Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

These consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States (“US GAAP”). In the opinion of management, the accompanying consolidated financial statements reflect all adjustments (consisting only of normal recurring items) considered necessary to present fairly the Company’s financial position at

June 30, 2018

and

December 31, 2017,

the results of its operations and comprehensive loss for the

three

month and

six

month periods ended

March 31

and

June 30, 2018

and

2017,

and the cash flows for the

six

month period ended

June 30, 2018

and

2017.

Consolidation, Policy [Policy Text Block]

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions have been eliminated upon consolidation.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the U.S. requires management to make estimates and assumptions that affect the reported values of amounts in the financial statements and accompanying notes. Actual results could differ from those estimates.

Research and Development Expense, Policy [Policy Text Block]

Research and Development Costs

All research and development costs are charged to expense as incurred. Research and development costs include salaries and personnel-related costs, consulting fees, fees paid for contract clinical trial research services, the costs of laboratory consumables, equipment and facilities, license fees and other external costs. Costs incurred to acquire licenses for intellectual property to be used in research and development activities with

alternative future use are expensed as incurred as research and development costs.

Nonrefundable advance payments for goods or services to be received in the future for use in research and development activities are deferred and capitalized. The capitalized amounts are expensed as the related goods are delivered or the services are performed.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Share-Based Compensation

The Company accounts for its share-based compensation awards in accordance with ASC Topic

718,

Compensation-Stock Compensation

(“ASC

718”

). ASC

718

requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statements of operations based on their grant date fair values. For stock options granted to employees and to members of the board of directors for their services on the board of directors, the Company estimates the grant date fair value of each option award using the Black-Scholes option-pricing model. The use of the Black-Scholes option-pricing model requires management to make assumptions with respect to the expected term of the option, the expected volatility of the common stock consistent with the expected life of the option, risk-free interest rates and expected dividend yields of the common stock. To determine the fair value of its common stock, the Company uses the closing price of the Company’s common stock as reported by NASDAQ. For awards subject to service-based vesting conditions, the Company recognizes share-based compensation expense, equal to the grant date fair value of stock options on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur rather than on an estimated basis.

Share-based compensation expense recognized for the

three

and

six

months ended

June 30, 2018

and

2017

was included in the following line items on the Consolidated Statements of Operations (in thousands).

	Three Months Ended June 30,					Six Months Ended June 30,
	2018		2017			2018		2017
Research and development	$	162	$	(273	)	$	250	$	21
General and administrative		475		1,171			497		1,601
Total share-based compensation expense	$	637	$	898		$	747	$	1,622

The fair value of each option is estimated on the date of grant using the Black-Scholes method with the following assumptions:

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
Dividend yield		-			-			-			-
Expected volatility		80%			67%		67%	-	80%	65%	-	67%
Risk-free interest rate	2.58%	-	2.90%	1.83%	-	1.97%	2.38%	-	2.90%	1.83%	-	2.41%
Expected life (in years)	5.38	-	10	5.38	-	6	5.38	-	10	5.38	-	10
Weighted-average grant date fair value per share		4.52			4.66			4.53			4.85

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash and Cash Equivalents

The Company considers highly liquid investments with a maturity of

three

months or less when purchased to be cash equivalents. Cash and cash equivalents consisted primarily of cash on deposit in U.S., German, Swiss, Japanese and Canadian banks. Cash and cash equivalents are stated at cost which approximates fair value.

Concentration Risk, Credit Risk, Policy [Policy Text Block]

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to credit risk consist primarily of cash and cash equivalents. The Company holds these investments in highly-rated financial institutions, and limits the amounts of credit exposure to any

one

financial institution. These amounts at times

may

exceed federally insured limits. The Company has

not

experienced any credit losses in such accounts and does

not

believe it is exposed to any significant credit risk on these funds. The Company has

off-balance sheet concentrations of credit risk, such as foreign currency exchange contracts, option contracts or other hedging arrangements.

Fair Value Measurement, Policy [Policy Text Block]

Fair Value Measurements

The Company follows ASC Topic

820,

Fair Value Measurements and Disclosures

, which establishes a fair value hierarchy for those instruments measured at fair value that distinguishes between assumptions based on market date (observable inputs) and the Company’s own assumptions (unobservable inputs). The hierarchy consists of

three

levels:

•

Level

1—Unadjusted

quoted prices in active markets for identical assets or liabilities.

•

Level

2—Quoted

prices for similar assets and liabilities in active markets, quoted prices in markets that are

not

active, or inputs which are observable, either directly or indirectly, for substantially the full term of the asset or liability.

•

Level

3—Unobservable

inputs that reflect the Company’s own assumptions about the assumptions market participants would use in pricing the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

June 30, 2018

and

December 31, 2017,

the Company did

not

have any assets or liabilities that are measured at fair value on a recurring basis. The carrying amounts reflected in the balance sheets for cash and cash equivalents, prepaid expenses and other current assets, accounts payable, and accrued expenses approximate their fair values at

June 30, 2018

and

December 31, 2017,

due to their short-term nature.

Property, Plant and Equipment, Policy [Policy Text Block]

Property and Equipment

Property and equipment, which consists of land, construction in process, furniture and fixtures, computers and office equipment, scientific equipment, leasehold improvements, vehicles and building are stated at cost and depreciated over the estimated useful lives of the assets, with the exception of land and construction in process which are

not

depreciated, using the straight line method. The useful lives are as follows:


• Furniture and fixtures	7 years

• Office equipment	5 years

• Leasehold improvements	Shorter of asset’s useful life or remaining lease term

• Scientific equipment	5 years

• Vehicles	5 years

• Building	39 years

Costs of major additions and betterments are capitalized; maintenance and repairs, which do

not

improve or extend the life of the respective assets, are charged to expense as incurred. Upon retirement or sale, the cost of the disposed asset and the related accumulated depreciation are removed from the accounts and the resulting gain or loss is recognized.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Impairment of Long-Lived Assets

The Company periodically evaluates its long-lived assets for potential impairment in accordance with ASC Topic

360,

Property, Plant and Equipment

. Potential impairment is assessed when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset

may

not

be recovered. Recoverability of these assets is assessed based on undiscounted expected future cash flows from the assets, considering a number of factors, including past operating results, budgets and economic projections, market trends and product development cycles. If impairments are identified, assets are written down to their estimated fair value. The Company has

not

recognized any impairment through

June 30, 2018.

Income Tax, Policy [Policy Text Block]

Income Taxes

The Company makes estimates and judgments in determining the need for a provision for income taxes, including the estimation of its taxable income or loss for the full fiscal year. The Company has accumulated significant deferred tax assets that reflect the tax effects of net operating losses and tax credit carryovers and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Realization of certain deferred tax assets is dependent upon future earnings. The Company is uncertain about the timing and amount of any future earnings. Accordingly, the Company offsets these deferred tax assets with a valuation allowance. The Company

may

in the future determine that certain deferred tax assets will likely be realized, in which case the Company will reduce its valuation allowance in the period in which such determination is made. If the valuation allowance is reduced, the Company

may

recognize a benefit from income taxes in its consolidated statements of operations in that period.

The GAAP guidance requires recognition of the impact of a tax position in our financial statements only if that position is more likely than

not

to be sustained upon examination by taxing authorities, based on the technical merits of the position. Any interest and penalties related to uncertain tax positions will be reflected in income tax expense. Determining the consolidated provision for income taxes involves judgments, estimates and the application of complex tax regulations. We are required to provide for income taxes in each of the jurisdictions where we operate, including estimated liabilities for uncertain tax positions. Although we believe that we have provided adequate liabilities for uncertain tax positions, the actual liability resulting from examinations by taxing authorities could differ from the recorded income tax liabilities and could result in additional income tax expense having a material impact on our consolidated results of operations. Changes of estimates in our income tax liabilities are reflected in our income tax provision in the period in which the factors resulting in the change to our estimate become known to us. We benefit from the tax credit incentives under the U.S. research and experimentation tax credit extended to taxpayers engaged in qualified research and experimental activities while carrying on a trade or business.

December 22, 2017,

the President of the United States signed into law the Tax Cuts and Jobs Act, or TCJA, tax reform legislation. The TCJA makes significant changes in U.S. tax law including a reduction in the corporate tax rates, changes to net operating loss carryforwards and carrybacks, and a repeal of the corporate alternative minimum tax. The TCJA reduced the U.S. corporate tax rate from the current rate of

percent down to

percent starting on

January 1, 2018.

As a result of the TCJA, the Company was required to revalue deferred tax assets and liabilities at

percent. As of and for the year ended

December 31, 2017,

this revaluation resulted in a provision of

$4.5

million to income tax expense in continuing operations and a corresponding reduction in the valuation allowance. As a result, there was

impact to the Company’s consolidated statements of comprehensive loss as a result of the reduction in tax rates.

As the Company does

not

have all of the necessary information to analyze all income tax effects of the TCJA, the Company will continue to make and refine calculations and estimates as additional information is obtained, which could potentially affect the provisional amounts relating to the deferred income taxes, including but

not

limited to deferred tax assets related to share-based compensation expenses. Where the Company has

not

yet been able to make reasonable estimates of the impact of certain elements, the Company has

not

recorded any amounts related to those elements and has continued accounting for them in accordance with ASC

740

on the basis of the tax laws in effect immediately prior to the enactment of the TCJA. The Company expects to complete a detailed analysis

later than the

fourth

quarter of

2018.

Foreign Currency Transactions and Translations Policy [Policy Text Block]

Foreign Currency Transactions

Certain transactions are denominated in a currency other than the Company’s functional currency of the U.S. dollar, and the Company generates assets and liabilities that are fixed in terms of the amount of foreign currency that will be received or paid. At each balance sheet date, the Company adjusts the assets and liabilities to reflect the current exchange rate, resulting in a translation gain or loss. Transaction gains and losses are also realized upon a settlement of a foreign currency transaction in determining net loss for the period in which the transaction is settled.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income (Loss)

ASC Topic

220,

Comprehensive Income

, requires that all components of comprehensive income (loss), including net income (loss), be reported in the financial statements in the period in which they are recognized. Comprehensive income (loss) is defined as the change in equity during a period from transactions and other events and circumstances from non-owner sources, including unrealized gains and losses on investments and foreign currency translation adjustments.

Segment Reporting, Policy [Policy Text Block]

Segment and Geographic Information

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company and the chief operating decision maker view the Company’s operations and manage its business as

one

operating segment. Substantially all of the Company’s operations are in the U.S. geographic segment.

Earnings Per Share, Policy [Policy Text Block]

Net Loss Per Share

Net loss per share (“EPS”) is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted EPS is computed by dividing net loss by the weighted average number of common shares and common share equivalents outstanding (if dilutive) during each period. The number of common share equivalents, which include stock options, is computed using the treasury stock method.

Subsequent Events, Policy [Policy Text Block]

Subsequent Events

The Company considered events or transactions occurring after the balance sheet date but prior to the date the consolidated financial statements are available to be issued for potential recognition or disclosure in its consolidated financial statements. The Company has evaluated subsequent events through the date of filing this Form

-Q.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

Recently Issued Accounting Pronouncements

February 2016,

the FASB issued final guidance that will change the accounting for leases, Accounting Standards Update (ASU)

No.

2016

02,

“Leases.” The FASB issued final guidance that requires lessees to put most leases on their balance sheets but recognize expenses on their income statements in a manner similar to today’s accounting. The guidance also eliminates today’s real estate-specific provisions for all entities. The pronouncement will also require additional disclosures about the amount, timing and uncertainty of cash flows arising from leases. For calendar-year public business entities and certain calendar-year

not

-for-profit entities and employee benefit plans, the guidance is effective in

2019,

and interim periods within that year, and early adoption is permitted. The adoption of this standard will require the Company to record its operating leases on the balance sheet. The Company is currently evaluating the impact of this pronouncement on the Company's consolidated financial statements.