I. RESTATEMENT

3 Months Ended

Dec. 31, 2019

Accounting Changes and Error Corrections [Abstract]

I. RESTATEMENT

In October 2008, the Company entered into an agreement whereby the Company leased a building owned by a third party. The Company accounted for the lease arrangement in accordance with the build-to-suit guidance in ASC 840-40-55. On October 1, 2019, the Company adopted ASC 842 using the modified retrospective transition approach. Upon adoption of ASC 842, the Company determined the arrangement should be accounted for as a finance lease.

In December 2020, the Company determined that the opening finance right of use (ROU) asset and total stockholders’ equity balances were understated by approximately $2.04 million as of October 1, 2019, the date of adoption. The following is a summary of the components of the understated balances:

· The unamortized value of approximately $0.6 million relating to the issuance of warrants to the landlord should have been capitalized and included as part of the finance ROU asset as of October 1, 2019.

· The unamortized value of approximately $1.4 million relating to a payment made to the landlord at lease inception, which the Company is recovering in the form of reduced rent, should have been capitalized and included as part of the finance ROU asset as of October 1, 2019.

The changes do not impact any prior year’s financial statements but are an adjustment to the opening finance ROU asset and accumulated deficit balances effective October 1, 2019. As a result of the changes to the opening finance ROU asset and accumulated deficit balances, the accompanying financial statements for the three months ended December 31, 2019 have been restated to reflect the correction of the error. The following is a summary of the restatement:

	December 31, 2019
BALANCE SHEET	PREVIOUSLY REPORTED			ADJUSTMENT		RESTATED
Finance lease right of use assets	$	13,120,256		$	1,985,751	$	15,106,007
Total assets		29,507,833			1,985,751		31,493,584
Accumulated deficit		(359,097,170	)		1,985,751		(357,111,419	)
Total stockholders' equity		6,968,314			1,985,751		8,954,065
Total liabilities and stockholders' equity		29,507,833			1,985,751		31,493,584

	Three Months Ended December 31, 2019
STATEMENT OF OPERATIONS	PREVIOUSLY REPORTED			ADJUSTMENT			RESTATED
Research and development expenses	$	4,196,613		$	56,200		$	4,252,813
Total operating expenses		6,835,509			56,200			6,891,709
Operating loss		(6,800,003	)		(56,200	)		(6,856,203	)
Net loss available to common shareholders		(5,475,160	)		(56,200	)		(5,531,360	)
Net loss per share - basic and diluted	$	(0.16	)				$	(0.16	)

The impact, as a result of the restatement, to the accompanying Statement of Cash Flows is an increase to net loss offset by an increase to depreciation and amortization expense of $56,200 resulting in no impact to the cash used in operating activities.

In addition, the cumulative effect adjustment to the opening accumulated deficit balance in the statement of stockholders' equity as of October 1, 2019 increased $2.0 million from $0.1 million (previously reported) to $2.1 million (restated).