AVENUE THERAPEUTICS, INC., 10-Q filed on 8/14/2018
Quarterly Report
v3.10.0.1
Document And Entity Information - shares
6 Months Ended
Jun. 30, 2018
Aug. 06, 2018
Document Information [Line Items]    
Document Type 10-Q  
Amendment Flag false  
Document Period End Date Jun. 30, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q2  
Entity Registrant Name AVENUE THERAPEUTICS, INC.  
Entity Central Index Key 0001644963  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Trading Symbol ATXI  
Entity Common Stock, Shares Outstanding   10,554,420
v3.10.0.1
CONDENSED BALANCE SHEETS - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Current Assets:    
Cash and cash equivalents $ 8,940 $ 11,782
Short-term investments 0 10,000
Prepaid expenses and other current assets 496 388
Total Assets 9,436 22,170
Current Liabilities:    
Accounts payable and accrued expenses 4,234 2,737
Accounts payable and accrued expenses - related party 185 53
Total current liabilities 4,419 2,790
Total Liabilities 4,419 2,790
Commitments and Contingencies
Stockholders' Equity    
Common Stock ($0.0001 par value), 50,000,000 shares authorized Common shares; 10,554,170 and 10,265,083 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively 1 1
Common stock issuable, 0 and 273,837 shares as of June 30, 2018 and December 31, 2017, respectively 0 1,103
Additional paid-in capital 40,711 38,937
Accumulated deficit (35,695) (20,661)
Total Stockholders' Equity 5,017 19,380
Total Liabilities and Stockholders' Equity 9,436 22,170
Series A Preferred Stock [Member]    
Stockholders' Equity    
Preferred Stock ($0.0001 par value), 2,000,000 shares authorized Class A Preferred Stock, 250,000 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively $ 0 $ 0
v3.10.0.1
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares
Jun. 30, 2018
Dec. 31, 2017
Preferred Stock, Par or Stated Value Per Share $ 0.0001 $ 0.0001
Preferred Stock, Shares Authorized 2,000,000 2,000,000
Common Stock, Par or Stated Value Per Share $ 0.0001 $ 0.0001
Common Stock, Shares Authorized 50,000,000 50,000,000
Common Stock, Shares, Issued 10,554,170 10,265,083
Common Stock, Shares, Outstanding 10,554,170 10,265,083
Common Stock Shares issuable 0 273,837
Series A Preferred Stock [Member]    
Preferred Stock, Shares Issued 250,000 250,000
Preferred Stock, Shares Outstanding 250,000 250,000
v3.10.0.1
CONDENSED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
3 Months Ended 6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Operating expenses:        
Research and development $ 3,754 $ 447 $ 13,193 $ 580
General and administrative 927 1,297 1,913 1,668
Loss from operations (4,681) (1,744) (15,106) (2,248)
Interest income (24) 0 (72) 0
Interest expense 0 93 0 188
Interest expense - related party 0 20 0 81
Change in fair value of convertible notes payable 0 95 0 99
Change in fair value of warrant liabilities 0 454 0 451
Net Loss $ (4,657) $ (2,406) $ (15,034) $ (3,067)
Net loss per common share outstanding, basic and diluted $ (0.45) $ (0.70) $ (1.48) $ (0.95)
Weighted average number of common shares outstanding, basic and diluted 10,251,950 3,459,942 10,176,062 3,242,602
v3.10.0.1
CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY - 6 months ended Jun. 30, 2018 - USD ($)
$ in Thousands
Total
Class A Preferred [Member]
Common Stock [Member]
Common Stock issuable [Member]
Additional Paid-in Capital [Member]
Accumulated deficit [Member]
Balance at Dec. 31, 2017 $ 19,380 $ 0 $ 1 $ 1,103 $ 38,937 $ (20,661)
Balance (Shares) at Dec. 31, 2017   250,000 10,265,083 273,837    
Issuance of common shares - Founders Agreement 0 $ 0 $ 0 $ (1,103) 1,103 0
Issuance of common shares - Founders Agreement (in shares)   0 273,837 (273,837)    
Exercise of warrants under the NSC Note 0 $ 0 $ 0 $ 0 0 0
Exercise of warrants under the NSC Note (in shares)   0 15,250 0    
Share based compensation 671 $ 0 $ 0 $ 0 671 0
Share based compensation (in shares)   0 0 0    
Net loss (15,034) $ 0 $ 0 $ 0 0 (15,034)
Balance at Jun. 30, 2018 $ 5,017 $ 0 $ 1 $ 0 $ 40,711 $ (35,695)
Balance (Shares) at Jun. 30, 2018   250,000 10,554,170 0    
v3.10.0.1
CONDENSED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Cash flows from operating activities:    
Net loss $ (15,034) $ (3,067)
Adjustments to reconcile net loss to net cash used in operating activities:    
Share based compensation 671 24
Change in fair value of convertible notes payable 0 99
Change in fair value of warrant liabilities 0 451
Debt discount amortization 0 68
Issuance of common shares - Founders Agreement 0 948
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets (108) (22)
Accounts payable and accrued expenses 1,497 320
Accounts payable and accrued expenses - related party 132 451
Interest payable 0 (1)
Accrued interest - related party 0 74
Net cash used in operating activities (12,842) (655)
Cash flows from investing activities:    
Maturity of Short-term investments (certificates of deposits) 10,000 0
Net cash provided by investing activities 10,000 0
Cash flows from financing activities:    
Issuance of common shares 0 37,950
Offering costs 0 (3,447)
Proceeds from notes payable - related party 0 638
Net cash provided by financing activities 0 35,141
Net change in cash (2,842) 34,486
Cash and cash equivalents, beginning of period 11,782 197
Cash and cash equivalents, end of period 8,940 34,683
Supplemental disclosure of cash flow information:    
Cash paid for interest 0 125
Non-cash financing activities:    
Conversion of MSA fees into common shares 0 1,000
Issuance of warrants 0 750
Extinguishment of Fortress compensation accrual 0 632
Modification to interest on fortress note 0 300
Conversion of notes payable 0 200
Change in fair value of convertible notes warrants $ 0 $ 15
v3.10.0.1
Organization, Plan of Business Operations
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]
Note 1 - Organization, Plan of Business Operations
 
Avenue Therapeutics, Inc. (the “Company” or “Avenue”) was incorporated in Delaware on February 9, 2015, as a wholly owned subsidiary of Fortress Biotech, Inc. (“Fortress”), to develop and market pharmaceutical products for the acute care setting in the United States. The Company is focused on developing its product candidate, an intravenous (“IV”) formulation of tramadol HCI (“IV Tramadol”), for moderate to moderately severe post-operative pain.
 
Liquidity and Capital Resources
 
The Company has incurred substantial operating losses since its inception and expects to continue to incur significant operating losses for the foreseeable future as it executes on its product development plan and may never become profitable. As of June 30, 2018, the Company had an accumulated deficit of $35.7 million.
 
The Company’s current development plan anticipates that its cash and cash equivalents at June 30, 2018 will provide sufficient liquidity through August 14, 2019. This development plan includes delaying certain previously planned activities in order to preserve cash.  The Company will need to raise additional funding through strategic relationships, public or private equity or debt financings, grants or other arrangements. If such funding is not available or not available on terms acceptable to the Company, it may require additional curtailment of the Company’s planned activities and impact the Company’s ability to continue as a going concern.
v3.10.0.1
Significant Accounting Policies
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Significant Accounting Policies [Text Block]
Note 2 — Significant Accounting Policies
 
Basis of Presentation
 
The accompanying unaudited interim condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited interim condensed financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period.
 
Therefore, these unaudited interim condensed financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2017, which were included in the Company’s Form 10-K, and filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2018. The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.
 
The unaudited interim condensed financial statements may not be indicative of future performance and may not reflect what the results of operations, financial position, and cash flows would have been had Avenue operated as an independent entity. Certain estimates, including allocations from Fortress, have been made to provide financial statements for stand-alone reporting purposes. Inter-company transactions between Fortress and Avenue are classified as Accounts Payable and Accrued Expenses - Related Party in the unaudited interim condensed financial statements. The Company believes that the assumptions underlying the unaudited interim condensed financial statements are reasonable.
 
The Company has no subsidiaries.
 
Use of Estimates
 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
 
Annual Stock Dividend
 
In September 2016, the Company issued 250,000 Class A preferred shares to Fortress. The Class A preferred shares entitle the holder to a stock dividend equal to 2.5% of the fully diluted outstanding equity of the Company (“The Annual Stock Dividend”) to be paid on February 17 of each year. On June 13, 2018, the 
Company’s Stockholders adopted an amendment to the Company’s Third Amended and Restated Certificate of Incorporation amending 
the payment date going forward to January 1 of each year.
 
The Company recorded the Annual Stock Dividend due to Fortress as contingent consideration. Contingent consideration is recorded when probable and reasonably estimable. The Company’s future share prices cannot be estimated due to the nature of its assets and the Company’s stage of development. Due to these uncertainties, the Company concluded that it could not reasonably estimate the contingent consideration until shares were actually issued on February 17, 2018 and 2017. Because the issuance of shares on February 17, 2018 and 2017 occurred prior to the issuance of the December 31, 2017 and 2016 financial statements, respectively, the Company recorded approximately $1.1 million and $49,000 in research and development - licenses acquired for the years ended December 31, 2017 and 2016, respectively.
 
Net loss per Share
 
Loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding, excluding unvested restricted stock and stock options, during the period. Since dividends are declared paid and set aside among the holders of shares of common stock and Class A common stock pro-rata on an as-if-converted basis, the two-class method of computing net loss per share is not required.
 
The following table sets forth the common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted income (loss) per share because to do so would have been anti-dilutive for the periods presented:
 
 
 
For the Three and Six Months Ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2018
 
 
2017
 
Restricted stock units/awards
 
 
673,332
 
 
 
199,999
 
Preferred shares
 
 
250,000
 
 
 
250,000
 
Options
 
 
20,000
 
 
 
-
 
Total potential dilutive effect
 
 
943,332
 
 
 
449,999
 
 
Recently Adopted Accounting Standards
 
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2017-01,
 
Business Combinations (Topic 805) Clarifying the Definition of a Business
 
(“ASU 2017-01”). The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted ASU 2017-01 in the first quarter of 2018 and its adoption did not have a material impact on the Company’s unaudited interim condensed financial statements.
 
In May 2017, the FASB issued ASU No. 2017-09,
 
Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting
, (“ASU 2017-09”) which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. It is effective prospectively for the annual period ending December 31, 2018 and interim periods within that annual period. Early adoption is permitted. The Company early adopted ASU 2017-09 in the first quarter of 2018 and its adoption did not have a material impact on the Company’s unaudited interim condensed financial statements.
 
Recently Issued Accounting Standards
 
In June 2018, the FASB issued ASU No. 2018-07,
 
Improvements to Nonemployee Share-Based Payment Accounting
, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The changes take effect for public companies for fiscal years starting after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is currently evaluating the impact of adopting this standard on its financial statements and related disclosures, but does not expect it to have a material impact.
v3.10.0.1
Allocation
6 Months Ended
Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]  
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]
Note 3 — Allocation
 
The expense allocations to Avenue, which represent Lucy Lu’s executive compensation, have been paid by Fortress and allocated by the Company between Avenue and Fortress based on time spent on Avenue projects versus time spent on Fortress projects. The allocations were based on assumptions that management believes are reasonable; however, these allocations are not necessarily indicative of the costs and expenses that would have resulted if Avenue had been operating as a stand-alone entity. Since Lucy Lu became a full-time employee for Avenue in June 2017, the allocations ceased as her time spent was 100% devoted to Avenue. For the three months ended June 30, 2018 and 2017, the allocated expenses related to Lucy Lu were approximately $0 and $0.1 million, respectively, and were recorded 50% to research and development and 50% to general and administrative expenses.  For the six months ended June 30, 2018 and 2017, the allocated expenses related to Lucy Lu were approximately $0 and $0.2 million, respectively, and were recorded 50% to research and development and 50% to general and administrative expenses.
v3.10.0.1
Related Party Agreements
6 Months Ended
Jun. 30, 2018
Related Party Transactions [Abstract]  
Related Party Transactions Disclosure [Text Block]
Note 4 — Related Party Agreements
 
Management Services Agreement with Fortress
 
Effective as of February 17, 2015, Fortress entered into a Management Services Agreement (the “MSA”) with Avenue to provide advisory and consulting services to Avenue for a period of five (5) years. Services provided under the MSA may include, without limitation, (i) advice and assistance concerning any and all aspects of Avenue’s operations, clinical trials, financial planning and strategic transactions and financings and (ii) conducting relations on behalf of Avenue with accountants, attorneys, financial advisors and other professionals (collectively, the “Services”). Avenue is obligated to utilize clinical research services, medical education, communication and marketing services and investor relations/public relation services of companies or individuals designated by Fortress, provided those services are offered at market prices. However, Avenue is not obligated to take or act upon any advice rendered from Fortress and Fortress shall not be liable for any of Avenue’s actions or inactions based upon their advice. Fortress and its affiliates, including all members of Avenue’s Board of Directors, have been contractually exempt from fiduciary duties to Avenue relating to corporate opportunities. In consideration for the Services, Avenue will pay Fortress an annual consulting fee of $0.5 million (the “Annual Consulting Fee”), payable in advance in equal quarterly installments on the first business day of each calendar quarter in each year, provided, however, that such Annual Consulting Fee shall be increased to $1.0 million for each calendar year in which Avenue has net assets in excess of $100.0 million at the beginning of the calendar year. For the three months ended June 30, 2018 and 2017, the Company had expenses related to the MSA of approximately $0.1 million, respectively. For the six months ended June 30, 2018 and 2017, the Company had expenses related to the MSA of approximately $0.3 million, respectively.
v3.10.0.1
Accounts Payable and Accrued Expenses
6 Months Ended
Jun. 30, 2018
Payables and Accruals [Abstract]  
Accounts Payable and Accrued Liabilities Disclosure [Text Block]
Note 5— Accounts Payable and Accrued Expenses
 
Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands):
 
 
 
As of June 30,
 
 
As of December 31,
 
 
 
2018
 
 
2017
 
Accounts payable
 
$3,194
 
 
$1,545
 
Accrued employee compensation
 
 
134
 
 
 
215
 
Accrued contracted services and other
 
 
906
 
 
 
977
 
Accounts payable and accrued expenses
 
$4,234
 
 
$2,737
 
v3.10.0.1
Stockholders' Equity
6 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Stockholders' Equity Note Disclosure [Text Block]
Note 6 — Stockholders’ Equity
 
Awards to Fortress
 
Pursuant to the Company’s Third Amended and Restated Certificate of Incorporation for the annual stock dividend that was due on February 17, 2018, the Company issued 273,837 shares of common stock to Fortress, which equaled to 2.5% of the fully diluted outstanding equity of Avenue at the time of issuance for the annual stock dividend. On June 13, 2018, the 
Company’s Stockholders adopted an amendment to the Company’s Third Amended and Restated Certificate of Incorporation amending 
the payment date going forward to January 1 of each year.
 
Equity Incentive Plan
 
The Company has in effect the 2015 Incentive Plan (“2015 Incentive Plan”). The 2015 Incentive Plan was adopted in January 2015 by our stockholders. Under the 2015 Incentive Plan, the compensation committee of the Company’s board of directors is authorized to grant stock-based awards to directors, officers, employees and consultants. The plan authorizes grants to issue up to 2,000,000 shares of authorized but unissued common stock and expires 10 years from adoption and limits the term of each option to no more than 10 years from the date of grant.
 
Restricted Stock Units and Restricted Stock Awards
 
The following table summarizes restricted stock unit and award activity for the six months ended June 30, 2018:
 
  
Number of Units 
and Awards
  
Weighted 
Average Grant 
Date Fair Value
 
Unvested balance at December 31, 2017  714,999  $5.00 
Granted
  -  $- 
Vested
  (41,667) $0.44 
Unvested balance at June 30, 2018  673,332  $5.28 
 
For the three months ended June 30, 2018 and 2017, stock-based compensation expenses associated with the amortization of restricted stock units and restricted stock awards for employees and non-employees were approximately $0.3 million and $19,000 respectively. For the six months ended June 30, 2018 and 2017, stock-based compensation expenses associated with the amortization of restricted stock units and restricted stock awards for employees and non-employees were approximately $0.7 million and $24,000 respectively.
 
At June 30, 2018, the Company had unrecognized stock-based compensation expense related to restricted stock units and restricted stock awards of $2.1 million, which is expected to be recognized over the remaining weighted-average vesting period of 2.2 years.
 
Stock Options
 
The following table summarizes stock option award activity for the six months ended June 30, 2018:
 
  
Stock Options
  
Weighted 
Average Exercise 
Price
  
Weighted Average 
Remaining 
Contractual Life 
(in years)
 
Outstanding, December 31, 2017  20,000  $6.29   4.63 
Granted  -   -   - 
Outstanding, June 30, 2018  20,000  $6.29   4.13 
 
Stock Warrants
 
The following table summarizes the warrant activity for the six months ended June 30, 2018:
 
 
 
Warrants
 
 
Weighted
Average Exercise
Price
 
 
Aggregate

Intrinsic Value

(in thousands)
 
Outstanding, December 31, 2017
 
 
123,413
 
 
$0.0811
 
 
$438
 
Exercised
 
 
(15,250)
 
$0.0001
 
 
 
-
 
Outstanding, June 30, 2018
 
 
108,163
 
 
$0.0926
 
 
$378
 
v3.10.0.1
Significant Accounting Policies (Policies)
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Basis of Accounting, Policy [Policy Text Block]
Basis of Presentation
 
The accompanying unaudited interim condensed financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S GAAP for complete financial statements. In the opinion of management, the unaudited interim condensed financial statements reflect all adjustments, which include only normal recurring adjustments necessary for the fair statement of the balances and results for the periods presented. Certain information and footnote disclosures normally included in the Company’s annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These unaudited interim condensed financial statement results are not necessarily indicative of results to be expected for the full fiscal year or any future period.
 
Therefore, these unaudited interim condensed financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 2017, which were included in the Company’s Form 10-K, and filed with the U.S. Securities and Exchange Commission (“SEC”) on March 1, 2018. The results of operations for any interim periods are not necessarily indicative of the results that may be expected for the entire fiscal year or any other interim period.
 
The unaudited interim condensed financial statements may not be indicative of future performance and may not reflect what the results of operations, financial position, and cash flows would have been had Avenue operated as an independent entity. Certain estimates, including allocations from Fortress, have been made to provide financial statements for stand-alone reporting purposes. Inter-company transactions between Fortress and Avenue are classified as Accounts Payable and Accrued Expenses - Related Party in the unaudited interim condensed financial statements. The Company believes that the assumptions underlying the unaudited interim condensed financial statements are reasonable.
 
The Company has no subsidiaries.
Use of Estimates, Policy [Policy Text Block]
Use of Estimates
 
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period. Actual results could differ from those estimates.
Stockholders' Equity, Policy [Policy Text Block]
Annual Stock Dividend
 
In September 2016, the Company issued 250,000 Class A preferred shares to Fortress. The Class A preferred shares entitle the holder to a stock dividend equal to 2.5% of the fully diluted outstanding equity of the Company (“The Annual Stock Dividend”) to be paid on February 17 of each year. On June 13, 2018, the 
Company’s Stockholders adopted an amendment to the Company’s Third Amended and Restated Certificate of Incorporation amending 
the payment date going forward to January 1 of each year.
 
The Company recorded the Annual Stock Dividend due to Fortress as contingent consideration. Contingent consideration is recorded when probable and reasonably estimable. The Company’s future share prices cannot be estimated due to the nature of its assets and the Company’s stage of development. Due to these uncertainties, the Company concluded that it could not reasonably estimate the contingent consideration until shares were actually issued on February 17, 2018 and 2017. Because the issuance of shares on February 17, 2018 and 2017 occurred prior to the issuance of the December 31, 2017 and 2016 financial statements, respectively, the Company recorded approximately $1.1 million and $49,000 in research and development - licenses acquired for the years ended December 31, 2017 and 2016, respectively.
Earnings Per Share, Policy [Policy Text Block]
Net loss per Share
 
Loss per share is computed by dividing net loss by the weighted-average number of common shares outstanding, excluding unvested restricted stock and stock options, during the period. Since dividends are declared paid and set aside among the holders of shares of common stock and Class A common stock pro-rata on an as-if-converted basis, the two-class method of computing net loss per share is not required.
 
The following table sets forth the common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted income (loss) per share because to do so would have been anti-dilutive for the periods presented:
 
 
 
For the Three and Six Months Ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2018
 
 
2017
 
Restricted stock units/awards
 
 
673,332
 
 
 
199,999
 
Preferred shares
 
 
250,000
 
 
 
250,000
 
Options
 
 
20,000
 
 
 
-
 
Total potential dilutive effect
 
 
943,332
 
 
 
449,999
 
New Accounting Pronouncements, Policy [Policy Text Block]
Recently Adopted Accounting Standards
 
In January 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) No. 2017-01,
 
Business Combinations (Topic 805) Clarifying the Definition of a Business
 
(“ASU 2017-01”). The amendments in this ASU clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted ASU 2017-01 in the first quarter of 2018 and its adoption did not have a material impact on the Company’s unaudited interim condensed financial statements.
 
In May 2017, the FASB issued ASU No. 2017-09,
 
Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting
, (“ASU 2017-09”) which clarifies when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. It is effective prospectively for the annual period ending December 31, 2018 and interim periods within that annual period. Early adoption is permitted. The Company early adopted ASU 2017-09 in the first quarter of 2018 and its adoption did not have a material impact on the Company’s unaudited interim condensed financial statements.
 
Recently Issued Accounting Standards
 
In June 2018, the FASB issued ASU No. 2018-07,
 
Improvements to Nonemployee Share-Based Payment Accounting
, which simplifies the accounting for share-based payments granted to nonemployees for goods and services. Under the ASU, most of the guidance on such payments to nonemployees would be aligned with the requirements for share-based payments granted to employees. The changes take effect for public companies for fiscal years starting after December 15, 2018, including interim periods within that fiscal year. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early adoption is permitted, but no earlier than an entity’s adoption date of Topic 606. The Company is currently evaluating the impact of adopting this standard on its financial statements and related disclosures, but does not expect it to have a material impact.
v3.10.0.1
Significant Accounting Policies (Tables)
6 Months Ended
Jun. 30, 2018
Accounting Policies [Abstract]  
Schedule of Earnings Per Share, Basic, by Common Class, Including Two Class Method [Table Text Block]
The following table sets forth the common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted income (loss) per share because to do so would have been anti-dilutive for the periods presented:
 
 
 
For the Three and Six Months Ended
 
 
 
June 30,
 
 
June 30,
 
 
 
2018
 
 
2017
 
Restricted stock units/awards
 
 
673,332
 
 
 
199,999
 
Preferred shares
 
 
250,000
 
 
 
250,000
 
Options
 
 
20,000
 
 
 
-
 
Total potential dilutive effect
 
 
943,332
 
 
 
449,999
 
v3.10.0.1
Accounts Payable and Accrued Expenses (Tables)
6 Months Ended
Jun. 30, 2018
Payables and Accruals [Abstract]  
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block]
Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands):
 
 
 
As of June 30,
 
 
As of December 31,
 
 
 
2018
 
 
2017
 
Accounts payable
 
$3,194
 
 
$1,545
 
Accrued employee compensation
 
 
134
 
 
 
215
 
Accrued contracted services and other
 
 
906
 
 
 
977
 
Accounts payable and accrued expenses
 
$4,234
 
 
$2,737
 
v3.10.0.1
Stockholders' Equity (Tables)
6 Months Ended
Jun. 30, 2018
Equity [Abstract]  
Schedule of Unvested Restricted Stock Units Roll Forward [Table Text Block]
The following table summarizes restricted stock unit and award activity for the six months ended June 30, 2018:
 
  
Number of Units 
and Awards
  
Weighted 
Average Grant 
Date Fair Value
 
Unvested balance at December 31, 2017  714,999  $5.00 
Granted
  -  $- 
Vested
  (41,667) $0.44 
Unvested balance at June 30, 2018  673,332  $5.28 
Share-based Compensation, Stock Options, Activity [Table Text Block]
The following table summarizes stock option award activity for the six months ended June 30, 2018:
 
  
Stock Options
  
Weighted 
Average Exercise 
Price
  
Weighted Average 
Remaining 
Contractual Life 
(in years)
 
Outstanding, December 31, 2017  20,000  $6.29   4.63 
Granted  -   -   - 
Outstanding, June 30, 2018  20,000  $6.29   4.13 
Share-based Compensation, Activity [Table Text Block]
The following table summarizes the warrant activity for the six months ended June 30, 2018:
 
 
 
Warrants
 
 
Weighted
Average Exercise
Price
 
 
Aggregate

Intrinsic Value

(in thousands)
 
Outstanding, December 31, 2017
 
 
123,413
 
 
$0.0811
 
 
$438
 
Exercised
 
 
(15,250)
 
$0.0001
 
 
 
-
 
Outstanding, June 30, 2018
 
 
108,163
 
 
$0.0926
 
 
$378
 
v3.10.0.1
Organization, Plan of Business Operations (Details Textual) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Retained Earnings (Accumulated Deficit) $ (35,695) $ (20,661)
v3.10.0.1
Significant Accounting Policies (Details) - shares
6 Months Ended
Jun. 30, 2018
Jun. 30, 2017
Total potential dilutive effect shares outstanding 943,332 449,999
Restricted stock units/awards    
Total potential dilutive effect shares outstanding 673,332 199,999
Preferred shares    
Total potential dilutive effect shares outstanding 250,000 250,000
Options    
Total potential dilutive effect shares outstanding 20,000 0
v3.10.0.1
Significant Accounting Policies (Details Textual) - USD ($)
1 Months Ended 12 Months Ended
Sep. 30, 2016
Dec. 31, 2017
Dec. 31, 2016
Stock Issued During Period, Shares, New Issues 250,000    
Preferred Stock, Dividend Rate, Percentage 2.50%    
Research and Development in Process   $ 1,100,000 $ 49,000
v3.10.0.1
Allocation (Details Textual) - Lucy Lu's [Member] - USD ($)
$ in Millions
1 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Compensation Expense   $ 0.0 $ 0.1 $ 0.0 $ 0.2
Compensation Allocation Percentage 100.00%        
Research and Development Expense [Member]          
Compensation Allocation Percentage   50.00%   50.00%  
General and Administrative Expense [Member]          
Compensation Allocation Percentage   50.00%   50.00%  
v3.10.0.1
Related Party Agreements (Details Textual) - USD ($)
$ in Millions
1 Months Ended 3 Months Ended 6 Months Ended
Feb. 17, 2015
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Service Agreement Expenses   $ 0.1 $ 0.1 $ 0.3 $ 0.3
Asset Management Income [Member]          
Annual Consulting Fee $ 0.5        
Increase In Annual Consulting Fee 1.0        
Excess In Net Assets Value $ 100.0        
v3.10.0.1
Accounts Payable and Accrued Expenses (Details) - USD ($)
$ in Thousands
Jun. 30, 2018
Dec. 31, 2017
Accounts payable $ 3,194 $ 1,545
Accrued employee compensation 134 215
Accrued contracted services and other 906 977
Accounts payable and accrued expenses $ 4,234 $ 2,737
v3.10.0.1
Stockholders' Equity (Details) - Restricted Stock [Member]
6 Months Ended
Jun. 30, 2018
$ / shares
shares
Number of Units, Unvested Beginning Balance | shares 714,999
Number of Units, Granted | shares 0
Number of Units, Vested | shares (41,667)
Number of Units, Unvested Ending Balance | shares 673,332
Weighted Average Grant Date Fair Value, Unvested Beginning Balance | $ / shares $ 5.00
Weighted Average Grant Date Fair Value, Granted | $ / shares 0
Weighted Average Grant Date Fair Value, Vested | $ / shares 0.44
Weighted Average Grant Date Fair Value, Unvested Ending Balance | $ / shares $ 5.28
v3.10.0.1
Stockholders' Equity (Details1) - $ / shares
6 Months Ended 12 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Stock Options, Outstanding, Begining 20,000  
Stock Options, Granted 0  
Stock Options, Outstanding, Ending 20,000 20,000
Weighted Average Exercise Price, Outstanding, Begining $ 6.29  
Weighted Average Exercise Price, Granted 0  
Weighted Average Exercise Price, Outstanding, Ending $ 6.29 $ 6.29
Weighted Average Remaining Contractual Life (in years) 4 years 1 month 17 days 4 years 7 months 17 days
v3.10.0.1
Stockholders' Equity (Details 2) - Warrant [Member] - USD ($)
$ / shares in Units, $ in Thousands
6 Months Ended
Jun. 30, 2018
Dec. 31, 2017
Number of Units, Unvested Beginning Balance 123,413  
Warrants, Exercised (15,250)  
Number of Units, Unvested Ending Balance 108,163  
Weighted Average Exercise Price, Outstanding $ 0.0811  
Weighted Average Exercise Price, Exercised 0.0001  
Weighted Average Exercise Price, Outstanding $ 0.0926  
Aggregate Intrinsic Value $ 378 $ 438
v3.10.0.1
Stockholders' Equity (Deficit) (Details Textual) - USD ($)
1 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended
Feb. 17, 2018
Jun. 30, 2018
Jun. 30, 2017
Jun. 30, 2018
Jun. 30, 2017
Dec. 31, 2017
Share-based Compensation       $ 671,000 $ 24,000  
2015 Incentive Plan [Member]            
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized   2,000,000   2,000,000    
Share-based Compensation Arrangement by Share-based Payment Award, Plan Modification, Description and Terms           10 years
Fortress Biotech, Inc [Member]            
Stock Issuance Common Stock Issuable During Period, Shares 273,837          
Percentage of Diluted outstanding Equity 2.50%          
Restricted Stock [Member]            
Share-based Compensation   $ 300,000 $ 19,000 $ 700,000 $ 24,000  
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options   $ 2,100,000   $ 2,100,000    
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition       2 years 2 months 12 days