Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Nov. 01, 2017 | Dec. 08, 2016 | |
Document And Entity Information | |||
Entity Registrant Name | SenesTech, Inc. | ||
Entity Central Index Key | 1,680,378 | ||
Trading Symbol | SNES | ||
Document Type | 10-K/A | ||
Document Period End Date | Dec. 31, 2016 | ||
Amendment Flag | true | ||
Amendment Description | EXPLANATORY NOTE SenesTech, Inc. (the “Company”) is filing this Amendment No. 1 on Form 10-K/A to amend its Annual Report on Form 10-K for the year ended December 31, 2016, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2017 (the “2016 Annual Report”) solely to add a summary of a significant accounting policy to “Item 8. Financial Statements and Supplementary Data — Notes to the Financial Statements — Summary of Significant Accounting Policies” and to clarify a risk factor related to our internal control over financial reporting. The remainder of the Annual Report on Form 10-K is included for convenience only and, except for corresponding updates to the cover page, Part IV and signature page, reflects the contents of the 2016 Annual Report. This Amendment No. 1 has not been updated to reflect any events occurring after the filing of the 2016 Annual Report. | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 51,362,120 | ||
Entity Common Stock, Shares Outstanding | 10,389,497 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,016 |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 11,826 | $ 141 |
Accounts receivable | 10 | 13 |
Prepaid expenses | 337 | 36 |
Inventory | 57 | |
Total current assets | 12,230 | 190 |
Property and equipment, net | 631 | 613 |
Deferred offering costs | 9 | 6 |
Security deposits | 132 | |
Total assets | 12,870 | 941 |
Current liabilities: | ||
Short-term debt | 45 | 27 |
Accounts payable | 351 | 544 |
Accrued contract cancellation settlement | 1,000 | |
Accrued expenses | 371 | 758 |
Notes payable, related parties | 30 | 462 |
Convertible notes payable, related parties | 200 | |
Deferred revenue | 221 | |
Total current liabilities | 1,797 | 2,212 |
Notes payable, related parties | 6 | 34 |
Long-term debt, net | 138 | 450 |
Common stock warrant liability | 69 | 63 |
Deferred rent | 33 | 28 |
Deferred compensation obligations | 2,000 | |
Total liabilities | 2,043 | 4,787 |
Commitments and contingencies ( See note 15) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value, 100,000,000 shares authorized, 10,157,292 and 4,108,766 shares issued and outstanding at December 31, 2016 and 2015, respectively | 10 | 4 |
Additional paid-in capital | 72,069 | 39,000 |
Accumulated other comprehensive income, series A convertible preferred stock dividend | 17 | |
Stock subscribed, but not issued | 59 | 14 |
Accumulated deficit | (61,311) | (50,357) |
Total stockholders' equity (deficit) | 10,827 | (11,322) |
Total liabilities and stockholders' equity (deficit) | 12,870 | 941 |
Series A Preferred Stock [Member] | ||
Current liabilities: | ||
Convertible preferred stock | 4,380 | |
Series B Convertible Preferred Stock [Member] | ||
Current liabilities: | ||
Convertible preferred stock | $ 3,096 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock shares authorized | 100,000,000 | 100,000,000 |
Common stock shares issued | 10,157,292 | 4,108,766 |
Common stock shares outstanding | 10,157,292 | 4,108,766 |
Series A Preferred Stock [Member] | ||
Temporary equity , par value (in dollars per share) | $ 0.001 | |
Temporary equity, authorized | 2,000,000 | |
Temporary equity, issued | 400,000 | |
Temporary equity, outstanding | 400,000 | |
Liquidation preference | $ 2.017 | |
Series B Preferred Stock [Member] | ||
Temporary equity , par value (in dollars per share) | $ 0.001 | |
Temporary equity, authorized | 7,515,000 | |
Temporary equity, issued | 399,512 | |
Temporary equity, outstanding | 399,512 | |
Liquidation preference |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Revenue: | ||
License revenue | $ 186 | $ 186 |
Other revenue | 132 | 55 |
Total revenue | 318 | 241 |
Operating expenses: | ||
Research and development | 2,705 | 7,221 |
General and administrative | 8,129 | 8,665 |
Total operating expenses | 10,834 | 15,886 |
Net operating loss | (10,516) | (15,645) |
Other income (expense): | ||
Interest expense | (32) | (418) |
Interest expense, related parties | (55) | (437) |
(Loss) gain on extinguishment of notes and convertible notes, related parties | (161) | 569 |
Loss on extinguishment of NAU promissory note | (1,530) | |
Loss on extinguishment of secured promissory note | (34) | |
Other income (expense) | (31) | (678) |
Total other income (expense) | (279) | (2,528) |
Net loss | (10,795) | (18,173) |
Series A convertible preferred stock dividends | (159) | (17) |
Net loss and comprehensive loss | $ (10,954) | $ (18,190) |
Weighted average common shares outstanding - basic and fully diluted (in shares) | 6,417,936 | 3,852,349 |
Net loss per common share - basic and fully diluted (in dollars per shares) | $ (1.71) | $ (4.71) |
STATEMENT OF CHANGES IN CONVERT
STATEMENT OF CHANGES IN CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Series A Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Stock Subscribed Not Issued [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Total |
Begining balance at Dec. 31, 2014 | $ 4 | $ 26,281 | $ 158 | $ (32,167) | $ (5,724) | |||
Begining balance (in shares) at Dec. 31, 2014 | 3,629,921 | 10,496 | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of series B convertible preferred stock for cash | $ 2,941 | |||||||
Issuance of series B convertible preferred stock for cash (in shares) | 379,512 | |||||||
Issuance of common stock for services | 1 | $ 15 | 16 | |||||
Issuance of common stock for services (in shares) | 100 | 3,250 | ||||||
Stock-based compensation | 11,262 | 11,262 | ||||||
Issuance of common stock upon exercise of stock options and warrants | 78 | 78 | ||||||
Issuance of common stock upon exercise of stock options and warrants (in shares) | 390,873 | |||||||
Issuance of series A convertible preferred stock for cancellation of note | $ 4,380 | |||||||
Issuance of series A convertible preferred stock for cancellation of note (in shares) | 400,000 | |||||||
Issuance of series A convertible preferred stock for cash | $ 155 | |||||||
Issuance of series A convertible preferred stock for cash (in shares) | 20,000 | |||||||
Issuance of common stock upon conversion of notes | 610 | 610 | ||||||
Issuance of common stock upon conversion of notes (in shares) | 80,417 | |||||||
Shares of common stock forfeited | $ (47) | (47) | ||||||
Shares of common stock forfeited (in shares) | (3,041) | |||||||
Warrant issued in connection with cancellation of NAU promissory note | 330 | 330 | ||||||
Recognition of warrants issued with 2014/2015 convertible notes | 97 | 97 | ||||||
Recognition of warrant issued with promissory notes | 229 | 229 | ||||||
Reclassification of subscribed shares to common stock | 112 | $ (112) | ||||||
Reclassification of subscribed shares to common stock (in shares) | 7,455 | (7,455) | ||||||
Dividends paid on preferred shares | 17 | (17) | ||||||
Net loss | (18,173) | (18,173) | ||||||
Ending balance at Dec. 31, 2015 | $ 4,380 | $ 3,096 | $ 4 | 39,000 | $ 14 | 17 | (50,357) | (11,322) |
Ending balance (in shares) at Dec. 31, 2015 | 400,000 | 399,512 | 4,108,766 | 3,250 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Issuance of series B convertible preferred stock for cash | $ 896 | |||||||
Issuance of series B convertible preferred stock for cash (in shares) | 115,668 | |||||||
Issuance of series B convertible preferred stock for conversion of notes | $ 16 | |||||||
Issuance of series B convertible preferred stock for conversion of notes (in shares) | 2,007 | |||||||
Issuance of common stock upon conversion of series A preferred stock | $ (4,380) | 4,380 | 4,380 | |||||
Issuance of common stock upon conversion of series A preferred stock (in shares) | (400,000) | 400,000 | ||||||
Issuance of common stock upon conversion of series B preferred stock | $ (4,008) | $ 1 | 4,007 | 4,008 | ||||
Issuance of common stock upon conversion of series B preferred stock (in shares) | (517,187) | 517,187 | ||||||
Issuance of common stock sold for cash | $ 4 | 18,828 | 18,832 | |||||
Issuance of common stock sold for cash (in shares) | 4,353,486 | |||||||
Issuance of common stock for services | 338 | $ 45 | $ 383 | |||||
Issuance of common stock for services (in shares) | 126,373 | 5,250 | 126,373 | |||||
Issuance of common stock for services, related parties | 295 | $ 295 | ||||||
Issuance of common stock for services, related parties (in shares) | 13,320 | |||||||
Stock-based compensation | 2,689 | 2,689 | ||||||
Forgiveness of accrued liabilities, related party | 2,003 | 2,003 | ||||||
Issuance of common stock upon exercise of stock options and warrants | $ 1 | 520 | 521 | |||||
Issuance of common stock upon exercise of stock options and warrants (in shares) | 630,935 | |||||||
Recognition of warrants issued with unsecured notes | 9 | 9 | ||||||
Cashless exercise of warrants (in shares) | 7,225 | |||||||
Dividends paid on preferred shares | (17) | (159) | (176) | |||||
Net loss | (10,795) | (10,795) | ||||||
Ending balance at Dec. 31, 2016 | $ 10 | $ 72,069 | $ 59 | $ (61,311) | $ 10,827 | |||
Ending balance (in shares) at Dec. 31, 2016 | 10,157,292 | 8,500 |
STATEMENTS OF CASH FLOWS
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (10,795) | $ (18,173) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 196 | 182 |
Stock-based compensation | 2,689 | 11,262 |
Shares of common stock issued for services, net of forfeitures | 678 | (10) |
Common stock warrant issued as compensation | 53 | |
Non-cash interest expense from convertible notes and notes payable | 519 | |
Amortization of debt discount | 27 | 177 |
Change in fair value of convertible notes payable, related parties | 671 | |
loss on remeasurement of common stock warrant liability | 6 | 10 |
Loss (gain) on extinguishment of secured convertible promissory note, related parties | (569) | |
(Gain) loss on extinguishment of debts, net | 161 | 1,564 |
(Increase) decrease in current assets: | ||
Accounts receivable | 3 | 18 |
Prepaid expenses | (301) | (3) |
Inventory | (57) | |
Deposits | (3) | 3 |
Increase (decrease) in current liabilities: | ||
Accounts payable | (193) | 393 |
Accrued expenses | 1,109 | 388 |
Deferred rent | 5 | |
Deferred revenues | (221) | (151) |
Net cash used in operating activities | (6,696) | (3,666) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (57) | (130) |
Net cash used in investing activities | (57) | (130) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Dividend payments on preferred stock | (176) | |
Proceeds from the issuance of series B convertible preferred stock | 896 | 155 |
Proceeds from the issuance of common stock | 18,832 | |
Proceeds from the issuance of convertible notes payable, related parties | 310 | 1,915 |
Repayments of convertible notes payable, related parties | (310) | |
Proceeds from the issuance of convertible notes payable | 16 | |
Repayments of convertible notes payable | (500) | |
Proceeds from notes payable, related parties | 222 | |
Repayments of notes payable, related parties | (1,101) | (71) |
Proceeds from notes payable | 1,000 | |
Repayments of notes payable | (29) | (13) |
Repayments of capital lease obligations | (21) | (16) |
Payment of deferred offering costs | (132) | |
Proceeds from exercise of stock options and warrants | 521 | 56 |
Net cash provided by financing activities | 18,438 | 3,116 |
NET CHANGE IN CASH | 11,685 | (680) |
CASH AT BEGINNING OF PERIOD | 141 | 821 |
CASH AT END OF PERIOD | 11,826 | 141 |
SUPPLEMENTAL INFORMATION: | ||
Interest paid | 393 | 16 |
Income taxes paid | ||
NON-CASH INVESTING AND FINANCING ACTIVITIES: | ||
Issuance of series A convertible preferred stock and common stock warrant in connection with cancellation of debt | 4,380 | |
Issuance of series B convertible preferred stock in connection with conversion of convertible notes and notes payable | 2,941 | |
Issuance of shares of common stock upon conversion of convertible notes payable | 8,387 | 610 |
Issuance of capital lease obligations for purchase of equipment | 157 | 30 |
Debt discount on convertible notes | 9 | 229 |
Issuance of warrants with notes payable | 97 | |
Original issue discount | 147 | |
Contributed capital, debt forgiveness by related parties | 2,003 | |
Related party convertible note extinguished for settlement payable | $ 404 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | 1. Organization and Description of Business SenesTech, Inc. (the “Company”) was formed in July 2004 and incorporated in the state of Nevada. The Company subsequently reincorporated in the state of Delaware in November 2015. The Company has its corporate headquarters in Flagstaff Arizona. The Company has developed proprietary technology for managing animal pest populations through fertility control. The Company believes that its innovative non-lethal approach, targeting reproduction, is more humane, less harmful to the environment, and more effective in providing a sustainable solution to pest infestations than traditional lethal pest management methods. Its first fertility control product candidate, ContraPest, will be marketed for use in controlling the rat population. The innovative compound is consumed by rats and leaves them non-reproductive without other observable side effects. The Company is pursuing regulatory approvals for ContraPest in various jurisdictions, including the United States (“U.S.”), India, Argentina and the European Union (“EU”). On August 23, 2015, the Company submitted ContraPest for registration with the U.S. Environmental Protection Agency (“EPA”), and the EPA granted registration approval for ContraPest effective August 2, 2016. Following regulatory approval for ContraPest, the Company plans to commercialize and distribute ContraPest by leveraging new and existing third party relationships with manufacturing, marketing and distribution partners in the U.S. and internationally. Need for Additional Capital In the course of its research and development activities, the Company has sustained operating losses since its inception and expects such losses to continue for the foreseeable future. The Company’s ultimate success depends upon the outcome of a combination of factors, including: (i) the success of its research and development; (ii) regulatory approval and commercialization of ContraPest and its other product candidates; (iii) market acceptance and commercial viability of ContraPest and other products if the Company obtains the necessary regulatory approvals; (iv) the ability to market its products and establish an effective sales force and marketing infrastructure to generate significant revenue; (v) the ability to retain and attract key personnel to develop, operate and grow its business; and (vi) the timely and successful completion of additional financing as needed. The Company has funded its operations to date through the sale of convertible preferred stock and common stock, including an initial public offering of 1,875,000 shares of its common stock on December 8, 2016, debt financing, consisting primarily of convertible notes and, to a lesser extent, payments received in connection with research grants and licensing fees. As of December 31, 2016, the Company had cash and cash equivalents of $11,826. Based upon its current operating plan, they expect that cash and cash equivalents at December 31, 2016, will be sufficient to fund its current operations for at least the next 12 months. However, for reasons detailed above, the Company may require additional capital and would have to continue to fund its operating losses and research and development activities in the near term by issuing additional debt and equity instruments. However, if such equity or debt financing is not available at adequate levels, the Company will need to reevaluate its plans. All amounts shown in these financial statements are in thousands, except percentages and per share and share amounts. Per share and share amounts reflect post-reverse split values. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 reported amounts of revenues and expenses during the reporting period. The significant estimates in the Company’s financial statements include the valuation of preferred stock, common stock and related warrants, and other stock-based awards. Actual results could differ from such estimates. Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows. Deferred Offering Costs Deferred offering costs consist primarily of legal, accounting and other direct and incremental fees and costs related to the Company’s initial public offering on December 8, 2016. Deferred offering costs of $2,234 were offset against the proceeds received from the initial public offering in December of 2016. At December 31, 2015, deferred offering costs of $132 were deferred in the accompanying balance sheet. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of ninety days or less at the time of deposit to be cash equivalents. The Company does not have any cash equivalents for the periods presented. Accounts Receivable Accounts receivable consist primarily of trade receivables. The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. The allowance for doubtful trade receivables was $0 as of December 31, 2016 and 2015 as we believe all of our receivables are fully collectable. Inventories Inventories are stated at the lower of cost or market value, using the first-in, first-out convention. Inventories consist of raw materials and finished goods. As of December 31, 2016 and 2015, the Company had inventories of $57 and $0, respectively. Prepaid Expenses Prepaid expenses consist primarily of payments made for director compensation to be earned in the first 6 months of 2017 as well as payments made for director and officer insurance, rent and legal deposits to be expensed in the current year. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Equipment held under capital leases are stated at the present value of minimum lease payments less accumulated amortization. Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. The cost of leasehold improvements is amortized over the life of the improvement or the term of the lease, whichever is shorter. Equipment held under capital leases are amortized over the shorter of the lease term or estimated useful life of the asset. The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred. Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require long-lived assets or asset groups to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated from the use of the asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, such as discounted cash flow models and the use of third- party independent appraisals. The Company has not recorded an impairment of long-lived assets since its inception. Revenue Recognition The Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies when (i) persuasive evidence of an arrangement exists; (ii) the performance of service has been rendered to a customer or delivery has occurred; (iii) the amount of fee to be paid by a customer is fixed and determinable; and (iv) the collectability of the fee is reasonably assured. The Company has generated revenue from a license agreement with a strategic partner, pursuant to which the Company had granted to such partner the exclusive right to manufacture and distribute its product, ContraPest, once the required regulatory approvals were received (See Note 16). This licensing agreement was subsequently terminated on January 23, 2017 (See Note 18). The terms of the licensing agreement contained multiple elements or deliverables, as discussed below. Management evaluates whether the arrangement involving the multiple deliverables contains more than one unit of accounting. To determine the units of accounting under a multiple-element arrangement, management evaluates certain separation criteria, including whether the deliverables have stand-alone value, based on the relevant facts and circumstances of the arrangement. The Company determined that the license granted pursuant to the license agreement did not have stand-alone value and, therefore, the nonrefundable, upfront license fee payments received by the Company are recognized on a straight-line basis over the estimated related performance period (i.e. from the effective date of the agreement through the estimated completion date of the Company’s substantive performance obligations). In accordance with the terms of the license agreement, the Company was also to receive a future fixed amount of contingent milestone payments (i.e. post-regulatory approval license fees) and contingent sales-based royalties to be received upon the achievement of certain milestone events. The milestone events under the agreement include regulatory approval, patent issuance or alternative intellectual property coverage, and sales-based events. The Company did not earn or receive any of the potential contingent milestone payments, as the milestone events to receive such post-approval license fees and sales-based royalties were not achieved. The Company recognizes revenue that is contingent upon the achievement of a substantive milestone event in its entirety in the period in which the milestone is achieved. A milestone is considered substantive when the consideration payable to the Company for such milestone has all of the following characteristics: (i) there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved; (ii) the event can only be achieved based in whole or part on either the Company’s performance or a specific outcome resulting from the Company’s performance; and (iii) if achieved, the event would result in additional payments being due to the Company. As the potential contingent consideration was to be received only upon the achievement of milestone events that are considered substantive, the Company would only recognize such revenue in the period the milestone is achieved and the milestone payments are due and collectible. In addition, the Company accounts for sales-based royalties as revenue upon achievement of certain sales milestones. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue on the balance sheet. Amounts expected to be recognized as revenue in the next twelve months following the balance sheet date are classified as a current liability. The Company recognizes other revenue earned from pilot studies upon the performance of specific services under the respective service contract. To date, the Company has generated minimal revenue from the commercial sales of products. Research and Development Research and development costs are expensed as incurred. Research and development expenses primarily consist of salaries and benefits for research and development employees, stock-based compensation, consulting fees, lab supplies, and costs incurred related to conducting scientific trials and field studies, and regulatory compliance costs. Also, included in research and development expenses is an allocation of facilities related costs, including depreciation of research and development equipment. Stock-based Compensation Employee stock-based awards, consisting of stock options expected to be settled in shares of the Company’s common stock, are recorded as equity awards. The grant date fair value of these awards is measured using the Black-Scholes option pricing model. The Company expenses the grant date fair value of its stock options on a straight-line basis over their respective vesting periods. Performance-based awards are expensed over the performance period when the related performance goals are probable of being achieved. For equity instruments issued to non-employees, the stock-based consideration is measured using a fair value method. The measurement of the stock-based compensation is subject to re-measurement as the underlying equity instruments vest. Convertible Preferred Stock With the closing of the Company’s initial public offering, in December, 2016, the Series A and Series B convertible preferred stock were converted into shares of common stock. The holder of all of the outstanding shares of Series A convertible preferred stock agreed to convert and has converted all of its shares of Series A convertible preferred stock into shares of common stock on a one-for-one basis immediately prior to the consummation of this offering. See Note 12. The Series A convertible preferred stock and Series B convertible preferred stock were presented outside of permanent equity, in temporary or mezzanine equity, on the Company’s December 31, 2015 balance sheet. The Company initially records preferred stock that may be redeemed at the option of the holder based on the occurrence of an event outside of the Company’s control, at the value of the proceeds received. Subsequently, if it is probable that the preferred stock will become redeemable, the Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying amount of the preferred stock to equal its redemption value at the end of each reporting period. If it is not probable that the preferred stock will become redeemable, the Company does not adjust its carrying amount. In the absence of retained earnings, these charges are recorded against additional paid-in capital, if any, and then to accumulated deficit. Valuation of Common Stock Due to the absence of an active market for the Company’s common stock, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately- Held Company Equity Securities issued as Compensation, Significant changes to the key assumptions used in the valuations could result in different fair values of the Company’s common stock at each valuation date. Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In November 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. Only those benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities are recognized. Based on its evaluation, the Company has concluded there are no significant uncertain tax positions requiring recognition in its financial statements. The Company recognizes interest and/or penalties related to uncertain tax positions in income tax expense. There are no uncertain tax positions as of December 31, 2016 or 2015 and as such, no interest or penalties were recorded in income tax expense. Comprehensive Loss Net loss and comprehensive loss were the same for all periods presented; therefore, a separate statement of comprehensive loss is not included in the accompanying financial statements. Loss Per Share Attributable to Common Stockholders Basic loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share attributable to common stockholders is computed by dividing the 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 computation of diluted loss per share attributable to common stockholders, the Series A convertible preferred stock, Series B convertible preferred stock, convertible promissory notes, common stock purchase warrants, and common stock options are considered to be potentially dilutive securities but have been excluded from the calculation of diluted loss per share attributable to common stockholders because their effect would be anti-dilutive given the net loss reported for the years ended December 31, 2016 and 2015. Therefore, basic and diluted loss per share attributable to common stockholders was the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted loss per share attributable to common stockholders (in common stock equivalent shares): December 31, 2016 2015 Series A convertible preferred stock — 400,000 Series B convertible preferred stock — 399,512 Convertible promissory notes — 56,500 Common stock purchase warrants 829,285 610,487 Restricted stock unit 455,430 — Common stock options 1,477,300 1,282,862 Total 2,762,015 2,749,361 In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014 the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Adoption of the new standard is effective for reporting periods beginning after December 15, 2017. We plan to use the modified retrospective method of adoption and will adopt the standard as of January 1, 2018, the beginning of our next fiscal year. We have completed an initial evaluation of the potential impact from adopting the new standard, including a detailed review of performance obligations for all material revenue streams. Based on this initial evaluation, we do not expect adoption will have a material impact on our financial position, results of operations, or cash flows. Related disclosures will be expanded in line with the requirements of the standard. We will continue our evaluation until our adoption of the new standard. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic230): Classification of Certain Cash Receipts and Cash Payments |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements The accounting guidance for fair value, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The framework for measuring fair value consists of a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. The three-level hierarchy for the inputs to valuation techniques is briefly summarized as follows: • Level 1 — Inputs are unadjusted, quoted prices in active markets for identical assets and liabilities at the measurement date; • Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and • Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. An asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs. Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques: A. Market approach: Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. B. Cost approach: Amount that would be required to replace the service capacity of an asset (replacement cost). C. Income approach: Techniques to convert future amounts to a single present amount based upon market expectations, including present value techniques, option-pricing and excess earnings models. Items Measured at Fair Value on a Recurring Basis The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy: December 31, Valuation 2016 2015 Technique Common stock warrant liability $ 69 $ 63 C Convertible notes payable – current liability $ — $ — C The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities: Common 2014/2015 Stock Convertible Warrant Notes Liability Payable Balance at December 31, 2014 — 447 Issuance of common stock warrant 53 — Issuance of convertible notes — 1,818 Change in fair value (1) 10 728 Extinguishment of convertible notes for Series B convertible preferred stock — (2,993 ) Balance at December 31, 2015 $ 63 $ — Change in fair value 6 — Balance at December 31, 2016 $ 69 $ — (1) The change in the fair value of the common stock warrant and convertible notes payable was recorded as an increase to other income (expense) and interest expense of $677 and $63, respectively, in the statements of operations and comprehensive loss Financial Instruments Not Carried at Fair Value The carrying amounts of the Company’s financial instruments, including accounts payable and accrued liabilities, approximate fair value due to their short maturities. The estimated fair value of the convertible notes and other notes, not recorded at fair value, are recorded at cost or amortized cost which was deemed to estimate fair value. |
Prepaid expenses
Prepaid expenses | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Prepaid expenses | 4. Prepaid expenses Prepaid expenses consist of the following: December 31, 2016 2015 Director compensation $ 215 $ 6 Director and officer insurance 70 — Legal retainer 25 — Rent 17 16 Engineering, software licenses and other 10 14 Total accrued expenses $ 337 $ 36 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 5. Property and Equipment Property and equipment, net consist of the following: December 31, Useful Life 2016 2015 Research and development equipment 5 years $ 989 $ 834 Office and computer equipment 3 years 235 181 Furniture and fixtures 7 years 17 12 Leasehold improvements * 189 189 1,430 1,216 Less accumulated depreciation and amortization 799 603 Total $ 631 $ 613 * Shorter of lease term or estimated useful life Depreciation and amortization expense was approximately $196 and $182 for the year ended December 31, 2016 and 2015, respectively. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | 6. Accrued Expenses Accrued expenses consist of the following: December 31, 2016 2015 Compensation and related benefits $ 82 $ 425 Accrued interest — 4 Accrued interest – related parties — 329 Accrued Litigation 286 — Other 3 — Total accrued expenses $ 371 $ 758 |
Accrued Contract Cancellation S
Accrued Contract Cancellation Settlement | 12 Months Ended |
Dec. 31, 2016 | |
Accrued Contract Cancellation Settlement Disclosure [Abstract] | |
Accrued Contract Cancellation Settlement | 7. Accrued contract cancellation settlement The accrued contract cancellation settlement of $1.0 million was a result of the Company entering into a settlement agreement with Neogen Corporation in which Neogen and the Company agreed to (a) terminate the existing Exclusive License Agreement between us and Neogen dated May 15, 2014 (the “License Agreement”), with neither Neogen or the Company having any further obligations thereunder (other than certain confidentiality obligations); (b) dismiss with prejudice the court action filed by Neogen in the District Court for the District of Arizona on January 19, 2017 (the “Court Action”), and (c) mutually release any and all existing or future claims between the parties and their affiliates related to or arising from the License Agreement or the Court Action. Under the terms of the agreement, the Company agreed to make a one-time payment in the amount of $1.0 million in settlement of all claims and termination of all existing contracts between the parties. See notes 17 and 18 for further details. |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Borrowings | 8. Borrowings A summary of the Company’s borrowings, including capital lease obligations, is as follows: At December 31, Short-term debt: 2016 2015 NAU Promissory Note $ — $ — Current portion of long-term debt 45 27 Total short-term debt $ 45 $ 27 Long-term debt: Capital lease obligations $ 51 $ 72 Other unsecured promissory notes 132 400 Other promissory notes — 5 Total 183 477 Less: current portion of long-term debt 45 27 Total long-term debt $ 138 $ 450 Capital Lease Obligations Capital lease obligations are for computer and lab equipment leased through Great American and Thermo Fisher. These capital leases expire at various dates through May of 2020. Unsecured Promissory Note with Northern Arizona University In July 2015, the Company and NAU Ventures entered into an Amended and Restated Letter Agreement (“NAU Agreement”) to issue to NAU Ventures 400,000 shares of Series A convertible preferred stock and a three-year warrant to purchase 210,526 shares of common stock at an exercise price of $15.00 per share (“NAU Warrant”), subject to standard anti-dilution provisions, in exchange for the cancellation of the NAU Promissory Note. The NAU Warrant agreement includes an early termination provision that states in the event of a public offering, consolidation, merger, sale or other disposition of all or substantially all of the assets, the NAU Warrant will terminate unless exercised prior to the occurrence of such above-mentioned events. The NAU Agreement replaced in its entirety a prior letter agreement, dated July 2, 2014, that was not consummated. This previous letter agreement provided for similar terms as the NAU Agreement. Pursuant to the NAU Agreement, the cancellation of the NAU Promissory Note and issuance of Series A convertible preferred stock was contingent on reincorporation of the Company to a Delaware corporation. In November 2015, a certificate of conversion was filed to reincorporate the Company from a Nevada corporation to a Delaware corporation. Immediately following the reincorporation, the transactions contemplated by the NAU Agreement closed. The Company issued to NAU Ventures 2,000,000 shares of Series A convertible preferred stock, valued at $4,380, and the NAU Warrant, valued at $330, in exchange for full cancellation of the NAU Promissory Note. As a result, the outstanding balance on the NAU Promissory Note, including accrued interest of $1,313, of $3,180 was extinguished. The Company recorded a loss on the extinguishment of the NAU Promissory Note of $1,530 during the year ended December 31, 2015. The fair value of the Series A convertible preferred stock was determined using a simulation model of discounted cash flows and included an assumption for the likelihood of a qualified financing or a change in control event, each as defined in the documents creating the Series A preferred stock. The Warrant was valued using the following inputs to a Monte Carlo model: underlying stock price of $7.50, term of three years, exercise price of $15.00, volatility of 70.6%, risk free rate of 1.27% and an estimate of the likelihood of an early termination. The estimated fair value of the NAU Warrant on the date of issuance was recorded in additional paid-in capital. On August 1, 2016, the Company and NAU Ventures, LLC, the holder of the Series A convertible preferred stock, entered into a Conversion and Termination Agreement (the “Conversion Agreement”). Pursuant to the Conversion Agreement, the holder has agreed to convert all of its shares of Series A convertible preferred stock into 400,000 shares of common stock immediately prior to the consummation of the Company’s proposed initial public offering. In addition, the Company has agreed to make a cash payment of $175,890 to the holder of the Series A convertible preferred stock for its agreement to waive all accrued dividends on the Series A convertible preferred stock and convert all of its shares of Series A convertible preferred stock into common stock immediately prior to the consummation of this offering. In the event the Company’s initial public offering was not consummated on or before July 31, 2017, then the Conversion Agreement would have terminated in its entirety and the terms of the Series A convertible preferred stock would have reverted back to its original terms. With the closing of the Company’s initial public offering, in December, 2016, NAU converted all of their shares of Series A convertible preferred stock into shares of common stock on a one-for-one basis immediately prior to the consummation of this offering. See Note 12. Secured Promissory Note In April 2015, the Company issued a secured promissory note to an investor with an aggregate principal amount of $500 (the “Secured Promissory Note”) together with common stock warrants to purchase 69,333 shares of common stock, for total proceeds of $500. The Secured Promissory Note required interest at 4% per annum with a maturity date in April 2016. The Secured Promissory Note was collateralized by all of the Company’s personal property. See Note 11 for a description of the features of the warrants. The Secured Promissory Note exists independently from the detachable warrants and is accounted for separately. At the time of issuance, the proceeds received from the issuance of the Secured Promissory Note was allocated to the Secured Promissory Note and warrant based on the relative fair values of the Secured Promissory Note with the warrants and without the warrants. The Company determined the estimated fair value of the Secured Promissory Note using a lattice model and the estimated fair value of the warrants using a Monte Carlo model. The relative fair value of the warrants of $113 was recorded to additional paid-in- capital. The remainder of the proceeds was allocated to the Secured Promissory Note. The Company recorded the value of the warrant as a debt discount on the related note. The Secured Promissory Note is carried at amortized cost and the debt discount of $113 is amortized to interest expense, using the effective interest method, through the maturity date of the Secured Promissory Note. During the year ended December 31, 2015, the Company recorded accretion of debt discount of $79 within interest expense in the accompanying statements of operations and comprehensive loss. On December 31, 2015, the Secured Promissory Note was cancelled as consideration for the purchase of shares of Series B convertible preferred stock at $7.75 per share, which was the same price as the shares sold to other investors in the Company’s Series B convertible preferred stock financing in December 2015. The Company issued 66,705 shares of Series B convertible preferred Other Promissory Notes During September, October and December 2015, the Company issued unsecured promissory notes to an investor with an aggregate principal amount of $500 (the “2015 Unsecured Notes”) together with warrants to purchase 69,333 shares of common stock for total cash proceeds of $500. The 2015 Unsecured Notes required interest at 4% per annum with a maturity date in April 2017. The 2015 Unsecured Notes are convertible into common stock or Series B convertible preferred stock solely upon mutual agreement of both the Company and the holder at a conversion price of $7.75 per share. Also, the Company may prepay the 2015 Unsecured Notes at any time prior to their maturity date without the consent of the holder or penalty. See Note 11 for a description of the features of the warrants. The 2015 Unsecured Notes notes exist independently from the detachable warrants and are accounted for separately. At the date of issuance, the proceeds received from the issuance of the 2015 Unsecured Notes was allocated to the 2015 Unsecured Notes and warrants based on the relative fair values of the 2015 Unsecured Notes with the warrants and without the warrants. The Company determined the estimated fair value of the 2015 Unsecured Notes using a lattice model and the estimated fair value of the warrants using a Monte Carlo model. The relative fair value of the warrants of $116 was recorded to additional paid-in- capital. The remainder of the proceeds was allocated to the 2015 Unsecured Notes. The Company recorded the value of the warrants as a debt discount on the related 2015 Unsecured Notes. The 2015 Unsecured Notes are carried at amortized cost and the debt discount of $116 is amortized to interest expense, using the effective interest method, through the maturity date of the 2015 Unsecured Notes. The outstanding carrying amount of the 2015 Unsecured Notes, net of $100 unamortized debt discount, was $0 and $400 at December 31, 2016 and 2015, respectively, and was classified on the balance sheet as long-term debt. In May 2012, the Company entered into a promissory note for the purchase of equipment. The note is payable in monthly payments of $1 with an interest rate of 5% per annum. The note matured in May 2016. At December 31, 2016 and 2015, the note had a balance outstanding of $0 and $5, respectively. 2016 Unsecured Notes In February and March 2016, the Company issued to two investors unsecured, short-term promissory notes (the “2016 Unsecured Notes”) with an aggregate principal amount of $310 bearing interest at a rate of 4% per annum. In May 2016, these 2016 Unsecured Notes were surrendered as consideration for purchase of 124,000 shares of common stock in the Rights Offering at the subscription price of $2.50 per share. See Note 13. In March 2016, the Company issued to two investors additional 2016 Unsecured Notes with an aggregate principal amount of $16, together with detachable warrants to purchase 9,032 shares of common stock, for total proceeds of $16. These 2016 Unsecured Notes were then immediately surrendered as consideration for the purchase of 10,036 shares of Series B convertible preferred stock at a price of $7.75 per share. At issuance, the Company allocated the proceeds of $7 and $9 to the debt and equity components, respectively. The Company recorded the equity component as a discount to these 2016 Unsecured Notes. The extinguishment of these 2016 Unsecured Notes, upon their cancellation and exchange into the Series B convertible preferred stock resulted in a write-off of the unamortized debt discount and the Company recorded a loss on extinguishment of $9 in the year ended December 31, 2016. |
Notes Payable, Related Parties
Notes Payable, Related Parties | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Notes Payable, Related Parties | 9. Notes Payable, Related Parties A summary of the Company’s notes payable, related parties is as follows: December 31, 2016 2015 Unsecured promissory note, interest rate of 4.25% and 8% per annum $ 36 $ 73 Unsecured promissory note, interest rate of 8% per annum — 236 Unsecured promissory note, interest rate of 6% per annum — 27 Unsecured promissory notes, interest rate of 4% per annum — 160 Total notes payable, related parties 36 496 Less: current portion of notes payable, related parties 30 462 Total notes payable, long-term $ 6 $ 34 The Company issued a series of unsecured promissory notes to a previous executive employee for deferred salaries to be repaid in a future period. The notes accrue interest at a rate of 8% per annum. The outstanding balance on these notes, including accrued interest, totaled $380 at December 31, 2015. In March 2016, the Company issued an amended and restated promissory note (“Revised Note”) in the amount of $414, which includes accrued and unpaid interest and other settlement costs and replaced in their entirety the previous unsecured promissory notes. The Revised Note of $414 requires the Company to pay an initial payment of $25 upon the effective date of the note, and monthly and quarterly payments of $10 and $25, respectively, thereafter, with interest accruing at 12% per annum. Additionally, the Revised Note provides for an acceleration of the amount due in the event of (i) a merger, sale or acquisition of substantially of the Company’s assets; (ii) initial public offering; (iii) total equity raise of $2.5 million or more; and (iii) debt financing of $2.5 million with an unaffiliated lender within thirty days of such events. In May 2016, the Company repaid the outstanding balance under the Revised Note, plus accrued and unpaid interest totaling $389, as the consummation of the Rights Offering triggered an acceleration of the amounts due under the Revised Note. In April 2013, the Company and a previous employee entered into an agreement to settle all outstanding obligations consisting of a promissory note of $40, dated March 2009, and deferred salaries amounting to $72. The note and salary obligation continue to bear interest at 8% and 4.25%, respectively. The note requires monthly payments of $1 and matures in May 2018. The deferred salary obligation requires monthly payments of $1 and matures in June 2018. Amounts outstanding on these obligations were $36 and $73 at December 31, 2016 and 2015, respectively. In October 2011, the Company entered into an unsecured promissory note in the amount of $30 with its chief executive officer with interest accruing at 4%. At the same time, the Company entered into an unsecured promissory note in the amount of $30 with its Chief Research Officer with the same terms and conditions. Both of these notes were repaid in 2015. In 2015, the Company entered into short-term unsecured promissory notes, totaling $195, with its previous chief executive officer. The notes accrued interest at 4% per annum and matured in December 2015. The funds were used to meet working capital requirements. The Company repaid $35 on the promissory notes during 2015 and repaid the balance in May 2016. In August 2015, the Company entered into a short-term unsecured promissory note for $27 with a member of its advisory board. The note accrued interest at 6% per annum and was due in February 2016. Upon maturity, the holder transferred the note to a certain stockholder who acquired the note. The maturity date of the note was then extended for ninety days. On April 7, 2016, this note was settled with the issuance of 54,000 shares of common stock. See note 13. Equity Participation Promissory Notes In September 2016, the Company entered into a settlement agreement with the holder of equity participation promissory notes. The settlement agreement terminated the holder’s equity participation and conversion rights. The Company agreed to pay the promissory note holder principal, interest and expenses of $464 with $88 paid at the agreement execution and equal monthly payments of $14. Interest continues to accrue on unpaid balances at 1.25% per month with the total outstanding balance to be paid in full by the earlier of (i) May 25, 2017, (ii) the sale, merger or acquisition of the Company or substantially all of its assets, or (iii) 45 days after an initial public offering. This settlement was fully paid at December 31, 2016. Interest expense on the notes payable, related parties, was $56 and $33 for the years ended December 31, 2016 and 2015, respectively. |
Convertible Notes Payable, Rela
Convertible Notes Payable, Related Parties | 12 Months Ended |
Dec. 31, 2016 | |
Convertible Notes Payable Related Parties | |
Convertible Notes Payable, Related Parties | 10. Convertible Notes Payable, Related Parties A summary of the Company’s convertible notes payable, related parties is as follows: December 31, 2016 2015 Convertible notes payable, short term: Equity Participation Notes $ — $ 200 2014/2015 Convertible Notes — — Other convertible notes payable — — Total convertible notes payable, short term $ — $ 200 Equity Participation Promissory Notes In late 2009 and early 2010, the Company entered into unsecured promissory note agreements with certain of its existing stockholders for an aggregate principal amount of $675 with an original maturity date of May 31, 2010 (the “Equity Participation Notes”). The Company continues to accrue unpaid interest on the Equity Participation Notes at a rate 15% per annum, The terms of the Equity Participation Notes provide for the holder to convert, at any time, the outstanding principal and unpaid accrued interest into shares of common stock at an conversion rate of $10.00 per share provided, however, that in the event, that the Company’s common stock is registered in an initial public offering, prior to such time the Company achieves a net profit of $15 million, then the conversion rate shall be $5.00 per share. Additionally, the Equity Participation Notes provide the holder an equity participation right at the rates from .8330% to 4% on the first $15 million of net profit, which is defined as net profit before interest, taxes, depreciation, amortization (“EBITDA”) and compensation of officers, directors and any of their related parties. There were no amounts accrued for these contingent equity participation payments at December 31, 2016 and 2015. 2014 Convertible Promissory Notes In the first quarter of 2015, the Company made an offer to the holders of the 2014 Notes to allow the holders to tender their convertible notes prior to maturity in exchange the Company would agree to include interest through the original maturity date in calculating the number of conversion shares. In May and June 2015, the Company converted the outstanding principal and accrued interest due on the 2014 Notes, totaling $452, into 71,446 shares of common stock at the following conversion rates: principal at $7.50 per share and interest at $5.00 per share. The discount on the 2014 Notes was amortized to interest expense through the conversion dates using the effective interest method. The Company recorded an expense of $231, including the charge of the unamortized discount of $142, for the inducement to convert the 2014 Notes as additional interest expense. The Company recorded interest expense on the 2014 Notes of $0 and $312 during the year ended December 31, 2016 and 2015, respectively. 2014/2015 Secured Convertible Promissory Notes During the period from December 2014 through November 2015, the Company issued secured convertible promissory notes (the “2014/2015 Convertible Notes”) to certain existing stockholders which provided for borrowings of $2,365. The 2014/2015 Convertible Notes bore interest at a rate of 4% per annum, matured one year from their date of issuance and were collateralized by all of the Company’s personal property. The 2014/2015 Convertible Notes could not be repaid prior to their maturity date without the consent of the holders of at least a majority of the outstanding principal amount of the 2014/2015 Convertible Notes. The 2014/2015 Convertible Notes contained two conversion options contingent upon the occurrence of a future event, as follows: (i) all outstanding principal and unpaid accrued interest on the 2014/2015 Convertible Notes would automatically convert into equity securities upon the consummation of an equity financing with proceeds of at least $2 million (“Qualified Financing”) at conversion rates of 70% or 80%, as noted below; and (ii) if the Company was acquired, prior to a Qualified Financing, in a change in control transaction, the holder had an option to have all outstanding principal plus any unpaid accrued interest paid in cash or convert such amount into shares of common stock at a conversion price equal to $7.50 per share, subject to adjustment for such events as stock splits, combination, and reorganization. The Company received proceeds of $875 from the 2014/2015 Convertible Notes issued from December 2014 through February 2015 with an aggregate principal amount of $875. In the event of a Qualified Financing, these 2014/2015 Convertible Notes provided automatic conversion of all outstanding principal and unpaid accrued interest thereon into the shares of the equity securities sold in the Qualified Financing at a conversion rate of 70% of the price per share paid by the other purchasers in the Qualified Financing. From April 2015 through November 2015, the Company issued additional 2014/2015 Convertible Notes with an aggregate principal amount of $1,490 together with detachable common stock warrants for proceeds of $1,490. However, in the event of a Qualified Financing, these 2014/2015 Convertible Notes provided automatic conversion of all outstanding principal and unpaid accrued interest thereon into the shares of the equity securities sold in the Qualified Financing at a higher conversion rate of 80% of the price per share paid by the other purchasers in the Qualified Financing. The Company determined that the conversion option upon a Qualified Financing is the predominant conversion option and is a conditional obligation that the Company would settle by issuing a variable number of its shares. In this manner, the value that the convertible note holder would receive upon a Qualified Financing conversion event is a fixed monetary amount known at inception. Although the two contingent conversion features are embedded derivative features, they did not require bifurcation to be accounted for separately. Therefore, the 2014/2015 Convertible Notes are measured initially at fair value and subsequently with changes in fair value recognized in earnings. There were a total of 131,733 detachable common stock warrants issued with the 2014/2015 Convertible Notes. The 2014/2015 Convertible Notes and warrants exist independently as separate securities. See Note 9 for a description of the warrants. As the 2014/2015 Convertible Notes are measured at fair value, such notes are allocated a portion of the proceeds equal to their fair value with the remaining proceeds being allocated to the detachable warrants. The estimated aggregate fair value of the 2014/2015 Convertible Notes issued was determined to be $2,268 with the remaining $97 of proceeds allocated to the detachable warrants. The Company determined the estimated fair value of the 2014/2015 Convertible Notes using a lattice model. For the year ended December 31, 2016 and 2015, the Company recognized the changes in fair value on the 2014/2015 Convertible Notes of $0 and $671, respectively, within other income (expense), in the accompanying statements of operations and comprehensive loss. As part of a Series B convertible preferred stock financing in December 2015, the Company provided an offer to the holders of the 2014/2015 Convertible Notes to cancel and exchange their notes as consideration for their purchase of the Series B convertible preferred stock at the same price as the shares to be sold to other investors in the preferred stock financing. In consideration of the Company pricing the Series B convertible preferred stock at $7.75 per share in the preferred stock financing and securing the $7.75 conversion price, the holders of the 2014/2015 Convertible Notes waived the discount that provided for the automatic conversion of the convertible notes into the equity securities sold in a Qualified Financing of at least $2 million. With this offer, the holders of the 2014/2015 Convertible Notes received no additional consideration, there was no modification of terms in their notes, and it did not represent the exercise of a conversion right obtained in the terms of the 2014/2015 Convertible Notes at issuance. On December 31, 2015, all holders of the 2014/2015 Convertible Notes accepted the Company’s offer to cancel and exchange their notes as consideration for the purchase of the Series B convertible preferred stock. The Company determined that the offer made to the holders of the 2014/2015 Convertible Notes should be accounted for as an extinguishment of debt. The Company issued 312,861 shares of Series B convertible preferred stock to the holders of the 2014/2015 Convertible Notes to cancel and exchange the aggregate $2,365 principal amount and unpaid accrued interest totaling $2,465 on their notes as consideration for their purchase of the preferred stock at the $7.75 per share price. In determining the reacquisition price in the extinguishment of the convertible notes, the value of the Series B convertible preferred stock was readily determinable as the preferred stock was sold separately to other investors as part of the preferred stock financing at $7.75 per share. As a result, the $2,425 amount to reacquire the convertible notes was less than the $2,993 fair value carrying amount of the 2014/2015 Convertible Notes on December 31, 2015, the date of extinguishment. As such, the Company recorded a gain on extinguishment of $569, which represents the elimination of the fair value accounting adjustments in the year ended December 31, 2015. Other convertible notes The Company entered into an unsecured promissory note with a stockholder in the amount of $60 with interest accruing at a rate of 10% per annum. The note provided for the holder to convert the outstanding principal and accrued and unpaid interest into shares of common stock at a conversion rate equal to $7.50 per share. In 2015, the holder converted the note balance, including accrued and unpaid interest, in the aggregate amount of $68, into 8,971 shares of common stock in accordance with the original conversion terms of the note. |
Common Stock Warrants and Commo
Common Stock Warrants and Common Stock Warrant Liability | 12 Months Ended |
Dec. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Common Stock Warrants and Common Stock Warrant Liability | 11. Common Stock Warrants and Common Stock Warrant Liability The table summarizes the common stock warrant activity as of December 31, 2016 as follows: Common Stock Warrants Number Date Term Exercise Price Secured Promissory Note 69,333 April 2015 5 years (1) $ 7.50 2014/2015 Convertible Notes 131,734 April – November 2015 5 years (1) $ 7.50 Other Promissory Notes 69,333 September –December 2015 5 years (1) $ 7.50 270,400 University of Arizona 15,000 June 2015 5 years (2) $ 7.50 Consulting Agreement 121,228 July 2015 10 years (3) $ 7.50 Northern Arizona University 210,526 November 2015 3 years (4) $ 15.00 Warrants issued 617,154 Warrants exercised 6,667 Outstanding at December 31, 2015 610,487 Initial Public Offering Underwriter 187,500 December 2016 5 years $ 9.60 Marketing and Development Services 100,000 February 2016 5 years(1) $ 7.50 Other Advisory Services 40,000 August 2016 3 years(1) $ 7.50 Promissory Notes 9,031 March 2016 3 years(1) $ 7.50 Warrants issued 336,531 Warrants exercised 117,733 Outstanding at December 31, 2016 829,285 (1) The warrants also terminate, if not exercised, upon the closing of (i) an initial public offering of common stock; or (ii) a liquidation, dissolution or winding up of the Company. (2) In the event of a terminating change of the Company, as defined in the warrant agreement, the warrant holder would be paid in cash the aggregate fair market value of the warrant shares immediately prior to the consummation of the terminating change event. (3) The warrant also terminates, if not exercised, (i) two years after the closing of an initial public offering of common stock; or (ii) the closing of a liquidation, dissolution or winding up of the Company. (4) The warrant also terminates, if not exercised, upon the closing of (i) an initial public offering of common stock; or (ii) a consolidation, merger, sale or other disposition of all or substantially all of the Company’s assets Secured Promissory Note, 2014/2015 Convertible Notes, other promissory notes Common Stock Warrants In conjunction with the issuance of the Secured Promissory Note, 2014/2015 Convertible Notes, and certain other promissory notes, the Company issued detachable common stock warrants (“Warrants”) to purchase an aggregate 270,400 shares of common stock, with an exercise price of $7.50 per share. The Warrants are exercisable until the earlier of (i) 5 years from the date of grant; (ii) the closing of an initial public offering of common stock by the Company; and (iii) the closing of liquidation, dissolution or winding up of the Company. The Warrants have a net share settlement (cashless exercise) provision. With this provision the holder may, in lieu of payment of the exercise price in cash, surrender the warrant and receive a net amount of shares based on the fair market value of the common stock at the time of exercise of the warrant after deduction of the aggregate exercise price. However, the Warrants would be exercised automatically in full pursuant to the net exercise provision, without any further action on behalf of the holder, immediately prior to the time the Warrants would otherwise terminate. The Warrants are considered freestanding instruments as (i) they were transferred together with the notes issued but exist independently as a separate security; (ii) they may be exercised separately from the notes; and (iii) they are exercisable for a specific period (term) and do not impact the notes if and when exercised. The Company estimated the fair value of the Warrants at issuance using a Monte Carlo option pricing model based on the following significant inputs: common stock price of $7.50 to $7.575; comparable company volatility of 58.0% to 76.7%; risk- free rates of 1.31% to 1.76%; and the probability of an equity event occurring. The Company reflected the amounts recorded for the Warrants issued within stockholders’ deficit, as additional paid-in-capital. Although the Warrants are a derivative that can be net share settled, the Warrants are considered indexed to the Company’s common stock and the Company has the ability to settle the warrant contract in common shares and met the conditions within the contract to classify the Warrants as an equity instrument. Common Stock Warrant Issued for Marketing and Development Services In February 2016, the Company issued to a stockholder a warrant to purchase 100,000 shares of common stock at an exercise price of $7.50 per share as consideration for providing marketing and development services in Southeast Asia. The warrant was fully vested and exercisable on the date of grant. The common stock warrant has the similar features as the Warrants disclosed in Note 11, except it is exercisable until the earlier of (i) five years from the date of grant; (ii) two years after the closing of an initial public offering of common stock by the Company; and (iii) the closing of a liquidation, dissolution or winding up of the Company. The Company estimated the fair value of the common stock warrant to be $431 on the date of grant using a Black- Scholes option pricing model based on the following significant inputs : March 2016 Promissory Notes Common Stock Warrants In March 2016, the Company issued certain 2016 Unsecured Notes with common stock warrants to purchase an aggregate of 9,032 shares of common stock at an exercise price of $7.50 per share. See Note 8. The common stock warrants are exercisable until the earlier of (i) 3 years from the date of grant; (ii) 2 years after the closing of an initial public offering of common stock; and (iii) the closing of a liquidation, dissolution or winding up of the Company. The Company estimated the fair value of the common stock warrants on the date of grant using a Monte Carlo pricing model based on the following significant inputs: common stock price of $7.575; comparable company volatility 79.6%; and risk-free rate of 1.49%. August 2016 Other Advisory Services On August 16, 2016, the Company issued to each of two advisors warrants to purchase 20,000 shares of common stock at an exercise price of $7.50 per share, in each case, on a post-reverse split basis, as consideration for providing advisory services to the Company. The warrants were fully vested and exercisable on the date of grant until the earlier of (i) three years from the date of grant; (ii) two years after the closing of an initial public offering of common stock; and (iii) the closing of a liquidation, dissolution or winding up of the Company. The Company recorded the fair value of the warrants as stock-based compensation expense within general and administrative expense on the date of grant. Common Stock Warrant Issued To Initial Public Offering Underwriter In December 2016, the Company issued to the underwriter of its IPO a warrant to purchase 100,000 shares of common stock at an exercise price of $9.60 per share as consideration for providing services in connection with our initial public offering. The warrant was fully vested and exercisable on the date of grant. The common stock warrant is exercisable until five years from the date of grant. The Company estimated the fair value of the common stock warrant to be $939 on the date of grant using a Black- Scholes option pricing model based on the following significant inputs : University of Arizona Common Stock Warrant In connection with the June 2015 amended and restated exclusive license agreement with the University of Arizona (“University”), the Company issued to the University a common stock warrant to purchase 15,000 shares of common stock at an exercise price of $7.50 per share. The warrant is exercisable immediately and expires, if not exercised, five years from the date of grant. In the event of a “terminating change” of the Company, as defined in the warrant agreement, the warrant holder would be paid in cash the aggregate fair market value of the underlying shares immediately prior to the consummation of the terminating change event. Due to the cash settlement provision, the derivative warrant liability was recorded at fair value and is revalued at the end of each reporting period. The changes in fair value are reported in other income (expense) in the statements of operations and comprehensive loss. The estimated fair value of the derivative warrant liability was $53 at the date of grant. The estimated fair value of the derivative warrant liability was $63 at December 31, 2015. As this derivative warrant liability is revalued at the end of each reporting period, the fair values as determined at the date of grant and subsequent periods was based on the following significant inputs using a Monte Carlo option pricing model: common stock price of $7.50 to $7.575; comparable company volatility of 60.8% to 81.4% of the underlying common stock; risk-free rates of 1.21% to 1.76%; and dividend yield of 0%; including the probability assessment of a terminating change event occurring. The change in fair value of the derivative warrant liability was $10 for the year ended December 31, 2015 and was recorded in other income (expense) in the accompanying statements of operations and comprehensive loss. July 2015 Consulting Agreement Common Stock Warrant In July 2015, the Company issued a common stock warrant to purchase 121,227 shares of common stock, with an exercise price of $7.50 per share, as consideration for services under a consulting arrangement. The warrant was fully vested and exercisable on the date of grant. This common stock warrant has the similar features as the Warrants described above, except it is exercisable until the earlier of (i) 10 years from the date of grant; (ii) 2 years after the closing of an initial public offering of common stock by the Company; and (iii) the closing of a liquidation, dissolution or winding up of the Company. The estimated the fair value of the common stock warrant on the date of grant was $537 as determined by using a Black-Scholes option pricing model based on the following significant inputs: common stock price of $7.575; comparable company volatility of 60.9%; expected term of 6.25 years; risk-free rate of 2.09%; and dividend yield of 0%. The Company recorded the fair value of the, warrant as stock-based compensation expense within general and administrative expense in the accompanying statements of operations and comprehensive loss in 2015. Northern Arizona University Common Stock Warrant In November 2015, the Company issued a common stock warrant to purchase 210,526 shares of common stock at an exercise price of $15.00 per share to Northern Arizona University (“NAU”) as part of the consideration given with the Series A convertible preferred stock in exchange for the full cancellation of the NAU Promissory Note. See Note 8. |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2016 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | 12. Convertible Preferred Stock Series A Convertible Preferred Stock In November 2015, the Company issued 400,000 shares of Series A convertible preferred stock, valued at $4,380, in exchange for cancellation of the NAU Promissory Note. See Note 8. The Series A convertible preferred stock was recorded at the date of issuance at fair value. The Company’s Series A convertible preferred stock has been classified as temporary equity on its balance sheet at December 31, 2015. Upon certain liquidation events, as discussed below, that are not solely within the control of the Company, including liquidation, sale or transfer of control of the Company, holders of the Series A convertible preferred stock can cause the redemption of the Series A convertible preferred stock for cash highlighting the potential future cash obligation. A general summary of the rights with respect to the Series A convertible preferred stock are provided below: Dividends The holders of the Series A convertible preferred stock are entitled to dividends at the rate of 6% of the original issue price ($5.00) per annum which accrues whether or not earned or declared by the Board of Directors, whether or not there are profits or funds legally available for the payment and are cumulative to the extent not paid. The Company is restricted to pay or declare any dividend or make any other distribution on the common stock, or purchase, redeem or acquire for value any shares of common stock as long as the Series A convertible preferred stock is outstanding. Voting Each holder of the Series A convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A convertible preferred stock could be converted. The preferred stockholders shall vote as a separate class to (i) approve amendments to the Certificate of Incorporation, (ii) authorization of any new classes of stock, and (iii) any asset transfers or acquisitions or any voluntary dissolution or liquidation of the Company. For so long as any shares of preferred stock remain outstanding, the holders of the Series A convertible preferred stock may appoint one member of the Board in a nonvoting observer capacity. Conversion Rights Series A convertible preferred stock may, at the option of the holder, be converted at any time into shares of common stock at a conversion rate of $5.00 per share, subject to certain adjustments for stock splits, stock dividends, reclassifications and certain other events. Each share of Series A convertible preferred stock will automatically be converted into shares of common stock on the then- effective Series A conversion price (i) at any time upon the affirmative election of the holders of the majority of the outstanding shares of the Series A convertible preferred stock or (ii) immediately upon the closing of a firmly underwritten public offering of common stock in which the gross cash proceeds to the Company are at least $20 million and the Company’s shares have been listed for trading on the New York Stock Exchange, NASDAQ Global Select Market or NASDAQ Global Market (“Qualified IPO”). Upon conversion, any declared and unpaid dividends would be paid. Redemption Rights Pursuant to the NAU Agreement, in connection with a Qualified IPO, the Company agreed to use the proceeds to redeem all shares of Series A convertible preferred stock (or common stock issued upon conversion) at a price per share equal to the greater of (i) the original issue price ($5.00) of Series A convertible preferred stock plus all unpaid accrued dividends and (ii) the then fair market value (“Redemption Price”). In connection with a “change of control event,” the Company would use such proceeds to redeem all shares of Series A convertible preferred stock (or common stock issued upon conversion) at a price per share equal to the greater of (i) the original issue price ($5.00) of the Series A convertible preferred stock plus all unpaid accrued dividends and (ii) the then-current Redemption Price. A change of control event is defined as a liquidation, merger, stock sale or sale of substantially all of the assets of the Company. Liquidation Rights The holders of the Series A convertible preferred stock have a liquidation preference that gives such holders first priority upon a change in control event whereby such holders shall be entitled to receive an amount in liquidation equal to the original issued price ($5.00) plus accrued unpaid dividends. Series B Convertible Preferred Stock In December 2015, the Company issued Series B convertible preferred stock at $7.75 per share as follows: (i) 312,861 shares to the holders of the 2014/2015 Convertible Notes in exchange for the cancellation of such notes; (ii) 66,651 shares to the holder of the Secured Promissory Note in exchange for the cancellation of such note; and (iii) 20,000 shares sold to a related party investor for cash in the Series B convertible preferred stock financing. The Series B convertible preferred stock has been classified as temporary equity on the accompanying balance sheet at December 31, 2015. Although the Series B convertible preferred stock is not subject to mandatory redemption, upon certain change in control liquidation events that are outside of the Company’s control, the holders of the Series B convertible preferred stock can elect to receive, at their option, cash in amount equal to the liquidation value of such holder’s Series B convertible preferred stock. As of December 31, 2015, the Company has 399,512 shares of Series B convertible preferred stock issued and outstanding with an aggregate carrying value of $3,096. For year ended December 31, 2016, the Company issued an aggregate of 115,668 shares of Series B convertible preferred stock to investors at a per share price of $7.75 for total cash consideration of $896. In addition, in January 2016, a holder of 33,578 shares of Series B convertible preferred stock converted its shares into 33,578 shares of common stock. In March 2016, certain 2016 Unsecured Notes were exchanged by the holders for 2,007 shares of Series B convertible preferred stock. See Note 8. Upon the closing of the initial public offering in December of 2016, 483,609 shares of the Series B convertible preferred stock automatically converted into 483,609 shares of the Company’s common stock. Significant provisions of the Series B convertible preferred stock are as follows: Dividends Dividends may be declared and paid on the Series B convertible preferred stock from funds legally available thereof as and when determined by the Board of Directors. Liquidation Value A change in control is treated as a liquidation event that entitles the holder to receive, at their option, cash in amount equal to the liquidation value of each holder’s Series B convertible preferred shares. The liquidation value for each share of Series B convertible preferred stock is an amount equal to $7.75 per share, subject to adjustment in the event of a stock split, stock dividend or similar event. Conversion Rights The holder of the Series B convertible preferred stock has the right to convert at any time all or part of the preferred shares into shares of common stock. Each share of Series B convertible preferred stock will automatically convert into shares of common stock on the closing of an underwritten public offering of the Company’s equity securities which results in gross proceeds of at least $5 million. The initial conversion price is $7.75 per share, subject to certain adjustments for stock splits, stock dividends, reclassification and certain other defined events. Voting Each holder of the Series B convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A convertible preferred stock could be converted. The holders of shares of Series B convertible preferred stock are entitled to vote on all matters submitted to the vote of the stockholders. Redemption Rights The Series B convertible preferred stock is not subject to redemption. |
Stockholders' Deficit
Stockholders' Deficit | 12 Months Ended |
Dec. 31, 2016 | |
Equity [Abstract] | |
Stockholders' Deficit | 13. Stockholders’ Deficit The Company was organized under the laws of the state of Nevada on July 27, 2004 and was subsequently reincorporated under the laws of the state of Delaware on November 10, 2015. In connection with the reincorporation, as approved by the stockholders, the Company changed its authorized capital stock to consist of (i) 100 million shares of common stock, $.001 par value, and (ii) 2 million shares of preferred stock, $0.001 par value, designated as Series A convertible preferred stock. In December 2015, the Company amended its Certificate of Incorporation to change its authorized capital stock to provide for 15 million authorized shares of preferred stock of which 7,515,000 was designated as Series B convertible preferred stock, par value $.001 per share. Prior to November 10, 2015, the Company’s authorized capital stock consisted of 100 million shares of common stock, $.001 par value, and 10 million shares of preferred stock, $.001 par value. Common Stock The Company had 10,157,292 and 4,108,766 shares of common stock issued and outstanding as of December 31, 2016 and 2015, respectively. The holders of shares of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders. As long as shares of preferred stock are outstanding, the holders of outstanding shares of common stock are not entitled to receive any dividends. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share ratably in all assets remaining after payment of liabilities and the liquidation preference of any then outstanding shares of preferred stock. The holders of common stock have no preemptive, conversion or other subscription rights. There are no redemption or sinking fund provisions applicable to the common stock. In May and June 2015, the 2014 Notes with an outstanding principal and accrued interest of $452 were converted into 71,446 shares of common stock (conversion rate: principal – $7.50 per share; interest – $5.00 per share). The shares of common stock were recorded at their estimated fair value of $7.575 per share on the date of issuance. See Note 10. In November 2015, the Company converted a note payable with a stockholder that had an outstanding principal balance, including accrued interest, totaling $68, into 8,971 shares of common stock in accordance with its original conversion terms. See Note 10. On April 7, 2016, a short-term unsecured promissory note for $27 was settled with the issuance of 54,000 shares of common stock. During 2015, the Company issued 390,873 shares of common stock upon the exercise of stock options for cash proceeds of $78. On December 8, 2016, in connection with its initial public offering, the Company issued 1,875,000 shares of common stock for net consideration of $12.6 million. In May, 2016, certain 2016 Unsecured Notes were surrendered as consideration for purchase of 124,000 shares of common stock in the Right’s offering at the subscription price of $2.50 per share. For the year ended December 31, 2016, the Company issued 630,935 shares of common stock upon the exercise of stock options and warrants for cash proceeds of $521. During the year ended December 31, 2016, the Company issued an aggregate of 13,320 ordinary shares in net settlement of vested restricted stock units, valued at $295. Rights Offering In April 2016, the Company offered to the existing holders of shares of (i) its common stock and (ii) Series B convertible preferred stock, in each case, as of April 8, 2016 (the “Record Date”), at no charge, non-transferable subscription rights, on a pro rata basis, to purchase shares of common stock at a subscription price of $2.50 per share (the “Rights Offering”). In addition, the holders also had the right to purchase additional shares of common stock, if any shares remain unsubscribed. The Company offered subscription rights on 5,794,162 shares of its common stock. The Rights Offering was conducted as a private placement on a “best efforts” basis, with no minimum subscription required. The subscription rights were initially exercisable beginning on April 8, 2016 and expiring on April 29, 2016 (the “Subscription Period”). However, the Company reserved the right to extend the Subscription Period for up to two additional weeks. The Company extended the Subscription Period for one additional week. The Rights Offering closed on May 6, 2016. The Company issued 2,478,486 shares of common stock and received aggregate consideration of $6,199 in the Rights Offering. The aggregate consideration received consisted of: (i) $5,284 in cash; (ii) $821 in consideration paid through the cancellation of $821 in outstanding principal amount (and related unpaid interest) under certain 2016 Unsecured Notes (as defined below) and the 2015 Unsecured Notes; and (iii) the extinguishment of $94 in amounts owed by the Company for services and related miscellaneous expenses. Such cash proceeds will be used for working capital and general corporate purposes. As the Rights Offering was offered to certain existing holders of the Company’s stock, the shares sold are treated as outstanding from the date of their issuance in the computation of loss per share, basic and diluted in future periods. |
Stock-based Compensation
Stock-based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-based Compensation | 14. Stock-based Compensation Effective December 2008, the Company established the 2008 – 2009 Non-Qualified Stock Option Plan (the “2008 – 2009 Plan”) under which 20,000 stock options remain outstanding at December 31, 2016. The stock-based awards were issued with a price not less than $15.00 per share or 100% of the fair value of a share of common stock on the date of grant. After July 2015, no further awards were granted under the 2008 – 2009 Plan. Such outstanding awards will continue to be governed by their existing terms under the 2008 – 2009 Plan. Effective July 2015, the Company’s stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”), which permits the issuance of up to 2,000,000 shares reserved for the grant of stock options, stock appreciation rights, restricted stock units and other stock-based awards for employees, directors or consultants of the Company. The Board of Directors approved an additional 1,000,000 shares of common stock for issuance under the 2015 Plan. The stock-based awards are generally issued with a price equal to no less than fair value at the date of grant. Options granted under the 2015 Plan generally vest immediately, or ratably over a two- to 36-month period coinciding with their respective service periods; however, participants may exercise their options prior to vesting as provided by the 2015 Plan. Unvested shares issued for option exercised early may be subject to a repurchase by the Company if the participant terminates at the original exercise price. Options under the 2015 Plan generally have a contractual term of five or ten years. Certain stock option awards provide for accelerated vesting upon a change in control or an initial public offering. As of December 31, 2016, the Company had 1,419,480 shares of common stock available for issuance under the 2015 Plan. The Company measures the fair value of stock options with service-based and performance-based vesting criteria to employees, directors and consultants on the date of grant using the Black-Scholes option pricing model. The fair value of equity instruments issued to non-employees is re-measured as the award vests. The Black-Scholes valuation model requires the Company to make certain estimates and assumptions, including assumptions related to the expected price volatility of the Company’s stock, the period under which the options with be outstanding, the rate of return on risk-free investments, and the expected dividend yield for the Company’s stock. During 2016, the Company issued a total of 126,373 shares of common stock, valued at $383, for services performed. The weighted-average assumptions used in the Black-Scholes option-pricing model used to calculate the fair value of options granted during the year ended December 31, 2015, were as follows: Employee Non-Employee Expected volatility 66.4 % 76.6 % Expected dividend yield — — Expected term (in years) 4.0 5.0 Risk-free interest rate 1.3 % 1.7 % The weighted-average assumptions used in the Black-Scholes option-pricing model used to calculate the fair value of options granted during the year ended December 31, 2016, were as follows: Employee Non-Employee Expected volatility 82.1 % N/A Expected dividend yield — N/A Expected term (in years) 3.25 N/A Risk-free interest rate 1.83 % N/A Due to the Company’s limited operating history and lack of company-specific historical or implied volatility, the expected volatility assumption was determined based on historical volatilities from traded options of biotech companies of comparable in size and stability, whose share prices are publicly available. The expected term of options granted to employees is calculated based on the mid-point between the vesting date and the end of the contractual term according to the simplified method as described in SEC Staff Accounting Bulletin 110 because the Company does not have sufficient historical exercise data to provide a reasonable basis upon which to estimate the expected term due to the limited period of time its awards have been outstanding. For non-employee options, the expected term of options granted is the contractual term of the options. The risk-free rate by reference to the implied yields of U.S. Treasury securities with a remaining term equal to the expected term assumed at the time of grant. The expected dividend assumption is based on the Company’s history and expectation of dividend payouts. The Company has not paid and does not intend to pay dividends. The table summarizes the stock option activity, for both plans, for the periods indicated as follows: Number of Weighted Weighted Aggregate Outstanding at December 31, 2014 255,509 $ 2.35 3.9 $ 3,230 Granted 2,477,255 $ 0.50 7.1 Exercised 384,206 $ 0.05 Forfeited 210,876 $ 0.50 Expired 13,348 $ 15.00 Outstanding at December 31, 2015 2,124,334 $ 0.50 6.4 $ 4,249 Granted 200,000 $ 7.98 5.0 $ 34 Exercised 621,602 $ 0.73 Forfeited 210,849 $ 0.50 Expired 14,583 $ 15.00 Outstanding at December 31, 2016 1,477,300 1.61 5.8 $ 9,662 Exercisable at December 31, 2016 999,310 $ 1.00 5.6 $ 7,145 (1) The aggregate intrinsic value on the table was calculated based on the difference between the estimated fair value of the Company’s stock and the exercise price of the underlying option. The estimated stock values used in the calculation was $8.15 and $2.50 per share for each of the years ended December 31, 2016 and 2015 respectively. The weighted average grant-date fair value of options granted to employees for the year ended December 31, 2016 was $7.98 per share. The stock-based compensation expense was recorded as follows: Year Ended December 31, 2016 2015 Research and development $ 403 $ 4,931 General and administrative 2,966 6,331 Total stock-based compensation expense $ 3,369 $ 11,262 The allocation between research and development and general and administrative expense was based on the department and services performed by the employee or non-employee. Included in the table above, the Company recorded stock-based compensation expense of $207 and $338 for the years ended December 31, 2016 and 2015, respectively, for stock options granted to non-employees. In June 2016, the Company entered into an employment letter agreement with its chief executive officer which replaced the previous employment agreement dated October 16, 2013. At the same time, the Company entered into an employment letter agreement with its president and chief research officer that contained similar features and terms which replaced her previous employment agreement dated October 16, 2013. By entering into the employment letter agreements (the “2016 agreements”) and accepting the signing bonus, the chief executive officer and the president and chief research officer (collectively, the “executive officers”) waived all rights to receive any compensation amounts provided for in the previous employment agreements. The 2013 agreements, among other provisions, provided for a signing bonus of $1,000 on the acceptance and signing of such agreements. Upon the signing of the 2013 agreements, the Company recorded a deferred compensation obligation as an undiscounted noncurrent liability, in the amount of an aggregate $2,000 for the In June 2016, the Company reversed the deferred compensation obligation of $2,000 to additional paid in capital which is in the period the terms of 2016 agreements were accepted and replaced the previous employment agreements. As such, the executive officers, whom are also principal stockholders, have forgiven the compensation that was previously earned and due under the 2013 agreements. The 2016 agreements, among other things, provide for an annual base salary which may be adjusted periodically and, upon signing of the 2016 agreements, a signing bonus was payable within one business day after the signing the 2016 agreements. In addition, the 2016 agreements provide for an annual incentive bonus with a minimum target value equal to a certain stated percentage of annual base salary; however, any incentive bonus is determined at the discretion of the Board of Directors. The 2016 agreements also provide for the grant of the award of restricted stock units (RSU) representing the right to receive 220,000 shares of the Company’s common stock. The RSU award will vest and be settled over a three-year period, with one- third of the units vesting on the twelve-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service. Upon the sale of the Company, the 2016 agreements provides for a bonus of (a) 1% of the amount of the net sales price of the Company that is $100,000 or less, plus (ii) an additional 0.5% of the amount of the net sales price of the Company that is more than $100,000, payable in cash or other proceeds payable to other stockholders in such Company. Under the terms of her agreement, the executives shall be entitled to this change of control bonus if the change of control transaction occurs within 12 months following the termination of the executive’s employment by the Company without cause (as such term is defined in the 2016 agreement excluding death or disability) or within 12 months following the executive’s resignation for good reason (as such term is defined in the 2016 agreement), provided that the executive remains in compliance with the confidentiality and other ongoing post-termination obligations under the 2016 agreement. In the event of terminated without cause or resignation for good reason (as such terms are defined in the 2016 agreements) or upon death, all base salary and benefits for a period of twelve months following the effective date of such termination will be payable. Also, any earned but unpaid annual bonus, and all outstanding equity awards will accelerate immediately upon the date of termination. In recognition of his continued support and cooperation, and to resolve a dispute regarding whether his options appropriately expired in the first quarter of 2016, in July 2016, the Company’s Board of Directors agreed to issue to its former chief executive officer 120,000 shares of the Company’s common stock. The expense of $300 associated with this full and final settlement was recorded in the year ended December 31, 2016. At December 31, 2016, the total compensation cost related to non-vested options not yet recognized was $4,503, which will be recognized over a weighted average period of four years, assuming the employees complete their service period required for vesting. Effective December 2008, the Company established the 2008-2009 Non-Qualified Stock Option Plan (the “2008 – 2009 Plan”) under which 20,000 stock options remain outstanding at September 30, 2016. The stock-based awards were issued with a price not less than $15.00 per share or 100% of the fair value of a share of common stock on the date of grant. After July 2015, no further awards were granted under the 2008 – 2009 Plan. Such outstanding awards will continue to be governed by their existing terms under the 2008 – 2009 Plan. Effective July 2015, the Company’s stockholders approved the 2015 Equity Incentive Plan (the “2015 Plan”), which permits the issuance of up to 2,000,000 shares reserved for the grant of stock options, stock appreciation rights, restricted stock units and other stock-based awards for employees, directors or consultants Restricted Stock Units The following table summarizes restricted stock unit activity for the years ended December 31, 2016 and 2015: Number of Weighted Average Outstanding as of December 31, 2014 — $ — Granted — $ — Vested — $ — Forfeited — $ — Outstanding as of December 31, 2015 — $ — Granted 474,720 (1) $ 1.57 Vested (19,290 ) $ 8.10 Forfeited — $ — Outstanding as of December 31, 2016 455,430 $ 0.76 (1) 440,000 restricted stock units were granted and issued on September 30 th |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 15. Income Taxes Tax Rate Reconciliation The income tax benefit differed from the amounts computed by applying the federal statutory income tax rate of 34% to pretax income from operations as a result of the following: Year Ended December 31, 2016 2015 Income tax benefit at statutory federal rate $ (3,723 ) $ (6,179 ) Increase (reduction) in income taxes resulting from: Nondeductible expenses 7 69 Fair value adjustment on convertible notes 2 226 State and local income taxes, net of federal income tax benefit (505 ) (799 ) Federal valuation allowance 3,714 5,884 State valuation allowance 505 799 $ — $ — Significant Components of Current and Deferred Taxes The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are presented below: At December 31, 2016 2015 Deferred tax assets: Deferred rent $ 25 $ 11 Deferred revenue - 85 Federal and state net operating loss carryforwards 10,818 10,727 Stock-based compensation 4,831 6,493 Compensation accruals and other 553 36 Total deferred tax assets 16,227 17,352 Valuation allowance (16,144 ) (17,277 ) Net deferred tax assets 83 75 Deferred tax liabilities: Total deferred tax liabilities (83 ) (75 ) Net deferred tax asset (liability) $ - $ - Property and equipment (83 ) (75 ) In assessing the realizability of deferred tax assets, management considers whether it is more-likely-than-not that some portion or all of the deferred taxes will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considered the scheduled reversal of the deferred tax liabilities including the impact of available carryback and carryforward periods and does not believe it is more-likely-than-not the Company will realize the benefits of the deferred tax assets. Accordingly, a valuation allowance has been recorded against the deferred tax assets. The valuation allowance decreased by approximately $1.1 million for the year ended December 31, 2016 and increased $6.7 million for the year ended December 31, 2015. At December 31, 2016 and 2015, the Company had federal and state net operating loss carryforwards of $34.0 million and $27.8 million, respectively. The state loss carryforwards will begin expiring in 2016 and the federal loss carryforwards will begin expiring in 2021, unless previously utilized. Utilization of the net operating loss carryforwards may be subject to a substantial annual limitation due to the ownership change limitations provided by Section 382 of the Internal Revenue Code and similar state provisions. Generally, in addition to certain entity reorganizations, the limitation applies when one or more 5% stockholders increase their ownership, in the aggregate, by more than 50% percentage points over a 36-month time period testing period, or the beginning the day after the most recent ownership change, if shorter. The annual limitation may result in the expiration of net operating losses and credit before utilization. The Company files a federal income tax return. For taxable years ending before 2012, the Company is no longer subject to U.S. federal examination; however, the Internal Revenue Service has the ability to review years prior to 2012 to the extent the Company utilizes tax attributes carried forward from those prior years. The statute of limitations on the Company’s state filings is four years. |
License and Other Agreements
License and Other Agreements | 12 Months Ended |
Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
License and Other Agreements | 16. License and Other Agreements Neogen Corporation In May 2014, the Company entered into an exclusive license agreement with Neogen Corporation (“Neogen”). The Company granted an exclusive license to Neogen to (i) use the Company’s intellectual property (“IP”), consisting primarily of the ContraPest technology and (ii) manufacture, distribute and sell commercial rodent control products in the United States and certain U.S. territories, Canada and Mexico. Under the terms of the licensing agreement, the Company was required to submit an application to the United States Environmental Protection Agency (“EPA”) for approval of ContraPest, complete two agricultural field trials that support commercial feasibility for use of the product, and submit such studies and results to Neogen for their approval. The application to the EPA was submitted in August 2015, and the EPA granted registration approval for ContraPest effective August 2, 2016. The first field trial is complete, but has not yet been approved by Neogen. With respect to the second trial, the EPA indicated to the Company that it would be more efficient to wait until the product was approved rather than applying for an additional experimental use permit. Given that the EPA has granted registration approval, the Company is now preparing to commence the second field trial. The Company has received nonrefundable, upfront license fee payments, totaling $488. The remaining license fee of $162 will be received when Neogen formally accepts the Company’s report on its study of the field trials. The Company has determined that the license does not have stand-alone value therefore, the license fees of $488 are deferred and recognized, on a straight-line basis, from May 2014, the effective date of the agreement, over the estimated related period of performance through December 2016, which includes the acceptance by Neogen of the Company’s study for the field trials that support commercial feasibility for use of the product. For each of the years ended December 31, 2016 and 2015, the Company recognized revenue of $186 under the licensing agreement. As of December 31, 2016 and 2015, deferred revenue amounted to $0 and $186, respectively. Any changes in the estimated period of performance wound have been accounted for prospectively as a change in estimate. In addition, Neogen was obligated under the licensing agreement to pay additional consideration to the Company consisting of future fixed-amount of contingent milestone payments (i.e. post-regulatory approval license fees) of up to an aggregate of $3 million, and sales-based royalties on the net sales of licensed products by Neogen, as well as its affiliates and sublicensees. The Company did not receive or earn these potential contingent consideration payments as the milestone events to receive such post-approval license fees and sales based royalties were not achieved prior to the termination of the agreement. The agreement was to expire upon the later of (i) the last expiration of last patent included in the licensed IP; or (ii) the tenth anniversary of the effective date of the agreement (i.e. May 2024). As previously disclosed in our Current Report on Form 8-K dated and filed January 23, 2017, on January 23, 2017 we entered into a termination agreement (the “Settlement Agreement”) with Neogen Corporation (“Neogen”). Pursuant to the Settlement Agreement, the parties agreed to (a) terminate the existing Exclusive License Agreement between us and Neogen dated May 15, 2014 (the “License Agreement”), with neither Neogen or us having any further obligations thereunder (other than certain confidentiality obligations); (b) dismiss with prejudice the court action filed by Neogen in the District Court for the District of Arizona on January 19, 2017 (the “Court Action”), as further described below; and (c) mutually release any and all existing or future claims between the parties and their affiliates related to or arising from the License Agreement or the Court Action. As part of the Settlement Agreement, we agreed to pay to Neogen upon the execution of the Settlement Agreement an aggregate of $1.0 million in settlement of all claims. NeoVenta Solutions, Inc. In September 2015, the Company entered into a marketing, sales and distribution agreement with NeoVenta Solutions, Inc. (“NeoVenta”). The Company granted an exclusive license to NeoVenta to market, sell and distribute its product in certain granted foreign countries (“granted countries”), consisting of Bangladesh, India, Indonesia, Malaysia, Singapore, Sri Lanka and Thailand. Other granted countries can be added when approved and agreed upon by the parties. NeoVenta will be responsible for seeking applicable regulatory approvals to market ContraPest in the granted countries. After such regulatory approvals have been obtained, the Company has granted to NeoVenta an exclusive license to market, sell and distribute its product in these granted countries. NeoVenta will make purchases of product at predetermined prices from the Company. NeoVenta has agreed to minimum sales commitments of rodent control products in granted countries, which total $23 million over the first five years. NeoVenta will make purchases of product at predetermined prices from the Company. The initial term of the agreement is for five years from the earlier of (i) obtaining the required certifications for ContraPest or any products saleable in any of the countries in the territory; or (ii) six months after approval of ContraPest or any other products by the EPA. The agreement will automatically renew for one additional five year period. Thereafter, the agreement will renew for successive one-year periods unless written notification of intent not to renew is provided by either party to the other not less than sixty days prior to the beginning of any one-year renewal period. Somerville In May 2014, the Company entered into a service contract with the City of Somerville, Massachusetts (“Somerville”) whereby the Company was providing services and/or supplies in connection with conducting a rodent population study through field trials for Somerville. The total contract amount was not to exceed $215 for the services rendered and/or supplies received. Through an amendment to the contract, the contract was extended to December 31, 2016. Services under the contract are now complete. The Company has recognized revenue for services rendered under this contract of $132 during the year ended December 31, 2016 in other revenue in the statements of operations and comprehensive loss. Chicago Transit Authority In September 2015 the Company entered into a services contract with the Chicago Transit Authority, or CTA, to begin a field trial of the Company’s bait station, which study is now complete. The total contract amount was not to exceed $58. The services contract ended in March 2016. The Company recognized revenue for services rendered under this contract of $42 during the year ended December 31, 2015, in other revenue in the statements of operations and comprehensive loss. University of Arizona In 2005, the Company entered into an exclusive license agreement with the Arizona Board of Regents of the University of Arizona (“University”) to in-license certain patents and other intellectual property to be used in the future product development in the domestic animal fertility control market. The patent claims in the United States, Australia and New Zealand cover the use of the vinyl cyclohexene Diep oxide to deplete ovarian follicles in individual mammals and reproduction of mammals. The license agreement gives the Company exclusive rights to commercialize products based on this intellectual property. The University owns the patent rights, but the agreement requires the Company to pay all costs incurred by the University in maintaining and perfecting the patent rights. In exchange for the intellectual property, the Company paid the University a nonrefundable fee of $5, agreed to reimburse the University for its patent costs, pay milestone payments totaling up to $75 upon the achievement of certain research, development and regulatory milestones. In addition, the University is entitled to royalty fees of 5% of net sales of the licensed product and sublicensing royalty income of licensed product. In June 2015, the Company and University executed an amended and restated exclusive license agreement. The amendment reduced the milestone payments to totaling up to $50,000 upon the achievement of certain research, development and regulatory milestones and royalty fees from 5% to 2% of net sales of licensed product and 4% of any sublicensing royalty income of licensed product. As consideration for the amended terms, the Company entered into a warrant purchase agreement whereby the University was granted a warrant to purchase 15,000 shares of common stock, with an initial fair value of $53. The warrant is exercisable immediately for a term of five years from the effective date of the amendment. See Note 9. The agreement will terminate with last-to-expire patent licensed under the agreement which extends to 2026. The Company may terminate the agreement or the grant of rights under the agreement, at any time, upon ninety days prior written notice to the University. Future milestone payments are considered to be contingent consideration and will be accrued when probable of being paid. At December 31, 2015 and 2016, no milestone payments were probable of being paid and it is not likely in the near future. Bioceres/INMET S.A. Agreement In January 2016, the Company entered into a services agreement with Bioceres, Inc. (“Bioceres”), a wholly-owned subsidiary of Bioceres S.A., a leading agricultural biotechnology company in Argentina, and its Argentinean subsidiary, Ingenieria Metabolica S.A. (“INMET”) to develop a production method for synthetic triptolide, the main ingredient in ContraPest. The Company also entered into an agency agreement with INMET whereby the Company appointed INMET as its exclusive agent to seek regulatory approval for and conduct pre-sales and marketing of its product, ContraPest, in Argentina. The Company and INMET have also agreed to manufacture and distribute its product in Argentina and other countries, as mutually agreed, through a newly formed entity. The term of the service agreement is for two years. The service agreement can be terminated at any time upon written notice by either party for any reason. The term of the agency agreement with INMET is the earlier of: (i) when the Company and INMET incorporate the joint venture entity in Argentina or (ii) January 2018. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 17. Commitments and Contingencies Legal Proceedings The Company may be subject to legal proceedings and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened litigation where the ultimate disposition or resolution could have a material adverse effect on its financial position, results of operations or liquidity. Neogen Settlement Agreement As previously disclosed in the Company’s Current Report on Form 8-K dated and filed January 23, 2017, on January 23, 2017, the Company entered into an agreement (the “Settlement Agreement”) with Neogen Corporation (“Neogen”). Pursuant to the Settlement Agreement, the parties agreed to (a) terminate the existing Exclusive License Agreement between us and Neogen dated May 15, 2014 (the “License Agreement”), with neither Neogen or the Company having any further obligations thereunder (other than certain confidentiality obligations); (b) dismiss with prejudice the court action filed by Neogen in the District Court for the District of Arizona on January 19, 2017 (the “Court Action”), as further described below; and (c) mutually release any and all existing or future claims between the parties and their affiliates related to or arising from the License Agreement or the Court Action. Prior to the notice of filing received by SenesTech, the Company was unaware that any action was contemplated or actioned and was proceeding with all elements of the agreement in good faith. All communications prior to the complaint indicated that Neogen also was proceeding in good faith to execute on the agreement. Under the terms of the agreement, the Company agreed to make a one-time payment in the amount of $1,000 in settlement of all claims and termination of all existing contracts between the parties. Both Neogen and the Company further agreed to drop any and all legal complaints, claims or threat of litigation for failure to perform under the previous contractual relationship. Although notice of the legal action by Neogen and the subsequent agreement to terminate existing agreements with Neogen, occurred AFTER December 31, 2016, as per the provisions of Accounting Standards Codification Topic 450 Loss Contingencies, included in the financial statements of the Company at December 31, 2016 is a $1,000 charge to general and administrative expenses and a corresponding accrual of contract cancellation settlement agreement related to this agreement. Employment Agreements The Company entered into an employment agreement, dated October 2013, with the Chief Executive Officer which provides for an employment term of three years and will automatically renew for an additional three-year period unless terminated by either party by giving ninety days written notice. At the same time, the Company entered into an employment agreement with its Chief Research Officer that contained similar features and terms. The agreements, among other provisions, provides for an annual base salary which will be reviewed and may be adjusted periodically, and upon signing the agreement, a signing bonus of $1,000. The signing bonus was to be paid over three years in eleven quarterly installments of $91 per quarter, payable only from product revenue after providing for all operational expenses and such bonus was not to be paid from funds received from capital investment. The bonus would become immediately payable and due upon the employees’ termination, disability or death. Upon the signing of the employment agreements in 2013, the Company recorded a deferred compensation obligation, undiscounted non-current liability, in the amount of an aggregate $2,000 in signing bonuses, since the payment of such obligation was not reliably determinable. The amount was classified as a non-current liability until an event occurs that makes the payment due and payable. In addition, upon the sale of the Company, the agreements provided for, at the employees’ election, a lump sum cash payment equal to the current value of shares of common stock held, or no less than $3.00 per share, whichever is greater. In addition, upon the sale of the Company, the agreement provided for a bonus of (a) 1% of the amount of the net sales price that is $100,000 or less and (ii) 0.5% of the amount of the net sales price that is more than $100,000. Under the terms of the agreement, this change of control bonus would be paid regardless of whether employed by the Company at the time of any sale of all or a portion of the stock or assets, and if deceased, such amount would be paid to the employees’ estate. The agreements provided for cash payments pursuant to a phantom equity interest in all patents owned and/or leased by the Company, such that the payments under the phantom equity interest shall be determined as if the phantom patent interested represented a one half of one percent (0.5%) gross profits interest in the patents. Gross profit means the amount received from customers that license product that has registrations. The patent bonus is due in perpetuity for so long as the Company or any successor exists regardless of whether the employees continue to be employed at the time the profits are earned by the Company or any successor entity. In June 2016, the Company entered into an employment letter agreement with its chief executive officer which replaced the previous employment agreement dated October 16, 2013. At the same time, the Company entered into an employment letter agreement with its president and chief research officer that contained similar features and terms which replaced her previous employment agreement dated October 16, 2013. By entering into the employment letter agreements (the “2016 agreements”) and accepting the signing bonus, the chief executive officer and the president and chief research officer (collectively, the “executive officers”) waived all rights to receive any compensation amounts provided for in the previous employment agreements noted above. The 2013 agreements, among other provisions, provided for a signing bonus of $1,000 on the acceptance and signing of such agreements. Upon the signing of the 2013 agreements, the Company recorded a deferred compensation obligation as an undiscounted noncurrent liability, in the amount of an aggregate $2,000 for the amount of the signing bonuses, since the payment of such obligation was not reliably determinable. The amount was classified as a noncurrent liability as an event that makes the payment due and payable had not occurred. In June 2016, the Company reversed the deferred compensation obligation of $2,000 to additional paid in capital which is in the period the terms of 2016 agreements were accepted and replaced the previous employment agreements. As such, the executive officers, whom are also principal stockholders, have forgiven the compensation that was previously earned and due under the 2013 agreements. The 2016 agreements, among other things, provide for an annual base salary which will be reviewed and may be adjusted periodically and, upon signing of the 2016 agreements, a signing bonus was payable within one business day after the signing the 2016 agreements. In addition, the 2016 agreements provide for an annual incentive bonus with a minimum target value equal to a certain stated percentage of annual base salary; however, any incentive bonus is determined at the discretion of the Board of Directors. The 2016 agreements also provide for the grant of the award of restricted stock units (RSU) representing the right to receive 220,000 shares of the Company’s common stock. The RSU award will vest and be settled over a three-year period, with one- third of the units vesting on the twelve-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service. Upon the sale of the Company, the 2016 agreements provides for a bonus of (a) 1% of the amount of the net sales price of the Company that is $100,000 or less, plus (ii) an additional 0.5% of the amount of the net sales price of the Company that is more than $100,000, payable in cash or other proceeds payable to other stockholders in such Company. Under the terms of her agreement, the executives shall be entitled to this change of control bonus if the change of control transaction occurs within 12 months following the termination of the executive’s employment by the Company without cause (as such term is defined in the 2016 agreement excluding death or disability) or within 12 months following the executive’s resignation for good reason (as such term is defined in the 2016 agreement), provided that the executive remains in compliance with the confidentiality and other ongoing post-termination obligations under the 2016 agreement. In the event of terminated without cause or resignation for good reason (as such terms are defined in the 2016 agreements) or upon death, all base salary and benefits for a period of twelve months following the effective date of such termination will be payable. Also, any earned but unpaid annual bonus, and all outstanding equity awards will accelerate immediately upon the date of termination. Resolution of Dispute In recognition of his continued support and cooperation, and to resolve a dispute regarding whether his options appropriately expired in the first quarter of 2016, in July 2016, the Company’s Board of Directors agreed to issue to its former chief executive officer 120,000 shares of the Company’s common stock. The expense of $300 associated with this full and final settlement was recorded at December 31, 2016. Lease Commitments The Company is obligated under capital leases for certain research and computer equipment that expires in October 2017 through May 2020. At December 31, 2015, the gross amount of office and computer equipment, and research equipment and the related accumulated amortization recorded under the capital leases was $69 and $21, respectively. In February 2012, the Company entered into an operating lease for its corporate headquarters. The lease was due to expire in January 2015. In December 2013, the Company amended its lease to expand into the remaining area in the building and extended the term to December 31, 2019. In February 2014, the Company further amended the lease to expand into an adjacent building. The lease requires escalating rental payments over the lease term. Minimum rental payments under the operating lease are recognized on a straight-line basis over the term of the lease and accordingly, the Company records the difference between the cash rent payments and the recognition of rent expense as a deferred rent liability. The lease is guaranteed by the President of the Company. On November 16, 2016, we leased an additional 25,000 square feet of research and development space, also in Flagstaff, This lease expires on November 15, 2018. The lease requires fixed rental payments over the lease term. Minimum rental payments under the operating lease are recognized on a straight-line basis over the term of the lease and accordingly, the Company records the difference between the cash rent payments and the recognition of rent expense as a deferred rent liability. Rent expense was $234 and $205 and $175 for the year ended December 31, 2016, 2015 and 2014, respectively. The future minimum lease payments under non-cancellable operating lease and future minimum capital lease payments as of December 31, 2016 are follows: Capital Leases Operating Lease Years Ending December 31, 2017 26 254 2018 18 258 2019 10 221 2020 3 - Total minimum lease payments $ 57 $ 733 Capital Less: amounts representing interest (6.39%, ranging from 10.48% to 11.56%) $ 7 Present value of minimum lease payments 50 Less: current installments under capital lease obligations 22 Total long-term portion $ 28 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | 18. Subsequent Events Neogen Settlement Agreement As previously disclosed in the Company’s Current Report on Form 8-K dated and filed January 23, 2017, on January 23, 2017, the Company entered into an agreement (the “Settlement Agreement”) with Neogen Corporation (“Neogen”). Pursuant to the Settlement Agreement, the parties agreed to (a) terminate the existing Exclusive License Agreement between us and Neogen dated May 15, 2014 (the “License Agreement”), with neither Neogen or the Company having any further obligations thereunder (other than certain confidentiality obligations); (b) dismiss with prejudice the court action filed by Neogen in the District Court for the District of Arizona on January 19, 2017 (the “Court Action”), as further described below; and (c) mutually release any and all existing or future claims between the parties and their affiliates related to or arising from the License Agreement or the Court Action. Prior to the notice of filing received by SenesTech, the Company was unaware that any action was contemplated or actioned and was proceeding with all elements of the agreement in good faith. All communications prior to the complaint indicated that Neogen also was proceeding in good faith to execute on the agreement. Under the terms of the agreement, the Company agreed to make a one-time payment in the amount of $1,000 in settlement of all claims and termination of all existing contracts between the parties. This payment was made in January, 2017. Both Neogen and the Company further agreed to drop any and all legal complaints, claims or threat of litigation for failure to perform under the previous contractual relationship. Although notice of the legal action by Neogen and the subsequent agreement to terminate existing agreements with Neogen, occurred AFTER December 31, 2016, as per the provisions of FAS 5 Loss Contingency, included in the financial statements of the Company at December 31, 2016 is a $1,000 charge to general and administrative expenses and a corresponding accrual of contract cancellation settlement agreement related to this agreement. In January, 2017, the Company issued 3,750 shares of common stock to a consultant for services. In March, 2017, the Board of Directors granted 40,000 restricted stock units to a Vice President of the Company. These options vested immediately and the Company will recognize compensation expense in March of 2017 for the value of the grant. The Company has evaluated subsequent events from the balance sheet date through March 31, 2017, the date at which the financial statements were issued, and determined that there were no other items that require adjustment to or disclosure in the financial statements. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 reported amounts of revenues and expenses during the reporting period. The significant estimates in the Company’s financial statements include the valuation of preferred stock, common stock and related warrants, and other stock-based awards. Actual results could differ from such estimates. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings, financial position or cash flows. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs consist primarily of legal, accounting and other direct and incremental fees and costs related to the Company’s initial public offering on December 8, 2016. Deferred offering costs of $2,234 were offset against the proceeds received from the initial public offering in December of 2016. At December 31, 2015, deferred offering costs of $132 were deferred in the accompanying balance sheet. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of ninety days or less at the time of deposit to be cash equivalents. The Company does not have any cash equivalents for the periods presented. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of trade receivables. The Company provides an allowance for doubtful trade receivables equal to the estimated uncollectible amounts. That estimate is based on historical collection experience, current economic and market conditions and a review of the current status of each customer's trade accounts receivable. The allowance for doubtful trade receivables was $0 as of December 31, 2016 and 2015 as we believe all of our receivables are fully collectable. |
Inventories | Inventories Inventories are stated at the lower of cost or market value, using the first-in, first-out convention. Inventories consist of raw materials and finished goods. As of December 31, 2016 and 2015, the Company had inventories of $57 and $0, respectively. |
Prepaid Expenses | Prepaid Expenses Prepaid expenses consist primarily of payments made for director compensation to be earned in the first 6 months of 2017 as well as payments made for director and officer insurance, rent and legal deposits to be expensed in the current year. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Equipment held under capital leases are stated at the present value of minimum lease payments less accumulated amortization. Depreciation on property and equipment is computed using the straight-line method over the estimated useful lives of the respective assets. The cost of leasehold improvements is amortized over the life of the improvement or the term of the lease, whichever is shorter. Equipment held under capital leases are amortized over the shorter of the lease term or estimated useful life of the asset. The Company incurs maintenance costs on its major equipment. Repair and maintenance costs are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, such as property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require long-lived assets or asset groups to be tested for possible impairment, the Company compares the undiscounted cash flows expected to be generated from the use of the asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques, such as discounted cash flow models and the use of third- party independent appraisals. The Company has not recorded an impairment of long-lived assets since its inception. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from the commercial sales of products, licensing agreements and contracts to perform pilot studies when (i) persuasive evidence of an arrangement exists; (ii) the performance of service has been rendered to a customer or delivery has occurred; (iii) the amount of fee to be paid by a customer is fixed and determinable; and (iv) the collectability of the fee is reasonably assured. The Company has generated revenue from a license agreement with a strategic partner, pursuant to which the Company had granted to such partner the exclusive right to manufacture and distribute its product, ContraPest, once the required regulatory approvals were received (See Note 16). This licensing agreement was subsequently terminated on January 23, 2017 (See Note 18). The terms of the licensing agreement contained multiple elements or deliverables, as discussed below. Management evaluates whether the arrangement involving the multiple deliverables contains more than one unit of accounting. To determine the units of accounting under a multiple-element arrangement, management evaluates certain separation criteria, including whether the deliverables have stand-alone value, based on the relevant facts and circumstances of the arrangement. The Company determined that the license granted pursuant to the license agreement did not have stand-alone value and, therefore, the nonrefundable, upfront license fee payments received by the Company are recognized on a straight-line basis over the estimated related performance period (i.e. from the effective date of the agreement through the estimated completion date of the Company’s substantive performance obligations). In accordance with the terms of the license agreement, the Company was also to receive a future fixed amount of contingent milestone payments (i.e. post-regulatory approval license fees) and contingent sales-based royalties to be received upon the achievement of certain milestone events. The milestone events under the agreement include regulatory approval, patent issuance or alternative intellectual property coverage, and sales-based events. The Company did not earn or receive any of the potential contingent milestone payments, as the milestone events to receive such post-approval license fees and sales-based royalties were not achieved. The Company recognizes revenue that is contingent upon the achievement of a substantive milestone event in its entirety in the period in which the milestone is achieved. A milestone is considered substantive when the consideration payable to the Company for such milestone has all of the following characteristics: (i) there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved; (ii) the event can only be achieved based in whole or part on either the Company’s performance or a specific outcome resulting from the Company’s performance; and (iii) if achieved, the event would result in additional payments being due to the Company. As the potential contingent consideration was to be received only upon the achievement of milestone events that are considered substantive, the Company would only recognize such revenue in the period the milestone is achieved and the milestone payments are due and collectible. In addition, the Company accounts for sales-based royalties as revenue upon achievement of certain sales milestones. Amounts received prior to satisfying the revenue recognition criteria are recorded as deferred revenue on the balance sheet. Amounts expected to be recognized as revenue in the next twelve months following the balance sheet date are classified as a current liability. The Company recognizes other revenue earned from pilot studies upon the performance of specific services under the respective service contract. To date, the Company has generated minimal revenue from the commercial sales of products. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Research and development expenses primarily consist of salaries and benefits for research and development employees, stock-based compensation, consulting fees, lab supplies, and costs incurred related to conducting scientific trials and field studies, and regulatory compliance costs. Also, included in research and development expenses is an allocation of facilities related costs, including depreciation of research and development equipment. |
Stock-based Compensation | Stock-based Compensation Employee stock-based awards, consisting of stock options expected to be settled in shares of the Company’s common stock, are recorded as equity awards. The grant date fair value of these awards is measured using the Black-Scholes option pricing model. The Company expenses the grant date fair value of its stock options on a straight-line basis over their respective vesting periods. Performance-based awards are expensed over the performance period when the related performance goals are probable of being achieved. For equity instruments issued to non-employees, the stock-based consideration is measured using a fair value method. The measurement of the stock-based compensation is subject to re-measurement as the underlying equity instruments vest. |
Convertible Preferred Stock | Convertible Preferred Stock With the closing of the Company’s initial public offering, in December, 2016, the Series A and Series B convertible preferred stock were converted into shares of common stock. The holder of all of the outstanding shares of Series A convertible preferred stock agreed to convert and has converted all of its shares of Series A convertible preferred stock into shares of common stock on a one-for-one basis immediately prior to the consummation of this offering. See Note 12. The Series A convertible preferred stock and Series B convertible preferred stock were presented outside of permanent equity, in temporary or mezzanine equity, on the Company’s December 31, 2015 balance sheet. The Company initially records preferred stock that may be redeemed at the option of the holder based on the occurrence of an event outside of the Company’s control, at the value of the proceeds received. Subsequently, if it is probable that the preferred stock will become redeemable, the Company recognizes changes in the redemption value immediately as they occur and adjusts the carrying amount of the preferred stock to equal its redemption value at the end of each reporting period. If it is not probable that the preferred stock will become redeemable, the Company does not adjust its carrying amount. In the absence of retained earnings, these charges are recorded against additional paid-in capital, if any, and then to accumulated deficit. |
Valuation of Common Stock | Valuation of Common Stock Due to the absence of an active market for the Company’s common stock, the Company utilized methodologies in accordance with the framework of the American Institute of Certified Public Accountants’ Technical Practice Aid, Valuation of Privately- Held Company Equity Securities issued as Compensation, Significant changes to the key assumptions used in the valuations could result in different fair values of the Company’s common stock at each valuation date. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities and net operating loss carryforwards using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date. The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. These deferred tax assets are subject to periodic assessments as to recoverability and if it is determined that it is more likely than not that the benefits will not be realized, valuation allowances are recorded which would increase the provision for income taxes. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent financial operations. In November 2015, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes The Company applies a more-likely-than-not recognition threshold for all tax uncertainties. Only those benefits that have a greater than fifty percent likelihood of being sustained upon examination by the taxing authorities are recognized. Based on its evaluation, the Company has concluded there are no significant uncertain tax positions requiring recognition in its financial statements. The Company recognizes interest and/or penalties related to uncertain tax positions in income tax expense. There are no uncertain tax positions as of December 31, 2016 or 2015 and as such, no interest or penalties were recorded in income tax expense. |
Comprehensive Loss | Comprehensive Loss Net loss and comprehensive loss were the same for all periods presented; therefore, a separate statement of comprehensive loss is not included in the accompanying financial statements. |
Loss Per Share Attributable to Common Stockholders | Loss Per Share Attributable to Common Stockholders Basic loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted loss per share attributable to common stockholders is computed by dividing the 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 computation of diluted loss per share attributable to common stockholders, the Series A convertible preferred stock, Series B convertible preferred stock, convertible promissory notes, common stock purchase warrants, and common stock options are considered to be potentially dilutive securities but have been excluded from the calculation of diluted loss per share attributable to common stockholders because their effect would be anti-dilutive given the net loss reported for the years ended December 31, 2016 and 2015. Therefore, basic and diluted loss per share attributable to common stockholders was the same for all periods presented. The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted loss per share attributable to common stockholders (in common stock equivalent shares): December 31, 2016 2015 Series A convertible preferred stock — 400,000 Series B convertible preferred stock — 399,512 Convertible promissory notes — 56,500 Common stock purchase warrants 829,285 610,487 Restricted stock unit 455,430 — Common stock options 1,477,300 1,282,862 Total 2,762,015 2,749,361 In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014 the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. Since ASU 2014-09 was issued, several additional ASUs have been issued to clarify various elements of the guidance. These standards provide guidance on recognizing revenue, including a five-step model to determine when revenue recognition is appropriate. The standard requires that an entity recognize revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Adoption of the new standard is effective for reporting periods beginning after December 15, 2017. We plan to use the modified retrospective method of adoption and will adopt the standard as of January 1, 2018, the beginning of our next fiscal year. We have completed an initial evaluation of the potential impact from adopting the new standard, including a detailed review of performance obligations for all material revenue streams. Based on this initial evaluation, we do not expect adoption will have a material impact on our financial position, results of operations, or cash flows. Related disclosures will be expanded in line with the requirements of the standard. We will continue our evaluation until our adoption of the new standard. In January 2016, the FASB issued Accounting Standards Update No. 2016-01, Financial Instruments — Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Improvements to Employee Share-Based Payment Accounting In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic230): Classification of Certain Cash Receipts and Cash Payments |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of outstanding potentially dilutive securities calculation of diluted loss per share attributable to common stockholders | The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted loss per share attributable to common stockholders (in common stock equivalent shares): December 31, 2016 2015 Series A convertible preferred stock — 400,000 Series B convertible preferred stock — 399,512 Convertible promissory notes — 56,500 Common stock purchase warrants 829,285 610,487 Restricted stock unit 455,430 — Common stock options 1,477,300 1,282,862 Total 2,762,015 2,749,361 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value of financial instruments | measured at fair value on a recurring basis by level within the fair value hierarchy: December 31, Valuation 2016 2015 Technique Common stock warrant liability $ 69 $ 63 C Convertible notes payable – current liability $ — $ — C |
Schedule of Level 3 financial liabilities | The following table sets forth a summary of the changes in the fair value of the Company’s Level 3 financial liabilities: Common 2014/2015 Stock Convertible Warrant Notes Liability Payable Balance at December 31, 2014 — 447 Issuance of common stock warrant 53 — Issuance of convertible notes — 1,818 Change in fair value (1) 10 728 Extinguishment of convertible notes for Series B convertible preferred stock — (2,993 ) Balance at December 31, 2015 $ 63 $ — Change in fair value 6 — Balance at December 31, 2016 $ 69 $ — (1) The change in the fair value of the common stock warrant and convertible notes payable was recorded as an increase to other income (expense) and interest expense of $677 and $63, respectively, in the statements of operations and comprehensive loss |
Prepaid expenses (Tables)
Prepaid expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of prepaid expenses | Prepaid expenses consist of the following: December 31, 2016 2015 Director compensation $ 215 $ 6 Director and officer insurance 70 — Legal retainer 25 — Rent 17 16 Engineering, software licenses and other 10 14 Total accrued expenses $ 337 $ 36 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment, net consist of the following: December 31, Useful Life 2016 2015 Research and development equipment 5 years $ 989 $ 834 Office and computer equipment 3 years 235 181 Furniture and fixtures 7 years 17 12 Leasehold improvements * 189 189 1,430 1,216 Less accumulated depreciation and amortization 799 603 Total $ 631 $ 613 * Shorter of lease term or estimated useful life |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of accrued expenses | Accrued expenses consist of the following: December 31, 2016 2015 Compensation and related benefits $ 82 $ 425 Accrued interest — 4 Accrued interest – related parties — 329 Accrued Litigation 286 — Other 3 — Total accrued expenses $ 371 $ 758 |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of borrowings | A summary of the Company’s borrowings, including capital lease obligations, is as follows: At December 31, Short-term debt: 2016 2015 NAU Promissory Note $ — $ — Current portion of long-term debt 45 27 Total short-term debt $ 45 $ 27 Long-term debt: Capital lease obligations $ 51 $ 72 Other unsecured promissory notes 132 400 Other promissory notes — 5 Total 183 477 Less: current portion of long-term debt 45 27 Total long-term debt $ 138 $ 450 |
Notes Payable, Related Parties
Notes Payable, Related Parties (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of notes payable, related parties | A summary of the Company’s notes payable, related parties is as follows: December 31, 2016 2015 Unsecured promissory note, interest rate of 4.25% and 8% per annum $ 36 $ 73 Unsecured promissory note, interest rate of 8% per annum — 236 Unsecured promissory note, interest rate of 6% per annum — 27 Unsecured promissory notes, interest rate of 4% per annum — 160 Total notes payable, related parties 36 496 Less: current portion of notes payable, related parties 30 462 Total notes payable, long-term $ 6 $ 34 |
Convertible Notes Payable, Re33
Convertible Notes Payable, Related Parties(table) | 12 Months Ended |
Dec. 31, 2016 | |
Convertible Notes Payable Related Parties | |
Convertible Notes Payable, Related Parties | A summary of the Company’s convertible notes payable, related parties is as follows: December 31, 2016 2015 Convertible notes payable, short term: Equity Participation Notes $ — $ 200 2014/2015 Convertible Notes — — Other convertible notes payable — — Total convertible notes payable, short term $ — $ 200 |
Common Stock Warrants and Com34
Common Stock Warrants and Common Stock Warrant Liability (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of common stock warrant activity | The table summarizes the common stock warrant activity as of December 31, 2016 as follows: Common Stock Warrants Number of Warrants Date Issued Term Exercise Price Secured Promissory Note 69,333 April 2015 5 years (1) $ 7.50 2014/2015 Convertible Notes 131,734 April – November 2015 5 years (1) $ 7.50 Other Promissory Notes 69,333 September –December 2015 5 years (1) $ 7.50 270,400 University of Arizona 15,000 June 2015 5 years (2) $ 7.50 Consulting Agreement 121,228 July 2015 10 years (3) $ 7.50 Northern Arizona University 210,526 November 2015 3 years (4) $ 15.00 Warrants issued 617,154 Warrants exercised 6,667 Outstanding at December 31, 2015 610,487 Initial Public Offering Underwriter 187,500 December 2016 5 years $ 9.60 Marketing and Development Services 100,000 February 2016 5 years(1) $ 7.50 Other Advisory Services 40,000 August 2016 3 years(1) $ 7.50 Promissory Notes 9,031 March 2016 3 years(1) $ 7.50 Warrants issued 336,531 Warrants exercised 117,733 Outstanding at December 31, 2016 829,285 (1) The warrants also terminate, if not exercised, upon the closing of (i) an initial public offering of common stock; or (ii) a liquidation, dissolution or winding up of the Company. (2) In the event of a terminating change of the Company, as defined in the warrant agreement, the warrant holder would be paid in cash the aggregate fair market value of the warrant shares immediately prior to the consummation of the terminating change event. (3) The warrant also terminates, if not exercised, (i) two years after the closing of an initial public offering of common stock; or (ii) the closing of a liquidation, dissolution or winding up of the Company. (4) The warrant also terminates, if not exercised, upon the closing of (i) an initial public offering of common stock; or (ii) a consolidation, merger, sale or other disposition of all or substantially all of the Company’s assets |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of fair value of options granted | The weighted-average assumptions used in the Black-Scholes option-pricing model used to calculate the fair value of options granted during the year ended December 31, 2015, were as follows: Employee Non-Employee Expected volatility 66.4 % 76.6 % Expected dividend yield — — Expected term (in years) 4.0 5.0 Risk-free interest rate 1.3 % 1.7 % The weighted-average assumptions used in the Black-Scholes option-pricing model used to calculate the fair value of options granted during the year ended December 31, 2016, were as follows: Employee Non-Employee Expected volatility 82.1 % N/A Expected dividend yield — N/A Expected term (in years) 3.25 N/A Risk-free interest rate 1.83 % N/A |
Schedule of stock option activity | The table summarizes the stock option activity, for both plans, for the periods indicated as follows: Number of Weighted Weighted Average Remaining Contractual Term (years) Aggregate Outstanding at December 31, 2014 255,509 $ 2.35 3.9 $ 3,230 Granted 2,477,255 $ 0.50 7.1 Exercised 384,206 $ 0.05 Forfeited 210,876 $ 0.50 Expired 13,348 $ 15.00 Outstanding at December 31, 2015 2,124,334 $ 0.50 6.4 $ 4,249 Granted 200,000 $ 7.98 5.0 $ 34 Exercised 621,602 $ 0.73 Forfeited 210,849 $ 0.50 Expired 14,583 $ 15.00 Outstanding at December 31, 2016 1,477,300 1.61 5.8 $ 9,662 Exercisable at December 31, 2016 999,310 $ 1.00 5.6 $ 7,145 (1) The aggregate intrinsic value on the table was calculated based on the difference between the estimated fair value of the Company’s stock and the exercise price of the underlying option. The estimated stock values used in the calculation was $8.15 and $2.50 per share for each of the years ended December 31, 2016 and 2015 respectively. |
Schedule of stock-based compensation expense | The stock-based compensation expense was recorded as follows: Year Ended December 31, 2016 2015 Research and development $ 403 $ 4,931 General and administrative 2,966 6,331 Total stock-based compensation expense $ 3,369 $ 11,262 |
Schedule of summarizes restricted stock unit activity | The following table summarizes restricted stock unit activity for the years ended December 31, 2016 and 2015: Number of Units Weighted Average Grant-Date Fair Value Per Units Outstanding as of December 31, 2014 — $ — Granted — $ — Vested — $ — Forfeited — $ — Outstanding as of December 31, 2015 — $ — Granted 474,720 (1) $ 1.57 Vested (19,290 ) $ 8.10 Forfeited — $ — Outstanding as of December 31, 2016 455,430 $ 0.76 (1) 440,000 restricted stock units were granted and issued on September 30 th |
Income Taxes (Table)
Income Taxes (Table) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of income tax benefit | The income tax benefit differed from the amounts computed by applying the federal statutory income tax rate of 34% to pretax income from operations as a result of the following: Year Ended December 31, 2016 2015 Income tax benefit at statutory federal rate $ (3,723 ) $ (6,179 ) Increase (reduction) in income taxes resulting from: Nondeductible expenses 7 69 Fair value adjustment on convertible notes 2 226 State and local income taxes, net of federal income tax benefit (505 ) (799 ) Federal valuation allowance 3,714 5,884 State valuation allowance 505 799 $ — $ — |
Schedule of deferred tax assets | The tax effects of temporary differences that give rise to significant portions of the deferred tax assets are presented below: At December 31, 2016 2015 Deferred tax assets: Deferred rent $ 25 $ 11 Deferred revenue - 85 Federal and state net operating loss carryforwards 10,818 10,727 Stock-based compensation 4,831 6,493 Compensation accruals and other 553 36 Total deferred tax assets 16,227 17,352 Valuation allowance (16,144 ) (17,277 ) Net deferred tax assets 83 75 Deferred tax liabilities: Total deferred tax liabilities (83 ) (75 ) Net deferred tax asset (liability) $ - $ - Property and equipment (83 ) (75 ) |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of the future minimum lease payments under non-cancellable operating lease and future minimum capital lease payments | The future minimum lease payments under non-cancellable operating lease and future minimum capital lease payments as of December 31, 2016 are follows: Capital Leases Operating Lease Years Ending December 31, 2017 26 254 2018 18 258 2019 10 221 2020 3 - Total minimum lease payments $ 57 $ 733 Capital Less: amounts representing interest (6.39%, ranging from 10.48% to 11.56%) $ 7 Present value of minimum lease payments 50 Less: current installments under capital lease obligations 22 Total long-term portion $ 28 |
Organization and Description 38
Organization and Description of Business (Details Narrative) - USD ($) $ in Thousands | Dec. 08, 2016 | Dec. 31, 2016 |
Stock issued during period | 13,320 | |
Cash, cash equivalents and short-term investments | $ 11,826 | |
Common Stock [Member] | ||
Stock issued during period | 1,875,000 |
Summary of Significant Accoun39
Summary of Significant Accounting Policies (Details) - shares | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Total | 2,762,015 | 2,749,361 |
Series A Convertible Preferred Stock [Member] | ||
Total | 400,000 | |
Series B Convertible Preferred Stock [Member] | ||
Total | 399,512 | |
Convertible Promissory Notes [Member] | ||
Total | 56,500 | |
Common Stock Purchase Warrants [Member] | ||
Total | 829,285 | 610,487 |
Restricted Stock Units [Member] | ||
Total | 455,430 | |
Employee Stock Options [Member] | ||
Total | 1,477,300 | 1,282,862 |
Summary of Significant Accoun40
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Deferred offering costs | $ 2,234 | $ 132 |
Cash equivalents, at carrying value | 0 | |
Allowance for doubtful trade receivables | 0 | 0 |
Inventory, net | $ 57 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Common Stock Warrant Liability [Member] | ||
Fair value liability | $ 69 | $ 63 |
2014/2015 Convertible Promissory Notes [Member] | ||
Fair value liability |
Fair Value Measurements (Deta42
Fair Value Measurements (Details 1) - Recurring [Member] - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | |||
Common Stock Warrant Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | $ 63 | |||
Issuance of common stock warrant | 53 | |||
Issuance of convertible notes | ||||
Change in fair value | 6 | 10 | [1] | |
End balance | 69 | 63 | ||
2014/2015 Convertible Promissory Notes [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Beginning balance | 447 | |||
Issuance of convertible notes | 1,818 | |||
Change in fair value | [1] | 728 | ||
Extinguishment of convertible notes for Series B convertible preferred stock | (2,993) | |||
End balance | ||||
[1] | The change in the fair value of the common stock warrant and convertible notes payable was recorded as an increase to other income (expense) and interest expense of $677 and $63, respectively, in the statements of operations and comprehensive loss. |
Fair Value Measurements (Deta43
Fair Value Measurements (Details Narrative) - Recurring [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Common Stock Warrant Liability [Member] | |
Increase to other income (expense) | $ 677 |
2014/2015 Convertible Promissory Notes [Member] | |
Increase to interest expense | $ 63 |
Prepaid expenses (Details)
Prepaid expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Director compensation | $ 215 | $ 6 |
Director and officer insurance | 70 | |
Legal retainer | 25 | |
Rent | 17 | 16 |
Engineering, software licenses and other | 10 | 14 |
Total prepaid expenses | $ 337 | $ 36 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Property, Plant and Equipment, Gross | $ 1,430 | $ 1,216 | |
Less accumulated depreciation and amortization | 799 | 603 | |
Total | 631 | 613 | |
Research and Development Equipment [Member] | |||
Property, Plant and Equipment, Gross | $ 989 | 834 | |
Property, Plant and Equipment, Useful Life | 5 years | ||
Office and Computer Equipment [Member] | |||
Property, Plant and Equipment, Gross | $ 235 | 181 | |
Property, Plant and Equipment, Useful Life | 3 years | ||
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment, Gross | $ 17 | 12 | |
Property, Plant and Equipment, Useful Life | 7 years | ||
Leasehold Improvements [Member] | |||
Property, Plant and Equipment, Gross | [1] | $ 189 | $ 189 |
[1] | Shorter of lease term or estimated useful life |
Property and Equipment (Detai46
Property and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation and amortization expense | $ 196 | $ 182 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Compensation and related benefits | $ 82 | $ 425 |
Accrued interest | 4 | |
Accrued interest - related parties | 329 | |
Accrued litigation | 286 | |
Other | 3 | |
Total accrued expenses | $ 371 | $ 758 |
Accrued Contract Cancellation48
Accrued Contract Cancellation Settlement (Details Narrative) - USD ($) $ in Thousands | Jan. 23, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued Contract Cancellation Settlement Disclosure [Abstract] | |||
Accrued contract cancellation settlement liabilities | $ 1,000 | $ 1,000 |
Borrowings (Details)
Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Short-term debt: | ||
NAU Promissory Note | ||
Current portion of long-term debt | 45 | 27 |
Total short-term debt | 45 | 27 |
Long-term debt: | ||
Capital lease obligations | 51 | 72 |
Other unsecured promissory notes | 132 | 400 |
Other promissory notes | 5 | |
Total | 183 | 477 |
Less: current portion of long-term debt | 45 | 27 |
Total long-term debt | $ 138 | $ 450 |
Borrowings (Details Narrative)
Borrowings (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 08, 2016 | Aug. 01, 2016 | Mar. 31, 2016 | Nov. 30, 2015 | Jul. 31, 2015 | Apr. 30, 2015 | May 31, 2012 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 |
Number of shares issued | 13,320 | ||||||||||
Number of shares issued, value | $ 295 | ||||||||||
Stock price (in dollars per share) | $ 2.50 | $ 8.15 | $ 2.50 | ||||||||
Debt discount | $ 27 | $ 177 | |||||||||
Long-term debt | $ 477 | 183 | 477 | ||||||||
Common Stock [Member] | |||||||||||
Number of shares issued | 1,875,000 | ||||||||||
4% Secured Promissory Note [Member] | Investor [Member] | |||||||||||
Debt face amount | $ 500 | ||||||||||
Proceeds from notes issuance | $ 500 | ||||||||||
Description of debt maturity date | Maturity date in April 2016. | ||||||||||
Description of collateral | The Secured Promissory Note was collateralized by all of the Company’s personal property. | ||||||||||
Debt discount | $ 113 | ||||||||||
Accretion of debt discount | 79 | ||||||||||
4% Other Promissory Notes [Member] | Investor [Member] | |||||||||||
Debt face amount | 500 | 500 | |||||||||
Proceeds from notes issuance | 500 | ||||||||||
Debt discount | 116 | ||||||||||
Unamortized debt discount | 100 | 100 | |||||||||
Long-term debt | 400 | 0 | 400 | ||||||||
5% Promissory Note [Member] | |||||||||||
Description of debt maturity date | The note matured in May 2016. | ||||||||||
Long-term debt | 5 | 0 | 5 | ||||||||
Debt monthly payments | $ 1 | ||||||||||
4% 2016 Unsecured Notes [Member] | Two Investors [Member] | |||||||||||
Debt face amount | $ 310 | $ 310 | |||||||||
4% 2016 Unsecured Notes [Member] | Two Investors [Member] | |||||||||||
Debt face amount | 16 | $ 16 | |||||||||
Proceeds from notes issuance | $ 16 | ||||||||||
Extinguishment of 4% Secured Promissory Note [Member] | Investor [Member] | |||||||||||
Extinguishment of debt amount | 517 | ||||||||||
Net carrying amount | $ 483 | $ 483 | |||||||||
Extinguishment of 4% 2016 Unsecured Notes [Member] | Two Investors [Member] | Common Stock [Member] | |||||||||||
Number of shares issued | 124,000 | ||||||||||
Stock price (in dollars per share) | $ 2.50 | $ 2.50 | |||||||||
Extinguishment of 4% 2016 Unsecured Notes [Member] | Two Investors [Member] | |||||||||||
Loss on the extinguishment | $ 9 | ||||||||||
NAU Warrants [Member] | |||||||||||
Number of shares purchased | 210,526 | ||||||||||
Exercise price (in dollars per share) | $ 15 | ||||||||||
Warrant [Member] | 4% Secured Promissory Note [Member] | Investor [Member] | |||||||||||
Number of shares purchased | 69,333 | ||||||||||
Fair value of the warrants | $ 113 | ||||||||||
Warrant [Member] | 4% Other Promissory Notes [Member] | Investor [Member] | |||||||||||
Number of shares purchased | 69,333 | 69,333 | |||||||||
Fair value of the warrants | $ 116 | ||||||||||
Warrant [Member] | 4% 2016 Unsecured Notes [Member] | Two Investors [Member] | |||||||||||
Number of shares purchased | 9,032 | 9,032 | |||||||||
Series B Convertible Preferred Stock [Member] | Extinguishment of 4% Secured Promissory Note [Member] | Investor [Member] | |||||||||||
Number of shares issued | 66,705 | ||||||||||
Loss on the extinguishment | $ 34 | ||||||||||
Stock price (in dollars per share) | $ 7.75 | $ 7.75 | |||||||||
Series B Convertible Preferred Stock [Member] | Extinguishment of 4% Secured Promissory Note [Member] | Investor [Member] | |||||||||||
Stock price (in dollars per share) | $ 7.75 | $ 7.75 | |||||||||
Series B Convertible Preferred Stock [Member] | Extinguishment of 4% 2016 Unsecured Notes [Member] | Two Investors [Member] | |||||||||||
Number of shares issued | 10,036 | ||||||||||
Stock price (in dollars per share) | $ 7.75 | $ 7.75 | |||||||||
Amended and Restated Letter Agreement [Member] | Extinguishment of Unsecured Promissory Note [Member] | |||||||||||
Accrued interest | $ 1,313 | ||||||||||
Extinguishment of debt amount | 3,180 | ||||||||||
Loss on the extinguishment | $ 1,530 | ||||||||||
Amended and Restated Letter Agreement [Member] | NAU Warrants [Member] | |||||||||||
Number of shares purchased | 210,526 | ||||||||||
Exercise price (in dollars per share) | $ 15 | ||||||||||
Amended and Restated Letter Agreement [Member] | NAU Warrants [Member] | Extinguishment of Unsecured Promissory Note [Member] | |||||||||||
Number of shares purchased, value | $ 330 | ||||||||||
Stock price (in dollars per share) | $ 7.50 | ||||||||||
Expected term | 3 years | ||||||||||
Exercise price (in dollars per share) | $ 15 | ||||||||||
Volatility | 70.60% | ||||||||||
Risk free rate | 1.27% | ||||||||||
Amended and Restated Letter Agreement [Member] | Series A Preferred Stock [Member] | |||||||||||
Number of shares issued | 400,000 | ||||||||||
Number of shares issued, value | $ 4,380 | ||||||||||
Amended and Restated Letter Agreement [Member] | Series A Preferred Stock [Member] | Extinguishment of Unsecured Promissory Note [Member] | |||||||||||
Number of shares issued | 2,000,000 | ||||||||||
Conversion and Termination Agreement [Member] | Series A Preferred Stock [Member] | NAU Ventures, LLC [Member] | |||||||||||
Number of shares converted | 400,000 | ||||||||||
Payment of additional cash | $ 175,890 |
Notes Payable, Related Partie51
Notes Payable, Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Total unsecured promissory note payable, related parties | $ 36 | $ 496 |
Less: current portion of notes payable, related parties | 30 | 462 |
Total notes payable, long-term | 6 | 34 |
4.25% and 8% unsecured promissory note [Member] | ||
Total unsecured promissory note payable, related parties | 36 | 73 |
8% unsecured promissory note [Member] | ||
Total unsecured promissory note payable, related parties | 236 | |
6% unsecured promissory note [Member] | ||
Total unsecured promissory note payable, related parties | 27 | |
4% unsecured promissory note [Member] | ||
Total unsecured promissory note payable, related parties | $ 160 |
Notes Payable, Related Partie52
Notes Payable, Related Parties (Details Narrative) - USD ($) $ in Thousands | Apr. 07, 2016 | Sep. 30, 2016 | Mar. 31, 2016 | Apr. 30, 2013 | Jun. 30, 2017 | Jun. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2017 | May 31, 2016 | Aug. 31, 2015 | Oct. 31, 2011 |
Settlement of outstanding obligations | $ 40 | |||||||||||
Due to Employees | $ 72 | |||||||||||
Interest expense related party | $ 0 | $ 1 | $ 55 | $ 437 | ||||||||
Debt interest expense | 32 | 418 | ||||||||||
Interest expense on notes payable related parties | 30 | 462 | ||||||||||
Salary Obligation [Member] | ||||||||||||
Debt interest rate | 4.25% | |||||||||||
Debt instrument payment | $ 1 | |||||||||||
Debt instrument maturity date | Jun. 30, 2018 | |||||||||||
Unsecured promissory note [Member] | ||||||||||||
Debt interest rate | 12.00% | |||||||||||
Settlement of outstanding obligations | $ 25 | |||||||||||
Outstanding debt including accrued interest | 380 | $ 389 | ||||||||||
Amount of restated promissory note including accrued interest | $ 414 | |||||||||||
Description of debt payment | The Revised Note of $414 requires the Company to pay an initial payment of $25 upon the effective date of the note, and monthly and quarterly payments of $10 and $25, respectively, thereafter, with interest accruing at 12% per annum. Additionally, the Revised Note provides for an acceleration of the amount due in the event of (i) a merger, sale or acquisition of substantially of the Company’s assets; (ii) initial public offering; (iii) total equity raise of $2.5 million or more; and (iii) debt financing of $2.5 million with an unaffiliated lender within thirty days of such events. | |||||||||||
Debt financing | $ 2,500 | |||||||||||
4.25% and 8% unsecured promissory note [Member] | ||||||||||||
Debt instrument payment | $ 1 | |||||||||||
Debt instrument maturity date | May 30, 2018 | |||||||||||
Outstanding debt including accrued interest | $ 73 | $ 36 | ||||||||||
Unsecured Promissory Note [Member] | ||||||||||||
Debt interest rate | 8.00% | |||||||||||
4% unsecured promissory note [Member] | Chief executive officer [Member] | ||||||||||||
Description of debt payment | The notes accrued interest at 4% per annum and matured in December 2015. The funds were used to meet working capital requirements. The Company repaid $35 on the promissory notes during 2015 and repaid the balance in May 2016. | |||||||||||
Face amount debt | $ 195 | $ 30 | ||||||||||
4% unsecured promissory note [Member] | Chief research officer [Member] | ||||||||||||
Face amount debt | $ 30 | |||||||||||
6% unsecured promissory note [Member] | ||||||||||||
Face amount debt | $ 27 | |||||||||||
Issuance of common stock settlment of debt | 54,000 | |||||||||||
6% unsecured promissory note [Member] | advisory board [Member] | ||||||||||||
Description of debt payment | The note accrued interest at 6% per annum and was due in February 2016. Upon maturity, the holder transferred the note to a certain stockholder who acquired the note. The maturity date of the note was then extended for ninety days. On April 7, 2016, this note was settled with the issuance of 54,000 shares of common stock. | |||||||||||
Face amount debt | $ 27 | |||||||||||
Issuance of common stock settlment of debt | 54,000 | |||||||||||
Equity Participation Promissory Notes [Member] | ||||||||||||
Debt interest rate | 1.25% | |||||||||||
Debt instrument payment | $ 14 | |||||||||||
Description of debt payment | Interest continues to accrue on unpaid balances at 1.25% per month with the total outstanding balance to be paid in full by the earlier of (i) May 25, 2017, (ii) the sale, merger or acquisition of the Company or substantially all of its assets, or (iii) 45 days after an initial public offering. This settlement was fully paid at December 31, 2016. | |||||||||||
Face amount debt | $ 464 | |||||||||||
Debt interest expense | $ 88 |
Convertible Notes Payable, Re53
Convertible Notes Payable, Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Total convertible notes payable, short term | $ 200 | |
Equity participation notes [Member] | ||
Total convertible notes payable, short term | 200 | |
2014/2015 Convertible Notes [Member] | ||
Total convertible notes payable, short term | ||
Other convertible notes [Member] | ||
Total convertible notes payable, short term |
Convertible Notes Payable, Re54
Convertible Notes Payable, Related Parties (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Jan. 01, 2010 | Jun. 30, 2015 | Feb. 28, 2015 | Jun. 30, 2017 | Jun. 30, 2017 | Nov. 30, 2015 | Nov. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 |
Proceeds from debt detachable warrants | $ 310 | $ 1,915 | ||||||||
Interest expense related party | $ 0 | $ 1 | $ 55 | $ 437 | ||||||
Share price (in dollars per share) | $ 8.15 | $ 2.50 | ||||||||
Debt interest expense | $ 32 | $ 418 | ||||||||
Proceeds from convertible debt | 16 | |||||||||
Gains on extinguishment of debt | $ (34) | |||||||||
Series B Preferred Stock [Member] | ||||||||||
Share price (in dollars per share) | $ 7.75 | $ 7.75 | ||||||||
2014 Convertible Promissory Notes [Member] | ||||||||||
Interest expense related party | $ 312 | $ 0 | ||||||||
Outstanding debt including accrued interest | $ 452 | |||||||||
Conversion price (in dollars per share) | $ 7.50 | |||||||||
Conversion rates on interest | $ 5 | |||||||||
Face amount debt | $ 452 | |||||||||
Number of share issued (in shares) | 71,446 | 71,446 | ||||||||
Debt interest expense | $ 231 | |||||||||
Unamortized debt discount | $ 142 | |||||||||
2014/2015 Convertible Notes [Member] | ||||||||||
Description of debt conversion | In the event of a Qualified Financing, these 2014/2015 Convertible Notes provided automatic conversion of all outstanding principal and unpaid accrued interest thereon into the shares of the equity securities sold in the Qualified Financing at a conversion rate of 70% of the price per share paid by the other purchasers in the Qualified Financing. | |||||||||
Face amount debt | $ 875 | |||||||||
Proceeds from convertible debt | $ 875 | |||||||||
2014/2015 Convertible Notes [Member] | Common Stock Warrants [Member] | ||||||||||
Proceeds from debt detachable warrants | $ 97 | |||||||||
Description of debt conversion | 2014/2015 Convertible Notes provided automatic conversion of all outstanding principal and unpaid accrued interest thereon into the shares of the equity securities sold in the Qualified Financing at a higher conversion rate of 80% of the price per share paid by the other purchasers in the Qualified Financing. | |||||||||
Face amount debt | $ 1,490 | $ 1,490 | ||||||||
Number of share issued (in shares) | 131,733 | |||||||||
Proceeds from convertible debt | $ 1,490 | |||||||||
Fair value of debt | $ 2,268 | $ 2,268 | ||||||||
2014/2015 Convertible Notes [Member] | Common Stock Warrants [Member] | Other Operating Income (Expense) [Member] | ||||||||||
Fair value of debt | $ 0 | $ 671 | ||||||||
2014/2015 Convertible Notes [Member] | Series B Preferred Stock [Member] | ||||||||||
Conversion price (in dollars per share) | $ 7.75 | |||||||||
Share price (in dollars per share) | $ 7.75 | |||||||||
Debt financing | $ 2,000 | |||||||||
Face amount debt | 2,365 | |||||||||
Fair value of debt | $ 2,993 | |||||||||
2014/2015 Convertible Notes [Member] | Series B Convertible Preferred Stock [Member] | ||||||||||
Number of share issued (in shares) | 312,861 | |||||||||
Total accrued interest | $ 2,465 | |||||||||
Gains on extinguishment of debt | $ 569 | |||||||||
2014/2015 Convertible Notes [Member] | Shareholder [Member] | ||||||||||
Debt interest rate | 4.00% | 4.00% | ||||||||
Description of debt conversion | The 2014/2015 Convertible Notes could not be repaid prior to their maturity date without the consent of the holders of at least a majority of the outstanding principal amount of the 2014/2015 Convertible Notes. The 2014/2015 Convertible Notes contained two conversion options contingent upon the occurrence of a future event, as follows: (i) all outstanding principal and unpaid accrued interest on the 2014/2015 Convertible Notes would automatically convert into equity securities upon the consummation of an equity financing with proceeds of at least $2 million (“Qualified Financing”) at conversion rates of 70% or 80%, as noted below; and (ii) if the Company was acquired, prior to a Qualified Financing, in a change in control transaction, the holder had an option to have all outstanding principal plus any unpaid accrued interest paid in cash or convert such amount into shares of common stock at a conversion price equal to $7.50 per share, subject to adjustment for such events as stock splits, combination, and reorganization. | |||||||||
Conversion price (in dollars per share) | $ 7.50 | $ 7.50 | ||||||||
Debt financing | $ 2,000 | $ 2,000 | ||||||||
Face amount debt | $ 2,365 | $ 2,365 | ||||||||
Other convertible notes [Member] | ||||||||||
Debt interest rate | 10.00% | |||||||||
Description of debt conversion | The note provided for the holder to convert the outstanding principal and accrued and unpaid interest into shares of common stock at a conversion rate equal to $7.50 per share. In 2015, the holder converted the note balance, including accrued and unpaid interest, in the aggregate amount of $68, into 8,971 shares of common stock in accordance with the original conversion terms of the note. | |||||||||
Conversion price (in dollars per share) | $ 7.50 | |||||||||
Face amount debt | $ 60 | |||||||||
Number of share issued (in shares) | 8,971 | |||||||||
Total accrued interest | $ 68 | |||||||||
Unsecured Promissory Note Agreements [Member] | Equity participation notes [Member] | Shareholder [Member] | ||||||||||
Debt interest rate | 15.00% | |||||||||
Debt instrument maturity date | May 31, 2010 | |||||||||
Description of debt conversion | The terms of the Equity Participation Notes provide for the holder to convert, at any time, the outstanding principal and unpaid accrued interest into shares of common stock at an conversion rate of $10.00 per share provided, however, that in the event, that the Company’s common stock is registered in an initial public offering, prior to such time the Company achieves a net profit of $15 million, then the conversion rate shall be $5.00 per share. Additionally, the Equity Participation Notes provide the holder an equity participation right at the rates from .8330% to 4% on the first $15 million of net profit, which is defined as net profit before interest, taxes, depreciation, amortization (“EBITDA”) and compensation of officers, directors and any of their related parties. There were no amounts accrued for these contingent equity participation payments at December 31, 2016 and 2015. | |||||||||
Conversion price (in dollars per share) | $ 10 | |||||||||
Face amount debt | $ 675 |
Common Stock Warrants and Com55
Common Stock Warrants and Common Stock Warrant Liability (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Outstanding at beginning | 610,487 | ||
Warrants issued | 270,400 | ||
Warrants issued | 336,531 | 617,154 | |
Warrants exercised | 117,733 | 6,667 | |
Outstanding at end | 829,285 | 610,487 | |
Secured Promissory Note [Member] | |||
Warrants issued | 69,333 | ||
Date Issued | 2015-04 | ||
Term | [1] | 5 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
2014/2015 Convertible Notes [Member] | |||
Warrants issued | 131,734 | ||
Term | [1] | 5 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
2014/2015 Convertible Notes [Member] | Maximum [Member] | |||
Date Issued | 2015-11 | ||
2014/2015 Convertible Notes [Member] | Minimum [Member] | |||
Date Issued | 2015-04 | ||
Other Promissory Notes [Member] | |||
Warrants issued | 69,333 | ||
Term | [1] | 5 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
Other Promissory Notes [Member] | Maximum [Member] | |||
Date Issued | 2015-12 | ||
Other Promissory Notes [Member] | Minimum [Member] | |||
Date Issued | 2015-09 | ||
University of Arizona [Member] | |||
Warrants issued | 15,000 | ||
Date Issued | 2015-06 | ||
Term | [2] | 5 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
Consulting Agreement [Member] | |||
Warrants issued | 121,228 | ||
Date Issued | 2015-07 | ||
Term | [3] | 10 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
Northern Arizona University [Member] | |||
Warrants issued | 210,526 | ||
Date Issued | 2015-11 | ||
Term | [4] | 3 years | |
Exercise Price (in dollars per share) | $ 15 | ||
Initial Public Offering Underwriter Warrants [Member] | |||
Warrants issued | 187,500 | ||
Date Issued | 2016-12 | ||
Term | 5 years | ||
Exercise Price (in dollars per share) | $ 9.60 | ||
Marketing and Development Services Warrants [Member] | |||
Warrants issued | 100,000 | ||
Date Issued | 2016-02 | ||
Term | [1] | 5 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
Other Advisory Services Warrants [Member] | |||
Warrants issued | 40,000 | ||
Date Issued | 2016-08 | ||
Term | [1] | 3 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
Promissory Notes [Member] | |||
Warrants issued | 9,031 | ||
Date Issued | 2016-03 | ||
Term | [1] | 3 years | |
Exercise Price (in dollars per share) | $ 7.50 | ||
[1] | The warrants also terminate, if not exercised, upon the closing of (i) an initial public offering of common stock; or (ii) a liquidation, dissolution or winding up of the Company. | ||
[2] | In the event of a terminating change of the Company, as defined in the warrant agreement, the warrant holder would be paid in cash the aggregate fair market value of the warrant shares immediately prior to the consummation of the terminating change event. | ||
[3] | The warrant also terminates, if not exercised, (i) two years after the closing of an initial public offering of common stock; or (ii) the closing of a liquidation, dissolution or winding up of the Company. | ||
[4] | The warrant also terminates, if not exercised, upon the closing of (i) an initial public offering of common stock; or (ii) a consolidation, merger, sale or other disposition of all or substantially all of the Company's assets |
Common Stock Warrants and Com56
Common Stock Warrants and Common Stock Warrant Liability (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Aug. 16, 2016 | Dec. 31, 2016 | Mar. 31, 2016 | Feb. 29, 2016 | Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Nov. 30, 2015 | Jun. 30, 2015 |
Share price (in dollars per share) | $ 8.15 | $ 8.15 | $ 2.50 | ||||||
Fair value adjustment of warrants | $ 6 | $ 10 | |||||||
Common Stock Warrants [Member] | |||||||||
Number of shares purchased | 270,400 | 270,400 | |||||||
Exercise price (in dollars per share) | $ 7.50 | $ 7.50 | |||||||
Warrant term | 5 years | ||||||||
Description of method used | Monte Carlo option pricing model | ||||||||
Expected volatility rate, minimum | 58.00% | ||||||||
Expected volatility rate, maximum | 76.70% | ||||||||
Risk free interest rate, minimum | 1.31% | ||||||||
Risk free interest rate, maximum | 1.76% | ||||||||
Common Stock Warrants [Member] | Minimum [Member] | |||||||||
Share price (in dollars per share) | 7.50 | $ 7.50 | |||||||
Common Stock Warrants [Member] | Maximum [Member] | |||||||||
Share price (in dollars per share) | $ 7.575 | $ 7.575 | |||||||
Common Stock Warrant Issued for Marketing and Development Services [Member] | |||||||||
Number of shares purchased | 100,000 | ||||||||
Exercise price (in dollars per share) | $ 7.50 | ||||||||
Warrant term | 5 years | ||||||||
Description of method used | Black- Scholes option pricing model | ||||||||
Share price (in dollars per share) | $ 7.57 | ||||||||
Fair value of common stock warrant | $ 431 | ||||||||
Expected volatility rate | 77.80% | ||||||||
Expected term | 3 years 9 months | ||||||||
Expected dividend rate | 0.00% | ||||||||
Risk free interest rate | 2.09% | ||||||||
March 2016 Promissory Notes Common Stock Warrants [Member] | |||||||||
Number of shares purchased | 9,032 | ||||||||
Exercise price (in dollars per share) | $ 7.50 | ||||||||
Warrant term | 3 years | ||||||||
Description of method used | Monte Carlo pricing model | ||||||||
Share price (in dollars per share) | $ 7.575 | ||||||||
Expected volatility rate | 79.60% | ||||||||
Risk free interest rate | 1.49% | ||||||||
August 2016 Other Advisory Services [Member] | |||||||||
Number of shares purchased | 20,000 | ||||||||
Exercise price (in dollars per share) | $ 7.50 | ||||||||
Warrant term | 3 years | ||||||||
Common Stock Warrant Issued To Initial Public Offering Underwriter [Member] | |||||||||
Number of shares purchased | 100,000 | 100,000 | |||||||
Exercise price (in dollars per share) | $ 9.60 | $ 9.60 | |||||||
Warrant term | 5 years | ||||||||
Description of method used | Black- Scholes option pricing model | ||||||||
Share price (in dollars per share) | $ 8 | $ 8 | |||||||
Fair value of common stock warrant | $ 939 | $ 939 | |||||||
Expected volatility rate | 82.10% | ||||||||
Expected term | 5 years | ||||||||
Expected dividend rate | 0.00% | ||||||||
Risk free interest rate | 1.92% | ||||||||
University of Arizona Common Stock Warrant [Member] | |||||||||
Number of shares purchased | 15,000 | 15,000 | |||||||
Exercise price (in dollars per share) | $ 7.50 | $ 7.50 | |||||||
Warrant term | 5 years | ||||||||
Description of method used | Monte Carlo option pricing model | ||||||||
Expected dividend rate | 0.00% | ||||||||
Derivative liability | $ 63 | $ 53 | |||||||
Fair value adjustment of warrants | $ 10 | ||||||||
University of Arizona Common Stock Warrant [Member] | Minimum [Member] | |||||||||
Share price (in dollars per share) | $ 7.50 | ||||||||
Expected volatility rate | 60.80% | ||||||||
Risk free interest rate | 1.21% | ||||||||
University of Arizona Common Stock Warrant [Member] | Maximum [Member] | |||||||||
Share price (in dollars per share) | $ 7.575 | ||||||||
Expected volatility rate | 81.40% | ||||||||
Risk free interest rate | 1.76% | ||||||||
July 2015 Consulting Agreement Common Stock Warrant [Member] | |||||||||
Number of shares purchased | 121,227 | ||||||||
Exercise price (in dollars per share) | $ 7.50 | ||||||||
Warrant term | 10 years | ||||||||
Description of method used | Black-Scholes option pricing model | ||||||||
Share price (in dollars per share) | $ 7.575 | ||||||||
Fair value of common stock warrant | $ 537 | ||||||||
Expected volatility rate | 60.90% | ||||||||
Expected term | 6 years 3 months | ||||||||
Expected dividend rate | 0.00% | ||||||||
Risk free interest rate | 2.09% | ||||||||
Northern Arizona University Common Stock Warrant [Member] | |||||||||
Number of shares purchased | 210,526 | ||||||||
Exercise price (in dollars per share) | $ 15 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2016 | Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Number of shares issued | 13,320 | |||
Number of shares issued,value | $ 295 | |||
Stock price (in dollars per share) | $ 8.15 | $ 2.50 | ||
Description of voting rights | The holders of outstanding shares of common stock are not entitled to receive any dividends. | |||
Series A Preferred Stock [Member] | ||||
Dividend rate | 6.00% | |||
Original issue price (in dollars per share) | $ 5 | |||
Description of stock conversion rights terms | Each share of Series A convertible preferred stock will automatically be converted into shares of common stock on the then- effective Series A conversion price (i) at any time upon the affirmative election of the holders of the majority of the outstanding shares of the Series A convertible preferred stock or (ii) immediately upon the closing of a firmly underwritten public offering of common stock in which the gross cash proceeds to the Company are at least $20 million and the Company’s shares have been listed for trading on the New York Stock Exchange, NASDAQ Global Select Market or NASDAQ Global Market (“Qualified IPO”). Upon conversion, any declared and unpaid dividends would be paid. | |||
Description of stock redemption rights terms | (i) the original issue price ($5.00) of the Series A convertible preferred stock plus all unpaid accrued dividends and (ii) the then-current Redemption Price. | |||
Description of stock liquidation rights terms | The holders of the Series A convertible preferred stock have a liquidation preference that gives such holders first priority upon a change in control event whereby such holders shall be entitled to receive an amount in liquidation equal to the original issued price ($5.00) plus accrued unpaid dividends. | |||
Preferred stock, issued | 400,000 | |||
Preferred stock, outstanding | 400,000 | |||
Preferred stock, value issued | $ 4,380 | |||
Description of voting rights | Each holder of the Series A convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A convertible preferred stock could be converted. The preferred stockholders shall vote as a separate class to (i) approve amendments to the Certificate of Incorporation, (ii) authorization of any new classes of stock, and (iii) any asset transfers or acquisitions or any voluntary dissolution or liquidation of the Company. For so long as any shares of preferred stock remain outstanding, the holders of the Series A convertible preferred stock may appoint one member of the Board in a nonvoting observer capacity. | |||
Series B Preferred Stock [Member] | ||||
Number of shares issued | 115,668 | 312,861 | ||
Number of shares issued,value | $ 896 | |||
Description of stock conversion rights terms | The holder of the Series B convertible preferred stock has the right to convert at any time all or part of the preferred shares into shares of common stock. Each share of Series B convertible preferred stock will automatically convert into shares of common stock on the closing of an underwritten public offering of the Company’s equity securities which results in gross proceeds of at least $5 million. The initial conversion price is $7.75 per share, subject to certain adjustments for stock splits, stock dividends, reclassification and certain other defined events. | |||
Description of stock redemption rights terms | The Series B convertible preferred stock is not subject to redemption. | |||
Description of stock liquidation rights terms | A change in control is treated as a liquidation event that entitles the holder to receive, at their option, cash in amount equal to the liquidation value of each holder’s Series B convertible preferred shares. The liquidation value for each share of Series B convertible preferred stock is an amount equal to $7.75 per share, subject to adjustment in the event of a stock split, stock dividend or similar event. | |||
Stock price (in dollars per share) | $ 7.75 | $ 7.75 | ||
Number of shares issued upon debt cancellation | 66,651 | |||
Number of shares issued to related party | 20,000 | |||
Preferred stock, issued | 399,512 | |||
Preferred stock, outstanding | 399,512 | |||
Preferred stock, value issued | $ 3,096 | |||
Number of shares converted | 33,578 | 483,609 | ||
Number of common shares issued upon stock conversion | 33,578 | 483,609 | ||
Number of shares issued against debt exchange | 2,007 | |||
Description of voting rights | Each holder of the Series B convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A convertible preferred stock could be converted. The holders of shares of Series B convertible preferred stock are entitled to vote on all matters submitted to the vote of the stockholders. | |||
Amended and Restated Letter Agreement [Member] | Series A Preferred Stock [Member] | ||||
Number of shares issued | 400,000 | |||
Number of shares issued,value | $ 4,380 | |||
Description of stock redemption rights terms | (i) the original issue price ($5.00) of Series A convertible preferred stock plus all unpaid accrued dividends and (ii) the then fair market value (“Redemption Price”). |
Stockholders' Deficit (Details
Stockholders' Deficit (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 08, 2016 | Apr. 29, 2016 | Apr. 07, 2016 | May 31, 2016 | Apr. 30, 2016 | Nov. 30, 2015 | Jun. 30, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Jun. 30, 2016 | Nov. 10, 2015 |
Common stock, authorized | 100,000,000 | 100,000,000 | 100,000,000 | ||||||||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||
Preferred stock, authorized | 15,000,000 | 10,000,000 | |||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||
Common stock, issued | 10,157,292 | 4,108,766 | |||||||||
Common stock, outstanding | 10,157,292 | 4,108,766 | |||||||||
Common stock, voting rights | The holders of shares of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders. | ||||||||||
Preferred stock, voting rights | The holders of outstanding shares of common stock are not entitled to receive any dividends. | ||||||||||
Number of shares issued | 13,320 | ||||||||||
Proceeds from issuance of common stock | $ 18,832 | ||||||||||
Net consideration of shares issued | $ 295 | ||||||||||
Stock Options and Warrants [Member] | |||||||||||
Number of shares issued | 630,935 | ||||||||||
Proceeds from issuance of common stock | $ 521 | ||||||||||
Stock Options [Member] | |||||||||||
Number of shares issued | 390,873 | ||||||||||
Proceeds from issuance of common stock | $ 78 | ||||||||||
Initial Public Offering [Member] | |||||||||||
Number of shares issued | 1,875,000 | ||||||||||
Net consideration of shares issued | $ 12,600 | ||||||||||
Rights Offering [Member] | |||||||||||
Number of shares issued | 2,478,486 | 5,794,162 | |||||||||
Proceeds from issuance of common stock | $ 5,284 | ||||||||||
Net consideration of shares issued | 6,199 | ||||||||||
Subscription price (in dollars per share) | $ 2.50 | ||||||||||
6% Unsecured Promissory Note [Member] | |||||||||||
Principal value | $ 27 | ||||||||||
Number of shares issued | 54,000 | ||||||||||
2016 Unsecured Notes [Member] | |||||||||||
Surrendered as consideration for purchase | 124,000 | ||||||||||
Subscription price (in dollars per share) | $ 2.50 | ||||||||||
Unsecured Promissory Note 2015 and 2016 [Member] | Rights Offering [Member] | |||||||||||
Proceeds from cancellation of outstanding principal amount | 821 | ||||||||||
Extinguishment of debt | $ 94 | ||||||||||
2014 Convertible Promissory Notes [Member] | |||||||||||
Principal value | $ 452 | ||||||||||
Number of shares issued | 71,446 | 71,446 | |||||||||
Conversion price, principal (in dollars per share) | $ 7.50 | ||||||||||
Conversion Price, interest (in dollars per share) | $ 5 | ||||||||||
Other Convertible Notes [Member] | |||||||||||
Principal value | $ 68 | ||||||||||
Number of shares issued | 8,971 | ||||||||||
Series A Preferred Stock [Member] | |||||||||||
Preferred stock, authorized | 2,000,000 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||
Preferred stock, voting rights | Each holder of the Series A convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A convertible preferred stock could be converted. The preferred stockholders shall vote as a separate class to (i) approve amendments to the Certificate of Incorporation, (ii) authorization of any new classes of stock, and (iii) any asset transfers or acquisitions or any voluntary dissolution or liquidation of the Company. For so long as any shares of preferred stock remain outstanding, the holders of the Series A convertible preferred stock may appoint one member of the Board in a nonvoting observer capacity. | ||||||||||
Series B Preferred Stock [Member] | |||||||||||
Preferred stock, authorized | 7,515,000 | ||||||||||
Preferred stock, par value (in dollars per share) | $ 0.001 | ||||||||||
Preferred stock, voting rights | Each holder of the Series B convertible preferred stock is entitled to the number of votes equal to the number of shares of common stock into which such shares of Series A convertible preferred stock could be converted. The holders of shares of Series B convertible preferred stock are entitled to vote on all matters submitted to the vote of the stockholders. | ||||||||||
Number of shares issued | 115,668 | 312,861 | |||||||||
Net consideration of shares issued | $ 896 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Employee [Member] | ||
Expected volatility | 82.10% | 66.40% |
Expected dividend yield | ||
Expected term (in years) | 3 years 3 months | 4 years |
Risk-free interest rate | 1.83% | 1.30% |
Non-Employee [Member] | ||
Expected volatility | 76.60% | |
Expected dividend yield | ||
Expected term (in years) | 5 years | |
Risk-free interest rate | 1.70% |
Stock-based Compensation (Det60
Stock-based Compensation (Details 1) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding at beginning | 2,124,334 | 255,509 | |
Granted | 200,000 | 2,477,255 | |
Exercised | 621,602 | 384,206 | |
Forfeited | 210,849 | 210,876 | |
Expired | 14,583 | 13,348 | |
Outstanding at ending | 1,477,300 | 2,124,334 | |
Exercisable at ending | 999,310 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | $ 0.50 | $ 2.35 | |
Granted | 7.98 | 0.50 | |
Exercised | 0.73 | 0.05 | |
Forfeited | 0.50 | 0.50 | |
Expired | 15 | 15 | |
Outstanding at ending | 1.61 | $ 0.50 | |
Exercisable at ending | $ 1 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward] | |||
Outstanding at beginning | 3 years 10 months 24 days | ||
Granted | 5 years | 7 years 1 month 6 days | |
Outstanding at ending | 5 years 9 months 18 days | 6 years 4 months 24 days | |
Exercisable at ending | 5 years 9 months 6 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Aggregate Intrinsic Value [Roll Forward] | |||
Outstanding at beginning | [1] | $ 4,249 | $ 3,230 |
Granted | [1] | 34 | |
Outstanding at ending | [1] | 9,662 | $ 4,249 |
Exercisable at ending | [1] | $ 7,145 | |
[1] | The aggregate intrinsic value on the table was calculated based on the difference between the estimated fair value of the Company's stock and the exercise price of the underlying option. The estimated stock values used in the calculation was $8.15 and $2.50 per share for each of the years ended December 31, 2016 and 2015 respectively. |
Stock-based Compensation (Det61
Stock-based Compensation (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Allocated Share-based Compensation Expense | $ 3,369 | $ 11,262 |
Research and Development [Member] | ||
Allocated Share-based Compensation Expense | 403 | 4,931 |
General and Administrative Expense [Member] | ||
Allocated Share-based Compensation Expense | $ 2,966 | $ 6,331 |
Stock-based Compensation (Det62
Stock-based Compensation (Details 3) - $ / shares | Dec. 31, 2016 | Dec. 19, 2016 | Sep. 30, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Granted | 156 | 0 | ||||
Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Number of Shares [Roll Forward] | ||||||
Balance at beginning | ||||||
Granted | 15,430 | 19,290 | 440,000 | 474,720 | [1] | |
Vested | (19,290) | |||||
Forfeited | ||||||
Balance at ending | 455,430 | 455,430 | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Roll Forward] | ||||||
Balance at beginning | ||||||
Granted | $ 0.10 | $ 0.50 | 1.57 | |||
Vested | 8.10 | |||||
Forfeited | ||||||
Balance at ending | $ 0.76 | $ 0.76 | ||||
[1] | 440,000 restricted stock units were granted and issued on September 30th with a weighted average grant date fair value of $0.50 and vest 1/3 on the first anniversary of grant and the remaining balance quarterly over the subsequent 8 quarters. 19,290 restricted stock units were granted on December 19, 2016 with a weighted average grant date fair value of $8.10 and vested immediately. An additional 15,430 restricted stock units were granted on December 19, 2016 and fully vest on the first anniversary of grant. The Company accounts for the restricted stock units as equity-settled awards in accordance with ASC 718. The total fair value of restricted stock units vested during the years ended December 31, 2016 and 2015 was $156 and $0.00, respectively. |
Stock-based Compensation (Det63
Stock-based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2016 | Dec. 19, 2016 | Sep. 30, 2016 | Jul. 31, 2016 | Jun. 30, 2016 | Jul. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share price | $ 8.15 | $ 8.15 | $ 2.50 | ||||||
Stock units granted | 156 | 0 | |||||||
Stock issued for services | 126,373 | ||||||||
Stock issued for services, value | $ 383 | $ 16 | |||||||
Weighted average exercise price, granted | $ 7.98 | $ 0.50 | |||||||
Stock based compensation expense | $ 3,369 | $ 11,262 | |||||||
Deferred compensation obligation, noncurrent | $ 2,000 | ||||||||
Restricted Stock Units [Member] | |||||||||
Stock units granted | 15,430 | 19,290 | 440,000 | 474,720 | [1] | ||||
Weighted average grant date fair value | $ 0.10 | $ 0.50 | $ 1.57 | ||||||
2016 Agreement [Member] | |||||||||
Reversal of deferred compensation obligation | $ 2,000 | ||||||||
Share based compensation, description | A bonus of (a) 1% of the amount of the net sales price of the Company that is $100,000 or less, plus (ii) an additional 0.5% of the amount of the net sales price of the Company that is more than $100,000, payable in cash or other proceeds payable to other stockholders in such Company. Under the terms of her agreement, the executives shall be entitled to this change of control bonus if the change of control transaction occurs within 12 months following the termination of the executive’s employment by the Company without cause (as such term is defined in the 2016 agreement excluding death or disability) or within 12 months following the executive’s resignation for good reason (as such term is defined in the 2016 agreement), provided that the executive remains in compliance with the confidentiality and other ongoing post-termination obligations under the 2016 agreement. | ||||||||
2016 Agreement [Member] | Restricted Stock Units [Member] | |||||||||
Number of shares authorized | 220,000 | 220,000 | |||||||
Awards vesting period | 3 years | ||||||||
Deferred Bonus [Member] | 2013 Agreement [Member] | |||||||||
Amount of signing bonus | $ 1,000 | ||||||||
Deferred compensation obligation, noncurrent | $ 2,000 | 2,000 | |||||||
Non-Employee [Member] | |||||||||
Stock based compensation expense | 207 | $ 338 | |||||||
Former Chief Executive Officer [Member] | 2016 Agreement [Member] | |||||||||
Number of shares issued | 120,000 | ||||||||
Full and final settlement expense | $ 300 | ||||||||
Stock Option Plan 2008-2009 [Member] | |||||||||
Number of shares outstanding | 20,000 | 20,000 | |||||||
Basis price per share | $ 15 | ||||||||
Common stock purchase price | 100.00% | ||||||||
Compensation cost not yet recognized | $ 4,503 | $ 4,503 | |||||||
Compensation cost not yet recognized, period for recognition | 4 years | ||||||||
Equity Incentive Plan 2015 [Member] | |||||||||
Number of shares authorized | 2,000,000 | ||||||||
Number of additional shares authorized | 1,000,000 | ||||||||
Common stock capital shares reserved for future issuance | 1,419,480 | 2,000,000 | 1,419,480 | ||||||
[1] | 440,000 restricted stock units were granted and issued on September 30th with a weighted average grant date fair value of $0.50 and vest 1/3 on the first anniversary of grant and the remaining balance quarterly over the subsequent 8 quarters. 19,290 restricted stock units were granted on December 19, 2016 with a weighted average grant date fair value of $8.10 and vested immediately. An additional 15,430 restricted stock units were granted on December 19, 2016 and fully vest on the first anniversary of grant. The Company accounts for the restricted stock units as equity-settled awards in accordance with ASC 718. The total fair value of restricted stock units vested during the years ended December 31, 2016 and 2015 was $156 and $0.00, respectively. |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Income Taxes Details | ||
Income tax benefit at statutory federal rate | $ (3,723) | $ (6,179) |
Increase (reduction) in income taxes resulting from: | ||
Nondeductible expenses | 7 | 69 |
Fair value adjustment on convertible notes | 2 | 226 |
State and local income taxes, net of federal income tax benefit | (505) | (799) |
Federal valuation allowance | 3,714 | 5,884 |
State valuation allowance | 505 | 799 |
Total income tax expense benefit |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred tax assets: | ||
Deferred rent | $ 25 | $ 11 |
Deferred revenue | 85 | |
Federal and state net operating loss carryforwards | 10,818 | 10,727 |
Stock-based compensation | 4,831 | 6,493 |
Compensation accruals and other | 553 | 36 |
Total deferred tax assets | 16,227 | 17,352 |
Valuation allowance | (16,144) | (17,277) |
Net deferred tax assets | 83 | 75 |
Deferred tax liabilities: | ||
Total deferred tax liabilities | (83) | (75) |
Net deferred tax asset (liability) | ||
Property and equipment | $ (83) | $ (75) |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Federal statutory income tax rate | 34.00% | |
Increase (decrease) in valuation allowance of deferred tax assets | $ (1,100,000) | $ 6,700,000 |
Federal and state net operating loss carryforwards | $ 34,000,000 | $ 27,800,000 |
Description of use for federal and state loss carryforwards | State loss carryforwards will begin expiring in 2016 and the federal loss carryforwards will begin expiring in 2021, unless previously utilized. | |
Internal Revenue Service (IRS) [Member] | ||
Description for limitation of use of tax credit carryforward | The limitation applies when one or more 5% stockholders increase their ownership, in the aggregate, by more than 50% percentage points over a 36-month time period testing period, or the beginning the day after the most recent ownership change, if shorter |
License and Other Agreements (D
License and Other Agreements (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Jan. 23, 2017 | Sep. 30, 2015 | Jun. 30, 2015 | May 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | |
Licencing revenue | $ 186 | $ 186 | ||||
Deferred revenue | 0 | 186 | ||||
Contingent milestone payments | 3,000,000 | |||||
Other revenues | $ 132 | $ 55 | ||||
Warrants issued | 336,531 | 617,154 | ||||
Service Contract [Member] | ||||||
Contractual amount for services rendered | $ 58 | $ 215 | ||||
Other revenues | $ 132 | $ 42 | ||||
License Agreement [Member] | ||||||
Reimbursement of patent costs | 5 | |||||
Patent milestone payments | $ 75 | |||||
Percentage of royalty on net sales | 5.00% | |||||
Amended License Agreement [Member] | ||||||
Patent milestone payments | $ 50,000 | |||||
Percentage of royalty on net sales | 2.00% | |||||
Percentage of sublicensing royalty income | 4.00% | |||||
Warrant Purchase Agreement [Member] | ||||||
Warrants issued | 15,000 | |||||
Fair value of warrants | $ 53 | |||||
Class of warrants or rights, term | 5 years | |||||
Neogen Corporation [Member] | ||||||
License and Services Revenue | $ 0 | $ 186 | ||||
Litigation Settlement, Amount | $ 1,000 | |||||
Licencing revenue | 488 | |||||
License fee receivable | $ 162 | |||||
NeoVenta Solutions, Inc. [Member] | ||||||
Minimum sales commitments | $ 23,000,000 |
Commitments and Contingencies68
Commitments and Contingencies (Details) $ in Thousands | Dec. 31, 2016USD ($) |
Capital Leases | |
2,017 | $ 26 |
2,018 | 18 |
2,019 | 10 |
2,020 | 3 |
Total minimum lease payments | 57 |
Operating Lease | |
2,017 | 254 |
2,018 | 258 |
2,019 | 221 |
2,020 | |
Total minimum lease payments | $ 733 |
Commitments and Contingencies69
Commitments and Contingencies (Details 1) $ in Thousands | Dec. 31, 2016USD ($) |
Commitments And Contingencies Details 1 | |
Less: amounts representing interest (6.39%, ranging from 10.48% to 11.56%) | $ 7 |
Present value of minimum lease payments | 50 |
Less: current installments under capital lease obligations | 22 |
Total long-term portion | $ 28 |
Commitments and Contingencies70
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 19, 2016 | Sep. 30, 2016 | Oct. 30, 2013 | Dec. 31, 2016 | Dec. 31, 2015 | |
Deferred compensation obligation | $ 2,000 | ||||||
Number of shares granted | 156 | 0 | |||||
Number of shares issued | 13,320 | ||||||
Office and Computer Equipment [Member] | |||||||
Accumulated amortization | $ 69 | ||||||
Research and Development Equipment [Member] | |||||||
Accumulated amortization | $ 21 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Number of shares granted | 15,430 | 19,290 | 440,000 | 474,720 | [1] | ||
Former Chief executive officer [Member] | |||||||
Number of shares issued | 120,000 | ||||||
Resolution of dispute expense | $ 300 | ||||||
2013 Employment Agreements [Member] | Chief executive officer [Member] | |||||||
Agreement term | 3 years | ||||||
Additional renewal agreement term | 3 years | ||||||
Signing bonus | $ 1,000 | ||||||
Description of signing bonus terms | The signing bonus was to be paid over three years in eleven quarterly installments of $91 per quarter, payable only from product revenue after providing for all operational expenses and such bonus was not to be paid from funds received from capital investment. | ||||||
Deferred compensation obligation | $ 2,000 | ||||||
Description of employment agreement terms | The agreements provided for, at the employees’ election, a lump sum cash payment equal to the current value of shares of common stock held, or no less than $3.00 per share, whichever is greater. In addition, upon the sale of the Company, the agreement provided for a bonus of (a) 1% of the amount of the net sales price that is $100,000 or less and (ii) 0.5% of the amount of the net sales price that is more than $100,000. Under the terms of the agreement, this change of control bonus would be paid regardless of whether employed by the Company at the time of any sale of all or a portion of the stock or assets, and if deceased, such amount would be paid to the employees’ estate. | ||||||
Percentage of cash payment for phantom equity interest patents on gross profits interest | 0.50% | ||||||
2016 Employment Agreements [Member] | Chief executive officer [Member] | |||||||
Description of signing bonus terms | The 2016 agreements provides for a bonus of (a) 1% of the amount of the net sales price of the Company that is $100,000 or less, plus (ii) an additional 0.5% of the amount of the net sales price of the Company that is more than $100,000, payable in cash or other proceeds payable to other stockholders in such Company. | ||||||
2016 Employment Agreements [Member] | Chief executive officer [Member] | Restricted Stock Units (RSUs) [Member] | |||||||
Number of shares granted | 220,000 | ||||||
Expiration term | 3 years | ||||||
Description of vesting rights | The RSU award will vest and be settled over a three-year period, with one- third of the units vesting on the twelve-month anniversary of the date of grant, and the remaining units vesting in equal quarterly tranches over the following twenty-four months of continuous service. | ||||||
Settled Litigation [Member] | Neogen Settlement Agreement [Member] | General and Administrative Expense [Member] | |||||||
One-time payment | $ 1,000 | ||||||
[1] | 440,000 restricted stock units were granted and issued on September 30th with a weighted average grant date fair value of $0.50 and vest 1/3 on the first anniversary of grant and the remaining balance quarterly over the subsequent 8 quarters. 19,290 restricted stock units were granted on December 19, 2016 with a weighted average grant date fair value of $8.10 and vested immediately. An additional 15,430 restricted stock units were granted on December 19, 2016 and fully vest on the first anniversary of grant. The Company accounts for the restricted stock units as equity-settled awards in accordance with ASC 718. The total fair value of restricted stock units vested during the years ended December 31, 2016 and 2015 was $156 and $0.00, respectively. |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Jan. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Subsequent Event [Line Items] | ||||
Stock issued for services | 126,373 | |||
Awards granted | 200,000 | 2,477,255 | ||
Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued for services | 126,373 | 100 | ||
Subsequent Event [Member] | Consultant [Member] | Common Stock [Member] | ||||
Subsequent Event [Line Items] | ||||
Stock issued for services | 3,750 | |||
Subsequent Event [Member] | Vice President [Member] | Restricted Stock Units [Member] | ||||
Subsequent Event [Line Items] | ||||
Awards granted | 40,000 | |||
Settlement Agreement [Member] | Neogen Corporation [Member] | Subsequent Event [Member] | ||||
Subsequent Event [Line Items] | ||||
Settlement of all claims and termination | $ 1,000 | |||
Settlement Agreement [Member] | Neogen Corporation [Member] | Subsequent Event [Member] | General and Administrative Expense [Member] | ||||
Subsequent Event [Line Items] | ||||
Settlement of all claims and termination | $ 1,000 |