NOTES TO THE FINANCIAL STATEMENTS
(unaudited)
(dollars in thousands, except per share data)
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1.
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Description of Business and Basis of Preparation
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Organization
SCYNEXIS, Inc. (“SCYNEXIS” or the “Company”) is a Delaware corporation formed on
November 4, 1999
. SCYNEXIS is a pharmaceutical company, headquartered in Jersey City, New Jersey, committed to the development and commercialization of novel anti-infectives to address significant unmet therapeutic needs. The Company is developing the Company's lead product candidate, SCY-078, as a novel oral and intravenous drug for the treatment of serious and life-threatening invasive fungal infections in humans.
The Company has incurred losses and negative cash flows from operations since its initial public offering ("IPO") in May 2014 and expects to continue to incur losses. The Company's liquidity over the next 12 months could be materially affected by, among other things: its ability to raise capital through equity offerings, debt financings, other non-dilutive third-party funding (e.g., grants), strategic alliances and licensing or collaboration arrangements; key SCY-078 development and regulatory events; costs related to its development of SCY-078; and other factors.
Shelf Registration Filing
On October 30, 2015, the Company filed a shelf registration statement on Form S-3 with the SEC which was declared effective on November 16, 2015. The registration statement contained two prospectuses:
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•
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a base prospectus which covers the offering, issuance and sale by the Company of up to a maximum aggregate offering price of
$150,000
of the Company's common stock, preferred stock, debt securities and warrants, including common stock or preferred stock issuable upon conversion of debt securities, common stock issuable upon conversion of preferred stock, or common stock, preferred stock or debt securities issuable upon the exercise of warrants (the "Shelf Registration"), and
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•
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a prospectus covering the offering, issuance and sale by the Company of up to a maximum aggregate offering price of
$40,000
of the Company's common stock that may be issued and sold under a sales agreement with Cowen and Company, LLC ("Cowen"). On April 10, 2016, the Company terminated the sales agreement with Cowen and on April 11, 2016, entered
into a Controlled Equity Offering Sales Agreement
SM
(the “Sales Agreement”) with Cantor Fitzgerald & Co. (“Cantor”). Pursuant to the Sales Agreement, the Company may sell from time to time, at its option, up to an aggregate of
$40,000
of the Company’s common stock, through Cantor, as sales agent (the “ATM Offering”). Pursuant to the Sales Agreement, sales of the common stock, if any, will be made under the Company’s previously filed and currently effective registration statement on Form S-3
(File No. 333-207705)
.
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The common stock that may be offered, issued and sold by the Company under the Sales Agreement is included in the
$150,000
of securities that may be offered, issued and sold by the Company under the base prospectus. Upon termination of the Sales Agreement with Cantor, any portion of the
$40,000
included in the Sales Agreement that is not sold pursuant to the Sales Agreement will be available for sale in other offerings pursuant to the base prospectus and a corresponding prospectus supplement, and if no shares are sold under the Sales Agreement, the full
$150,000
of securities may be sold in other offerings pursuant to the base prospectus.
June 2016 Public Offering
On June 21, 2016, the Company completed a public offering (the "June 2016 Public Offering") of its common stock and warrants pursuant to the Company's effective Shelf Registration. The Company sold an aggregate of
9,375,000
shares of common stock and warrants to purchase up to
4,218,750
shares of the Company's common stock at a public offering price of
$2.40
per share. The warrant exercise price is
$3.00
per share. Net proceeds from the June 2016 Public Offering were approximately
$20,754
, after deducting underwriting discounts and commissions and offering expenses of approximately
$1,746
. See Note 8 for further details.
Loan Agreement
On September 30, 2016, the Company entered into a Loan and Security Agreement (the “Loan Agreement”) with Solar Capital Ltd. (“Solar”), in its capacity as administrative and collateral agent and as lender. Pursuant to the Loan Agreement, Solar is providing the Company with a
48
-month secured term loan in the amount of
$15,000
(the “Term Loan”) and all principal and accrued interest on the Term Loan is due on September 30, 2020 (the “Maturity Date”). See Note 6 for further details.
Unaudited Interim Financial Information
The accompanying unaudited financial statements and notes have been prepared in accordance with accounting principles generally accepted in the United States, or US GAAP, as contained in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (the “Codification” or “ASC”) for interim financial information. In the opinion of management, the interim financial information includes all adjustments of a normal recurring nature necessary for a fair presentation of the results of operations, financial position, and cash flows. The results of operations for the three and nine months ended
September 30, 2016
, are not necessarily indicative of the results for the full year or the results for any future periods. These interim financial statements should be read in conjunction with the financial statements and notes set forth in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC") on March 7, 2016.
Discontinued Operations
As described in Note 13, the Company met the relevant criteria for reporting the Company's contract research and development services business (the "Services Business") in discontinued operations in the second quarter of 2015. The accompanying unaudited interim financial statements present the Services Business as discontinued operations for the three and nine months ended September 30, 2016, and 2015, pursuant to FASB Topic 205-20,
Presentation of Financial Statements--Discontinued Operations
.
Use of Estimates
The preparation of financial statements in conformity with US GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Significant estimates include: the estimate of services and effort expended by third-party research and development service providers used to recognize research and development expense, estimates utilized in recognizing stock-based compensation for options granted to employees and nonemployees, and the estimates and assumptions utilized in measuring the warrant liability fair value each reporting period.
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2.
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Summary of Significant Accounting Policies
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Cash and Cash Equivalents
The Company considers any highly liquid investments with a remaining maturity of three months or less when purchased to be cash and cash equivalents.
Investments
The Company's investments comprise held-to-maturity debt securities and are carried at amortized cost. An impairment charge is recorded and a new cost basis in the investment is established when a decline in fair value, if any, is deemed to be other-than-temporary.
Concentration of Credit Risk
Financial instruments, which potentially expose the Company to concentrations of credit risk, consist principally of cash on deposit with a bank, which exceeds the FDIC insurance limits, as well as accounts receivable. Ongoing credit evaluations of the bank and customers' financial condition and independent ratings are reviewed by the Company.
Other Assets
Other assets consist primarily of the refundable long-term deposit on the leased building facility and the restricted cash posted as collateral for the Company's corporate credit card program.
Deferred Offering Costs
Deferred offering costs are expenses directly related to the Form S-3 filed with the SEC on October 30, 2015 and declared effective on November 16, 2015. These costs consist of legal, accounting, printing, and filing fees that the Company has capitalized, including fees incurred by the independent registered public accounting firm directly related to the Shelf Registration. Deferred costs associated with the Shelf Registration are reclassified to additional paid in capital on a pro-rata
basis when the Company completes offerings under the Shelf Registration, with any remaining deferred offering costs to be charged to the results of operations at the end of the three-year life of the Shelf Registration. During the three months ended March 31, 2016, the Company expensed
$111
of deferred offering costs associated with the Shelf Registration as a result of the termination of the "at the market" ("ATM") offering program entered into with Cowen on November 11, 2015.
Warrant Liability
On June 21, 2016, the Company sold an aggregate of
9,375,000
shares of common stock and warrants to purchase up to
4,218,750
shares of the Company's common stock at a public offering price of
$2.40
per share of common stock sold. The Company accounted for these warrants as a liability instrument measured at its fair value. The fair values of these warrants have been determined using the Black-Scholes valuation model ("Black-Scholes"). The warrants are subject to remeasurement at each balance sheet date, using Black-Scholes, with any changes in the fair value of the outstanding warrants recognized in the the accompanying statements of operation. See Note 8 for further details.
Comprehensive Loss
The Company has no items of comprehensive income or loss other than net loss.
Revenue Recognition and Deferred Revenue
The Company has entered into collaboration arrangements in exchange for non-refundable upfront payments and consideration as services are performed. These arrangements include multiple elements, such as the sale of licenses and the provision of services. Under these arrangements, the Company also is entitled to receive development milestone payments and royalties in the form of a designated percentage of product sales. The Company classifies non-refundable upfront payments, milestone payments and royalties received under collaboration and licensing agreements as revenues within its statements of operations because the Company views such activities as being central to its business operations.
Revenue is recognized when all of the following conditions are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) fees are fixed or determinable, and (iv) collection of fees is reasonably assured.
When entering into an arrangement, the Company first determines whether the arrangement includes multiple deliverables and is subject to accounting guidance in ASC subtopic 605-25,
Multiple-Element Arrangements
. If the Company determines that an arrangement includes multiple elements, it determines whether the arrangement should be divided into separate units of accounting and how the arrangement consideration should be measured and allocated among the separate units of accounting. An element qualifies as a separate unit of accounting when the delivered element has standalone value to the customer. The Company’s arrangements do not include a general right of return relative to delivered elements. Any delivered elements that do not qualify as separate units of accounting are combined with other undelivered elements within the arrangement as a single unit of accounting. If the arrangement constitutes a single combined unit of accounting, the Company determines the revenue recognition method for the combined unit of accounting and recognizes the revenue over the period from inception through the date the last deliverable within the single unit of accounting is delivered.
Non-refundable upfront license fees are recorded as deferred revenue and recognized into revenue on a straight-line basis over the estimated period of the Company’s substantive performance obligations. If the Company does not have substantive performance obligations, the Company recognizes non-refundable upfront fees into revenue through the date the deliverable is satisfied. Analyzing the arrangement to identify deliverables requires the use of judgment and each deliverable may be an obligation to deliver services, a right or license to use an asset, or another performance obligation. In arrangements that include license rights and other non-contingent deliverables, such as participation in a steering committee, these deliverables do not have standalone value because the non-contingent deliverables are dependent on the license rights. That is, the non-contingent deliverables would not have value without the license rights, and only the Company can perform the related services. Upfront license rights and non-contingent deliverables, such as participation in a steering committee, do not have standalone value as they are not sold separately and they cannot be resold. In addition, when non-contingent deliverables are sold with upfront license rights, the license rights do not represent the culmination of a separate earnings process. As such, the Company accounts for the license and the non-contingent deliverables as a single combined unit of accounting. In such instances, the license revenue in the form of non-refundable upfront payments is deferred and recognized over the applicable relationship period, which historically has been the estimated period of the Company’s substantive performance obligations or the period the rights granted are in effect. The Company recognizes contingent event-based payments under license agreements when the payments are received. The Company has not received any royalty payments to date.
The Company will recognize a milestone payment when earned if it is substantive and the Company has
no
ongoing performance obligations related to the milestone. A milestone payment is considered substantive if it: 1) is commensurate with either the Company’s performance to achieve the milestone or the enhanced value of the delivered item as a result of a specific
outcome from the Company’s performance to achieve the milestone; 2) relates solely to past performance; and 3) is reasonable relative to all of the deliverables and payment terms, including other potential milestone consideration, within the arrangement.
Amounts received prior to satisfying all revenue recognition criteria are recorded as deferred revenue in the accompanying balance sheets.
The Company’s deferred revenue includes non-refundable upfront payments received under certain licensing and collaboration arrangements that contain substantive performance obligations that the Company is providing over respective defined service or estimated relationship periods. Such non-refundable upfront payments are recognized over these defined service or estimated relationship periods. The Company received a non-refundable upfront payment of
$1,500
from R-Pharm in August 2013 which is being recognized over a period of
70
months. The Company recognized revenue in continuing operations from this upfront payment of
$64
and
$193
for the three and nine months ended
September 30, 2016
, respectively.
Collaboration Arrangements
The Company assesses its contractual arrangements, and presents costs incurred and payments received under contractual arrangements, in accordance with ASC 808,
Collaborative Arrangements
("Topic 808"), when the Company determines that the contractual arrangement includes a joint operating activity, has active participation by both parties, and both parties are subject to significant risks and rewards under the arrangement. When reimbursement payments are due to the Company under a collaborative arrangement within the scope of Topic 808, the Company determines the appropriate classification for each specific reimbursement payment in the statements of operations by considering (i) the nature of the arrangement, (ii) the nature of the Company’s business operations, and (iii) the contractual terms of the arrangement.
The Company's August 2013 development, license, and supply agreement with R-Pharm, CJSC (“R-Pharm”), combined with the supplemental arrangement in November 2014, is a collaborative arrangement pursuant to Topic 808 and the Company’s previously described accounting policy. The reimbursements due from R-Pharm for specified research and development costs incurred by the Company are classified as a reduction to research and development expense in the accompanying statements of operations. The reimbursements due to the Company are recorded as a reduction of expense when (i) the reimbursable expenses have been incurred by the Company, (ii) persuasive evidence of a cost reimbursement arrangement exists, (iii) reimbursable costs are fixed or determinable, and (iv) the collection of the reimbursement payment is reasonably assured. The Company recorded receivables for unpaid reimbursement amounts due from R-Pharm of $
1,017
and
$430
as of
September 30, 2016
and December 31, 2015, respectively, which are presented in prepaid expenses and other current assets in the accompanying balance sheets.
Research and Development
Major components of research and development costs include clinical trial activities and services, including related drug formulation, manufacturing, and other development, preclinical studies, cash compensation, stock-based compensation, fees paid to consultants and other entities that conduct certain research and development activities on the Company’s behalf, materials and supplies, legal services, and regulatory compliance.
The Company is required to estimate its expenses resulting from its obligations under contracts with clinical research organizations, clinical site agreements, vendors, and consultants in connection with conducting SCY-078 clinical trials and preclinical development. The financial terms of these contracts are subject to negotiations which vary from contract to contract, and may result in payment flows that do not match the periods over which materials or services are provided to the Company under such contracts. The Company’s objective is to reflect the appropriate development and trial expenses in its financial statements by matching those expenses with the period in which the services and efforts are expended. For clinical trials, the Company accounts for these expenses according to the progress of the trial as measured by actual hours expended by CRO personnel, investigator performance or completion of specific tasks, patient progression, or timing of various aspects of the trial. For preclinical development services performed by outside service providers, the Company determines accrual estimates through financial models, taking into account development progress data received from outside service providers and discussions with applicable Company and service provider personnel.
Reimbursements of certain research and development costs by parties under collaborative arrangements have been recorded as a reduction of research and development expense presented within the statement of operations. Such reimbursements were recognized under the collaboration arrangement with R-Pharm during the three and nine months ended
September 30, 2016
. Information about the Company’s research and development expenses and reimbursements due under collaboration arrangements for the three and nine months ended
September 30, 2016
and 2015, is presented as follows:
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Three Months Ended September 30,
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Nine Months Ended September 30,
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2016
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2015
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2016
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2015
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Research and development expense, gross
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$
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5,091
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$
|
3,553
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$
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16,881
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$
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11,352
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Less: Reimbursement of research and development expense
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201
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|
|
95
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|
|
588
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|
|
827
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Research and development expense, net of reimbursements
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$
|
4,890
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|
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$
|
3,458
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|
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$
|
16,293
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|
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$
|
10,525
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Patent Expenses
Costs related to filing and pursuing patent applications, as well as costs related to maintaining the Company's existing patent portfolio, are recorded as expense as incurred since recoverability of such expenditures is uncertain.
Fair Value of Financial Instruments
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, based on the Company’s principal or, in absence of a principal, most advantageous market for the specific asset or liability. The Company uses a three-tier fair value hierarchy to classify and disclose all assets and liabilities measured at fair value on a recurring basis, as well as assets and liabilities measured at fair value on a non-recurring basis, in periods subsequent to their initial measurement. The hierarchy requires the Company to use observable inputs when available, and to minimize the use of unobservable inputs when determining fair value. The three tiers are defined as follows:
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•
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Level 1 — Observable inputs that reflect quoted market prices (unadjusted) for identical assets or liabilities in active markets;
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•
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Level 2 — Observable inputs other than quoted prices in active markets that are observable either directly or indirectly in the marketplace for identical or similar assets and liabilities; and
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•
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Level 3 — Unobservable inputs that are supported by little or no market data, which require the Company to develop its own assumptions about the assumptions market participants would use in pricing the asset or liability based on the best information available in the circumstances.
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Income Taxes
The Company provides for deferred income taxes under the asset and liability method, whereby deferred income taxes result from temporary differences between the tax bases of assets and liabilities and their reported amounts in the financial statements. Valuation allowances are established when necessary to reduce deferred tax assets to the amount that the Company believes is more likely than not to be realized.
The Company recognizes uncertain tax positions when the positions will be more likely than not sustained based solely upon the technical merits of the positions.
Certain modifications made to an outstanding incentive stock option award at any time after the initial grant dates which are considered to be “material modifications", as defined within the Internal Revenue Code, may result in the affected award being recharacterized as a non-statutory stock option. The effects of any recharacterization modification for purposes of income tax accounting are recognized on a prospective basis.
Stock-Based Compensation
The Company measures and recognizes compensation expense for all stock-based payment awards made to employees, officers, and directors based on the estimated fair values of the awards as of grant date. The Company values equity instruments and stock options granted to employees and non-employee directors using the Black-Scholes valuation model. The value of the award is recorded as expense over the requisite service periods and the Company recognizes forfeitures as they occur in the period.
Basic and Diluted Net Loss per Share of Common Stock
The Company calculates net loss per common share in accordance with ASC 260,
Earnings Per Share
("Topic 260”). Basic and diluted net loss per common share was determined by dividing net loss applicable to common stockholders by the weighted average number of common shares outstanding during the period.
The following potentially dilutive shares of common stock have not been included in the computation of diluted net loss per share for all periods as the result would be anti-dilutive.
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September 30,
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2016
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2015
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Warrants to purchase Series C-1 Preferred
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14,033
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14,033
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Warrants to purchase common stock associated with June 2016 Public Offering
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4,218,750
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—
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Warrants to purchase common stock associated with Loan Agreement
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122,435
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—
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Stock options
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1,815,583
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1,207,697
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Effect of Recent Accounting Pronouncements
In May 2014, the FASB issued ASU No. 2014-09,
Revenue from Contracts with Customers: Topic 606,
or ASU 2014-09. ASU 2014-09 establishes the principles for recognizing revenue and develops a common revenue standard for U.S. GAAP. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In applying the new revenue recognition model to contracts with customers, an entity: (1) identifies the contract(s) with a customer; (2) identifies the performance obligations in the contract(s); (3) determines the transaction price; (4) allocates the transaction price to the performance obligations in the contract(s); and (5) recognizes revenue when (or as) the entity satisfies a performance obligation. The accounting standards update applies to all contracts with customers except those that are within the scope of other topics in the FASB Accounting Standards Codification. The accounting standards update also requires significantly expanded quantitative and qualitative disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. This guidance is effective for fiscal years and interim periods within those years beginning after December 15, 2017. The Company is currently evaluating the impact that the implementation of ASU 2014-09 will have on the Company’s financial statements.
In August 2014, the FASB issued ASU No. 2014-15,
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern
, or ASU 2014-15. ASU 2014-15 will explicitly require management to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosure in certain circumstances. The new standard will be effective for all entities in the first annual period ending after December 15, 2016. Earlier adoption is permitted. The Company is not early adopting ASU 2014-15. The Company is currently evaluating the impact that the implementation of ASU 2014-15 will have on the Company’s financial statements, and the actual impact will be dependent upon the Company’s liquidity and the nature or significance of future events or conditions that exist upon adopting the updated standard.
In February 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-02,
Leases
, or ASU 2016-02. The new guidance requires lessees to recognize the assets and liabilities arising from leases on the balance sheet. For public companies, ASU 2016-02 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact that the implementation of ASU 2016-02 will have on the Company’s financial statements.
In March 2016, the FASB issued ASU No. 2016-09,
Compensation-Stock Compensation
, or ASU 2016-09. The new guidance is an update to ASC 718 and simplifies several aspects of the accounting for share-based transactions. For public companies, ASU 2016-09 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. Early adoption is permitted for an entity in any interim or annual period and the Company is evaluating the impact of the implementation that ASU 2016-09 will have on the Company's financial statements.
In April 2016, the FASB issued ASU No. 2016-10,
Revenue from Contracts with Customers
, or ASU 2016-10. The new guidance is an update to ASC 606 and provides clarity on: identifying performance obligations and licensing implementation. For public companies, ASU 2016-10 is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. The Company is currently evaluating the impact that the implementation of ASU 2016-10 will have on the Company’s financial statements.
3. Investments
The following table summarizes the held-to-maturity securities held at September 30, 2016:
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Amortized Cost
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Unrealized Gains
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Unrealized Losses
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Fair Value
|
As of September 30, 2016
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|
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U.S. government securities
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$
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28,574
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|
$
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7
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$
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48
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|
|
$
|
28,533
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|
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Total
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$
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28,574
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$
|
7
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$
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48
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|
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$
|
28,533
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|
As of September 30, 2016, the Company has
$6,030
of held-to-maturity investments with contractual maturities greater than one year and
$22,544
of held-to-maturity investments with contractual maturities less than one year.
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4.
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Prepaid Expenses and Other Current Assets
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September 30, 2016
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December 31, 2015
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Prepaid SCY-078 development services
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$
|
262
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|
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$
|
108
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Prepaid insurance
|
400
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|
|
285
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|
Other prepaid expenses
|
89
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|
|
91
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|
Other receivable due from R-Pharm
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1,017
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430
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Escrow receivable due from Accuratus (Note 13)
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—
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500
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Other current assets
|
70
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|
|
38
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Total prepaid expenses and other current assets
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$
|
1,838
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|
|
$
|
1,452
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|
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|
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|
September 30, 2016
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|
December 31, 2015
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Accrued research and development expenses
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$
|
516
|
|
|
$
|
1,903
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|
Accrued employee bonus compensation
|
569
|
|
|
776
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|
Employee withholdings
|
7
|
|
|
42
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|
Other accrued expenses
|
214
|
|
|
428
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|
Total accrued expenses
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$
|
1,306
|
|
|
$
|
3,149
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On September 30, 2016, the Company entered into the Loan Agreement with Solar, in its capacity as administrative and collateral agent and as lender. Pursuant to the Loan Agreement, Solar is providing the Company with a
48
-month secured term loan in the amount of
$15,000
(the “Term Loan”)
.
The Term Loan bears interest at a floating rate equal to the LIBOR rate in effect plus
8.49%
and the Company is required to make interest-only payments on the Term Loan
beginning November 1, 2016 and continuing
through
March
1, 2018
. Beginning April 1, 2018 (the “Amortization Date”), the Company is required to
make
monthly payments of interest plus
equal monthly
principal
payments
from the Amortization Date through the maturity date of the Term Loan.
If the Company receives certain positive clinical data prior to March 31, 2018, and receives unrestricted net cash proceeds of not less than
$20,000
after September 8, 2016, from certain financing, licensing, or other non-dilutive agreements,
the Amortization Date is extended
for an additional
six months
(extending the interest-only time period by
six months
). However, the ultimate term of the Term Loan is not extended and the
equal monthly payments of principal
will be calculated based on the remaining term of the Term Loan
. The obligations under the Loan Agreement are secured by a lien on substantially all assets of the Company other than its intellectual property, which is subject to a negative pledge.
The Loan Agreement contains customary affirmative covenants, including covenants regarding the payment of taxes and other obligations, maintenance of insurance, reporting requirements and compliance with applicable laws and regulations. Further, the Loan Agreement contains customary negative covenants limiting the ability of the Company, among other things, to incur debt, grant liens, make investments, make acquisitions, make certain restricted payments and sell assets, subject to certain exceptions, and maintain certain minimum liquidity requirements. Upon the occurrence and during the continuance of
an event of default, the lenders may declare all outstanding principal and accrued but unpaid interest under the Loan Agreement immediately due and payable and may exercise the other rights and remedies provided for under the Loan Agreement and related loan documents. The events of default under the Loan Agreement include payment defaults, cross defaults with certain other agreements, breaches of covenants or representations and warranties, the occurrence of a material adverse effect and certain bankruptcy events. The Company has the right to prepay the Term Loan in whole at any time and the Loan Agreement contains customary prepayment and closing fees.
Pursuant to the Loan Agreement, on September 30, 2016 (the "Closing Date"), the Company issued to Solar a warrant (the “Solar Warrant”) to purchase an aggregate of up to
122,435
shares of the Company’s common stock at an exercise price of
$3.6754
per share. The Solar Warrant will expire
five
years from the date of the grant. The Solar Warrant is classified as equity and recorded at its relative fair value in the shareholder's equity section of the balance sheet (See Note 8).
Future principal debt payments on the currently outstanding Term Loan are payable as follows:
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|
|
September 30, 2016
|
2016
|
$
|
—
|
|
2017
|
—
|
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2018
|
4,500
|
|
2019
|
6,000
|
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2020
|
4,500
|
|
Total principal payments
|
15,000
|
|
Final fee due at maturity
|
750
|
|
Total principal and final fee payment
|
15,750
|
|
Unamortized discount and debt issuance costs
|
(1,583
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)
|
Less current portion
|
—
|
|
Loan payable, long term
|
$
|
14,167
|
|
|
|
7.
|
Commitments and Contingencies
|
Leases
The Company leases its headquarters facilities under a long-term non-cancelable operating lease. On July 13, 2015, the Company entered into a sublease (the "Sublease") that became effective July 22, 2015, to sublet certain premises consisting of
10,141
square feet of space (the "Subleased Premises") located at 101 Hudson Street, Jersey City, New Jersey from Optimer Pharmaceuticals, Inc. The term of the Sublease commenced on August 1, 2015 (the "Commencement Date") and is scheduled to expire on July 30, 2018. No base rent was due under the Sublease until one month after the Commencement Date. Under the Sublease, the Company is obligated to pay monthly base rent of approximately
$25
per month, which amount increases by
3%
annually on each anniversary of the Commencement Date. In addition, the Company was required to fund a security deposit with the sublandlord in the amount of
$74
. Rent expense was approximately
$74
and
$221
for the three and nine months ended September 30, 2016, respectively. Future minimum lease payments for all operating leases as of September 30, 2016 are as follows:
|
|
|
|
|
|
|
September 30, 2016 to December 31, 2016
|
$
|
76
|
|
2017
|
307
|
|
2018
|
182
|
|
2019
|
—
|
|
2020
|
—
|
|
Thereafter
|
—
|
|
Total
|
$
|
565
|
|
License Arrangement with Potential Future Expenditures
As of
September 30, 2016
, the Company had a license arrangement with Merck Sharp & Dohme Corp., or Merck, that involves potential future expenditures. Under the license arrangement, the Company exclusively licensed from Merck its rights to SCY-078 in the field of human health. SCY-078 is the Company's lead product candidate. Pursuant to the terms of the license
agreement, Merck is eligible to receive milestone payments from the Company that could total
$19,000
upon occurrence of specific events, including initiation of a phase 3 clinical study, new drug application, and marketing approvals in each of the U.S., major European markets and Japan. In addition, Merck is eligible to receive tiered royalties from the Company based on a percentage of worldwide net sales of SCY-078. The aggregate royalty percentages are mid- to high-single digits.
In December 2014, the Company and Merck entered into an amendment to the license agreement that deferred the remittance of a milestone payment due to Merck, such that no amount would be due upon initiation of the first phase 2 clinical trial of a product containing the SCY-078 compound (the "Deferred Milestone"). The amendment also increased, in an amount equal to the Deferred Milestone, the milestone payment that would be due upon initiation of the first Phase 3 clinical trial of a product containing the SCY-078 compound. Except as described above, all other terms and provisions of the license agreement remain in full force and effect.
The Company has
two
additional licensing agreements for other compounds that could require it to make payments of up to
$2,300
upon achievement of certain milestones by the Company.
Clinical Development Arrangements
The Company has entered into, and expects to continue to enter into, contracts in the normal course of business with various third parties who support its clinical trials, preclinical research studies, and other services related to its development activities. The scope of the services under these agreements can generally be modified at any time, and the agreement can be terminated by either party after a period of notice and receipt of written notice.
Commitment Services Agreement
In connection with the sale of the Services Business, the Company and Accuratus Lab Services, Inc. ("Accuratus") entered into a Commitment to Services Agreement (the "Services Agreement") pursuant to which Accuratus will provide the Company with certain contract research and development services. The material terms of the Services Agreement are described in Note 13.
Compensatory Arrangements with Former Employees and Officers
The Company has entered into certain compensatory arrangements and commitments with former employees and officers, the material terms of which are described in Note 12.
Authorized, Issued, and Outstanding Common Stock
The Company’s common stock has a par value of
$0.001
per share and consists of
125,000,000
authorized shares as of
September 30, 2016
, and
December 31, 2015
;
23,430,868
and
13,905,599
shares were issued and outstanding at
September 30, 2016
, and
December 31, 2015
, respectively. The following table summarizes common stock share activity for the
nine
months ended
September 30, 2016
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shares of
Common Stock
|
|
Common Stock
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Total Stockholders' Equity
|
Balance, December 31, 2015
|
13,905,599
|
|
|
$
|
14
|
|
|
$
|
192,069
|
|
|
$
|
(150,134
|
)
|
|
$
|
41,949
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(26,540
|
)
|
|
(26,540
|
)
|
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
908
|
|
|
—
|
|
|
908
|
|
Debt discount for Solar Warrant
|
|
|
|
|
244
|
|
|
|
|
244
|
|
Common stock issued through employee stock purchase plan
|
7,356
|
|
|
—
|
|
|
21
|
|
|
—
|
|
|
21
|
|
Common stock issued under Shelf Registration, net of expenses
|
9,517,913
|
|
|
9
|
|
|
16,585
|
|
|
—
|
|
|
16,594
|
|
Balance, September 30, 2016
|
23,430,868
|
|
|
$
|
23
|
|
|
$
|
209,827
|
|
|
$
|
(176,674
|
)
|
|
$
|
33,176
|
|
Shares Reserved for Future Issuance
The Company had reserved shares of common stock for future issuance as follows:
|
|
|
|
|
|
|
|
September 30, 2016
|
|
December 31, 2015
|
Outstanding stock options
|
1,815,583
|
|
|
1,379,727
|
|
Outstanding Series C-1 Preferred warrants
|
14,033
|
|
|
14,033
|
|
Outstanding June 2016 Public Offering warrants
|
4,218,750
|
|
|
—
|
|
Outstanding Solar Warrant
|
122,435
|
|
|
—
|
|
For possible future issuance under 2014 Equity Incentive Plan (Note 10)
|
672,782
|
|
|
552,415
|
|
For possible future issuance under Employee Stock Purchase Plan (Note 10)
|
72,338
|
|
|
50,283
|
|
For possible future issuance under 2015 Inducement Plan (Note 10)
|
165,000
|
|
|
165,000
|
|
Total common shares reserved for future issuance
|
7,080,921
|
|
|
2,161,458
|
|
Warrants Associated with Convertible Preferred Stock Issuances
In July 2006, the Company issued warrants to purchase
196,923
shares of Series C-1 Preferred Stock, which converted into the right to purchase
14,033
shares of common stock in connection with the Company's IPO; however, the Company refers to these warrants as its Series C-1 Preferred warrants. The Series C-1 Preferred warrants were issued in conjunction with a loan financing agreement with an original exercise price of
$3.25
per share of Series C-1 Preferred, which converted into an exercise price of
$45.61
per share of common stock in connection with the Company's IPO. These warrants remain outstanding as of September 30, 2016 and will expire on May 7, 2019, which is the five year anniversary of the Company's IPO. The fair value at the date of grant for these instruments was
$459
, which was recorded as a debt discount. The debt discount related to these warrants was fully amortized as of December 31, 2010. The Company determined that the warrants should be recorded as a derivative liability and stated at fair value at each reporting period. As of September 30, 2016 and December 31, 2015, the fair value of the warrant derivative liability was
zero
.
Warrants Associated with June 2016 Public Offering
On June 21, 2016, the Company completed the June 2016 Public Offering of its common stock and warrants pursuant to the Company's effective Shelf Registration (see Note 1). Each purchaser received a warrant to purchase
0.45
of a share for each share purchased in the June 2016 Public Offering. There is not expected to be any trading market for the warrants. Each warrant was exercisable immediately upon issuance, will expire
five
years from the date of issuance, and has an exercise price of
$3.00
per share.
The warrants contain a provision where the warrant holder has the option to receive cash, equal to the Black-Scholes fair value of the remaining unexercised portion of the warrant, as cash settlement in the event that there is a fundamental transaction (contractually defined to include various merger, acquisition or stock transfer activities). Due to this provision, ASC 480,
Distinguishing Liabilities from Equity
requires that these warrants be classified as liabilities. The fair values of these warrants have been determined using the Black-Scholes valuation model, and the changes in the fair value are recorded in the accompanying statements of operations. During the three months ended September 30, 2016, the Company recorded a loss of
$4,570
due to the change in fair value of the warrant liability. As of September 30, 2016, the fair value of the warrant liability was
$9,164
.
Warrant Associated with Loan Agreement
Pursuant to the Loan Agreement, on the Closing Date the Company issued to Solar the Solar Warrant to purchase an aggregate of up to
122,435
shares of the Company’s common stock at an exercise price of
$3.6754
per share. The Solar Warrant will expire
five
years from the date of the grant. The Solar Warrant is classified as equity and recorded at its relative fair value in the shareholder's equity section of the balance sheet.
The Company applies intraperiod tax allocation guidance pursuant to Topic 740 to allocate income tax (expense) benefit between pre-tax income (loss) from continuing operations and discontinued operations. For periods in which the Company reports pre-tax income from discontinued operations for financial reporting purposes and pre-tax loss from continuing operations, the Company presents income from discontinued operations net of income tax expense attributable to its discontinued operations using the estimated annual effective tax rate of the Services Business. The Company also recognizes a corresponding income tax benefit on its loss from continuing operations for the same affected period. After applying the intraperiod tax allocation policy described above, the Company did not record a federal or state income tax expense or benefit for the three and
nine
months ended
September 30, 2016
.
|
|
10.
|
Stock-based Compensation
|
2009 Stock Option Plan
The Company had a share-based compensation plan (the “2009 Stock Option Plan”) under which the Company granted options to purchase shares of common stock to employees, directors, and consultants as either incentive stock options or nonqualified stock options. Incentive stock options could be granted with exercise prices not less than
100%
to
110%
of the fair market value of the common stock. Options granted under the plan generally vest over
three
to
four
years and expire in
10
years from the date of grant.
2014 Equity Incentive Plan
In February 2014, the Company’s board of directors adopted the 2014 Equity Incentive Plan, or the 2014 Plan, which was subsequently ratified by its stockholders and became effective on
May 2, 2014
(the “Effective Date”). The 2014 Plan, as amended on June 18, 2014 and February 25, 2015, is the successor to and continuation of the 2009 Stock Option Plan. As of the Effective Date,
no
additional awards will be granted under the 2009 Stock Option Plan, but all stock awards granted under the 2009 Stock Option Plan prior to the Effective Date will remain subject to the terms of the 2009 Stock Option Plan. All awards granted on and after the Effective Date will be subject to the terms of the 2014 Plan. The 2014 Plan provides for the grant of the following awards: (i) incentive stock options, (ii) nonstatutory stock options, (iii) stock appreciation rights, (iv) restricted stock awards, (v) restricted stock unit awards, and (vi) other stock awards. Employees, directors, and consultants are eligible to receive awards.
Under the 2014 Plan, after giving effect to the increases to the share reserve approved by the Company’s stockholders in September 2014, and June 2015, but excluding the automatic increases discussed below, the aggregate number of shares of common stock that could be issued from and after the Effective Date (the “share reserve”) could not exceed the sum of (i)
1,122,731
new shares, (ii) the shares that represented the 2009 Stock Option Plan’s available reserve on the Effective Date, and (iii) any returning shares from the 2009 Stock Option Plan. Under the 2014 Plan, the share reserve will automatically increase on January 1
st
of each year, for a period of not more than
10
years, commencing on January 1, 2015, and ending on January 1, 2024, in an amount equal to
4.0%
of the total number of shares of capital stock outstanding on December 31
st
of the preceding calendar year. The board of directors may act prior to January 1
st
of a given year to provide that there will be
no
increase in the share reserve or that the increase will be a lesser number of shares than would otherwise occur.
Pursuant to the terms of the 2014 Plan, (a) on January 1, 2015, the Company automatically added
340,484
shares to the total number of shares of common stock available for future issuance under the 2014 Plan, and (b) on January 1, 2016, the Company automatically added
556,223
shares to the total number of shares of common stock available for future issuance under the 2014 Plan.
Stock Option Grants
During the three and nine months ended September 30, 2016, the Company granted options to purchase
47,026
and
487,946
shares of common stock, respectively. As of
September 30, 2016
, there were
672,782
shares of common stock available for future issuance under the 2014 Plan.
2015 Inducement Plan
On March 26, 2015, the Company's board of directors adopted the 2015 Inducement Plan, or the 2015 Plan. The 2015 Plan has a share reserve covering
450,000
shares of common stock. During the quarter ended September 30, 2016, there were no grants of the Company's common stock under the 2015 Inducement Plan. As of
September 30, 2016
, there were
165,000
shares of common stock available for future issuance under the 2015 Plan.
2014 Employee Stock Purchase Plan
In February 2014, the Company’s board of directors adopted the 2014 Employee Stock Purchase Plan (“ESPP”), which was subsequently ratified by the Company’s stockholders and became effective on
May 2, 2014
. The purpose of the ESPP is to provide means by which eligible employees of the Company and of certain designated related corporations may be given an opportunity to purchase shares of the Company’s common stock, and to seek and retain services of new and existing employees and to provide incentives for such persons to exert maximum efforts for the success of the Company. Common stock that may be issued under the ESPP will not exceed
47,794
shares, plus the number of shares of common stock that are automatically added on January 1st of each year for a period of
ten
years, commencing on January 1, 2015 and ending on January 1, 2024, in an amount equal to the lesser of (i)
0.8%
of the total number of shares of outstanding common stock on December 31 of the preceding calendar year, and (ii)
29,411
shares of common stock. Similar to the 2014 Plan, the board of directors may act prior to January 1st of a given year to provide that there will be
no
increase in the share reserve or that the increase will be a lesser number of shares than would otherwise occur. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code.
In the quarterly period ended March 31, 2016, the number of shares of common stock available for issuance under the ESPP was automatically increased by
29,411
shares pursuant to the terms of the ESPP and the Company issued
1,229
shares of
common stock under the ESPP. During the quarterly period ended March 31, 2015, the number of shares of common stock available for issuance under the ESPP was automatically increased by
29,411
shares pursuant to the terms of the ESPP and the Company issued
15,107
shares of common stock under the ESPP. As of
September 30, 2016
, there were
72,338
shares of common stock available for future issuance under the ESPP; and the Company issued
6,127
shares under the ESPP during the three months ended September 30, 2016.
Compensation Cost
The compensation cost that has been charged against income for stock awards under the 2009 Stock Option Plan, the 2014 Plan, the 2015 Plan, and the ESPP was
$293
and
$908
for the three and nine months ended
September 30, 2016
, respectively, and
$1,541
and
$2,656
for the three and nine months ended September 30, 2015, respectively. The total income tax benefit recognized in the statements of operations for share-based compensation arrangements was
$0
for the three and nine months ended
September 30, 2016
and
2015
. Cash received from options exercised was
$0
for the three and
nine
months ended
September 30, 2016
, and 2015.
Stock-based compensation expense related to stock options is included in the following line items in the accompanying statements of operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Research and development
|
$
|
67
|
|
|
$
|
128
|
|
|
$
|
223
|
|
|
$
|
242
|
|
Selling, general and administrative
|
226
|
|
|
1,306
|
|
|
685
|
|
|
2,206
|
|
Discontinued operations (Note 13)
|
—
|
|
|
107
|
|
|
—
|
|
|
208
|
|
Total
|
$
|
293
|
|
|
$
|
1,541
|
|
|
$
|
908
|
|
|
$
|
2,656
|
|
|
|
11.
|
Fair Value Measurements
|
The carrying amounts of certain financial instruments, including cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their respective fair values due to the short-term nature of such instruments.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The Company evaluates its financial assets and liabilities subject to fair value measurements on a recurring basis to determine the appropriate level in which to classify them for each reporting period, pursuant to the policy described in Note 2. This determination requires significant judgments to be made. The following table summarizes the conclusions reached as of September 30, 2016 and December 31, 2015 for financial instruments measured at fair value on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Hierarchy Classification
|
|
|
Balance
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs (Level 3)
|
December 31, 2015
|
|
|
|
|
|
|
|
|
Cash on deposit
|
|
$
|
46,935
|
|
|
$
|
46,935
|
|
|
—
|
|
|
—
|
|
Money market funds
|
|
50
|
|
|
50
|
|
|
—
|
|
|
—
|
|
Total assets
|
|
$
|
46,985
|
|
|
$
|
46,985
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
September 30, 2016
|
|
|
|
|
|
|
|
|
Cash on deposit
|
|
$
|
29,809
|
|
|
$
|
29,809
|
|
|
—
|
|
|
—
|
|
Total assets
|
|
$
|
29,809
|
|
|
$
|
29,809
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Warrant liability
|
|
$
|
9,164
|
|
|
—
|
|
|
—
|
|
|
$
|
9,164
|
|
Total liabilities
|
|
$
|
9,164
|
|
|
—
|
|
|
—
|
|
|
$
|
9,164
|
|
|
|
|
|
|
|
|
|
|
Level 3 financial liabilities consist of the warrant liability for which there is no current market such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate. The Company uses the Black-Scholes option valuation model to value the Level 3 warrant liability at inception and on subsequent valuation dates. This model incorporates transaction details such as the Company’s stock price, contractual terms, maturity, risk free rates, as well as volatility.
|
|
12.
|
Accrued Severance and Retention Costs
|
Compensatory Plan with Services Business Employees
In connection with the Company's sale of its Services Business in July 2015 to Accuratus, which is more fully described in Note 13, the Company designed a compensatory plan to promote the retention of services of its non-executive employees supporting that business (the "Services Business Plan") as well to provide severance payments for non-executive employees that were not offered a comparable position by Accuratus (the "June 2015 Terminated Employees"). The Services Business Plan met the definition of an exit and disposal activity pursuant to FASB ASC 420--
Exit and Disposal Cost Obligations
and the related retention and severance expense was recognized in 2015. As of September 30, 2016, the remaining severance and retention obligation for the June 2015 Terminated Employees was
$8
.
Compensatory Arrangement with Employees of the Company's Continuing Operations
In connection with the Company's relocation of its continuing operations to Jersey City, New Jersey, the Company designed a compensatory plan to promote the retention of services of non-executive employees supporting its continuing operations (the "Retention Plan"). The Company has concluded that the Retention Plan meets the definition of an exit and disposal activity pursuant to FASB ASC 420--
Exit and Disposal Cost Obligations
as of June 30, 2015, and all related expenses incurred were recognized in 2015.
The Retention Plan provided that non-executive employees were eligible to receive cash bonuses, severance payments and related benefit premiums provided that such employees remained employed through December 31, 2015 and were not terminated for cause. During the year ended December 31, 2015, the Company recognized total expense of
$1,012
, which was included in research and development and selling, general, and administrative expenses. As of September 30, 2016, the obligation for cash bonuses, severance payments and related benefit premiums under the Retention Plan has been fully paid.
Compensatory Arrangement with Former Executive Officer
Yves J. Ribeill, Ph.D., resigned as President effective July 21, 2015. Dr. Ribeill resigned as a member of the board of directors effective March 16, 2016. The Company and Dr. Ribeill entered into an agreement, effective July 21, 2015, (the “Separation Agreement”), providing for certain payments and benefits to Dr. Ribeill over
12
months commencing with the first payroll period following the resignation date as President. The cash severance payments and related benefit premiums and payroll taxes totaled approximately
$1,046
as of July 21, 2015, which was recognized as expense in the quarterly period ended September 30, 2015. As of September 30, 2016, the obligation for cash severance payments and related benefit premiums and payroll taxes under the Separation Agreement has been fully paid.
|
|
13.
|
Sale of the Services Business, Discontinued Operations
|
On May 4, 2015, the Company's board of directors directed management to pursue a plan to sell the Service Business to Accuratus, representing a strategic shift in the Company's operations. The Company met the relevant criteria for reporting the service business as held for sale and in discontinued operations in the second quarter of 2015, pursuant to FASB Topic 205-20,
Presentation of Financial Statements--Discontinued Operations
, and FASB Topic 360,
Property, Plant, and Equipment
. The Company assessed the Services Business net asset group for impairment pursuant to FASB Topic 360 and recorded a
$1,350
impairment charge on classification of property and equipment assets as held for sale in the quarterly period ended June 30, 2015.
Sale of the Services Business
On July 21, 2015, the Company completed the sale of the Services Business to Accuratus pursuant to the Purchase Agreement, with an effective date of July 17, 2015 for an aggregate purchase price of
$3,875
, subject to a working capital adjustment of
$824
, which reduced the proceeds at closing. In addition, a portion of the consideration payable at closing equal to
$500
was withheld and was subject to an escrow for a period of
12
months from the date of closing to satisfy indemnification obligations of the Company in connection with breaches of any representation and warranties and other customary obligations under the terms of the Purchase Agreement. The escrow funds were received in full on July 19, 2016 in accordance with the Purchase Agreement. The net cash consideration received by the Company upon closing in July 2015 was
$2,549
, after adjusting for the items described above and a nominal escrow fee.
Continuing Involvement with Accuratus
The Company and Accuratus entered into the Services Agreement pursuant to which Accuratus is providing the Company with certain contract research and development services for
18
months (the "Initial Term") following the closing of the sale of the Services Business for a minimum purchase obligation of at least
$3,300
due from the Company over the Initial Term of the Services Agreement. The purpose of the Services Agreement is to replace services that were previously provided internally by employees of the Company prior to the sale of the Services Business. The employees performing these services became employees of Accuratus in connection with this sale transaction.
For the three and nine months ended September 30, 2016, the Company recognized
$593
and
$2,792
, respectively, of expense for services provided by Accuratus under the Services Agreement, which is included in research and development expense in the accompanying unaudited interim statements of operations.
Discontinued Operations
The following table presents revenue, (expenses), gains, and (losses) attributable to discontinued operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended September 30, 2015
|
|
Nine Months Ended September 30, 2015
|
Major line items constituting loss of discontinued operations:
|
|
|
|
|
|
Revenue
|
|
|
$
|
560
|
|
|
$
|
7,408
|
|
Cost of revenue
|
|
|
(466
|
)
|
|
(7,296
|
)
|
Research and development
|
|
|
(7
|
)
|
|
(860
|
)
|
Severance and exit costs
|
|
|
(1,061
|
)
|
|
(2,114
|
)
|
Impairment charge from classification of assets held for sale
|
|
|
—
|
|
|
(1,350
|
)
|
Gain (loss) on disposal, net of associated transaction costs of $764 for the three and nine month periods ended September 30, 2015
|
|
|
148
|
|
|
(73
|
)
|
Loss from discontinued operations
|
|
|
$
|
(826
|
)
|
|
$
|
(4,285
|
)
|
The following table presents depreciation, capital expenditures, and significant operating and investing non-cash items related to the discontinued operations:
|
|
|
|
|
|
|
|
Nine Months Ended September 30, 2015
|
Depreciation expense
|
|
$
|
391
|
|
Purchases of property and equipment
|
|
(547
|
)
|
Stock-based compensation
|
|
208
|
|
Changes in deferred rent
|
|
(133
|
)
|
Equipment purchases in accounts payable and accrued expenses
|
|
—
|
|