I. RESTATEMENT

6 Months Ended

Mar. 31, 2020

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 six and three months ended March 31, 2020 have been restated to reflect the correction of the error. The following is a summary of the restatement:

	March 31, 2020
BALANCE SHEET	PREVIOUSLY REPORTED			ADJUSTMENT		RESTATED
Finance lease right of use assets	$	12,741,195		$	1,929,551	$	14,670,746
Total assets		34,717,226			1,929,551		36,646,777
Accumulated deficit		(368,108,788	)		1,929,551		(366,179,237	)
Total stockholders' equity		12,208,509			1,929,551		14,138,060
Total liabilities and stockholders' equity		34,717,226			1,929,551		36,646,777

	Six Months Ended March 31, 2020									Three Months Ended March 31, 2020
STATEMENT OF OPERATIONS	PREVIOUSLY REPORTED			ADJUSTMENT			RESTATED			PREVIOUSLY REPORTED			ADJUSTMENT			RESTATED
Research and development expenses	$	8,598,960		$	112,400		$	8,711,360		$	4,402,347		$	56,200		$	4,458,547
Total operating expenses		13,796,378			112,400			13,908,778			6,960,869			56,200			7,017,069
Operating loss		(13,462,146	)		(112,400	)		(13,574,546	)		(6,662,143	)		(56,200	)		(6,718,343	)
Net loss		(14,486,778	)		(112,400	)		(14,599,178	)		(9,011,618	)		(56,200	)		(9,067,818	)
Net loss available to common shareholders		(14,508,512	)		(112,400	)		(14,620,912	)		(9,033,353	)		(56,200	)		(9,089,552	)
Net loss per share - basic and diluted	$	(0.41	)				$	(0.41	)	$	(0.25	)				$	(0.25	)

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 $112,400 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).