Delaware | 2834 | 27-4842691 | ||||||
---|---|---|---|---|---|---|---|---|
(State or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Evan L. Greebel, Esq. Katten Muchin Rosenman LLP 575 Madison Avenue New York, NY 10022 Tel.: (212) 940-6383 | Donald J. Murray Eric W. Blanchard Covington & Burling LLP The New York Times Building 820 Eighth Avenue New York, NY 10018 Tel.: (212) 841-1000 |
Large accelerated filer ☐ | Accelerated filer ☐ | ||||
Non-accelerated filer ☐ (Do not check if a smaller reporting company) | Smaller reporting company ☒ |
Title of Securities to be Registered | Proposed Maximum Aggregate Offering Price (1) | Amount of Registration Fee (2) | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Common Stock, par value $0.0001 per share | $ | 4 6 ,000,000 | $ | 5,924.80 |
Per Share | Total | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Public Offering Price | $ | $ | ||||||||||
Underwriting Discounts and Commissions | $ | $ | ||||||||||
Proceeds to us, before expenses(1) | $ | $ |
Roth Capital Partners | Ladenburg Thalmann & Co. Inc. | Summer Street Research Partners |
(In thousands, except share and per share amounts) | For the year ended December 31, | For the period from March 31, 2011 (inception) through December 31, | For the nine months ended September 30, | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2012 | 2011 | 2013 | 2012 | |||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||
Compensation and related costs | $ | 18,133,550 | $ | 2,227,203 | $ | 1,767,195 | $ | 8,371,481 | ||||||||||||||
Professional fees | 8,494,583 | 556,287 | 4,392,673 | 7,761,899 | ||||||||||||||||||
Research and development | 541,119 | 353,394 | 2,113,813 | 286,889 | ||||||||||||||||||
Selling, general and administrative | 1,387,765 | 126,812 | 4,131,193 | 337,622 | ||||||||||||||||||
Technology license fee | 1,700,000 | — | 100,000 | — | ||||||||||||||||||
Total operating expenses | 30,257,017 | 3,263,696 | 12,504,874 | 16,757,891 | ||||||||||||||||||
Operating loss | (30,257,017 | ) | (3,263,696 | ) | (12,504,874 | ) | (16,757,891 | ) | ||||||||||||||
Total other expense, net | (86,839 | ) | (4,560 | ) | (8,184,362 | ) | (54,778 | ) | ||||||||||||||
Net loss | $ | (30,343,856 | ) | $ | (3,268,256 | ) | $ | (20,689,236 | ) | $ | (16,812,669 | ) | ||||||||||
Net loss per common share, basic and diluted | $ | (8.29 | ) | $ | (1.59 | ) | $ | (1.62 | ) | $ | (5.55 | ) | ||||||||||
Weighted average common shares outstanding, basic and diluted | 3,662,114 | 2,053,402 | 12,797,714 | 3,027,468 |
AS OF SEPTEMBER 30, 2013 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
(In thousands) | ACTUAL | AS ADJUSTED(1) | ||||||||||
BALANCE SHEET DATA: | ||||||||||||
Cash | $ | 13,410 | $ | 50,010 | ||||||||
Marketable securities, available-for-sale | 2,957 | 2,957 | ||||||||||
Property and equipment, net | 38 | 38 | ||||||||||
Total assets | 21,365 | 57,965 | ||||||||||
Total current liabilities | 27,169 | 27,169 | ||||||||||
Accumulated deficit | (54,301 | ) | (54,301 | ) | ||||||||
Total stockholders’ (deficit) equity | (5,804 | ) | 30,796 |
As of September 30, 2013 | ||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Actual | As Adjusted | |||||||||||
(Unaudited) | ||||||||||||
Cash, marketable securities, available for sale and prepaid expenses and other current assets | $ | 16,847,848 | $ | 53,447,848 | ||||||||
Stockholders’ equity (deficit): | ||||||||||||
Preferred stock, $0.001 par value, 20,000,000 Shares authorized; 0 issued and outstanding | — | — | ||||||||||
Common stock, $0.0001 par value: 100,000,000 shares authorized; 18,376,363 shares issued and outstanding, actual; 23,195,640 shares issued and outstanding, as adjusted | 1,838 | 2,320 | ||||||||||
Additional paid-in capital | 48,649,970 | 85,249,488 | ||||||||||
Deficit accumulated during the development stage | (54,301,348 | ) | (54,301,348 | ) | ||||||||
Accumulated other comprehensive income | (154,834 | ) | (154,834 | ) | ||||||||
Total stockholders’ equity (deficit) | (5,804,374 | ) | 30,795,626 | |||||||||
Total capitalization | $ | (5,804,374 | ) | $ | 30,795,626 |
Public offering price per share | $ | 8.30 | ||||||||||
Net tangible book value (deficit) per share as of September 30, 2013 | $ | (0.43 | ) | |||||||||
Increase per share attributable to investors purchasing our common stock in this offering | 1.67 | |||||||||||
As adjusted net tangible book value per share after this offering | 1.24 | |||||||||||
Dilution per share to investors purchasing our common stock in this offering | $ | 7.06 |
Quarter Ending | High | Low | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Fiscal Year 2014 | ||||||||||||
First Quarter (through January 6 , 2014) | $ | 8.49 | $ | 7.19 | ||||||||
Fiscal Year 2013 | ||||||||||||
First Quarter | $ | 5.78 | $ | 3.00 | ||||||||
Second Quarter | $ | 9.99 | $ | 4.75 | ||||||||
Third Quarter | $ | 7.25 | $ | 4.50 | ||||||||
Fourth Quarter | $ | 9.00 | $ | 5.25 | ||||||||
Fiscal Year 2012 | ||||||||||||
First Quarter | N/A | N/A | ||||||||||
Second Quarter | $ | 1.05 | $ | 1.05 | ||||||||
Third Quarter | $ | 1.05 | $ | 1.05 | ||||||||
Fourth Quarter | $ | 3.00 | $ | 0.13 | ||||||||
Fiscal Year 2011 | ||||||||||||
First Quarter | $ | 0.90 | $ | 0.90 | ||||||||
Second Quarter | $ | 0.90 | $ | 0.90 | ||||||||
Third Quarter | $ | 1.05 | $ | 0.90 | ||||||||
Fourth Quarter | $ | 1.05 | $ | 0.90 | ||||||||
Fiscal Year 2010 | ||||||||||||
First Quarter | N/A | N/A | ||||||||||
Second Quarter | $ | 0.90 | $ | 0.90 | ||||||||
Third Quarter | $ | 0.90 | $ | 0.90 | ||||||||
Fourth Quarter | $ | 0.90 | $ | 0.90 |
Nine months ended September 30, | Year ended December 31, | For the period from March 11, 2011 (inception) through December 31, | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2013 | 2012 | 2012 | 2011 | |||||||||||||||||||
External service provider costs: | ||||||||||||||||||||||
Sparsentan | $ | 877,298 | $ | 109,205 | $ | 176,450 | $ | — | ||||||||||||||
RE-024 | 390,477 | 45,568 | 124,635 | — | ||||||||||||||||||
General | 215,681 | 132,116 | 240,034 | 94,454 | ||||||||||||||||||
Other product candidates | 144,528 | — | — | 258,940 | ||||||||||||||||||
Total external service providers costs: | 1,627,984 | 286,889 | 541,119 | 353,394 | ||||||||||||||||||
Internal personnel costs: | 485,829 | — | — | — | ||||||||||||||||||
Total research and development | $ | 2,113,813 | $ | 286,889 | $ | 541,119 | $ | 353,394 |
For the nine months ended September 30, | For the year ended December 31, 2012 | For the period from March 11, 2011 (inception) through December 31, 2011 | ||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2013 | 2012 | |||||||||||||||||||||
Net cash used in operating activities | $ | (9,442,442 | ) | $ | (2,088,811 | ) | $ | (2,736,739 | ) | $ | (785,747 | ) | ||||||||||
Net cash used in investing activities | (6,670,416 | ) | (1,569,018 | ) | (1,699,593 | ) | (12,872 | ) | ||||||||||||||
Net cash provided by financing activities | 29,511,295 | 3,649,965 | 4,437,667 | 808,672 | ||||||||||||||||||
Net increase (decrease) in cash | 13,398,437 | (7,864 | ) | 1,335 | 10,053 | |||||||||||||||||
Cash, beginning of period | 11,388 | 10,053 | 10,053 | — | ||||||||||||||||||
Cash, end of period | $ | 13,409,825 | $ | 2,189 | $ | 11,388 | $ | 10,053 |
Name | Age | Position | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Martin Shkreli | 30 | Chief Executive Officer and Director | ||||||||
Marc Panoff | 43 | Chief Financial Officer | ||||||||
Horacio Plotkin, M.D. | 48 | Chief Medical Officer | ||||||||
Stephen Aselage | 62 | Director | ||||||||
Steve Richardson | 59 | Director | ||||||||
Cornelius E. Golding | 65 | Director | ||||||||
Jeffrey Paley, M.D. | 46 | Director |
Name and Principal Position | Fiscal Year | Salary ($) | Bonus ($) | Stock Awards ($)(1) | Option Awards ($)(1) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Martin Shkreli, Chief Executive Officer and Director(2) | 2 013 | 2 52,091 | 9 33,430 | — | 88,200 | — | 1 ,273,721 | ||||||||||||||||||||||||||||||
2 012 | 2 50,000 | 5 65,231 | 1 4,444,10 0 | — | — | 15,259,331 | |||||||||||||||||||||||||||||||
Marc Panoff, Chief Financial Officer | 2013 | 142,153 | 27,488 | 76,800 | — | — | 246,441 | ||||||||||||||||||||||||||||||
2012 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Horacio Plotkin, Chief Medical Officer | 2 013 | 222,727 | 20,000 | — | 166,115 | — | 408,842 | ||||||||||||||||||||||||||||||
2012 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Stephen Aselage, Director (2) (3) | 2013 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
2012 | 83,333 | — | 2,000,000 | — | — | 2,083,333 | |||||||||||||||||||||||||||||||
Robert Wilson, former Chief Executive Officer, President and Director (4) | 2 013 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
2 012 | — | — | — | — | — | — | |||||||||||||||||||||||||||||||
Gary Lyons, former Director (4) | 2013 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
2012 | — | — | — | — | — | — |
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name | Number of Securities Underlying Unexercised Options (#) Exercisable | Number of Securities Underlying Unexercised Options (#) Unexercisable | Option Exercise Price ($) | Option Expiration Date | Number of Shares or Units of Stock That Have Not Vested (#) | Market Value of Shares or Units of Stock That Have Not Vested ($) | ||||||||||||||||||||||||||
Martin Shkreli | 90,000 | 990,000 | (1) | $ | 7.45 | 12/16/2023 | — | — | ||||||||||||||||||||||||
Marc Panoff | — | — | — | — | 108,000 | (2) | $ | 756,000 | ||||||||||||||||||||||||
Horacio Plotkin | 2 0,000 | 10 0,000 | (3) | $ | 8.70 | 5/13/2023 | — | — |
Name | Fees Earned or Paid in Cash ($) | Stock Awards ($) | Option Awards ($) | All Other Compensation ($) | Total ($) | ||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Stephen Aselage | 6,250 | — | 78,697 | — | 84,947 | ||||||||||||||||||||||
Cornelius E. Golding | 6,250 | — | 78,697 | — | 84,947 | ||||||||||||||||||||||
Jeffrey Paley | 6,250 | — | 78,697 | — | 84,947 | ||||||||||||||||||||||
Steven Richardson | — | — | 98,372 | — | 98,372 |
Shares Beneficially Owned Prior to Offering | Beneficial Ownership After Offering | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Name of Beneficial Owner | Shares | Percent | Shares | Percent | ||||||||||||||||||
Executive Officers and Directors | ||||||||||||||||||||||
Martin Shkreli, Chief Executive Officer and Director | 3,445,615 | (1) | 18.60 | % | 3,445,615 | 14.85 | % | |||||||||||||||
Marc Panoff, Chief Financial Officer | 121,650 | (2) | * | 121,650 | * | |||||||||||||||||
Horatio Plotkin, M.D., Chief Medical Officer | 33,300 | (3) | * | 33,300 | * | |||||||||||||||||
Stephen Aselage, Director | 274,034 | (4) | 1.49 | % | 274,034 | 1.18 | % | |||||||||||||||
Steven Richardson, Director | 117,620 | (5) | * | 117,620 | * | |||||||||||||||||
Cornelius E. Golding, Director | 12,000 | (6) | * | 12,000 | * | |||||||||||||||||
Jeffrey Paley, M.D., Director | 83,665 | (7) | * | 83,665 | * | |||||||||||||||||
All directors and executive officers as a group | 4,087,884 | 21.96 | % | 4,087,884 | 17.62 | % | ||||||||||||||||
5% Stockholders | ||||||||||||||||||||||
O paleye L.P. | 3 ,078,382 | (8) | 1 5.94 | % | 3 ,078,382 | 13.27 | % | |||||||||||||||
Perceptive Life Sciences Master Fund Ltd | 1,575,005 | (9) | 8.33 | % | 1,575,005 | 6.79 | % | |||||||||||||||
Sabby Healthcare Volatility Master Fund, Ltd. | 1,297,945 | (10) | 6.97 | % | 1,297,945 | 5.60 | % | |||||||||||||||
QVT Fund V LP | 1,285,857 | (11) | 6.84 | % | 1,285,857 | 5.54 | % |
Underwriter | Number of Shares | ||||||
---|---|---|---|---|---|---|---|
Jefferies LLC | |||||||
Roth Capital Partners, LLC | |||||||
Ladenburg Thalmann & Co. Inc. | |||||||
Summer Street Research Partners | |||||||
Total |
Per Share | Total | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Without Option to Purchase Additional Shares | With Option to Purchase Additional Shares | Without Option to Purchase Additional Shares | With Option to Purchase Additional Shares | |||||||||||||||||||
Public offering price | $ | $ | $ | $ | ||||||||||||||||||
Underwriting discounts and commissions paid by us | $ | $ | $ | $ | ||||||||||||||||||
Proceeds to us, before expenses | $ | $ | $ | $ |
Page | |||||
---|---|---|---|---|---|
For the three and nine months ended September 30, 2013 | |||||
For the year ended December 31, 2012 | |||||
Financial Statements | |||||
September 30, 2013 | December 31, 2012 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
(unaudited) | ||||||||||||
Assets | ||||||||||||
Current assets: | ||||||||||||
Cash | $ | 13,409,825 | $ | 11,388 | ||||||||
Marketable securities, available-for-sale | 2,957,376 | — | ||||||||||
Prepaid expenses and other current assets | 480,647 | 21,830 | ||||||||||
Total current assets | 16,847,848 | 33,218 | ||||||||||
Property and equipment, net | 38,437 | 23,790 | ||||||||||
Patents pending | 23,793 | 18,093 | ||||||||||
Due from affiliate | — | 137,547 | ||||||||||
Security deposits | 177,547 | — | ||||||||||
Deposits on license agreements | 2,250,000 | — | ||||||||||
Technology license, net | 2,027,085 | 2,178,617 | ||||||||||
Total assets | $ | 21,364,710 | $ | 2,358,047 | ||||||||
Liabilities and Stockholders' Deficit | ||||||||||||
Current liabilities: | ||||||||||||
Technology license liability | $ | — | $ | 1,300,000 | ||||||||
Accounts payable | 1,721,511 | 1,023,320 | ||||||||||
Accrued expenses | 1,511,848 | 2,467,796 | ||||||||||
Settlements payable | 1,691,400 | — | ||||||||||
Note payable—related party | — | 884,764 | ||||||||||
Investors’ deposits | — | 100,000 | ||||||||||
Due to related parties | 10,000 | 23,200 | ||||||||||
Derivative financial instruments, at estimated fair value—warrants | 22,234,325 | — | ||||||||||
Total current liabilities | 27,169,084 | 5,799,080 | ||||||||||
Stockholders’ Deficit: | ||||||||||||
Preferred stock Series A $0.001 par value; 20,000,000 shares authorized; 0 issued and outstanding | — | — | ||||||||||
Common stock $0.0001 par value; 100,000,000 shares authorized; 18,376,363 and 8,952,905 issued and outstanding, respectively | 1,838 | 895 | ||||||||||
Additional paid-in capital | 48,649,970 | 30,203,402 | ||||||||||
Deficit accumulated during the development stage | (54,301,348 | ) | (33,612,112 | ) | ||||||||
Accumulated other comprehensive income | (154,834 | ) | — | |||||||||
Total stockholders’ deficit | (5,804,374 | ) | (3,407,815 | ) | ||||||||
Total liabilities and stockholders' deficit | $ | 21,364,710 | $ | 2,391,265 |
For the three months ended September 30, | For the nine months ended September 30, | For the period from March 11, 2011 (inception) through September 30, 2013 | |||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2013 | 2012 | 2013 | 2012 | ||||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||
Compensation and related costs— inclusive of share base compensation $28,519, $4,780,383, $70,189, $7,724,150 and $17,808,002 | $ | 478,741 | $ | 5,068,707 | $ | 1,767,195 | $ | 8,371,481 | $ | 22,127,948 | |||||||||||||||||
Professional fees—inclusive of share based compensation $1,640,501, $2,247,292, $1,849,745, $6,290,252 and $8,501,449 | 2,463,804 | 3,167,242 | 4,392,673 | 7,761,899 | 13,602,012 | ||||||||||||||||||||||
Research and development—inclusive of share based compensation $72,888, $0, $109,571, $0 and $109,571 | 1,399,875 | 110,656 | 2,113,813 | 286,889 | 3,008,326 | ||||||||||||||||||||||
Selling, general and administrative | 812,066 | 113,140 | 4,131,193 | 337,622 | 5,487,301 | ||||||||||||||||||||||
Technology license fee | — | — | 100,000 | — | 1,800,000 | ||||||||||||||||||||||
Total operating expenses | 5,154,486 | 8,459,745 | 12,504,874 | 16,757,891 | 46,025,587 | ||||||||||||||||||||||
Operating loss | (5,154,486 | ) | (8,459,745 | ) | (12,504,874 | ) | (16,757,891 | ) | (46,025,587 | ) | |||||||||||||||||
Other income (expense): | |||||||||||||||||||||||||||
Interest income | 4 | 6,049 | 9 | 15,781 | 21,914 | ||||||||||||||||||||||
Interest expense | — | (26,761 | ) | (41,563 | ) | (70,559 | ) | (147,480 | ) | ||||||||||||||||||
Registration payment obligation income | 360,000 | — | 360,000 | — | 360,000 | ||||||||||||||||||||||
Registration payment obligation expense | (360,000 | ) | — | (360,000 | ) | — | (360,000 | ) | |||||||||||||||||||
Realized gain on sale of marketable securities | 59,737 | — | 59,737 | — | 59,737 | ||||||||||||||||||||||
Change in fair value of derivative financial instruments—warrants | (5,803,054 | ) | — | (8,198,672 | ) | — | (8,198,672 | ) | |||||||||||||||||||
Loss on transactions denominated in foreign currencies | — | — | (3,873 | ) | — | (11,260 | ) | ||||||||||||||||||||
Total other expense, net | (5,743,313 | ) | (20,712 | ) | (8,184,362 | ) | (54,778 | ) | (8,275,761 | ) | |||||||||||||||||
Net loss | $ | (10,897,799 | ) | $ | (8,480,457 | ) | $ | (20,689,236 | ) | $ | (16,812,669 | ) | $ | (54,301,348 | ) | ||||||||||||
Net loss per common share, basic and diluted | $ | (0.71 | ) | $ | (2.42 | ) | $ | (1.62 | ) | $ | (5.55 | ) | |||||||||||||||
Weighted average common shares outstanding, basic and diluted | 15,365,631 | 3,510,415 | 12,797,714 | 3,027,468 | |||||||||||||||||||||||
Comprehensive Loss: | |||||||||||||||||||||||||||
Net loss | $ | (10,897,799 | ) | $ | (8,480,457 | ) | $ | (20,689,236 | ) | $ | (16,812,669 | ) | $ | (54,301,348 | ) | ||||||||||||
Unrealized loss on marketable securities | (154,834 | ) | — | (154,834 | ) | — | (154,834 | ) | |||||||||||||||||||
Comprehensive Loss | $ | (11,052,633 | ) | $ | (8,480,457 | ) | $ | (20,844,070 | ) | $ | (16,812,669 | ) | $ | (54,456,182 | ) |
Common stock | Additional paid in capital | Receivables due from stockholder | Accumulated other comprehensive loss | Accumulated deficit | Total Stockholders’ deficit | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares | Amount | ||||||||||||||||||||||||||||||||||||
Balance—March 11, 2011 (inception) | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
Issuance of common shares | 1,608,300 | 161 | 24,839 | (25,000 | ) | — | — | — | |||||||||||||||||||||||||||||
Issuance of common shares to founders in connection with the initial capital contribution | 50,000 | 5 | 95 | — | — | — | 100 | ||||||||||||||||||||||||||||||
Incentive shares granted—employees | 1,758,300 | 176 | (176 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Incentive shares granted—non employees | 381,000 | 38 | (38 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Incentive shares forfeited—employees | (45,835 | ) | (5 | ) | 5 | — | — | — | — | ||||||||||||||||||||||||||||
Share based compensation—employees | — | — | 1,724,967 | — | — | — | 1,724,967 | ||||||||||||||||||||||||||||||
Share based compensation—non employees | — | — | 254,332 | — | — | — | 254,332 | ||||||||||||||||||||||||||||||
Issuance of shares in connection with March 2011 private placement, net of fees of $66,061 | 253,750 | 25 | 658,914 | — | — | — | 658,939 | ||||||||||||||||||||||||||||||
Issuance of Series A preferred in connection with March 2011 private placement, net of fees of $1,367, recapitalization to common stock | 36,750 | 4 | 103,629 | — | — | — | 103,633 | ||||||||||||||||||||||||||||||
Loan made to stockholder | — | — | — | (10,000 | ) | — | — | (10,000 | ) | ||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (3,268,256 | ) | (3,268,256 | ) | ||||||||||||||||||||||||||||
Balance—December 31, 2011 | 4,042,265 | 404 | 2,766,567 | (35,000 | ) | — | (3,268,256 | ) | (536,285 | ) | |||||||||||||||||||||||||||
Prior Issuance of Series A preferred in connection with January 2012 private placement, net of fees of $61,677, exchanged to common stock | 326,963 | 33 | 1,806,644 | — | — | — | 1,806,677 | ||||||||||||||||||||||||||||||
Prior Issuance of Series A preferred in connection with May 2012 private placement, net of fees of $12,275, exchanged to common stock | 470,764 | 47 | 1,668,979 | — | — | — | 1,669,026 | ||||||||||||||||||||||||||||||
Shares transferred to consultants by founder for services | — | — | 4,400,000 | — | — | — | 4,400,000 | ||||||||||||||||||||||||||||||
Shares transferred to employees by founders for services | — | — | 1,375,000 | — | — | — | 1,375,000 | ||||||||||||||||||||||||||||||
Shares issued in accordance with license agreement | 620,000 | 62 | 1,549,938 | — | — | — | 1,550,000 | ||||||||||||||||||||||||||||||
Shares outstanding at time of reverse merger date December 12, 2012 | 2,585,583 | 259 | 1,142 | — | — | — | 1,401 | ||||||||||||||||||||||||||||||
Incentive shares granted—employees | 866,180 | 86 | (86 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Incentive shares granted—non employees | 87,503 | 9 | (9 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Incentive shares forfeited—employees | (46,353 | ) | (5 | ) | 5 | — | — | — | — | ||||||||||||||||||||||||||||
Share based compensation—employees | — | — | 14,637,850 | — | — | — | 14,637,850 | ||||||||||||||||||||||||||||||
Share based compensation—non employees | — | — | 1,997,372 | — | — | — | 1,997,372 | ||||||||||||||||||||||||||||||
Receivable due from stockholder charged to compensation | — | — | — | 407,900 | — | — | 407,900 | ||||||||||||||||||||||||||||||
Loan made to stockholder | — | — | — | (372,900 | ) | — | — | (372,900 | ) | ||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | (30,343,856 | ) | (30,343,856 | ) |
Common stock | Additional paid in capital | Receivables due from stockholder | Accumulated other comprehensive loss | Accumulated deficit | Total Stockholders’ deficit | ||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares | Amount | ||||||||||||||||||||||||||||||||||||
Balance—December 31, 2012 | 8,952,905 | $ | 895 | $ | 30,203,402 | $ | — | $ | — | $ | (33,612,112 | ) | $ | (3,407,815 | ) | ||||||||||||||||||||||
Incentive shares granted—employees (unaudited) | 135,000 | 14 | (14 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Share based compensation—consultants (unaudited) | 194,000 | 19 | 1,282,201 | — | — | — | 1,282,220 | ||||||||||||||||||||||||||||||
Share based compensation—employees (unaudited) | — | — | 179,760 | — | — | — | 179,760 | ||||||||||||||||||||||||||||||
Share based compensation—non employees (unaudited) | — | — | 567,525 | — | — | — | 567,525 | ||||||||||||||||||||||||||||||
Incentive shares forfeited—employees (unaudited) | (20,833 | ) | (2 | ) | 2 | — | — | — | — | ||||||||||||||||||||||||||||
Incentive shares forfeited—non employees (unaudited) | (37,500 | ) | (4 | ) | 4 | — | — | — | — | ||||||||||||||||||||||||||||
Issuance of common stock in connection with January 2013 private placement at $3.00 per share, net of fees of $0 (unaudited) | 272,221 | 27 | 816,637 | — | — | — | 816,664 | ||||||||||||||||||||||||||||||
Issuance of common stock in connection with February 2013 private placement at $3.00 per share, net of fees of $678,986 and registration payment obligation of $360,000 (unaudited) | 3,045,929 | 305 | 3,592,891 | — | — | — | 3,593,196 | ||||||||||||||||||||||||||||||
Issuance of common stock in connection with August 2013 private placement at $4.50 per share, net of fees of $2,811,313 and payment made to February investors for inducement to participate in August financing of $2,238,681 (unaudited) | 5,531,401 | 553 | 10,639,270 | — | — | — | 10,639,823 | ||||||||||||||||||||||||||||||
Issuance of common stock in connection with payment made to February investors for inducement to participate in August financing, 271,222 shares at $4.50 per share and 20,685 shares at $5.00 per share (unaudited) | 291,907 | 29 | 1,323,894 | — | — | — | 1,323,923 | ||||||||||||||||||||||||||||||
Shares issued on behalf of related party | 6,000 | 1 | 44,399 | — | — | — | 44,400 | ||||||||||||||||||||||||||||||
Adjustment to existing shareholder (unaudited) | 5,333 | 1 | (1 | ) | — | — | — | — | |||||||||||||||||||||||||||||
Unrealized loss on marketable securities | — | — | — | — | (154,834 | ) | — | (154,834 | ) | ||||||||||||||||||||||||||||
Net loss (unaudited) | — | — | — | — | — | (20,689,236 | ) | (20,689,236 | ) | ||||||||||||||||||||||||||||
Balance—September 30, 2013 (unaudited) | 18,376,363 | $ | 1,838 | $ | 48,649,970 | $ | — | $ | (154,834 | ) | $ | (54,301,348 | ) | $ | (5,804,374 | ) |
For the nine months ended September 30, | For the period from March 11, 2011 (inception) through September 30, 2013 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2013 | 2012 | ||||||||||||||||
Cash Flows From Operating Activities: | |||||||||||||||||
Net loss | $ | (20,689,236 | ) | $ | (16,812,669 | ) | $ | (54,301,348 | ) | ||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||
Depreciation and amortization | 159,128 | 73,417 | 284,368 | ||||||||||||||
Gain on securities available for sale | (59,737 | ) | — | (59,737 | ) | ||||||||||||
Compensation in lieu of receivable | — | — | 407,900 | ||||||||||||||
Share based compensation—consultants | 1,282,220 | — | 1,282,220 | ||||||||||||||
Share based compensation—employees | 179,760 | 7,724,150 | 17,917,577 | ||||||||||||||
Share based compensation—non-employees | 567,525 | 6,290,252 | 7,219,229 | ||||||||||||||
Registration payment obligation expense | 360,000 | — | — | ||||||||||||||
Reversal of registration payment obligation liability | (360,000 | ) | — | — | |||||||||||||
Share based payment—Technology license contingent fee | — | — | 1,550,000 | ||||||||||||||
Change in estimated fair value of derivative financial instruments—warrants | 8,198,672 | — | 8,198,672 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Prepaid expenses | (458,817 | ) | (30,431 | ) | (480,647 | ) | |||||||||||
Other assets | — | (8,781 | ) | — | |||||||||||||
Technology license fees | — | — | 150,000 | ||||||||||||||
Settlement payable | 1,691,400 | — | 1,691,400 | ||||||||||||||
Accounts payable and accrued expenses | (313,357 | ) | 675,251 | 3,175,438 | |||||||||||||
Net cash used in operating activities | (9,442,442 | ) | (2,088,811 | ) | (12,964,928 | ) | |||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||
Purchase of fixed assets | (22,243 | ) | (8,471 | ) | (49,889 | ) | |||||||||||
Purchase of intangible assets | (5,700 | ) | (1,158,418 | ) | (1,173,793 | ) | |||||||||||
Payments for security deposits for exclusivity of certain licenses | (2,250,000 | ) | — | (2,250,000 | ) | ||||||||||||
Increase in security deposit | (40,000 | ) | — | (40,000 | ) | ||||||||||||
Repayment of technology license liability | (1,300,000 | ) | — | (1,300,000 | ) | ||||||||||||
Purchase of marketable securities, available-for-sale | (3,430,418 | ) | — | (3,430,418 | ) | ||||||||||||
Proceeds from the sale of marketable securities, available-for-sale | 377,945 | — | 377,945 | ||||||||||||||
Cash received in merger transaction | — | — | 3,721 | ||||||||||||||
Due from related parties | — | (2,800 | ) | — | |||||||||||||
Payments made on behalf of affiliate | — | — | (137,547 | ) | |||||||||||||
Loans made to stockholder | — | (399,329 | ) | (382,900 | ) | ||||||||||||
Net cash used in investing activities | (6,670,416 | ) | (1,569,018 | ) | (8,382,881 | ) | |||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||
Proceeds from related parties | — | — | 56,500 | ||||||||||||||
Repayment of net amounts due to related parties | (13,200 | ) | (30,000 | ) | (46,500 | ) | |||||||||||
Proceeds from note payable—related party | — | 930,000 | 930,000 | ||||||||||||||
Repayment of note payable—related party | (884,764 | ) | (15,236 | ) | (930,000 | ) | |||||||||||
Investors’ deposits | — | — | 100,000 | ||||||||||||||
Proceeds received from issuance of common stock, net | 31,355,455 | 2,765,201 | 35,593,830 | ||||||||||||||
Payment to investors participated in August 2013 financing | (946,196 | ) | — | (946,196 | ) | ||||||||||||
Net cash provided by financing activities | 29,511,295 | 3,649,965 | 34,757,634 | ||||||||||||||
Net increase in cash | 13,398,437 | (7,864 | ) | 13,409,825 | |||||||||||||
Cash, beginning of period | 11,388 | 10,053 | — | ||||||||||||||
Cash, end of period | $ | 13,409,825 | $ | 2,189 | $ | 13,409,825 |
For the nine months ended September 30, | For the period from March 11, 2011 (inception) through September 30, 2013 | ||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
2013 | 2012 | ||||||||||||||||
Supplemental Disclosure of Cash Flow Information: | |||||||||||||||||
Cash paid for interest | $ | 28,263 | $ | 9,764 | $ | 43,027 | |||||||||||
Non-cash investing and financing activities: | |||||||||||||||||
Unrealized loss on marketable securities | $ | (154,834 | ) | $ | — | $ | (154,834 | ) | |||||||||
Forfeiture of subscription receivable | $ | — | $ | — | $ | 25,000 | |||||||||||
Reclassification of due from related parties | $ | — | $ | 500 | $ | — | |||||||||||
Technology license liability | $ | — | $ | 1,300,000 | $ | — | |||||||||||
Shares issued on behalf of related party | $ | 44,400 | $ | — | $ | 44,400 | |||||||||||
Affiliate receivable applied to security deposit | $ | 137,547 | $ | — | $ | 137,547 |
Cost | Unrealized Gains | Unrealized Losses | Estimated Fair Value | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Marketable securities available-for-sale: | $ | 3,112,210 | $ | — | $ | 154,834 | $ | 2,957,376 |
As of | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Date of issuance February 14, 2013 | Date of issuance August 14, 2013 | Date of issuance August 15, 2013 | September 30, 2013 | |||||||||||
Fair market price of common stock | $3.75 | $4.50 | $4.50 | $6.50 | ||||||||||
Contractual term | 5 years | 5 years | 5 years | 4.38-4.87 years | ||||||||||
Risk-free interest rate | 0.86% | 1.48% | 1.48% | 1.41% | ||||||||||
Expected volatility | 101% | 106% | 106% | 96%-102% |
Total carrying value at September 30, 2013 | Fair Value Measurements at September 30, 2013 | |||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Quoted prices in active markets (Level 1) | Significant other observable inputs (Level 2) | Significant unobservable inputs (Level 3) | ||||||||||||||||||||
Asset: | ||||||||||||||||||||||
Marketable securities, available-for-sale | $ | 2,957,376 | $ | 2,957,376 | $ | — | $ | — | ||||||||||||||
Liability: | ||||||||||||||||||||||
Derivative liability related to warrants | $ | 22,248,040 | $ | — | $ | — | $ | 22,248,040 |
Fair Value Measurements of Common Stock Warrants Using Significant Unobservable Inputs (Level 3) | |||||||
---|---|---|---|---|---|---|---|
Balance at January 1, 2013 | $ | — | |||||
Issuance of common stock warrants: | |||||||
February 14, 2013 | 4,505,605 | ||||||
August 14, 2013 | 328,561 | ||||||
August 15, 2013 | 9,201,487 | ||||||
Total value upon issuance | 14,035,653 | ||||||
Change in fair value of common stock warrant liability | 8,198,672 | ||||||
Balance at September 30, 2013 | $ | 22,234,325 |
Employee — number of shares | Non Employee — number of shares | Total number of shares | Weighted Average Fair Value | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Unvested December 31, 2011 | 1,281,225 | 321,165 | 1,602,390 | $ | 4.00 | |||||||||||||||||
Granted | 866,180 | 87,503 | 953,683 | 12.89 | ||||||||||||||||||
Vested | (2,048,280 | ) | (193,672 | ) | (2,241,952 | ) | 7.34 | |||||||||||||||
Forfeited | (46,353 | ) | — | (46,353 | ) | 9.06 | ||||||||||||||||
Unvested December 31, 2012 | 52,772 | 214,996 | 267,768 | 5.79 | ||||||||||||||||||
Granted | 135,000 | — | 135,000 | 6.24 | ||||||||||||||||||
Vested | (17,918 | ) | (115,445 | ) | (133,363 | ) | 5.05 | |||||||||||||||
Forfeited | (20,833 | ) | (37,500 | ) | (58,333 | ) | 4.00 | |||||||||||||||
Unvested September 30, 2013 | 149,021 | 62,051 | 211,073 | $ | 6.43 |
December 31, 2012 | December 31, 2011 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Assets | ||||||||||||
Current assets | ||||||||||||
Cash | $ | 11,388 | $ | 10,053 | ||||||||
Other current assets | 21,830 | 7,000 | ||||||||||
Total current assets | 33,218 | 17,053 | ||||||||||
Property and equipment, net | 23,790 | 2,517 | ||||||||||
Patents pending | 18,093 | — | ||||||||||
Due from affiliate | 137,547 | |||||||||||
Technology license, net | 2,178,617 | — | ||||||||||
Total assets | $ | 2,391,265 | $ | 19,570 | ||||||||
Liabilities and Stockholders’ Deficit | ||||||||||||
Liabilities | ||||||||||||
Current liabilities | ||||||||||||
Technology license liability | $ | 1,300,000 | $ | — | ||||||||
Accounts payable | 1,023,320 | 340,134 | ||||||||||
Accrued expenses | 2,467,796 | 169,721 | ||||||||||
Note payable—related party | 884,764 | — | ||||||||||
Investors deposit | 100,000 | — | ||||||||||
Due to related parties | 23,200 | 46,000 | ||||||||||
Total liabilities | 5,799,080 | 555,855 | ||||||||||
STOCKHOLDERS’ DEFICIT | ||||||||||||
Preferred stock Series A $0.001 par value; 20,000,000 authorized; 0 and 0 issued and outstanding, respectively | — | — | ||||||||||
Common stock $0.0001 par value; 100,000,000 authorized; 8,952,905 and 4,042,265 issued and outstanding, respectively | 895 | 404 | ||||||||||
Additional paid-in capital | 30,203,402 | 2,766,567 | ||||||||||
Subscription receivable—Stockholder | — | (35,000 | ) | |||||||||
Deficit accumulated during the development stage | (33,612,112 | ) | (3,268,256 | ) | ||||||||
Total stockholders’ deficit | (3,407,815 | ) | (536,285 | ) | ||||||||
Total liabilities and stockholders’ deficit | $ | 2,391,265 | $ | 19,570 |
For the year ended December 31, 2012 | For the period from March 11, 2011 (inception) through December 31, 2011 | For the period from March 11, 2011 (inception) through December 31, 2012 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Operating expenses: | |||||||||||||||||
Compensation and related costs—inclusive of share based compensation $16,012,850, $1,724,967 and $17,737,817 | $ | 18,133,550 | $ | 2,227,203 | $ | 20,360,753 | |||||||||||
Professional fees—inclusive of share based compensation $6,397,372, $254,332, and $6,651,704 | 9,035,702 | 909,681 | 9,945,383 | ||||||||||||||
Selling, general and administrative | 1,292,296 | 63,812 | 1,356,108 | ||||||||||||||
Technology license contingent fees | 1,700,000 | — | 1,700,000 | ||||||||||||||
Rent | 95,469 | 63,000 | 158,469 | ||||||||||||||
Total operating expenses | 30,257,017 | 3,263,696 | 33,520,713 | ||||||||||||||
Other income (expense): | |||||||||||||||||
Interest income | 21,830 | 75 | 21,905 | ||||||||||||||
Interest expense | (105,917 | ) | — | (105,917 | ) | ||||||||||||
Loss on transactions denominated in foreign currencies | (2,752 | ) | (4,635 | ) | (7,387 | ) | |||||||||||
Total other expense | (86,839 | ) | (4,560 | ) | (91,399 | ) | |||||||||||
Net loss | $ | (30,343,856 | ) | $ | (3,268,256 | ) | $ | (33,612,112 | ) | ||||||||
Net loss per common share—basic and diluted | $ | (8.29 | ) | $ | (1.59 | ) | |||||||||||
Weighted average number of common shares outstanding during the period—basic and diluted | 3,662,114 | 2,053,402 |
Common stock | Additional paid in capital | Receivable due from stockholder | Accumulated deficit | Total Stockholders’ deficit | ||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Shares | Amount | |||||||||||||||||||||||||||||||
Balance—March 11, 2011 (inception) | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||
Issuance of common shares | 1,608,300 | 161 | 24,839 | (25,000 | ) | — | — | |||||||||||||||||||||||||
Issuance of common shares to founders in connection with the initial capital contribution | 50,000 | 5 | 95 | — | — | 100 | ||||||||||||||||||||||||||
Incentive shares granted—employees | 1,758,300 | 176 | (176 | ) | — | — | — | |||||||||||||||||||||||||
Incentive shares granted—non employees | 381,000 | 38 | (38 | ) | — | — | — | |||||||||||||||||||||||||
Incentive shares forfeited—employees | (45,835 | ) | (5 | ) | 5 | — | — | — | ||||||||||||||||||||||||
Share based compensation—employees | — | — | 1,724,967 | — | — | 1,724,967 | ||||||||||||||||||||||||||
Share based compensation—non employees | — | — | 254,332 | — | — | 254,332 | ||||||||||||||||||||||||||
Issuance of shares in connection with March 2011 private placement, net of fees of $66,061 | 253,750 | 25 | 658,914 | — | — | 658,939 | ||||||||||||||||||||||||||
Issuance of Series A preferred in connection with March 2011 private placement, net of fees of $1,367, recapitalization to common stock | 36,750 | 4 | 103,629 | — | — | 103,633 | ||||||||||||||||||||||||||
Loan made to stockholder | — | — | — | (10,000 | ) | — | (10,000 | ) | ||||||||||||||||||||||||
Net loss | — | — | — | — | (3,268,256 | ) | (3,268,256 | ) | ||||||||||||||||||||||||
Balance—December 31, 2011 | 4,042,265 | 404 | 2,766,567 | (35,000 | ) | (3,268,256 | ) | (536,285 | ) | |||||||||||||||||||||||
Issuance of Series A preferred in connection with January 2012 private placement, net of fees of $61,677 recapitalized into common stock | 326,963 | 33 | 1,806,644 | — | — | 1,806,677 | ||||||||||||||||||||||||||
Issuance of Series A preferred in connection with May 2012 private placement, net of fees of $12,275, recapitalized into common stock | 470,764 | 47 | 1,668,979 | — | — | 1,669,026 | ||||||||||||||||||||||||||
Shares transferred to consultants by founder for services rendered to the Company | — | — | 4,400,000 | — | — | 4,400,000 | ||||||||||||||||||||||||||
Shares transferred to employees by founders for services rendered to the Company | — | — | 1,375,000 | — | — | 1,375,000 | ||||||||||||||||||||||||||
Shares issued in accordance with technology license agreement | 620,000 | 62 | 1,549,938 | — | — | 1,550,000 | ||||||||||||||||||||||||||
Shares outstanding at time of reverse merger completed on December 12, 2012 | 2,585,583 | 259 | 1,142 | — | — | 1,401 | ||||||||||||||||||||||||||
Incentive shares granted—employees | 866,180 | 86 | (86 | ) | — | — | — | |||||||||||||||||||||||||
Incentive shares granted—non employees | 87,503 | 9 | (9 | ) | — | — | — | |||||||||||||||||||||||||
Incentive shares forfeited—employees | (46,353 | ) | (5 | ) | 5 | — | — | — | ||||||||||||||||||||||||
Share based compensation—employees | — | — | 14,637,850 | — | — | 14,637,850 | ||||||||||||||||||||||||||
Share based compensation—non employees | — | — | 1,997,372 | — | — | 1,997,372 | ||||||||||||||||||||||||||
Receivable due from stockholder charged to compensation | — | — | — | 407,900 | — | 407,900 | ||||||||||||||||||||||||||
Loan made to stockholder | — | — | — | (372,900 | ) | (372,900 | ) | |||||||||||||||||||||||||
Net loss | — | — | — | — | (30,343,856 | ) | (30,343,856 | ) | ||||||||||||||||||||||||
Balance—December 31, 2012 | 8,952,905 | $ | 895 | $ | 30,203,402 | $ | — | $ | (33,612,112 | ) | $ | (3,407,815 | ) |
For the year ended December 31, 2012 | For the period from March 11, 2011 (inception) through December 31, 2011 | For the period from March 11, 2011 (inception) through December 31, 2012 | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Cash Flows From Operating Activities: | |||||||||||||||||
Net loss | $ | (30,343,856 | ) | $ | (3,268,256 | ) | $ | (33,612,112 | ) | ||||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||||||
Depreciation and amortization | 124,885 | 355 | 125,240 | ||||||||||||||
Compensation in lieu of stockholder receivable | 407,900 | — | 407,900 | ||||||||||||||
Share based compensation—employees | 16,012,850 | 1,724,967 | 17,737,817 | ||||||||||||||
Share based compensation—non-employees | 6,397,372 | 254,332 | 6,651,704 | ||||||||||||||
Share based payment—Technology license contingent fee | 1,550,000 | — | 1,550,000 | ||||||||||||||
Changes in operating assets and liabilities: | |||||||||||||||||
Other assets | (14,830 | ) | (7,000 | ) | (21,830 | ) | |||||||||||
Technology license fee | 150,000 | — | 150,000 | ||||||||||||||
Accounts payable | 680,865 | 340,134 | 1,020,999 | ||||||||||||||
Accrued expenses | 2,298,075 | 169,721 | 2,467,796 | ||||||||||||||
Net cash (used) in operating activities | (2,736,739 | ) | (785,747 | ) | (3,522,486 | ) | |||||||||||
Cash Flows From Investing Activities: | |||||||||||||||||
Purchase of fixed assets | (24,774 | ) | (2,872 | ) | (27,646 | ) | |||||||||||
Purchase of intangible assets | (1,168,093 | ) | — | (1,168,093 | ) | ||||||||||||
Cash received in merger transaction | 3,721 | — | 3,721 | ||||||||||||||
Payments made on behalf of affiliate | (137,547 | ) | — | (137,547 | ) | ||||||||||||
Loans made to stockholder | (372,900 | ) | (10,000 | ) | (382,900 | ) | |||||||||||
Net cash (used) in investing activities | (1,699,593 | ) | (12,872 | ) | (1,712,465 | ) | |||||||||||
Cash Flows From Financing Activities: | |||||||||||||||||
Proceeds from advances from related parties | 10,500 | 46,000 | 56,500 | ||||||||||||||
Repayment of advances from related parties | (33,300 | ) | — | (33,300 | ) | ||||||||||||
Proceeds from note payable—related party | 930,000 | — | 930,000 | ||||||||||||||
Repayment of note payable—related party | (45,236 | ) | — | (45,236 | ) | ||||||||||||
Investor deposit | 100,000 | — | 100,000 | ||||||||||||||
Proceeds received from issuance of common stock, net of cost of $73,952, $67,428 and $141,380, respectively | 3,475,703 | 762,672 | 4,238,375 | ||||||||||||||
Net cash provided in financing activities | 4,437,667 | 808,672 | 5,246,339 | ||||||||||||||
Net decrease in cash | 1,335 | 10,053 | 11,388 | ||||||||||||||
Cash, beginning of period | 10,053 | — | — | ||||||||||||||
Cash, end of period | $ | 11,388 | $ | 10,053 | $ | 11,388 | |||||||||||
Supplemental Disclosure of Cash Flow Information: | |||||||||||||||||
Cash paid for interest | $ | 14,764 | $ | — | $ | 14,764 | |||||||||||
Non-cash investing and financing activities: | |||||||||||||||||
Issuance of common stock for subscription receivable | $ | — | $ | 25,000 | $ | 25,000 |
December 31, 2012 | March 11, 2011 through December 31, 2011 | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|
Compensation related costs | $ | 1,022,716 | $ | — | ||||||||
Consulting fees | 679,800 | 169,721 | ||||||||||
Legal fees | 563,380 | — | ||||||||||
Finders’ fee liability | 100,000 | — | ||||||||||
Interest | 90,650 | — | ||||||||||
Other | 11,250 | — | ||||||||||
$ | 2,467,796 | $ | 169,721 |
Employee – number of shares | Non Employee – number of shares | Total number of shares | Weighted Average Fair Value | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Unvested March 11, 2011 (“inception”) | $ | — | ||||||||||||||||||||
Granted | 1,758,300 | 381,000 | 2,139,300 | 4.00 | ||||||||||||||||||
Vested | (431,240 | ) | (59,835 | ) | (491,075 | ) | 4.00 | |||||||||||||||
Forfeited | (45,835 | ) | — | (45,835 | ) | — | ||||||||||||||||
Unvested December 31, 2011 | 1,281,225 | 321,165 | 1,602,390 | $ | 4.00 | |||||||||||||||||
Granted | 866,180 | 87,503 | 953,683 | 12.89 | ||||||||||||||||||
Vested | (2,048,280 | ) | (193,672 | ) | (2,241,952 | ) | 7.34 | |||||||||||||||
Forfeited | (46,353 | ) | — | (46,353 | ) | — | ||||||||||||||||
Unvested December 31, 2012 | 52,772 | 214,996 | 267,768 | $ | 3.20 |
Year Ending December 31, | |||||||
2013 | $ | 138,200 | |||||
2014 | 140,161 | ||||||
2015 | 140,161 | ||||||
2016 | 128,481 | ||||||
Total | $ | 547,003 |
2012 | |||||||
---|---|---|---|---|---|---|---|
Current | |||||||
Federal | $ | — | |||||
State | — | ||||||
— | |||||||
Deferred | |||||||
Federal | (1,173 | ) | |||||
State | (733 | ) | |||||
(1,906 | ) | ||||||
Total | $ | (1,906 | ) | ||||
Change in valuation allowance | 1,906 | ||||||
Income tax (benefit) | — | ||||||
Total | $ | — |
2012 | |||||||
---|---|---|---|---|---|---|---|
Statutory rate—federal | (35.00 | %) | |||||
State taxes, net of federal benefit | (1.81 | %) | |||||
Partnership Losses preceding the conversion to a C Corp | 19.39 | % | |||||
Stock Based Compensation related to profits interest | 9.52 | % | |||||
Meals & Entertainment | 0.01 | % | |||||
Deferred tax adjustment upon conversion to taxable status | 1.61 | % | |||||
Change in valuation allowance | 6.28 | % | |||||
Income tax provision (benefit) | 0.00 | % |
2012 | Asset | Liability | |||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Net operating loss and capital loss carry forward | $ | 2,748 | $ | 2,748 | |||||||||||||
Technology license | $ | (466 | ) | (466 | ) | ||||||||||||
Organizational costs | $ | 9 | 9 | ||||||||||||||
Accrual to Cash | $ | (385 | ) | (385 | ) | ||||||||||||
Valuation allowance | $ | (1,906 | ) | ||||||||||||||
Total | $ | — | $ | 2,748 | $ | (842 | ) |
SEC registration fee | $ | 5,925 | |||||
FINRA filing fee | $ | 6,500 | |||||
Printing expenses | $ | 75,000 | |||||
Legal fees and expenses | $ | 700,000 | |||||
Accounting fees and expenses | $ | 35,000 | |||||
Transfer agent and registrar fees | $ | 1,000 | |||||
Miscellaneous expenses | $ | 5,000 | |||||
Total | $ | 828,425 |
Exhibit No. | Description | ||||
---|---|---|---|---|---|
1.1 | Form of Underwriting Agreement* | ||||
2.1 | Agreement and Plan of Merger, dated December 12, 2012, by and among Desert Gateway, Inc. (now known as Retrophin, Inc.) (the “Company”), Desert Gateway Acquisition Corp., and Retrophin Inc.(1) | ||||
3.1 | Certificate of Incorporation of the Company(2) | ||||
3.2 | Amended and Restated Bylaws of the Company(3) | ||||
4.1 | Form of Warrant issued to the purchasers (the “February 2013 Purchasers”) in the private placement of 3,045,929 shares of common stock, dated February 14, 2013(4) | ||||
4.2 | Form of Common Stock Purchase Warrant, dated August 15, 2013, issued to the purchasers (the “August 2013 Purchasers”) of securities in the private placement of the Company closed on August 15, 2013(5) | ||||
5.1 | Opinion of Katten Muchin Rosenman LLP* | ||||
10.1 | Securities Purchase Agreement, dated February 12, 2013, by and among the Company and the February 2013 Purchasers(6) | ||||
10.2 | Registration Rights Agreement, dated February 12, 2013, by and among the Company and the February 2013 Purchasers(7) | ||||
10.3 | Sublicense Agreement, dated February 16, 2012, by and among Ligand Pharmaceuticals Incorporated, a Delaware corporation, Pharmacopeia, Inc., a Delaware limited liability company, and Retrophin, LLC, a Delaware limited liability company(8) | ||||
10.4 | Employment Agreement, dated April 24, 2013, by and between Retrophin, Inc. and Horacio Plotkin, M.D.(9) | ||||
10.5 | Employment Agreement, dated May 7, 2013, by and between Retrophin, Inc. and Marc Panoff(10) | ||||
10.6 | Amendment to Employment Agreement, dated as of June 30, 2013(11) | ||||
10.7 | Securities Purchase Agreement, dated August 14, 2013, by and among the Company and the August 2013 Purchasers(12) | ||||
10.8 | Registration Rights Agreement, dated August 15, 2013, by and among the Company and the August 2013 Purchasers(13) | ||||
10.9 | First Amendment to Securities Purchase Agreement, dated August 14, 2013, by and among the Company and the purchasers signatory thereto(14) | ||||
10.10 | First Amendment to Registration Rights Agreement, dated August 14, 2013, by and among the Company and the purchasers signatory thereto(15) | ||||
10.11 | Sponsored Research Agreement between St. Jude Children’s Research Hospital and the Company, dated October 1, 2013.(16) (Portions of Sections 1, 4, 6, Appendix A and Appendix B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) | ||||
10.12 | Form of Settlement and Release Agreement between the Company, MSMB Capital Management, LP, MSMB Capital Management LLC, MSMB Healthcare LP, MSMB Healthcare Investors LLC, MSMB Healthcare Management LLC and the other parties thereto(17) | ||||
10.13 | Form of Indemnification Agreement between the Company, MSMB Capital Management, LP, MSMB Capital Management LLC, MSMB Healthcare LP, MSMB Healthcare Investors LLC and MSMB Healthcare Management LLC(18) | ||||
10.14 | Form of Promissory Note made by MSMB Capital Management, LP, MSMB Capital Management LLC, MSMB Healthcare LP, MSMB Healthcare Investors LLC and MSMB Healthcare Management LLC in favor of the Company(19) | ||||
10.15 | License Agreement, dated December 12, 2013, by and among Retrophin, Inc., Novartis Pharma AG and Novartis AG.(20) (Portions of Sections 1, 4, 10, 11, 16, Schedule A and Schedule B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) | ||||
10.16 | Exclusive License Agreement, dated December 12, 2013, by and between Retrophin, Inc. and Stuart Weg, MD.(21) (Portions of Sections 2, 3, 4, 6, 7, Appendix A and Appendix B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) |
Exhibit No. | Description | ||||
---|---|---|---|---|---|
10.17 | Sponsored Research Agreement, dated December 12, 2013, by and between Retrophin, Inc. and The Regents of the University of California, on behalf of its San Diego Campus.(22) (Portions of the Recital, Sections 1, 2, 3, 4, 5, 6, 8, 9, 14, Exhibit A and Exhibit B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) | ||||
10.18 | Employment Agreement, dated December 16, 2013, by and between Retrophin, Inc. and Martin Shkreli.(23) | ||||
10.19 | Stock Purchase Agreement, dated December 23 , 2013, by and among Retrophin, Inc., Kyalin Biosciences, Inc. and the Sellers party thereto. (24) | ||||
21.1 | List of the Company’s Subsidiaries ** | ||||
23.1 | Consent of Marcum LLP* | ||||
23.2 | Consent of Katten Muchin Rosenman LLP (included in Exhibit 5.1)* | ||||
101.INS | XBRL Instance Document * | ||||
101.SCH | XBRL Taxonomy Extension Schema Document * | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document * | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document * | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document * | ||||
101.PRE | Taxonomy Extension Presentation Linkbase Document * |
Signature | Title | Date | ||||||
---|---|---|---|---|---|---|---|---|
* | Chief Executive Officer and Director (Principal Executive Officer) | January 7 , 2014 | ||||||
/s/ Marc Panoff | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | January 7 , 2014 | ||||||
* | Director | January 7 , 2014 | ||||||
* | Director | January 7 , 2014 | ||||||
* | Director | January 7 , 2014 | ||||||
* | Director | January 7 , 2014 | ||||||
*By:
|
Exhibit No. | Description | ||||
---|---|---|---|---|---|
1.1 | Form of Underwriting Agreement* | ||||
2.1 | Agreement and Plan of Merger, dated December 12, 2012, by and among Desert Gateway, Inc. (now known as Retrophin, Inc.) (the “Company”), Desert Gateway Acquisition Corp., and Retrophin Inc.(1) | ||||
3.1 | Certificate of Incorporation of the Company(2) | ||||
3.2 | Amended and Restated Bylaws of the Company(3) | ||||
4.1 | Form of Warrant issued to the purchasers (the “February 2013 Purchasers”) in the private placement of 3,045,929 shares of common stock, dated February 14, 2013(4) | ||||
4.2 | Form of Common Stock Purchase Warrant, dated August 15, 2013, issued to the purchasers (the “August 2013 Purchasers”) of securities in the private placement of the Company closed on August 15, 2013(5) | ||||
5.1 | Opinion of Katten Muchin Rosenman LLP* | ||||
10.1 | Securities Purchase Agreement, dated February 12, 2013, by and among the Company and the February 2013 Purchasers(6) | ||||
10.2 | Registration Rights Agreement, dated February 12, 2013, by and among the Company and the February 2013 Purchasers(7) | ||||
10.3 | Sublicense Agreement, dated February 16, 2012, by and among Ligand Pharmaceuticals Incorporated, a Delaware corporation, Pharmacopeia, Inc., a Delaware limited liability company, and Retrophin, LLC, a Delaware limited liability company(8) | ||||
10.4 | Employment Agreement, dated April 24, 2013, by and between Retrophin, Inc. and Horacio Plotkin, M.D.(9) | ||||
10.5 | Employment Agreement, dated May 7, 2013, by and between Retrophin, Inc. and Marc Panoff(10) | ||||
10.6 | Amendment to Employment Agreement, dated as of June 30, 2013(11) | ||||
10.7 | Securities Purchase Agreement, dated August 14, 2013, by and among the Company and the August 2013 Purchasers(12) | ||||
10.8 | Registration Rights Agreement, dated August 15, 2013, by and among the Company and the August 2013 Purchasers(13) | ||||
10.9 | First Amendment to Securities Purchase Agreement, dated August 14, 2013, by and among the Company and the purchasers signatory thereto(14) | ||||
10.10 | First Amendment to Registration Rights Agreement, dated August 14, 2013, by and among the Company and the purchasers signatory thereto(15) | ||||
10.11 | Sponsored Research Agreement between St. Jude Children’s Research Hospital and the Company, dated October 1, 2013.(16) (Portions of Sections 1, 4, 6, Appendix A and Appendix B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) | ||||
10.12 | Form of Settlement and Release Agreement between the Company, MSMB Capital Management, LP, MSMB Capital Management LLC, MSMB Healthcare LP, MSMB Healthcare Investors LLC, MSMB Healthcare Management LLC and the other parties thereto(17) | ||||
10.13 | Form of Indemnification Agreement between the Company, MSMB Capital Management, LP, MSMB Capital Management LLC, MSMB Healthcare LP, MSMB Healthcare Investors LLC and MSMB Healthcare Management LLC(18) | ||||
10.14 | Form of Promissory Note made by MSMB Capital Management, LP, MSMB Capital Management LLC, MSMB Healthcare LP, MSMB Healthcare Investors LLC and MSMB Healthcare Management LLC in favor of the Company(19) | ||||
10.15 | License Agreement, dated December 12, 2013, by and among Retrophin, Inc., Novartis Pharma AG and Novartis AG.(20) (Portions of Sections 1, 4, 10, 11, 16, Schedule A and Schedule B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) | ||||
10.16 | Exclusive License Agreement, dated December 12, 2013, by and between Retrophin, Inc. and Stuart Weg, MD.(21) (Portions of Sections 2, 3, 4, 6, 7, Appendix A and Appendix B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) | ||||
10.17 | Sponsored Research Agreement, dated December 12, 2013, by and between Retrophin, Inc. and The Regents of the University of California, on behalf of its San Diego Campus.(22) (Portions of the Recital, Sections 1, 2, 3, 4, 5, 6, 8, 9, 14, Exhibit A and Exhibit B of the Exhibit have been omitted pursuant to a request for confidential treatment and filed separately with the Commission.) |
Exhibit No. | Description | ||||
---|---|---|---|---|---|
10.18 | Employment Agreement, dated December 16, 2013, by and between Retrophin, Inc. and Martin Shkreli.(23) | ||||
10.19 | Stock Purchase Agreement, dated December 23 , 2013, by and among Retrophin, Inc., Kyalin Biosciences, Inc. and the Sellers party thereto. (24) | ||||
21.1 | List of the Company’s Subsidiaries ** | ||||
23.1 | Consent of Marcum LLP* | ||||
23.2 | Consent of Katten Muchin Rosenman LLP (included in Exhibit 5.1)* | ||||
101.INS | XBRL Instance Document * | ||||
101.SCH | XBRL Taxonomy Extension Schema Document * | ||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document * | ||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document * | ||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document * | ||||
101.PRE | Taxonomy Extension Presentation Linkbase Document * |