2016 Q1 Form 10-Q Financial Statement

#000119312516590536 Filed on May 13, 2016

View on sec.gov

Income Statement

Concept 2016 Q1 2015 Q1
Revenue $1.158M $807.0K
YoY Change 43.49% -20.88%
Cost Of Revenue
YoY Change
Gross Profit
YoY Change
Gross Profit Margin
Selling, General & Admin $2.300M $1.320M
YoY Change 74.24% 17.86%
% of Gross Profit
Research & Development $6.876M $4.503M
YoY Change 52.7% 34.02%
% of Gross Profit
Depreciation & Amortization $66.00K $62.00K
YoY Change 6.45% -52.31%
% of Gross Profit
Operating Expenses $9.177M $5.824M
YoY Change 57.57% 30.0%
Operating Profit -$8.019M -$5.017M
YoY Change 59.84%
Interest Expense $0.00 $201.0K
YoY Change -100.0%
% of Operating Profit
Other Income/Expense, Net $28.00K -$522.0K
YoY Change -105.36% 190.0%
Pretax Income -$7.990M -$5.740M
YoY Change 39.2% 57.26%
Income Tax $0.00 $0.00
% Of Pretax Income
Net Earnings -$7.991M -$5.740M
YoY Change 39.22% 57.26%
Net Earnings / Revenue -690.07% -711.28%
Basic Earnings Per Share -$14.68
Diluted Earnings Per Share -$14.80M -$14.68
COMMON SHARES
Basic Shares Outstanding 10.77M 533.1K
Diluted Shares Outstanding 533.1K

Balance Sheet

Concept 2016 Q1 2015 Q1
SHORT-TERM ASSETS
Cash & Short-Term Investments $49.80M $4.300M
YoY Change 1058.14%
Cash & Equivalents $49.81M $4.300M
Short-Term Investments
Other Short-Term Assets $824.0K $700.0K
YoY Change 17.71%
Inventory
Prepaid Expenses
Receivables $136.0K $2.300M
Other Receivables $0.00 $0.00
Total Short-Term Assets $50.77M $7.300M
YoY Change 595.44%
LONG-TERM ASSETS
Property, Plant & Equipment $524.0K $600.0K
YoY Change -12.67%
Goodwill
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $123.0K $600.0K
YoY Change -79.5%
Total Long-Term Assets $941.0K $1.200M
YoY Change -21.58%
TOTAL ASSETS
Total Short-Term Assets $50.77M $7.300M
Total Long-Term Assets $941.0K $1.200M
Total Assets $51.71M $8.500M
YoY Change 508.33%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $3.207M $900.0K
YoY Change 256.33%
Accrued Expenses $1.172M $2.300M
YoY Change -49.04%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00
YoY Change
Long-Term Debt Due
YoY Change
Total Short-Term Liabilities $8.594M $6.500M
YoY Change 32.22%
LONG-TERM LIABILITIES
Long-Term Debt $0.00 $10.50M
YoY Change -100.0%
Other Long-Term Liabilities $3.600M $5.000M
YoY Change -28.0%
Total Long-Term Liabilities $3.600M $15.50M
YoY Change -76.77%
TOTAL LIABILITIES
Total Short-Term Liabilities $8.594M $6.500M
Total Long-Term Liabilities $3.600M $15.50M
Total Liabilities $12.18M $22.00M
YoY Change -44.62%
SHAREHOLDERS EQUITY
Retained Earnings -$128.2M
YoY Change
Common Stock $20.00K
YoY Change
Preferred Stock
YoY Change
Treasury Stock (at cost)
YoY Change
Treasury Stock Shares
Shareholders Equity $39.53M -$13.50M
YoY Change
Total Liabilities & Shareholders Equity $51.71M $8.500M
YoY Change 508.33%

Cashflow Statement

Concept 2016 Q1 2015 Q1
OPERATING ACTIVITIES
Net Income -$7.991M -$5.740M
YoY Change 39.22% 57.26%
Depreciation, Depletion And Amortization $66.00K $62.00K
YoY Change 6.45% -52.31%
Cash From Operating Activities -$8.400M -$4.530M
YoY Change 85.43% 107.8%
INVESTING ACTIVITIES
Capital Expenditures $24.00K $7.000K
YoY Change 242.86% -117.5%
Acquisitions
YoY Change
Other Investing Activities
YoY Change
Cash From Investing Activities -$20.00K -$10.00K
YoY Change 100.0% -75.0%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities 44.38M 40.00K
YoY Change 110850.0% -99.19%
NET CHANGE
Cash From Operating Activities -8.400M -4.530M
Cash From Investing Activities -20.00K -10.00K
Cash From Financing Activities 44.38M 40.00K
Net Change In Cash 35.96M -4.500M
YoY Change -899.11% -266.05%
FREE CASH FLOW
Cash From Operating Activities -$8.400M -$4.530M
Capital Expenditures $24.00K $7.000K
Free Cash Flow -$8.424M -$4.537M
YoY Change 85.67% 112.01%

Facts In Submission

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<div> <table style="FONT-SIZE: 10pt; FONT-FAMILY: 'Times New Roman'; BORDER-COLLAPSE: collapse; TEXT-TRANSFORM: none; WORD-SPACING: 0px; WIDOWS: 1; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr> <td valign="top" width="4%" align="left"><b>1.</b></td> <td valign="top" align="left"><b>Nature of the Business</b></td> </tr> </table> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> Proteostasis Therapeutics, Inc. (the &#x201C;Company&#x201D;) was incorporated in Delaware on December&#xA0;13, 2006. The Company is an innovative biopharmaceutical company committed to the discovery and development of novel therapeutics that treat diseases caused by an imbalance in the proteostasis network, a set of pathways that control protein biosynthesis, folding, trafficking and clearance. The Company&#x2019;s initial therapeutic focus is on cystic fibrosis, which is caused by defects in the cystic fibrosis transmembrane conductance regulator (&#x201C;CFTR&#x201D;) protein and insufficient CFTR protein function. The Company&#x2019;s lead product candidate, PTI-428, is in early clinical development, and the Company&#x2019;s other drug candidates are in the discovery phase.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations and ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure and extensive compliance-reporting capabilities. Even if the Company&#x2019;s product development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The Company&#x2019;s financial statements have been prepared on the basis of continuity of operations, realization of assets, and the satisfaction of liabilities in the ordinary course of business. Through March&#xA0;31, 2016, the Company has primarily funded its operations with proceeds received from its initial public offering, proceeds from the sale of convertible preferred stock and, to a lesser extent, payments received in connection with collaboration agreements and research grants. The Company has incurred losses and negative cash flows from operations and had an accumulated deficit of $128,209 as of March&#xA0;31, 2016. The Company expects to continue to generate losses for the foreseeable future. As of March&#xA0;31, 2016, the Company expects that its cash of $49,807 will be sufficient to fund its operating expenses and capital expenditure requirements through at least March&#xA0;31, 2017. The future viability of the Company beyond that point is dependent on its ability to raise additional capital to finance its operations. Although the Company has been successful in raising capital in the past, there is no assurance that it will be successful in obtaining such additional financing on terms acceptable to the Company, if at all. If the Company is unable to obtain funding, the Company could be forced to delay, reduce or eliminate its research and development programs, product portfolio expansion or commercialization efforts, which could adversely affect its business prospects.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; WIDOWS: 1; MARGIN-TOP: 18pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px"> <b><i>Reverse Stock Split</i></b></p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> On January&#xA0;19, 2016, the Company effected a 1-for-10.8102 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company&#x2019;s Preferred Stock. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements and notes thereto have been adjusted retroactively, where applicable, to reflect this reverse stock split and adjustment of the preferred stock conversion ratios.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; WIDOWS: 1; MARGIN-TOP: 18pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px"> <b><i>Initial Public Offering</i></b></p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> In February 2016, the Company issued and sold 6,250,000 shares of its common stock in its initial public offering (&#x201C;IPO&#x201D;) at a public offering price of $8.00 per share, for net proceeds of $42,887 after deducting underwriting discounts and commissions of $3,500 and other offering expenses of $3,613. Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into an aggregate of 9,699,600 shares of common stock, and the Company issued 2,590,742 shares of common stock as payment of $36,016 of accruing dividends due to holders of Series A preferred stock. In addition, the Company&#x2019;s convertible preferred stock warrant outstanding at the close of the IPO converted to a warrant to purchase common stock.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> In connection with the completion of the IPO, the Company amended its certificate of incorporation to authorize the future issuance of up to 5,000,000 shares of undesignated preferred stock, par value $0.001 per share. As of March&#xA0;31, 2016, there were no shares of preferred stock issued or outstanding.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; MARGIN-LEFT: 62px; WIDOWS: 1; MARGIN-TOP: 18pt; LETTER-SPACING: normal; TEXT-INDENT: 0px; -webkit-text-stroke-width: 0px"> <b><i>Unaudited Interim Financial Information</i></b></p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 6pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The accompanying unaudited interim financial statements as of March&#xA0;31, 2016 and for the three months ended March&#xA0;31, 2016 and 2015 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (the &#x201C;SEC&#x201D;) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (&#x201C;GAAP&#x201D;) have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These interim financial statements should be read in conjunction with the Company&#x2019;s&#xA0;audited financial statements and the notes thereto for the year ended December&#xA0;31, 2015 included in the Company&#x2019;s&#xA0;Annual Report on Form 10-K filed with the SEC on March&#xA0;30, 2016.</p> <p style="MARGIN-BOTTOM: 0pt; WHITE-SPACE: normal; TEXT-TRANSFORM: none; WORD-SPACING: 0px; COLOR: rgb(0,0,0); FONT: 10pt 'Times New Roman'; WIDOWS: 1; MARGIN-TOP: 12pt; LETTER-SPACING: normal; TEXT-INDENT: 4%; -webkit-text-stroke-width: 0px"> The unaudited interim financial statements have been prepared on the same basis as the audited financial statements. In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments which are necessary for a fair statement of the Company&#x2019;s financial position as of March&#xA0;31, 2016 and results of operations and cash flows for the three months ended March&#xA0;31, 2016 and 2015. Such adjustments are of a normal and recurring nature. The results of operations for the three months ended March&#xA0;31, 2016 are not necessarily indicative of the results of operations that may be expected for the year ending December&#xA0;31, 2016.</p> </div>
CY2016Q1 us-gaap Net Cash Provided By Used In Operating Activities Continuing Operations
NetCashProvidedByUsedInOperatingActivitiesContinuingOperations
-8397000
CY2016Q1 us-gaap Fair Value Assumptions Expected Volatility Rate
FairValueAssumptionsExpectedVolatilityRate
0.769 pure
CY2016Q1 us-gaap Fair Value Assumptions Risk Free Interest Rate
FairValueAssumptionsRiskFreeInterestRate
0.0080 pure
CY2016Q1 dei Document Fiscal Year Focus
DocumentFiscalYearFocus
2016
CY2016Q1 dei Amendment Flag
AmendmentFlag
false
CY2016Q1 us-gaap Earnings Per Share Basic And Diluted
EarningsPerShareBasicAndDiluted
-0.87
CY2016Q1 us-gaap Antidilutive Securities Excluded From Computation Of Earnings Per Share Amount
AntidilutiveSecuritiesExcludedFromComputationOfEarningsPerShareAmount
1670653 shares
CY2016Q1 dei Document Type
DocumentType
10-Q
CY2016Q1 dei Entity Central Index Key
EntityCentralIndexKey
0001445283
CY2016Q1 dei Entity Filer Category
EntityFilerCategory
Non-accelerated Filer
CY2016Q1 dei Trading Symbol
TradingSymbol
PTI
CY2016Q1 us-gaap Weighted Average Number Of Share Outstanding Basic And Diluted
WeightedAverageNumberOfShareOutstandingBasicAndDiluted
10766722 shares
CY2016Q1 us-gaap Stockholders Equity Reverse Stock Split
StockholdersEquityReverseStockSplit
On January 19, 2016, the Company effected a 1-for-10.8102 reverse stock split of its issued and outstanding shares of common stock and a proportional adjustment to the existing conversion ratios for each series of the Company's Preferred Stock.
CY2016Q1 dei Current Fiscal Year End Date
CurrentFiscalYearEndDate
--12-31
CY2016Q1 dei Entity Registrant Name
EntityRegistrantName
PROTEOSTASIS THERAPEUTICS, INC.
CY2016Q1 dei Document Period End Date
DocumentPeriodEndDate
2016-03-31
CY2016Q1 us-gaap Use Of Estimates
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<div> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-LEFT: 4%; MARGIN-TOP: 6pt"> <b><i>Use of Estimates</i></b></p> <p style="MARGIN-BOTTOM: 0pt; FONT-SIZE: 10pt; FONT-FAMILY: Times New Roman; MARGIN-TOP: 6pt; TEXT-INDENT: 4%"> The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Significant estimates and assumptions reflected in these financial statements include, but are not limited to, revenue recognition, the accrual for research and development expenses and the valuation of common stock, preferred stock warrant liability and derivative liability. Estimates are periodically reviewed in light of changes in circumstances, facts and experience. Changes in estimates are recorded in the period in which they become known. Actual results could differ from those estimates.</p> </div>
CY2016Q1 us-gaap Payments To Acquire Property Plant And Equipment
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24000
CY2016Q1 us-gaap Net Income Loss
NetIncomeLoss
-7991000
CY2016Q1 us-gaap Stock Issued During Period Value Stock Options Exercised
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41000
CY2016Q1 us-gaap General And Administrative Expense
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2301000
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CY2016Q1 us-gaap Proceeds From Issuance Initial Public Offering
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46500000
CY2016Q1 us-gaap Increase Decrease In Accounts Payable
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CY2016Q1 us-gaap Net Income Loss Available To Common Stockholders Basic
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CY2016Q1 us-gaap Revenues
Revenues
1158000
CY2016Q1 us-gaap Adjustments To Additional Paid In Capital Sharebased Compensation Requisite Service Period Recognition Value
AdjustmentsToAdditionalPaidInCapitalSharebasedCompensationRequisiteServicePeriodRecognitionValue
308000
CY2016Q1 us-gaap Stock Issued During Period Value New Issues
StockIssuedDuringPeriodValueNewIssues
42887000
CY2016Q1 us-gaap Depreciation Depletion And Amortization
DepreciationDepletionAndAmortization
66000
CY2016Q1 pti Change In Fair Value Of Derivative Liability
ChangeInFairValueOfDerivativeLiability
55000
CY2016Q1 us-gaap Fair Value Net Derivative Asset Liability Measured On Recurring Basis Change In Unrealized Gain Loss
FairValueNetDerivativeAssetLiabilityMeasuredOnRecurringBasisChangeInUnrealizedGainLoss
55000
CY2016Q1 us-gaap Payments Of Stock Issuance Costs
PaymentsOfStockIssuanceCosts
2157000
CY2016Q1 us-gaap Operating Income Loss
OperatingIncomeLoss
-8019000
CY2016Q1 us-gaap Increase Decrease In Other Operating Assets
IncreaseDecreaseInOtherOperatingAssets
-21000
CY2016Q1 us-gaap Other Nonoperating Income Expense
OtherNonoperatingIncomeExpense
28000
CY2016Q1 us-gaap Adjustments To Additional Paid In Capital Warrant Issued
AdjustmentsToAdditionalPaidInCapitalWarrantIssued
28000
CY2016Q1 us-gaap Stock Issued During Period Value Conversion Of Convertible Securities
StockIssuedDuringPeriodValueConversionOfConvertibleSecurities
112292000
CY2016Q1 us-gaap Increase Decrease In Accounts Receivable
IncreaseDecreaseInAccountsReceivable
-782000
CY2016Q1 us-gaap Increase Decrease In Other Current Assets
IncreaseDecreaseInOtherCurrentAssets
644000
CY2016Q1 us-gaap Increase Decrease In Deferred Income Taxes
IncreaseDecreaseInDeferredIncomeTaxes
3000000
CY2016Q1 us-gaap Stock Issued During Period Value Share Based Compensation
StockIssuedDuringPeriodValueShareBasedCompensation
62000
CY2016Q1 us-gaap Income Tax Expense Benefit
IncomeTaxExpenseBenefit
0
CY2016Q1 us-gaap Share Based Compensation
ShareBasedCompensation
308000
CY2016Q1 us-gaap Temporary Equity Accretion To Redemption Value Adjustment
TemporaryEquityAccretionToRedemptionValueAdjustment
1378000
CY2016Q1 us-gaap Fair Value Adjustment Of Warrants
FairValueAdjustmentOfWarrants
-82000
CY2016Q1 us-gaap Increase Decrease In Deferred Revenue
IncreaseDecreaseInDeferredRevenue
-1021000
CY2016Q1 us-gaap Cash And Cash Equivalents Period Increase Decrease
CashAndCashEquivalentsPeriodIncreaseDecrease
35963000
CY2016Q1 us-gaap Operating Expenses
OperatingExpenses
9177000
CY2016Q1 us-gaap Net Cash Provided By Used In Investing Activities Continuing Operations
NetCashProvidedByUsedInInvestingActivitiesContinuingOperations
-24000
CY2016Q1 us-gaap Net Cash Provided By Used In Financing Activities Continuing Operations
NetCashProvidedByUsedInFinancingActivitiesContinuingOperations
44384000
CY2016Q1 us-gaap Research And Development Expense
ResearchAndDevelopmentExpense
6876000
CY2016Q1 us-gaap Increase Decrease In Accrued Liabilities
IncreaseDecreaseInAccruedLiabilities
-1806000
CY2016Q1 us-gaap Proceeds From Stock Options Exercised
ProceedsFromStockOptionsExercised
41000
CY2016Q1 us-gaap Allocated Share Based Compensation Expense
AllocatedShareBasedCompensationExpense
308000
CY2016Q1 pti Stockholders Equity Reverse Stock Split Effective Date
StockholdersEquityReverseStockSplitEffectiveDate
2016-01-19
CY2016Q1 pti Collaborative Arrangement Milestone Payment Expected
CollaborativeArrangementMilestonePaymentExpected
28520000
CY2016Q1 pti Stock Issued For Payment Of Accrued Dividends
StockIssuedForPaymentOfAccruedDividends
3000
CY2016Q1 pti Stock Issued For Payment Of Accrued Bonus
StockIssuedForPaymentOfAccruedBonus
62000
CY2016Q1 pti Conversion Of Preferred Stock Warrants Into Common Stock Warrants
ConversionOfPreferredStockWarrantsIntoCommonStockWarrants
28000
CY2016Q1 pti Prepaid Rent Expense
PrepaidRentExpense
42000
CY2016Q1 pti Discount Rate Used To Derive Present Value Of Future Milestone Payments
DiscountRateUsedToDerivePresentValueOfFutureMilestonePayments
0.25 pure
CY2016Q1 pti Probability Of Change In Control Assumed
ProbabilityOfChangeInControlAssumed
0.05 pure

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