AVENUE THERAPEUTICS, INC., 10-Q filed on 11/4/2020
Quarterly Report
v3.20.2
Document and Entity Information - shares
9 Months Ended
Sep. 30, 2020
Oct. 28, 2020
Document and Entity Information [Abstract]    
Document Type 10-Q  
Document Period End Date Sep. 30, 2020  
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   16,747,803
Entity Central Index Key 0001644963  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Title of 12(b) Security Common Stock  
Trading Symbol ATXI  
Security Exchange Name NASDAQ  
Entity Ex Transition Period true  
v3.20.2
CONDENSED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Current Assets:    
Cash and cash equivalents $ 4,325 $ 8,745
Prepaid expenses and other current assets 27 170
Total Assets 4,352 8,915
Current Liabilities:    
Accounts payable and accrued expenses 1,087 1,101
Accounts payable and accrued expenses - related party 31 14
Licenses payable   1,000
Total current liabilities 1,118 2,115
Total Liabilities 1,118 2,115
Commitments and Contingencies
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 September 30, 2020 and December 31, 2019, respectively 0 0
Common Stock ($0.0001 par value), 50,000,000 shares authorized Common shares, 16,747,803 and 16,682,190 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively 2 2
Additional paid-in capital 75,507 74,915
Accumulated deficit (72,275) (68,117)
Total Stockholders' Equity 3,234 6,800
Total Liabilities and Stockholders' Equity $ 4,352 $ 8,915
v3.20.2
CONDENSED BALANCE SHEETS (Parenthetical) - $ / shares
Sep. 30, 2020
Dec. 31, 2019
CONDENSED BALANCE SHEETS    
Preferred Stock, Par or Stated Value Per Share $ 0.0001 $ 0.0001
Preferred Stock, Shares Authorized 2,000,000 2,000,000
Preferred Stock, Shares Issued 250,000 250,000
Preferred Stock, Shares Outstanding 250,000 250,000
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 16,747,803 16,682,190
Common Stock, Shares, Outstanding 16,747,803 16,682,190
v3.20.2
CONDENSED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Operating expenses:        
Research and development $ 466 $ 1,706 $ 2,382 $ 18,339
General and administrative 571 617 1,832 2,452
Loss from operations (1,037) (2,323) (4,214) (20,791)
Interest income (9) (81) (56) (298)
Net Loss $ (1,028) $ (2,242) $ (4,158) $ (20,493)
Net loss per common share outstanding, basic and diluted $ (0.06) $ (0.14) $ (0.25) $ (1.32)
Weighted average number of common shares outstanding, basic and diluted 16,519,464 16,376,204 16,489,701 15,487,519
v3.20.2
CONDENSED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($)
$ in Thousands
Class A Preferred Shares
Common Shares
Additional paid-in capital
Accumulated deficit
Total
Balance at Dec. 31, 2018   $ 1 $ 41,577 $ (42,209) $ (631)
Balance (in shares) at Dec. 31, 2018 250,000 10,667,714      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Share based compensation     1,585   1,585
Share based compensation (in shares)   75,000      
Issuance of common shares, net of costs   $ 1 31,499   31,500
Issuance of common shares, net of costs (in shares)   5,833,333      
Cashless exercise of warrants (in shares)   85,308      
Net loss       (20,493) (20,493)
Balance at Sep. 30, 2019   $ 2 74,661 (62,702) 11,961
Balance (in shares) at Sep. 30, 2019 250,000 16,661,355      
Balance at Jun. 30, 2019   $ 2 74,362 (60,460) 13,904
Balance (in shares) at Jun. 30, 2019 250,000 16,559,747      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Share based compensation     299   299
Share based compensation (in shares)   75,000      
Cashless exercise of warrants (in shares)   26,608      
Net loss       (2,242) (2,242)
Balance at Sep. 30, 2019   $ 2 74,661 (62,702) 11,961
Balance (in shares) at Sep. 30, 2019 250,000 16,661,355      
Balance at Dec. 31, 2019   $ 2 74,915 (68,117) 6,800
Balance (in shares) at Dec. 31, 2019 250,000 16,682,190      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Share based compensation     592   592
Share based compensation (in shares)   65,000      
Cashless exercise of warrants (in shares)   613      
Net loss       (4,158) (4,158)
Balance at Sep. 30, 2020   $ 2 75,507 (72,275) 3,234
Balance (in shares) at Sep. 30, 2020 250,000 16,747,803      
Balance at Jun. 30, 2020   $ 2 75,346 (71,247) 4,101
Balance (in shares) at Jun. 30, 2020 250,000 16,702,803      
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Share based compensation     161   161
Share based compensation (in shares)   45,000      
Net loss       (1,028) (1,028)
Balance at Sep. 30, 2020   $ 2 $ 75,507 $ (72,275) $ 3,234
Balance (in shares) at Sep. 30, 2020 250,000 16,747,803      
v3.20.2
CONDENSED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Cash flows from operating activities:    
Net loss $ (4,158) $ (20,493)
Adjustments to reconcile net loss to net cash used in operating activities:    
Share based compensation 592 1,585
Changes in operating assets and liabilities:    
Prepaid expenses and other current assets 143 76
Accounts payable and accrued expenses (14) (1,960)
Accounts payable and accrued expenses - related party 17 (471)
Net cash used in operating activities (3,420) (21,263)
Cash flows from investing activities:    
Purchase of Short-term investments (certificates of deposit)   (5,000)
Milestone payment for research and development licenses (1,000)  
Net cash used in investing activities (1,000) (5,000)
Cash flows from financing activities:    
Issuance of common shares   35,000
Offering costs   (2,667)
Net cash provided by financing activities   32,333
Net change in cash (4,420) 6,070
Cash and cash equivalents, beginning of period 8,745 2,671
Cash and cash equivalents, end of period $ 4,325 8,741
Non-cash financing activities:    
Prior period financing costs   $ 833
v3.20.2
Organization, Plan of Business Operations
9 Months Ended
Sep. 30, 2020
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 moderate to moderately severe post-operative pain.

Stock Purchase and Merger Agreement

On November 12, 2018, the Company and InvaGen Pharmaceuticals Inc. (“InvaGen”), entered into definitive agreements with two closing stages for a proposed acquisition of the Company for a total aggregate consideration of $215.0 million. The Stock Purchase and Merger Agreement (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.

At the second stage closing, InvaGen will acquire the remaining shares of Avenue’s common stock, pursuant to a reverse triangular merger with Avenue remaining as the surviving entity, for up to $180.0 million in the aggregate (the “Merger Transaction”). The second stage closing is subject to the satisfaction of certain closing conditions, including conditions pertaining to the U.S. Food and Drug Administration ("FDA") approval, labeling, scheduling and the absence of any Risk Evaluation and Mitigation Strategy or similar restrictions in effect with respect to IV Tramadol, as well as the expiration of any waiting period applicable to the acquisition under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.

In October 2020, InvaGen communicated to the Company that it believes a Material Adverse Effect (as defined in the SPMA) has occurred due to the impact of the COVID-19 pandemic on potential commercialization and projected sales of IV Tramadol, which means it is possible InvaGen could attempt to avoid its obligation to consummate the second stage closing under the SPMA. The Company disagrees with InvaGen's assertion that a Material Adverse Effect has occurred and the Company has advised InvaGen of this position.

Subject to the terms and conditions described in the SPMA, InvaGen may also 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 will be deducted from the aggregate consideration payable to the Company’s stockholders by virtue of the Merger Transaction. There have been no amounts drawn upon this interim financing as of September 30, 2020.

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 September 30, 2020, the Company had an accumulated deficit of $72.3 million.

On October 12, 2020, the Company announced that it had received a Complete Response Letter (“CRL") from the FDA regarding the Company’s New Drug Application 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. The Company's ability to potentially commercialize IV Tramadol, and the timing of potential commercialization, is dependent on the FDA's review of the Company's response to the CRL and its NDA for IV Tramadol, and other items such as timely and successful completion of the terminal sterilization validation, ultimate FDA approval, and potentially additional capital.

The Company's current business plan assumes a meeting with the FDA in an attempt to resolve the deficiencies and issues raised in the CRL.  The Company may require additional capital to fund operating needs to address the deficiencies and issues based on the outcome of the meeting with the FDA. The Company cannot assure you that the FDA will ever approve IV Tramadol, that the Company can ever resolve the intended patient population issue, or that the Company along with its third-party manufacturer, will be able to complete terminal sterilization validation successfully and in a timely manner. 

As of September 30, 2020, the Company had cash and cash equivalents of $4.3 million. The Company believes that its cash and cash equivalents should be sufficient to fund its operating expenses through the end of the first quarter of 2021. However, in the event that IV Tramadol is approved but there is a delay in the second stage closing due to the alleged Material Adverse Effect or if after April 30, 2021 InvaGen chooses not to consummate the second stage closing, the Company would need to secure additional funds through equity or debt offerings, or other potential sources. In the event that the FDA requires additional testing related to the intended patient population or the terminal sterilization validation, the Company would need to secure additional funds through equity or debt offerings, or other potential sources. The Company cannot be certain 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 these unaudited interim condensed financial statements. The unaudited interim financial statements do not contain any adjustments that might result from the resolution of any of the above uncertainty.

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 (except as may be implicated by the alleged Material Adverse Effect claimed by InvaGen). 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. The Company will also continue to assess the alleged Material Adverse Effect claimed by InvaGen.

 

v3.20.2
Significant Accounting Policies
9 Months Ended
Sep. 30, 2020
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, 2019, which were included in the Company’s Form 10-K, and filed with the U.S. Securities and Exchange Commission (“SEC”) on March 30, 2020. 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, 2019 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 income (loss) per share because to do so would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

For the Three and Nine Months Ended

 

 

September 30, 

 

September 30, 

 

    

2020

    

2019

Unvested restricted stock units/awards

 

1,139,910

 

1,115,162

Preferred shares

 

250,000

 

250,000

Total potential dilutive effect

 

1,389,910

 

1,365,162

 

Recent Accounting Pronouncements to be Adopted

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 is currently evaluating the impact of this standard on its 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. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer's social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. At this time, the Company does not believe that the CARES Act will have a material impact on the Company's income tax provision for 2020. The Company will continue to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows.

v3.20.2
Accounts Payable and Accrued Expenses
9 Months Ended
Sep. 30, 2020
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 September 30, 

 

As of December 31,

 

    

2020

    

2019

Accounts payable

 

$

399

 

$

354

Accrued employee compensation

 

 

159

 

 

477

Accrued contracted services and other

 

 

529

 

 

270

Accounts payable and accrued expenses

 

$

1,087

 

$

1,101

 

v3.20.2
Related Party Transactions
9 Months Ended
Sep. 30, 2020
Related Party Transactions  
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 may borrow up to $2.0 million collectively from Fortress and InvaGen, subject to certain conditions set forth herein. Fortress’ commitment amount is  $0.8 million, and InvaGen’s is $1.2 million, and a 7% per annum interest rate applies (payable on the last day of each fiscal quarter). Repayment of the loan is due upon the earliest of i) the second stage closing ii) April 29, 2021 and iii) the date that is 30 days following the termination of the SPMA. As of September 30, 2020, there have been no amounts drawn on the Facility Agreement.

v3.20.2
Stockholders' Equity
9 Months Ended
Sep. 30, 2020
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 nine months ended September 30, 2020:

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

Number of Units

 

Average Grant

 

    

and Awards

    

Date Fair Value

Unvested balance at December 31, 2019

 

1,045,162

 

$

5.10

Granted

 

176,413

 

$

10.99

Vested

 

(81,665)

 

$

5.78

Unvested balance at September 30, 2020

 

1,139,910

 

$

5.96

 

 

For the three months ended September 30, 2020 and 2019, stock-based compensation expenses associated with the amortization of restricted stock units and restricted stock awards for employees and non-employees were approximately $0.2 million and $0.3 million, respectively. For the nine months ended September 30, 2020 and 2019, stock-based compensation expenses associated with the amortization of restricted stock units and restricted stock awards for employees and non-employees were approximately $0.6 million and $1.6 million, respectively.

At September 30, 2020, the Company had unrecognized stock-based compensation expense related to restricted stock units and restricted stock awards of $0.5 million, which is expected to be recognized over the remaining weighted-average vesting period of 1.3 years.  This amount does not include, as of September 30, 2020, 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 nine months ended September 30, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

Aggregate

 

 

 

 

Average Exercise

 

Intrinsic Value

 

    

Warrants

    

Price

    

(in thousands)

Outstanding, December 31, 2019

 

16,454

 

$

0.6079

 

$

148

Exercised

 

(613)

 

$

0.0001

 

 

 —

Outstanding, September 30, 2020

 

15,841

 

$

0.6315

 

$

162

 

v3.20.2
Subsequent Events
9 Months Ended
Sep. 30, 2020
Subsequent Events  
Subsequent Events

Note 6 – Subsequent Events

On October 12, 2020, the Company announced that it had received a Complete Response Letter (“CRL”) from the FDA regarding the Company’s New Drug Application for IV Tramadol.  The Company has requested a meeting with the FDA to resolve the issues described in the CRL and the meeting has been scheduled for the fourth quarter of 2020.

v3.20.2
Significant Accounting Policies (Policies)
9 Months Ended
Sep. 30, 2020
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, 2019, which were included in the Company’s Form 10-K, and filed with the U.S. Securities and Exchange Commission (“SEC”) on March 30, 2020. 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, 2019 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 income (loss) per share because to do so would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

For the Three and Nine Months Ended

 

 

September 30, 

 

September 30, 

 

    

2020

    

2019

Unvested restricted stock units/awards

 

1,139,910

 

1,115,162

Preferred shares

 

250,000

 

250,000

Total potential dilutive effect

 

1,389,910

 

1,365,162

 

Recent Accounting Pronouncements to be Adopted

Recent Accounting Pronouncements to be Adopted

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 is currently evaluating the impact of this standard on its 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. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer's social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. At this time, the Company does not believe that the CARES Act will have a material impact on the Company's income tax provision for 2020. The Company will continue to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows.

v3.20.2
Significant Accounting Policies (Tables)
9 Months Ended
Sep. 30, 2020
Significant Accounting Policies  
Schedule of diluted income (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 income (loss) per share because to do so would have been anti-dilutive for the periods presented:

 

 

 

 

 

 

 

 

For the Three and Nine Months Ended

 

 

September 30, 

 

September 30, 

 

    

2020

    

2019

Unvested restricted stock units/awards

 

1,139,910

 

1,115,162

Preferred shares

 

250,000

 

250,000

Total potential dilutive effect

 

1,389,910

 

1,365,162

 

v3.20.2
Accounts Payable and Accrued Expenses (Tables)
9 Months Ended
Sep. 30, 2020
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 September 30, 

 

As of December 31,

 

    

2020

    

2019

Accounts payable

 

$

399

 

$

354

Accrued employee compensation

 

 

159

 

 

477

Accrued contracted services and other

 

 

529

 

 

270

Accounts payable and accrued expenses

 

$

1,087

 

$

1,101

 

v3.20.2
Stockholders' Equity (Tables)
9 Months Ended
Sep. 30, 2020
Stockholders' Equity  
Schedule of restricted stock unit and award activity

The following table summarizes restricted stock unit and award activity for the nine months ended September 30, 2020:

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

 

Number of Units

 

Average Grant

 

    

and Awards

    

Date Fair Value

Unvested balance at December 31, 2019

 

1,045,162

 

$

5.10

Granted

 

176,413

 

$

10.99

Vested

 

(81,665)

 

$

5.78

Unvested balance at September 30, 2020

 

1,139,910

 

$

5.96

 

Schedule of warrant activity

The following table summarizes the warrant activity for the nine months ended September 30, 2020:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted

 

Aggregate

 

 

 

 

Average Exercise

 

Intrinsic Value

 

    

Warrants

    

Price

    

(in thousands)

Outstanding, December 31, 2019

 

16,454

 

$

0.6079

 

$

148

Exercised

 

(613)

 

$

0.0001

 

 

 —

Outstanding, September 30, 2020

 

15,841

 

$

0.6315

 

$

162

 

v3.20.2
Organization, Plan of Business Operations (Details) - USD ($)
$ / shares in Units, $ in Thousands
Feb. 08, 2019
Sep. 30, 2020
Dec. 31, 2019
Nov. 12, 2018
Cash and cash equivalents   $ 4,325 $ 8,745  
Accumulated deficit   $ (72,275) $ (68,117)  
Line of Credit [Member]        
Interim Financing Amount $ 7,000      
Invagen Pharmaceuticals Inc [Member]        
Business Acquisition, Equity Interest Issued or Issuable, Value Assigned $ 31,500     $ 215,000
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares 5,833,333      
Business Acquisition, Share Price $ 6.00      
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners 33.30%      
Invagen Pharmaceuticals Inc [Member] | Common Shares        
Stock Issued During Period, Value, Acquisitions $ 180,000      
v3.20.2
Significant Accounting Policies (Details) - shares
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Total potential dilutive effect (in shares) 1,389,910 1,365,162 1,389,910 1,365,162
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 1,115,162 1,139,910 1,115,162
Preferred shares        
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]        
Total potential dilutive effect (in shares) 250,000 250,000 250,000 250,000
v3.20.2
Accounts Payable and Accrued Expenses (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Accounts Payable and Accrued Expenses    
Accounts payable $ 399 $ 354
Accrued employee compensation 159 477
Accrued contracted services and other 529 270
Accounts payable and accrued expenses $ 1,087 $ 1,101
v3.20.2
Related Party Transactions (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
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
v3.20.2
Stockholders' Equity - Equity Incentive Plan (Details) - Two Thousand Fifteen Incentive Plan
9 Months Ended
Sep. 30, 2020
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
v3.20.2
Stockholders' Equity - Restricted Stock Units and Restricted Stock Awards - Activity (Details) - Unvested restricted stock units/awards
9 Months Ended
Sep. 30, 2020
$ / 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 1,045,162
Number of Units and Awards, Granted | shares 176,413
Number of Units and Awards, Vested | shares (81,665)
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 $ 5.10
Weighted Average Grant Date Fair Value, Granted | $ / shares 10.99
Weighted Average Grant Date Fair Value, Vested | $ / shares 5.78
Weighted Average Grant Date Fair Value, Unvested Ending Balance | $ / shares $ 5.96
v3.20.2
Stockholders' Equity - Restricted Stock Units and Restricted Stock Awards - Share-based Compensation Expense (Details) - USD ($)
$ in Millions
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Unvested restricted stock units/awards        
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]        
Share-based Compensation $ 0.2 $ 0.3 $ 0.6 $ 1.6
v3.20.2
Stockholders' Equity - Restricted Stock Units and Restricted Stock Awards - Unrecognized Share-based Compensation Expense (Details) - Unvested restricted stock units/awards
$ in Millions
9 Months Ended
Sep. 30, 2020
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 | $ $ 0.5
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition 1 year 3 months 18 days
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested Upon Performance | shares 487,586
v3.20.2
Stockholders' Equity - Warrants (Details) - Warrants under National Securities, Inc Note - USD ($)
$ / shares in Units, $ in Thousands
9 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Class of Warrant or Right [Line Items]    
Beginning Balance (in shares) 16,454  
Exercised (in shares) (613)  
Ending Balance (in shares) 15,841  
Aggregate Intrinsic Value $ 162 $ 148
Weighted Average    
Class of Warrant or Right [Line Items]    
Beginning Balance (in dollars per shares) $ 0.6079  
Exercised (in dollars per share) 0.0001  
Ending Balance (in dollars per shares) $ 0.6315