AVENUE THERAPEUTICS, INC., 10-Q filed on 5/17/2021
Quarterly Report
v3.21.1
Document and Entity Information - shares
3 Months Ended
Mar. 31, 2021
May 12, 2021
Document and Entity Information [Abstract]    
Document Type 10-Q  
Document Period End Date Mar. 31, 2021  
Entity Registrant Name AVENUE THERAPEUTICS, INC.  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company true  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding   16,748,068
Entity Central Index Key 0001644963  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q1  
Amendment Flag false  
Title of 12(b) Security Common Stock  
Trading Symbol ATXI  
Security Exchange Name NASDAQ  
Entity Ex Transition Period true  
v3.21.1
BALANCE SHEETS - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Current Assets:    
Cash and cash equivalents $ 1,825 $ 3,132
Prepaid expenses and other current assets 119 113
Total Assets 1,944 3,245
Current Liabilities:    
Accounts payable and accrued expenses 389 857
Accounts payable and accrued expenses - related party 80 29
Total current liabilities 469 886
Total Liabilities 469 886
Commitments and Contingencies
Stockholders' Equity    
Common Stock ($0.0001 par value), 50,000,000 shares authorized Common shares, 16,748,068 and 16,747,803 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively 2 2
Additional paid-in capital 75,739 75,625
Accumulated deficit (74,266) (73,268)
Total Stockholders' Equity 1,475 2,359
Total Liabilities and Stockholders' Equity 1,944 3,245
Class A Preferred Shares    
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 March 31, 2021 and December 31, 2020, respectively $ 0 $ 0
v3.21.1
BALANCE SHEETS (Parenthetical) - $ / shares
Mar. 31, 2021
Dec. 31, 2020
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 16,748,068 16,747,803
Common Stock, Shares, Outstanding 16,748,068 16,747,803
Class A Preferred Shares    
Preferred Stock, Shares Issued 250,000 250,000
Preferred Stock, Shares Outstanding 250,000 250,000
v3.21.1
STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Operating expenses:    
Research and development $ 258 $ 697
General and administrative 743 577
Loss from operations (1,001) (1,274)
Interest income (3) (32)
Net Loss $ (998) $ (1,242)
Net loss per common share outstanding, basic and diluted $ (0.06) $ (0.08)
Weighted average number of common shares outstanding, basic and diluted 16,556,320 16,474,655
v3.21.1
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)
Class A Preferred Shares
Common Shares
Additional paid-in capital
Accumulated deficit
Total
Balance at Dec. 31, 2019 $ 0 $ 2,000 $ 74,915,000 $ (68,117,000) $ 6,800,000
Balance (in shares) at Dec. 31, 2019 250,000 16,682,190      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Share based compensation $ 0 $ 0 215,000 0 215,000
Share based compensation (in shares) 0 0      
Cashless exercise of warrants $ 0 $ 0 0 0 0
Cashless exercise of warrants (in shares) 0 613      
Net loss $ 0 $ 0 0 (1,242,000) (1,242,000)
Balance at Mar. 31, 2020 $ 0 $ 2,000 75,130,000 (69,359,000) 5,773,000
Balance (in shares) at Mar. 31, 2020 250,000 16,682,803      
Balance at Dec. 31, 2020 $ 0 $ 2,000 75,625,000 (73,268,000) 2,359,000
Balance (in shares) at Dec. 31, 2020 250,000 16,747,803      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Share based compensation $ 0 $ 0 114,000 0 114,000
Share based compensation (in shares) 0 0      
Cashless exercise of warrants $ 0 $ 0 0 0 0
Cashless exercise of warrants (in shares)   265      
Net loss 0 $ 0 0 (998,000) (998,000)
Balance at Mar. 31, 2021 $ 0 $ 2,000 $ 75,739,000 $ (74,266,000) $ 1,475,000
Balance (in shares) at Mar. 31, 2021 250,000 16,748,068      
v3.21.1
CONDENSED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Cash flows from operating activities:    
Net loss $ (998) $ (1,242)
Adjustments to reconcile net loss to net cash used in operating activities:    
Share based compensation 114 215
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets (6) 48
Accounts payable and accrued expenses (468) (311)
Accounts payable and accrued expenses - related party 51 119
Net cash used in operating activities (1,307) (1,171)
Cash flows from investing activities:    
Milestone payment for research and development licenses 0 (1,000)
Net cash used in investing activities 0 (1,000)
Cash flows from financing activities:    
Net change in cash (1,307) (2,171)
Cash and cash equivalents, beginning of period 3,132 8,745
Cash and cash equivalents, end of period $ 1,825 $ 6,574
v3.21.1
Organization, Plan of Business Operations
3 Months Ended
Mar. 31, 2021
Organization, Plan of Business Operations  
Organization, Plan of Business Operations

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 post-operative acute pain.

Stock Purchase and Merger Agreement

On November 12, 2018, the Company, InvaGen Pharmaceuticals Inc. (“InvaGen”), and Madison Pharmaceuticals, Inc. entered into a Stock Purchase and Merger Agreement (“SPMA”), pursuant to which the Company agreed to its sale in a two-stage transaction. In the first stage, InvaGen agreed to purchase, for $35 million, common shares representing 33.3% of the fully diluted capitalization of the Company. In the second stage, InvaGen would acquire the remaining issued and outstanding capital stock of the Company for approximately $180 million in a reverse subsidiary merger transaction (the “Merger Transaction”).  The SPMA was approved by a majority of the Company’s stockholders, including a majority of its non-affiliated stockholders, at its special shareholder meeting on February 6, 2019. On February 8, 2019, InvaGen acquired 5,833,333 shares of the Company’s common stock at $6.00 per share (the “Stock Purchase Transaction”) for net proceeds of $31.5 million after deducting commission fees and other offering costs, representing a 33.3% stake in the Company’s capital stock on a fully diluted basis.

Consummation of the Merger Transaction is conditioned upon, among other things, U.S. Federal Drug Administration (“FDA”) approval of IV Tramadol, its labeling and scheduling, and the absence of certain other restrictions in effect with respect to IV Tramadol. Pursuant to the SPMA, if FDA approval of IV Tramadol was not obtained on or before April 30, 2021, InvaGen would not be subject to the mandatory closing obligations set forth in the SPMA with respect to the Merger Transaction. As the Company did not receive approval from the FDA for IV Tramadol on or before April 30, 2021, InvaGen is no longer subject to the mandatory closing obligations under the SPMA, but retains an option to complete the Merger Transaction until October 31, 2021 (the time following which the Company can choose to terminate the SPMA), and also retains the option to terminate the SPMA.

In the event that InvaGen does not exercise its right to terminate the SPMA, certain restrictions relating to the Company’s ability to raise capital and explore strategic alternatives, among other things, could exist through October 31, 2021, the time following which the Company can choose to terminate the SPMA. In the event of termination of the SPMA, InvaGen will retain certain rights pursuant to the Stockholder’s Agreement entered into on November 12, 2018 between the Company and InvaGen. These rights exist as long as InvaGen maintains at least 75% of the common shares acquired in the Stock Purchase Transaction and include among other things, the right to restrict the Company from certain equity issuances and changes to the Company’s capital stock without obtaining InvaGen’s prior written consent.

Subject to the terms and conditions described in the SPMA, InvaGen may also (in its sole discretion) provide interim financing to the Company in an amount of up to $7.0 million during the time period between the Stock Purchase Transaction (which occurred on February 8, 2019) and the Merger Transaction. Any amounts drawn on the interim financing would be deducted from the aggregate consideration payable to the Company’s stockholders by virtue of the Merger Transaction. To date, InvaGen has not provided the Company with this interim financing.

Over the past several months, the Company has communicated with InvaGen relating to InvaGen’s assertions that Material Adverse Effects (as defined in the SPMA) have occurred due to the impact of the COVID-19 pandemic on potential commercialization and projected sales of IV Tramadol.  Additionally, in connection with the resubmission of the Company’s New Drug Application (“NDA”) in February 2021, InvaGen communicated to the Company that it believes the proposed label for IV Tramadol would also constitute a Material Adverse Effect (as defined in the SPMA) on the purported basis that the proposed label under certain circumstances would make the product commercially unviable. InvaGen has communicated to the Company its desire to consider all options on the proposed merger, including the option to not consummate the merger. Since the Company did not receive FDA approval for IV Tramadol by April 30, 2021, these assertions have no impact as to whether InvaGen is obligated to close the SPMA because, as discussed above, InvaGen no longer has such an obligation. As a result, the possible timing and likelihood of the completion of the merger are uncertain. There can be no assurance that the Merger Transaction will be completed on the expected terms, anticipated schedule, or at all. It is also possible InvaGen could attempt to pursue monetary claims against the Company.

 

Liquidity and Capital Resources

Going Concern

The Company is not yet generating revenue, 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 March 31, 2021, the Company had an accumulated deficit of $74.3 million.

On October 12, 2020, the Company announced that it had received a Complete Response Letter (“CRL”) from the FDA regarding the Company’s NDA for IV Tramadol. The CRL cited deficiencies related to the terminal sterilization validation and stated that IV Tramadol, intended to treat patients in acute pain who require an opioid, is not safe for the intended patient population. On February 12, 2021, the Company resubmitted its NDA to the FDA for IV Tramadol. The NDA resubmission follows the receipt of official minutes from a Type A meeting with the FDA. The resubmission included revised language relating to the proposed product label and a report relating to terminal sterilization validation. The FDA assigned a Prescription Drug User Fee Act goal date of April 12, 2021 and informed the Company on April 12, 2021 that it had not yet completed its review of the NDA resubmission. The Company's ability to potentially commercialize IV Tramadol, and the timing of any potential commercialization, are dependent on the FDA’s review of the Company’s resubmission of its NDA for IV Tramadol, whether or not the FDA ultimately approves IV Tramadol, and potentially on whether or not the Company procures additional capital.

As of March 31, 2021, the Company had cash and cash equivalents of $1.8 million. In the event that IV Tramadol is approved by the FDA, this triggers an obligation by the Company to make $5.0 million in contractual milestone payments, for which the Company currently does not have sufficient funding. In the event that IV Tramadol is not approved by the FDA, the Company believes that its cash and cash equivalents should be sufficient to fund its operating expenses only into the third quarter of 2021. The Company will need to secure additional funds through equity or debt offerings, or other potential sources. Furthermore, under the SPMA, any additional debt or equity funding must be approved by InvaGen. The Company cannot be certain that InvaGen will approve any debt or equity funding or that additional funding will be available on acceptable terms, or at all. These factors individually and collectively raise substantial doubt about the Company’s ability to continue as a going concern within one year from the date of this report. The unaudited interim condensed financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainty.

In light of the foregoing, it may be necessary at some point for the Company to seek protection under Chapter 11 of the United States Bankruptcy Code, which could have a material adverse impact on the Company's business, financial condition, operations and could place its shareholders at significant risk of losing all of their investment. In any such Chapter 11 proceeding, the Company may seek to restructure its obligations or commence an orderly wind-down of its operations and sale of its assets, in either event, holders of equity interests could receive or retain little or no recovery. The Company also notes that the process of exploring refinancing or restructuring alternatives, including those under Chapter 11, may be disruptive to its business and operations.

In addition to the foregoing, based on current assessments, the Company does not expect any material impact on its development timeline and its liquidity due to the worldwide spread of the COVID-19 virus. However, the Company is continuing to assess the effect on its operations by monitoring the spread of COVID-19 and the actions implemented to combat the virus throughout the world.

 

v3.21.1
Significant Accounting Policies
3 Months Ended
Mar. 31, 2021
Significant Accounting Policies  
Significant Accounting Policies

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, 2020, which were included in the Company’s Annual Report on Form 10-K, and filed with the U.S. Securities and Exchange Commission (“SEC”) on March 31, 2021. 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 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.

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 in its audited financial statements for the year ended December 31, 2020 included in the Company’s Form 10-K.  With the exception of those noted below, there have been no material changes to the Company’s significant accounting policies.

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 and preferred shares, 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 potential common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

March 31, 

 

March 31, 

 

    

2021

    

2020

Unvested restricted stock units/awards

 

1,139,910

 

1,201,575

Preferred shares

 

250,000

 

250,000

Total potential dilutive effect

 

1,389,910

 

1,451,575

 

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, (“ASU 2019-12”) which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021 and its adoption did not have a material impact on the Company’s unaudited interim condensed financial statements and related disclosures.

Coronavirus Aid, Relief and Economic Security Act (“CARES Act”)

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. On December 27, 2020, the President of the United States signed the Consolidated Appropriations Act, 2021 (“Consolidated Appropriations Act”) into law. The Consolidated Appropriations Act is intended to enhance and expand certain provisions of the CARES Act, allows for the deductions of expenses related to the Payroll Protection Program funds received by companies, and provides an update to meals and entertainment expensing for 2021. The Company does not anticipate the Consolidated Appropriations Act to have a material impact to the Company’s income tax provision (benefit) for 2021.

v3.21.1
Accounts Payable and Accrued Expenses
3 Months Ended
Mar. 31, 2021
Accounts Payable and Accrued Expenses  
Accounts Payable and Accrued Expenses

Note 3 — Accounts Payable and Accrued Expenses

Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

As of March 31, 

 

As of December 31,

 

    

2021

    

2020

Accounts payable

 

$

138

 

$

143

Accrued employee compensation

 

 

30

 

 

23

Accrued contracted services and other

 

 

221

 

 

691

Accounts payable and accrued expenses

 

$

389

 

$

857

 

v3.21.1
Related Party Transactions
3 Months Ended
Mar. 31, 2021
Related Party Agreements  
Related Party Transactions

Note 4 — Related Party Transactions

On June 12, 2020, the Company, Fortress and InvaGen entered into a Facility Agreement (“Facility Agreement”) whereby beginning on October 1, 2020 the Company could have borrowed up to $2.0 million collectively from Fortress and InvaGen, subject to certain conditions set forth herein. Fortress’ commitment amount was $0.8 million, and InvaGen’s was $1.2 million, and a 7% per annum interest rate applied (payable on the last day of each fiscal quarter). The Facility Agreement expired on April 29, 2021 and went undrawn. As of March 31, 2021, there were no amounts drawn on the Facility Agreement.

v3.21.1
Stockholders' Equity
3 Months Ended
Mar. 31, 2021
Stockholders' Equity  
Stockholders' Equity

Note 5 — Stockholders’ Equity

Equity Incentive Plan

The Company has in effect the 2015 Incentive Plan (“2015 Incentive Plan”). The 2015 Incentive Plan was adopted in December 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 three months ended March 31, 2021:

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

Number of Units

 

Average Grant

 

    

and Awards

    

Date Fair Value

Unvested balance at December 31, 2020

 

1,139,910

 

$

5.96

Granted

 

 

$

 —

Vested

 

 

$

Unvested balance at March 31, 2021

 

1,139,910

 

$

5.96

 

 

For the three months ended March 31, 2021 and 2020, stock-based compensation expenses associated with the amortization of restricted stock units and restricted stock awards for employees and non-employees were approximately $0.1 million and $0.2 million, respectively.

At March 31, 2021, the Company had unrecognized stock-based compensation expense related to restricted stock units and restricted stock awards of $0.3 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.0 years. This amount does not include, as of March 31, 2021, 487,586 shares of restricted stock outstanding which are performance-based and vest upon achievement of certain corporate milestones. The expense is recognized over the vesting period of the award. Stock-based compensation for milestone awards will be measured and recorded if and when it is probable that the milestone will be achieved.

Stock Warrants

The following table summarizes the warrant activity for the three months ended March 31, 2021:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

Aggregate

 

 

 

 

Average Exercise

 

Intrinsic Value

 

    

Warrants

    

Price

    

(in thousands)

Outstanding, December 31, 2020

 

15,841

 

$

0.6315

 

$

84

Exercised

 

(265)

 

$

0.0001

 

 

 —

Outstanding, March 31, 2021

 

15,576

 

$

0.6422

 

$

85

 

v3.21.1
Significant Accounting Policies (Policies)
3 Months Ended
Mar. 31, 2021
Significant Accounting Policies  
Basis of Presentation

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, 2020, which were included in the Company’s Annual Report on Form 10-K, and filed with the U.S. Securities and Exchange Commission (“SEC”) on March 31, 2021. 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 Company has no subsidiaries.

Use of Estimates

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.

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

The Company’s significant accounting policies are described in Note 2 in its audited financial statements for the year ended December 31, 2020 included in the Company’s Form 10-K.  With the exception of those noted below, there have been no material changes to the Company’s significant accounting policies.

Net Loss Per Share

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 and preferred shares, 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 potential common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

March 31, 

 

March 31, 

 

    

2021

    

2020

Unvested restricted stock units/awards

 

1,139,910

 

1,201,575

Preferred shares

 

250,000

 

250,000

Total potential dilutive effect

 

1,389,910

 

1,451,575

 

Recently Adopted Accounting Standards

Recently Adopted Accounting Standards

In December 2019, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, (“ASU 2019-12”) which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The Company adopted ASU 2019-12 on January 1, 2021 and its adoption did not have a material impact on the Company’s unaudited interim condensed financial statements and related disclosures.

Coronavirus Aid, Relief and Economic Security Act (“CARES Act”)

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020. On December 27, 2020, the President of the United States signed the Consolidated Appropriations Act, 2021 (“Consolidated Appropriations Act”) into law. The Consolidated Appropriations Act is intended to enhance and expand certain provisions of the CARES Act, allows for the deductions of expenses related to the Payroll Protection Program funds received by companies, and provides an update to meals and entertainment expensing for 2021. The Company does not anticipate the Consolidated Appropriations Act to have a material impact to the Company’s income tax provision (benefit) for 2021.

v3.21.1
Significant Accounting Policies (Tables)
3 Months Ended
Mar. 31, 2021
Significant Accounting Policies  
Schedule of diluted net loss per share

The following table sets forth the potential common shares that could potentially dilute basic income per share in the future that were not included in the computation of diluted net loss per share because to do so would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

For the Three Months Ended

 

 

March 31, 

 

March 31, 

 

    

2021

    

2020

Unvested restricted stock units/awards

 

1,139,910

 

1,201,575

Preferred shares

 

250,000

 

250,000

Total potential dilutive effect

 

1,389,910

 

1,451,575

 

v3.21.1
Accounts Payable and Accrued Expenses (Tables)
3 Months Ended
Mar. 31, 2021
Accounts Payable and Accrued Expenses  
Schedule of accounts payable, accrued expenses and other liabilities

Accounts payable, accrued expenses and other liabilities consisted of the following (in thousands):

 

 

 

 

 

 

 

 

 

 

As of March 31, 

 

As of December 31,

 

    

2021

    

2020

Accounts payable

 

$

138

 

$

143

Accrued employee compensation

 

 

30

 

 

23

Accrued contracted services and other

 

 

221

 

 

691

Accounts payable and accrued expenses

 

$

389

 

$

857

 

v3.21.1
Stockholders' Equity (Tables)
3 Months Ended
Mar. 31, 2021
Stockholders' Equity  
Schedule of restricted stock unit and award activity

The following table summarizes restricted stock unit and award activity for the three months ended March 31, 2021:

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

Number of Units

 

Average Grant

 

    

and Awards

    

Date Fair Value

Unvested balance at December 31, 2020

 

1,139,910

 

$

5.96

Granted

 

 

$

 —

Vested

 

 

$

Unvested balance at March 31, 2021

 

1,139,910

 

$

5.96

 

Schedule of warrant activity

The following table summarizes the warrant activity for the three months ended March 31, 2021:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

Aggregate

 

 

 

 

Average Exercise

 

Intrinsic Value

 

    

Warrants

    

Price

    

(in thousands)

Outstanding, December 31, 2020

 

15,841

 

$

0.6315

 

$

84

Exercised

 

(265)

 

$

0.0001

 

 

 —

Outstanding, March 31, 2021

 

15,576

 

$

0.6422

 

$

85

 

v3.21.1
Organization, Plan of Business Operations (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Feb. 08, 2019
Mar. 31, 2021
Dec. 31, 2020
Nov. 12, 2018
Cash and cash equivalents   $ 1,825 $ 3,132  
Contractual milestone payments   5,000    
Accumulated deficit   $ 74,266 $ 73,268  
Line of Credit [Member]        
Interim Financing Amount $ 7,000      
Invagen Pharmaceuticals Inc [Member]        
Percentage of equity interest agreed to acquire in first stage       33.30%
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned       $ 35,000
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned, Remaining Purchase Amount       $ 180,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares 5,833,333      
Business Acquisition, Share Price $ 6.00      
Business acquisition shares acquisition for net proceeds $ 31,500      
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners 33.30%      
v3.21.1
Significant Accounting Policies (Details) - shares
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potential dilutive effect (in shares) 1,389,910 1,451,575
Unvested restricted stock units/awards    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potential dilutive effect (in shares) 1,139,910 1,201,575
Preferred shares    
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]    
Total potential dilutive effect (in shares) 250,000 250,000
v3.21.1
Accounts Payable and Accrued Expenses (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Dec. 31, 2020
Accounts Payable and Accrued Expenses    
Accounts payable $ 138 $ 143
Accrued employee compensation 30 23
Accrued contracted services and other 221 691
Accounts payable and accrued expenses $ 389 $ 857
v3.21.1
Related Party Transactions (Details) - USD ($)
$ in Thousands
Mar. 31, 2021
Jun. 12, 2020
Maximum credit facility amount   $ 2,000
Credit facility amount $ 0  
Aggregate interest percentage 7.00%  
Invagen Pharmaceuticals Inc [Member]    
Credit facility amount   1,200
Fortress [Member]    
Credit facility amount   $ 800
v3.21.1
Stockholders' Equity - Equity Incentive Plan (Details) - Two Thousand Fifteen Incentive Plan
3 Months Ended
Mar. 31, 2021
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized 2,000,000
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period 10 years
Options  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]  
Share-based Compensation Arrangement by Share-based Payment Award, Terms of Award 10 years
v3.21.1
Stockholders' Equity - Restricted Stock Units and Restricted Stock Awards - Activity (Details) - Unvested restricted stock units/awards
Mar. 31, 2021
$ / shares
shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]  
Number of Units and Awards, Unvested Beginning Balance | shares 1,139,910
Number of Units and Awards, Unvested Ending Balance | shares 1,139,910
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]  
Weighted Average Grant Date Fair Value, Unvested Beginning Balance | $ / shares $ 5.96
Weighted Average Grant Date Fair Value, Unvested Ending Balance | $ / shares $ 5.96
v3.21.1
Stockholders' Equity - Restricted Stock Units and Restricted Stock Awards - Share-based Compensation Expense (Details) - USD ($)
$ in Millions
3 Months Ended
Mar. 31, 2021
Mar. 31, 2020
Unvested restricted stock units/awards    
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]    
Share-based Compensation $ 0.1 $ 0.2
v3.21.1
Stockholders' Equity - Restricted Stock Units and Restricted Stock Awards - Unrecognized Share-based Compensation Expense (Details) - Unvested restricted stock units/awards
$ in Millions
3 Months Ended
Mar. 31, 2021
USD ($)
shares
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract]  
Employee Service Share-based Compensation, Nonvested Awards, Compensation Not yet Recognized, Share-based Awards Other than Options | $ $ 0.3
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition 1 year
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested Upon Performance | shares 487,586
v3.21.1
Stockholders' Equity - Warrants (Details) - Warrants under National Securities, Inc Note - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended
Mar. 31, 2021
Dec. 31, 2020
Class of Warrant or Right [Line Items]    
Beginning Balance (in shares) 15,841  
Exercised (in shares) (265)  
Ending Balance (in shares) 15,576  
Aggregate Intrinsic Value $ 85 $ 84
Weighted Average    
Class of Warrant or Right [Line Items]    
Beginning Balance (in dollars per shares) $ 0.6315  
Exercised (in dollars per share) 0.0001  
Ending Balance (in dollars per shares) $ 0.6422