|
Delaware
|
| |
2834
|
| |
20-1295171
|
|
|
(State or other jurisdiction
of incorporation or organization) |
| |
(Primary Standard Industrial
Classification Code Number) |
| |
(I.R.S. Employer
Identification Number)
|
|
|
Yvan-Claude Pierre, Esq.
Michael Sanders, Esq. Daniel I. Goldberg, Esq. Reed Smith LLP 599 Lexington Avenue New York, New York 10022 (212) 521-5400 (212) 521-5450 — Facsimile |
| |
Anthony J. Marsico, Esq.
Greenberg Traurig, LLP MetLife Building 200 Park Avenue New York, NY 10166 (212) 801-9200 (212) 801-6400 — Facsimile |
|
|
Large accelerated filer
|
| | ☐ | | | Accelerated filer | | | ☐ | |
| Non-accelerated filer | | | ☐ (Do not check if a smaller reporting company) | | |
Smaller reporting company
|
| | ☒ | |
Title of each class of securities to be registered
|
| |
Proposed Maximum
Aggregate Offering Price(1) |
| |
Amount of
Registration Fee |
| ||||||
Common stock, par value $0.001 per share(2)
|
| | | $ | 23,000,000 | | | | | $ | 2,672.60 | | |
Representative’s Warrants to Purchase Common Stock(3)
|
| | | | — | | | | | | — | | |
Common Stock Underlying Representative’s Warrants(2)(4)
|
| | | $ | 1,000,000 | | | | | $ | 116.20 | | |
Total Registration Fee
|
| | | $ | 24,000,000 | | | | | $ | 2,788.80(5) | | |
| | | | | | | |
| PRELIMINARY PROSPECTUS | | |
SUBJECT TO COMPLETION
|
| |
DATED JUNE 19, 2015
|
|
| | | | | | | | |
| | |
Per Share
|
| |
Total
|
| ||||||
Public offering price
|
| | | $ | | | | | $ | | | ||
Underwriting discounts and commissions(1)
|
| | | $ | | | | | $ | | | ||
Offering proceeds to us, before expenses
|
| | | $ | | | | | $ | | | |
| Aegis Capital Corp | | |
Chardan Capital Markets, LLC
|
|
| | |
Page
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| | | | 131 | |
| | | | 134 | |
| | | | 137 | |
| | | | 145 | |
| | | | 145 | |
| | | | 145 | |
| | | | F-1 |
| | |
Three Months Ended
March 31, |
| |
Years ended December 31,
|
| ||||||||||||||||||
| | |
2015
|
| |
2014
|
| |
2014
|
| |
2013
|
| ||||||||||||
| | |
(Unaudited)
|
| | | |||||||||||||||||||
Statement of Operations Data: | | | | | | ||||||||||||||||||||
Operating costs and expenses: | | | | | | ||||||||||||||||||||
Research and development
|
| | | $ | 31,460 | | | | | $ | 5,850 | | | | | $ | 113,931 | | | | | $ | 461,551 | | |
Patent costs
|
| | | | 62,274 | | | | | | 36,782 | | | | | | 197,731 | | | | | | 292,358 | | |
General and administrative
|
| | | | 1,302,565 | | | | | | 243,909 | | | | | | 1,969,960 | | | | | | 1,356,888 | | |
Total operating expenses
|
| | | | 1,396,299 | | | | | | 286,541 | | | | | | 2,281,622 | | | | | | 2,110,797 | | |
Loss from operations
|
| | | | (1,396,299) | | | | | | (286,541) | | | | | | (2,281,622) | | | | | | (2,110,797) | | |
Other expense (income): | | | | | | ||||||||||||||||||||
Interest income
|
| | | | (2,204) | | | | | | (204) | | | | | | (525) | | | | | | (1,677) | | |
Interest expense
|
| | | | — | | | | | | — | | | | | | 213,516 | | | | | | 6,076 | | |
Other income
|
| | | | (7,091) | | | | | | — | | | | | | (21,148) | | | | | | (19,365) | | |
Total other expense (income)
|
| | | | (9,295) | | | | | | (204) | | | | | | 191,843 | | | | | | (14,966) | | |
Net loss
|
| | | | (1,387,004) | | | | | | (286,337) | | | | | | (2,473,465) | | | | | | (2,095,831) | | |
Cumulative preferred stock dividends
|
| | | | 149,283 | | | | | | 147,445 | | | | | | 589,462 | | | | | | 547,303 | | |
Accretion of discount on Series C preferred
stock |
| | | | 31,818 | | | | | | — | | | | | | 8,580 | | | | | | — | | |
Net loss applicable to common stockholders
|
| | | $ | (1,568,105) | | | | | $ | (433,782) | | | | | $ | (3,071,507) | | | | | $ | (2,643,134) | | |
Net loss per share, basic and diluted
|
| | | $ | (3.37) | | | | | $ | (0.96) | | | | | $ | (6.79) | | | | | $ | (5.86) | | |
Weighted average shares outstanding, basic and diluted
|
| | | | 465,384 | | | | | | 451,398 | | | | | | 452,509 | | | | | | 451,398 | | |
Pro forma information(1) | | | | | | ||||||||||||||||||||
Pro forma net loss
|
| | | $ | (1,387,004) | | | | | $ | (286,337) | | | | | $ | (2,473,465) | | | | | $ | (2,095,831) | | |
Pro forma net loss per share, basic and diluted (unaudited)
|
| | | $ | (0.37) | | | | | $ | (0.09) | | | | | $ | (0.73) | | | | | $ | (0.64) | | |
Pro forma weighted average shares outstanding, basic and diluted
|
| | | | 3,788,061 | | | | | | 3,355,752 | | | | | | 3,384,952 | | | | | | 3,276,426 | | |
| | |
March 31, 2015
|
||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro Forma
As Adjusted(1) |
||||||||
| | |
(Unaudited)
|
||||||||||||||
Balance Sheet Data: | | | | | | | | | | | | | | | | | |
Cash and cash equivalents
|
| | | $ | 1,975,313 | | | | | $ | 1,975,313 | | | | | $ | 19,375,113 |
Working Capital
|
| | | | 808,628 | | | | | | 808,628 | | | | | | 18,208,428 |
Total assets
|
| | | | 2,343,729 | | | | | | 2,343,729 | | | | | | 19,743,529 |
Accounts payable, accrued expenses and other liabilities
|
| | | | 1,223,038 | | | | | | 1,223,038 | | | | | | 1,223,038 |
Preferred stock subject to redemption
|
| | | | 16,384,715 | | | | | | — | | | | | | — |
Common stock and preferred stock
|
| | | | 9,353 | | | | | | 3,788 | | | | | | 7,788 |
Additional paid-in capital
|
| | | | 4,199,047 | | | | | | 20,589,327 | | | | | | 37,985,127 |
Accumulated deficit
|
| | | | (19,472,424) | | | | | | (19,472,424) | | | | | | (19,472,424) |
Total stockholders’ equity (deficit)
|
| | | | (15,264,024) | | | | | | 1,120,691 | | | | | | 18,520,491 |
| | |
As of March 31, 2015
|
| ||||||||||||||||||
| | |
Actual
|
| |
Pro Forma
|
| |
Pro Forma
As Adjusted(1) |
| ||||||||||||
| | | | | | | | |
(Unaudited)
|
| | | | | | | ||||||
Cash and cash equivalents
|
| | | $ | 1,975,313 | | | | | $ | 1,975,313 | | | | | $ | 19,375,113 | | | |||
Long-term debt (inclusive of current portion)
|
| | | | — | | | | | | — | | | |
|
| ||||||
Preferred stock subject to redemption, $0.001 par value,
16,378,646 shares authorized, 14,869,662 shares issued and outstanding, actual; 16,378,646 shares authorized, no shares issued and outstanding, pro forma; and no shares authorized, no shares issued and outstanding, pro forma as adjusted |
| | | | 16,384,715 | | | | | | — | | | |
|
| ||||||
Preferred stock, $0.001 par value, 8,887,500 shares
authorized, issued and outstanding, actual; 8,887,500 shares authorized, no shares issued and outstanding, pro forma; and 5,000,000 shares authorized, no shares issued and outstanding, pro forma as adjusted |
| | | | 8,888 | | | | | | — | | | |
|
| ||||||
Common stock, $0.001 par value, 50,000,000 shares authorized, 465,384 shares issued and outstanding, actual; 50,000,000 shares authorized, 3,788,060 shares issued and outstanding, pro forma; and 25,000,000 shares authorized, 7,788,060 shares issued and outstanding, pro forma as adjusted
|
| | | | 465 | | | | | | 3,788 | | | | | | 7,788 | | | |||
Additional paid-in capital
|
| | | | 4,199,047 | | | | | | 20,589,327 | | | | | | 37,985,127 | | | |||
Accumulated deficit
|
| | | | (19,472,424) | | | | | | (19,472,424) | | | | | | (19,472,424) | | | |||
Total stockholders’ equity (deficit)
|
| | | | (15,264,024) | | | | | | 1,120,691 | | | | | | 18,520,491 | | | |||
Total capitalization
|
| | | $ | 1,120,691 | | | | | $ | 1,120,691 | | | | | $ | 18,520,491 | | | |||
|
|
Assumed initial public offering price per share
|
| | | | | | | | | $ | 5.00 | | | ||
|
Historical net tangible deficit per share as of March 31, 2015
|
| | | $ | (32.80) | | | | | | | | | ||
|
Increase per share due to the conversion of all shares of preferred stock
|
| | | $ | 33.10 | | | | | | | | | ||
|
Pro forma net tangible book value per share as of March 31, 2015
|
| | | $ | 0.30 | | | | | | | | | ||
|
Increase per share attributable to new investors
|
| | | $ | 2.08 | | | | | | | | | ||
|
Pro forma net tangible book value per share after this offering
|
| | | | | | | | | | 2.38 | | | ||
|
Dilution per share to new investors
|
| | | | | | | | | $ | 2.62 | | | ||
|
| | |
Shares Purchased
|
| |
Total Consideration
|
| |
Average Price
Per Share |
| ||||||||||||||||||||||||||
| | |
Number
|
| |
Percentage
|
| |
Amount
|
| |
Percentage
|
| |||||||||||||||||||||||
Existing stockholders
|
| | | | 3,788,060 | | | | | | 48.64% | | | | | $ | 17,140,295 | | | | | | 46.15% | | | | | $ | 4.52 | | | |||||
New Investors
|
| | | | 4,000,000 | | | | | | 51.36% | | | | | $ | 20,000,000 | | | | | | 53.85% | | | | | $ | 5.00 | | | |||||
Total
|
| | | | 7,788,060 | | | | | | 100.00% | | | | | $ | 37,140,295 | | | | | | 100.00% | | | | | $ | 4.77 | | | |||||
|
| | |
Three months ended March 31, 2015
|
| |||||||||
| | |
Low
|
| |
High
|
| ||||||
Expected dividend yield
|
| | | | 0.00% | | | | | | 0.00% | | |
Expected stock-price volatility
|
| | | | 51.45% | | | | | | 65.06% | | |
Risk-free interest rate
|
| | | | 0.77% | | | | | | 2.00% | | |
Expected term of options
|
| | | | 5 | | | | | | 10 | | |
Stock price
|
| | | $ | 5.86 | | | | | $ | 5.86 | | |
|
Year
|
| |
Share Class
|
| |
Price per Share
|
|
|
2005
|
| |
Common Stock(a)
|
| |
$1.79
|
|
|
2006
|
| |
Series A-2 Preferred Stock(a)(b)
|
| |
$0.40
|
|
|
2008 – 2009
|
| |
Series A-3 Preferred Stock(b)
|
| |
$0.62
|
|
|
2010 – 2013
|
| |
Series B Preferred Stock(b)
|
| |
$1.19
|
|
|
2014
|
| |
Series C Preferred Stock(b)
|
| |
$1.30
|
|
| | |
Valuation Date
|
| |||||||||||||||
| | |
November 7, 2013
|
| |
July 31, 2012
|
| |
December 31, 2010
|
| |||||||||
Risk-free rate
|
| | | | 0.55% | | | | | | 0.57% | | | | | | 2.01% | | |
Maturity (years)
|
| | | | 3.00 | | | | | | 4.00 | | | | | | 5.00 | | |
Volatility
|
| | | | 58.00% | | | | | | 61.00% | | | | | | 61.00% | | |
Grant Date
|
| |
Number of Common
Shares Underlying Options Granted |
| |
Exercise Price
per Common Share |
| |
Estimated Fair Value
per Share of Common Stock |
| |
Intrinsic Value
Option |
| ||||||
2005
|
| | | | 58,321 | | | |
$0.07
|
| | | $ | 1.79 | | | |
$1.72
|
|
2009
|
| | | | 60,559 | | | |
$0.72 – $0.79
|
| | | $ | 4.43 | | | |
$3.71 – $3.64
|
|
2011
|
| | | | 33,846 | | | |
$1.00
|
| | | $ | 1.00 | | | |
$0.00
|
|
2012
|
| | | | 60,019 | | | |
$1.14
|
| | | $ | 1.14 | | | |
$0.00
|
|
2013
|
| | | | 100,000 | | | |
$1.14 – $1.30
|
| | | $ | 1.14 | | | |
$0.00
|
|
2014
|
| | | | 1,626,740 | | | |
$5.86 – $13.23
|
| | | $ | 5.86 | | | |
$0.00
|
|
| | |
Options
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2014
|
| | | | 1,788,717 | | | | | $ | 7.128 | | | ||
Granted
|
| | | | — | | | | | | — | | | ||
Exercised/Expired/Forfeited
|
| | | | (918) | | | | | | (5.863) | | | ||
Outstanding at March 31, 2015
|
| | | | 1,787,799 | | | | | $ | 7.131 | | | ||
Exercisable at March 31, 2015
|
| | | | 208,918 | | | | | $ | 4.419 | | | ||
Expected to be vested
|
| | | | 1,578,881 | | | | | $ | 7.490 | | | ||
|
| | |
For the Three Months Ended March 31,
|
| |
Dollar
Change |
| |
Percentage
Change |
| |||||||||||||||||||
| | |
2015
|
| |
2014
|
| ||||||||||||||||||||||
Statement of Operations Data: | | | | | | ||||||||||||||||||||||||
Operating costs and expenses | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Research and development
|
| | | $ | 31,460 | | | | | $ | 5,850 | | | | | $ | 25,610 | | | | | | 438% | | | ||||
Patent costs
|
| | | | 62,274 | | | | | | 36,782 | | | | | | 25,492 | | | | | | 69% | | | ||||
General and administrative
|
| | | | 1,302,565 | | | | | | 243,909 | | | | | | 1,058,656 | | | | | | 434% | | | ||||
Total operating expenses
|
| | | | 1,396,299 | | | | | | 286,541 | | | | | | 1,109,758 | | | | | | 387% | | | ||||
Loss from operations
|
| | | | (1,396,299) | | | | | | (286,541) | | | | | | (1,109,758) | | | | | | 387% | | | ||||
Other income: | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Interest income
|
| | | | 2,204 | | | | | | 204 | | | | | | 2,000 | | | | | | 980% | | | ||||
Other income
|
| | | | 7,091 | | | | | | — | | | | | | 7,091 | | | | | | 100% | | | ||||
Total other income
|
| | | | 9,295 | | | | | | 204 | | | | | | 9,091 | | | | | | 4,456% | | | ||||
Net Loss
|
| | | $ | (1,387,004) | | | | | $ | (286,337) | | | | | $ | (1,100,667) | | | | | | 384% | | | ||||
|
| | |
For the Year Ended December 31,
|
| |
Dollar
Change |
| |
Percentage
Change |
| |||||||||||||||||||
| | |
2014
|
| |
2013
|
| ||||||||||||||||||||||
Statement of Operations Data: | | | | | | ||||||||||||||||||||||||
Operating costs and expenses | | | | ||||||||||||||||||||||||||
Research and development
|
| | | $ | 113,931 | | | | | $ | 461,551 | | | | | $ | (347,620) | | | | | | (75)% | | | ||||
Patent costs
|
| | | | 197,731 | | | | | | 292,358 | | | | | | (94,627) | | | | | | (32)% | | | ||||
General and administrative
|
| | | | 1,969,960 | | | | | | 1,356,888 | | | | | | 613,072 | | | | | | 45% | | | ||||
Total operating expenses
|
| | | | 2,281,622 | | | | | | 2,110,797 | | | | | | 170,825 | | | | | | 8% | | | ||||
Loss from operations
|
| | | | (2,281,622) | | | | | | (2,110,797) | | | | | | (170,825) | | | | | | 8% | | | ||||
Other expense (income): | | | | | | ||||||||||||||||||||||||
Interest income
|
| | | | (525) | | | | | | (1,677) | | | | | | 1,152 | | | | | | (69)% | | | ||||
Interest expense
|
| | | | 213,516 | | | | | | 6,076 | | | | | | 207,440 | | | | | | 3,414% | | | ||||
Other income
|
| | | | (21,148) | | | | | | (19,365) | | | | | | (1,783) | | | | | | 9% | | | ||||
Total other expense (income)
|
| | | | 191,843 | | | | | | (14,966) | | | | | | 206,809 | | | | | | (1,382)% | | | ||||
Net Loss
|
| | | $ | (2,473,465) | | | | | $ | (2,095,831) | | | | | $ | (377,634) | | | | | | 18% | | | ||||
|
| | |
For the Three Months Ended March 31,
|
| |
For the Year Ended December 31,
|
| ||||||||||||||||||||||
| | |
2015
|
| |
2014
|
| |
2014
|
| |
2013
|
| ||||||||||||||||
Net cash used in: | | | | | | | | | | | | | | | | | | | | | | | | | | ||||
Operating activities
|
| | | $ | (618,526) | | | | | $ | (289,072) | | | | | $ | (1,157,385) | | | | | $ | (1,956,914) | | | ||||
Investing activities
|
| | | | — | | | | | | (1,166) | | | | | | (1,166) | | | | | | (8,692) | | | ||||
Financing activities
|
| | | | (153,409) | | | | | | (9,000) | | | | | | 3,457,573 | | | | | | 643,995 | | | ||||
Net decrease in cash
|
| | | $ | (771,935) | | | | | $ | (299,238) | | | | | $ | 2,299,022 | | | | | $ | (1,321,611) | | | ||||
|
Name
|
| |
Age
|
| |
Position(s)
|
|
Executive Officers: | | | | ||||
Michael D. Step | | |
55
|
| | Chief Executive Officer and Director | |
Samuel O. Lynn | | |
47
|
| | Chief Financial Officer | |
Andrew J. Ritter | | |
32
|
| | President and Director | |
Ira E. Ritter | | |
65
|
| | Executive Chairman, Chief Strategic Officer and Director | |
Non-Employee Directors: | | | | ||||
Noah Doyle | | |
47
|
| | Director | |
Matthew W. Foehr | | |
42
|
| | Director | |
Paul V. Maier | | |
67
|
| | Director | |
Gerald T. Proehl | | |
56
|
| | Director | |
Name and Principal Position
|
| |
Year
|
| |
Salary
($) |
| |
Bonus
($) |
| |
Option
Awards(1) ($) |
| |
All Other
Compensation ($) |
| |
Total
($) |
| ||||||||||||||||||
Michael D. Step
Chief Executive Officer |
| | | | 2014 | | | | | $ | 90,000 | | | | | $ | — | | | | | $ | 2,332,410 | | | | | $ | — | | | | | $ | 2,422,410 | | |
Andrew J. Ritter
President |
| | | | 2014 | | | | | $ | 204,070 | | | | | $ | — | | | | | $ | 1,253,638 | | | | | $ | 7,428 | | | | | $ | 1,465,136 | | |
Ira E. Ritter
Executive Chairman and Chief Strategic Officer |
| | | | 2014 | | | | | $ | 182,922 | | | | | $ | — | | | | | $ | 1,253,638 | | | | | $ | 13,082 | | | | | $ | 1,449,642 | | |
Name
|
| |
Number of
Securities Underlying Unexercised Options Exercisable |
| |
Number of
Securities Underlying Unexercised Options Unexercisable |
| |
Option
Exercise Price ($) |
| |
Option
Expiration Date |
| ||||||||||||
Michael D. Step
|
| | | | 16,352(1) | | | | | | 9,811(1) | | | | | $ | 1.14 | | | | | | 8/16/2022 | | |
| | | 646,537(2) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | 73,377(3) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | — | | | | | | (4) | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
Andrew J. Ritter
|
| | | | 3,370(5) | | | | | | 45,581(5) | | | | | $ | 1.27 | | | | | | 9/25/2023 | | |
| | | 20,979(6) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | — | | | | | | 432,434(7) | | | | | | (7) | | | | | | 12/2/2024 | | | ||
Ira E. Ritter
|
| | | | 3,370(8) | | | | | | 45,581(8) | | | | | $ | 1.27 | | | | | | 9/25/2023 | | |
| | | 20,979(9) | | | | | | — | | | | | $ | 5.86 | | | | | | 12/2/2024 | | | ||
| | | — | | | | | | 432,434(10) | | | | | | (10) | | | | | | 12/2/2024 | | |
Beneficial Owner
|
| |
Number of Shares
Beneficially Owned |
| |
Percentage of Common Stock
Beneficially Owned |
| ||||||||||||
|
Before Offering
|
| |
After Offering
|
| ||||||||||||||
Five Percent Stockholders | | | | | | | | | | | | | | | |||||
Javelin Venture Partners I SPV I, LLC(1)(2)(3)
|
| | | | 645,506 | | | | | | 15.7% | | | | | | 7.6% | | |
Javelin Venture Partners, L.P.(1)(3)(4)
|
| | | | 1,331,028 | | | | | | 34.4% | | | | | | 16.9% | | |
Stonehenge Partners LLC(5)(6)(7)
|
| | | | 817,272 | | | | | | 21.6% | | | | | | 10.5% | | |
Executive Officers, Directors and Director Nominees | | | | | | | | | | | | | | | |||||
Michael D. Step(8)
|
| | | | 169,604 | | | | | | 4.3% | | | | | | 2.1% | | |
Andrew J. Ritter(6)(9)
|
| | | | 24,475 | | | | | | * | | | | | | * | | |
Ira E. Ritter(7)(10)
|
| | | | 24,475 | | | | | | * | | | | | | * | | |
Noah Doyle(3)(11)
|
| | | | 22,727 | | | | | | * | | | | | | * | | |
Matthew W. Foehr
|
| | | | — | | | | | | * | | | | | | * | | |
Paul V. Maier
|
| | | | — | | | | | | * | | | | | | * | | |
Gerald T. Proehl
|
| | | | — | | | | | | * | | | | | | * | | |
All current executive officers and directors as a group (8 persons)
|
| | | | 241,281 | | | | | | 6.1% | | | | | | 3.0% | | |
Underwriter
|
| |
Number of
Shares |
| ||||
Aegis Capital Corp
|
| |
|
| ||||
Chardan Capital Markets, LLC
|
| | | | | | | |
Barrington Research Associates, Inc.
|
| | | | | | | |
Total | | | | | 4,000,000 | | | |
|
| | |
Per
Share |
| |
Total Without
Over-Allotment Option |
| |
Total With
Over-Allotment Option |
| |||||||||
Public offering price
|
| | | $ | | | | | $ | | | | | $ | | | |||
Underwriting discount (7%)
|
| | | $ | | | | | $ | | | | | $ | | | |||
Proceeds, before expense, to us
|
| | | $ | | | | | $ | | | | | $ | | | |||
Non-accountable expense allowance (1%)(1)
|
| | | $ | | | | | $ | | | | | $ | | | |
| | |
Page
|
||
AUDITED FINANCIAL STATEMENTS | | | | | |
| | | | F-2 | |
| | | | F-3 | |
| | | | F-4 | |
| | | | F-5 | |
| | | | F-6 | |
| | | | F-7 |
| | |
Page
|
| |||
| | | | F-25 | | | |
| | | | F-26 | | | |
| | | | F-27 | | | |
| | | | F-28 | | |
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
ASSETS | | | | | | | | | | | | | | ||
Current assets
|
| | | | | | | | | | | | | ||
Cash and cash equivalents
|
| | | $ | 2,747,248 | | | | | $ | 448,226 | | | ||
Prepaid expenses
|
| | | | 57,115 | | | | | | 76,636 | | | ||
Total current assets
|
| | | | 2,804,363 | | | | | | 524,862 | | | ||
Other assets
|
| | | | 10,331 | | | | | | 15,359 | | | ||
Deferred offering costs
|
| | | | 143,454 | | | | | | — | | | ||
Property and equipment, net
|
| | | | 5,172 | | | | | | 7,485 | | | ||
Total Assets
|
| | | $ | 2,963,320 | | | | | $ | 547,706 | | | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | | ||
Current liabilities | | | | | | | | | | | | | | ||
Accounts payable
|
| | | $ | 1,083,597 | | | | | $ | 834,496 | | | ||
Accrued expenses
|
| | | | 168,635 | | | | | | 27,443 | | | ||
Notes payable
|
| | | | — | | | | | | 31,500 | | | ||
Other liabilities
|
| | | | 2,518 | | | | | | 4,517 | | | ||
Total current liabilities
|
| | | | 1,254,750 | | | | | | 897,956 | | | ||
Preferred stock subject to redemption, $0.001 par value, 16,378,646 and 11,878,646 shares authorized as of December 31, 2014 and December 31, 2013, respectively, 13,399,668 and 10,408,652 shares issued and outstanding at December 31, 2014 and December 2013, respectively. $9.1 million aggregate liquidation preference of Series B cumulative preferred stock at December 31, 2014
|
| | | | 16,203,612 | | | | | | 12,413,876 | | | ||
Stockholders’ deficit | | | | | | | | | | | | | | ||
Preferred stock, par value $0.001, 8,887,500 shares authorized, issued and outstanding as of December 31, 2014 and December 31, 2013
|
| | | | 8,888 | | | | | | 8,888 | | | ||
Common stock, par value $0.001, 50,000,000 and 26,500,000 shares
authorized as of December 31, 2014 and December 31, 2013, respectively; 465,384 and 451,398 shares issued and outstanding as of December 31, 2014 and December 31, 2013, respectively |
| | | | 465 | | | | | | 451 | | | ||
Additional paid-in capital
|
| | | | 3,399,924 | | | | | | 2,059,347 | | | ||
Accumulated deficit
|
| | | | (17,904,319) | | | | | | (14,832,812) | | | ||
Total stockholders’ deficit
|
| | | | (14,495,042) | | | | | | (12,764,126) | | | ||
Total Liabilities and Stockholders’ Deficit
|
| | | $ | 2,963,320 | | | | | $ | 547,706 | | | ||
|
| | |
For the Years Ended December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
Operating costs and expenses: | | | | | | | | | | | | | | ||
Research and development
|
| | | $ | 113,931 | | | | | $ | 461,551 | | | ||
Patent costs
|
| | | | 197,731 | | | | | | 292,358 | | | ||
General and administrative
|
| | | | 1,969,960 | | | | | | 1,356,888 | | | ||
Total operating expenses
|
| | | | 2,281,622 | | | | | | 2,110,797 | | | ||
Operating loss
|
| | | | (2,281,622) | | | | | | (2,110,797) | | | ||
Other expense (income): | | | | | | | | | | | | | | ||
Interest income
|
| | | | (525) | | | | | | (1,677) | | | ||
Interest expense
|
| | | | 213,516 | | | | | | 6,076 | | | ||
Other income
|
| | | | (21,148) | | | | | | (19,365) | | | ||
Total other expense (income)
|
| | | | 191,843 | | | | | | (14,966) | | | ||
Net loss
|
| | | $ | (2,473,465) | | | | | $ | (2,095,831) | | | ||
Cumulative preferred stock dividends
|
| | | | 589,462 | | | | | | 547,303 | | | ||
Accretion of discount on Series C preferred stock
|
| | | | 8,580 | | | | | | — | | | ||
Net loss applicable to common stockholders
|
| | | $ | (3,071,507) | | | | | $ | (2,643,134) | | | ||
Net loss per common share – basic and diluted
|
| | | $ | (6.79) | | | | | $ | (5.86) | | | ||
Weighted average common shares outstanding – basic and diluted
|
| | | | 452,509 | | | | | | 451,398 | | | ||
|
| | |
Preferred
Stock Subject to Redemption |
| |
Stockholders’ Deficit
|
| |
Total
Stockholders’ Deficit |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Preferred Stock
|
| |
Common Stock
|
| |
Additional
Paid-in Capital |
| |
Accumulated
Deficit |
| |||||||||||||||||||||||||||||||||||||||||||||||||||
| | |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |
Shares
|
| |
Amount
|
| |||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2012
|
| | | | 9,885,423 | | | | | $ | 11,093,677 | | | | | | 8,887,500 | | | | | $ | 8,888 | | | | | | 451,398 | | | | | $ | 451 | | | | | $ | 2,032,697 | | | | | $ | (12,189,678) | | | | | $ | (10,147,642) | | | |||||||||
Conversion of note payable into shares
|
| | | | 103,234 | | | | | | 122,901 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 12,253 | | | | | | — | | | | | | 12,253 | | | |||||||||
Prepaid forward sale of Series B preferred stock
|
| | | | — | | | | | | 150,000 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||||||||
Issuance of shares subject to redemption
|
| | | | 419,995 | | | | | | 499,995 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | |||||||||
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,397 | | | | | | — | | | | | | 14,397 | | | |||||||||
Cumulative dividends on Series B preferred stock
|
| | | | — | | | | | | 547,303 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (547,303) | | | | | | (547,303) | | | |||||||||
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,095,831) | | | | | | (2,095,831) | | | |||||||||
Balance at December 31, 2013
|
| | | | 10,408,652 | | | | | $ | 12,413,876 | | | | | | 8,887,500 | | | | | $ | 8,888 | | | | | | 451,398 | | | | | $ | 451 | | | | | $ | 2,059,347 | | | | | $ | (14,832,812) | | | | | $ | (12,764,126) | | | |||||||||
Conversion of notes payable into preferred stock subject to redemption and warrants to purchase common stock
|
| | | | 621,788 | | | | | | 660,635 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 136,733 | | | | | | — | | | | | | 136,733 | | | |||||||||
Issuance of preferred stock subject to
redemption and warrants to purchase common stock, net of offering cost of $68,767 |
| | | | 2,369,228 | | | | | | 2,531,059 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 482,068 | | | | | | — | | | | | | 482,068 | | | |||||||||
Exercise of options on common stock
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 13,986 | | | | | | 14 | | | | | | 14,386 | | | | | | — | | | | | | 14,400 | | | |||||||||
Stock based compensation
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 707,390 | | | | | | — | | | | | | 707,390 | | | |||||||||
Cumulative dividends on Series B preferred stock
|
| | | | — | | | | | | 589,462 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (589,462) | | | | | | (589,462) | | | |||||||||
Accretion of discount on Series C preferred stock
|
| | | | — | | | | | | 8,580 | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (8,580) | | | | | | (8,580) | | | |||||||||
Net loss
|
| | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (2,473,465) | | | | | | (2,473,465) | | | |||||||||
Balance at December 31, 2014
|
| | | | 13,399,668 | | | | | $ | 16,203,612 | | | | | | 8,887,500 | | | | | $ | 8,888 | | | | | | 465,384 | | | | | $ | 465 | | | | | $ | 3,399,924 | | | | | $ | (17,904,319) | | | | | $ | (14,495,042) | | | |||||||||
|
| | |
For the Years Ended December 31,
|
| |||||||||
| | |
2014
|
| |
2013
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (2,473,465) | | | | | $ | (2,095,831) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | ||||||||||
Depreciation
|
| | | | 3,479 | | | | | | 2,139 | | |
Stock based compensation
|
| | | | 707,390 | | | | | | 14,397 | | |
Change in fair value of put embedded in convertible debt
|
| | | | (21,148) | | | | | | — | | |
Accretion of discount on convertible debt
|
| | | | 10,192 | | | | | | — | | |
Non-cash interest on conversion of debt
|
| | | | 184,445 | | | | | | — | | |
Increase (decrease) in cash attributable to changes in operating assets
and liabilities: |
| | | ||||||||||
Prepaid expenses
|
| | | | 19,521 | | | | | | 1,655 | | |
Other assets
|
| | | | 5,028 | | | | | | (7,903) | | |
Accounts payable
|
| | | | 249,101 | | | | | | 119,742 | | |
Accrued expenses
|
| | | | 160,071 | | | | | | 4,370 | | |
Other liabilities
|
| | | | (1,999) | | | | | | 4,517 | | |
Net cash used in operating activities
|
| | | | (1,157,385) | | | | | | (1,956,914) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | (1,166) | | | | | | (8,692) | | |
Net cash used in investing activities
|
| | | | (1,166) | | | | | | (8,692) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Deferred offering costs
|
| | | | (143,454) | | | | | | — | | |
Proceeds from borrowing under notes payable
|
| | | | 605,000 | | | | | | — | | |
Repayment of borrowing under note payable
|
| | | | (31,500) | | | | | | (6,000) | | |
Net proceeds from issuance of preferred stock subject to redemption and warrants to purchase common stock
|
| | | | 3,013,127 | | | | | | 499,995 | | |
Proceeds received on prepaid forward sale of preferred stock subject to redemption
|
| | | | — | | | | | | 150,000 | | |
Proceeds from exercise of options on common stock
|
| | | | 14,400 | | | | | | — | | |
Net cash provided by financing activities
|
| | | | 3,457,573 | | | | | | 643,995 | | |
Net increase (decrease) in cash
|
| | | | 2,299,022 | | | | | | (1,321,611) | | |
Cash at beginning of period
|
| | | | 448,226 | | | | | | 1,769,837 | | |
Cash at end of period
|
| | | $ | 2,747,248 | | | | | $ | 448,226 | | |
Non-cash financing activities: | | | | | | | | | | | | | |
Conversion of account payable to note payable
|
| | | $ | — | | | | | $ | 37,500 | | |
Conversion of notes payable into preferred stock subject to redemption and warrants to purchase common stock
|
| | | $ | 612,923 | | | | | $ | 135,154 | | |
Cumulative preferred stock dividends
|
| | | $ | 589,462 | | | | | $ | 547,303 | | |
Accretion of Series C
|
| | | $ | 8,580 | | | | |||||
Cash paid for interest
|
| | | $ | — | | | | | $ | — | | |
Cash paid for taxes
|
| | | $ | — | | | | | $ | — | | |
| | | | | |
As of December 31,
|
| |||||||||||
| | |
Estimated Life
|
| |
2014
|
| |
2013
|
| ||||||||
Computers and equipment
|
| |
5 years
|
| | | $ | 5,487 | | | | | $ | 4,320 | | | ||
Furniture and fixtures
|
| |
7 years
|
| | | | 4,270 | | | | | | 4,270 | | | ||
Leasehold improvements
|
| |
7 years
|
| | | | — | | | | | | 3,500 | | | ||
Total property and equipment
|
| | | | | | | 9,757 | | | | | | 12,090 | | | ||
Accumulated depreciation
|
| | | | | | | (4,585) | | | | | | (4,605) | | | ||
Total property and equipment, net of accumulated depreciation
|
| | | | | | $ | 5,172 | | | | | $ | 7,485 | | | ||
|
| | |
Year ended December 31, 2014
|
| |||||||||
| | |
Low
|
| |
High
|
| ||||||
Expected dividend yield
|
| | | | 0.00% | | | | | | 0.00% | | |
Expected stock-price volatility
|
| | | | 51.45% | | | | | | 64.24% | | |
Risk-free interest rate
|
| | | | 0.88% | | | | | | 3.04% | | |
Expected term of options
|
| | | | 5 | | | | | | 10 | | |
Stock price
|
| | | $ | 1.14 | | | | | $ | 5.86 | | |
|
Year
|
| |
Share Class
|
| |
Price per Share
|
|
|
2005
|
| |
Common Stock(a)
|
| |
$1.79
|
|
|
2006
|
| |
Series A-2 Preferred Stock(a)(b)
|
| |
$0.40
|
|
|
2008 – 2009
|
| |
Series A-3 Preferred Stock(b)
|
| |
$0.62
|
|
|
2010 – 2013
|
| |
Series B Preferred Stock(b)
|
| |
$1.19
|
|
|
2014
|
| |
Series C Preferred Stock(b)
|
| |
$1.30
|
|
| | |
Valuation Dates
|
| |||||||||||||||
| | |
November 7, 2013
|
| |
July 31, 2012
|
| |
December 31, 2010
|
| |||||||||
Risk-free rate
|
| | | | 0.55% | | | | | | 0.57% | | | | | | 2.01% | | |
Maturity (years)
|
| | | | 3.00 | | | | | | 4.00 | | | | | | 5.00 | | |
Volatility | | | | | 58.00% | | | | | | 61.00% | | | | | | 61.00% | | |
Grant Date
|
| |
Number of Common
Shares Underlying Options Granted |
| |
Exercise Price
per Common Share |
| |
Estimated Fair Value
per Share of Common Stock |
| |
Intrinsic Value
Option |
| ||||||
2005 | | | | | 58,321 | | | |
$0.07
|
| | | $ | 1.79 | | | |
$1.72
|
|
2009 | | | | | 60,559 | | | |
$0.72 – $0.79
|
| | | $ | 4.43 | | | |
$3.71 – $3.64
|
|
2011 | | | | | 33,846 | | | |
$1.00
|
| | | $ | 1.00 | | | |
$0.00
|
|
2012 | | | | | 60,019 | | | |
$1.14
|
| | | $ | 1.14 | | | |
$0.00
|
|
2013 | | | | | 100,000 | | | |
$1.14 – $1.30
|
| | | $ | 1.14 | | | |
$0.00
|
|
2014 | | | | | 1,626,740 | | | |
$5.86 – $13.23
|
| | | $ | 5.86 | | | |
$0.00
|
|
| | |
Options
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2013
|
| | | | 226,793 | | | | | $ | 1.083 | | | ||
Granted
|
| | | | 1,626,740 | | | | | | 7.722 | | | ||
Exercised/Expired/Forfeited
|
| | | | (64,816) | | | | | | (0.888) | | | ||
Outstanding at December 31, 2014
|
| | | | 1,788,717 | | | | | $ | 7.128 | | | ||
Exercisable at December 31, 2014
|
| | | | 162,237 | | | | | $ | 4.053 | | | ||
Expected to be vested
|
| | | | 1,626,480 | | | | | $ | 7.434 | | | ||
|
| | |
December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
Statutory U.S. federal rate
|
| | | | 34.0% | | | | | | 34.0% | | | ||
State income tax, net of federal benefit
|
| | | | 3.9% | | | | | | 3.9% | | | ||
Meals & entertainment
|
| | | | (0.3)% | | | | | | (0.4)% | | | ||
Others | | | | | (0.5)% | | | | | | (2.8)% | | | ||
Forward sale of preferred stock
|
| | | | (2.3)% | | | | | | 0.0% | | | ||
Non-cash interest on conversion
|
| | | | (2.8)% | | | | | | 0.0% | | | ||
Valuation allowance
|
| | | | (32.0)% | | | | | | (34.7)% | | | ||
Provision for income taxes
|
| | | | 0.0% | | | | | | 0.0% | | | ||
|
| | |
As of December 31,
|
| |||||||||||
| | |
2014
|
| |
2013
|
| ||||||||
Deferred tax assets: | | | | | | | | | | | | | | ||
Net operating loss carry forwards
|
| | | $ | 3,675,012 | | | | | $ | 3,306,227 | | | ||
Patent costs
|
| | | | 318,652 | | | | | | 243,722 | | | ||
Capitalized interest
|
| | | | 85,568 | | | | | | 8,518 | | | ||
Accrued vacation
|
| | | | 10,237 | | | | | | 6,192 | | | ||
Research and development credit
|
| | | | 200,482 | | | | | | 73,484 | | | ||
Stock based compensation
|
| | | | 383,381 | | | | | | 115,314 | | | ||
Other
|
| | | | 4,460 | | | | | | 4,828 | | | ||
Gross deferred tax assets
|
| | | | 4,677,792 | | | | | | 3,758,285 | | | ||
Valuation allowance
|
| | | | (4,677,792) | | | | | | (3,758,285) | | | ||
Net deferred tax assets
|
| | | $ | — | | | | | $ | — | | | ||
|
| | |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
| | |
(unaudited)
|
| | | | | | | |||||
ASSETS | | | | | | | | | | | | | | ||
Current assets | | | | | | | | | | | | | | ||
Cash and cash equivalents
|
| | | $ | 1,975,313 | | | | | $ | 2,747,248 | | | ||
Prepaid expenses
|
| | | | 56,353 | | | | | | 57,115 | | | ||
Total current assets
|
| | | | 2,031,666 | | | | | | 2,804,363 | | | ||
Other assets
|
| | | | 10,331 | | | | | | 10,331 | | | ||
Deferred offering costs
|
| | | | 296,863 | | | | | | 143,454 | | | ||
Property and equipment, net
|
| | | | 4,869 | | | | | | 5,172 | | | ||
Total Assets
|
| | | $ | 2,343,729 | | | | | $ | 2,963,320 | | | ||
LIABILITIES AND STOCKHOLDERS’ DEFICIT | | | | | | | | | | | | | | ||
Current liabilities | | | | | | | | | | | | | | ||
Accounts payable
|
| | | $ | 1,002,723 | | | | | $ | 1,083,597 | | | ||
Accrued expenses
|
| | | | 218,636 | | | | | | 168,635 | | | ||
Other liabilities
|
| | | | 1,679 | | | | | | 2,518 | | | ||
Total current liabilities
|
| | | | 1,223,038 | | | | | | 1,254,750 | | | ||
Preferred stock subject to redemption, $0.001 par value,16,378,646 shares authorized as of March 31, 2015 and December 31, 2014; 14,869,662 and 13,399,668 shares issued and outstanding at March 31, 2015 and December 31, 2014, respectively; $11.0 million aggregate liquidation preference of Series B cumulative preferred stock at March 31, 2015
|
| | | | 16,384,715 | | | | | | 16,203,612 | | | ||
Stockholders’ deficit | | | | ||||||||||||
Preferred stock, par value $0.001, 8,887,500 shares authorized, issued and outstanding as of March 31, 2015 and December 31, 2014
|
| | | | 8,888 | | | | | | 8,888 | | | ||
Common stock, par value $0.001, 50,000,000 shares authorized as of March 31, 2015 and December 31, 2014; 465,384 shares issued and outstanding as of March 31, 2015 and December 31, 2014
|
| | | | 465 | | | | | | 465 | | | ||
Additional paid-in capital
|
| | | | 4,199,047 | | | | | | 3,399,924 | | | ||
Accumulated deficit
|
| | | | (19,472,424) | | | | | | (17,904,319) | | | ||
Total stockholders’ deficit
|
| | | | (15,264,024) | | | | | | (14,495,042) | | | ||
Total Liabilities and Stockholders’ Deficit
|
| | | $ | 2,343,729 | | | | | $ | 2,963,320 | | | ||
|
| | |
For the Three Months Ended March 31,
|
| |||||||||||
| | |
2015
|
| |
2014
|
| ||||||||
Operating costs and expenses: | | | | | | | | | | | | | | ||
Research and development
|
| | | $ | 31,460 | | | | | $ | 5,850 | | | ||
Patent costs
|
| | | | 62,274 | | | | | | 36,782 | | | ||
General and administrative
|
| | | | 1,302,565 | | | | | | 243,909 | | | ||
Total operating expenses
|
| | | | 1,396,299 | | | | | | 286,541 | | | ||
Operating loss
|
| | | | (1,396,299) | | | | | | (286,541) | | | ||
Other income: | | | | | | | | | | | | | | ||
Interest income
|
| | | | 2,204 | | | | | | 204 | | | ||
Other income
|
| | | | 7,091 | | | | | | — | | | ||
Total other income
|
| | | | 9,295 | | | | | | 204 | | | ||
Net loss
|
| | | $ | (1,387,004) | | | | | $ | (286,337) | | | ||
Cumulative preferred stock dividends
|
| | | | 149,283 | | | | | | 147,445 | | | ||
Accretion of discount on Series C preferred stock
|
| | | | 31,818 | | | | | | — | | | ||
Net loss applicable to common stockholders
|
| | | $ | (1,568,105) | | | | | $ | (433,782) | | | ||
Net loss per common share – basic and diluted
|
| | | $ | (3.37) | | | | | $ | (0.96) | | | ||
Weighted average common shares outstanding – basic and diluted
|
| | | | 465,384 | | | | | | 451,398 | | | ||
|
| | |
For the Three Months Ended March 31,
|
| |||||||||
| | |
2015
|
| |
2014
|
| ||||||
Cash flows from operating activities | | | | | | | | | | | | | |
Net loss
|
| | | $ | (1,387,004) | | | | | $ | (286,337) | | |
Adjustments to reconcile net loss to net cash used in operating activities:
|
| | | ||||||||||
Depreciation
|
| | | | 303 | | | | | | 1,267 | | |
Stock based compensation
|
| | | | 799,125 | | | | | | 213 | | |
Increase (decrease) in cash attributable to changes in operating assets
and liabilities: |
| | | | | | | | | | | | |
Prepaid expenses
|
| | | | 762 | | | | | | (32,256) | | |
Accounts payable
|
| | | | (80,874) | | | | | | 35,564 | | |
Accrued expenses
|
| | | | 50,001 | | | | | | (7,137) | | |
Other liabilities
|
| | | | (839) | | | | | | (386) | | |
Net cash used in operating activities
|
| | | | (618,526) | | | | | | (289,072) | | |
Cash flows from investing activities | | | | | | | | | | | | | |
Purchase of property and equipment
|
| | | | — | | | | | | (1,166) | | |
Net cash used in investing activities
|
| | | | — | | | | | | (1,166) | | |
Cash flows from financing activities | | | | | | | | | | | | | |
Deferred offering costs
|
| | | | (153,409) | | | | | | — | | |
Repayment of borrowing under note payable
|
| | | | — | | | | | | (9,000) | | |
Net cash used in financing activities
|
| | | | (153,409) | | | | | | (9,000) | | |
Net decrease in cash
|
| | | | (771,935) | | | | | | (299,238) | | |
Cash at beginning of period
|
| | | | 2,747,248 | | | | | | 448,226 | | |
Cash at end of period
|
| | | $ | 1,975,313 | | | | | $ | 148,988 | | |
Non-cash financing activities: | | | | | | | | | | | | | |
Cumulative preferred stock dividends
|
| | | $ | 149,283 | | | | | $ | 147,445 | | |
Accretion of Series C
|
| | | $ | 31,818 | | | | | $ | — | | |
Cash paid for interest
|
| | | $ | — | | | | | $ | — | | |
Cash paid for taxes
|
| | | $ | — | | | | | $ | — | | |
| | |
Estimated Life
|
| |
March 31,
2015 |
| |
December 31,
2014 |
| ||||||||
Computers and equipment
|
| |
5 years
|
| | | $ | 5,487 | | | | | $ | 5,487 | | | ||
Furniture and fixtures
|
| |
7 years
|
| | | | 4,270 | | | | | | 4,270 | | | ||
Total property and equipment
|
| | | | | | | 9,757 | | | | | | 9,757 | | | ||
Accumulated depreciation
|
| | | | | | | (4,888) | | | | | | (4,585) | | | ||
Total property and equipment, net of accumulated depreciation
|
| | | | | | $ | 4,869 | | | | | $ | 5,172 | | | ||
|
| | |
Warrants
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2014
|
| | | | 418,323 | | | | | $ | 9.30 | | | ||
Granted
|
| | | | — | | | | | | — | | | ||
Exercised/Expired/Forfeited
|
| | | | — | | | | | | — | | | ||
Outstanding at March 31, 2015
|
| | | | 418,323 | | | | | $ | 9.30 | | | ||
Exercisable at March 31, 2015
|
| | | | 418,323 | | | | | $ | 9.30 | | | ||
|
| | |
Three months ended March 31, 2015
|
| |||||||||
| | |
Low
|
| |
High
|
| ||||||
Expected dividend yield
|
| | | | 0.00% | | | | | | 0.00% | | |
Expected stock-price volatility
|
| | | | 51.45% | | | | | | 65.06% | | |
Risk-free interest rate
|
| | | | 0.77% | | | | | | 2.00% | | |
Expected term of options
|
| | | | 5 | | | | | | 10 | | |
Stock price
|
| | | $ | 5.86 | | | | | $ | 5.86 | | |
|
Year
|
| |
Share Class
|
| |
Price per Share
|
|
|
2005
|
| |
Common Stock(a)
|
| |
$1.79
|
|
|
2006
|
| |
Series A-2 Preferred Stock(a)(b)
|
| |
$0.40
|
|
|
2008 – 2009
|
| |
Series A-3 Preferred Stock(b)
|
| |
$0.62
|
|
|
2010 – 2013
|
| |
Series B Preferred Stock(b)
|
| |
$1.19
|
|
|
2014
|
| |
Series C Preferred Stock(b)
|
| |
$1.30
|
|
| | |
Valuation Date
|
| |||||||||||||||
| | |
November 7, 2013
|
| |
July 31, 2012
|
| |
December 31, 2010
|
| |||||||||
Risk-free rate
|
| | | | 0.55% | | | | | | 0.57% | | | | | | 2.01% | | |
Maturity (years)
|
| | | | 3.00 | | | | | | 4.00 | | | | | | 5.00 | | |
Volatility | | | | | 58.00% | | | | | | 61.00% | | | | | | 61.00% | | |
Grant Date
|
| |
Number of Common
Shares Underlying Options Granted |
| |
Exercise Price
per Common Share |
| |
Estimated Fair Value
per Share of Common Stock |
| |
Intrinsic Value
Option |
| ||||||
2005 | | | | | 58,321 | | | |
$0.07
|
| | | $ | 1.79 | | | |
$1.72
|
|
2009 | | | | | 60,559 | | | |
$0.72 – $0.79
|
| | | $ | 4.43 | | | |
$3.71 – $3.64
|
|
2011 | | | | | 33,846 | | | |
$1.00
|
| | | $ | 1.00 | | | |
$0.00
|
|
2012 | | | | | 60,019 | | | |
$1.14
|
| | | $ | 1.14 | | | |
$0.00
|
|
2013 | | | | | 100,000 | | | |
$1.14 – $1.30
|
| | | $ | 1.14 | | | |
$0.00
|
|
2014 | | | | | 1,626,740 | | | |
$5.86 – $13.23
|
| | | $ | 5.86 | | | |
$0.00
|
|
| | |
Options
|
| |
Weighted Average
Exercise Price |
| ||||||||
Outstanding at December 31, 2014
|
| | | | 1,788,717 | | | | | $ | 7.128 | | | ||
Granted
|
| | | | — | | | | | | — | | | ||
Exercised/Expired/Forfeited
|
| | | | (918) | | | | | | (5.863) | | | ||
Outstanding at March 31, 2015
|
| | | | 1,787,799 | | | | | $ | 7.131 | | | ||
Exercisable at March 31, 2015
|
| | | | 208,918 | | | | | $ | 4.419 | | | ||
Expected to be vested
|
| | | | 1,578,881 | | | | | $ | 7.490 | | | ||
|
| | |
Total
|
| ||||
SEC registration fee
|
| | | $ | 3,045.37 | | | |
FINRA filing fee
|
| | | $ | 4,431.20 | | | |
NASDAQ listing fee
|
| | | $ | 50,000.00 | | | |
Printing and engraving expenses
|
| | | $ | 50,000.00 | | | |
Legal fees and expenses
|
| | | $ | 450,000.00 | | | |
Accounting fees and expenses
|
| | | $ | 200,000.00 | | | |
Transfer agent and registrar fees
|
| | | $ | 5,000.00 | | | |
Miscellaneous
|
| | | $ | 237,523.43 | | | |
Total
|
| | | $ | 1,000,000.00 | | | |
|
|
Signature
|
| |
Title
|
| |
Date
|
|
|
/s/ Michael D. Step
Michael D. Step
|
| |
Chief Executive Officer and Director
(Principal Executive Officer) |
| |
June 19, 2015
|
|
|
/s/ Samuel O. Lynn
Samuel O. Lynn
|
| |
Chief Financial Officer
(Principal Financial and Accounting Officer) |
| |
June 19, 2015
|
|
|
/s/ Ira E. Ritter
Ira E. Ritter
|
| |
Executive Chairman, Chief Strategic Officer and Director
|
| |
June 19, 2015
|
|
|
/s/ Andrew J. Ritter
Andrew J. Ritter
|
| |
President and Director
|
| |
June 19, 2015
|
|
|
*
Noah Doyle
|
| |
Director
|
| |
June 19, 2015
|
|
|
*
Matthew W. Foehr
|
| |
Director
|
| |
June 19, 2015
|
|
|
*
Paul V. Maier
|
| |
Director
|
| |
June 19, 2015
|
|
|
*
Gerald T. Proehl
|
| |
Director
|
| |
June 19, 2015
|
|
| *By: | | |
/s/ Andrew J. Ritter
Andrew J. Ritter
Attorney-in-fact |
|
Exhibit No.
|
| |
Description
|
|
1.1** | | | Form of Underwriting Agreement | |
3.1** | | | Restated Certificate of Incorporation of Ritter Pharmaceuticals, Inc. | |
3.2** | | | Bylaws of Ritter Pharmaceuticals, Inc. | |
3.3 | | | Certificate of Amendment to the Restated Certificate of Incorporation of Ritter Pharmaceuticals, Inc. | |
3.4** | | | Form of Amended and Restated Certificate of Incorporation of Ritter Pharmaceuticals, Inc. | |
3.5** | | | Form of Amended and Restated Bylaws of Ritter Pharmaceuticals, Inc. | |
4.1** | | | Form of Common Stock Certificate of Ritter Pharmaceuticals, Inc. | |
4.2** | | | Amended and Restated Investors’ Rights Agreement, dated as of November 17, 2010, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.3** | | | Amendment No. 1 to the Amended and Restated Investors’ Rights Agreement, dated as of January 13, 2011, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.4** | | | Amendment No. 2 to the Amended and Restated Investors’ Rights Agreement, dated as of February 6, 2012, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.5** | | | Amendment No. 3 to the Amended and Restated Investors’ Rights Agreement, dated as of December 4, 2014, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.6** | | | Form of Amendment No. 4 to the Amended and Restated Investors’ Rights Agreement, by and among Ritter Pharmaceuticals, Inc. and the persons and entities named therein | |
4.7** | | | Form of Representative’s Warrant Agreement | |
5.1** | | | Opinion of Reed Smith LLP | |
10.1** | | | Office Lease, dated June 25, 2013, by and between Douglas Emmett 1997, LLC and Ritter Pharmaceuticals, Inc. | |
10.2** | | | Offer Letter, dated December 2, 2014, by and between Michael D. Step and Ritter Pharmaceuticals, Inc. | |
10.3** | | | Executive Compensation Plan | |
10.4** | | | Executive Severance & Change in Control Agreement, dated October 1, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.5** | | | 2008 Stock Plan | |
10.6** | | | 2009 Stock Plan | |
10.7** | | | Form of 2015 Stock Plan | |
10.8** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.9** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.10** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Michael D. Step | |
10.11** | | | Stock Option Agreement, dated September 25, 2013, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | |
10.12** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | |
10.13** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | |
10.14** | | | Stock Option Agreement, dated September 25, 2013, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | |
Exhibit No.
|
| |
Description
|
| | ||
10.15** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | ||
10.16** | | | Stock Option Agreement, dated December 2, 2014, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | ||
10.17** | | | Research and Development Agreement & License, dated November 30, 2010, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.18** | | | Amendment No. 1 to Research and Development Agreement & License, dated July 6, 2011, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.19** | | | Amendment No. 2 to Research and Development Agreement & License, dated September 30, 2011, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.20** | | | Amendment No. 3 to Research and Development Agreement & License, dated February 6, 2012, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.21** | | | Amendment No. 4 to Research and Development Agreement & License, dated November 4, 2013, by and among Kolu Pohaku Technologies, LLC, Kolu Pohaku Management, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.22** | | | Put and Call Option Agreement, dated November 30, 2010, by and between Kolu Pohaku Technologies, LLC and Ritter Pharmaceuticals, Inc. | | | ||
10.23** | | | Subordinated Convertible Promissory Note to SJ Investment Company, LLC, dated May 23, 2014, in the principal amount of $25,000.00 | | | ||
10.24** | | | Subordinated Convertible Promissory Note to Javelin Venture Partners, L.P., dated May 23, 2014, in the principal amount of $350,000.00 | | | ||
10.25** | | | Subordinated Convertible Promissory Note to Javelin Venture Partners, L.P., dated September 8, 2014, in the principal amount of $80,000.00 | | | ||
10.26** | | | Unsecured Promissory Note to Javelin Venture Partners, L.P., dated October 9, 2014, in the principal amount of $70,000.00 | | | ||
10.27** | | | Subordinated Convertible Promissory Note, dated October 20, 2014, in the principal amount of $80,000.00 | | | ||
10.28** | | | Series C Preferred Stock and Warrant Purchase Agreement, dated December 4, 2014, by and among Ritter Pharmaceuticals, Inc. and the Investors named therein | | | ||
10.29** | | | Form of Indemnification Agreement between Ritter Pharmaceuticals, Inc. and each of its directors and executive officers | | | ||
10.30** | | | Clinical Supply and Operation Agreement, dated December 16, 2009, by and among Ritter Pharmaceuticals, Inc. and Ricerche Sperimentali Montale SpA and Inalco SpA | | | ||
10.31** | | | Amendment 1 to the Clinical Supply and Cooperation Agreement, dated September 25, 2010, by and among Ritter Pharmaceuticals, Inc. and Ricerche Sperimentali Montale SpA and Inalco SpA | | | ||
10.32** | | | Form of Offer Letter, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | | | ||
10.33** | | | Form of Offer Letter, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | | |
10.34** | | | Form of Executive Severance & Change in Control Agreement, by and between Ritter Pharmaceuticals, Inc. and Andrew J. Ritter | | | ||
10.35** | | | Form of Executive Severance & Change in Control Agreement, by and between Ritter Pharmaceuticals, Inc. and Ira E. Ritter | | | ||
21.1** | | | Subsidiaries of Registrant | | | ||
23.1 | | | Consent of Mayer Hoffman McCann P.C., independent registered public accounting firm | | | ||
23.2** | | | Consent of Reed Smith LLP (included in Exhibit 5.1) | | | ||
24.1** | | | Power of Attorney (included on applicable signature pages) | | |
Exhibit 3.3
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
RITTER PHARMACEUTICALS, INC.
a Delaware corporation
Ritter Pharmaceuticals, Inc., a corporation organized and existing under the General Corporation Law of the State of Delaware (the “Corporation”), does hereby certify as follows:
Article IV of the Restated Certificate of Incorporation of this Corporation shall be amended to add after the first paragraph thereof the following paragraph:
“Upon the effectiveness of the Certificate of Amendment of the Restated Certificate of Incorporation adding this paragraph (the "Effective Time"), each seven and fifteen-on hundredths (7.15) shares of the Corporation's Common Stock, par value $0.001 per share, issued and outstanding immediately prior to the Effective Time shall automatically be combined into one (1) validly issued, fully paid and non-assessable share of Common Stock, par value $0.001 per share, without any further action by the Corporation or the holder thereof, subject to the treatment of fractional share interests as described below (the "Reverse Stock Split "). The Reverse Stock Split shall be effected on a certificate-by-certificate basis and no fractional shares shall be issued upon or as a result of the Reverse Stock Split. In lieu of any fractional shares to which the holder would otherwise be entitled as a result of the Reverse Stock Split, the Corporation shall pay an amount of cash (without interest or deduction) equal to the product of (i) the fractional share of Common Stock to which the holder would otherwise be entitled multiplied by (ii) the fair market value per share thereof as of the Effective Time as determined in good faith by the Board of Directors of the Corporation. Each certificate or book entry that immediately prior to the Effective Time represented shares of Common Stock shall thereafter be deemed to represent that number of shares of Common Stock into which the shares of Common Stock represented by such certificate or book entry shall have been combined, subject to the elimination of fractional share interests as described above.”
This Certificate of Amendment was duly adopted in accordance with Section 228 and 242 of the General Corporation Law of the State of Delaware.
In witness whereof, Ritter Pharmaceuticals, Inc. has caused this Certificate of Amendment to be signed by its duly authorized officer this 17 day of June, 2015.
RITTER PHARMACEUTICALS, INC. | ||
By: | /s/ ANDREW J. RITTER | |
Andrew J. Ritter, | ||
President |
- 2 - |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
As independent registered public accountants, we hereby consent to the use in this Registration Statement on Form S-1/A and related Prospectus of our report dated March 13, 2015 (except for the matters noted in Note 11, as to which the date is April 24, 2015, and except for the effects of the stock split as described in Note 2 and Note 3, as to which the date is June 19, 2015) relating to the financial statements of Ritter Pharmaceuticals, Inc., (which report includes an explanatory paragraph relating to the uncertainty of the Company’s ability to continue as a going concern) and to the reference to us under the caption "Experts" which is contained in this Prospectus.
/s/ Mayer Hoffman McCann P.C.
Orange County, California
June 19, 2015
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