Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 10, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | ENDRA Life Sciences Inc. | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Entity Central Index Key | 1,681,682 | |
Current Fiscal Year End Date | --12-31 | |
Entity Common Stock, Shares Outstanding | 3,923,027 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Current Reporting Status | Yes | |
Entity Voluntary Filers | No | |
Entity Well-known Seasoned Issuer | No | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Assets | ||
Cash | $ 2,205,858 | $ 5,601,878 |
Accounts receivable | 11,770 | 6,850 |
Prepaid expenses | 318,924 | 67,497 |
Inventory | 279,210 | 191,680 |
Other current assets | 18,553 | 14,249 |
Total Current Assets | 2,834,315 | 5,882,154 |
Other Assets | ||
Fixed assets, net | 211,345 | 241,549 |
Total Assets | 3,045,660 | 6,123,702 |
Current Liabilities: | ||
Accounts payable and accrued liabilities | 751,376 | 848,214 |
Senior secured convertible promissory notes payable, net of discount | 353,581 | 0 |
Total Liabilities | 1,104,957 | 848,214 |
Stockholders’ Equity | ||
Preferred stock, $0.0001 par value; 10,000,000 shares authorized; no shares issued or outstanding | 0 | 0 |
Common stock, $0.0001 par value; 50,000,000 shares authorized; 3,923,027 and 3,923,027 shares issued and outstanding | 392 | 392 |
Additional paid in capital | 24,507,821 | 23,170,531 |
Accumulated deficit | (22,567,510) | (17,895,435) |
Total Stockholders’ Equity | 1,940,703 | 5,275,488 |
Total Liabilities and Stockholders’ Equity | $ 3,045,660 | $ 6,123,702 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock shares, par value | $ 0.0001 | $ 0.0001 |
Preferred stock shares, authorized | 10,000,000 | 10,000,000 |
Preferred stock shares, issued | 0 | 0 |
Preferred stock shares, outstanding | 0 | 0 |
Common stock shares, par value | $ 0.0001 | $ 0.0001 |
Common stock shares, authorized | 50,000,000 | 50,000,000 |
Common stock shares, issued | 3,923,027 | 3,923,027 |
Common stock shares, outstanding | 3,923,027 | 3,923,027 |
Condensed Statements of Operati
Condensed Statements of Operations - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 0 | $ 57,772 | $ 6,174 | $ 57,772 |
Cost of Goods Sold | 0 | 51,427 | 0 | 51,427 |
Gross Profit | 0 | 6,345 | 6,174 | 6,345 |
Operating Expenses | ||||
Research and development | 839,756 | 174,725 | 2,508,579 | 270,539 |
Sales and marketing | 41,357 | 6,904 | 148,534 | 8,028 |
General and administrative | 941,956 | 881,570 | 2,009,747 | 1,145,329 |
Total operating expenses | 1,823,068 | 1,063,199 | 4,666,860 | 1,423,897 |
Operating loss | (1,823,068) | (1,056,855) | (4,660,686) | (1,417,552) |
Other Expenses | ||||
Other income (expense) | (23,704) | (374,937) | (11,389) | (755,862) |
Total other expenses | (23,704) | (374,937) | (11,389) | (755,862) |
Loss from operations before income taxes | (1,846,772) | (1,431,791) | (4,672,075) | (2,173,414) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net Loss | $ (1,846,772) | $ (1,431,791) | $ (4,672,075) | $ (2,173,414) |
Net loss per share - basic and diluted | $ (0.47) | $ (0.59) | $ (1.19) | $ (1.37) |
Weighted average common shares - basic and diluted | 3,923,027 | 2,437,010 | 3,923,027 | 1,584,906 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash Flows from Operating Activities | ||
Net loss | $ (4,672,075) | $ (2,173,414) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 30,204 | 30,964 |
Common stock, options and warrants issued for services | 749,749 | 306,184 |
Interest on discount of convertible debt | 0 | 711,472 |
Imputed interest on promissory notes | 0 | 1,480 |
Amortization of debt discount | 5,822 | 0 |
Changes in operating assets and liabilities: | ||
Increase in accounts receivable | (4,920) | 0 |
Increase in prepaid expenses | (251,428) | (4,200) |
Increase in inventory | (87,530) | (93,316) |
Increase in other assets | (4,304) | (272) |
Decrease in accounts payable and accrued liabilities | (96,838) | (157,618) |
Net cash used in operating activities | (4,331,320) | (1,378,720) |
Cash Flows from Investing Activities: | ||
Purchases of fixed assets | 0 | (7,862) |
Net cash used in investing activities | 0 | (7,862) |
Cash Flows from Financing Activities | ||
Proceeds from issuance of common stock, net of fees | 0 | 8,590,700 |
Repayment of notes payable | 0 | (50,000) |
Proceeds from senior secured convertible promissory notes, net of fees | 935,300 | 225,000 |
Net cash provided by financing activities | 935,300 | 8,765,700 |
Net Increase/(Decrease) in cash | (3,396,020) | 7,379,118 |
Cash, beginning of period | 5,601,878 | 144,953 |
Cash, end of period | 2,205,858 | 7,524,071 |
Supplemental disclosures: | ||
Interest paid | 0 | 0 |
Income tax paid | 0 | 0 |
Supplemental disclosures of non-cash Items: | ||
Discount on convertible notes | $ 587,541 | $ 225,000 |
Nature of the Business
Nature of the Business | 6 Months Ended |
Jun. 30, 2018 | |
Nature Of Business | |
Nature of the Business | ENDRA Life Sciences Inc. (“ENDRA” or the “Company”) is developing a medical imaging technology based on the thermoacoustic effect that improves the sensitivity and specificity of clinical ultrasound. On May 8, 2017, the Company effected a 1-for-3.5 reverse stock split (the “Reverse Split”) of the Company’s common stock, with no reduction in authorized capital stock. In the Reverse Split, every 3.5 outstanding shares of common stock became one (1) share of common stock. All common stock and stock incentive plan information in these financial statements reflect the Reverse Split. ENDRA was incorporated on July 18, 2007 as a Delaware corporation. ENDRA Life Sciences Canada Inc. was organized under the laws of Ontario, Canada on July 6, 2017, and is wholly owned by the Company. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
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 requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined. Principles of Consolidation The Company’s unaudited consolidated financial statements include all accounts of the Company and its consolidated subsidiary and/or entities as of reporting period ending date(s) and for the reporting period(s) then ended. All inter-company balances and transactions have been eliminated. Basis of Presentation The accompanying unaudited financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ended December 31, 2018. The balance sheet at December 31, 2017 has been derived from the audited financial statements at such date. For further information, refer to the financial statements and footnotes thereto included in ENDRA Life Sciences Inc. annual financial statements for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 20, 2018. Cash and Cash Equivalents The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of one year or less, when purchased, to be cash. As of June 30, 2018 and December 31, 2017, the Company had no cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. Inventory The Company’s inventory is stated at the lower of cost or estimated net realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. The Company periodically determines whether a reserve should be taken for devaluation or obsolescence of inventory. As of June 30, 2018 and December 31, 2017, no such reserve was taken. Capitalization of Fixed Assets The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. Capitalization of Intangible Assets The Company records the purchase of intangible assets not purchased in a business combination in accordance with the ASC Topic 350. Revenue Recognition In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1, 2018 using the full retrospective method. The new standard did not have a material impact on its financial position and results of operations, as it did not change the manner or timing of recognizing revenue. Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to preform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows. Research and Development Costs The Company follows ASC 730-10, “Research and Development”. Research and development costs are charged to the statement of operations as incurred. During the six months ended June 30, 2018 and June 30, 2017, the Company incurred $2,508,579 and $270,539 of expenses related to research and development costs, respectively. Net Earnings (Loss) Per Common Share The Company computes earnings per share under ASC Subtopic 260-10, Earnings Per Share (“ASC 260-10”). Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless their effect on net loss per share is anti-dilutive. There were 3,267,052 and 3,208,262 potentially dilutive shares, which include outstanding common stock options, warrants, and convertible notes, as of June 30, 2018 and December 31, 2017, respectively. The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows: June 30, 2018 December 31, 2017 Options to purchase common stock 978,911 940,121 Warrants to purchase common stock 2,288,141 2,268,141 Potential equivalent shares excluded 3,267,052 3,208,262 Fair Value Measurements Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in its balance sheet, where it is practicable to estimate that value. As of June 30, 2018 and December 31, 2017, the amounts reported for cash, accrued liabilities and accrued interest approximated fair value because of their short maturities. In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” the Company measures certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The carrying amounts of the Company’s financial assets and liabilities, including cash, prepaid expenses, accounts payable, accrued expenses, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The fair value of notes payable and convertible notes approximates their fair values since the current interest rates and terms on these obligations are the same as prevailing market rates. Share-based Compensation The Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan”) permits the grant of stock options and other share-based awards to its employees, consultants and non-employee members of the board of directors covering up to 1,345,074 shares of common stock, of which approximately 350,000 remain available to be granted. Each January 1 the pool of shares available for issuance under the Omnibus Plan will automatically increase by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. The Company records share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification. The guidance requires the use of option-pricing models that require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model, and the resulting charge is expensed using the straight-line attribution method over the vesting period. The Company has elected to use the calculated value method to account for the options it issued in 2017 (prior to commencement on June 28, 2017 of public trading in the Company’s common stock). Under the Share-based Compensation Topic of the FASB Codification, a nonpublic entity that is unable to estimate the expected volatility of the price of its underlying shares may measure awards based on a “calculated value,” which substitutes the volatility of appropriate public companies (representative of the company’s size and industry) as a benchmark for the volatility of the entity’s own share price. The Company has used the historical closing values of these companies to estimate volatility, which was calculated to be 90%, for periods prior to June 28, 2017, when there was no active market for the Company’s common stock. Stock compensation expense recognized during the period is based on the value of share-based awards that were expected to vest during the period adjusted for estimated forfeitures. The estimated fair value of grants of stock options and warrants to non-employees of the Company is charged to expense, if applicable, in the financial statements. These options vest in the same manner as the employee options granted under the stock incentive plan as described above. Beneficial Conversion Feature If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. Debt Discount The Company determines if the convertible promissory notes should be accounted for as liability or equity under ASC 480, Liabilities — Distinguishing Liabilities from Equity. ASC 480 applies to certain contracts involving a company’s own equity, and requires that issuers classify the following freestanding financial instruments as liabilities: mandatorily redeemable financial instruments, obligations that require or may require repurchase of the issuer’s equity shares by transferring assets (e.g., written put options and forward purchase contracts), and certain obligations where at inception the monetary value of the obligation is based solely or predominantly on: ● A fixed monetary amount known at inception (for example, a payable settleable with a variable number of the issuer’s equity shares with an issuance date fair value equal to a fixed dollar amount); ● Variations in something other than the fair value of the issuer’s equity shares (for example, a financial instrument indexed to the S&P 500 and settleable with a variable number of the issuer’s equity shares); or ● Variations inversely related to changes in the fair value of the issuer’s equity shares (for example, a written put that could be net share settled). If the Company determines the instrument meets the guidance under ASC 480, the instrument is accounted for as a liability with a respective debt discount. The Company has previously recorded debt discounts in connection with raising funds through the issuance of promissory notes. These costs are amortized to noncash interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. See Note 6, Convertible Notes, for further discussion on the Company’s accounting treatment for the outstanding notes. Going Concern The Company’s financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited commercial experience and had a cumulative net loss from inception to June 30, 2018 of $22,567,510. The Company had working capital of $1,729,359 as of June 30, 2018. The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying financial statements for the period ended June 30, 2018 have been prepared assuming the Company will continue as a going concern. The Company’s cash resources will likely be insufficient to meet its anticipated needs during the next twelve months. The Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of or eliminate one or more of the Company’s research and development activities or commercialization efforts or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern for one year from the issuance of the accompanying financial statements. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that supersedes nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12,and ASU 2016-20, all of which clarify certain implementation guidance within ASU 2014-09. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. The standard can be adopted either retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company has reviewed ASU 2014-09 and using the full retrospective method has determined that its adoption has had no impact on its financial position, results of operations or cash flows. The Company has adopted the provisions of this statement in the first quarter of fiscal 2018. In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest period presented in the financial statements. The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting (“ASU 2017-09”). The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The adoption of ASU 2017-09, which will become effective for annual periods beginning after December 15, 2017 and for interim periods within those annual periods, has not and is not expected to have any impact on the Company’s financial statement presentation or disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or in management’s opinion will not have a material impact on the Company’s present or future financial statements. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2018 | |
Inventory, Net [Abstract] | |
Inventory | As of June 30, 2018 and December 31, 2017, inventory consisted of raw materials to be used in the assembly of a Nexus 128 system. As of June 30, 2018 and December 31, 2017 the Company had no orders pending for the sale of a Nexus 128 system. On June 15, 2018, the Company reported that would explore strategic alternatives with respect to its pre-clinical business, including the assembly and sale of its Nexus 128 system, including a potential sale. |
Fixed Assets
Fixed Assets | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Fixed Assets | As of June 30, 2018 and December 31, 2017, fixed assets consisted of the following: June 30, 2018 December 31, 2017 Computer equipment and fixtures $ 579,179 $ 579,179 Accumulated depreciation (367,834 ) (337,630 ) Fixed assets, net $ 211,345 $ 241,549 Depreciation expense for the six months ended June 30, 2018 and 2017 was $30,204 and $30,964, respectively. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 6 Months Ended |
Jun. 30, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accounts Payable and Accrued Liabilities | As of June 30, 2018 and December 31, 2017, current liabilities consisted of the following: June 30, 2018 December 31, 2017 Accounts payable $ 462,589 $ 780,262 Accrued payroll 34,839 40,578 Accrued bonuses 131,749 - Accrued employee benefits 52,229 27,375 Insurance premium financing 69,675 - Accrued interest on senior secured convertible promissory notes 295 - Total $ 751,376 $ 848,215 |
Convertible Notes
Convertible Notes | 6 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Notes | On June 28, 2018, the Company conducted a private placement offering in which the Company sold $1,077,000 aggregate principal amount of senior secured convertible promissory notes (the “Notes”) to accredited investors and National Securities Corporation, which served as placement agent in the offering. Certain of the Company’s officers and directors participated in the offering. The Notes are convertible into common stock at a conversion price equal to the lesser of (a) the lowest per share price at which commons stock is sold in a Qualified Financing (as defined below), as applicable, less a discount of 20%, or (b) $2.016, but in any event no less than a conversion price floor of $1.40. Each Note bears interest at a rate of 10% per annum until maturity on December 31, 2018 (the “Maturity Date”). Interest will be paid in arrears on the outstanding principal amount on the three month anniversary of the issuance of the Notes and each three month period thereafter and on the Maturity Date or on the date of conversion in full of each such Note. The principal amount of the Notes will automatically convert into shares of common stock (i) upon the consummation of a sale by the Company of common stock resulting in aggregate gross cash proceeds of at least $7.0 million (a “Qualified Financing”) or (ii) if the holders of a majority of the aggregate principal amount of outstanding Notes elect to convert the Notes at any time until three days prior to a Qualified Financing. Additionally, noteholders are entitled to convert the principal amount of Notes into common stock (i) at any time until three days prior to the consummation of a Qualified Financing or (ii) if a material Event of Default (as defined in the Notes) shall have occurred and be continuing. In each case, conversion is subject to the terms and provisions of the Notes. The Notes provide for customary events of default. In the case of an event of default with respect to the Notes, each Noteholder may declare its Note to be due and payable immediately without further action or notice. If such an event of default occurs and be continuing, interest on the Notes will automatically be increased to 15% until the default is cured. In addition, the Company issued warrants exercisable for 267,113 shares of the Company’s common stock to accredited investors and issued to National Securities Corporation, which served as placement agent in the offering, and its designees warrants exercisable for 53,423 shares of common stock. Each warrant will entitle the holder to purchase shares of Common Stock for an exercise price per share equal to $2.52, which was the closing bid price of shares of Common Stock on the NASDAQ Capital Market on June 27, 2018. The warrants are exercisable commencing six months after the date of issuance and expire June 28, 2021. The fair value of these warrants was determined to be $587,541 using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 99%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 3 years. The value of the warrants of $587,541 was considered as debt discount upon issuance and was being amortized as interest over the term of the notes or in full upon the conversion of the corresponding notes. During three and six months ended June 30, 2016, the Company amortized $5,822 of such discount to interest expense, and the unamortized discount as of June 30, 2018 was $581,719. |
Capital Stock
Capital Stock | 6 Months Ended |
Jun. 30, 2018 | |
Stockholders’ Equity | |
Capital Stock | At June 30, 2018, the authorized capital of the Company consisted of 60,000,000 shares of capital stock, consisting of 50,000,000 shares of common stock with a par value of $0.0001 per share, and 10,000,000 shares of preferred stock with a par value of $0.0001 per share. As of June 30, 2018, there were 3,923,027 shares of common stock issued and outstanding and no preferred stock outstanding. Common Stock Issued for Services During the year ended December 31, 2017, the Company issued 16,000 shares of common stock for services valued at $57,440, $47,865 of which was expensed during the six months ended June 30, 2018, based on the duration of the contract. The certificates for these shares were issued in January 2018. |
Stock Options and Warrants
Stock Options and Warrants | 6 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Stock Options and Warrants | Stock options are awarded to the Company’s employees, consultants and non-employee members of the board of directors under the 2016 Omnibus Incentive Plan and are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. The fair value of these stock options granted by the Company during the three and six months ended June 30, 2018 was determined to be $0 and $206,096, respectively, using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 120% to 127%%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 8 years. A summary of option activity under the Company’s stock options as of June 30, 2018, and changes during the six months then ended is presented below: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Balance outstanding at December 31, 2017 940,121 $ 5.65 6.46 Granted 49,790 4.44 8 Exercised - - - Forfeited - - - Cancelled or expired (2,000 ) 2.50 - Balance outstanding at June 30, 2018 987,911 $ 5.60 6.29 Exercisable at June 30, 2018 438,664 $ 6.37 5.14 On January 16, 2018, the Company granted warrants to purchase 20,000 shares of common stock with an exercise price of $5.50 per share for services. The warrants vest in six monthly installments beginning on February 16, 2018. The fair value of these warrants was determined to be $40,384 using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 126%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 3 years. During the three and six months ended June 30, 2018, $20,192 and $37,019, respectively, was expensed. On June 28, 2018, the Company conducted a private placement offering (see note 6) in which the Company issued warrants exercisable for 267,113 shares of the Company’s common stock to accredited investors and issued to National Securities Corporation, which served as placement agent in the offering, and its designees warrants exercisable for 53,423 shares of common stock. Each warrant will entitle the holder to purchase shares of Common Stock for an exercise price per share equal to $2.52, which was the closing bid price of shares of Common Stock on the NASDAQ Capital Market on June 27, 2018. The warrants are exercisable commencing six months after the date of issuance and expire June 28, 2021. The fair value of these warrants was determined to be $587,541 using the Black-Scholes-Merton option-pricing model based on the following assumptions: (i) volatility rate of 99%, (ii) discount rate of 0%, (iii) zero expected dividend yield, and (iv) expected life of 3 years. The following table summarizes all stock warrant activity of the Company for the six months ended June 30, 2018: Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Balance outstanding at December 31, 2017 2,268,141 $ 7.09 4.21 Granted 340,536 $ 2.70 2.97 Exercised - - - Forfeited - - - Expired - - - Balance outstanding at June 30, 2018 2,608,677 $ 6.51 3.61 Exercisable at June 30, 2018 2,284,808 $ 7.08 3.68 |
Commitments & Contingencies
Commitments & Contingencies | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments & Contingencies | Office Lease Effective January 1, 2015, the Company entered into an office lease agreement with Green Court, LLC, a Michigan limited liability company, for approximately 3,657 rentable square feet of space, for the initial monthly rent of $5,986, which commenced on January 1, 2015 for an initial term of 60 months and was amended on October 10, 2017 to increase the space to 3,950 square feet and the monthly rent to $7,798. Under the terms of the lease the Company has an option on the same space for an additional 60-month term. Future minimum payments under this lease are as follows: 2018 31,867 2019 79,269 Total $ 111,136 For the six months ended June 30, 2018 and 2017, the Company incurred rent expenses of $52,248 and $31,699, respectively. Employment and Consulting Agreements Francois Michelon If Mr. Michelon’s employment is terminated by the Company without cause, Mr. Michelon will be entitled to receive 12 months’ continuation of his current base salary and a lump sum payment equal to 12 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months of continued healthcare coverage if such termination occurs within one year following a change in control). Under his employment agreement, Mr. Michelon is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers. Michael Thornton If Mr. Thornton’s employment is terminated by the Company without cause, Mr. Thornton will be entitled to receive 12 months’ continuation of his current base salary and a lump sum payment equal to 12 months of continued healthcare coverage (or 24 months’ continuation of his current base salary and a lump sum payment equal to 24 months of continued healthcare coverage if such termination occurs within one year following a change in control). Under his employment agreement, Mr. Thornton is eligible to receive benefits that are substantially similar to those of the Company’s other senior executive officers. David R. Wells. Litigation From time to time the Company may become a party to litigation in the normal course of business. There are currently no legal matters that Management believes would have a material effect on the Company’s financial position or results of operations. |
Summary of Significant Accoun15
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates. Management makes estimates that affect certain accounts including deferred income tax assets, accrued expenses, fair value of equity instruments and reserves for any other commitments or contingencies. Any adjustments applied to estimates are recognized in the period in which such adjustments are determined. |
Principles of Consolidation | The Company’s unaudited consolidated financial statements include all accounts of the Company and its consolidated subsidiary and/or entities as of reporting period ending date(s) and for the reporting period(s) then ended. All inter-company balances and transactions have been eliminated. |
Basis of Presentation | The accompanying unaudited financial statements and related notes have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the year ended December 31, 2018. The balance sheet at December 31, 2017 has been derived from the audited financial statements at such date. For further information, refer to the financial statements and footnotes thereto included in ENDRA Life Sciences Inc. annual financial statements for the year ended December 31, 2017 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 20, 2018. |
Cash and Cash Equivalents | The Company considers all cash on hand and in banks, including accounts in book overdraft positions, certificates of deposit and other highly-liquid investments with maturities of one year or less, when purchased, to be cash. As of June 30, 2018 and December 31, 2017, the Company had no cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts and periodically evaluates the credit worthiness of the financial institutions and has determined the credit exposure to be negligible. |
Inventory | The Company’s inventory is stated at the lower of cost or estimated net realizable value, with cost primarily determined on a weighted-average cost basis on the first-in, first-out (“FIFO”) method. The Company periodically determines whether a reserve should be taken for devaluation or obsolescence of inventory. As of June 30, 2018 and December 31, 2017, no such reserve was taken. |
Capitalization of Fixed Assets | The Company capitalizes expenditures related to property and equipment, subject to a minimum rule, that have a useful life greater than one year for: (1) assets purchased; (2) existing assets that are replaced, improved or the useful lives have been extended; or (3) all land, regardless of cost. Acquisitions of new assets, additions, replacements and improvements (other than land) costing less than the minimum rule in addition to maintenance and repair costs, including any planned major maintenance activities, are expensed as incurred. |
Capitalization of Intangible Assets | The Company records the purchase of intangible assets not purchased in a business combination in accordance with the ASC Topic 350. |
Revenue Recognition | In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This standard provides a single set of guidelines for revenue recognition to be used across all industries and requires additional disclosures. The updated guidance introduces a five-step model to achieve its core principal of the entity recognizing revenue to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the updated guidance effective January 1, 2018 using the full retrospective method. The new standard did not have a material impact on its financial position and results of operations, as it did not change the manner or timing of recognizing revenue. Under ASC 606, in order to recognize revenue, the Company is required to identify an approved contract with commitments to preform respective obligations, identify rights of each party in the transaction regarding goods to be transferred, identify the payment terms for the goods transferred, verify that the contract has commercial substance and verify that collection of substantially all consideration is probable. The adoption of ASC 606 did not have an impact on the Company’s operations or cash flows. |
Research and Development Costs | The Company follows ASC 730-10, “Research and Development”. Research and development costs are charged to the statement of operations as incurred. During the six months ended June 30, 2018 and June 30, 2017, the Company incurred $2,508,579 and $270,539 of expenses related to research and development costs, respectively. |
Net Earnings (Loss) Per Common Share | The Company computes earnings per share under ASC Subtopic 260-10, Earnings Per Share (“ASC 260-10”). Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common stockholders (the numerator) by the weighted average number of shares of common stock outstanding (the denominator) during the reporting periods. Diluted loss per share is computed by increasing the denominator by the weighted average number of additional shares that could have been outstanding from securities convertible into common stock (using the “treasury stock” method), unless their effect on net loss per share is anti-dilutive. There were 3,267,052 and 3,208,262 potentially dilutive shares, which include outstanding common stock options, warrants, and convertible notes, as of June 30, 2018 and December 31, 2017, respectively. The potential shares, which are excluded from the determination of basic and diluted net loss per share as their effect is anti-dilutive, are as follows: June 30, 2018 December 31, 2017 Options to purchase common stock 978,911 940,121 Warrants to purchase common stock 2,288,141 2,268,141 Potential equivalent shares excluded 3,267,052 3,208,262 |
Fair Value Measurements | Disclosures about fair value of financial instruments require disclosure of the fair value information, whether or not recognized in its balance sheet, where it is practicable to estimate that value. As of June 30, 2018 and December 31, 2017, the amounts reported for cash, accrued liabilities and accrued interest approximated fair value because of their short maturities. In accordance with ASC Topic 820, “Fair Value Measurements and Disclosures,” the Company measures certain financial instruments at fair value on a recurring basis. ASC Topic 820 defines fair value, established a framework for measuring fair value in accordance with accounting principles generally accepted in the United States, and expands disclosures about fair value measurements. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC Topic 820 established a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ● Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; ● Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ● Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable. The carrying amounts of the Company’s financial assets and liabilities, including cash, prepaid expenses, accounts payable, accrued expenses, and other current liabilities, approximate their fair values because of the short maturity of these instruments. The fair value of notes payable and convertible notes approximates their fair values since the current interest rates and terms on these obligations are the same as prevailing market rates. |
Share-based Compensation | The Company’s 2016 Omnibus Incentive Plan (the “Omnibus Plan”) permits the grant of stock options and other share-based awards to its employees, consultants and non-employee members of the board of directors covering up to 1,345,074 shares of common stock, of which approximately 350,000 remain available to be granted. Each January 1 the pool of shares available for issuance under the Omnibus Plan will automatically increase by an amount equal to the lesser of (i) the number of shares necessary such that the aggregate number of shares available under the Omnibus Plan equals 25% of the number of fully-diluted outstanding shares on the increase date (assuming the conversion of all outstanding shares of preferred stock and other outstanding convertible securities and exercise of all outstanding options and warrants to purchase shares) and (ii) if the board of directors takes action to set a lower amount, the amount determined by the board. The Company records share-based compensation in accordance with the provisions of the Share-based Compensation Topic of the FASB Codification. The guidance requires the use of option-pricing models that require the input of highly subjective assumptions, including the option’s expected life and the price volatility of the underlying stock. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option valuation model, and the resulting charge is expensed using the straight-line attribution method over the vesting period. The Company has elected to use the calculated value method to account for the options it issued in 2017 (prior to commencement on June 28, 2017 of public trading in the Company’s common stock). Under the Share-based Compensation Topic of the FASB Codification, a nonpublic entity that is unable to estimate the expected volatility of the price of its underlying shares may measure awards based on a “calculated value,” which substitutes the volatility of appropriate public companies (representative of the company’s size and industry) as a benchmark for the volatility of the entity’s own share price. The Company has used the historical closing values of these companies to estimate volatility, which was calculated to be 90%, for periods prior to June 28, 2017, when there was no active market for the Company’s common stock. Stock compensation expense recognized during the period is based on the value of share-based awards that were expected to vest during the period adjusted for estimated forfeitures. The estimated fair value of grants of stock options and warrants to non-employees of the Company is charged to expense, if applicable, in the financial statements. These options vest in the same manner as the employee options granted under the stock incentive plan as described above. |
Beneficial Conversion Feature | If the conversion feature of conventional convertible debt provides for a rate of conversion that is below market value, this feature is characterized as a beneficial conversion feature (“BCF”). A BCF is recorded by the Company as a debt discount pursuant to ASC Topic 470-20 “Debt with Conversion and Other Options.” In those circumstances, the convertible debt is recorded net of the discount related to the BCF and the Company amortizes the discount to interest expense over the life of the debt using the effective interest method. |
Debt Discount | The Company determines if the convertible promissory notes should be accounted for as liability or equity under ASC 480, Liabilities — Distinguishing Liabilities from Equity. ASC 480 applies to certain contracts involving a company’s own equity, and requires that issuers classify the following freestanding financial instruments as liabilities: mandatorily redeemable financial instruments, obligations that require or may require repurchase of the issuer’s equity shares by transferring assets (e.g., written put options and forward purchase contracts), and certain obligations where at inception the monetary value of the obligation is based solely or predominantly on: ● A fixed monetary amount known at inception (for example, a payable settleable with a variable number of the issuer’s equity shares with an issuance date fair value equal to a fixed dollar amount); ● Variations in something other than the fair value of the issuer’s equity shares (for example, a financial instrument indexed to the S&P 500 and settleable with a variable number of the issuer’s equity shares); or ● Variations inversely related to changes in the fair value of the issuer’s equity shares (for example, a written put that could be net share settled). If the Company determines the instrument meets the guidance under ASC 480, the instrument is accounted for as a liability with a respective debt discount. The Company has previously recorded debt discounts in connection with raising funds through the issuance of promissory notes. These costs are amortized to noncash interest expense over the life of the debt. If a conversion of the underlying debt occurs, a proportionate share of the unamortized amounts is immediately expensed. See Note 6, Convertible Notes, for further discussion on the Company’s accounting treatment for the outstanding notes. |
Going Concern | The Company’s financial statements are prepared using accounting principles generally accepted in the United States (“U.S. GAAP”) applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has limited commercial experience and had a cumulative net loss from inception to June 30, 2018 of $22,567,510. The Company had working capital of $1,729,359 as of June 30, 2018. The Company has not established an ongoing source of revenue sufficient to cover its operating costs and to allow it to continue as a going concern. The accompanying financial statements for the period ended June 30, 2018 have been prepared assuming the Company will continue as a going concern. The Company’s cash resources will likely be insufficient to meet its anticipated needs during the next twelve months. The Company will require additional financing to fund its future planned operations, including research and development and commercialization of its products. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it establishes a revenue stream and becomes profitable. Management’s plans to continue as a going concern include raising additional capital through sales of equity securities and borrowing. However, management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. If the Company is not able to obtain the necessary additional financing on a timely basis, the Company will be required to delay, reduce the scope of or eliminate one or more of the Company’s research and development activities or commercialization efforts or perhaps even cease the operation of its business. The ability of the Company to continue as a going concern is dependent upon its ability to successfully secure other sources of financing and attain profitable operations. There is substantial doubt about the ability of the Company to continue as a going concern for one year from the issuance of the accompanying financial statements. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. |
Recent Accounting Pronouncements | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 is a comprehensive revenue recognition standard that supersedes nearly all existing revenue recognition guidance under current U.S. GAAP and replace it with a principle based approach for determining revenue recognition. Under ASU 2014-09, revenue is recognized when a customer obtains control of promised goods or services and is recognized in an amount that reflects the consideration which the entity expects to receive in exchange for those goods or services. In addition, the standard requires disclosure of the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The FASB has recently issued ASU 2016-08, ASU 2016-10, ASU 2016-11, ASU 2016-12,and ASU 2016-20, all of which clarify certain implementation guidance within ASU 2014-09. ASU 2014-09 is effective for interim and annual periods beginning after December 15, 2017. The standard can be adopted either retrospectively to each prior reporting period presented (full retrospective method), or retrospectively with the cumulative effect of initially applying the guidance recognized at the date of initial application (the cumulative catch-up transition method). The Company has reviewed ASU 2014-09 and using the full retrospective method has determined that its adoption has had no impact on its financial position, results of operations or cash flows. The Company has adopted the provisions of this statement in the first quarter of fiscal 2018. In February 2016, the FASB issued ASU No. 2016-02, Leases. ASU 2016-02 requires a lessee to record a right of use asset and a corresponding lease liability on the balance sheet for all leases with terms longer than 12 months. ASU 2016-02 is effective for all interim and annual reporting periods beginning after December 15, 2018. Early adoption is permitted. A modified retrospective transition approach is required for lessees for capital and operating leases existing at, or entered into after, the beginning of the earliest period presented in the financial statements. The Company is currently evaluating the expected impact that the standard could have on its financial statements and related disclosures. In May 2017, the FASB issued ASU No. 2017-09, Compensation – Stock Compensation (Topic 718) Scope of Modification Accounting (“ASU 2017-09”). The amendments in ASU 2017-09 provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The adoption of ASU 2017-09, which will become effective for annual periods beginning after December 15, 2017 and for interim periods within those annual periods, has not and is not expected to have any impact on the Company’s financial statement presentation or disclosures. Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC did not or in management’s opinion will not have a material impact on the Company’s present or future financial statements. |
Summary of Significant Accoun16
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Anti-dilutive shares | June 30, 2018 December 31, 2017 Options to purchase common stock 978,911 940,121 Warrants to purchase common stock 2,288,141 2,268,141 Potential equivalent shares excluded 3,267,052 3,208,262 |
Fixed Assets (Tables)
Fixed Assets (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Fixed assets | June 30, 2018 December 31, 2017 Computer equipment and fixtures $ 579,179 $ 579,179 Accumulated depreciation (367,834 ) (337,630 ) Fixed assets, net $ 211,345 $ 241,549 |
Accounts Payable and Accrued 18
Accounts Payable and Accrued Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Current liabilities | June 30, 2018 December 31, 2017 Accounts payable $ 462,589 $ 780,262 Accrued payroll 34,839 40,578 Accrued bonuses 131,749 - Accrued employee benefits 52,229 27,375 Insurance premium financing 69,675 - Accrued interest on senior secured convertible promissory notes 295 - Total $ 751,376 $ 848,215 |
Stock Options and Warrants (Tab
Stock Options and Warrants (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Stock option activity | Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Balance outstanding at December 31, 2017 940,121 $ 5.65 6.46 Granted 49,790 4.44 8 Exercised - - - Forfeited - - - Cancelled or expired (2,000 ) 2.50 - Balance outstanding at June 30, 2018 987,911 $ 5.60 6.29 Exercisable at June 30, 2018 438,664 $ 6.37 5.14 |
Warrant activity | Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (Years) Balance outstanding at December 31, 2017 2,268,141 $ 7.09 4.21 Granted 340,536 $ 2.70 2.97 Exercised - - - Forfeited - - - Expired - - - Balance outstanding at June 30, 2018 2,608,677 $ 6.51 3.61 Exercisable at June 30, 2018 2,284,808 $ 7.08 3.68 |
Commitments & Contingencies (Ta
Commitments & Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum lease payments | 2018 31,867 2019 79,269 Total $ 111,136 |
Nature of the Business (Details
Nature of the Business (Details Narrative) | 6 Months Ended |
Jun. 30, 2018 | |
Nature Of Business | |
Date of incorporation | Jul. 18, 2007 |
State of incorporation | Delaware |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Details) - shares | 6 Months Ended | 12 Months Ended |
Jun. 30, 2018 | Dec. 31, 2017 | |
Anti-dilutive shares exluded from the calculation of earnings per share | 3,267,052 | 3,208,262 |
Options to purchase common stock | ||
Anti-dilutive shares exluded from the calculation of earnings per share | 978,911 | 940,121 |
Warrants to purchase common stock | ||
Anti-dilutive shares exluded from the calculation of earnings per share | 2,288,141 | 2,268,141 |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||||
Research and development | $ 839,756 | $ 174,725 | $ 2,508,579 | $ 270,539 | |
Anti-dilutive shares exluded from the calculation of earnings per share | 3,267,052 | 3,208,262 | |||
Cumulative net loss | (22,567,510) | $ (22,567,510) | $ (17,895,435) | ||
Working capital deficit | $ (1,729,359) | $ (1,729,359) |
Fixed Assets (Details)
Fixed Assets (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Computer equipment and fixtures | $ 579,179 | $ 579,179 |
Accumulated depreciation | (367,834) | (337,630) |
Fixed assets, net | $ 211,345 | $ 241,549 |
Fixed Assets (Details Narrative
Fixed Assets (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 30,204 | $ 30,964 |
Accounts Payable and Accrued 26
Accounts Payable and Accrued Liabilities (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accounts payable | $ 462,589 | $ 780,262 |
Accrued payroll | 34,839 | 40,578 |
Accrued bonuses | 131,749 | 0 |
Accrued employee benefits | 52,229 | 27,375 |
Insurance premium financing | 69,675 | 0 |
Accrued interest on senior secured convertible promissory notes | 295 | 0 |
Total Current Liabilities | $ 751,376 | $ 848,215 |
Capital Stock (Details Narrativ
Capital Stock (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Jun. 30, 2018 | |
Stockholders’ Equity | ||
Common stock shares, par value | $ 0.0001 | $ 0.0001 |
Common stock shares, authorized | 50,000,000 | 50,000,000 |
Common stock shares, issued | 3,923,027 | 3,923,027 |
Common stock shares, outstanding | 3,923,027 | 3,923,027 |
Preferred stock shares, par value | $ 0.0001 | $ 0.0001 |
Preferred stock shares, authorized | 10,000,000 | 10,000,000 |
Preferred stock shares, issued | 0 | 0 |
Preferred stock shares, outstanding | 0 | 0 |
Common stock issued for services, shares | 16,000 | |
Common itock issued for services, amount | $ 57,440 |
Stock Options and Warrants (Det
Stock Options and Warrants (Details) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Number of options outstanding, beginning | shares | 940,121 |
Number of options granted | shares | 49,790 |
Number of options exercised | shares | 0 |
Number of options forfeited | shares | 0 |
Number of options cancelled or expired | shares | (2,000) |
Number of options outstanding, ending | shares | 987,911 |
Number of options outstanding, exercisable | shares | 438,664 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 5.65 |
Weighted average exercise price granted | $ / shares | 4.44 |
Weighted average exercise price exercised | $ / shares | .00 |
Weighted average exercise price forfeited | $ / shares | .00 |
Weighted average exercise price cancelled or expired | $ / shares | 2.50 |
Weighted average exercise price outstanding, ending | $ / shares | 5.60 |
Weighted average exercise price outstanding, exercisable | $ / shares | $ 6.37 |
Weighted average remaining contractual term outstanding, beginning | 6 years 5 months 16 days |
Weighted average remaining contractual term outstanding, granted | 8 years |
Weighted average remaining contractual term outstanding, ending | 6 years 3 months 14 days |
Weighted average remaining contractual term outstanding, exercisable | 5 years 1 month 20 days |
Stock Options and Warrants (D29
Stock Options and Warrants (Details 1) | 6 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | |
Number warrants balance outstanding, beginning | shares | 2,268,141 |
Number warrants granted | shares | 340,536 |
Number warrants exercised | shares | 0 |
Number warrants forfeited | shares | 0 |
Number warrants expired | shares | 0 |
Number warrants balance outstanding, ending | shares | 2,608,677 |
Number warrants outstanding, exercisable | shares | 2,284,808 |
Weighted average exercise price outstanding, beginning | $ / shares | $ 7.09 |
Weighted average exercise price granted | $ / shares | 2.70 |
Weighted average exercise price exercised | $ / shares | .00 |
Weighted average exercise price forfeited | $ / shares | .00 |
Weighted average exercise price expired | $ / shares | .00 |
Weighted average exercise price outstanding, ending | $ / shares | 6.51 |
Weighted average exercise price outstanding, exercisable | $ / shares | $ 7.08 |
Weighted average remaining contractual term outstanding, beginning | 4 years 2 months 16 days |
Weighted average remaining contractual term granted | 2 years 11 months 19 days |
Weighted average remaining contractual term outstanding, ending | 3 years 7 months 10 days |
Weighted average remaining contractual term outstanding, exercisable | 3 years 8 months 5 days |
Commitments & Contingencies (De
Commitments & Contingencies (Details) | Jun. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 31,867 |
2,019 | 79,267 |
Total | $ 111,136 |
Commitments & Contingencies (31
Commitments & Contingencies (Details Narrative) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Rent expense | $ 52,248 | $ 31,699 |