| Summary of Significant Accounting Policies | Note
2 - Summary of Significant Accounting Policies Use
of Estimates The
preparation of 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 and classification
of assets and liabilities, 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 material
impact on net earnings, financial position or cash flows. Cash
and Cash Equivalents The
Company considers money market fund investments to be cash equivalents. The Company had cash equivalents of $51 and $3 at March
31, 2018 and December 31, 2017, respectively, included in cash as reported. Investments
in Securities Held to Maturity The
Company uses cash holdings to purchase highly liquid, short term, investment grade securities diversified among security types,
industries and issuers. All of the Company’s investment securities are measured at fair value. The Company’s investment
securities primarily consist of municipal debt securities, corporate bonds, U.S. agency securities and commercial paper and highly-liquid
money market funds. 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 $5 as of March 31, 2018 and $0 at December 31, 2017. 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 March 31, 2018 and December 31, 2017, the Company had inventories of $787 and $540, respectively. Prepaid
Expenses Prepaid
expenses consist primarily of payments made for director compensation 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 is amortized over the shorter of the lease term or estimated useful life of the asset. The
Company incurs repair and maintenance costs on its major equipment, which 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 Effective
January 1, 2018, the Company adopted ASC 606 — Revenue from Contracts with Customers. Revenue Recognition. There was no impact on the
Company’s financial statements as a result of adopting Topic 606 for the three months ended March 31, 2018 and 2017, or
the twelve months ended December 31, 2017. The
Company derives revenue primarily from commercial sales of products. For
the three months ended March 31, 2018 and March 31, 2017, the Company generated net revenues of $19 and $7, respectively, from
the sale of ContraPest. 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, 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 restricted stock units and 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. The
stock-based compensation expense recorded for the three months ended March 31, 2018 and 2017, is as follows:
Three
Months Ended March 31,
2018 2017
Research
and development $ 29 $ 94
Selling,
general and administrative 669 967
Total
stock-based compensation expense $ 698 $ 1,061 See
Note 13 for additional discussion on stock-based compensation. 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. 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 March 31, 2018 or December 31, 2017 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, 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 three months ended March
31, 2018 and 2017. Therefore, basic and diluted loss per share attributable to common stockholders are the same for each period
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):
March
31,
2018 2017
Common
stock purchase warrants 6,431,785 829,284
Restricted stock unit 237,885 855,430
Common
stock options 1,629,967 1,502,300
Total 8,299,637 3,187,014 Adoption
of New Accounting Standards: In
May 2014 the FASB issued ASU 2014-09, Revenue from Contracts with Customers “Revenue from Contracts with Customers” Revenue Recognition In
March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting In
August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and
Cash Payments In January 2016, the FASB issued ASU 2016-01, Recognition
and Measurement of Financial Assets and Financial Liabilities Accounting Standards Issued But Not
Yet Adopted: In
February 2016, the FASB issued ASU 2016-02, Leases In
February 2018, the FASB issued ASU 2018-02, Income Statement-Reporting Comprehensive Income (Topic 220): Reclassification
of Certain Tax Effects from Accumulated Other Comprehensive Income |
