Document and Entity Information
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Document and Entity Information
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3 Months Ended | |
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Mar. 31, 2015
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May 15, 2015
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| Document And Entity Information | ||
| Entity Registrant Name | Bone Biologics, Corp. | |
| Entity Central Index Key | 0001419554 | |
| Document Type | 10-Q | |
| Document Period End Date | Mar. 31, 2015 | |
| Amendment Flag | false | |
| Current Fiscal Year End Date | --12-31 | |
| Entity Filer Category | Smaller Reporting Company | |
| Entity Common Stock, Shares Outstanding | 29,239,156 | |
| Document Fiscal Period Focus | Q1 | |
| Document Fiscal Year Focus | 2015 |
Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (Parenthetical)
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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)
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Mar. 31, 2015
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Dec. 31, 2014
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| Statement of Financial Position [Abstract] | ||
| Preferred stock, no par value | $ 0.001 | $ 0.001 |
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
| Preferred stock, shares issued | ||
| Preferred stock, shares outstanding | ||
| Common stock, par value | $ 0.001 | $ 0.001 |
| Common stock, shares authorized | 100,000,000 | 100,000,000 |
| Common stock, shares issued | 24,269,047 | 24,269,047 |
| Common stock, shares outstanding | 24,269,047 | 24,269,047 |
Condensed Consolidated Statements of Operations (Unaudited)
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Condensed Consolidated Statements of Operations (Unaudited) (USD $)
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3 Months Ended | |
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Mar. 31, 2015
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Mar. 31, 2014
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| Income Statement [Abstract] | ||
| Revenues | ||
| Cost of revenues | ||
| Gross profit | ||
| Operating expenses | ||
| Research and development | 188,288 | 49,654 |
| General and administrative | 735,132 | 124,111 |
| Total operating expenses | 923,420 | 173,765 |
| Loss from operations | (923,420) | (173,765) |
| Other expenses | ||
| Other expense | (1,484) | |
| Interest expense, net | (716,799) | (147,598) |
| Total other expenses | (716,799) | (149,082) |
| Loss before provision for income taxes | (1,640,219) | (322,847) |
| Provision for income taxes | 1,600 | 800 |
| Net loss | $ (1,641,819) | $ (323,647) |
| Weighted average shares outstanding - basic and diluted | 24,269,047 | 10,928,099 |
| Loss per share - basic and diluted | $ (0.07) | $ (0.03) |
Condensed Consolidated Statements of Cash Flows (Unaudited)
The Company
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The Company
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3 Months Ended |
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Mar. 31, 2015
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| The Company |
1. The Company
Bone Biologics, Corp. (the “Company”) was incorporated under the laws of the State of Delaware on October 18, 2007 as AFH Acquisition X, Inc. Pursuant to a Merger Agreement, dated September 19, 2014, by and between the Company, its wholly-owned subsidiary, Bone Biologics Acquisition Corp., a Delaware corporation (“Merger Sub”), and Bone Biologics, Inc., Merger Sub merged with and into Bone Biologics Inc., with Bone Biologics remaining as the surviving corporation in the Merger. Upon the consummation of the Merger, the separate existence of Merger Sub ceased. On September 22, 2014 the Company officially changed its name to “Bone Biologics, Corp.” to more accurately reflect the nature of its business and Bone Biologics, Inc. became a wholly-owned subsidiary of the Company. Bone Biologics, Inc. was incorporated in California on March 9, 2004.
Bone is a biotechnology company that is currently focused on bone regeneration in spinal fusion using the recombinant human protein, known as UCB-1 (or “Nell-1”). The Nell-1 protein is an osteoinductive recombinant protein that provides target specific control over bone regeneration. The protein has been licensed exclusively for worldwide applications to Bone Biologics through a technology transfer from the University of California, Los Angeles (“UCLA”). Bone Biologics received guidance from the United States Food and Drug Administration (“FDA”) that Nell-1 will be classified as a combination product with a device lead.
The Company is a development stage entity. The production and marketing of the Company’s products and its ongoing research and development activities will be subject to extensive regulation by numerous governmental authorities in the United States. Prior to marketing in the United States, any drug developed by the Company must undergo rigorous preclinical (animal) and clinical (human) testing and an extensive regulatory approval process implemented by the FDA under the Food, Drug and Cosmetic Act. The Company has limited experience in conducting and managing the preclinical and clinical testing necessary to obtain regulatory approval. There can be no assurance that the Company will not encounter problems in clinical trials that will cause the Company or the FDA to delay or suspend clinical trials.
The Company’s success will depend in part on its ability to obtain patents and product license rights, maintain trade secrets, and operate without infringing on the proprietary rights of others, both in the United States and other countries. There can be no assurance that patents issued to or licensed by the Company will not be challenged, invalidated, or circumvented, or that the rights granted thereunder will provide proprietary protection or competitive advantages to the Company.
Recapitalization
In connection with the Merger, the 5,000,000 outstanding shares of Common Stock of the Company prior to the Merger were consolidated into 3,853,600 shares of Common Stock and the remaining shares were cancelled.
Additionally, all of the issued and outstanding shares of Bone Biologics Inc.’s $0.0001 par value common stock converted into a combined total of 19,897,587 shares of the Company’s Common Stock (including 2,151,926 shares issuable upon the exercise of outstanding warrants and 5,648,658 shares issuable upon the conversion of debt). In exchange, Bone Biologics agreed to pay AFH the principal sum of $590,000.
Going Concern and Liquidity
The Company has no significant operating history and, from March 9, 2004 (inception) to March 31, 2015, has generated a net loss of approximately $13 million. The Company will continue to incur significant expenses for development activities for their lead product Nell-1. Operating expenditures for the next twelve months are estimated at $4.6 million. The accompanying condensed consolidated financial statements for the three months ended March 31, 2015, have been prepared assuming the Company will continue as a going concern. In connection with the LOI (See Note 5), management intends to raise additional debt and/or equity financing to fund future operations and to provide additional working capital. However, there is no assurance that such financing will be consummated or obtained in sufficient amounts necessary to meet the Company’s needs.
The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of the Company to continue as a going concern. |
Summary of Significant Accounting Policies
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Summary of Significant Accounting Policies
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Mar. 31, 2015
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies |
2. Summary of Significant Accounting Policies
The unaudited interim condensed consolidated financial statements have been prepared by us pursuant to the rules and regulations of the Securities and Exchange Commission. The information furnished herein reflects all adjustments (consisting of normal recurring accruals and adjustments) which are, in the opinion of management, necessary to fairly present the operating results for the respective periods. Certain information and footnote disclosures normally present in the annual consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to such rules and regulations. These consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes for the year ended December 31, 2014. The results of the three month period ended March 31, 2015 are not necessarily indicative of the results to be expected for the full year ending December 31, 2015.
Basis of Presentation
The accompanying condensed consolidated financial statements and related notes included activities of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Significant estimates include warrants and income tax valuation allowances. Actual results could differ from those estimates.
Fair Value of Financial Instruments
The Company’s consolidated financial instruments are accounts payable and notes payable. The recorded values of accounts payable approximate their values based on their short term nature. Notes payable are recorded at their issue value or if warrants are attached at their issue value less the value of the warrant.
The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 assumptions: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities resulting from embedded derivatives associated with certain warrants to purchase common stock.
Property and Equipment
Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.
Impairment of Long-Lived Assets
The long-lived assets held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was no impairment in the value of long-lived assets during the three months ended March 31, 2015.
Research and Development Costs
Research and development costs include, but are not limited to, patents and license expenses, payroll and other personnel expenses, consultants, expenses incurred under agreements with contract research and manufacturing organizations and animal clinical investigative sites and the cost to manufacture clinical trial materials. Costs related to research, design and development of products are charged to research and development expense as incurred.
Patents and Licenses
In March 2006, the Company entered into an exclusive license agreement (“Exclusive License Agreement”), with UCLA for the worldwide application of the Nell-1 protein through a technology transfer. See Note 5 for commitments related to the Exclusive License Agreement. Patent expenses include costs to acquire the license of Nell -1, which was de minimus, and costs to file patent applications related to Nell-1.
The Company expenses the costs incurred to file patent applications, all costs related to abandoned patent applications and maintenance costs, and these costs are included in research and development expenses. Costs associated with licenses acquired to be able to use products from third parties prior to receipt of regulatory approval to market the related products are also expensed. The Company’s licensed technologies may have alternative future uses in that they are enabling (or platform) technologies that can be the basis for multiple products that would each target a specific indication. Costs of acquisition of licenses are expensed.
Deferred Financing Costs
Deferred financing costs represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective interest method, while deferred financing costs from equity financings are netted against the gross proceeds received from the equity financings.
As a result, the deferred financing cost as of December 31, 2014 was $983,857. During the three months period ended March 31, 2015, the Company did not incur nor capitalized related cost due to financing. As of March 31, 2015, the deferred financing cost was $871,251. Amortization of deferred financing costs was $476,105 and $-0- for the three months ended March 31, 2015 and 2014, respectively.
Other receivables – related party
Other receivables – related party represent a receivable from AFH Holding & Advisory, LLC, a shareholder, for fees paid on their behalf for legal services. There are no established repayment terms.
Concentration of Credit Risk and Other Risks and Uncertainties
Cash balances are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. As of January 1, 2013, federal insurance coverage is $250,000 per depositor at each financial institution. A substantial majority of the Company’s cash balances exceed federally insured limits.
Stock Based Compensation
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date.
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due and deferred taxes resulting from timing differences in recording of transactions for tax purposes and financial reporting purposes.
The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are received or settled. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized.
The accounting provisions related to uncertain income tax positions require the Company to determine whether any tax position in all open years meets a more likely than not threshold of being sustained upon examination by the applicable taxing authority. The Company did not have any changes to its liability for uncertain tax positions as at March 31, 2015 and December 31, 2014.
The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of March 31, 2015 and December 31, 2014.
Loss per Common Share
The Company utilizes FASB ASC Topic No. 260, Earnings per Share. Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted loss per common share reflects the potential dilution that could occur if convertible debentures, options and warrants were to be exercised or converted or otherwise resulted in the issuance of common stock that then shared in the earnings of the entity.
Since the effects of outstanding options, warrants, and the conversion of convertible debt are anti-dilutive in all periods presented, shares of common stock underlying these instruments have been excluded from the computation of loss per common share.
The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of March 31, 2015 and 2014:
New Accounting Standards
The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its condensed consolidated financial statements.
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the quarter ended June 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915.
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company currently has no revenues and doesn’t expect any impact of adopting this guidance.
In June 2014, the FASB issued ASU 2014-12, "Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period." This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40),” which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard for the fiscal year ending December 31, 2014.
In April 2015, the FASB issued ASU 2015-3, "Interest - Imputation of Interest (Subtopic 835-30)," related to the presentation of debt issuance costs. This standard will require debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized to interest expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our year beginning January 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements. |
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Property and Equipment
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Property and Equipment
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Mar. 31, 2015
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| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Property and Equipment |
3. Property and Equipment
Property and equipment consist of the following at:
Depreciation expense for the three months ended March 31, 2015 and 2014 was $571 and $-0-, respectively. |
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Accounts Payable and Accrued Expenses
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Accounts Payable and Accrued Expenses
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Mar. 31, 2015
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| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts Payable and Accrued Expenses |
4. Accounts Payable and Accrued Expenses
Accounts payable and accrued expenses consist of the following:
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Commitments and Contingencies
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Commitments and Contingencies
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3 Months Ended |
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Mar. 31, 2015
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| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies |
5. Commitments and Contingencies
Letter of Intent
In August of 2012, Bone Biologics, Inc., along with its then majority owner and debt holder, MTF, entered into a Letter of Intent (“LOI”) with AFH to consummate a business combination through a share exchange, reverse merger, or other similar transactions resulting in the Company becoming a public entity (“the Transaction”). In August, 2013, the LOI was amended and restated, and on May 7, 2014, the LOI was again amended and restated. The Amended and Restated Letter of Intent dated May 7, 2014 (the “Amended LOI”) contemplates and defines the following events:
Consummation of Bridge Financings (“Closing I”)
In April 2013 and September 2013, the Company’s Board approved the Company to borrow up to an aggregate principal amount of $300,000 (the “April Bridge Financing”) and $250,000 (the “September Bridge Financing”) pursuant to the sale and issuance of convertible promissory notes and warrants to purchase common stock of the Company (collectively, the “Bridge Financings”). The note accrues interest at a rate of 12% per year and is payable each quarter. A warrant to purchase the Company’s common stock equal to 50% of the original principal amount at $1.00 per share was issued to each Bridge Financing participant. Principal and unpaid accrued interest may be converted into equity securities issued in the Company’s next equity financing in an aggregate amount of at least $2.5 million at a price equal to the price paid by investors in the next equity financing. On April 29, 2013 and on June 5, 2013, the Company borrowed $100,000 from MTF and $100,000 from Orthofix, Corp., respectively, under the April Bridge Financing. In September 2013, the Company borrowed $50,000 from AFH under the April Bridge Financing. In October 2013, the Company borrowed an additional $150,000 from Orthofix under the September Bridge Financing.
Consummation of Business Combination (“Closing II”)
Under the amended LOI, it was contemplated that the Company and its equity holders would consummate a share exchange, reverse merger, or other business combination, with a Delaware corporation publicly reporting pursuant to United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), or a private Delaware corporation (“Acquisition Co.”), either directly or indirectly through an affiliate. If the post-business combination entity was not already a corporation publicly reporting pursuant to the Exchange Act, AFH would assist the post business combination entity with the filing of an appropriate registration statement resulting in the Company becoming a public company (“PubCo”). The Company affected a merger on September 19, 2014 (See Note 1 Recapitalization). AFH received $590,000 in connection with the business combination.
Consummation of the Private Placement (“Closing III”)
Subsequent to Closing II, AFH agreed to use its best efforts to assist PubCo in procuring one or more investors for a private financing, whether debt or equity, of up to $10.0 million. Such transaction is to include an over-allotment option of 15% at AFH’s discretion (the “Private Placement”). At the consummation of Closing III, AFH Group received warrants to purchase up to 500,000 share of common stock of PubCo at the per share price of the shares offered in the Private Placement with a 5 year term and a cashless exercise provision (the “Extra Warrants”).
Consummation of the PIPE Transaction (“Closing IV”)
Subsequent to Closing III, AFH Advisory will use its best efforts to assist PubCo in procuring an investment bank (the “Bank”) to facilitate a private investment in public equity transaction in an amount between $8.0 million and $10.0 million through the sale of securities of PubCo (the “PIPE”). Such transaction will include a 15% over allotment at AFH and/or the Bank’s discretion. Such transaction is contingent upon the appointment of a Bank and filing appropriate forms with the Financial Industry Regulatory Authority, Corp. (“FINRA”).
Consummation of Initial Public Offering (“Closing V”)
Subsequent to Closing IV, AFH will assist PubCo in procuring a Bank to act as underwriter for an initial public offering in an amount of up to $40.0 million (the “Initial Public Offering”). The Initial Public Offering shall include a 15% over allotment option at AFH and/or the Bank’s discretion. Such a transaction is contingent upon the appointment of the Bank.
License Commitment
In connection with the Exclusive License Agreement, the Company is required to pay a royalty fee beginning in the first year of commercial sale of the licensed product equal to 3% of net sales on a quarterly basis with an annual minimum royalty of $25,000 for the life of the patent rights. In addition to the royalty fees, the Company is also required to pay UCLA a $10,000 annual maintenance fee, $50,000 upon FDA marketing approval and $25,000 upon first commercial sale.
On October 22, 2013, the Exclusive License Agreement was amended. The following additional fees will be due to UCLA: i) 2% of the amount raised in the Private Placement or, if the Private Placement did not close or was less than $2.5 million then a fee of $100,000 was due and payable by June 1, 2014, ii) $25,000 due upon closing of Phase 1 clinical trial and iii) $50,000 due upon closing of Phase 3 clinical trial. The Company paid the fee of $100,000 in June 2014. Furthermore, the Agreement was modified in that we shall pay the Regents $25,000 for closing of Phase 1 clinical trial and $50,000 for closing of Phase 3 clinical trial. This amendment also stipulates that human clinical trials will commence no later than December 31, 2015. Management believes they will not commence human clinical trials before the expiration of our current license. While the Company will continue to use commercially reasonable efforts to achieve this milestone, the parties are engaged in discussions to amend the license agreement but there are no assurances that an agreement can be reached.
Contingencies
The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company’s management does not believe that any such matters, individually or in the aggregate, will have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.
Indemnification
In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. To date, the Company has not paid any claims or been required to defend any action related to its indemnification obligations. However, the Company may record charges in the future as a result of these indemnification obligations.
In accordance with its amended and restated certificate of incorporation and amended and restated bylaws, the Company has indemnification obligations to its officers and directors for certain events or occurrences, subject to certain limits, while they are serving at the Company’s request in such capacity. There have been no claims to date and the Company has a director and officer insurance policy that enables it to recover a portion of any amounts paid for future potential claims. |
Notes Payable to Related Party
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Notes Payable to Related Party
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Mar. 31, 2015
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Payable to Related Party |
6. Notes Payable to Related Party
As of March 31, 2015 and December 31, 2014, the Company’s notes outstanding, with MTF a related party, consisted of the following:
Convertible Related Party Promissory Notes
The related party convertible promissory notes are considered hybrid instruments, which consist of a debt host instrument together with a conversion feature, thus giving the holder of a convertible note an option to convert into an equity instrument providing the holder a residual interest in the Company. The holder of a convertible promissory note also has the option to present its convertible promissory note to the Company and demand payment under the terms of the note after the maturity date or upon the occurrence of certain events such as the failure of the Company to make a payment on the note when due, bankruptcy or certain other liquidation events. The Company concluded that the convertible promissory note would be accounted for as a typical debt instrument with related interest expense recorded in the Company’s statements of operations. The Company concluded that there is no beneficial conversion feature as of the date of issuance of the convertible notes. However, the note contains a contingent feature whereby the conversion rate may be lowered if a financing occurs at a lower rate than the note’s conversion rate. If the contingency is met and the conversion feature is determined to be “beneficial” in a future accounting period, an additional financing cost would be recorded for the beneficial conversion feature in the Company’s statements of operations at that time.
New MTF Convertible Note
On September 19, 2014, MTF’s 2008 and 2009 Promissory Notes and any related loan agreements, credit agreements, guarantee agreements or other agreements related to the MTF 2008 and 2009 Promissory Notes were cancelled and the Company issued MTF a convertible promissory note in the face amount of $3,659,328 (the “New MTF Convertible Note”). Pursuant to the terms of the New MTF Convertible Note, 50% of all principal and accrued and unpaid interest due under the New MTF Convertible Note will be converted into common stock of the Company upon the closing of the PIPE. The remainder of the New MTF Convertible Note, including all accrued and unpaid interest, will be converted upon consummation of the Initial Public Offering. The New MTF Convertible Note was converted in May 2015. Please refer to Note 12. |
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Notes Payable
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Notes Payable
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3 Months Ended |
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Mar. 31, 2015
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| Debt Disclosure [Abstract] | |
| Notes Payable |
7. Notes Payable
Convertible Notes Payable
The convertible promissory notes are considered hybrid instruments, which consist of a debt host instrument together with a conversion feature, thus giving the holder of a convertible note an option to convert into an equity instrument providing the holder a residual interest in the Company. The holder of a convertible promissory note also has the option to present its convertible promissory note to the Company and demand payment under the terms of the note after the maturity date or upon the occurrence of certain events such as the failure of the Company to make a payment on the note when due, bankruptcy or certain other liquidation events. The Company concluded that the convertible promissory notes would be accounted for as a typical debt instrument with related interest expense recorded in the Company’s statements of operations. The Company concluded that there is no beneficial conversion feature as of the date of issuance of the convertible notes.
Secured Convertible Note and Warrant
On October 24, 2014, the Company issued a convertible promissory note in the amount of $5,000,000 (the “Convertible Note”) to Hankey Capital, LLC (“Hankey Capital”). The Convertible Note matures on October 24, 2017 (the “Maturity Date”) and bears interest at an annual rate of interest of the “prime rate” (as quoted in the "Money Rates" section of The Wall Street Journal) plus 4.0%, with a minimum rate of 8.5% per annum until maturity, with interest payable monthly in arrears. Prior to the Maturity Date, Hankey Capital has a right, in their sole discretion, to convert the Convertible Note into shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), at a conversion rate equal to the greater of (i) $1.58 per share and (ii) 70% of the average daily price for the Common Stock as measured over the course of the 60 day period prior to the conversion.
The Convertible Note is secured by certain collateral shares of Common Stock issued by the Company in the name of Hankey Capital, in such amount so as to maintain a loan to value ratio of no greater than 50% (the “Collateral”). 6,329,114 shares were issued upon closing the Convertible Note. The number of shares in the Collateral shall be adjusted on a yearly basis. The shares representing the Collateral contain a restrictive legend. The Company shall seek to register the Collateral shares initially delivered on the date of the Convertible Note pursuant to the Registration Rights Agreement described below. Upon the effectiveness of such Registration Statement, the Company will remove the restrictive legends from the Collateral shares so long as Hankey Capital agrees in any event not to sell any Collateral shares if Hankey Capital is notified that the Registration Statement is no longer effective. Hankey Capital may hold the Collateral in any brokerage account of its choosing, but shall not transfer, sell or otherwise dispose of any Collateral, except during the existence of an Event of Default, as defined in the Convertible Note. The Convertible Note is further secured by collateral assignments of all the Company’s license agreements.
The principal amount of the loan is pre-payable in whole or in part at any time, without premium or penalty. Upon any voluntary partial prepayment of outstanding principal, Hankey Capital shall return Collateral shares to the Company in the amount necessary, if any, to maintain the loan to value ratio at no less than 50%. Upon a full payment of the outstanding principal, all Collateral shares shall be returned return and cancelled. Hankey Capital shall also return Collateral shares under the same terms in case of partial or full conversion of the Convertible Note.
The Company paid a commitment fee in the amount of $150,000 (3% of the original principal amount of the loan) to Hankey Capital. The Company intends to use the proceeds of the Convertible Note for working capital and general corporate purposes.
On October 24, 2014, the Company also issued a warrant to Hankey Capital for 3,955,697 shares of Common Stock at an exercise price per share of $1.58 (the “Warrant”). The Warrant will expire on October 24, 2017. The Warrant also includes such other terms that are normal and customary for warrants of this type.
Registration Rights Agreement
On October 24, 2014, the Company entered into a Registration Rights Agreement with Hankey Capital, for certain demand registration rights and unlimited piggyback registration rights for the shares underlying the Convertible Note and the Warrant, and subject to an agreed lock up period. Pursuant to the Registration Rights Agreement, Hankey Capital may at any time request registration of their registrable shares. Within 30 days of such demand, the Company will provide written notice of such request to all other holders of registrable securities and will include in such registration all registrable shares with respect to which the Company has received written requests for inclusion within twenty-five (25) days after delivery of the Company’s notice. The Company has agreed to pay all registration expenses relating to up to three long-form registrations or short-form registrations for Hankey Capital.
Whenever the Company proposes to register any of its securities under the Securities Act (other than pursuant to a demand registration under the Registration Rights Agreement) and the registration form to be used may be used for the registration of any registrable shares, the Company will give prompt written notice to all holders of the registrable shares of its intention to effect such a registration and will include in such registration all registrable shares (in accordance with the priorities set forth in the Registration Rights Agreement) with respect to which the Company has received written requests for inclusion within fifteen (15) days after the delivery of the Company’s notice. Pursuant to Registration Rights Agreement, holders of registrable shares and the Company agree not to effect any public sale or distribution of equity securities of the Company, or any securities convertible into or exchangeable or exercisable for such securities, during the six (6) months following, the effective date of the Company’s merger with Bone Biologics, Inc. on September 19, 2014.
On October 24, 2014, Forefront Capital was issued a warrant to purchase 126,582 shares of Common Stock upon completion of the Hankey Capital Convertible Note.
The total debt discount costs related to our outstanding debt for the three months ended March 31, 2015 and 2014, was $119,542 and $47,306, respectively. These costs were amortized to interest expense. The unamortized debt discount at March 31, 2015 was $1,235,264. The cost is expected to be recognized over a period of 2.5 years. The unamortized debt discount at December 31, 2014 was $1,354,806. |
Stockholders' Equity
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Stockholders' Equity
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Mar. 31, 2015
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stockholders' Equity |
8. Stockholders’ Equity
Preferred Stock
The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 20,000,000 shares of preferred stock. No shares have been issued.
Common Stock
The Company’s amended and restated certificate of incorporation authorizes the Company to issue a total of 100,000,000 shares of common stock. As of March 31, 2015 and December 31, 2014, the Company had an aggregate of 24,269,047 shares of common stock outstanding.
In connection with the Secured Convertible Note to Hankey Capital, the Company issued 6,329,114 common shares as collateral. (See Note 7)
Each share of common stock has the right to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when declared by the Board of Directors, subject to the prior rights of holders of all classes of stock outstanding having priority rights as to dividends. No dividends have been declared by the Board.
Bone Biologics, Corp. Notes to Unaudited Condensed Consolidated Financial Statements
Common Stock Warrants
As of March 31, 2015, the Company had outstanding unexercised common stock warrants as follows:
Agent Warrants
Forefront Capital (“Forefront”) or its designees will receive the Agent Warrant. Such Agent Warrant will be issued at the closing of the Private Placement and shall provide, among other things, that the Agent Warrant shall: (i) be exercisable at the price of the securities (or the exercise price of the securities) issued to the investors in the offering, (ii) expire five (5) years from the date of issuance, (iii) include customary registration rights, including the registration rights provided to the Investors, (iv) contain provisions for cashless exercise and (v) include such other terms that are normal and customary for warrants of this type. In addition, Forefront or its designees will receive an Advisory Warrant equal to 2.0% of the Company’s post-merger and financing fully diluted shares outstanding upon the closing of $2.5 million of investors on which Forefront is eligible to receive compensation.
On February 15, 2015, Forefront was issued a warrant to purchase 699,037 shares of Common Stock which represents 2.0% of the Company’s post-merger fully diluted shares outstanding at $1.58 per share upon expiration of their engagement. The warrants expire in three years from issuance date. The initial fair value of the warrants was estimated at an aggregate value of $363,499, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 97.76%, risk-free interest rate of 1.10%, contractual term of 3 years and dividend yield of 0%.
No common stock warrants were exercised, or expired during the three months period March 31, 2015 and 2014. |
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Stock-Based Compensation
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Stock-Based Compensation
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Mar. 31, 2015
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation |
9. Stock-based Compensation
2014 Stock Option Plan
2,642,898 shares of our common stock have been initially authorized and reserved for issuance under our 2014 Stock Plan as option awards. This reserve may be increased by the Board on January 1, 2015 and each subsequent anniversary through January 1, 2024 by up to the number of shares of stock equal to 5% of the number of shares of stock issued and outstanding on the immediately preceding December 31. Appropriate adjustments will be made in the number of authorized shares and other numerical limits in our 2014 Stock Option Plan and in outstanding awards to prevent dilution or enlargement of participants’ rights in the event of a stock split or other change in our capital structure. Shares subject to awards granted under our 2014 Stock Option Plan which expire, are repurchased or are cancelled or forfeited will again become available for issuance under our 2014 Stock Option Plan. The shares available will not be reduced by awards settled in cash. Shares withheld to satisfy tax withholding obligations will not again become available for grant. The gross number of shares issued upon the exercise of stock appreciation rights or options exercised by means of a net exercise or by tender of previously owned shares will be deducted from the shares available under our 2014 Stock Option Plan.
Awards may be granted under our 2014 Stock Option Plan to our employees, including officers, director or consultants, and our present or future affiliated entities. While we may grant incentive stock options only to employees, we may grant non-statutory stock options, stock appreciation rights, restricted stock purchase rights or bonuses, restricted stock units, performance shares, performance units and cash-based awards or other stock based awards to any eligible participant.
The 2014 Stock Option Plan will be administered by our compensation committee. Subject to the provisions of our 2014 Stock Option Plan, the compensation committee determines, in its discretion, the persons to whom, and the times at which, awards are granted, as well as the size, terms and conditions of each award. All awards are evidenced by a written agreement between us and the holder of the award. The compensation committee has the authority to construe and interpret the terms of our 2014 Stock Option Plan and awards granted under our 2014 Stock Option Plan.
During the three months ended March 31, 2015 and 2014, the Company had stock-based compensation expense of $68,706 and $-0-, respectively, related to issuances to the Company’s employees and directors, included in reported net loss. The total amount of stock-based compensation for the three months ended March 31, 2015, was related solely to the issuance of stock options.
A summary of stock option activity for the three months ended March 31, 2015, is presented below:
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between our closing stock price on the respective date and the exercise price, times the number of shares) that would have been received by the option holders had all option holders exercised their options. There have not been any options exercised during either the three months ended March 31, 2015 or the year ended December 31, 2014.
There were no options issued during the three months ended March 31, 2015. Vesting of options differs based on the terms of each option. The Company has valued the options at their date of grant utilizing the Black Scholes option pricing model. As of the issuance of these consolidated financial statements, there was not an active public market for the Company’s shares. Accordingly, the fair value of the underlying options was determined based on the historical volatility data of similar companies, considering the industry, products and market capitalization of such other entities. The risk-free interest rate used in the calculations is based on the implied yield available on U.S. Treasury issues with an equivalent term approximating the expected life of the options as calculated using the simplified method. The expected life of the options used was based on the contractual life of the option granted. Stock-based compensation is a non-cash expense because we settle these obligations by issuing shares of our common stock from our authorized shares instead of settling such obligations with cash payments.
A summary of the changes in the Company’s non-vested options during the three months ended March 31, 2015, is as follows:
As of March 31, 2015, total unrecognized compensation cost related to unvested stock options was $228,442. The cost is expected to be recognized over a weighted average period of 1.75 years. |
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Income Taxes
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Income Taxes
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3 Months Ended |
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Mar. 31, 2015
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| Income Tax Disclosure [Abstract] | |
| Income Taxes |
10. Income Taxes
The Company’s effective tax rate is 0% for income tax for the three months ended March 31, 2015 and the Company expects that its effective tax rate for the full year 2015 will be 0%. Based on the weight of available evidence, including cumulative losses since inception and expected future losses, the Company has determined that it is more likely than not that the deferred tax asset amount will not be realized and therefore a valuation allowance has been provided on net deferred tax assets.
The Company files tax returns for U.S. Federal and the states of New Jersey and California. The Company is not currently subject to any income tax examinations. Since the Company’s inception, the Company had incurred losses from operations, which generally allows all tax years to remain open.
Uncertain Tax Positions
The Company recognizes the financial statement effects of a tax position when it becomes more likely than not, based upon the technical merits, that the position will be sustained upon examination.
The Company recognizes interest and/or penalties related to uncertain tax positions. To the extent accrued interest and penalties do not ultimately become payable, amounts accrued will be reduced and reflected in the period that such determination is made. The interest and penalties are recognized as other expense and not tax expense. The Company currently has no interest and penalties related to uncertain tax positions. |
Related Party Transactions
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Related Party Transactions
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3 Months Ended |
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Mar. 31, 2015
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| Related Party Transactions [Abstract] | |
| Related Party Transactions |
11. Related Party Transactions
Starting in September 2006, the Company entered into a series of consulting agreements with one of its stockholders whom previously served as chairman, president and CEO of the Company. The Company paid $45,000 and $30,000, for the three months ended March 31, 2015 and 2014, respectively, in consulting fees to this related party.
Also on September 19, 2014, the Company granted the consultant warrants to purchase up to 3% of the Company’s fully diluted shares of common stock outstanding as of the date of closing of the Merger totaling 699,671 shares of Common Stock of at a strike price of $1.00 per share, with a 7 year term to a consultant. The warrant will vest over a two-year period from the effective date, with 33.33% of the shares subject to the warrant becoming vested and exercisable on the date that the consulting agreement is executed, 33.33% of the shares subject to the option becoming vested and exercisable on the date that is twelve (12) months after the effective date, and 33.34% of the shares subject to the warrant vesting and becoming exercisable on the date that is twenty four (24) months after the effective date. The initial fair value of the warrant was estimated at an aggregate value of $614,049, using the Black-Scholes option pricing model with the following assumptions at the date of issuance: expected volatility of 113.7%, risk-free interest rate of 2.29%, contractual term of 7 years and dividend yield of 0%. The fair value on the warrant was recorded as general and administrative expense and amortized over the term of the agreement. As of March 31, 2015, all costs associated with the warrants were recognized. On February 29, 2015, the Company terminated the consulting contract. As per the contract the consultant was provided a ninety day notice and all warrants issued became fully vested.
In September 2014, the Company entered into a consulting agreement with MTF, which has agreed to provide the services of Mr. Michael Schuler to the Company as a contractor. Pursuant to the agreement, Mr. Schuler will serve as the Company’s Interim Chief Executive Officer for a period of 6 months. The agreement shall automatically renew for successive three (3) month periods unless either party provides written notice to the other party at least 10 days in advance of the renewal term of its decision not to renew the term. The agreement is intended to be temporary in nature, and will cease once the Company retains a permanent Chief Executive Officer. There are no payments due to MTF or Mr. Schuler with respect to any change in control of the Company or termination of the consulting agreement. For the three months ended March 31, 2015, the Company recognized $45,000 of expense related to this contract.
See Note 6 for related party notes payable to MTF. |
Subsequent Events
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Subsequent Events
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3 Months Ended |
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Mar. 31, 2015
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| Subsequent Events [Abstract] | |
| Subsequent Events |
12. Subsequent Events
Conversion of New MTF Convertible Note
On May 4, 2015, MTF converted their New MTF Convertible Note in the amount of $3,659,328 plus accrued interest of $193,443 into 2,438,463 shares of Common Stock of the Company.
2nd Secured Convertible Note and Warrant
On May 4, 2015, the Company issued a convertible promissory note in the amount of $2,000,000 (the “2nd Convertible Note”) to Hankey Capital, LLC (“Hankey Capital”). The 2nd Convertible Note matures on May 4, 2018 (the “Maturity Date”) and bears interest at an annual rate of interest of the “prime rate” (as quoted in the "Money Rates" section of The Wall Street Journal) plus 4.0%, with a minimum rate of 8.5% per annum until maturity, with interest payable monthly in arrears. Prior to the Maturity Date, Hankey Capital has a right, in their sole discretion, to convert the 2nd Convertible Note into shares of the Company’s Common Stock, at a conversion rate equal to the greater of (i) $1.58 per share or (ii) 70% of the average daily price for the Common Stock as measured over the course of the 60 day period prior to the conversion.
The 2nd Convertible Note is secured by certain collateral shares of Common Stock issued by the Company in the name of Hankey Capital, in such amount so as to maintain a loan to value ratio of no greater than 50% (the “Collateral”). The number of shares in the Collateral shall be adjusted on a yearly basis. The shares representing the Collateral contain a restrictive legend. Hankey Capital may hold the Collateral in any brokerage account of its choosing, but shall not transfer, sell or otherwise dispose of any Collateral, except during the existence of an Event of Default, as defined in the 2nd Convertible Note. The 2nd Convertible Note is further secured by collateral assignments of all the Company’s license agreements.
The principal amount of the loan is pre-payable in whole or in part at any time, without premium or penalty. Upon any voluntary partial prepayment of outstanding principal, Hankey Capital shall return Collateral shares to the Company in the amount necessary, if any, to maintain the loan to value ratio at no less than 50%. Upon a full payment of the outstanding principal, all the collateral shares shall be returned return and cancelled. Hankey Capital shall also return the collateral shares under the same terms in case of partial or full conversion of the 2nd Convertible Note.
In connection with the 2nd Convertible Note to Hankey Capital, on May 4, 2015 the Company issued 2,531,646 common shares as collateral.
The Company paid a commitment fee in the amount of $60,000 (3% of the original principal amount of the loan) to Hankey Capital. The Company intends to use the proceeds of the Convertible Note for working capital and general corporate purposes.
On May 4, 2015, the Company also issued a warrant to Hankey Capital for 1,898,734 shares of Common Stock at an exercise price per share of $1.58 (the “Warrant”). The Warrant will expire on May 4, 2018. The Warrant includes provisions for cashless exercise and also includes such other terms that are normal and customary for warrants of this type.
Under the terms of both the 2nd Convertible Note and the Warrant, at any time that any of the Company’s equity securities are registered under Section 12 of the Securities and Exchange Act of 1934, the aggregate number of Common Stock shares that may be acquired by Hankey Capital upon any exercise of any conversion under the 2nd Convertible Note or exercise of the Warrant, shall be limited to the extent necessary to insure that, following such exercise, or other acquisition, the total number of Common Stock shares then beneficially owned by Hankey Capital and its affiliates may not exceed 4.999% of the total number of issued and outstanding Common Stock. The Company shall, instead of issuing or transferring Common Stock in excess of this limitation, suspend its obligation to issue Common Stock in excess of the foregoing limitation until such time, if any, as such Common Stock shares may be issued in compliance with such limitation; provided, that, by written notice to the Company, Hankey Capital may waive the provisions of this section or increase or decrease the maximum percentage to any other percentage specified in such notice; provided further that any such waiver or increase or decrease will not be effective until the 61st day after such notice is received by the Company.
The Company has evaluated subsequent events through May 14, 2015, the date which the consolidated financial statements were available to be issued. There were no additional subsequent events noted that would require adjustment to or disclosure in these consolidated financial statements. |
Summary of Significant Accounting Policies (Policies)
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Summary of Significant Accounting Policies (Policies)
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Mar. 31, 2015
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation |
Basis of Presentation
The accompanying condensed consolidated financial statements and related notes included activities of the Company and have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). |
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| Use of Estimates |
Use of Estimates
The preparation of the accompanying condensed consolidated financial statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of expenses during the reporting period. Significant estimates include warrants and income tax valuation allowances. Actual results could differ from those estimates. |
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| Fair Value of Financial Instruments |
Fair Value of Financial Instruments
The Company’s consolidated financial instruments are accounts payable and notes payable. The recorded values of accounts payable approximate their values based on their short term nature. Notes payable are recorded at their issue value or if warrants are attached at their issue value less the value of the warrant.
The Company defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy is based on three levels of inputs that may be used to measure fair value, of which the first two are considered observable and the last is considered unobservable:
Level 1: Quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 assumptions: Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities including liabilities resulting from embedded derivatives associated with certain warrants to purchase common stock. |
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| Property and Equipment |
Property and Equipment
Property and equipment are stated at cost. Depreciation is calculated using the straight-line method over the estimated useful lives of the related assets, ranging from three to seven years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of property and equipment sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal. |
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| Impairment of Long-Lived Assets |
Impairment of Long-Lived Assets
The long-lived assets held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was no impairment in the value of long-lived assets during the three months ended March 31, 2015. |
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| Research and Development Costs |
Impairment of Long-Lived Assets
The long-lived assets held and used by the Company are reviewed for impairment no less frequently than annually or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. In the event that facts and circumstances indicate that the cost of any long-lived assets may be impaired, an evaluation of recoverability is performed. Management has determined that there was no impairment in the value of long-lived assets during the three months ended March 31, 2015. |
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| Patents and Licenses |
Patents and Licenses
In March 2006, the Company entered into an exclusive license agreement (“Exclusive License Agreement”), with UCLA for the worldwide application of the Nell-1 protein through a technology transfer. See Note 5 for commitments related to the Exclusive License Agreement. Patent expenses include costs to acquire the license of Nell -1, which was de minimus, and costs to file patent applications related to Nell-1.
The Company expenses the costs incurred to file patent applications, all costs related to abandoned patent applications and maintenance costs, and these costs are included in research and development expenses. Costs associated with licenses acquired to be able to use products from third parties prior to receipt of regulatory approval to market the related products are also expensed. The Company’s licensed technologies may have alternative future uses in that they are enabling (or platform) technologies that can be the basis for multiple products that would each target a specific indication. Costs of acquisition of licenses are expensed. |
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| Deferred Financing Costs |
Deferred Financing Costs
Deferred financing costs represent costs incurred in connection with the issuance of the convertible notes payable and private equity financing. Deferred financing costs related to the issuance of debt are being amortized over the term of the financing instrument using the effective interest method, while deferred financing costs from equity financings are netted against the gross proceeds received from the equity financings.
As a result, the deferred financing cost as of December 31, 2014 was $983,857. During the three months period ended March 31, 2015, the Company did not incur nor capitalized related cost due to financing. As of March 31, 2015, the deferred financing cost was $871,251. Amortization of deferred financing costs was $476,105 and $-0- for the three months ended March 31, 2015 and 2014, respectively. |
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| Other Receivables - Related Party |
Other receivables – related party
Other receivables – related party represent a receivable from AFH Holding & Advisory, LLC, a shareholder, for fees paid on their behalf for legal services. There are no established repayment terms. |
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| Concentration of Credit Risk and Other Risks and Uncertainties |
Concentration of Credit Risk and Other Risks and Uncertainties
Cash balances are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. As of January 1, 2013, federal insurance coverage is $250,000 per depositor at each financial institution. A substantial majority of the Company’s cash balances exceed federally insured limits. |
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| Stock Based Compensation |
Stock Based Compensation
ASC 718, Compensation – Stock Compensation, prescribes accounting and reporting standards for all share-based payment transactions in which employee services are acquired. Transactions include incurring liabilities, or issuing or offering to issue shares, options, and other equity instruments such as employee stock ownership plans and stock appreciation rights. Share-based payments to employees, including grants of employee stock options, are recognized as compensation expense in the consolidated financial statements based on their fair values. That expense is recognized over the period during which an employee is required to provide services in exchange for the award, known as the requisite service period (usually the vesting period).
The Company accounts for stock-based compensation issued to non-employees and consultants in accordance with the provisions of ASC 505-50, Equity – based Payments to Non-Employees. Measurement of share-based payment transactions with non-employees is based on the fair value of whichever is more reliably measurable: (a) the goods or services received; or (b) the equity instruments issued. The fair value of the share-based payment transaction is determined at the earlier of performance commitment date or performance completion date. |
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| Income Taxes |
Income Taxes
Income taxes are provided for the tax effects of transactions reported in the consolidated financial statements and consist of taxes currently due and deferred taxes resulting from timing differences in recording of transactions for tax purposes and financial reporting purposes.
The deferred tax assets and liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are received or settled. Valuation allowances are established when necessary to reduce deferred tax assets to amounts expected to be realized.
The accounting provisions related to uncertain income tax positions require the Company to determine whether any tax position in all open years meets a more likely than not threshold of being sustained upon examination by the applicable taxing authority. The Company did not have any changes to its liability for uncertain tax positions as at March 31, 2015 and December 31, 2014.
The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense. No such amounts are accrued as of March 31, 2015 and December 31, 2014. |
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| Loss per Common Share |
Loss per Common Share
The Company utilizes FASB ASC Topic No. 260, Earnings per Share. Basic loss per share is computed by dividing loss available to common shareholders by the weighted-average number of common shares outstanding. Diluted loss per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Diluted loss per common share reflects the potential dilution that could occur if convertible debentures, options and warrants were to be exercised or converted or otherwise resulted in the issuance of common stock that then shared in the earnings of the entity.
Since the effects of outstanding options, warrants, and the conversion of convertible debt are anti-dilutive in all periods presented, shares of common stock underlying these instruments have been excluded from the computation of loss per common share.
he following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of March 31, 2015 and 2014:
|
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| New Accounting Standards |
New Accounting Standards
The Company has reviewed all recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its condensed consolidated financial statements.
In June 2014, the FASB issued ASU 2014-10, Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements. ASU 2014-10 eliminates the distinction of a development stage entity and certain related disclosure requirements, including the elimination of inception-to-date information on the statements of operations, cash flows and stockholders’ equity. The amendments in ASU 2014-10 will be effective prospectively for annual reporting periods beginning after December 15, 2014, and interim periods within those annual periods, however early adoption is permitted. The Company adopted ASU 2014-10 during the quarter ended June 30, 2014, thereby no longer presenting or disclosing any information required by Topic 915.
In May 2014, the FASB issued ASU 2014-09, "Revenue from Contracts with Customers (Topic 606)," which is the new comprehensive revenue recognition standard that will supersede all existing revenue recognition guidance under GAAP. The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to a customer in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. This ASU is effective for annual and interim periods beginning on or after December 15, 2016, and early adoption is not permitted. Entities will have the option of using either a full retrospective approach or a modified approach to adopt the guidance in the ASU. The Company currently has no revenues and doesn’t expect any impact of adopting this guidance.
In June 2014, the FASB issued ASU 2014-12, "Compensation - Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could be Achieved after the Requisite Service Period." This ASU provides more explicit guidance for treating share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period as a performance condition. The new guidance is effective for annual and interim reporting periods beginning after December 15, 2015. The Company does not expect the adoption of this guidance to have a material impact on the consolidated financial statements.
In August 2014, the FASB issued ASU 2014-15, “Presentation of Financial Statements – Going Concern (Topic 205-40),” which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern for each annual and interim reporting period. If substantial doubt exists, additional disclosure is required. This new standard will be effective for the Company for annual and interim periods beginning after December 15, 2016. Early adoption is permitted. The Company adopted this new standard for the fiscal year ending December 31, 2014.
In April 2015, the FASB issued ASU 2015-3, "Interest - Imputation of Interest (Subtopic 835-30)," related to the presentation of debt issuance costs. This standard will require debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the debt liability rather than as an asset. These costs will continue to be amortized to interest expense using the effective interest method. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015, and retrospective adoption is required. We will adopt this pronouncement for our year beginning January 1, 2016. We do not expect this pronouncement to have a material effect on our consolidated financial statements. |
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Summary of Significant Accounting Policies (Tables)
|
Summary of Significant Accounting Policies (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share |
The following sets forth the number of shares of common stock underlying outstanding options, warrants, and convertible debt as of March 31, 2015 and 2014:
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Property and Equipment (Tables)
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Property and Equipment (Tables)
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015
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| Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property and Equipment |
Property and equipment consist of the following at:
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Accounts Payable and Accrued Expenses (Tables)
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Accounts Payable and Accrued Expenses (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015
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| Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accounts Payable and Accrued Expenses |
Accounts payable and accrued expenses consist of the following:
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Notes Payable to Related Party (Tables)
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Notes Payable to Related Party (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes Outstanding (Principal and Interest) Including Unamortized Discount, with Mtf Related Party |
As of March 31, 2015 and December 31, 2014, the Company’s notes outstanding, with MTF a related party, consisted of the following:
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Stockholders' Equity (Tables)
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Stockholders' Equity (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Outstanding Unexercised Common Stock Warrants |
As of March 31, 2015, the Company had outstanding unexercised common stock warrants as follows:
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Stock-Based Compensation (Tables)
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Stock-Based Compensation (Tables)
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2015
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| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Stock Option Activity |
A summary of stock option activity for the three months ended March 31, 2015, is presented below:
|
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| Schedule of Stock Option |
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| Schedule of Non-Vested Options |
A summary of the changes in the Company’s non-vested options during the three months ended March 31, 2015, is as follows:
|
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The Company (Details Narrative)
|
The Company (Details Narrative) (USD $)
|
3 Months Ended | 133 Months Ended | ||
|---|---|---|---|---|
|
Mar. 31, 2015
|
Mar. 31, 2014
|
Mar. 31, 2015
|
Dec. 31, 2014
|
|
| Common stock outstanding shares | 5,000,000 | 5,000,000 | ||
| Common stock remaining shares | 3,853,600 | 3,853,600 | ||
| Common stock issued and outstanding per share value | $ 0.001 | $ 0.001 | $ 0.001 | |
| Net income loss | $ (1,641,819) | $ (323,647) | $ 12,000,000 | |
| Estimated operating expenditure for next twelve months | 4,600,000 | 4,600,000 | ||
|
Bone Biologics Inc [Member]
|
||||
| Common stock issued and outstanding per share value | $ 0.0001 | $ 0.0001 | ||
| Common stock converted combined number of share | 19,897,587 | |||
| Number of outstanding warrants issuable shares | 2,151,926 | |||
| Number of shares issuable upon the conversion of debt | 5,648,658 | |||
| Payment to acquisition of asset value | $ 590,000 | |||
Summary of Significant Accounting Policies (Details Narrative)
|
Summary of Significant Accounting Policies (Details Narrative) (USD $)
|
3 Months Ended | 3 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
|
Mar. 31, 2015
|
Mar. 31, 2014
|
Dec. 31, 2014
|
Mar. 31, 2015
AFH [Member]
|
Dec. 31, 2014
AFH [Member]
|
Jan. 02, 2013
Depositor [Member]
|
Mar. 31, 2015
Minimum [Member]
|
Mar. 31, 2015
Maximum [Member]
|
|
| Estimated useful lives of property and equipment | 3 years | 7 years | ||||||
| Deferred financing costs | $ 871,251 | $ 983,857 | $ 871,251 | $ 983,857 | ||||
| Debt financing costs amortization | 476,105 | |||||||
| Federal insurance coverage cost | $ 250,000 | |||||||
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details)
|
Summary of Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details)
|
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
| Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 15,468,832 | 6,154,828 |
|
Warrants [Member]
|
||
| Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 7,722,501 | 634,300 |
|
Stock Options [Member]
|
||
| Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 757,977 | |
|
Convertible Promissory Notes [Member]
|
||
| Anti-dilutive securities outstanding excluded from computation of diluted net loss per share | 6,988,354 | 5,520,528 |
Property and Equipment (Details Narrative)
|
Property and Equipment (Details Narrative) (USD $)
|
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
| Property, Plant and Equipment [Abstract] | ||
| Depreciation | $ 571 | $ 0 |
Property and Equipment - Schedule of Property and Equipment (Details)
|
Property and Equipment - Schedule of Property and Equipment (Details) (USD $)
|
Mar. 31, 2015
|
Dec. 31, 2014
|
|---|---|---|
| Property, Plant and Equipment [Abstract] | ||
| Furniture and equipment | $ 12,405 | $ 11,901 |
| Less accumulated depreciation | (851) | (280) |
| Property and equipment, Net | $ 11,554 | $ 11,621 |
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details)
|
Accounts Payable and Accrued Expenses - Schedule of Accounts Payable and Accrued Expenses (Details) (USD $)
|
Mar. 31, 2015
|
Dec. 31, 2014
|
|---|---|---|
| Payables and Accruals [Abstract] | ||
| Interest expense | $ 164,469 | $ 87,774 |
| Accounts payable | 200,019 | 119,776 |
| Payroll liabilities | 11,030 | 7,839 |
| Total Accounts Payable and Accrued Expenses | $ 375,518 | $ 215,389 |
Commitments and Contingencies (Details Narrative)
|
Commitments and Contingencies (Details Narrative) (USD $)
|
3 Months Ended | 0 Months Ended | 3 Months Ended | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Mar. 31, 2015
Phase 1 Clinical Trial [Member]
|
Mar. 31, 2015
Phase 3 Clinical Trial [Member]
|
Mar. 31, 2015
License Agreement [Member]
|
Oct. 22, 2013
License Agreement [Member]
UCLA [Member]
|
Mar. 31, 2015
Closing II [Member]
|
Mar. 31, 2015
Closing III [Member]
|
Mar. 31, 2015
Closing IV [Member]
|
Mar. 31, 2015
Closing IV [Member]
Minimum [Member]
|
Mar. 31, 2015
Closing IV [Member]
Maximum [Member]
|
Mar. 31, 2015
Closing V [Member]
|
Mar. 31, 2015
Bridge Financing [Member]
|
Sep. 30, 2013
Bridge Financing [Member]
|
Apr. 30, 2013
Bridge Financing [Member]
|
Sep. 30, 2013
Bridge Financing [Member]
AFH [Member]
|
Apr. 29, 2013
Bridge Financing [Member]
MTF [Member]
|
Oct. 31, 2013
Bridge Financing [Member]
Orthofix, Corp. [Member]
|
Jun. 05, 2013
Bridge Financing [Member]
Orthofix, Corp. [Member]
|
|
| Principal amount | $ 250,000 | $ 300,000 | $ 100,000 | $ 150,000 | $ 100,000 | ||||||||||||
| Note accrued interest rate | 12.00% | ||||||||||||||||
| Percentage of warrants issued to purchase common stock | 50.00% | ||||||||||||||||
| Original principal amount price per share | $ 1.00 | ||||||||||||||||
| Equity securities issued amount | 2,500,000 | ||||||||||||||||
| Business acquisition purchase price | 50,000 | ||||||||||||||||
| Payment to acquisition of asset value | 590,000 | ||||||||||||||||
| Private financing debt equity | 10,000,000 | ||||||||||||||||
| Percentage of over allotment option | 15.00% | 15.00% | 15.00% | ||||||||||||||
| Public equity transaction in an amount | 8,000,000 | 10,000,000 | |||||||||||||||
| Initial public offering amount | 40,000,000 | ||||||||||||||||
| Issuance of warrants to purchase of common stock | 500,000 | ||||||||||||||||
| Warrants term | 5 years | ||||||||||||||||
| Percentage of sale of the licensed product equal | 3.00% | ||||||||||||||||
| Annual minimum royalty for life of the patent rights | 25,000 | ||||||||||||||||
| Payment of UCLA annual maintenance fee | 10,000 | 2,500,000 | |||||||||||||||
| Food and drug administration marketing approval | 50,000 | ||||||||||||||||
| Commercial sale amount | 25,000 | ||||||||||||||||
| Percentage amount raised of private placement | 2.00% | ||||||||||||||||
| Due from private placements | 100,000 | ||||||||||||||||
| Notes payable | 25,000 | 50,000 | |||||||||||||||
| License commitment fee due date | Jun. 01, 2014 | ||||||||||||||||
| License commitment fee | $ 100,000 | ||||||||||||||||
Notes Payable to Related Party (Details Narrative)
|
Notes Payable to Related Party (Details Narrative) (MTF Convertible Note [Member], USD $)
|
0 Months Ended |
|---|---|
|
Sep. 19, 2014
|
|
|
MTF Convertible Note [Member]
|
|
| Debt instrument face amount | $ 3,659,328 |
| Percentage of principal, accrued and unpaid interest of note converted into common stock | 50.00% |
Notes Payable to Related Party - Notes Outstanding (Principal and Interest) Including Unamortized Discount, with MTF Related Party (Details)
|
Notes Payable to Related Party - Notes Outstanding (Principal and Interest) Including Unamortized Discount, with MTF Related Party (Details) (USD $)
|
3 Months Ended | 12 Months Ended |
|---|---|---|
|
Mar. 31, 2015
|
Dec. 31, 2014
|
|
| Debt Disclosure [Abstract] | ||
| Issue Date | Sep. 19, 2014 | Sep. 19, 2014 |
| Maturity Date | Mar. 31, 2015 | Mar. 31, 2015 |
| Interest Rate | 0.085 | 0.085 |
| New MTF Convertible Promissory Note | $ 3,823,797 | $ 3,747,102 |
| Less: Accrued interest expense | 164,469 | 87,774 |
| Notes payable to related party | $ 3,659,328 | $ 3,659,328 |
Notes Payable (Details Narrative)
|
Notes Payable (Details Narrative) (USD $)
|
3 Months Ended | 12 Months Ended | 0 Months Ended | 0 Months Ended | |||||
|---|---|---|---|---|---|---|---|---|---|
|
Mar. 31, 2015
|
Mar. 31, 2014
|
Dec. 31, 2014
|
Sep. 19, 2014
|
Oct. 24, 2014
Hankey Capital, LLC [Member]
|
Oct. 24, 2014
Hankey Capital, LLC [Member]
Convertible Note [Member]
|
Oct. 24, 2014
Hankey Capital, LLC [Member]
Convertible Note [Member]
Maximum [Member]
|
Oct. 24, 2014
Hankey Capital, LLC [Member]
Convertible Note [Member]
Prime Rate [Member]
|
Oct. 24, 2014
Forefront [Member]
|
|
| Convertible promissory note amount | $ 5,000,000 | ||||||||
| Debt maturity date | Mar. 31, 2015 | Mar. 31, 2015 | Oct. 24, 2017 | ||||||
| Debt instrument interest rate, minimum | 4.00% | ||||||||
| Debt instrument interest rate, maximum | 8.50% | ||||||||
| Debt instrument conversation price per share | $ 0.001 | $ 1.58 | |||||||
| Warrant exercise price | $ 1.00 | $ 1.58 | |||||||
| Percentage of average daily price of common stock measured | 70.00% | ||||||||
| Debt instrument common stock price conversation period | 60 days | ||||||||
| Loan for collateral value ratio percentage | 50.00% | ||||||||
| Number of common stock shares issued for lending | 6,329,114 | ||||||||
| Percentage of commitment fee paid | 3.00% | ||||||||
| Loan commitment fee amount | 150,000 | ||||||||
| Warrant to purchase shares of common stock | 3,955,697 | 126,582 | |||||||
| Warrant expiration date | Oct. 24, 2017 | ||||||||
| Debt discount amortization | 119,542 | 47,306 | |||||||
| Amortization over period | 2 years 6 months | ||||||||
| Unamortized debt discount | $ 1,235,264 | $ 1,354,806 | |||||||
Stockholders' Equity (Details Narrative)
|
Stockholders' Equity (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | |||
|---|---|---|---|---|---|
|
Sep. 19, 2014
|
Mar. 31, 2015
|
Dec. 31, 2014
|
Mar. 31, 2015
Agent Warrants [Member]
|
Mar. 31, 2015
Hankey Capital, LLC [Member]
|
|
| Preferred stock, shares authorized | 20,000,000 | 20,000,000 | |||
| Preferred stock, shares issued | |||||
| Common stock, shares authorized | 100,000,000 | 100,000,000 | |||
| Common stock, shares outstanding | 24,269,047 | 24,269,047 | |||
| Common shares issued for collateral on loan, shares | 6,329,114 | ||||
| Warrants expiration duration | 5 years | ||||
| Percentage of warrants equal to diluted shares outstanding | 2.00% | ||||
| Fully diluted shares outstanding at the closing | 2,500,000 | ||||
| Warrants issued to purchase number of common stock | 699,037 | ||||
| Outstanding share, per share | $ 1.58 | ||||
| Fair value of warrants | $ 614,049 | $ 363,499 | |||
| Fair value assumption, expected volatility | 113.70% | 97.76% | |||
| Fair value assumption, risk-free interest rate | 2.29% | 1.10% | |||
| Fair value assumption, contractual term | 7 years | 3 years | |||
| Fair value assumption, dividend yield | 0.00% | 0.00% | |||
Stockholders' Equity - Schedule of Outstanding Unexercised Common Stock Warrants (Details)
|
Stockholders' Equity - Schedule of Outstanding Unexercised Common Stock Warrants (Details) (USD $)
|
3 Months Ended |
|---|---|
|
Mar. 31, 2015
|
|
| Number of Shares | 757,977 |
|
Unexercised Common Stock Warrants [Member]
|
|
| Number of Shares | 7,722,501 |
| Warrant expiration term | 3 years 9 months 4 days |
|
2006 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 0.17 |
| Number of Shares | 60,920 |
| Warrants expiration date | Oct. 31, 2016 |
|
2009 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 0.44 |
| Number of Shares | 118,383 |
| Warrants expiration date | Mar. 16, 2019 |
|
2010 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 0.44 |
| Warrants expiration date | Feb. 04, 2020 |
|
April 2013 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Warrants expiration date | Apr. 28, 2020 |
|
June 2013 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 50,000 |
| Warrants expiration date | Jun. 04, 2020 |
|
September 2013 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 25,000 |
| Warrants expiration date | Sep. 20, 2020 |
|
November 2013 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 75,000 |
| Warrants expiration date | Nov. 14, 2020 |
|
July 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.50 |
| Number of Shares | 166,667 |
| Warrants expiration date | May 30, 2018 |
|
July 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.50 |
| Number of Shares | 166,667 |
| Warrants expiration date | Jun. 30, 2018 |
|
July 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 500,000 |
| Warrants expiration date | Jun. 30, 2018 |
|
July 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 46,667 |
| Warrants expiration date | Jul. 02, 2018 |
|
July 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 0.00 |
| Number of Shares | 12,625 |
| Warrants expiration date | Jul. 10, 2018 |
|
September 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.62 |
| Number of Shares | 625,000 |
| Warrants expiration date | Aug. 31, 2021 |
|
September 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 699,671 |
| Warrants expiration date | Sep. 18, 2021 |
|
September 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 89,588 |
| Warrants expiration date | Sep. 29, 2021 |
|
October 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.00 |
| Number of Shares | 126,582 |
| Warrants expiration date | Oct. 23, 2017 |
|
October 2014 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.58 |
| Number of Shares | 3,955,697 |
| Warrants expiration date | Oct. 23, 2017 |
|
February 2015 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Exercise Price | $ 1.58 |
| Number of Shares | 699,037 |
| Warrants expiration date | Feb. 14, 2018 |
|
April 2010 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Number of Shares | 254,997 |
|
April 2013 [Member] | Unexercised Common Stock Warrants [Member]
|
|
| Number of Shares | 50,000 |
Stock-Based Compensation (Details Narrative)
|
Stock-Based Compensation (Details Narrative) (USD $)
|
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
| Percentage of stock issued and outstanding | 5.00% | |
| Stock-based compensation expense | $ 68,706 | |
| Unrecognized compensation cost related to unvested stock options | $ 228,442 | |
| Weighted average period | 1 year 9 months | |
|
2014 Stock Option Plan [Member]
|
||
| Shares authorized and reserved for issuance | 2,642,898 | |
Stock-Based Compensation - Schedule of Stock Option Activity (Details)
Stock-Based Compensation - Schedule of Stock Option (Details)
|
Stock-Based Compensation - Schedule of Stock Option (Details) (USD $)
|
3 Months Ended | |||
|---|---|---|---|---|
|
Mar. 31, 2015
|
Dec. 31, 2014
|
Mar. 31, 2015
September 2014 [Member]
|
Mar. 31, 2015
November 2014 [Member]
|
|
| Exericse price | $ 1.00 | $ 1.00 | ||
| Stock option | 757,977 | 757,977 | 583,059 | 174,918 |
| Expiration date | Sep. 18, 2021 | Nov. 03, 2024 | ||
Stock-Based Compensation - Schedule of Non-Vested Options (Details)
|
Stock-Based Compensation - Schedule of Non-Vested Options (Details) (USD $)
|
3 Months Ended | 12 Months Ended |
|---|---|---|
|
Mar. 31, 2015
|
Dec. 31, 2014
|
|
| Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
| Number of Non-vested Options Outstanding, Beginning | 501,469 | |
| Number of Non-vested Options, Vested | 256,508 | |
| Number of Non-vested Options, Ending | 501,469 | 501,469 |
| Number of Non-vested Options, Exercisable | 256,508 | |
| Number of Non-vested Options, Outstanding, Ending | 757,977 | |
| Weighted Average Fair Value at Grant Date, Outstanding, Beginning Balance | $ 0.73 | |
| Weighted Average Fair Value at Grant Date, Vested | ||
| Weighted Average Fair Value at Grant Date, Outstanding, Ending Balance | $ 0.73 | $ 0.73 |
| Weighted Average Fair Value at Grant Date, Exercisable | $ 0.73 | |
| Weighted Average Fair Value at Grant Date, Outstanding, Ending Balance | $ 0.73 | |
| Intrinsic Value, Outstanding, Beginning Balance | ||
| Intrinsic Value, Outstanding, Ending Balance |
Income Taxes (Details Narrative)
|
Income Taxes (Details Narrative)
|
3 Months Ended |
|---|---|
|
Mar. 31, 2015
|
|
| Income Tax Disclosure [Abstract] | |
| Effective tax rate | 0.00% |
Related Party Transactions (Details Narrative)
|
Related Party Transactions (Details Narrative) (USD $)
|
0 Months Ended | 3 Months Ended | |
|---|---|---|---|
|
Sep. 19, 2014
|
Mar. 31, 2015
|
Mar. 31, 2014
|
|
| Consulting fees for related party | $ 45,000 | $ 30,000 | |
| Granted common stock outstanding by the company, percentage | 3.00% | ||
| Warrant issued during period for purchase common stock | 699,671 | ||
| Warrant strike price per share | $ 1.00 | ||
| Consultant term | 7 years | ||
| Percentage of vested and exercisable | 33.33% | ||
| Fair value of warrants value | 614,049 | ||
| Expected volatility | 113.70% | ||
| Risk-free interest rate | 2.29% | ||
| Contractual term | 7 years | ||
| Dividend yield | 0.00% | ||
| Related party expense | $ 45,000 | ||
|
12 Months [Member]
|
|||
| Percentage of vested and exercisable | 33.33% | ||
|
24 Months [Member]
|
|||
| Percentage of vested and exercisable | 33.34% | ||
Subsequent Events (Details Narrative)
|
Subsequent Events (Details Narrative) (Subsequent Event [Member], USD $)
|
0 Months Ended |
|---|---|
|
May 04, 2015
|
|
|
Hankey Capital, LLC [Member]
|
|
| Number of stock shares converted | 2,531,646 |
| Percentage of commitment fee | 3.00% |
| Loans payable | $ 60,000 |
| Warrants issued | 1,898,734 |
| Common Stock exercise price per share | $ 1.58 |
| Warrants expiration date | May 04, 2018 |
| Maximum percentage of issued and outstanding common stock | 4.999% |
|
MTF Convertible Note [Member]
|
|
| Convertible note | 3,659,328 |
| Accrued interest | 193,443 |
| Number of stock shares converted | 2,438,463 |
|
Second Secured Convertible Note And Warrant [Member]
|
|
| Convertible note | $ 2,000,000 |
| Interest rate minimum | 8.50% |
| Share price | $ 1.58 |
| Percentage of average daily price for Common Stock | 70.00% |
| Maximum percentage of loan that can maintain | 50.00% |
|
Second Secured Convertible Note And Warrant [Member] | Prime Rate [Member]
|
|
| Debt instruments prime rate | 0.04 |