x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 27-2004382 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
11055 Flintkote Avenue, San Diego, California | 92121 | |
(Address of principal executive offices) | (Zip Code) | |
(858) 952-7570 | ||
(Registrant’s telephone number, including area code) |
Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: | ||
Common Stock | TROV | Nasdaq Capital Market |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer x | Smaller reporting company x | Emerging growth company o |
Page | ||
March 31, 2020 | December 31, 2019 | ||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 9,277,025 | $ | 10,195,292 | |||
Accounts receivable and unbilled receivable | 106,432 | 203,480 | |||||
Prepaid expenses and other current assets | 899,451 | 954,957 | |||||
Total current assets | 10,282,908 | 11,353,729 | |||||
Property and equipment, net | 758,503 | 877,823 | |||||
Operating lease right-of-use assets | 617,622 | 697,418 | |||||
Other assets | 156,370 | 157,576 | |||||
Total Assets | $ | 11,815,403 | $ | 13,086,546 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 598,985 | $ | 656,304 | |||
Accrued expenses | 3,411,723 | 3,260,061 | |||||
Operating lease liabilities | 870,592 | 865,379 | |||||
Total current liabilities | 4,881,300 | 4,781,744 | |||||
Derivative financial instruments—warrants | 2,020 | 4,127 | |||||
Operating lease liabilities, net of current portion | 649,621 | 860,963 | |||||
Other liabilities | 139,044 | 128,368 | |||||
Total Liabilities | 5,671,985 | 5,775,202 | |||||
Commitments and contingencies (Note 8) | |||||||
Stockholders’ equity | |||||||
Preferred stock, $0.001 par value, 20,000,000 shares authorized; 277,100 designated as Series A Convertible Preferred Stock; 60,600 shares outstanding at March 31, 2020 and December 31, 2019 with liquidation preference of $606,000 at March 31, 2020 and December 31, 2019; 200,000 designated as Series C Convertible Preferred Stock; 0 shares outstanding at March 31, 2020 and December 31, 2019 | 60 | 60 | |||||
Common stock, $0.0001 par value, 150,000,000 shares authorized; 11,010,587 and 8,593,633 shares issued and outstanding at March 31, 2020 and December 31, 2019, respectively | 8,554 | 8,312 | |||||
Additional paid-in capital | 219,805,965 | 217,172,528 | |||||
Service receivables | (678,656 | ) | (971,673 | ) | |||
Accumulated deficit | (212,992,505 | ) | (208,897,883 | ) | |||
Total stockholders’ equity | 6,143,418 | 7,311,344 | |||||
Total liabilities and stockholders’ equity | $ | 11,815,403 | $ | 13,086,546 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Revenues: | |||||||
Royalties | $ | 67,704 | $ | 62,021 | |||
Total revenues | 67,704 | 62,021 | |||||
Costs and expenses: | |||||||
Research and development | 2,705,691 | 2,648,599 | |||||
Selling, general and administrative | 1,486,019 | 1,375,185 | |||||
Total operating expenses | 4,191,710 | 4,023,784 | |||||
Loss from operations | (4,124,006 | ) | (3,961,763 | ) | |||
Interest income | 35,823 | 64,743 | |||||
Gain (loss) from change in fair value of derivative financial instruments—warrants | 2,107 | (9,761 | ) | ||||
Other income (expense), net | (2,486 | ) | 2,010 | ||||
Net loss | (4,088,562 | ) | (3,904,771 | ) | |||
Preferred stock dividend payable on Series A Convertible Preferred Stock | (6,060 | ) | (6,060 | ) | |||
Deemed dividend recognized on beneficial conversion features of Series C Convertible Preferred Stock issuance | — | (268,269 | ) | ||||
Net loss attributable to common stockholders | $ | (4,094,622 | ) | $ | (4,179,100 | ) | |
Net loss per common share — basic and diluted | $ | (0.41 | ) | $ | (1.02 | ) | |
Weighted-average shares outstanding — basic and diluted | 9,910,306 | 4,086,561 |
Preferred Stock Shares | Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Service Receivable | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||
Balance, January 1, 2020 | 60,600 | $ | 60 | 8,593,633 | $ | 8,312 | $ | 217,172,528 | $ | (971,673 | ) | $ | (208,897,883 | ) | $ | 7,311,344 | |||||||||||||
Stock-based compensation | — | — | — | 177,309 | — | — | 177,309 | ||||||||||||||||||||||
Sale of common stock and warrants | — | — | 800,000 | 80 | 999,921 | — | — | 1,000,001 | |||||||||||||||||||||
Issuance of common stock upon exercise of warrants | — | — | 1,610,144 | 161 | 1,456,208 | — | — | 1,456,369 | |||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | — | — | 6,810 | 1 | (1 | ) | — | — | — | ||||||||||||||||||||
Preferred stock dividend | — | — | — | — | — | — | (6,060 | ) | (6,060 | ) | |||||||||||||||||||
Release of clinical trial funding commitment | — | — | — | — | — | 293,017 | — | 293,017 | |||||||||||||||||||||
Net loss | — | — | — | — | — | — | (4,088,562 | ) | (4,088,562 | ) | |||||||||||||||||||
Balance, March 31, 2020 | 60,600 | $ | 60 | 11,010,587 | $ | 8,554 | $ | 219,805,965 | $ | (678,656 | ) | $ | (212,992,505 | ) | $ | 6,143,418 |
Preferred Stock Shares | Preferred Stock Amount | Common Stock Shares | Common Stock Amount | Additional Paid-In Capital | Service Receivable | Accumulated Deficit | Total Stockholders’ Equity | ||||||||||||||||||||||
Balance, January 1, 2019 | 60,600 | $ | 60 | 3,831,879 | $ | 7,742 | $ | 202,267,605 | $ | — | $ | (192,191,215 | ) | $ | 10,084,192 | ||||||||||||||
Stock-based compensation | — | — | — | — | 200,067 | — | — | 200,067 | |||||||||||||||||||||
Issuance of common stock, preferred stock and warrants for clinical trial funding commitment, net of expenses and discount of $40,000 and $235,640, respectively | 200,000 | 200 | 183,334 | 110 | 1,634,690 | (1,675,000 | ) | — | (40,000 | ) | |||||||||||||||||||
Deemed dividend recognized on beneficial conversion features of Series C Convertible Preferred Stock issuance | — | — | — | — | 268,269 | — | (268,269 | ) | — | ||||||||||||||||||||
Issuance of common stock upon exercise of warrants | — | — | 497,313 | 50 | 3,282,216 | — | — | 3,282,266 | |||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | — | — | 6,362 | 4 | (4 | ) | — | — | — | ||||||||||||||||||||
Preferred stock dividend payable on Series A Convertible Preferred Stock | — | — | — | — | — | — | (6,060 | ) | (6,060 | ) | |||||||||||||||||||
Issuance of common stock for share rounding as a result of reverse stock split | — | — | 6,466 | — | — | — | — | — | |||||||||||||||||||||
Release of clinical trial funding commitment | — | — | — | — | — | 70,487 | — | 70,487 | |||||||||||||||||||||
Net loss | — | — | — | — | — | — | (3,904,771 | ) | (3,904,771 | ) | |||||||||||||||||||
Balance, March 31, 2019 | 260,600 | $ | 260 | 4,525,354 | $ | 7,906 | $ | 207,652,843 | $ | (1,604,513 | ) | $ | (196,370,315 | ) | $ | 9,686,181 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Operating activities | |||||||
Net loss | $ | (4,088,562 | ) | $ | (3,904,771 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
Depreciation and amortization | 119,320 | 126,781 | |||||
Stock-based compensation expense | 177,309 | 200,067 | |||||
Change in fair value of derivative financial instruments—warrants | (2,107 | ) | 9,761 | ||||
Release of clinical trial funding commitment | 293,017 | 70,487 | |||||
Changes in operating assets and liabilities: | |||||||
Other assets | 1,206 | 15,725 | |||||
Accounts receivable and unbilled receivable | 97,048 | 52,079 | |||||
Prepaid expenses | 55,506 | 179,691 | |||||
Operating lease right-of-use assets | 79,796 | 73,188 | |||||
Accounts payable and accrued expenses | 88,283 | 3,635 | |||||
Operating lease liabilities | (206,129 | ) | (186,689 | ) | |||
Other liabilities | 10,676 | — | |||||
Net cash used in operating activities | (3,374,637 | ) | (3,360,046 | ) | |||
Investing activities: | |||||||
Capital expenditures | — | (5,274 | ) | ||||
Net cash used in investing activities | — | (5,274 | ) | ||||
Financing activities: | |||||||
Proceeds from sales of common stock and warrants | 1,000,001 | — | |||||
Costs related to the clinical trial funding commitment | — | (40,000 | ) | ||||
Proceeds from exercise of warrants | 1,456,369 | 3,282,266 | |||||
Net cash provided by financing activities | 2,456,370 | 3,242,266 | |||||
Net change in cash and cash equivalents | (918,267 | ) | (123,054 | ) | |||
Cash and cash equivalents—Beginning of period | 10,195,292 | 11,453,133 | |||||
Cash and cash equivalents—End of period | $ | 9,277,025 | $ | 11,330,079 | |||
Supplementary disclosure of cash flow activity: | |||||||
Cash paid for taxes | $ | 800 | $ | 800 | |||
Supplemental disclosure of non-cash investing and financing activities: | |||||||
Preferred stock dividend payable on Series A Convertible Preferred Stock | $ | 6,060 | $ | 6,060 | |||
Deemed dividend recognized for beneficial conversion features of Series C Convertible Preferred Stock issuance | $ | — | $ | 268,269 | |||
Common stock, Series C Convertible Preferred Stock and warrants issued in connection with clinical trial funding commitment, net of discount of $235,640 | $ | — | $ | 1,675,000 |
• | Seek collaborators for product candidates at an earlier stage than otherwise would be desirable and on terms that are less favorable than might otherwise be available; and |
• | Relinquish licenses or otherwise dispose of rights to technologies, product candidates or products that the Company would otherwise seek to develop or commercialize themselves, on unfavorable terms. |
• | Raising capital through public and private equity offerings; |
• | Introducing operation and business development initiatives to bring in new revenue streams; |
• | Reducing operating costs by identifying internal synergies; and |
• | Engaging in strategic partnerships. |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Numerator: | |||||||
Net loss attributable to common shareholders | $ | (4,094,622 | ) | $ | (4,179,100 | ) | |
Net loss used for basic and diluted loss per share | $ | (4,094,622 | ) | $ | (4,179,100 | ) | |
Denominator: | |||||||
Weighted-average shares used to compute basic and diluted net loss per share | 9,910,306 | 4,086,561 | |||||
Net loss per share attributable to common stockholders: | |||||||
Basic and diluted | $ | (0.41 | ) | $ | (1.02 | ) |
March 31, | |||||
2020 | 2019 | ||||
Options to purchase Common Stock | 975,233 | 80,345 | |||
Warrants to purchase Common Stock | 10,516,377 | 3,302,093 | |||
Restricted Stock Units | 4,491 | 18,620 | |||
Series A Convertible Preferred Stock | 877 | 877 | |||
Series C Convertible Preferred Stock | — | 333,334 | |||
11,496,978 | 3,735,269 |
Fair Value Measurements at March 31, 2020 | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Assets: | |||||||||||||||
Money market fund (1) | $ | 9,209,577 | $ | — | $ | — | $ | 9,209,577 | |||||||
Total Assets | $ | 9,209,577 | $ | — | $ | — | $ | 9,209,577 | |||||||
Liabilities: | |||||||||||||||
Derivative financial instruments—warrants (2) | $ | — | $ | — | $ | 2,020 | $ | 2,020 | |||||||
Total Liabilities | $ | — | $ | — | $ | 2,020 | $ | 2,020 |
Fair Value Measurements at December 31, 2019 | |||||||||||||||
Quoted Prices in Active Markets for Identical Assets and Liabilities (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Total | ||||||||||||
Assets: | |||||||||||||||
Money market fund (1) | $ | 10,131,240 | $ | — | $ | — | $ | 10,131,240 | |||||||
Total Assets | $ | 10,131,240 | $ | — | $ | — | $ | 10,131,240 | |||||||
Liabilities: | |||||||||||||||
Derivative financial instruments—warrants (2) | $ | — | $ | — | $ | 4,127 | $ | 4,127 | |||||||
Total Liabilities | $ | — | $ | — | $ | 4,127 | $ | 4,127 |
As of March 31, 2020 | As of December 31, 2019 | ||||||
Furniture and office equipment | $ | 775,030 | $ | 775,030 | |||
Leasehold improvements | 1,962,230 | 1,962,230 | |||||
Laboratory equipment | 744,856 | 744,856 | |||||
3,482,116 | 3,482,116 | ||||||
Less—accumulated depreciation and amortization | (2,723,613 | ) | (2,604,293 | ) | |||
Property and equipment, net | $ | 758,503 | $ | 877,823 |
Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | ||||||
Operating lease cost | $ | 106,744 | $ | 113,592 | |||
Operating sublease income | (72,793 | ) | (99,937 | ) | |||
Net operating lease cost | $ | 33,951 | $ | 13,655 |
March 31, 2020 | December 31, 2019 | ||||||
Operating lease ROU assets | $ | 617,622 | $ | 697,418 | |||
Current operating lease liabilities | $ | 870,592 | $ | 865,379 | |||
Non-current operating lease liabilities | 649,621 | 860,963 | |||||
Total operating lease liabilities | $ | 1,520,213 | $ | 1,726,342 | |||
Weighted-average remaining lease term–operating leases | 1.8 years | 2.0 years | |||||
Weighted-average discount rate–operating leases | 6.5 | % | 6.5 | % |
Three Months Ended March 31, 2020 | Three Months Ended March 31, 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | |||||||
Operating cash flows from operating leases | $ | 233,078 | $ | 226,364 |
Year Ending December 31, | Operating Leases | Sublease Income | Net Operating Leases | ||||||||
2020 (excluding the three months ended March 31, 2020) | 632,301 | (218,380 | ) | 413,921 | |||||||
2021 | 968,165 | (291,173 | ) | 676,992 | |||||||
2022 | 5,868 | — | 5,868 | ||||||||
2023 | 3,423 | — | 3,423 | ||||||||
Total future minimum lease payments | 1,609,757 | $ | (509,553 | ) | $ | 1,100,204 | |||||
Less imputed interest | (89,544 | ) | |||||||||
Total | $ | 1,520,213 |
Three Months Ended March 31, | |||||
2020 | 2019 | ||||
Range: | |||||
Estimated fair value of Trovagene common stock | $1.01 - $1.24 | $3.15 - $3.75 | |||
Expected warrant term | 2.8 - 3.1 years | 3.8 - 4.1 years | |||
Risk-free interest rate | 0.28 - 1.61% | 2.22 - 2.49% | |||
Expected volatility of Trovagene common stock | 111 - 112% | 102 - 105% | |||
Dividend yield | 0 | % | 0 | % | |
Weighted Average(1)(2): | |||||
Fair value of Trovagene common stock | $1.01 | ||||
Expected warrant term | 2.8 years | ||||
Risk-free interest rate | 0.28 | % | |||
Expected volatility of Trovagene common stock | 112 | % | |||
Dividend yield | 0 | % |
Date | Description | Number of Warrants | Derivative Instrument Liability | ||||||
December 31, 2019 | Balance of derivative financial instruments—warrants liability | 64,496 | $ | 4,127 | |||||
Change in fair value of derivative financial instruments—warrants during the period recognized as a gain in the condensed statements of operations | — | (2,107 | ) | ||||||
March 31, 2020 | Balance of derivative financial instruments—warrants liability | 64,496 | $ | 2,020 |
Three Months Ended March 31, | |||||||
2020 | 2019 | ||||||
Included in research and development expense | 76,868 | 110,081 | |||||
Included in selling, general and administrative expense | 100,441 | 89,986 | |||||
Total stock-based compensation expense | $ | 177,309 | $ | 200,067 |
Three Months Ended March 31, | |||||
2020 | 2019 | ||||
Risk-free interest rate | 0.93 | % | 2.33 | % | |
Dividend yield | 0 | % | 0 | % | |
Expected volatility of Trovagene common stock | 102 | % | 99 | % | |
Expected term | 6.0 years | 5.1 years |
Total Options | Weighted-Average Exercise Price Per Share | Intrinsic Value | ||||||||
Balance outstanding, December 31, 2019 | 1,015,418 | $ | 12.77 | $ | — | |||||
Granted | 5,000 | $ | 0.74 | |||||||
Canceled / Forfeited | (44,910 | ) | $ | 2.67 | ||||||
Expired | (275 | ) | $ | 259.20 | ||||||
Balance outstanding, March 31, 2020 | 975,233 | $ | 13.10 | $ | 1,350 | |||||
Exercisable at March 31, 2020 | 72,725 | $ | 144.72 | $ | — |
Number of Shares | Weighted-Average Grant Date Fair Value Per Share | Intrinsic Value | ||||||||
Non-vested RSUs outstanding, December 31, 2019 | 11,301 | $ | 15.38 | $ | 14,013 | |||||
Vested | (6,810 | ) | $ | 13.98 | $ | 9,073 | ||||
Non-vested RSUs outstanding, March 31, 2020 | 4,491 | $ | 17.50 | $ | 4,536 |
Total Warrants (1) | Weighted-Average Exercise Price Per Share (1) | Weighted-Average Remaining Contractual Term (1) | ||||||
Balance outstanding, December 31, 2019 | 10,589,482 | $ | 4.08 | 3.7 years | ||||
Granted | 931,967 | $ | 0.95 | |||||
Exercised | (1,005,072 | ) | $ | 1.56 | ||||
Balance outstanding, March 31, 2020 | 10,516,377 | $ | 4.04 | 3.6 years |
Three Months Ended March 31, | |||||||||||
2020 | 2019 | Increase (Decrease) | |||||||||
Royalties | $ | 67,704 | $ | 62,021 | $ | 5,683 | |||||
Total revenues | $ | 67,704 | $ | 62,021 | $ | 5,683 |
Three Months Ended March 31, | |||||||||||
2020 | 2019 | Increase (Decrease) | |||||||||
Salaries and staff costs | $ | 423,973 | $ | 403,888 | $ | 20,085 | |||||
Stock-based compensation | 76,868 | 110,081 | (33,213 | ) | |||||||
Clinical trials, outside services, and lab supplies | 1,973,541 | 1,927,929 | 45,612 | ||||||||
Facilities and other | 231,309 | 206,701 | 24,608 | ||||||||
Total research and development | $ | 2,705,691 | $ | 2,648,599 | $ | 57,092 |
Three Months Ended March 31, | |||||||||||
2020 | 2019 | Increase (Decrease) | |||||||||
Salaries and staff costs | $ | 493,557 | $ | 522,797 | $ | (29,240 | ) | ||||
Stock-based compensation | 100,441 | 89,986 | 10,455 | ||||||||
Outside services and professional fees | 494,989 | 457,832 | 37,157 | ||||||||
Facilities and other | 397,032 | 304,570 | 92,462 | ||||||||
Total selling, general and administrative | $ | 1,486,019 | $ | 1,375,185 | $ | 110,834 |
Three Months Ended March 31, | |||||||||||
2020 | 2019 | Increase (Decrease) | |||||||||
Net loss attributable to common shareholders | $ | (4,094,622 | ) | $ | (4,179,100 | ) | $ | (84,478 | ) | ||
Net loss per common share — basic and diluted | $ | (0.41 | ) | $ | (1.02 | ) | $ | (0.61 | ) | ||
Weighted average shares outstanding — basic and diluted | 9,910,306 | 4,086,561 | 5,823,745 |
Exhibit Number | Description of Exhibit | |
3.1 | ||
10.1 | ||
10.2 | ||
10.3 | ||
10.4 | ||
10.5 | ||
10.6 | ||
31.1 | ||
31.2 | ||
32.1 | ||
32.2 | ||
101.INS | XBRL Instance Document | |
101.SCH | XBRL Taxonomy Extension Schema | |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase | |
101.LAB | XBRL Taxonomy Extension Labels Linkbase | |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase | |
101.DEF | XBRL Taxonomy Extension Definition Linkbase |
TROVAGENE, INC. | ||
May 7, 2020 | By: | /s/ Thomas Adams |
Thomas Adams | ||
Chief Executive Officer | ||
TROVAGENE, INC. | ||
May 7, 2020 | By: | /s/ Brigitte Lindsay |
Brigitte Lindsay | ||
VP, Finance |
1. | I have reviewed this quarterly report on Form 10-Q of Trovagene, Inc. (the “Registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions); |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
May 7, 2020 | /s/ Thomas Adams |
Thomas Adams | |
Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Trovagene, Inc. (the “Registrant”); |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions); |
a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
May 7, 2020 | /s/ Brigitte Lindsay |
Brigitte Lindsay | |
VP, Finance |
May 7, 2020 | /s/ Thomas Adams |
Thomas Adams | |
Chief Executive Officer |
May 7, 2020 | /s/ Brigitte Lindsay |
Brigitte Lindsay | |
VP, Finance |
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Commitments and Contingencies (Details) - Nerviano - USD ($) $ in Millions |
1 Months Ended | |
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Mar. 31, 2017 |
Mar. 13, 2017 |
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Other Commitments [Line Items] | ||
Other commitment | $ 1.0 | |
Licensing Agreements | ||
Other Commitments [Line Items] | ||
Research and development expense | $ 2.0 |
Fair Value Measurements (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the Company’s Assets and Liabilities that are Measured and Recognized at Fair Value on a Recurring Basis Classified Under the Appropriate Level of the Fair Value Hierarchy | The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of March 31, 2020 and December 31, 2019:
(1) Included as a component of cash and cash equivalents on the accompanying condensed balance sheets. (2) A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments that trade infrequently and therefore have little or no price transparency are classified as Level 3. See Note 6 to the condensed financial statements for further information. |
Stockholders' Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 |
Mar. 31, 2019 |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense related to Trovagene equity awards have been recognized in operating results as follows:
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Schedule of Assumptions to Estimate Fair Value of Stock Option Awards | The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions during the following periods indicated:
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Summary of Stock Option Activity and of Changes in Stock Options Outstanding | A summary of stock option activity and changes in stock options outstanding is presented below:
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Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | A summary of the RSU activity is presented below:
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Summary of Warrant Activity and Changes in Warrants Outstanding | A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below:
(1) Balance outstanding as of March 31, 2020 excludes 131,967 pre-funded warrants to purchase shares of common stock at a nominal exercise price of $0.01 per share. These pre-funded warrants were exercised on April 28, 2020, see Note 11 to the condensed financial statements for further information. |
Summary of Significant Accounting Policies |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies During the three months ended March 31, 2020, there have been no changes to the Company’s significant accounting policies as described in its Annual Report on Form 10-K for the fiscal year ended December 31, 2019, except as described below. Net Loss Per Share Basic and diluted net loss per common share is determined by dividing net loss applicable to common stockholders by the weighted-average common shares outstanding during the period. Preferred dividends are included in net loss attributable to common stockholders in the computation of basic and diluted earnings per share. Shares used in calculating diluted net loss per common share exclude as anti-dilutive the following share equivalents: The following table sets forth the computation of basic and diluted earnings per share:
The following table sets forth the outstanding potentially dilutive securities that have been excluded in the calculation of diluted net loss per share because their effect was anti-dilutive:
Recently Adopted Accounting Pronouncement In August 2018, the FASB issued ASU No. 2018-13 ("ASU 2018-13"), Changes to the Disclosure Requirements for Fair Value Measurement. This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The standard is effective for all entities for financial statements issued for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The Company has prospectively adopted ASU 2018-13 as of January 1, 2020 for periods presented after adoption. The adoption of ASU 2018-13 did not have a material impact on the Company's financial statements. |
Derivative Financial Instruments - Warrants |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments - Warrants | Derivative Financial Instruments — Warrants Based upon the Company’s analysis of the criteria contained in ASC Topic 815-40, Contracts in Entity’s Own Equity (“ASC 815-40”) or ASC Topic 480-10, Distinguishing Liabilities from Equity (“ASC 480-10”), Trovagene determined that certain warrants issued in connection with the execution of certain equity financings must be recorded as derivative liabilities. In accordance with ASC 815-40 and ASC 480-10, the warrants are also being re-measured at each balance sheet date based on estimated fair value, and any resultant change in fair value is being recorded in the Company’s condensed statements of operations. The Company estimates the fair value of these warrants using the Black-Scholes option pricing model. The range of assumptions and weighted averages used to determine the fair value of the warrants valued using the Black-Scholes option pricing model during the periods indicated were:
(1) Weighted average is only disclosed for periods after January 1, 2020 under the adoption of ASU 2018-13. (2) The weighted average was calculated using the relative fair value method. Expected volatility is based on historical volatility of Trovagene’s common stock. The warrants have a transferability provision and based on guidance provided in Staff Accounting Bulletin (“SAB”) No. 107, Share-Based Payment (“SAB No. 107”), for instruments issued with such a provision, Trovagene used the remaining contractual term as the expected term of the warrants. The risk-free rate is based on the U.S. Treasury security rates consistent with the expected remaining term of the warrants at each balance sheet date. The following table sets forth the components of changes in the Company’s derivative financial instruments—warrants liability balance, valued using the Black-Scholes option pricing method, for the periods indicated.
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COVID-19 COVID-19 |
3 Months Ended |
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Mar. 31, 2020 | |
Unusual or Infrequent Items, or Both [Abstract] | |
COVID-19 | COVID-19 The COVID-19 outbreak in the United States has caused significant business disruption. The extent of the impact of COVID-19 on the Company's operational and financial performance will depend on certain developments, including the duration and spread of the outbreak, and impact on the Company's clinical trials, employees and vendors, all of which are uncertain and cannot be predicted. At this point, the extent to which COVID-19 may impact the Company's financial condition or results of operations is uncertain. A prolonged outbreak could have a material adverse impact on financial results and business operations of the Company, including the timing and ability of Company to complete certain clinical trials and other efforts required to advance the development of its drugs and raise additional capital. In response to the pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES ACT”) was signed into law on March 27, 2020. The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The CARES did not have a material impact on our income tax provision for the three months ended March 31, 2020. We continue to evaluate the impact of the CARES Act on our financial position, results of operations and cash flows. On April 15, 2020, the Company was granted a loan pursuant to the Paycheck Protection Program under Division A, Title I of the CARES Act (see Note 11). |
CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical) |
3 Months Ended |
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Mar. 31, 2019
USD ($)
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Statement of Cash Flows [Abstract] | |
Discount of issuance of common stock, preferred stock and warrants for clinical trial funding commitment | $ 235,640 |
Leases - Components of Lease Expense (Details) - USD ($) |
3 Months Ended | |
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Mar. 31, 2020 |
Mar. 31, 2019 |
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Leases [Abstract] | ||
Operating lease cost | $ 106,744 | $ 113,592 |
Operating sublease income | (72,793) | (99,937) |
Net operating lease cost | $ 33,951 | $ 13,655 |
Subsequent Event |
3 Months Ended |
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Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Events Private Placement On April 9, 2020, the Company entered into a securities purchase agreement with Lincoln Park Capital Fund, LLC (“LPC”), pursuant to which it sold to LPC, (i) in a registered direct offering, an aggregate of (a) 904,970 shares (the “Shares”) of common stock, par value $0.0001 per share (“Common Stock”) and (b) Series K pre-funded warrants (the “Series K Pre-Funded Warrants”) to purchase up to 255,000 shares (the “Series K Warrant Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), which will be exercisable immediately upon issuance for a period of five years after the date of issuance, and (ii) in a concurrent private placement, Series L warrants (the “Series L Warrants”) to purchase up to 1,159,970 shares (the “Series L Warrant Shares”) of Common Stock, for aggregate gross proceeds to the Company of approximately $1.084 million, before deducting estimated offering expenses payable by the Company. On April 28, 2020 LPC exercised 255,000 Series K Pre-Funded Warrants. Small Business Administration Payroll Protection Program Loan On April 15, 2020, the Company was granted a loan (the “Loan”) from JPMorgan Chase Bank, N.A. in the aggregate amount of $305,000, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act. The Loan, which was in the form of a Note dated April 15, 2020 issued by the Company, matures on April 15, 2022 and bears interest at a rate of 0.98% per annum, payable monthly commencing on November 15, 2020. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the Loan may only be used for payroll costs, rent, and utilities. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. Amendment to 2014 Equity Incentive Plan On April 16, 2020 the 2014 Equity Incentive Plan was approved by the shareholders and amended to increase the number of shares of common stock reserved for issuance thereunder to 2,243,056 from 1,243,056. Exercise of Series I Pre-Funded Warrants On April 28, 2020 LPC exercised 131,967 Series I Pre-Funded Warrants. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following table presents the Company’s assets and liabilities that are measured and recognized at fair value on a recurring basis classified under the appropriate level of the fair value hierarchy as of March 31, 2020 and December 31, 2019:
(1) Included as a component of cash and cash equivalents on the accompanying condensed balance sheets. (2) A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At each reporting period, all assets and liabilities for which the fair value measurement is based on significant unobservable inputs or instruments that trade infrequently and therefore have little or no price transparency are classified as Level 3. See Note 6 to the condensed financial statements for further information. |
Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity | Stockholders’ Equity Stock Options Stock-based compensation expense related to Trovagene equity awards have been recognized in operating results as follows:
The unrecognized compensation cost related to non-vested stock options outstanding at March 31, 2020 and 2019, net of estimated forfeitures, was $1,048,776 and $165,954, respectively, which is expected to be recognized over a weighted-average remaining vesting period of 2.1 and 0.8 years, respectively. The weighted-average remaining contractual term of outstanding options as of March 31, 2020 was approximately 8.8 years. The total fair value of stock options vested during the three months ended March 31, 2020 and 2019 were $34,929 and $188,984, respectively. The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions during the following periods indicated:
A summary of stock option activity and changes in stock options outstanding is presented below:
On June 6, 2019, the number of authorized shares in the Trovagene 2014 Equity Incentive Plan (“2014 EIP”) was increased from 243,056 to 1,243,056. As of March 31, 2020, there were 207,798 shares available for issuance under the 2014 EIP. Restricted Stock Units A summary of the RSU activity is presented below:
The total fair value of vested RSUs during the three months ended March 31, 2020 and 2019 were $95,170 and $126,983, respectively. Warrants A summary of warrant activity and changes in warrants outstanding, including both liability and equity classifications is presented below:
(1) Balance outstanding as of March 31, 2020 excludes 131,967 pre-funded warrants to purchase shares of common stock at a nominal exercise price of $0.01 per share. These pre-funded warrants were exercised on April 28, 2020, see Note 11 to the condensed financial statements for further information. Series C Convertible Preferred Stock and Service Receivable On January 25, 2019, the Company entered into a Master Services Agreement and a Stock and Warrant Subscription Agreement with PoC Capital, LLC (“PoC”), whereby PoC agreed to finance $1.675 million in clinical studies, including the development costs associated with Phase 1b/2 trial of onvansertib in combination with FOLFIRI and Avastin® in patients with metastatic Colorectal Cancer (“mCRC”) harboring KRAS mutation in exchange for (i)183,334 shares of common stock, (ii) warrants to purchase an aggregate of 150,000 shares of common stock, with an exercise price of $3.762 per share, expiring on January 25, 2024, and (iii) 200,000 shares of Series C Convertible Preferred Stock, each share of which was convertible into 1.67 shares of common stock. In April of 2019, all 200,000 shares of Series C Convertible Preferred Stock were converted into 333,333 shares of the Company's common stock. As of March 31, 2020, there were no shares of Series C Convertible Preferred Stock outstanding. The Company evaluated the awards issued under this transaction and determined they should be classified as equity. These equity awards were fully vested and nonforfeitable. Since the equity awards were for clinical trial services yet to be provided, the Company recognized $1.675 million service receivables as contra equity. The Company releases the service receivables as clinical trial services are performed. The conversion feature of the Series C Convertible Preferred Stock at the time of issuance was determined to be beneficial on the commitment date. Because the Series C Convertible Preferred Stock was perpetual with no stated maturity date, and the conversions could occur any time from inception, the Company immediately recorded a non-cash deemed dividend of $0.3 million related to the beneficial conversion feature arising from the issuance of Series C Convertible Preferred Stock. This non-cash deemed dividend increased the Company’s net loss attributable to common stockholders and net loss per share. |
Document and Entity Information - shares |
3 Months Ended | |
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Mar. 31, 2020 |
Apr. 30, 2020 |
|
Document and Entity Information | ||
Entity Registrant Name | Trovagene, Inc. | |
Entity Central Index Key | 0001213037 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 12,303,274 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false |
Organization and Basis of Presentation |
3 Months Ended | ||||||||||||||||||||||||
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Mar. 31, 2020 | |||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||
Organization and Basis of Presentation | Organization and Basis of Presentation Business Organization and Overview Trovagene, Inc. (“Trovagene” or the “Company”) headquartered in San Diego, California, is a clinical-stage biotechnology company with the singular mission of developing new treatment options for cancer patients in indications with the greatest medical need, including KRAS-mutated metastatic colorectal cancer, Zytiga®-resistant metastatic castration-resistant prostate cancer and relapsed or refractory acute myeloid leukemia. Our goal is to overcome resistance, improve response to treatment and increase overall survival. Trovagene’s intellectual property and proprietary technology enables the Company to analyze circulating tumor DNA (“ctDNA”) and clinically actionable markers. Unique to the Company’s clinical development plan, is the integration of predictive clinical biomarkers to assess patient response to treatment. Basis of Presentation The accompanying unaudited interim condensed financial statements of Trovagene have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”) related to a quarterly report on Form 10-Q. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. The unaudited interim condensed financial statements reflect all adjustments consisting of normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of the Company’s financial position and the results of its operations and cash flows for the periods presented. The unaudited condensed balance sheet at December 31, 2019 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by GAAP for annual financial statements. The operating results presented in these unaudited interim condensed financial statements are not necessarily indicative of the results that may be expected for any future periods. These unaudited interim condensed financial statements should be read in conjunction with the audited financial statements and the notes thereto for the year ended December 31, 2019 included in the Company’s annual report on Form 10-K filed with the SEC on February 27, 2020. Liquidity Trovagene’s condensed financial statements as of March 31, 2020 have been prepared under the assumption that Trovagene will continue as a going concern, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business. The accompanying 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 outcome of the uncertainty concerning the Company’s ability to continue as a going concern. The Company has incurred net losses since its inception and has negative operating cash flows. Considering the Company’s current cash resources, and service receivable related to the clinical trial funding commitment, management projects the Company’s existing resources will be sufficient to fund the Company’s planned operations into the fourth quarter of 2020. Based on its current business plan and assumptions, the Company expects to continue to incur significant losses and require significant additional capital to further advance its clinical trial programs and support its other operations. The Company has based its cash sufficiency estimates on its current business plan and its assumptions that may prove to be wrong. The Company could utilize its available capital resources sooner than it currently expects, and it could need additional funding to sustain its operations even sooner than currently anticipated. These circumstances raise substantial doubt about the Company’s ability to continue as a going concern for at least one year from the issuance of these financial statements. For the foreseeable future, the Company’s ability to continue its operations is dependent upon its ability to obtain additional capital. The Company cannot be certain that additional funding will be available on acceptable terms, or at all. To the extent that the Company can raise additional funds by issuing equity securities, the Company’s stockholders may experience significant dilution. The economic effects of COVID-19 could also have an adverse effect on the Company's ability to raise additional capital. See Note 10 to the condensed financial statements for further information. If the Company is unable to raise additional capital when required or on acceptable terms, it may have to significantly delay, scale back or discontinue the development and/or commercialization of one or more of its product candidates, all of which would have a material adverse impact on the Company’s operations. The Company may also be required to:
The Company is evaluating the following options to raise additional capital, increase revenue, as well as reduce costs, in an effort to strengthen its liquidity position:
Between April 1, 2020 and April 30, 2020, the Company has received approximately $1,085,000 from the sale of common stock, pre-funded warrants and warrants. In addition, on April 15, 2020 the Company has received a loan of $305,000 through the United States Small Business Administration Payroll Protection Program (see Note 11 for further details.) |
Leases - Future Minimum Lease Payments (Details) - USD ($) |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Leases | ||
2019 (excluding the nine months ended September 30, 2019) | $ 632,301 | |
2021 | 968,165 | |
2022 | 5,868 | |
2023 | 3,423 | |
Total future minimum lease payments | 1,609,757 | |
Less imputed interest | (89,544) | |
Total | 1,520,213 | $ 1,726,342 |
Sublease Income | ||
2019 (excluding the nine months ended September 30, 2019) | (218,380) | |
2021 | (291,173) | |
2022 | 0 | |
2023 | 0 | |
Total future minimum lease payments | (509,553) | |
Net Operating Leases | ||
2019 (excluding the nine months ended September 30, 2019) | 413,921 | |
2021 | 676,992 | |
2022 | 5,868 | |
2023 | 3,423 | |
Total future minimum lease payments | $ 1,100,204 |
Leases - Narrative (Details) |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2020
USD ($)
renewal_option
lease
|
Dec. 31, 2019
USD ($)
|
Jan. 01, 2019
USD ($)
|
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Lessee, Lease, Description [Line Items] | |||
Monthly rent payments | $ 78,000 | ||
Annual rent increase, percentage | 3.00% | ||
Number of lease renewals | renewal_option | 1 | ||
Renewal term | 5 years | ||
Number of subleases | lease | 2 | ||
Decrease in operating lease right-of-use assets | $ (617,622) | $ (697,418) | |
Accounting Standards Update 2016-02 | |||
Lessee, Lease, Description [Line Items] | |||
Decrease in operating lease right-of-use assets | $ (487,000) |
Property and Equipment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Property and Equipment | Property and equipment consist of the following:
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Organization and Basis of Presentation (Details) - USD ($) |
1 Months Ended | 3 Months Ended | ||
---|---|---|---|---|
Apr. 30, 2020 |
Mar. 31, 2020 |
Mar. 31, 2019 |
Apr. 15, 2020 |
|
Subsequent Event [Line Items] | ||||
Proceeds from sale of common stock and warrants, net | $ 1,000,001 | $ 0 | ||
Subsequent Event | ||||
Subsequent Event [Line Items] | ||||
Proceeds from sale of common stock and warrants, net | $ 1,085,000 | |||
Note payable | $ 305,000 |
Stockholders' Equity - Stock-based Compensation Expense (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2020 |
Mar. 31, 2019 |
|
Stock-based compensation expense | ||
Total stock based compensation expense | $ 177,309 | $ 200,067 |
Options vested, fair value | 34,929 | 188,984 |
Research and Development Expense | ||
Stock-based compensation expense | ||
Total stock based compensation expense | 76,868 | 110,081 |
Selling, general and administrative expense | ||
Stock-based compensation expense | ||
Total stock based compensation expense | 100,441 | 89,986 |
Stock Option | ||
Stock-based compensation expense | ||
Unrecognized compensation cost | $ 1,048,776 | $ 165,954 |
Weighted-average remaining vesting period for recognition | 2 years 1 month | 9 months 19 days |
Options outstanding, weighted average contractual life | 8 years 9 months |
CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Preferred stock, par value (in USD per share) | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized (in shares) | 20,000,000 | 20,000,000 |
Common stock, par value (in USD per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 11,010,587 | 8,593,633 |
Common stock, shares outstanding (in shares) | 6,436,505 | 3,831,880 |
Series A Convertible Preferred Stock | ||
Preferred stock, shares authorized (in shares) | 277,100 | 277,100 |
Preferred stock, shares outstanding (in shares) | 60,600 | 60,600 |
Series A Convertible Preferred Stock, liquidation preference (in dollars) | $ 606,000 | $ 606,000 |
Series C Convertible Preferred Stock | ||
Preferred stock, shares authorized (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Leases - Supplemental Balance Sheet Information (Details) - USD ($) |
Mar. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
Operating lease ROU assets | $ 617,622 | $ 697,418 |
Current operating lease liabilities | 870,592 | 865,379 |
Non-current operating lease liabilities | 649,621 | 860,963 |
Total operating lease liabilities | $ 1,520,213 | $ 1,726,342 |
Weighted-average remaining lease term–operating leases | 1 year 9 months 4 days | 2 years |
Weighted-average discount rate–operating leases | 6.50% | 6.50% |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases As a lessee, the Company’s current leases include its master facility lease and immaterial equipment leases, all of which are considered operating leases. The Company (as a sublessor) also subleases portions of its facility to third parties under two separate subleases. All of these subleases have been determined to be operating leases and are accounted for separately from the head lease. Master Facility Lease The Company leases a building in San Diego under an operating lease that expires on December 31, 2021. The lease currently requires fixed monthly rent payments of approximately $78,000, with 3% annual escalation. The lease also contains one five-year renewal option with minimum monthly rent equal to the then-current fair market value, subject to a 3% annual increase. As the Company is not reasonably certain to exercise this option, it has not been included in the calculation of the lease liability or right-of-use asset related to this lease. Facility Subleases As a result of corporate restructurings in previous years, the Company vacated a portion of its facility and has subleased the space to third parties under two separate sublease agreements, which both expire December 31, 2021. An additional sublease expired on October 31, 2019 and was not renewed. The Company recorded a cease-use loss liability and expense in 2018 pursuant to ASC 420, Exit or Disposal Cost Obligations, representing the total expected shortfall in sublease income for two of the subleases as compared to its required payments for those spaces under the remainder of the master lease term. This liability was being amortized over the remaining lease term until the adoption of ASC 842, whereupon the remaining cease-use loss liability of approximately $487,000 was eliminated and treated as a reduction to the beginning ROU asset value for the master lease as of January 1, 2019. Income will continue to be recognized on a straight-line basis over the term of the sublease. The components of lease expense were as follows:
Supplemental balance sheet information related to leases was as follows:
Supplemental cash flow and other information related to leases was as follows:
Total remaining annual commitments under non-cancelable lease agreements for each of the years ended December 31 are as follows:
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Leases | Leases As a lessee, the Company’s current leases include its master facility lease and immaterial equipment leases, all of which are considered operating leases. The Company (as a sublessor) also subleases portions of its facility to third parties under two separate subleases. All of these subleases have been determined to be operating leases and are accounted for separately from the head lease. Master Facility Lease The Company leases a building in San Diego under an operating lease that expires on December 31, 2021. The lease currently requires fixed monthly rent payments of approximately $78,000, with 3% annual escalation. The lease also contains one five-year renewal option with minimum monthly rent equal to the then-current fair market value, subject to a 3% annual increase. As the Company is not reasonably certain to exercise this option, it has not been included in the calculation of the lease liability or right-of-use asset related to this lease. Facility Subleases As a result of corporate restructurings in previous years, the Company vacated a portion of its facility and has subleased the space to third parties under two separate sublease agreements, which both expire December 31, 2021. An additional sublease expired on October 31, 2019 and was not renewed. The Company recorded a cease-use loss liability and expense in 2018 pursuant to ASC 420, Exit or Disposal Cost Obligations, representing the total expected shortfall in sublease income for two of the subleases as compared to its required payments for those spaces under the remainder of the master lease term. This liability was being amortized over the remaining lease term until the adoption of ASC 842, whereupon the remaining cease-use loss liability of approximately $487,000 was eliminated and treated as a reduction to the beginning ROU asset value for the master lease as of January 1, 2019. Income will continue to be recognized on a straight-line basis over the term of the sublease. The components of lease expense were as follows:
Supplemental balance sheet information related to leases was as follows:
Supplemental cash flow and other information related to leases was as follows:
Total remaining annual commitments under non-cancelable lease agreements for each of the years ended December 31 are as follows:
|
Related Party Transactions |
3 Months Ended |
---|---|
Mar. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions In November 2018, the Company entered into a Material Transfer Agreement (“MTA”) with Leucadia Life Sciences (“Leucadia”) pursuant to which Leucadia will develop a PCR-based assay for onvansertib for Acute Myeloid Leukemia (“AML”). The Company’s CEO, Dr. Thomas Adams, is a principal stockholder of Leucadia. In connection with the MTA, the Company entered into a consulting agreement with Tommy Adams, Co-Founder & Chief Operating Officer of Leucadia, who is the son of Dr. Adams. During the three months ended March 31, 2020 and 2019, the Company incurred and recorded approximately $276,000 and $245,000 respectively, of research and development expenses for services performed by Leucadia and Tommy Adams. |
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