Attached files
Exhibit 99.2
ACER THERAPEUTICS INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
June
30,
|
December
31,
|
|
|
2017
|
2016
|
|
Assets
|
(unaudited)
|
|
|
Current
assets:
|
|
|
|
Cash
and cash equivalents
|
$2,508,204
|
$1,834,018
|
|
Prepaid
expenses
|
493,660
|
540,053
|
|
Total
current assets
|
3,001,864
|
2,374,071
|
|
Property
and equipment, net
|
4,406
|
6,217
|
|
Other
assets:
|
|
|
|
Goodwill
|
272,315
|
272,315
|
|
In-process
research and development
|
118,600
|
118,600
|
|
Deferred
financing costs
|
—
|
1,901
|
|
Total
assets
|
$3,397,185
|
$2,773,104
|
|
|
|
|
|
Liabilities, Redeemable Preferred Stock and Stockholders’
Deficit
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$1,025,465
|
$383,411
|
|
Accrued
expenses
|
1,441,845
|
438,028
|
|
Convertible
notes payable
|
5,449,940
|
—
|
|
Total
liabilities
|
7,917,250
|
821,439
|
|
|
|
|
|
Commitments
|
|
|
|
|
|
|
|
Series
B Convertible Redeemable Preferred stock $0.0001 par value; 970,238
shares authorized, issued and outstanding (preference in
liquidation of $8,149,999 at June 30, 2017 and December 31, 2016,
respectively)
|
8,040,469
|
8,022,219
|
|
Series
A Convertible Redeemable Preferred stock, $0.0001 par value;
638,416 shares authorized, issued and outstanding (preference in
liquidation of $4,166,150 at June 30, 2017 and December 31, 2016,
respectively)
|
4,121,641
|
4,114,221
|
|
Convertible
Redeemable Preferred stock
|
12,162,110
|
12,136,440
|
|
Stockholders’
deficit:
|
|
|
|
Common
stock, $0.0001 par value; authorized 10,000,000 shares; 2,450,000
shares issued and outstanding
|
246
|
246
|
|
Additional
paid-in capital
|
1,177,145
|
1,172,200
|
|
Accumulated
deficit
|
(17,859,566)
|
(11,357,221)
|
|
Total
stockholders’ deficit
|
(16,682,175)
|
(10,184,775)
|
|
Total
liabilities, redeemable preferred stock and stockholders’
deficit
|
$3,397,185
|
$2,773,104
|
See
notes to unaudited condensed consolidated financial
statements.
-1-
ACER THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND
2016
(Unaudited)
|
|
Three
Months ended June 30,
|
Six
Months ended June 30,
|
||
|
|
2017
|
2016
|
2017
|
2016
|
|
Operating
expenses:
|
|
|
|
|
|
Research
and development
|
$1,857,856
|
$1,262,615
|
$4,891,395
|
$1,899,296
|
|
General
and administrative
|
1,156,494
|
523,793
|
1,490,023
|
779,967
|
|
Total
operating expenses
|
3,014,350
|
1,786,408
|
6,381,418
|
2,679,263
|
|
Loss
from operations
|
(3,014,350)
|
(1,786,408)
|
(6,381,418)
|
(2,679,263)
|
|
|
|
|
|
|
|
Other
income (expense):
|
|
|
|
|
|
Interest income
|
1,425
|
38
|
1,826
|
38
|
|
Interest
expense
|
(109,722)
|
-
|
(122,753)
|
-
|
|
Total
other income (expense), net
|
(108,297)
|
38
|
(120,927)
|
38
|
|
|
|
|
|
|
|
Net
loss
|
$(3,122,647)
|
$(1,786,370)
|
$(6,502,345)
|
$(2,679,225)
|
|
|
|
|||
|
Net
loss per share - basic and diluted
|
$(1.27)
|
$(0.73)
|
$(2.65)
|
$(1.09)
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding
- basic and diluted |
2,450,000
|
2,450,000
|
2,450,000
|
2,450,000
|
See
notes to unaudited condensed consolidated financial
statements.
-2-
ACER THERAPEUTICS INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2017 AND 2016
(Unaudited)
|
|
Six months ended June 30,
|
|
|
|
2017
|
2016
|
|
Cash
flows from operating activities:
|
|
|
|
Net
loss
|
$(6,502,345)
|
$(2,679,225)
|
|
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
|
|
|
Non-cash
interest expense
|
122,753
|
—
|
|
Share-based
compensation
|
30,615
|
31,346
|
|
Depreciation
|
1,811
|
1,722
|
|
Write-off
of deferred financing costs
|
1,901
|
69,896
|
|
|
|
|
|
Changes
in operating assets and liabilities:
|
|
|
|
Prepaid
expenses
|
46,393
|
(62,985)
|
|
Accounts
payable
|
642,054
|
(124,232)
|
|
Accrued
expenses
|
898,679
|
(431,991)
|
|
Net
cash used in operating activities
|
( 4,758,139)
|
(3,195,469)
|
|
|
|
|
|
Cash
flows from investing activities:
|
|
|
|
Purchase
of property and equipment
|
—
|
(1,582)
|
|
Net
cash used in investing activities
|
—
|
(1,582)
|
|
|
|
|
|
Cash
flows from financing activities:
|
|
|
|
Proceeds from convertible notes
payable
|
5,500,000
|
—
|
|
Proceeds
from issuance of Preferred Series B, net
|
—
|
7,994,834
|
|
Payment of debt
issuance costs
|
(67,675)
|
—
|
|
Net
cash provided by financing activities
|
5,432,325
|
7,994,834
|
|
|
|
|
|
Net
increase in cash and cash equivalents
|
674,186
|
4,797,786
|
|
Cash
and cash equivalents, beginning of period
|
1,834,018
|
798,545
|
|
Cash
and cash equivalents, end of period
|
$2,508,204
|
$5,596,331
|
|
|
|
|
|
Supplemental
non-cash financing transactions:
|
|
|
|
Accretion of issuance costs on Series A
Convertible Redeemable Preferred stock
|
$7,420
|
$7,420
|
|
Accretion
of issuance costs on Series B Convertible Redeemable Preferred
stock
|
$18,250
|
$9,127
|
See
notes to unaudited condensed consolidated financial
statements.
-3-
ACER THERAPEUTICS INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2017 AND
2016
(Unaudited)
1.
NATURE
OF OPERATIONS AND BASIS OF PRESENTATION
Business
Acer Therapeutics
Inc. (“Acer”) is a pharmaceutical company focused on
the acquisition, development and commercialization of therapies for
patients with serious rare and ultra-rare diseases with critical
unmet medical need. Acer’s late-stage clinical pipeline
includes two candidates for severe genetic disorders for which
there are few or no FDA-approved treatments: EDSIVO™
(celiprolol) for vascular EhlersDanlos Syndrome
(“vEDS”), and ACER-001 (a fully taste-masked, immediate
release formulation of sodium phenylbutyrate) for urea cycle
disorders (“UCD”) and Maple Syrup Urine Disease
(“MSUD”). There are no FDA-approved drugs for vEDS and
MSUD and limited options for UCD, which collectively impact more
than 4,000 patients in the United States. Acer’s products
have clinical proof-of-concept and mechanistic differentiation, and
Acer intends to seek approval for them in the U.S. by using the
regulatory pathway established under section 505(b)(2) of the
Federal Food, Drug, and Cosmetic Act, or FFDCA, that allows an
applicant to rely for approval at least in part on third-party
data, which is expected to expedite the preparation, submission,
and approval of a marketing application.
Since
its inception, Acer has devoted substantially all of its efforts to
business planning, research and development, recruiting management
and technical staff, acquiring operating assets and raising
capital.
The
accompanying condensed consolidated financial statements for
periods prior to August 2016 include the accounts of Acer and its
wholly-owned subsidiary, Anchor Therapeutics, Inc.
(“Anchor”) (collectively referred to as the
“Company”). All intercompany balances and transactions
are eliminated. See Merger Agreement section below.
The
Company is subject to a number of risks similar to other companies
in its industry including rapid technological change, uncertainty
of market acceptance of products, competition from larger companies
with substitute products, availability of future financing and
dependence on key personnel.
Merger Agreement
Opexa
Therapeutics, Inc. (“Opexa”) and Acer have entered into
an Agreement and Plan of Merger and Reorganization, dated June 30,
2017 (the “Merger Agreement”). The Merger Agreement
contains the terms and conditions of the proposed business
combination of Opexa and Acer. Under the Merger Agreement, Opexa
Merger Sub, Inc., a wholly-owned subsidiary of Opexa will merge
with and into Acer, with Acer surviving as a wholly-owned
subsidiary of Opexa. After the completion of the Merger, Opexa will
change its corporate name to “Acer Therapeutics Inc.”
as required by the Merger Agreement.
Basis of Presentation
The
accompanying condensed consolidated balance sheet as of June 30,
2017 and the condensed consolidated statements of operations and
cash flows for the three and six months ended June 30, 2017 and
2016 are unaudited and have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Regulation
S-X. The unaudited condensed consolidated financial statements have
been prepared on the same basis as the audited annual consolidated
financial statements and reflect, in the opinion of management, all
adjustments of a normal and recurring nature that are necessary for
the fair presentation of the Company’s financial position as
of June 30, 2017, the results of operations for the three and six
months ended June 30, 2017 and 2016, and the cash flows for the six
months ended June 30, 2017 and 2016. The results of operations for
the three and six months ended June 30, 2017 are not necessarily
indicative of the results to be expected for the year ending
December 31, 2017 or for any other future annual or interim period.
The condensed consolidated balance sheet as of December 31, 2016
included herein was derived from the audited consolidated financial
statements as of that date. These unaudited condensed consolidated
financial statements should be read in conjunction with the
Company’s audited consolidated financial statements included
in the registration statement on Form S-4 filed by Opexa with the
Securities and Exchange Commission on July 19, 2017 (Reg. No.
333-219358). The Company’s management performed an evaluation
of its activities through the date of filing of these financial
statements and concluded that there are no subsequent events, other
than as disclosed.
-4-
Going Concern Uncertainty
The
accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. The
Company has experienced recurring losses since inception. The
Company has relied on raising capital to finance its
operations.
The
Company plans to raise capital through equity and/or debt
financings. There is no assurance, however, that the Company will
be able to raise sufficient capital to fund its operations on terms
that are acceptable, or that its operations will ever be
profitable.
There
is substantial doubt about the Company’s ability to continue
as a going concern within one year after the date that the
accompanying financial statements are available to be issued and
these financial statements do not include any adjustments relating
to the recoverability of recorded asset amounts that might be
necessary as a result of the above uncertainty.
2.
SIGNIFICANT
ACCOUNTING POLICIES
A
summary of the significant accounting policies followed by the
Company in the preparation of the accompanying condensed
consolidated financial statements follows:
Share-Based Compensation
The
Company records share-based payments at fair value. The measurement
date for compensation expense related to employee awards is
generally the date of the grant. The measurement date for
compensation expense related to nonemployee awards is generally the
date that the performance of the awards is completed and, until
such time, the fair value of the awards is remeasured at the end of
each reporting period. Accordingly, the ultimate expense is not
fixed until such awards are vested. The fair value of awards, net
of expected forfeitures, is recognized as expense in the statement
of operations over the requisite service period, which is generally
the vesting period. The fair value of options is calculated using
the Black-Scholes option pricing model. This option valuation model
requires input of assumptions including, among others, the
volatility of stock price, the expected term of the option, and the
risk-free interest rate.
Use of Estimates
The
Company’s accounting principles require management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of assets and liabilities
at the date of the financial statements, and reported amounts of
revenues and expenses during the reporting period. Estimates having
relatively higher significance include the accounting for
acquisitions, stock-based compensation, and income taxes. Actual
results could differ from those estimates and changes in estimates
may occur.
Basic and Diluted Net Loss per Common Share
Basic
and diluted net loss per common share is computed by dividing net
loss in each period by the weighted average number of shares of
common stock outstanding during such period. For the periods
presented, common stock equivalents, consisting of options,
convertible redeemable preferred stock and convertible notes
payable, were not included in the calculation of the diluted loss
per share because they were anti-dilutive.
-5-
Recently Adopted Accounting Pronouncements
In
March 2016, the Financial Accounting Standards Board
(“FASB”) issued ASU No. 2016-09, Improvements to Employee Share-Based Payment
Accounting, or ASU No. 2016-09, which simplifies several
aspects of the accounting for share-based payment transactions,
including the income tax consequences, classification of awards as
either equity or liabilities and classification of cash flows. The
Company adopted ASU No. 2016-09 as of January 1, 2017. Under the
new standard, all excess tax benefits and tax deficiencies are
recognized as income tax expense or benefit in the statement of
operations. The tax effects of exercised or vested awards are
treated as discrete items in the reporting period in which they
occur. The Company applied the modified retrospective adoption
approach upon adoption of the standard, and prior periods have not
been adjusted. The Company elected to recognize forfeitures related
to employee share-based payments as they occur. There was no
material impact on the Company’s financial statements as a
result of the adoption of this guidance.
Recently Issued Accounting Pronouncements
Revenue from Contracts with Customers
In May
2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic
606), or ASU 2014-09. Subsequently, the FASB issued ASU
2015-14, Revenue from Contracts
with Customers (Topic 606), which adjusted the effective
date of ASU 2014-09; ASU No. 2016-08, Revenue from Contracts with Customers (Topic
606): Principal versus Agent Considerations (Reporting Revenue
Gross versus Net), which amends the principal-versus-agent
implementation guidance and illustrations in ASU 2014-09; ASU
No. 2016-10, Revenue from
Contracts with Customers (Topic 606): Identifying Performance
Obligations and Licensing, which clarifies identifying performance
obligations and licensing implementation guidance and illustrations
in ASU 2014-09; ASU No. 2016-12, Revenue from Contracts with Customers (Topic
606): Narrow-Scope Improvements and Practical Expedients,
which addresses implementation issues and is intended to reduce the
cost and complexity of applying the new revenue standard in ASU
2014-09; and ASU No. 2017-13, Revenue Recognition (Topic 605), Revenue from
Contracts with Customers (Topic 606), Leases (Topic 840), and
Leases (Topic 842): Amendments to SEC Paragraphs Pursuant to the
Staff Announcement at the July 20, 2017 EITF Meeting and Rescission
of Prior SEC Staff Announcements and Observer Comments (SEC
Update), which codifies recent announcements by the SEC
staff, or collectively, the Revenue ASUs.
The
Revenue ASUs provide an accounting standard for a single
comprehensive model for use in accounting for revenue arising from
contracts with customers and supersedes most current revenue
recognition guidance. The accounting standard is effective for
interim and annual periods beginning after December 15, 2017,
with an option to early adopt for interim and annual periods
beginning after December 15, 2016. The guidance permits two
methods of adoption: retrospectively to each prior reporting period
presented (the full retrospective method), or retrospectively with
the cumulative effect of initially applying the guidance recognized
at the date of initial application (the modified retrospective
method). The Company will adopt the new standard effective
January 1, 2018 under the modified retrospective method. The
Company has allocated internal resources to the implementation and
is in the process of determining the impact of the Revenue ASUs on
its financial statements; however, the adoption of the Revenue ASUs
may have a material impact on revenue recognition, its notes to
consolidated financial statements and its internal controls over
financial reporting. Currently, the Company does not have sources
of revenue but future arrangements may be impacted by the adoption
of the Revenue ASUs noted above.
Other Recent Accounting Pronouncements
In
January 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic
350). This ASU eliminates step 2 from the goodwill
impairment test by comparing the fair value of a reporting unit
with the carrying amount of the reporting unit. If the carrying
amount exceeds the fair value, an impairment charge for the excess
is recorded. The amendments of this ASU are effective for annual or
any interim goodwill impairment tests in fiscal years beginning
after December 15, 2019. Early adoption is permitted for interim or
annual goodwill impairment tests performed on testing dates after
January 1, 2017. The Company is currently evaluating the impact of
the adoption of this ASU on the consolidated financial
statements.
-6-
In May
2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718):
Scope of Modification Accounting, which clarifies when
changes to the terms or conditions of a share-based payment award
must be accounted for as modifications. The new guidance will
reduce diversity in practice and result in fewer changes to the
terms of an award being accounted for as modifications. Under ASU
2017-09, an entity will not apply modification accounting to a
share-based payment award if the award’s fair value, vesting
conditions and classification as an equity or liability instrument
are the same immediately before and after the change. ASU 2017-09
will be applied prospectively to awards modified on or after the
adoption date. The guidance is effective for annual periods, and
interim periods within those annual periods, beginning after
December 15, 2017. Early adoption is permitted. The Company is
evaluating the impact of the adoption of this guidance on its
financial statements but does not expect it to have a material
impact.
In July
2017, FASB issued ASU No. 2017-11, Earnings Per Share (Topic 260); Distinguishing
Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic
815): (Part I) Accounting for Certain Financial Instruments with
Down Round Features, (Part II) Replacement of the Indefinite
Deferral for Mandatorily Redeemable Financial Instruments of
Certain Nonpublic Entities and Certain Mandatorily Redeemable
Non-controlling Interests with a Scope Exception (Update).
Part I of this Update addresses the complexity of accounting for
certain financial instruments with down round features by
simplifying the accounting for these instruments. This Update
requires companies to disregard the down round feature when
assessing whether an instrument, such as a warrant, is indexed to
its own stock, for purposes of determining liability or equity
classification. This will change the classification of certain
warrants with down round features from a liability to equity. Also,
entities must adjust their basic earnings per share (EPS)
calculation for the effect of the down round provision when
triggered (that is, when the exercise price of the related
equity-linked financial instrument is adjusted downward because of
the down round feature). That effect is treated as a dividend and
as a reduction of income available to common shareholders in basic
EPS. An entity will also recognize the effect of the trigger within
equity. The guidance is effective for annual periods, and interim
periods within those annual periods, beginning after December 15,
2017. Early adoption is permitted. The Company is evaluating the
impact of the adoption of this guidance on its financial statements
and expects it to have a material impact as it would reclassify the
derivative warrant liability into additional paid-in capital. Part
II of this Update addresses the difficulty of navigating Topic 480,
Distinguishing Liabilities from Equity, because of the existence of
extensive pending content in the FASB Accounting Standards
Codification. The amendments in Part II of this Update
re-characterize the indefinite deferral of certain provisions of
Topic 480, Distinguishing Liabilities from Equity that previously
were presented as pending content in the Codification, to a scope
exception, and do not have any accounting effect.
3.
PROPERTY
AND EQUIPMENT
Property and
equipment consisted of the following at June 30, 2017 and December
31, 2016:
|
|
June
30,
2017
|
December
31,
2016
|
|
|
|
|
|
Computer
hardware and software
|
$10,861
|
$10,861
|
|
Less
accumulated depreciation
|
(6,455)
|
(4,644)
|
|
|
$4,406
|
$6,217
|
-7-
4.
ACCRUED
EXPENSES
Accrued
expenses consisted of the following at June 30, 2017 and December
31, 2016:
|
|
June
30,
2017
|
December
31,
2016
|
|
|
|
|
|
Accrued
legal
|
$218,676
|
$21,477
|
|
Accrued
consulting
|
134,360
|
13,105
|
|
Accrued
audit and tax
|
50,000
|
39,820
|
|
Accrued
interest
|
105,137
|
-
|
|
Accrued
license fees
|
823,842
|
205,444
|
|
Accrued
contract manufacturing
|
-
|
126,700
|
|
Accrued
contract research
|
100,000
|
16,800
|
|
Accrued
miscellaneous expenses
|
9,830
|
14,682
|
|
|
$1,441,845
|
$438,028
|
5.
CONVERTIBLE
NOTES PAYABLE
On
March 22, 2017, the Company issued senior secured convertible notes
payable (the “2017 Notes”) to existing investors and a
vendor in the aggregate principal amount of $3,125,000. The 2017
Notes accrued interest at 10% per annum and mature on the earlier
of (i) March 22, 2018 (the “Maturity Date”) or (ii)
upon a Change in Control of the Company, as defined
therein.
On May
31, 2017, the Company issued additional 2017 Notes to existing
investors and a vendor in the aggregate principal amount of
$2,375,000.
The
2017 Notes are convertible into common stock upon a Qualified
Financing (as defined therein), a Change in Control, or an optional
conversion by the holder. Conversion upon a Qualified Financing is
at a price per share equal to the price per share paid for the
shares sold in the Qualified Financing less a discount of: (i) 0%,
if a Qualified Financing occurs on or before June 30, 2017; (ii)
10%, if a Qualified Financing occurs after June 30, 2017 but on or
before September 1, 2017; or (iii) 20%, if a Qualified Financing
occurs after September 1, 2017. Conversion upon a Change in Control
is at the discretion of the holder such that the Company will pay
each holder the outstanding balance on their respective note or the
note is converted at a price per share equal to the lesser of
$16.57 and the price per share of common stock paid to the holders
of the common stock in such Change in Control. Conversion under an
optional conversion by the holder is at a price per share of $16.57
based on the outstanding balance of the note.
Upon
the issuance of the 2017 Notes, the Company evaluated all terms of
the 2017 Notes, including the Change in Control provision, to
identify any embedded features that required bifurcation and
recording as derivative instruments. The Company determined that
there were no such features requiring separate
accounting.
In
connection with the 2017 Notes, the Company incurred debt issuance
costs of $67,675 and recorded them as a debt discount. During the
six months ended June 30, 2017, the Company recognized $122,753 of
interest expense, which includes $17,615 in amortization of debt
discount and $105,138 of accrued interest on the 2017
Notes.
-8-
6.
COMMITMENTS
License Agreements
In
August 2016, the Company signed an agreement with the Greater Paris
University Hospitals AP-HP (via its Department of Clinical Research
and Development) granting the Company exclusive worldwide rights to
access and use data from a randomized controlled clinical study of
celiprolol. The Company will use this pivotal clinical data to
support a New Drug Application (“NDA”) regulatory
filing for its lead product, celiprolol, for the treatment of vEDS.
The agreement requires the Company to make certain upfront payments
to AP-HP, as well as reimburse certain costs, and make payments
upon achievement of defined milestones and payment of royalties on
net sales of celiprolol over the royalty term.
In
April 2014, the Company obtained exclusive rights to intellectual
property relating to ACER-001 and preclinical and clinical data,
through an exclusive license agreement with Baylor College of
Medicine (“BCM”). Under the terms of the agreement, as
amended, the Company has worldwide exclusive rights to develop,
manufacture, use, sell and import Licensed Products as defined in
the agreement. The license agreement requires the Company to make
certain upfront and annual payments to BCM, as well as reimburse
certain legal costs, and make payments upon achievement of defined
milestones and payment of royalties on net sales of any developed
product over the royalty term.
7.
STOCKHOLDERS’
EQUITY
Subscription Agreement
On June
30, 2017, the Company entered into a subscription agreement with
certain current shareholders of the Company and certain new
investors pursuant to which the purchasers agreed to purchase an
aggregate of 1,655,162 shares of the Company’s common stock
at a price per share of $9.47 for an aggregate consideration of
approximately $15.7 million immediately prior to the consummation
of the Merger, subject to specified conditions in the subscription
agreement.
8.
STOCK
INCENTIVE PLAN
The
Company’s 2013 Stock Incentive Plan, as amended (the
“Plan”), provides for the granting of up to 165,000
shares of common stock as incentive or non-qualified stock options
and/or restricted common stock to the Company’s employees,
officers, directors, consultants and advisers. Option awards are
generally granted with an exercise price equal to the fair value of
the common stock at the date of grant and have contractual terms of
10 years. A summary of option activity under the Plan for the six
months ended June 30, 2017 is as follows:
|
|
|
|
Weighted
|
|
|
|
Weighted
|
Average
|
|
|
|
Average
|
Remaining
|
|
|
Number
of
|
Exercise
|
Contractual
|
|
|
Shares
|
Price
|
Term
(Years)
|
|
|
|
|
|
|
Options outstanding at December 31, 2016
|
122,000
|
$2.55
|
|
|
|
|
|
|
|
Cancelled/forfeited
|
(5,625)
|
2.55
|
-
|
|
|
|
|
|
|
Options outstanding at
June 30, 2017
|
116,375
|
$2.55
|
7.79
|
|
|
|
|
|
|
Options exercisable at June 30, 2017
|
89,625
|
$2.55
|
7.79
|
At June
30, 2017, there was approximately $25,000 of unrecognized
compensation expense related to the share-based compensation
arrangements granted under the Plan and the average remaining
vesting period is 0.42 years.
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9.
NET
LOSS PER SHARE
Basic
net loss per share is computed by dividing the net loss by the
weighted-average number of common shares outstanding. Diluted net
loss per share is computed similarly to basic net loss per share
except that the denominator is increased to include the number of
additional common shares that would have been outstanding if the
potential common shares had been issued and if the additional
common shares were dilutive. Diluted net loss per share is the same
as basic net loss per common share, since the effects of
potentially dilutive securities are antidilutive.
As of
June 30, 2017 and 2016, the number of shares of common stock
underlying potentially dilutive securities include:
|
|
June 30,
|
|
|
|
2017
|
2016
|
|
|
|
|
|
Convertible
redeemable preferred stock
|
1,608,654
|
638,416
|
|
Convertible
promissory notes
|
331,925
|
-
|
|
Options
to purchase common stock
|
116,375
|
122,000
|
|
|
|
|
|
|
2,056,954
|
760,416
|
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