaining requisite service period Same as for employees, except the award will be marked-to-market through the performance commitment date Performance criterion is not probable of being met and: Is not tied to the successful completion of an initial public offering of the Company’s common stock (IPO) No expense recognition is required until the performance criterion is considered probable at which point expense is recognized using an accelerated multiple-option approach Same as for employees, except the award will be marked-to-market through the performance commitment date Is tied to the successful completion of an IPO by the Company Upon closing of an IPO by the Company, recognize the grant date fair value of the award(s) Same as for employees, except expense is recognized based upon the fair value of the Company’s common stock sold in the IPO ________________ (1) The accelerated multiple-option approach results in compensation expense being recognized for each separately vesting tranche of the award as though the award was in substance multiple awards and, therefore, results in accelerated expense recognition during the earlier vesting periods. Determining Fair Value of Stock Options Prior to the Merger, the fair value of the shares of the Company’s common stock underlying its stock-based awards was estimated on each grant date by the Company’s board of directors. To determine the fair value of the common stock underlying option grants, the Company’s board of directors considered, among other things, valuations of the Company’s common stock prepared by an unrelated valuation firm in accordance with the guidance provided by the American Institute of Certified Public Accountants Practice Guide, Valuation of Privately-Held-Company Equity Securities Issued as Compensation. Given the absence of a public trading market for its common stock prior to completion of the Merger, the board of directors exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of the Company’s common stock, including the Company’s stage of development; progress of the Company’s R&D efforts; the Company’s operating and financial performance, including levels of available capital resources; the rights, preferences and privileges of the Company’s convertible preferred stock relative to those of its common stock; sales of the Company’s convertible preferred stock; the valuation of publicly traded companies in its industry, equity market conditions affecting comparable public companies and the lack of marketability of the Company’s common stock. The Company obtained valuations on at least an annual basis or when it determined that significant value generating or diminishing internal and/or external events had occurred which would significantly increase or decrease the fair value of the common stock underlying its stock-based awards. Post the Merger, the fair value of our common stock will be equal to the closing price of our stock. For purposes of re-measuring the Company’s consultant stock options, the Company utilized the concluded fair values for the Company’s common stock underlying the stock options as aforementioned prior to the Merger or the closing price at each reporting date post the Merger to recognize estimated consultant stock-based compensation expense using the BSM at each reporting date. Forfeitures The Company adopted ASU No. 2016-09 Compensation — Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU No. 2016-09) in fiscal year 2016, under which the Company made a one-time policy election to record forfeitures when they occur. Performance-based Awards For performance-based restricted stock awards (RSAs) (i) the fair value of the award is determined on the grant date, (ii) the Company assesses the probability of the individual milestone under the award being achieved and (iii) the fair value of the shares subject to the milestone is expensed over the implicit service period commencing once management believes the performance criteria is probable of being met. Income Taxes The accounting guidance 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 based on the technical merits of the position. The Company uses the asset and 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. 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. When the Company establishes or reduces the valuation allowance against its deferred tax assets, its provision for income taxes will increase or decrease, respectively, in the period such determination is made. Net Loss Per Share Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. 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 potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive and therefore, basic and diluted net loss per share were the same for all periods presented. Potentially dilutive securities excluded from the calculation of diluted net loss per share are summarized in the table below. For the year ended December 31, 2018, the shares in the table also included 1,013,375 shares of options granted out of the share reserve increase approved by the board of directors under the Amended and Restated 2014 Plan (as defined below) on November 28, 2018, and are subject to the Company obtaining the requisite stockholder approval (the Contingent Options) at the 2019 annual meeting. For the year ended December 31, 2017, the shares in the table have been adjusted to reflect the conversion of Series A, B, C-1, and C convertible preferred stock and Series D as fully described in Note 8- Convertible Preferred Stock , and the Reverse Stock Split. Years Ended December 31, 2018 2017 Convertible preferred stock — 1,027,079 Series D redeemable convertible preferred stock — 6,878,986 Unvested restricted common stock subject to repurchase — 122,149 Unvested restricted stock units — 2,566 Options to purchase common stock 5,767,627 160,248 Warrants to purchase common stock 4,775,886 — Total 10,543,513 8,191,028 Recently Adopted Accounting Pronouncements The Company qualifies as an “emerging growth company” (EGC) pursuant to the provisions of the Jumpstart Our Business Startups (JOBS) Act from the fiscal year 2014 to 2018. Section 7(a)(2)(B) of the Securities Act of 1933, as amended, permits EGCs to defer compliance with new or revised accounting standards until non-issuers are required to comply with such standards. However, the Company elected not to take advantage of the extended transition period for implementation of new or revised financial accounting standards, and as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (ASU No. 2014-09), which amends the existing accounting standards for revenue recognition. ASU No. 2014-09 is based on principles that govern the recognition of revenue at an amount an entity expects to be entitled when products are transferred to customers. The new standard as amended by ASU No. 2015-14 ( Revenue from Contracts with Customers (Topic 606): Deferral of The Effective Date) , ASU No. 2016-10 ( Revenue from Contracts with Customers (Topic 606): Identifying Performance Obligation and Licensing), and ASU No. 2016-12 ( Revenue from Contracts with Customers (Topic 606): Narrow-scope Improvements and Practical Expedients) was effective for the Company beginning January 1, 2018. The Company adopted the new standard using the full retrospective approach, which did not have an impact on the Company’s financial position or results of operations as the Company is pre-revenue and does not anticipate generating any significant revenue prior to 2020. In May 2017, the FASB issued ASU No. 2017-09, Compensation—Stock Compensation (Topic 718): Scope of Modification Accounting (ASU No. 2017-09), which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. ASU No. 2017-09 was effective for the Company beginning January 1, 2018. The adoption of this new standard did not have a material impact on the Company’s financial position or results of operations. In June 2018, the FASB issued ASU No. 2018-07, Compensation- Stock Compensation (Topic 718 ) (ASU No. 2018-07), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from non-employees that are currently covered under Accounting Standards Codification (ASC) 505-50 , Equity-Based Payments to Non-employees. ASU No. 2018-07 will be effective for the Company beginning January 1, 2019 and early adoption is permitted. The Company adopted this new standard on September 30, 2018 using a modified retrospective transition method, under which the Company valued the equity awards to nonemployees as of September 30, 2018; any expense recorded for the awards in the future will be based on this value. There was no cumulative effect of the change on retained earnings. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842 ) (ASU No. 2016-02), which changes the presentation of assets and liabilities relating to leases. The core principle of ASU No. 2016-02 is that a lessee should recognize the assets and liabilities that arise from leases. The new standard as amended by ASU No. 2018-01 ( Leases (Topic 842 ): Land Easement Practical Expedient for Transition to Topic 842 ), ASU No. 2018-10 ( Codification Improvements to Topic 842, Leases ), and ASU No. 2018-11 ( Leases (Topic 842): Targeted Improvements ) (ASC No. 2018-11) was effective for the Company beginning January 1, 2019. This new standard is required to be adopted using a modified retrospective approach with certain available transitional practical expedients. The ASU No. 2018-11 issued in July 2018 allows for the adoption of the new standard to be applied at the adoption date as opposed to at the beginning of the earliest year presented. On January 1, 2019, the Company adopted this new standard under the provisions allowed under ASU 2018-11. Based on the Company's evaluation of impact on its financial statements, the Company currently expects to record approximately $0.8 million right-of-use assets and $1.0 million lease liabilities for all its active leases as of the adoption date in the consolidated balance sheets, and no material impact on its consolidated results of operations or cash flows. Recently Issued Accounting Pronouncements — Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820 ) (ASU No. 2018-13), which removes, modifies and adds certain disclosure requirements on fair value measurements in Topic 820. ASU No. 2018-13 will be effective for the Company beginning January 1, 2020. Early adoption is permitted. The Company is in the process of evaluating the impact of this standard on disclosures in its consolidated financial statements. |