[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended: September 30, 2018
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[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from __________ to __________
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000-55800
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(Commission File Number)
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(Exact name of registrant as specified in its charter)
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Wyoming
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81-3623646
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(State or other jurisdiction of incorporation or organization)
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(I.R.S. Employer Identification No.)
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777 Brickell Avenue, Suite 500, Miami, Florida
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33131
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(Address of principal executive offices)
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(Zip Code)
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(786)-620-2140
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(Registrant's telephone number, including area code)
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(Former name, former address and former fiscal year, if changed since last report)
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Large accelerated filer[ ]
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Accelerated filer [ ]
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Non-accelerated filer[ ] (Do not check if a smaller reporting company)
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Smaller reporting company [X]
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Emerging growth company [X]
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Page
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PART I – FINANCIAL INFORMATION
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3
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21
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27
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28
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PART II – OTHER INFORMATION
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29
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29
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29
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29
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29
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29
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30
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30
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September 30,
2018
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December 31,
2017
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ASSETS
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Current assets
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$
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198,622
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$
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57,767
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Prepaid expenses
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54,991
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15,812
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Total current assets
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253,613
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73,579
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||||||
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$
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253,613
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$
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73,579
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LIABILITIES AND STOCKHOLDERS' EQUITY
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Current liabilities
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$
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14,267
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$
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14,141
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Accounts payable and accrued liabilities – related party
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2,915
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1,410
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Convertible note – related party, net of debt discount
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25,000
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6,665
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Derivative liabilities
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30,506
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31,090
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Total current liabilities
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72,688
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53,306
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Total liabilities
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72,688
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53,306
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Stockholders' equity
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2
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2
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1,283
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1,240
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Additional Paid-in Capital
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3,497,774
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1,611,711
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Accumulated deficit
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(3,318,134
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)
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(1,592,680
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)
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Total stockholder's equity
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180,925
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20,273
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TOTAL LIABILITIES & STOCKHOLDERS' EQUITY
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$
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253,613
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$
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73,579
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Three Months ended
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Nine Months ended
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September 30,
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September 30,
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2018
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2017
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2018
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2017
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Net sales
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$
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-
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$
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-
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$
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-
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$
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-
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Operating expenses:
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||||||||||||||||
Research and development expenses
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104,798
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8,406
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237,770
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10,120
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Professional fees
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6,300
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8,170
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35,449
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11,297
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||||||||||||
General and administrative expenses
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423,216
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31,643
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1,432,980
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47,252
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48,219
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1,706,199
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68,669
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Income (loss) from operations
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(534,314
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)
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(48,219
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)
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(1,706,199
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)
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(68,669
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)
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Other income (expense)
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Interest expense
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(6,048
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)
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(1,785
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)
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(19,839
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)
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(7,215
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)
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Change in derivative liabilities
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(2,979
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)
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(47,954
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)
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584
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(47,954
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)
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Total Other income (expense)
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(9,027
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)
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(49,739
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)
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(19,255
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)
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(55,169
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)
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Net (loss)
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$
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(543,341
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)
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$
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(97,958
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)
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$
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(1,725,454
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)
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$
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(123,838
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)
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Net (loss) per common shares (basic and diluted)
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$
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(0.04
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$
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(0.00
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$
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(0.14
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$
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(0.00
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)
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Weighted average shares outstanding
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Basic and diluted
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12,807,584
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11,552,000
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12,744,561
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11,544,293
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For the Nine Months ended September 30,
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2018
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2017
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Cash Flows From Operating Activities
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Net loss
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$
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(1,725,454
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$
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(123,838
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Adjustments to reconcile net loss to net cash provided from (used by) operating activities:
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Stock awards recorded as advisory services
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178,000
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-
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Stock options granted and recorded as administrative expenses and advisory services
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1,183,106
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-
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Accretion of debt discount
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18,335
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6,599
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Change in derivative liabilities
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(584
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)
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47,954
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Changes in operating assets and liabilities:
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Prepaid expenses
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(39,179
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)
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-
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126
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6,059
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Accounts payable and accrued liabilities, related party
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1,505
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-
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Net cash provided (used by) operating activities
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(384,145
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(63,226
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)
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Cash Flows From Investing Activities
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Net cash provided from (used by) investing activities
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-
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-
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Cash Flows From Financing Activities
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Proceeds from convertible note
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-
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15,000
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Proceeds from private placement
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525,000
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32,000
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Financing costs
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-
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(22,548
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)
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Net cash provided from financing activities
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525,000
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24,452
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Increase (decrease) in cash and cash equivalents
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140,855
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(38,774
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)
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Cash at beginning of period
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57,767
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155,242
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Cash at end of period
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198,622
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116,468
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SUPPLEMENTAL DISCLOSURES
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Interest paid
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$
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-
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$
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-
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Income taxes paid
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$
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-
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$
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-
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Fair value measurements on a recurring basis
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Level 1
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Level 2
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Level 3
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As of September 30, 2018:
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Liabilities
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Derivative liabilities
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$
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-
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$
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-
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$
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30,506
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As of December 31, 2017:
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Liabilities
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Derivative liabilities
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$
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-
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$
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-
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$
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31,090
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September 30, 2018
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September 30, 2017
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Stock purchase warrants
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52,000
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566,000
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Research Warrants at 3% of issued and outstanding shares
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384,806
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-
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Convertible Notes
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28,778
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32,178
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Series A Preferred shares
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700
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700
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Stock options vested
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30,000
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-
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Stock options not yet vested
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690,000
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-
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Stock awards not yet vested
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290,000
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-
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1,476,284
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598,878
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September 30, 2018
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December 31, 2017
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Face value of certain convertible notes
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$
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25,000
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$
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25,000
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Less: unamortized discount
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-
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(18,335
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)
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Carrying value
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$
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25,000
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$
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6,665
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Balance at December 31, 2017
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$
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31,090
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Derivative addition associated with convertible notes
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-
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Change in fair value
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(584
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)
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Balance at September 30, 2018
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$
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30,506
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Commitment Date
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September 30,
2018
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December 31,
2017
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Expected dividends
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0
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0
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0
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Expected volatility
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101% ~103%
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77% ~ 83%
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110% ~ 115%
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Expected term
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0.92 ~ 1 year
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0.92 ~0.99 year
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0.67 ~0.74 year
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Risk free interest rate
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1.33%
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2.59%
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1.53% ~ 1.65%
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-
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Upon successful clinical FDA Phase II completion - $130,000; and
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-
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Upon successful clinical FDA Phase III completion - $390,000
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(1)
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Service Agreement with Ariel - Prof. Danny Baranes
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(2)
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Service Agreement with Ariel - Dr. Gadi Turgeman
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(3)
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Science Advisory Board Member Consulting Agreements (the "Agreements")
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(3)
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Science Advisory Board Member Consulting Agreements (the "Agreements") (continued)
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-
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Scientific Advisory Board and Consulting Services - Advisor shall provide general consulting services to Company (the "Services") as a member of its Scientific Advisory Board ("SAB"). As a member of the SAB, Advisor agrees to provide the Services as follows: (a) attending meetings of the Company's SAB; (b) performing the duties of a SAB member at such meetings, as established from time to time by the mutual agreement of the Company and the SAB members, including without limitation meeting with Company employees, consultants and other SAB members, reviewing goals of the Company and assisting in developing strategies for achieving such goals, and providing advice, support, theories, techniques and improvements in the Company's scientific research and product development activities; and (c) providing consulting services to Company at its request, including a reasonable amount of informal consultation over the telephone or otherwise as requested by Company. Advisor's consultation with Company will involve services as scientific, technical and business advisor to the Company and its senior team as needed with respect to the field of neuronal injuries and neuro degenerative diseases ("the "Field") and requires the application of unique, special and extraordinary skills and knowledge that Advisor possesses in the Field.
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-
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SAB Consulting Compensation - the Company shall grant to Advisor the option to purchase certain number of shares of the common stock of the Company as per the stock option award grant. The options are subject to terms and provisions of the Company's 2016 Stock Option and Stock Award Plan.
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(4)
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Business Advisory Board Agreement
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Investor Relations Agreement
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(6)
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Sponsored Research Agreement
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For the nine months ended
September 30, 2018
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For the year ended December 31, 2017
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Number of shares vested in period
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10,000
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290,000
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Fair market value per share
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$
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2.80
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$
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2.80
|
||||
Stock based compensation recognized
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$
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28,000
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$
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812,000
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(a)
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Stock Options granted to Science Advisors:
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(a)
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Stock Options granted to Science Advisors: (continued)
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(b)
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Stock Options granted to Officers:
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Measurement date
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Dividend yield
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0%
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Expected volatility
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114.69 ~ 126.34%
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Risk-free interest rate
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1.79% ~ 2.68%
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Expected life (years)
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3 ~ 5
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Stock Price
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$
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2.00 ~ 2.80
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Exercise Price
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$
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0.40 ~ 2.00
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September 30, 2018
|
December 31, 2017
|
||||||||||||||
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Weighted Average
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Weighted Average
|
||||||||||||||
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Shares
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Exercise Price
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Shares
|
Exercise Price
|
||||||||||||
Outstanding, beginning of period
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670,000
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$
|
1.93
|
-
|
$
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-
|
||||||||||
Granted
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50,000
|
$
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2.00
|
670,000
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$
|
1.93
|
||||||||||
Exercised
|
-
|
$
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-
|
-
|
$
|
-
|
||||||||||
Canceled
|
-
|
$
|
-
|
-
|
$
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-
|
||||||||||
Outstanding, end of period
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720,000
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$
|
1.93
|
670,000
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$
|
1.93
|
||||||||||
Options exercisable, end of period
|
30,000
|
$
|
2.00
|
13,334
|
$
|
2.00
|
||||||||||
Options expected to vest, end of period
|
690,000
|
$
|
1.93
|
656,666
|
$
|
1.89
|
||||||||||
Weighted average fair value of options granted
|
$
|
2.30
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$
|
2.36
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Measurement date
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|
|
Dividend yield
|
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0%
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|
Expected volatility
|
|
97.90~119.33%
|
|
|
Risk-free interest rate
|
|
1.47~1.60%
|
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Expected life (years)
|
|
2.71~2.92
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|
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Stock Price
|
|
$
|
0.25
|
|
Exercise Price
|
|
$
|
0.40
|
|
|
Warrants (1)
|
Weighted Average Exercise Price
|
||||||
Outstanding – December 31, 2016
|
502,000
|
$
|
0.40
|
|||||
Granted
|
64,000
|
0.40
|
||||||
Forfeited/Canceled
|
-
|
-
|
||||||
Exercised
|
512,000
|
(2)
|
0.40
|
|||||
Outstanding – December 31, 2017
|
54,000
|
0.40
|
||||||
Granted
|
-
|
-
|
||||||
Forfeited/Canceled
|
-
|
-
|
||||||
Exercised
|
2,000
|
(3)
|
0.40
|
|||||
Outstanding – September 30, 2018
|
52,000
|
$
|
0.40
|
|
For the three months ended September 30,
|
|||||||
|
2018
|
2017
|
||||||
|
||||||||
Net sales
|
$
|
-
|
$
|
-
|
||||
|
||||||||
Operating expenses:
|
||||||||
Research and development expenses
|
104,798
|
8,406
|
||||||
Professional fees
|
6,300
|
8,170
|
||||||
General and administrative expenses
|
423,216
|
31,643
|
||||||
Total operating expenses
|
534,314
|
48,219
|
||||||
|
||||||||
Income (loss) from operations
|
(534,314
|
)
|
(48,219
|
)
|
||||
|
||||||||
Other income (expense)
|
||||||||
Interest expense
|
(6,048
|
)
|
(1,785
|
)
|
||||
Change in derivative liabilities
|
(2,979
|
)
|
(47,954
|
)
|
||||
|
||||||||
Net (loss)
|
$
|
(543,341
|
)
|
$
|
(97,958
|
)
|
|
For the nine months ended September 30,
|
|||||||
|
2018
|
2017
|
||||||
|
||||||||
Net sales
|
$
|
-
|
$
|
-
|
||||
|
||||||||
Operating expenses:
|
||||||||
Research and development expenses
|
237,770
|
10,120
|
||||||
Professional fees
|
35,449
|
11,297
|
||||||
General and administrative expenses
|
1,432,980
|
47,252
|
||||||
Total operating expenses
|
1,706,199
|
68,669
|
||||||
|
||||||||
Income (loss) from operations
|
(1,706,199
|
)
|
(68,669
|
)
|
||||
|
||||||||
Other income (expense)
|
||||||||
Interest expense
|
(19,839
|
)
|
(7,215
|
)
|
||||
Change in derivative liabilities
|
584
|
(47,954
|
)
|
|||||
|
||||||||
Net (loss)
|
$
|
(1,725,454
|
)
|
$
|
(123,838
|
)
|
|
At September 30, 2018
|
At December 31, 2017
|
||||
|
||||||
Current Assets
|
$
|
253,613
|
$
|
73,579
|
||
Current Liabilities
|
72,688
|
53,306
|
||||
Working Capital
|
$
|
180,925
|
$
|
20,273
|
|
At September 30, 2018
|
At September 30, 2017
|
||||||
Net cash (used in) operating activities
|
$
|
(384,145
|
)
|
$
|
(63,226
|
)
|
||
Net cash provided by investing activities
|
-
|
-
|
||||||
Net cash provided by financing activities
|
$
|
525,000
|
$
|
24,452
|
||||
Net increase (decrease) in cash during period
|
$
|
140,855
|
$
|
(38,774
|
)
|
Exhibit Number
|
Exhibit
|
|
|
|
QRONS INC.
|
|
|
|
|
|
|
Date: November 6, 2018
|
By:
|
/s/ Jonah Meer
|
|
|
Name:
|
Jonah Meer
|
|
|
Title:
|
Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)
|
|
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 my 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 period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
|
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.
|
Dated: November 6, 2018
|
By:
|
/s/Jonah Meer
|
|
|
|
Name: Jonah Meer
|
|
|
|
Chief Executive Officer and Chief Financial Officer
(Principal Executive Officer and Principal Financial and Accounting Officer)
|
|
|
|
|
|
|
|
|
|
/s/Jonah Meer
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Jonah Meer
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Chief Executive Officer and Chief Financial Officer (Principal Executive Officer and Principal Financial and Accounting Officer)
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Date: November 6, 2018
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Document and Entity Information - shares |
9 Months Ended | |
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Sep. 30, 2018 |
Nov. 14, 2018 |
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Document and Entity Information [Abstract] | ||
Entity Registrant Name | Qrons Inc. | |
Entity Central Index Key | 0001689084 | |
Trading Symbol | QRON | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 12,849,581 |
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares |
Sep. 30, 2018 |
Dec. 31, 2017 |
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Statement of Financial Position [Abstract] | ||
Series A Preferred Shares, par value | $ 0.001 | $ 0.001 |
Series A Preferred Shares, authorized | 10,000 | 10,000 |
Series A Preferred Shares, shares issued | 2,000 | 2,000 |
Series A Preferred Shares, shares outstanding | 2,000 | 2,000 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 12,826,853 | 12,404,910 |
Common stock, shares outstanding | 12,826,853 | 12,404,910 |
Condensed Statements of Operations (Unaudited) - USD ($) |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Income Statement [Abstract] | ||||
Net sales | ||||
Operating expenses: | ||||
Research and development expenses | 104,798 | 8,406 | 237,770 | 10,120 |
Professional fees | 6,300 | 8,170 | 35,449 | 11,297 |
General and administrative expenses | 423,216 | 31,643 | 1,432,980 | 47,252 |
Total operating expenses | 534,314 | 48,219 | 1,706,199 | 68,669 |
Income (loss) from operations | (534,314) | (48,219) | (1,706,199) | (68,669) |
Other income (expense) | ||||
Interest expense | (6,048) | (1,785) | (19,839) | (7,215) |
Change in derivative liabilities | (2,979) | (47,954) | 584 | (47,954) |
Total Other income (expense) | (9,027) | (49,739) | (19,255) | (55,169) |
Net (loss) | $ (543,341) | $ (97,958) | $ (1,725,454) | $ (123,838) |
Net (loss) per common shares (basic and diluted) | $ (0.04) | $ 0.00 | $ (0.14) | $ 0.00 |
Weighted average shares outstanding Basic and diluted | 12,807,584 | 11,552,000 | 12,744,561 | 11,544,293 |
Description of Business and Basis of Presentation |
9 Months Ended |
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Sep. 30, 2018 | |
Description of Business and Basis of Presentation [Abstract] | |
Description of Business and Basis of Presentation | Note 1 – Description of Business and Basis of Presentation
Organization and nature of business:
Qrons Inc. ("Qrons" or the "Company") was incorporated under the laws of the State of Wyoming on August 22, 2016 under the name BioLabMart Inc.
On July 6, 2017, the board of directors and a majority of the Company's shareholders approved an amendment to the Company's Articles of Incorporation to change the name of the Company from "BioLabMart Inc." to "Qrons Inc.". On August 8, 2017, the Company filed Amended Articles of Incorporation with the State of Wyoming to effectuate such name change. The Company's common stock was approved by the Financial Industry Regulatory Authority ("FINRA") for quotation on the OTC pink sheets under the symbol "BLMB" as of July 3, 2017. FINRA announced the Company's name change to Qrons Inc. on its Daily List on August 9, 2017. The new name and symbol change to "QRON" for the OTC Market was effective August 10, 2017.
The Company is a preclinical stage biotechnology company developing advanced cell-based solutions to combat neuronal injuries and achieve a breakthrough in the treatment of traumatic brain injuries ("TBIs"), an unmet medical need. We believe that our approach is pushing the boundaries of science by using the latest advances in molecular biology and chemistry. The Company collaborates with universities and scientists in the fields of regenerative medicine, tissue engineering and 3D printable hydrogels to develop a treatment that integrates proprietary, engineered mesenchymal stem cells, 3D printable implant, smart materials and a novel delivery system.
Our headquarters are located at 777 Brickell Avenue, Suite 500, Miami, Florida 33131.
Ariel Agreements
On December 14, 2016, the Company entered into a license and research funding agreement ("License Agreement") with Ariel Scientific Innovations Ltd., formerly known as Ariel University R&D Co., Ltd., ("Ariel"), a wholly owned subsidiary of Ariel University, based in Ariel, Israel. Under the terms of the License Agreement, Professor Danny Baranes, the principal investigator and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel's research or technology or the Company's research funding (the "Products). Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.
In lieu of extending the research financing and research period under the License Agreement beyond the initial 12 months, on December 14, 2017, the Company entered into a 12-month services agreement with Ariel (the "Services Agreement") pursuant to which a team at Ariel under the direction of Prof. Danny Baranes will conduct molecular biology research activities involving the testing of implant materials for the Company. On April 12, 2018, the Services Agreement was amended to provide for additional services as the Company may request.
On March 6, 2018, the Company entered into an additional services agreement with Ariel for the services of Professor Gadi Turgeman and his neurobiology research team in their lab.
Dartmouth Agreements
On October 17, 2017, the Company entered into an Option Agreement (the "Agreement") with the Trustees of Dartmouth College which provides for, among other things, the grant to the Company of a one-year exclusive option to negotiate a worldwide, royalty bearing, exclusive license with Dartmouth for 3D printable materials in the field of human and animal health. During the option period, the Company agreed to use all commercially reasonable resources to evaluate the intellectual property and provide quarterly milestone reports and a commercialization plan upon exercise of the option. Pursuant to the Agreement, the Company
agreed to finance the prosecution of patents by Dartmouth to protect its intellectual property. Further, the Agreement provides for the payment by the Company of an option fee and certain license fees and royalty payments based upon the Company's product sales, as part of a final negotiated license agreement. The Company exercised its option on March 26, 2018 to negotiate definitive license terms, as it continues further evaluation and research.
On July 12, 2018, the Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement. Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned. Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes.
The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.
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Summary of Significant Accounting Policies |
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Summary of Significant Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Note 2 – Summary of Significant Accounting Policies
Financial Statement Presentation: The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission(the "SEC"), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year.
Fiscal year end: The Company has selected December 31 as its fiscal year end.
Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.
Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, "Research and Development". Research and development costs were $237,770 and $10,120 for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.
Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred. The Company incurred $48,832 and $15,657 in advertising or marketing costs during the nine months ended September 30, 2018 and 2017, respectively.
Related parties: For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
Stock-Based Compensation and Other Share-Based Payments: The expense attributable to the Company's Directors is recognized over the period the amounts are earned and vested, and the expense attributable to the Company's non-employees is recognized when vested, as described in Note 7, Stock Plan.
Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.
The following table provides a summary of the fair value of our derivative liabilities as of September 30, 2018 and December 31, 2017:
Warrants: The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815 "Derivatives and Hedging – Contracts in Entity's Own Equity" (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. For warrants classified as equity instruments we apply the Black Scholes model. Presently all warrants issued and outstanding are accounted for using the equity method.
Income taxes: The Company has adopted ASC Topic 740 – "Income Taxes" ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
Basic and Diluted Loss Per Share: In accordance with ASC Topic 260 – "Earnings Per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common stock had been issued and if the additional shares of common stock were dilutive.
Potential common stock consists of the incremental common stock issuable upon the exercise of common stock warrants (using the if-converted method), convertible notes, classes of shares with conversion features, and stock awards and stock options. The computation of basic loss per share for the nine-month period ended September 30, 2018 and 2017 excludes potentially dilutive securities of underlying share purchase warrants, convertible notes, stock options and preferred shares, because their inclusion would be antidilutive. As a result, the computations of net loss per share for each period presented is the same for both basic and fully diluted.
The table below reflects the potentially dilutive securities at each reporting period which have been excluded from the computation of diluted net loss per share:
New Accounting Pronouncements: There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows.
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Going Concern |
9 Months Ended |
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Sep. 30, 2018 | |
Going Concern [Abstract] | |
Going Concern | Note 3 – Going Concern
The Company has experienced net losses to date, and it has not generated revenue from operations. While the Company has recently raised proceeds, it does not believe its resources will be sufficient to meet its operating and capital needs beyond the fourth quarter of 2018. The Company expects it will require additional capital to fully implement the scope of its proposed business operations, which raises substantial doubt about its ability to continue as a going concern. The Company will have to continue to rely on equity and debt financing. There can be no assurance that financing, whether debt or equity, will always be available to the Company in the amount required at any particular time or for any particular period or, if available, that it can be obtained on favorable terms.
The financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or amount and classification of liabilities that might cause results from this uncertainty.
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Convertible Note - Related Party and Derivative Liabilities |
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Convertible Note - Related Party and Derivative Liabilities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible Note - Related Party and Derivative Liabilities | Note 4 – Convertible Note – Related Party and Derivative Liabilities
On September 1, 2016, the Company entered into a convertible debenture agreement with CubeSquare, LLC ("CubeSquare"), of which our Chief Executive Officer is the managing partner and our President is a 25% owner. The Company received proceeds of $10,000 during fiscal 2016 ("Note 1"). The note bears interest at 8% per annum and was due on September 1, 2017. Interest accrues from September 1, 2016 and is payable on maturity. Interest is payable, at the lender's option, in cash or common stock. Any portion of the loan and unpaid interest are convertible at any time at the option of the lender into shares of common stock of the Company at a conversion price of the greater of (i) $0.0625 per share if the Company's shares are not trading on a public market and; (ii) in the event the Company's shares are listed for trading on a public market, the conversion price shall be equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from the lender.
On September 28, 2017 the Company and CubeSquare amended Note 1 to extend the maturity date from September 1, 2017 to September 1, 2018 and on September 9, 2018, the Company further amended Note 1 to extend the maturity date to September 1, 2019, under the same terms and conditions.
On September 27, 2017, the Company entered into a second convertible debenture agreement with CubeSquare under which the Company received proceeds of $15,000 (Note 2). Note 2 bears interest at 8% per annum and is due on September 27, 2018. Interest shall accrue from September 27, 2017 and shall be payable on maturity. Any portion of the principal and unpaid interest under the note is convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from CubeSquare. On September 9, 2018, Note 2 was amended to extend the maturity date until September 27, 2019.
The Company analyzed the amendment to Note 1 and Note 2 under ASC 815-10-15-83 and concluded that these two convertible debentures meet the definition of a derivative. We estimated the fair value of the derivative on the inception dates, and subsequently, using the Black-Scholes valuation technique, adjusted for the effect of dilution, because that technique embodies all of the assumptions (including, volatility, expected terms, and risk-free rates) that are necessary to fair value complex derivate instruments.
The carrying value of these convertible notes is as follows:
Amortization of the discount over the three months ended September 30, 2018 and 2017 totaled $5,541 and $1,571, respectively, which amounts have been recorded as interest expense. Amortization of the discount over the nine months ended September 30, 2018 and 2017 totaled $18,335 and $6,599, respectively, which amounts have been recorded as interest expense.
As a
result of the application of ASC No. 815 in the periods ended September 30, 2018 and December 31, 2017 the fair value of the conversion feature is summarized as follows:
The fair value at the commitment and re-measurement dates for the Company's derivative liabilities were based upon the following management assumptions as of September 30, 2018 and commitment date:
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License and Research Funding Agreements |
9 Months Ended | ||||
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Sep. 30, 2018 | |||||
License And Research Funding Agreements [Abstract] | |||||
License and Research Funding Agreements | Note 5 – License and Research Funding Agreements
On December 14, 2016, the Company entered into the License Agreement with Ariel. Under the terms of the License Agreement, Professor Danny Baranes, the principal investigator and his research team will carry out further research relating to cell treatment with conditioned medium for neuronal tissue regeneration and repair. The Company shall fund the research completed during the research period in the total amount of $100,000. In consideration for payments under the License Agreement, the Company received an exclusive worldwide royalty- bearing license in Ariel patents and know-how to develop and commercialize products based on or incorporating conditioned medium for neuronal tissue regeneration and/or repair, resulting from Ariel's research or technology or the Company's research funding (the "Products). Under the License Agreement, the Company is required to use its best efforts to develop and commercialize the Products in accordance with development milestones set forth in the Agreement.
In addition, upon the occurrence of an Exit Event (as defined in the License Agreement) of the Company or of any affiliate commercializing the products, the Company is obligated to issue to Ariel an immediately exercisable warrant for that number of shares equal to 4% of the issued and outstanding shares of the Company at the time of issuance.
The Company and Ariel entered into Addendum #1, effective December 13, 2017 (the "Addendum") to the License Agreement pursuant to which Ariel was permitted to exercise a portion of the warrant granted pursuant to the License Agreement. On December 13, 2017, the Company issued 119,950 shares of common stock to Ariel, representing 1% of the issued and outstanding shares of the Company on such date, and valued at $335,860. The right to the balance of the shares subject to the warrant remains subject to the terms of the License Agreement and the occurrence of an Exit Event (as described in the License Agreement). In addition, the Addendum provides that Ariel may not request a demand registration until the balance of the shares subject to the warrant is exercised.
In addition to the other payments, the Company will pay Ariel upon the occurrence of the following milestone events, additional payments which shall be due within 6 months of completion of the milestone:
Upon successful development and commercialization and in recognition of the rights and licenses granted to the Company pursuant to the License Agreement, the Company will be subject to certain royalty payments as specified in the License Agreement.
During the year ended December 31, 2017, the Company incurred total research and development costs of $1,179,777, which amount includes the aforementioned value of 119,950 shares of common stock at $335,860 pursuant to the License Agreement, as well as $812,000 recorded as stock-based compensation related to certain stock awards discussed in Note 6 – Commitments below, granted to various members of the
Company's scientific advisory board.
In lieu of extending the research financing and research period under the License Agreement with Ariel beyond the initial 12 months, on December 14, 2017, the Company entered into a 12-month services agreement with Ariel (the "Services Agreement") pursuant to which a team at Ariel University under the direction of Professor Danny Baranes will conduct molecular biology research activities involving the testing of scaffold materials for the Company. As compensation for such services, the Company paid Ariel (i) $17,250 on December 19, 2017 and an additional $17,250 on April 26, 2018. On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request.
On March 6, 2018, the Company entered into an additional service agreement with Ariel for the services of Professor Gadi Turgeman and his stem cells research team in their lab pursuant to which the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.
On July 12, 2018, the Company entered into the Sponsored Research Agreement with Dartmouth pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement. Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned. Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.
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Commitments |
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Commitments [Abstract] | |||||||||||||||||
Commitments | Note 6 – Commitments
On December 14, 2017, the Company entered into a 12-month services agreement pursuant to which a team at Ariel under the direction of Prof. Danny Baranes will conduct molecular biology research activities involving the testing of implant materials for the Company. As compensation for the services provided, the Company will pay Ariel (i) $17,250 within five business days of the execution of the Services Agreement, and (ii) $17,250 by May 1, 2018.
The Services Agreement may be terminated by the non-breaching party upon a material breach that is not cured within 30 days or by the Company upon thirty days' prior written notice to Ariel. Ariel must keep confidential information of the Company confidential for five years after the term of the Services Agreement.
During the year ended December 31, 2017, $17,250 was paid and on April 26, 2018, the remaining installment of $17,250 was paid. During the year ended December 31, 2017, $1,438 was expensed, and during the nine months ended September 30, 2018 $25,875 was expensed, and the remaining $7,187, which amount is reflected on the Company's balance sheets as prepaid expenses, will be expensed in a subsequent period.
On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request. During the nine-month period ended September 30, 2018, the Company paid $14,082 for these additional fees.
On March 6, 2018, the Company entered into a service agreement for the services of Professor Gadi Turgeman and his stem cells research team in their lab. As compensation for the services provided, the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018.
The Services Agreement may be terminated by the non-breaching party upon a material breach that is not cured within 30 days or by the Company upon thirty days' prior written notice to Ariel. Ariel must keep confidential information of the Company confidential for six years after the term of the Services Agreement.
During the nine months ended September 30, 2018, $41,160 was paid and recorded as prepaid expenses, of which $24,010 was expensed in the nine-month period ended September 30, 2018, and the remaining $17,150 will be expensed in a subsequent period.
As part of its ongoing program of research and development, the Company has retained distinguished scientists and other qualified individuals to advise the Company with respect to its technology and business strategy and to assist it in the research, development and analysis of the Company's technology and products. In furtherance thereof, the Company has retained certain Advisors as members of its Scientific Advisory Board as described below, and the Company and Advisors have entered into agreements with the following terms and conditions:
On November 15, 2017, the Company entered into Agreements with three Advisors under the terms of which two Advisors are granted an option to purchase 20,000 shares of common stock and one Advisor was granted an option to purchase 30,000 shares of common stock under the 2016 Stock Option and Award Plan subject to certain vesting terms.
On April 16, 2018, the Company entered into a one-year advisory board member consulting agreement with an assistant Professor of Chemistry at Dartmouth College to serve on the Company's Scientific Advisory Board. In consideration for serving on the Scientific Advisory Board, the Company granted an option to purchase 30,000 shares of its common stock under certain vesting terms to the assistant Professor.
On August 15, 2018, the Company entered into an Agreement with an Advisor under the terms of which the Company granted an option to purchase 20,000 shares of common stock under the 2016 Stock Option and Award Plan subject to certain vesting terms.
On January 23, 2018, the Company entered into a one-year advisory board member consulting agreement with Pavel Hilman, the controlling shareholder of Conventus Holdings SA, a BVI corporation ("Conventus"), under which Mr. Hilman will serve on the Company's Advisory Board as a business advisor. The Advisory Board Agreement will automatically renew for up to two additional one-year periods, unless earlier terminated by either party upon 30 days' prior written notice to the other party. In consideration for serving on the Advisory Board, the Company awarded 10,000 shares of its common stock to Mr. Hilman under its 2016 Stock Option and Stock Award Plan.
On April 23, 2018, the Company entered into a six-month investor relations agreement with an investor relations firm for a monthly consulting fee of $5,000 and the issuance of 75,000 shares of common stock payable on signing the agreement.
On June 23, 2018, the Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018. A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue.
On July 12, 2018, the Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement. Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned. Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Company funded $36,293 on August 20, 2018 and will fund additional $18,147 by December 1, 2018 and $18,146 by June 1, 2019, respectively.
The Agreement may be terminated earlier than one year upon written agreement of the parties, a material breach which is not cured within 30 days of notice thereof, if Professor Ke no longer conducts the research under the Agreement and a successor acceptable to both parties is not available, or in the event of an unauthorized assignment of the Company's rights and obligations under the Agreement.
During the nine months
ended September 30, 2018, $36,293 was paid and recorded as prepaid expenses, of which $9,073 was expensed in the nine-month period ended September 30, 2018, and the remaining $27,220 will be expensed in a subsequent period.
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Stock Plan |
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Stock Plan [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Plan | Note 7 – Stock Plan
2016 Stock Option and Stock Award
On December 14, 2016, the Board adopted the Company's 2016 Stock Option and Stock Award Plan (the "Plan"). The Plan provides for the award of stock options (incentive and non-qualified), stock awards and stock appreciation rights to officers, directors, employees and consultants who provide services to the Company. The terms of awards under the Plan are made by the Administrator of the Plan appointed by the Company's Board of Directors (the "Board"), or in the absence of an Administrator, by the Board. The Company has reserved 10 million shares for issuance under the Plan.
Stock Awards:
On December 14, 2016, the Board awarded to each of its Science Advisors, Prof. Danny Baranes and Dr. Liat Hammer, a total of 440,000 shares of common stock of which 150,000 shares vested on December 14, 2016, 145,000 shares vested on December 14, 2017, and 145,000 shares will vest on December 14, 2018, provided such advisors are still providing services to the Company.
The value of the vested awards had been recorded as research and development expenses in the respective periods. A total of 290,000 stock awards are expected to vest during the fourth quarter of fiscal 2018.
On January 23, 2018, the Company awarded 10,000 shares of its common stock to Mr. Hilman under its 2016 Stock Option and Stock Award Plan, which shares were fully vested and recorded as advisory services on issuance.
Stock Options:
On November 15, 2017, under the 2016 Stock Option and Award Plan, the Board awarded two of its Science Advisors the following three-year stock options: (i) an immediately exercisable option to purchase 6,667 shares of common stock at an exercise price of $2.00 per share, (ii) an option to purchase 6,667 shares of common stock exercisable on November 15, 2018 at an exercise price of $2.00 per share and (iii) an option to purchase 6,666 shares of common stock exercisable on November 15, 2019 at an exercise price of $2.00 per share, provided the advisors are still providing services to the Company.
On November 15, 2017, under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 15,000 shares of common stock, exercisable on November 15, 2018 at an exercise price of $0.40 per share and (ii) an option to purchase 15,000 shares of common stock exercisable on November 15, 2019 at an exercise price of $0.40 per share, provided the advisor is still providing services to the Company.
On April 16,
2018, under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 10,000 shares of common stock, exercisable on April 16, 2018 at an exercise price of $2.00 per share and (ii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2019 at an exercise price of $2.00 per share, and (iii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2020 at an exercise price of $2.00 per share, provided the advisor is still providing services to the Company. provided the advisor is still providing services to the Company.
On August 15, 2018, under the 2016 Stock Option and Award Plan, the Board granted a Science Advisor an option to purchase an aggregate of 20,000 shares of common stock at an exercise price of $2.00 per share. The option vests as to 6,667 shares on each of August 15, 2018 and August 15, 2019 and as to 6,666 shares on August 15, 2020 and remains exercisable as to each such installment for three years from the date of vesting.
During the year ended December 31, 2017, total recognized compensation in respect of the above stock option compensation was $29,000, which amount has been allocated as advisory services as part of general and administrative expenses.
The Company recorded stock-based compensation in the amount of $48,078 and $122,816 in respect to these options grants during the three and nine months ended September 30, 2018, respectively, which amounts have been allocated as advisory services as part of general and administrative expenses.
As of September 30, 2018, total unrecognized compensation remaining to be recognized in future periods totaled $92,671.
On December 4, 2017, the Board granted five-year options to each of its two officers for the purchase of 300,000 shares of the common stock of the Company. The options have an exercise price of $2.00 and vest and become exercisable on December 4, 2018.
During the year ended December 31, 2017, total recognized compensation of $106,029 was recorded as general and administrative expenses.
During the three and nine months ended September 30, 2018, total recognized compensation of $353,430 and $1,060,290, respectively, was recorded as general and administrative expenses.
As of September 30, 2018, total unrecognized compensation remaining to be recognized in future periods totaled $246,755.
The fair value of each option award above is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):
A summary of the activity for the Company's stock options for the nine-month period ended September 30, 2018 and for the year ended December 31, 2017, is as follows:
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Capital Stock |
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Capital Stock [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock | Note 8 – Capital Stock
Authorized:
The Company has authorized 100,000,000 shares of common stock, par value $0.0001 and 10,000 shares of preferred stock which is designated as Series A Preferred Stock, par value $0.001.
Series A Preferred Stock:
The Series A Preferred Stock is redeemable at the option of the Company at any time, in whole or in part, upon 10 trading days prior notice, at a price of $1.00 per share plus 4% per annum from the date of issuance (the "Stated Value"). The holders of the Series A Preferred Stock are entitled to a liquidation preference equal to the Stated Value, prior to the holders of other preferred stock or common stock. The holders of the Series A Preferred Stock have the right to convert such stock into common stock at a conversion rate equal to the Stated Value as of the conversion date divided by the average closing price of the common stock for the five previous trading days. The Company is required to reserve sufficient number of shares for the conversion of the Series A Preferred Stock. The holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company's common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding.
There was a total of 2,000 shares of Series A Preferred Stock issued and outstanding as at September 30, 2018 and December 31, 2017.
Common Stock issuances during the nine months ended September 30, 2018:
On January 23, 2018 the Company sold 312,500 shares of its common stock to Conventus and raised $500,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.
On January 23, 2018, the Company issued 10,000 shares for advisory services (Note 6(4)). The shares were valued at fair market value on the date of issuance for a total of $28,000 or $2.80 per share.
On February 6, 2018, the Company received a warrant exercise notice in respect of 2,000 warrants from a subscriber and issued 1,715 shares of common stock on a cashless exercise basis as per the cashless exercise formula contained in the warrant.
On April 23, 2018, the Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share.
On September 16, 2018 the Company sold 22,728 shares of its common stock to an investor and raised $25,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.
Common Stock issuances as of December 31, 2017:
On December 13, 2017, 119,950 shares were issued to Ariel as an exercise of warrants pursuant to a License Agreement (Note 5 – License and Research Funding Agreement). These shares were valued at $335,860 or $2.80 per share, based on fair market value, and the associated cost was recorded as research and development expenses.
On December 14, 2017, the Company issued 290,000 shares to two
Scientific Advisors as a stock award, valued at $812,000, or $2.80 per share, based on fair market value, and recorded the associated cost as research and development expenses. (Note 7 – Stock Plan).
During the year ended December 31, 2017, the Company received aggregate proceeds of $32,000 in private placement subscriptions for a total of 128,000 shares.
During the year ended December 31, 2017 the Company received warrant exercise notices in respect of 512,000 warrants from various subscribers and issued a total of 442,960 shares of common stock on a cashless exercise basis as per the cashless exercise formula in the warrant.
Share Purchase Warrants
In accordance with authoritative accounting guidance, the fair value of the aforementioned warrants was calculated using the Black-Scholes option-pricing model with the following assumptions at the measurement date(s):
As of September 30, 2018, and December 31, 2017, the following common stock purchase warrants were outstanding:
(1) Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40.
(2) During the year ended December 31, 2017, investors exercised 512,000 share purchase warrants and received 442,960 underlying shares for exercise on a cashless basis.
(3) During the nine-month period ended September 30, 2018, investors exercised 2,000 share purchase warrants and received 1,715 underlying shares for exercise on a cashless basis.
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Subsequent Events |
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Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 9 – Subsequent Events
On October 8, 2018 the Company sold 22,728 shares of its common stock to an investor and raised $25,000 pursuant to a subscription agreement in a private placement offering. The proceeds of the offering will be used for research and general corporate purposes.
The Company has evaluated subsequent events from the balance sheet date through the date that the financial statements were issued and determined that there are no additional subsequent events to disclose.
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Summary of Significant Accounting Policies (Policies) |
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Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Statement Presentation | Financial Statement Presentation: The accompanying unaudited condensed financial statements of the Company have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission(the "SEC"), including the instructions to Form 10-Q and Regulation S-X. Certain information and note disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America ("U.S. GAAP"), have been condensed or omitted from these statements pursuant to such rules and regulations and, accordingly, they do not include all the information and notes necessary for comprehensive financial statements and should be read in conjunction with our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2017.
In the opinion of the management of the Company, all adjustments, which are of a normal recurring nature, necessary for a fair statement of the results for the three and nine-month periods have been made. Results for the interim period presented are not necessarily indicative of the results that might be expected for the entire fiscal year.
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Fiscal year end | Fiscal year end: The Company has selected December 31 as its fiscal year end.
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Use of Estimates | Use of Estimates: The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported therein. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that differ from these estimates.
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Cash Equivalents | Cash Equivalents: The Company considers all highly liquid investments with maturities of 90 days or less from the date of purchase to be cash equivalents.
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Research and Development Costs | Research and Development Costs: The Company charges research and development costs to expense when incurred in accordance with FASB ASC 730, "Research and Development". Research and development costs were $237,770 and $10,120 for the nine-month periods ended September 30, 2018 and September 30, 2017, respectively.
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Advertising and Marketing Costs | Advertising and Marketing Costs: Advertising and marketing costs are expensed as incurred. The Company incurred $48,832 and $15,657 in advertising or marketing costs during the nine months ended September 30, 2018 and 2017, respectively.
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Related parties | Related parties: For the purposes of these financial statements, parties are considered to be related if one party has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.
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Stock-Based Compensation and Other Share-Based Payments | Stock-Based Compensation and Other Share-Based Payments: The expense attributable to the Company's Directors is recognized over the period the amounts are earned and vested, and the expense attributable to the Company's non-employees is recognized when vested, as described in Note 7, Stock Plan.
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Fair Value of Financial Instruments | Fair Value of Financial Instruments
FASB ASC 820, Fair Value Measurements and Disclosures, defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. FASB ASC 820 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. FASB ASC 820 describes three levels of inputs that may be used to measure fair value:
Level 1 – Quoted prices in active markets for identical assets or liabilities.
Level 2 – Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant judgment or estimation.
If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level of input that is significant to the fair value measurement of the instrument.
The following table provides a summary of the fair value of our derivative liabilities as of September 30, 2018 and December 31, 2017:
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Warrants | Warrants: The Company accounts for common stock warrants in accordance with applicable accounting guidance provided in ASC Topic 815 "Derivatives and Hedging – Contracts in Entity's Own Equity" (ASC Topic 815), as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. For warrants classified as equity instruments we apply the Black Scholes model. Presently all warrants issued and outstanding are accounted for using the equity method.
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Income taxes | Income taxes: The Company has adopted ASC Topic 740 – "Income Taxes" ASC Topic 740 requires the use of the asset and liability method of accounting for income taxes. Under the asset and liability method of ASC Topic 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.
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Basic and Diluted Loss Per Share | Basic and Diluted Loss Per Share: In accordance with ASC Topic 260 – "Earnings Per Share", the basic loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common stock outstanding. Diluted loss per common share is computed similar to basic loss per common share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential common stock had been issued and if the additional shares of common stock were dilutive.
Potential common stock consists of the incremental common stock issuable upon the exercise of common stock warrants (using the if-converted method), convertible notes, classes of shares with conversion features, and stock awards and stock options. The computation of basic loss per share for the nine-month period ended September 30, 2018 and 2017 excludes potentially dilutive securities of underlying share purchase warrants, convertible notes, stock options and preferred shares, because their inclusion would be antidilutive. As a result, the computations of net loss per share for each period presented is the same for both basic and fully diluted.
The table below reflects the potentially dilutive securities at each reporting period which have been excluded from the computation of diluted net loss per share:
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New Accounting Pronouncements | New Accounting Pronouncements: There were various accounting standards and interpretations issued recently, none of which are expected to have a material effect on the Company's operations, financial position or cash flows.
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Summary of Significant Accounting Policies (Tables) |
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Summary of Significant Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of the fair value of our derivative liabilities |
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Schedule of potentially dilutive securities |
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Convertible Note - Related Party and Derivative Liabilities (Tables) |
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Schedule of convertible notes |
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Schedule of fair value of conversion feature |
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Schedule of fair value at commitment and re-measurement dates derivative liabilities |
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Stock Plan (Tables) |
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Stock Plan [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of stock award |
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Schedule of fair value options assumptions |
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Schedule of stock options |
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Capital Stock (Tables) |
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Capital Stock [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value warrants assumptions |
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Schedule of common stock purchase warrants were outstanding |
(1) Each two shares of common stock purchased under the private placement provides for one warrant to acquire an additional share of common stock together with the payment of $0.40.
(2) During the year ended December 31, 2017, investors exercised 512,000 share purchase warrants and received 442,960 underlying shares for exercise on a cashless basis.
(3) During the nine-month period ended September 30, 2018, investors exercised 2,000 share purchase warrants and received 1,715 underlying shares for exercise on a cashless basis.
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Summary of Significant Accounting Policies (Details) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
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Level 1 [Member] | ||
Liabilities | ||
Derivative liabilities | ||
Level 2 [Member] | ||
Liabilities | ||
Derivative liabilities | ||
Level 3 [Member] | ||
Liabilities | ||
Derivative liabilities | $ 30,506 | $ 31,090 |
Summary of Significant Accounting Policies (Details Textual) - USD ($) |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Summary of Significant Accounting Policies (Textual) | ||||
Research and development costs | $ 104,798 | $ 8,406 | $ 237,770 | $ 10,120 |
Advertising or marketing costs | $ 48,832 | $ 15,657 | ||
Research warrants issued and outstanding, percentage | 3.00% |
Convertible Note - Related Party and Derivative Liabilities (Details) - USD ($) |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Convertible Note - Related Party and Derivative Liabilities [Abstract] | ||
Face value of certain convertible notes | $ 25,000 | $ 25,000 |
Less: unamortized discount | (18,335) | |
Carrying value | $ 25,000 | $ 6,665 |
Convertible Note - Related Party and Derivative Liabilities (Details 1) |
9 Months Ended |
---|---|
Sep. 30, 2018
USD ($)
| |
Convertible Note - Related Party and Derivative Liabilities [Abstract] | |
Balance at December 31, 2017 | $ 31,090 |
Derivative addition associated with convertible notes | |
Change in fair value | (584) |
Balance at September 30, 2018 | $ 30,506 |
Convertible Note - Related Party and Derivative Liabilities (Details 2) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Derivative [Line Items] | ||
Expected dividends | 0.00% | 0.00% |
Risk free interest rate | 2.59% | |
Commitment Date [Member] | ||
Derivative [Line Items] | ||
Expected dividends | 0.00% | |
Risk free interest rate | 1.33% | |
Minimum [Member] | ||
Derivative [Line Items] | ||
Expected volatility | 77.00% | 110.00% |
Expected term | 11 months 1 day | 8 months 2 days |
Risk free interest rate | 1.53% | |
Minimum [Member] | Commitment Date [Member] | ||
Derivative [Line Items] | ||
Expected volatility | 101.00% | |
Expected term | 11 months 1 day | |
Maximum [Member] | ||
Derivative [Line Items] | ||
Expected volatility | 83.00% | 115.00% |
Expected term | 11 months 26 days | 8 months 26 days |
Risk free interest rate | 1.65% | |
Maximum [Member] | Commitment Date [Member] | ||
Derivative [Line Items] | ||
Expected volatility | 103.00% | |
Expected term | 1 year |
Convertible Note - Related Party and Derivative Liabilities (Details Textual) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|---|
Sep. 09, 2018 |
Sep. 28, 2017 |
Sep. 27, 2017 |
Sep. 01, 2016 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Convertible Note - Related Party and Derivative Liabilities (Textual) | ||||||||
Received proceeds totaling | $ 15,000 | |||||||
Amortization of discount | $ 5,541 | $ 1,571 | $ 18,335 | $ 6,599 | ||||
CubeSquare, LLC [Member] | ||||||||
Convertible Note - Related Party and Derivative Liabilities (Textual) | ||||||||
Received proceeds totaling | $ 15,000 | $ 10,000 | ||||||
Interest rate per annum | 8.00% | 8.00% | ||||||
Conversion, description | Any portion of the principal and unpaid interest under the note is convertible at any time at the option of CubeSquare into shares of common stock of the Company at a conversion price equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from CubeSquare. | (i) $0.0625 per share if the Company's shares are not trading on a public market and; (ii) in the event the Company's shares are listed for trading on a public market, the conversion price shall be equal to a 50% discount to the average of the five lowest trading prices during the previous twenty trading days prior to the date of the notice of conversion from the lender. | ||||||
Maturity date | Sep. 01, 2017 | |||||||
Maturity date, description | Note 2 was amended to extend the maturity date until September 27, 2019. | Note 1 to extend the maturity date from September 1, 2017 to September 1, 2018 and on September 9, 2018, the Company further amended Note 1 to extend the maturity date to September 1, 2019, under the same terms and conditions. | ||||||
Debt instument due date | Sep. 27, 2018 | |||||||
CubeSquare, LLC [Member] | President [Member] | ||||||||
Convertible Note - Related Party and Derivative Liabilities (Textual) | ||||||||
Ownership percentage | 25.00% |
License and Research Funding Agreements (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
---|---|---|---|---|---|---|---|---|---|
Mar. 06, 2018 |
Dec. 13, 2017 |
Dec. 14, 2016 |
Apr. 23, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
License and Research Funding Agreements (Textual) | |||||||||
Research and development costs | $ 104,798 | $ 8,406 | $ 237,770 | $ 10,120 | |||||
Shares issued for advisory services, value | 75,000 | ||||||||
License and research funding agreement compensation paid, description | The Company entered into an additional service agreement with Ariel for the services of Professor Gadi Turgeman and his stem cells research team in their lab pursuant to which the Company paid Ariel $20,580 on each of March 19, 2018 and August 22, 2018. | The Company paid Ariel (i) $17,250 on December 19, 2017 and an additional $17,250 on April 26, 2018. On April 12, 2018, the Services Agreement was amended to provide for the payment by the Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request. | |||||||
Ariel University [Member] | |||||||||
License and Research Funding Agreements (Textual) | |||||||||
Shares issued for advisory services, value | 119,950 | ||||||||
Shares issued, value | $ 335,860 | ||||||||
Shares issued, percentage | 1.00% | ||||||||
License Agreement [Member] | |||||||||
License and Research Funding Agreements (Textual) | |||||||||
Total amount of fund for research during research period | $ 100,000 | ||||||||
Warrant exercisable percentage | 4.00% | ||||||||
Payments of completion of milestone events, description | Upon successful clinical FDA Phase II completion - $130,000; and Upon successful clinical FDA Phase III completion - $390,000 | ||||||||
Research and development costs | $ 1,179,777 | ||||||||
Aforementioned funding amount | 119,950 | ||||||||
Stock based compensation | 812,000 | ||||||||
Payments of completion of milestone events due | 6 months | ||||||||
Shares issued, value | $ 335,860 |
Commitments (Details) - USD ($) |
1 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 08, 2018 |
Jul. 12, 2018 |
Jun. 23, 2018 |
Apr. 12, 2018 |
Apr. 23, 2018 |
Jan. 23, 2018 |
Nov. 15, 2017 |
Sep. 30, 2018 |
Dec. 31, 2017 |
Aug. 22, 2018 |
Aug. 15, 2018 |
May 01, 2018 |
Apr. 26, 2018 |
Apr. 16, 2018 |
Mar. 19, 2018 |
Dec. 14, 2017 |
|
Commitments (Textual) | ||||||||||||||||
Compensation for the services provided | $ 17,250 | $ 17,250 | $ 17,250 | |||||||||||||
Compensation cost | $ 1,438 | |||||||||||||||
Service agreement payment, description | The Company of an additional monthly fee, commencing March 2018, of up to 8,000 Israeli shekels as compensation for additional costs which the Company may request. | |||||||||||||||
Consulting fee | $ 5,000 | |||||||||||||||
Investor relations agreement, description | The Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018. A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue. | The Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share. | ||||||||||||||
Paid for additional fees | $ 14,082 | |||||||||||||||
Issuance of common stock payable | 75,000 | |||||||||||||||
Service Agreement with Ariel [Member] | ||||||||||||||||
Commitments (Textual) | ||||||||||||||||
Compensation for the services provided | $ 20,580 | $ 20,580 | $ 17,250 | |||||||||||||
Compensation cost | 25,875 | |||||||||||||||
Prepaid expenses | 41,160 | |||||||||||||||
Prepaid expensed during period | 24,010 | |||||||||||||||
Outstanding expenses | 17,150 | |||||||||||||||
Sponsored Research Agreement [Member] | ||||||||||||||||
Commitments (Textual) | ||||||||||||||||
Prepaid expenses | 36,293 | |||||||||||||||
Prepaid expensed during period | 9,073 | |||||||||||||||
Outstanding expenses | $ 27,220 | |||||||||||||||
Sponsored research agreement, description | The Company entered into a one-year sponsored research agreement (the "Sponsored Research Agreement"), with the Trustees of Dartmouth College ("Dartmouth") pursuant to which the Company will support and fund the cost of research conducted by Dartmouth of mutual interest to the parties in accordance with the Agreement. Intellectual property invented or developed solely by a party shall be owned by such party and intellectual property jointly invented or developed shall be jointly owned. Dartmouth shall retain an irrevocable worldwide right to use intellectual property owned by it resulting from its research under the Agreement on a non-exclusive royalty-free basis for research and education purposes. The Company funded $36,293 on August 20, 2018 and will fund additional $18,147 by December 1, 2018 and $18,146 by June 1, 2019, respectively. | |||||||||||||||
2016 Stock Option and Award Plan [Member] | ||||||||||||||||
Commitments (Textual) | ||||||||||||||||
Advisors are granted the option | 10,000 | 20,000 | ||||||||||||||
Stock option and advisor granted | 30,000 | 20,000 | 30,000 | |||||||||||||
Subsequent Event [Member] | Service Agreement with Ariel [Member] | ||||||||||||||||
Commitments (Textual) | ||||||||||||||||
Compensation cost | $ 7,187 |
Stock Plan (Details) - USD ($) |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Stock Plan [Abstract] | ||
Number of shares vested in period | 10,000 | 290,000 |
Fair market value per share | $ 2.80 | $ 2.80 |
Stock based compensation recognized | $ 28,000 | $ 812,000 |
Stock Plan (Details 1) - Stock Options [Member] - Measurement Date [Member] |
9 Months Ended |
---|---|
Sep. 30, 2018
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Exercise Price, Minimum | $ 0.40 |
Exercise Price, Maximum | $ 2.00 |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 114.69% |
Risk-free interest rate | 1.79% |
Expected life (years) | 3 years |
Stock Price | $ 2.00 |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 126.34% |
Risk-free interest rate | 2.68% |
Expected life (years) | 5 years |
Stock Price | $ 2.80 |
Stock Plan (Details 2) - $ / shares |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
|
Stock Plan [Abstract] | ||
Shares Outstanding, beginning of period | 670,000 | |
Shares, Granted | 50,000 | 670,000 |
Shares, Exercised | ||
Shares, Canceled | ||
Shares Outstanding, end of period | 720,000 | 670,000 |
Shares Options exercisable, end of period | 30,000 | 13,334 |
Shares, Options expected to vest, end of period | 690,000 | 656,666 |
Weighted Average Shares Exercise Price, Outstanding, beginning of period | $ 1.93 | |
Weighted Average Shares Exercise Price, Granted | 2.00 | 1.93 |
Weighted Average Shares Exercise Price, Exercised | ||
Weighted Average Exercise Price, Canceled | ||
Weighted Average Shares Exercise Price, Outstanding, end of period | 1.93 | 1.93 |
Weighted Average Exercise Price, Options exercisable, end of period | 2.00 | 2.00 |
Weighted Average Exercise Price, Options expected to vest, end of period | 1.93 | 1.89 |
Weighted Average Exercise Price, Weighted average fair value of options granted | $ 2.30 | $ 2.36 |
Stock Plan (Details Textual) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Aug. 15, 2018 |
Dec. 14, 2017 |
Dec. 04, 2017 |
Dec. 14, 2016 |
Apr. 16, 2018 |
Nov. 15, 2017 |
Sep. 30, 2018 |
Sep. 30, 2018 |
Dec. 31, 2017 |
Jan. 23, 2018 |
|
Stock Plan (Textual) | ||||||||||
Total unrecognized compensation remaining to be recognized in future periods | $ 92,671 | |||||||||
General and administrative expenses [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Stock-based compensation | $ 48,078 | 122,816 | $ 29,000 | |||||||
Stock Options granted to Officers [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Total unrecognized compensation remaining to be recognized in future periods | 246,755 | |||||||||
Weighted average exercise price | $ 2 | |||||||||
Shares of common stock under certain vesting terms | 5 years | |||||||||
Vest and exercisable date | Dec. 04, 2018 | |||||||||
Granted an option to purchase shares of common stock | 300,000 | |||||||||
Stock Options granted to Officers [Member] | General and administrative expenses [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Stock-based compensation | $ 353,430 | $ 1,060,290 | $ 106,029 | |||||||
2016 Stock Option and Award Plan [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Reserved shares for issuance | 10,000,000 | |||||||||
Stock award | 10,000 | |||||||||
Description of services agreement | Under the 2016 Stock Option and Award Plan, the Board granted a Science Advisor an option to purchase an aggregate of 20,000 shares of common stock at an exercise price of $2.00 per share. The option vests as to 6,667 shares on each of August 15, 2018 and August 15, 2019 and as to 6,666 shares on August 15, 2020 and remains exercisable as to each such installment for three years from the date of vesting. | Under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 10,000 shares of common stock, exercisable on April 16, 2018 at an exercise price of $2.00 per share and (ii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2019 at an exercise price of $2.00 per share, and (iii) an option to purchase 10,000 shares of common stock exercisable on April 16, 2020 at an exercise price of $2.00 per share, provided the advisor is still providing services to the Company. provided the advisor is still providing services to the Company. | Under the 2016 Stock Option and Award Plan, the Board awarded two of its Science Advisors the following three-year stock options: (i) an immediately exercisable option to purchase 6,667 shares of common stock at an exercise price of $2.00 per share, (ii) an option to purchase 6,667 shares of common stock exercisable on November 15, 2018 at an exercise price of $2.00 per share and (iii) an option to purchase 6,666 shares of common stock exercisable on November 15, 2019 at an exercise price of $2.00 per share, provided the advisors are still providing services to the Company. | |||||||
2016 Stock Option and Award Plan one [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Description of services agreement | Under the 2016 Stock Option and Award Plan, the Board awarded a Science Advisor, the following three-year stock options: (i) an option to purchase 15,000 shares of common stock, exercisable on November 15, 2018 at an exercise price of $0.40 per share and (ii) an option to purchase 15,000 shares of common stock exercisable on November 15, 2019 at an exercise price of $0.40 per share, provided the advisor is still providing services to the Company. | |||||||||
Board of Directors Chairman [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Stock award | 440,000 | |||||||||
Receive common stock vest upon grant date | 150,000 | |||||||||
Vested shares | 145,000 | 145,000 | ||||||||
Board of Directors Chairman [Member] | December 14, 2018 [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Vested shares | 145,000 | |||||||||
Stock awards are expected to vest [Member] | Fourth Quarter [Member] | ||||||||||
Stock Plan (Textual) | ||||||||||
Vested shares | 290,000 |
Capital Stock (Details) - Measurement Date [Member] - Stock Purchase Warrants [Member] |
9 Months Ended |
---|---|
Sep. 30, 2018
$ / shares
| |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Dividend yield | 0.00% |
Stock Price | $ 0.25 |
Exercise Price | $ 0.40 |
Maximum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 119.33% |
Risk-free interest rate | 1.60% |
Expected life (years) | 2 years 11 months 1 day |
Minimum [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility | 97.90% |
Risk-free interest rate | 1.47% |
Expected life (years) | 2 years 8 months 16 days |
Capital Stock (Details 1) - Stock Purchase Warrants [Member] - $ / shares |
9 Months Ended | 12 Months Ended | |||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Dec. 31, 2017 |
||||||||||
Warrants | |||||||||||
Outstanding - Beginning balance | [1] | 54,000 | 502,000 | ||||||||
Granted | [1] | 64,000 | |||||||||
Forfeited/Canceled | [1] | ||||||||||
Exercised | [1] | 2,000 | 512,000 | ||||||||
Outstanding - Ending balance | [1] | 52,000 | 54,000 | ||||||||
Weighted Average Exercise Price | |||||||||||
Outstanding - Beginning balance | $ 0.40 | $ 0.40 | |||||||||
Granted | 0.40 | ||||||||||
Forfeited/Canceled | |||||||||||
Exercised | 0.40 | [2] | 0.40 | [3] | |||||||
Outstanding - Ending balance | $ 0.40 | $ 0.40 | |||||||||
|
Capital Stock (Details Textual) - USD ($) |
1 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 23, 2018 |
Feb. 06, 2018 |
Dec. 14, 2017 |
Dec. 13, 2017 |
Sep. 16, 2018 |
Apr. 23, 2018 |
Jan. 23, 2018 |
Sep. 30, 2018 |
Dec. 31, 2017 |
|||
Capital Stock (Textual) | |||||||||||
Common stock, shares authorized | 100,000,000 | 100,000,000 | |||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||||||
Series A Preferred Shares, shares issued | 2,000 | 2,000 | |||||||||
Series A Preferred Shares, shares outstanding | 2,000 | 2,000 | |||||||||
Series A Preferred Shares, authorized | 10,000 | 10,000 | |||||||||
Series A Preferred Shares, par value | $ 0.001 | $ 0.001 | |||||||||
Shares issued for advisory services, value | 75,000 | ||||||||||
Subscriptions shares | 128,000 | ||||||||||
Warrant, description | The Company received a warrant exercise notice in respect of 2,000 warrants from a subscriber and issued 1,715 shares of common stock on a cashless exercise basis as per the cashless exercise formula contained in the warrant. | ||||||||||
Warrants received underlying shares for exercise on a cashless basis | 442,960 | ||||||||||
Investor relations agreement, description | The Company gave notice of rescission of the agreement to such firm and requested the return of the consulting fee paid and the 75,000 shares of common stock. As a result, the Company has not recorded any fees for services rendered past June 23, 2018. A total of $10,000 representing April 2018 and May 2018 monthly consulting fees is reflected in the statement of operations and a total of $150,000, the fair market value of the issued shares, was expensed on issue. | The Company issued 75,000 shares of its common stock in respect of an investor relations services agreement which was rescinded on June 23, 2018 (Note 6(5)). The shares were valued at the fair market value on the date of issuance for a total of $150,000, or $2.00 per share. | |||||||||
Additional share of common stock per share | $ 0.40 | ||||||||||
License Agreement Terms [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Share issued for agreement | 119,950 | ||||||||||
Conversion value | $ 335,860 | ||||||||||
Conversion of stock par value | $ 2.80 | ||||||||||
Investors [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Warrant exercise | 2,000 | ||||||||||
Warrants received underlying shares for exercise on a cashless basis | 1,715 | ||||||||||
Scientific Advisors [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Share issued for agreement | 290,000 | ||||||||||
Conversion value | $ 812,000 | ||||||||||
Conversion of stock par value | $ 2.80 | ||||||||||
Private Placement [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Sale and issuance of common stock | 22,728 | 312,500 | |||||||||
Total proceeds of subscriptions amount | $ 25,000 | $ 500,000 | $ 32,000 | ||||||||
Investor relations agreement, description | The Company issued 10,000 shares for advisory services (Note 6(4)). The shares were valued at fair market value on the date of issuance for a total of $28,000 or $2.80 per share. | ||||||||||
Warrant [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Warrant exercise | [1] | 2,000 | 512,000 | ||||||||
Series A Preferred Stock [Member] | |||||||||||
Capital Stock (Textual) | |||||||||||
Preferred stock, conversion basis, description | The Series A Preferred Stock is redeemable at the option of the Company at any time, in whole or in part, upon 10 trading days prior notice, at a price of $1.00 per share plus 4% per annum from the date of issuance (the "Stated Value"). The holders of the Series A Preferred Stock are entitled to a liquidation preference equal to the Stated Value, prior to the holders of other preferred stock or common stock. The holders of the Series A Preferred Stock have the right to convert such stock into common stock at a conversion rate equal to the Stated Value as of the conversion date divided by the average closing price of the common stock for the five previous trading days. The Company is required to reserve sufficient number of shares for the conversion of the Series A Preferred Stock. The holders of Class A Preferred Stock shall vote together as a single class with the holders of the Company's common stock and the holders of any other class or series of shares entitled to vote with the common stock, with the holders of Class A Preferred Stock being entitled to 66 2/3% of the total votes on all such matters, regardless of the actual number of shares of Class A Preferred Stock then outstanding. | ||||||||||
|
Subsequent Events (Details) - Subsequent Event [Member] |
Oct. 08, 2018
USD ($)
shares
|
---|---|
Subsequent Events (Textual) | |
Sale and issuance of common stock | shares | 22,728 |
Total proceeds of subscriptions amount | $ | $ 25,000 |
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