0000950170-22-023525 | 10-Q | XBRL Viewer

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Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2022	Nov. 07, 2022
Cover [Abstract]
Entity Registrant Name	Clearside Biomedical, Inc.
Amendment Flag	false
Document Period End Date	Sep. 30, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3
Trading Symbol	CLSD
Document Type	10-Q
Entity Central Index Key	0001539029
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Interactive Data Current	Yes
Document Transition Report	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Security Exchange Name	NASDAQ
Entity Incorporation, State or Country Code	DE
Document Quarterly Report	true
Entity Common Stock, Shares Outstanding		60,190,731
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity File Number	001-37783
Entity Tax Identification Number	45-2437375
Entity Address, Address Line One	900 North Point Parkway
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Alpharetta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30005
City Area Code	678
Local Phone Number	270-3631

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Current assets:
Cash and cash equivalents	$ 53,381	$ 30,436
Accounts receivable	123	10,000
Prepaid expenses	1,047	921
Other current assets	311	779
Total current assets	54,862	42,136
Property and equipment, net	437	238
Operating lease right-of-use asset	226	369
Restricted cash	160	160
Total assets	55,685	42,903
Current liabilities:
Accounts payable	1,739	941
Accrued liabilities	2,945	3,312
Current portion of operating lease liabilities	407	387
Deferred revenue	113
Total current liabilities	5,204	4,640
Liability related to the sales of future royalties, net	31,935
Operating lease liabilities	0	288
Total liabilities	37,139	4,928
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.001 par value; 10,000,000 shares authorized and no shares issued at September 30, 2022 and December 31, 2021	0	0
Common stock, $0.001 par value; 200,000,000 and 100,000,000 shares authorized at September 30, 2022 and December 31, 2021, respectively; 60,190,731 and 59,722,930 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively	60	60
Additional paid-in capital	297,261	293,406
Accumulated deficit	(278,775)	(255,491)
Total stockholders’ equity	18,546	37,975
Total liabilities and stockholders’ equity	$ 55,685	$ 42,903

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value	$ 0.001	$ 0.001
Common stock, shares authorized	200,000,000	100,000,000
Common stock, shares, issued	60,190,731	59,722,930
Common stock, shares outstanding	60,190,731	59,722,930

Statements of Operations - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Statements of Operations - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Revenue	$ 266	$ 3,074	$ 997	$ 3,888
Type of Revenue [Extensible List]	us-gaap:LicenseMember	us-gaap:LicenseMember	us-gaap:LicenseMember	us-gaap:LicenseMember
Operating expenses:
Research and development	$ 4,637	$ 5,147	$ 14,603	$ 14,697
General and administrative	2,353	2,816	8,601	8,525
Total operating expenses	6,990	7,963	23,204	23,222
Loss from operations	(6,724)	(4,889)	(22,207)	(19,334)
Non-cash interest expense on liability related to the sales of future royalties	(1,297)	0	(1,297)	0
Other income	194	2	220	1,001
Net loss	$ (7,827)	$ (4,887)	$ (23,284)	$ (18,333)
Net loss per share of common stock basic	$ (0.13)	$ (0.08)	$ (0.39)	$ (0.32)
Net loss per share of common stock diluted	$ (0.13)	$ (0.08)	$ (0.39)	$ (0.32)
Weighted average shares outstanding basic	60,188,541	59,474,346	60,134,821	58,095,080
Weighted average shares outstanding diluted	60,188,541	59,474,346	60,134,821	58,095,080

Condensed Consolidated Statements of Stockholders Equity - USD ($)	Total	Common Stock	Additional Paid-In-Capital	Accumulated Deficit
Beginning balance at Dec. 31, 2020	$ 8,763,000	$ 52,000	$ 264,578,000	$ (255,867,000)
Beginning balance, shares at Dec. 31, 2020		51,860,941
Issuance of common shares under a direct registered offering	11,078,000	$ 4,000	11,074,000
Issuance of common shares under a direct registered offering, shares		4,209,050
Issuance of common shares under at-the-market sales agreement	3,249,000	$ 2,000	3,247,000
Issuance of common shares under at-the-market sales agreement, shares		1,186,579
Exercise of stock options	38,000		38,000
Exercise of stock options, shares		62,493
Vesting and settlement of restricted stock units		$ 227,754
Issuance of common shares under employee stock purchase plan	54,000		54,000
Issuance of common shares under employee stock purchase plan, shares		31,908
Share-based compensation expense	1,154,000		1,154,000
Net loss	(7,351,000)			(7,351,000)
Ending balance at Mar. 31, 2021	16,985,000	$ 58,000	280,145,000	(263,218,000)
Ending balance, shares at Mar. 31, 2021		57,578,725
Beginning balance at Dec. 31, 2020	8,763,000	$ 52,000	264,578,000	(255,867,000)
Beginning balance, shares at Dec. 31, 2020		51,860,941
Net loss	(18,333,000)
Ending balance at Sep. 30, 2021	17,848,000	$ 60,000	291,988,000	(274,200,000)
Ending balance, shares at Sep. 30, 2021		59,626,519
Beginning balance at Mar. 31, 2021	16,985,000	$ 58,000	280,145,000	(263,218,000)
Beginning balance, shares at Mar. 31, 2021		57,578,725
Issuance of common shares under at-the-market sales agreement	7,084,000	$ 1,000	7,083,000
Issuance of common shares under at-the-market sales agreement, shares		1,397,436
Exercise of stock options	33,000		33,000
Exercise of stock options, shares		21,673
Vesting and settlement of restricted stock units, shares		93,757
Share-based compensation expense	1,331,000		1,331,000
Net loss	(6,095,000)			(6,095,000)
Ending balance at Jun. 30, 2021	19,338,000	$ 59,000	288,592,000	(269,313,000)
Ending balance, shares at Jun. 30, 2021		59,091,591
Issuance of common shares under at-the-market sales agreement	1,875,000	$ 1,000	1,874,000
Issuance of common shares under at-the-market sales agreement, shares		307,404
Exercise of stock options	149,000		149,000
Exercise of stock options, shares		100,194
Vesting and settlement of restricted stock units, shares		93,757
Issuance of common shares under employee stock purchase plan	57,000		57,000
Issuance of common shares under employee stock purchase plan, shares		33,573
Share-based compensation expense	1,316,000		1,316,000
Net loss	(4,887,000)			(4,887,000)
Ending balance at Sep. 30, 2021	17,848,000	$ 60,000	291,988,000	(274,200,000)
Ending balance, shares at Sep. 30, 2021		59,626,519
Beginning balance at Dec. 31, 2021	37,975,000	$ 60,000	293,406,000	(255,491,000)
Beginning balance, shares at Dec. 31, 2021		59,722,930
Exercise of stock options	3,000		3,000
Exercise of stock options, shares		22,727
Vesting and settlement of restricted stock units, shares		375,331
Issuance of common shares under employee stock purchase plan	62,000		62,000
Issuance of common shares under employee stock purchase plan, shares		26,630
Share-based compensation expense	1,307,000		1,307,000
Net loss	(7,644,000)			(7,644,000)
Ending balance at Mar. 31, 2022	31,703,000	$ 60,000	294,778,000	(263,135,000)
Ending balance, shares at Mar. 31, 2022		60,147,618
Beginning balance at Dec. 31, 2021	37,975,000	$ 60,000	293,406,000	(255,491,000)
Beginning balance, shares at Dec. 31, 2021		59,722,930
Net loss	(23,284,000)
Ending balance at Sep. 30, 2022	18,546,000	$ 60,000	297,261,000	(278,775,000)
Ending balance, shares at Sep. 30, 2022		60,190,731
Beginning balance at Mar. 31, 2022	31,703,000	$ 60,000	294,778,000	(263,135,000)
Beginning balance, shares at Mar. 31, 2022		60,147,618
Exercise of stock options	4,000		4,000
Exercise of stock options, shares		2,824
Share-based compensation expense	1,354,000		1,354,000
Net loss	(7,813,000)			(7,813,000)
Ending balance at Jun. 30, 2022	25,248,000	$ 60,000	296,136,000	(270,948,000)
Ending balance, shares at Jun. 30, 2022		60,150,442
Issuance of common shares under employee stock purchase plan	51,000		51,000
Issuance of common shares under employee stock purchase plan, shares		40,289
Share-based compensation expense	1,074,000		1,074,000
Net loss	(7,827,000)			(7,827,000)
Ending balance at Sep. 30, 2022	$ 18,546,000	$ 60,000	$ 297,261,000	$ (278,775,000)
Ending balance, shares at Sep. 30, 2022		60,190,731

Statements of Cash Flows - USD ($) $ in Thousands	9 Months Ended
Statements of Cash Flows - USD ($) $ in Thousands	Sep. 30, 2022	Sep. 30, 2021
Operating activities
Net loss	$ (23,284)	$ (18,333)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense on liability related to the sales of future royalites	1,297
Depreciation	123	133
Share-based compensation expense	3,735	3,801
Gain on extinguishment of debt		(998)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	9,952	(475)
Other assets and liabilities	(125)	(115)
Accounts payable and accrued liabilities	431	200
Deferred revenue	113
Net cash used in operating activities	(7,758)	(15,787)
Investing activities
Acquisition of property and equipment	(155)
Net cash used in investing activities	(155)
Financing activities
Proceeds from royalty purchase and sale agreement, net of issuance costs	30,638
Proceeds from registered direct offering, net of issuance costs		11,078
Proceeds from at-the-market sales agreement, net of issuance costs		12,208
Proceeds from exercise of stock options	7	220
Proceeds from shares issued under employee stock purchase plan	113	111
Net cash provided by financing activities	30,758	23,617
Net increase (decrease) in cash, cash equivalents and restricted cash	22,845	7,830
Cash, cash equivalents and restricted cash, beginning of period	30,696	17,647
Cash, cash equivalents and restricted cash, end of period	53,541	25,477
Supplemental disclosure of noncash financing activities
Forgiveness of PPP Loan and accrued interest		998
Reconciliation of cash, cash equivalents and restricted cash
Cash and cash equivalents	53,381	25,217
Restricted cash (including $100 for each period recorded in other current assets)	160	260
Cash, cash equivalents and restricted cash at end of period	$ 53,541	$ 25,477

Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Statement of Cash Flows [Abstract]
Restricted Cash	$ 160	$ 260
Other Assets, Current	311	$ 100
Restricted Cash, Statement of Financial Position [Extensible Enumeration]		Other Assets, Current
Royalty Purchase And Sale Agreement Issuance Costs	$ 1,900

The Company

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The Company

1. The Company

Clearside Biomedical, Inc. (the “Company”) is a biopharmaceutical company focused on revolutionizing the delivery of therapies to the back of the eye through the suprachoroidal space (SCS®). Incorporated in the State of Delaware on May 26, 2011, the Company has its corporate headquarters in Alpharetta, Georgia.

The Company’s activities since inception have primarily consisted of developing product and technology rights, raising capital and performing research and development activities. The Company is subject to a number of risks and uncertainties similar to those of other life science companies at a similar stage of development, including, among others, the need to obtain adequate additional financing, successful development efforts including regulatory approval of products, compliance with government regulations, successful commercialization of potential products, protection of proprietary technology and dependence on key individuals.

Liquidity

The Company had cash and cash equivalents of $53.4 million as of September 30, 2022.

Historically, the Company has funded its operations primarily through the sale of common stock and convertible preferred stock, the issuance of long-term debt, and license agreements. On October 25, 2021, the Company announced that the U.S. Food and Drug Administration (the "FDA") approved XIPERE® (triamcinolone acetonide injectable suspension) for the treatment of macular edema associated with uveitis, a form of eye inflammation. In January 2022, the Company received $10.0 million from Bausch + Lomb, a division of Bausch Health Companies, Inc. ("Bausch"), upon completion of pre-launch activities for XIPERE pursuant to the license agreement granting Bausch an exclusive license to develop and commercialize XIPERE in the United States and Canada. Bausch launched XIPERE in the United States in the first quarter of 2022.

As further described in Note 5 to the financial statements on August 8, 2022, the Company entered into a Purchase and Sale Agreement (the "Purchase and Sale Agreement") pursuant to which it sold its rights to receive royalty and milestone payments due to the Company from XIPERE and certain SCS Microinjector license agreements subject to a cap which may be increased under certain circumstances. The Company received a payment of $32.1 million in September 2022, representing the $32.5 million to which the Company was entitled, net of certain of HCR's transaction-related expenses which the Company agreed to reimburse. There were additional issuance costs of $1.5 million related to the Purchase and Sale Agreement resulting in net proceeds of $30.6 million.

The Company has suffered recurring losses and negative cash flows from operations since inception and anticipates incurring additional losses until such time, if ever, that it can generate significant revenue. The Company has no current source of revenue to sustain present activities. The Company does not expect to generate other meaningful revenue until and unless the Company's licensees successfully commercialize XIPERE and the Company has fulfilled its obligations under the Purchase and Sale Agreement, its other licensees receive regulatory approval and successfully commercialize its product candidates, or the Company commercializes its product candidates either on its own or with a third party. In the absence of product or other revenues, the amount, timing, nature or source of which cannot be predicted, the Company’s losses will continue as it conducts its research and development activities.

The Company will continue to need to obtain additional financing to fund future operations, including completing the development, partnering and potential commercialization of its primary product candidates. The Company will need to obtain financing to complete the development and conduct clinical trials for the regulatory approval of its product candidates if requested by regulatory bodies. If such product candidates were to receive regulatory approval, the Company would need to obtain financing to prepare for the potential commercialization of its product candidates, if the Company decides to commercialize the products on its own.

Based on its cash and cash equivalents as of the filing date, November 9, 2022, its current plans and forecasted expenses the Company expects that it will be able to fund its planned operating expenses and capital expenditure requirements into 2024. The Company has based this estimate on assumptions that may prove to be wrong, and it could exhaust its capital resources sooner than expected. Until the Company can generate sufficient revenue, the Company will need to finance future cash needs through public or private equity offerings, license agreements, debt financings or restructurings, collaborations, strategic alliances and marketing or distribution arrangements.

Significant Accounting Policies	9 Months Ended
Significant Accounting Policies	Sep. 30, 2022
Accounting Policies [Abstract]
Significant Accounting Policies	2. Significant Accounting Policies Basis of Presentation and Principles of Consolidation The Company's consolidated financial statements include the results of the financial operations of Clearside Biomedical, Inc. and its wholly-owned subsidiary, Clearside Royalty, LLC. a Delaware limited liability company, which was formed for the purposes of the transactions contemplated by the Purchase and Sale Agreement describe in Note 5. The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position and results of operations for the interim periods presented. The results for the nine months ended September 30, 2022 are not indicative of results to be expected for the year ending December 31, 2022, any other interim periods or any future year or period. These unaudited financial statements should be read in conjunction with the audited financial statements and related footnotes, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenue recognition, the accounting for useful lives to calculate depreciation and amortization, clinical trial expense accruals, share-based compensation expense, income tax valuation allowance and the liability related to the sales of future royalties. Actual results could differ from these estimates. Effects of COVID-19 The COVID-19 pandemic continues to result in global economic uncertainty. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require us to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company's consolidated financial statements. Revenue Recognition The Company recognizes revenue from its contracts with customers under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The Company’s primary revenue arrangements are license agreements which typically include upfront payments, regulatory and commercial milestone payments and royalties based on future product sales. The arrangements may also include payments for the Company’s SCS Microinjector devices as well as payments for assistance and oversight of the customer’s use of the Company’s technology. In determining the amount of revenue to be recognized under these agreements, the Company performs the following steps: (i) identifies the promised goods and services to be transferred in the contract, (ii) identifies the performance obligations, (iii) determines the transaction price, (iv) allocates the transaction price to the performance obligations and (v) recognizes revenue as the performance obligations are satisfied. The Company receives payments from its customers based on billing schedules established in each contract. Upfront and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under the arrangement. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less. Research and Development Costs Research and development costs are charged to expense as incurred and include: • employee-related expenses, including salaries, benefits, travel and share-based compensation expense for research and development personnel; • expenses incurred under agreements with contract research organizations, contract manufacturing organizations and consultants that conduct preclinical studies and clinical trials; • costs associated with preclinical and clinical development activities; • costs associated with submitting regulatory approval applications for the Company’s product candidates; • costs associated with training physicians on the suprachoroidal injection procedure and educating and providing them with appropriate product candidate information; • costs associated with technology and intellectual property licenses; • costs for the Company’s research and development facility; and • depreciation expense for assets used in research and development activities. Costs for certain development activities, such as clinical trial activities, are recognized based on an evaluation of the estimated total costs for the clinical trial, progress to completion of specific tasks using data such as patient enrollment, pass through expenses, clinical site activations, data from the clinical sites or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual contracts and any subsequent amendments, which may differ from the patterns of costs incurred, and are reflected in the financial statements as prepaid or accrued expense. Share-Based Compensation Compensation cost related to share-based awards granted to employees, directors and consultants is measured based on the estimated fair value of the award at the grant date. The Company estimates the fair value of stock options using a Black-Scholes option pricing model. The fair value of restricted stock units granted is measured based on the market value of the Company’s common stock on the date of grant. Share-based compensation costs are expensed on a straight-line basis over the relevant vesting period. Compensation cost related to shares purchased through the Company’s employee stock purchase plan, which is considered compensatory, is based on the estimated fair value of the shares on the offering date, including consideration of the discount and the look back period. The Company estimates the fair value of the shares using a Black-Scholes option pricing model. Compensation expense is recognized over the six-month withholding period prior to the purchase date. All share-based compensation costs are recorded in general and administrative or research and development costs in the statements of operations based upon the recipient's underlying role within the Company. Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with an original term of three months or less at the date of purchase. Concentration of Credit Risk Arising From Cash Deposits in Excess of Insured Limits The Company maintains its cash in bank deposits that at times may exceed federally insured limits. The Company has not experienced any loss in such accounts. The Company believes it is not exposed to any significant risks with respect to its cash balances. Liability Related to the Sales of Future Royalties and Non-Cash Interest Expense The Company recognizes a liability related to the sales of future royalties under ASC 470-10 Debt and ASC 835-30 Interest - Imputation of Interest. The initial funds received by the Company pursuant to the terms of the Purchase and Sale Agreement were recorded as a liability and will be accreted under the effective interest method up to the estimated amount of future royalties and milestone payments to be made under the Purchase and Sale Agreement. The issuance costs were recorded as a direct deduction to the carrying amount of the liability and will be amortized under the effective interest method over the estimated period the liability will be repaid. The Company estimated the total amount of future royalty revenue and milestone payments to be generated over the life of the Purchase and Sale Agreement, and a significant increase or decrease in these estimates could materially impact the liability balance and the related interest expense. If the timing of the receipt of royalty payments or milestones is materially different from the original estimates, the Company will prospectively adjust the effective interest and the related amortization of the liability and related issuance costs.

Property and Equipment, Net

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

3. Property and Equipment, Net

Property and equipment, net consisted of the following (dollar amounts in thousands):


	Estimated Useful Lives (Years)	September 30, 2022			December 31, 2021
Furniture and fixtures	5	$	337		$	337
Machinery and equipment	5		343			176
Computer equipment	3		13			13
Leasehold improvements	Lesser of useful life or remaining lease term		667			667
Construction-in-process			155			—
			1,515			1,193
Less: Accumulated depreciation			(1,078	)		(955	)
		$	437		$	238

Accrued Liabilities

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Accrued Liabilities

4. Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	September 30,		December 31,
	2022		2021
Accrued research and development	$	1,453	$	1,083
Accrued employee costs		1,249		1,854
Accrued professional fees		43		30
Accrued expense		200		345
	$	2,945	$	3,312

Royalty Purchase and Sale Agreement

9 Months Ended

Sep. 30, 2022

Royalty Purchase and Sales Agreement [Abstract]

Royalty Purchase and Sale Agreement

5. Royalty Purchase and Sale Agreement

On August 8, 2022 (the “Closing Date”), the Company, through its wholly-owned subsidiary Clearside Royalty LLC, a Delaware limited liability company (“Royalty Sub”), entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with entities managed by HealthCare Royalty Management, LLC (“HCR”), pursuant to which Royalty Sub sold to HCR certain of its rights to receive royalty and milestone payments payable to Royalty Sub under the Arctic Vision License Agreement, the Bausch License Agreement, that certain License Agreement, effective as of July 3, 2019, by and between the Company and Aura Biosciences, Inc. (the “Aura License Agreement”), that certain Option and License Agreement, dated as of August 29, 2019, by and between REGENXBIO Inc. and the Company (the “REGENXBIO License Agreement”) and any and all out-license agreements following the Closing Date for, or related to XIPERE or the SCS Microinjector technology (to be used in connection with compounds or products of any third parties) delivered, in whole or in part, by means of the SCS Microinjector technology), excluding, for the avoidance of doubt, any in-licensed or internally developed therapies following the Closing Date (collectively, the “Royalties”), in exchange for up to $65 million. In connection with this transaction, the Company assigned the Arctic Vision License Agreement, Bausch License Agreement, Aura License Agreement, REGENXBIO License Agreement, the Company's license agreement with Emory University and The Georgia Tech Research Corporation and related intellectual property rights to Royalty Sub.

Under the terms of the Purchase and Sale Agreement, Royalty Sub received an initial payment of $32.1 million, representing the $32.5 million to which the Company was entitled, net of certain of HCR's transaction-related expenses which the Company agreed to reimburse. There were additional issuance costs of $1.5 million related to the Purchase and Sale Agreement resulting in net proceeds of $30.6 million. An additional $12.5 million was deposited by HCR in an escrow account to be released to Royalty Sub upon attainment of a pre-specified XIPERE sales milestone achieved no later than March 31, 2024 (the "First Milestone Event"). The terms of the Purchase and Sale Agreement also provide for an additional $20 million milestone payment to Royalty Sub upon attainment of a second pre-specified sales milestone related to 2024 XIPERE sales (the "Second Milestone Event").

The Purchase and Sale Agreement will automatically expire, and the payment of Royalties from the Royalty Sub to HCR will cease, when HCR has received payments of the Royalties equal to 2.5 times the aggregate amount of payments made by HCR under the Agreement if the Second Milestone Event is achieved on or prior to December 31, 2024 (the “Initial Cap”). If the Second Milestone Event is not achieved on or prior to December 31, 2024, payment of Royalties from Royalty Sub to HCR will cease when HCR has received Royalties payments equal to 3.4 times the aggregate amount of payments under the Purchase and Sale Agreement (the “Alternative Cap”, and together with the Initial Cap, the “Cap Amount”). In the event of a change in control, acquiror will have the option to make a payment to HCR of the Cap Amount then in effect, less the aggregate amount of Royalty payments made by

Royalty Sub to HCR under the Purchase and Sale Agreement as a one-time payment at which time, payment of Royalties to HCR will cease. Alternatively, in the event of a change in control, the acquiror will have the option to make an initial payment of 1.0 times the aggregate amount of payments made by HCR under the Purchase and Sale Agreement as of the date of such change in control, then in that event, payment of Royalties from Royalty Sub to HCR will cease when HCR has received total Royalties payments (including the initial payment) equal to the Alternative Cap. After the Purchase and Sale Agreement expires, all rights to receive the Royalties return to Royalty Sub.

Issuance costs pursuant to the Purchase and Sale Agreement consisting primarily of advisory and legal fees, totaled $1.9 million including the amount of HCR's transaction-related expenses that the Company reimbursed.

The following table summarizes the activity of the Purchase and Sale Agreement (in thousands):


Royalty purchase and sale agreement effective August 8, 2022	$	32,500
Issuance costs		(1,862	)
Non-cash interest expense		1,297
Balance at September 30, 2022	$	31,935

Effective interest rate		26.5	%

CARES Act Paycheck Protection Program Loan

9 Months Ended

Sep. 30, 2022

Unusual or Infrequent Items, or Both [Abstract]

CARES Act Paycheck Protection Program Loan

6. CARES Act Paycheck Protection Program Loan

On April 20, 2020, the Company entered into a loan agreement with Silicon Valley Bank (the “PPP Lender”) under the terms of which the PPP Lender made a loan to the Company in an aggregate principal amount of $1.0 million (the “PPP Loan”) pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is evidenced by a promissory note (the “Note”) containing the terms and conditions for repayment of the PPP Loan.

Under the terms of the Note and the PPP Loan, interest accrued on the outstanding principal amount at the rate of 1.0% per annum. The term of the Note was until April 2022, with the Company obligated to make equal monthly payments of principal and interest, beginning in November 2020 and continuing until the maturity date.

The CARES Act and the PPP provide a mechanism for forgiveness of up to the full amount borrowed. On January 11, 2021, the Company was notified by the PPP Lender that the PPP Loan had been forgiven in full, including approximately $7,000 of accrued interest. In accordance with ASC 405-20, Extinguishment of Liabilities, the income from the forgiveness of the amount borrowed and the accrued interest was recognized in the consolidated statement of operations in other income as a gain on extinguishment of debt.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
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-Name Accounting Standards Codification
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-Name Accounting Standards Codification
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+ Details

Common Stock

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Common Stock

7. Common Stock

At the Company's Annual Meeting of Stockholders held on June 22, 2022, the Company's stockholders approved an amendment to the amended and restated certificate of incorporation to increase the Company's authorized number of shares of common stock from 100,000,000 shares to 200,000,000 shares. As of September 30, 2022 the Company was authorized to issue 200,000,000 shares of $0.001 par value common stock. As of September 30, 2022 and December 31, 2021, there were 60,190,731 and 59,722,930 shares of common stock outstanding, respectively.

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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+ Details

Stock Purchase Warrants

9 Months Ended

Sep. 30, 2022

Stock Purchase Warrants [Abstract]

Stock Purchase Warrants

8. Stock Purchase Warrants

In September 2016, in connection with a loan agreement, the Company issued warrants to purchase up to 29,796 shares of common stock at a price per share of $10.74. The warrants expire in September 2026, or earlier upon the occurrence of specified mergers or acquisitions of the Company, and are immediately exercisable. The warrants were recorded in equity and had a weighted average remaining life of 4.0 years as of September 30, 2022.

Share-Based Compensation

9 Months Ended

Sep. 30, 2022

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

9. Share-Based Compensation

Share-based compensation is accounted for in accordance with the provisions of ASC 718, Compensation-Stock Compensation.

Stock Options

The Company has granted stock option awards to employees, directors and consultants from its 2011 Stock Incentive Plan (the "2011 Plan") and its 2016 Equity Incentive Plan (the “2016 Plan”). The estimated fair value of options granted is determined as of the date of grant using the Black-Scholes option pricing model. The resulting fair value is recognized ratably over the requisite service period, which is generally the vesting period of the awards.

Share-based compensation expense for options granted under the 2016 Plan is reflected in the consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	431	$	391	$	1,245	$	1,182
General and administrative		327		525		1,381		1,461
Total	$	758	$	916	$	2,626	$	2,643

The following table summarizes the activity under the 2011 Plan and the 2016 Plan related to stock options during the nine months ended September 30, 2022:


				Weighted
	Number of			Average
	Shares			Exercise Price
Options outstanding at December 31, 2021		5,762,328		$	4.07
Granted		1,734,440			2.00
Exercised		(25,551	)		0.31
Forfeited		(252,612	)		2.78
Options outstanding at September 30, 2022		7,218,605			3.63

Options exercisable at December 31, 2021		3,148,502			4.59

Options exercisable at September 30, 2022		4,369,653			4.28

As of September 30, 2022, the Company had $5.1 million of unrecognized compensation expense related to unvested stock options issued under the 2016 Plan, which is expected to be recognized over a weighted average period of 2.5 years.

Restricted Stock Units

The Company has granted restricted stock units (“RSUs”) to employees from the 2016 Plan. The shares underlying the RSU awards have vesting terms of four years from the date of grant subject to the employees’ continuous service and subject to accelerated vesting in specified circumstances. The fair value of the RSUs granted is measured based on the market value of the Company’s common stock on the date of grant and is recognized ratably over the requisite service period, which is generally the vesting period of the awards.

The total share-based compensation expense related to RSUs is reflected in the consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	186	$	194	$	592	$	561
General and administrative		123		190		494		552
Total	$	309	$	384	$	1,086	$	1,113

The following table summarizes the activity related to RSUs during the nine months ended September 30, 2022:


				Weighted Average
	Number of			Grant Date
	Shares			Fair Value
Non-vested RSUs outstanding at December 31, 2021		1,317,347		$	3.58
Granted		648,460			2.19
Vested		(375,331	)		3.44
Forfeited		(127,544	)		3.04
Non-vested RSUs outstanding at September 30, 2022		1,462,932			3.04

As of September 30, 2022, the Company had $3.4 million of unrecognized compensation expense related to the RSUs which is expected to be recognized over a weighted average period of 2.5 years.

Employee Stock Purchase Plan

The 2016 Employee Stock Purchase Plan (the “2016 ESPP”) became effective on June 1, 2016. The 2016 ESPP is considered a compensatory plan and the fair value of the discount and the look-back period are estimated using the Black-Scholes option pricing model and expense is recognized over the six-month withholding period prior to the purchase date.

The share-based compensation expense recognized for the 2016 ESPP is reflected in the consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	5	$	12	$	15	$	29
General and administrative		2		4		8		16
Total	$	7	$	16	$	23	$	45

During the nine months ended September 30, 2022, the Company issued 66,919 shares of common stock purchased under the 2016 ESPP.

Commitment and Contingencies

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

10. Commitments and Contingencies

Lease Commitment Summary

In November 2016, the Company signed an office lease agreement to lease approximately 20,000 square feet of office space in Alpharetta, Georgia for its corporate headquarters. The lease agreement is for a 6.5 year term with a renewal option for one additional five-year term. Rental payments are $35,145 per month subject to an increase of 3% per year. Rent expense under this lease is recognized on a straight-line basis over the term of the lease. In addition, the lease agreement requires payment of the pro-rata share of the annual operating expenses associated with the premises.

The Company’s operating leases included on the consolidated balance sheet are as follows (in thousands):


	September 30, 2022
Operating lease right-of-use asset	$	226

Liabilities
Current portion of operating lease liabilities	$	407
Operating lease liabilities		—
Total operating lease liabilities	$	407

The Company recognizes a right-of-use asset for the right to use the underlying asset for the lease term, and a lease liability, which represents the present value of the Company’s obligation to make payments over the lease term. The renewal option is not included in the calculation of the right-of-use asset and the lease liabilities as the Company is renewing the current lease on to-be-determined terms. The present value of the lease payments is calculated using an incremental borrowing rate as the Company’s leases do not provide an implicit interest rate. At September 30, 2022, the Company’s weighted average discount rate was 11.0% and the weighted average lease term was 1.0 years.

Minimum lease payments were as follows at September 30, 2022 (in thousands):


Year Ending December 31,
2022		103
2023		316
Total minimum lease payments		419
Less imputed interest		(12	)
Total operating lease liabilities	$	407

Equipment leases with an initial term of 12 months or less are not recorded with operating lease liabilities. The Company recognizes expense for these leases on a straight-line basis over the lease term. The equipment leases were deemed to be immaterial.

Operating lease cost was $62,000 for each of the three months ended September 30, 2022 and 2021, and $185,000 for each of the nine months ended September 30, 2022 and 2021. Variable lease cost was $24,000 for each of the three months ended September 30, 2022 and 2021, and $71,000 for each of the nine months ended September 30, 2022 and 2021. Short-term lease cost was $21,000 and $2,000 for the three months ended September 30, 2022 and 2021, respectively, and $64,000 and $6,000 for the nine months ended

September 30, 2022 and 2021, respectively. Cash payments included in operating activities on the statement of cash flows for operating lease liabilities were $305,000 and $293,000 for the nine months ended September 30, 2022 and 2021, respectively.

Contract Service Providers

In the course of the Company’s normal business operations, it has agreements with contract service providers to assist in the performance of its research and development, clinical research and manufacturing. Substantially all of these contracts are on an as needed basis.

License and Other Agreements

9 Months Ended

Sep. 30, 2022

License And Other Agreement [Abstract]

License and Other Agreements

11. License and Other Agreements

Bausch + Lomb

On October 22, 2019, the Company entered into a License Agreement (as amended, the "Bausch License Agreement”) with Bausch. Pursuant to the Bausch License Agreement, the Company has granted an exclusive license to Bausch to develop, manufacture, distribute, promote, market and commercialize XIPERE using the Company’s proprietary SCS Microinjector (the “Device”), as well as specified other steroids, corticosteroids and NSAIDs in combination with the Device (“Other Products,” and together with XIPERE, the “Products”), subject to specified exceptions, in the United States and Canada (the “Territory”) for the treatment of ophthalmology indications, including non-infectious uveitis.

Pursuant to the Bausch License Agreement, Bausch paid the Company an upfront payment of $5.0 million in October 2019. In October 2021, the FDA approved XIPERE. The Company received $5.0 million from Bausch as a result of the approval. In December 2021, $10.0 million was recorded upon completion of pre-launch activities for XIPERE and payment was received in January 2022. In addition, Bausch has agreed to pay up to an aggregate of $55.0 million in additional milestone payments upon the achievement of (i) specified regulatory approvals for specified additional indications of XIPERE and (ii) specified levels of annual net sales (as defined in the Bausch License Agreement). Further, during the applicable royalty term, the Company will also be entitled to receive tiered royalties at increasing percentages, from the high-teens to twenty percent, based on XIPERE achieving certain annual net sales thresholds in the Territory, in each case subject to reductions in specified circumstances; provided that the Company will not receive any royalties on the first $45.0 million of cumulative net sales of all products in the Territory. Bausch launched XIPERE in the United States in the first quarter of 2022. The Company's rights to these royalties and milestone payments have been sold pursuant to the terms and conditions of the Purchase and Sale Agreement described in Note 5 to the consolidated financial statements.

Arctic Vision (Hong Kong) Limited

On March 10, 2020, the Company entered into a License Agreement (the “Arctic Vision License Agreement”) with Arctic Vision (Hong Kong) Limited (“Arctic Vision”). Pursuant to the Arctic Vision License Agreement, the Company has granted an exclusive license to Arctic Vision to develop, distribute, promote, market and commercialize XIPERE, subject to specified exceptions, in China, Hong Kong, Macau, Taiwan and South Korea (the “Arctic Territory”). Under the terms of the Arctic Vision License Agreement, neither party may commercialize XIPERE in the other party’s territory. Arctic Vision has agreed to use commercially reasonably efforts to pursue development and commercialization of XIPERE for indications associated with uveitis in the Arctic Territory. In addition, upon receipt of the Company’s consent, Arctic Vision will have the right, but not the obligation, to develop and commercialize XIPERE for additional indications in the Arctic Territory.

Pursuant to the Arctic Vision License Agreement, Arctic Vision paid the Company an upfront payment of $4.0 million in March 2020. In December 2021, the Company received a milestone payment of $4.0 million following the receipt of FDA approval of XIPERE in the United States. In addition, Arctic Vision has agreed to pay the Company up to $22.5 million in development and sales milestones. Further, during the applicable royalty term, the Company will also be entitled to receive tiered royalties of ten to twelve percent of net sales based on achieving certain annual net sales thresholds in the Territory, subject to customary reductions, payable on a product-by-product and country-by-country basis, commencing at launch in such country and lasting until the latest of (i) the date that all valid claims within the licensed patent rights covering XIPERE have expired, (ii) the date of the loss of marketing or regulatory exclusivity of XIPERE in a given country, or (iii) ten years from the first commercial sale of XIPERE in a given country. The Company's rights to these royalties and milestone payments have been sold pursuant to the terms and conditions of the Purchase and Sale Agreement described in Note 5 to the consolidated financial statements.

In August 2021, the Company entered into an amendment to the Arctic Vision License Agreement to expand the territories covered by the license to include India and the ASEAN Countries (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam). In September 2021, the Company entered into a second amendment to the Arctic Vision License Agreement to expand the Arctic Territory to include Australia and New Zealand. The Company received an aggregate of $3.0 million in consideration for the expansion of the Arctic Territory.

Other

The Company periodically enters into short-term agreements with other customers to evaluate the potential use of its proprietary SCS Microinjector with third-party product candidates for the treatment of various diseases. Funds received from these agreements are recognized as revenue over the term of the agreement.

Fair Value Measurements

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value Measurements

12. Fair Value Measurements

The Company’s material financial instruments at September 30, 2022 and December 31, 2021 consisted primarily of cash and cash equivalents. The fair values of cash and cash equivalents, other current assets and accounts payable approximate their respective carrying values due to the short term nature of these instruments and are classified as Level 1 in the fair value hierarchy.

There were no transfers between Levels 1, 2 and 3 during the nine months ended September 30, 2022 and the year ended December 31, 2021.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Net Loss per Share

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Net Loss Per Share

13. Net Loss Per Share

Basic net loss per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding for the period, without consideration of the dilutive effect of potential common stock equivalents. Diluted net loss per share gives effect to all dilutive potential shares of common stock outstanding during this period. For all periods presented, the Company’s potential common stock equivalents, which included stock options, restricted stock units and stock purchase warrants, have been excluded from the computation of diluted net loss per share as their inclusion would have the effect of reducing the net loss per share. Therefore, the denominator used to calculate both basic and diluted net loss per share is the same in all periods presented. The Company’s potential common stock equivalents that have been excluded from the computation of diluted net loss per share for all periods presented because of their antidilutive effect consisted of the following:


	Three and Nine Months Ended September 30,
	2022		2021
Outstanding stock options		7,218,605		5,858,739
Non-vested restricted stock units		1,462,932		1,317,347
Stock purchase warrants		29,796		29,796
		8,711,333		7,205,882

Significant Accounting Policies (Policies)	9 Months Ended
Significant Accounting Policies (Policies)	Sep. 30, 2022
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation and Principles of Consolidation The Company's consolidated financial statements include the results of the financial operations of Clearside Biomedical, Inc. and its wholly-owned subsidiary, Clearside Royalty, LLC. a Delaware limited liability company, which was formed for the purposes of the transactions contemplated by the Purchase and Sale Agreement describe in Note 5. The Company’s consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). In the opinion of management, the Company has made all necessary adjustments, which include normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position and results of operations for the interim periods presented. The results for the nine months ended September 30, 2022 are not indicative of results to be expected for the year ending December 31, 2022, any other interim periods or any future year or period. These unaudited financial statements should be read in conjunction with the audited financial statements and related footnotes, which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021.
Use of Estimates	Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of income and expenses during the reporting periods. Significant items subject to such estimates and assumptions include revenue recognition, the accounting for useful lives to calculate depreciation and amortization, clinical trial expense accruals, share-based compensation expense, income tax valuation allowance and the liability related to the sales of future royalties. Actual results could differ from these estimates.
Effects of COVID-19	Effects of COVID-19 The COVID-19 pandemic continues to result in global economic uncertainty. Estimates and assumptions about future events and their effects cannot be determined with certainty and therefore require the exercise of judgment. As of the date of issuance of these financial statements, the Company is not aware of any specific event or circumstance that would require us to update its estimates, assumptions and judgments or revise the carrying value of its assets or liabilities. These estimates may change as new events occur and additional information is obtained and are recognized in the consolidated financial statements as soon as they become known. Actual results could differ from those estimates and any such differences may be material to the Company's consolidated financial statements.
Revenue Recognition	Revenue Recognition The Company recognizes revenue from its contracts with customers under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC Topic 606”). The Company’s primary revenue arrangements are license agreements which typically include upfront payments, regulatory and commercial milestone payments and royalties based on future product sales. The arrangements may also include payments for the Company’s SCS Microinjector devices as well as payments for assistance and oversight of the customer’s use of the Company’s technology. In determining the amount of revenue to be recognized under these agreements, the Company performs the following steps: (i) identifies the promised goods and services to be transferred in the contract, (ii) identifies the performance obligations, (iii) determines the transaction price, (iv) allocates the transaction price to the performance obligations and (v) recognizes revenue as the performance obligations are satisfied. The Company receives payments from its customers based on billing schedules established in each contract. Upfront and other payments may require deferral of revenue recognition to a future period until the Company performs its obligations under the arrangement. Amounts are recorded as accounts receivable when the Company’s right to consideration is unconditional. The Company does not assess whether a contract has a significant financing component if the expectation at contract inception is such that the period between payment by the customer and the transfer of the promised goods or services to the customer will be one year or less.
Research and Development Costs	Research and Development Costs Research and development costs are charged to expense as incurred and include: • employee-related expenses, including salaries, benefits, travel and share-based compensation expense for research and development personnel; • expenses incurred under agreements with contract research organizations, contract manufacturing organizations and consultants that conduct preclinical studies and clinical trials; • costs associated with preclinical and clinical development activities; • costs associated with submitting regulatory approval applications for the Company’s product candidates; • costs associated with training physicians on the suprachoroidal injection procedure and educating and providing them with appropriate product candidate information; • costs associated with technology and intellectual property licenses; • costs for the Company’s research and development facility; and • depreciation expense for assets used in research and development activities. Costs for certain development activities, such as clinical trial activities, are recognized based on an evaluation of the estimated total costs for the clinical trial, progress to completion of specific tasks using data such as patient enrollment, pass through expenses, clinical site activations, data from the clinical sites or information provided to the Company by its vendors on their actual costs incurred. Payments for these activities are based on the terms of the individual contracts and any subsequent amendments, which may differ from the patterns of costs incurred, and are reflected in the financial statements as prepaid or accrued expense.
Share-Based Compensation	Share-Based Compensation Compensation cost related to share-based awards granted to employees, directors and consultants is measured based on the estimated fair value of the award at the grant date. The Company estimates the fair value of stock options using a Black-Scholes option pricing model. The fair value of restricted stock units granted is measured based on the market value of the Company’s common stock on the date of grant. Share-based compensation costs are expensed on a straight-line basis over the relevant vesting period. Compensation cost related to shares purchased through the Company’s employee stock purchase plan, which is considered compensatory, is based on the estimated fair value of the shares on the offering date, including consideration of the discount and the look back period. The Company estimates the fair value of the shares using a Black-Scholes option pricing model. Compensation expense is recognized over the six-month withholding period prior to the purchase date. All share-based compensation costs are recorded in general and administrative or research and development costs in the statements of operations based upon the recipient's underlying role within the Company.
Cash Equivalents	Cash Equivalents Cash equivalents consist of short-term, highly liquid investments with an original term of three months or less at the date of purchase.
Concentration of Credit Risk Arising From Cash Deposits in Excess of Insured Limits	Concentration of Credit Risk Arising From Cash Deposits in Excess of Insured Limits The Company maintains its cash in bank deposits that at times may exceed federally insured limits. The Company has not experienced any loss in such accounts. The Company believes it is not exposed to any significant risks with respect to its cash balances.
Liability Related to the Sales of Future Royalties and Non-Cash Interest Expense	Liability Related to the Sales of Future Royalties and Non-Cash Interest Expense The Company recognizes a liability related to the sales of future royalties under ASC 470-10 Debt and ASC 835-30 Interest - Imputation of Interest. The initial funds received by the Company pursuant to the terms of the Purchase and Sale Agreement were recorded as a liability and will be accreted under the effective interest method up to the estimated amount of future royalties and milestone payments to be made under the Purchase and Sale Agreement. The issuance costs were recorded as a direct deduction to the carrying amount of the liability and will be amortized under the effective interest method over the estimated period the liability will be repaid. The Company estimated the total amount of future royalty revenue and milestone payments to be generated over the life of the Purchase and Sale Agreement, and a significant increase or decrease in these estimates could materially impact the liability balance and the related interest expense. If the timing of the receipt of royalty payments or milestones is materially different from the original estimates, the Company will prospectively adjust the effective interest and the related amortization of the liability and related issuance costs.

Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2022

Property, Plant and Equipment [Abstract]

Schedule of Property and Equipment, Net

Property and equipment, net consisted of the following (dollar amounts in thousands):


	Estimated Useful Lives (Years)	September 30, 2022			December 31, 2021
Furniture and fixtures	5	$	337		$	337
Machinery and equipment	5		343			176
Computer equipment	3		13			13
Leasehold improvements	Lesser of useful life or remaining lease term		667			667
Construction-in-process			155			—
			1,515			1,193
Less: Accumulated depreciation			(1,078	)		(955	)
		$	437		$	238

Accrued Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Payables and Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued liabilities consisted of the following (in thousands):


	September 30,		December 31,
	2022		2021
Accrued research and development	$	1,453	$	1,083
Accrued employee costs		1,249		1,854
Accrued professional fees		43		30
Accrued expense		200		345
	$	2,945	$	3,312

Royalty Purchase and Sale Agreement (Tables)

9 Months Ended

Sep. 30, 2022

Royalty Purchase and Sales Agreement [Abstract]

Schedule of activity of the royalty obligation

The following table summarizes the activity of the Purchase and Sale Agreement (in thousands):


Royalty purchase and sale agreement effective August 8, 2022	$	32,500
Issuance costs		(1,862	)
Non-cash interest expense		1,297
Balance at September 30, 2022	$	31,935

Effective interest rate		26.5	%

Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2022

Summary of Share-based Compensation Expense

Share-based compensation expense for options granted under the 2016 Plan is reflected in the consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	431	$	391	$	1,245	$	1,182
General and administrative		327		525		1,381		1,461
Total	$	758	$	916	$	2,626	$	2,643

Summary of Activity Related to Stock Options

The following table summarizes the activity under the 2011 Plan and the 2016 Plan related to stock options during the nine months ended September 30, 2022:


				Weighted
	Number of			Average
	Shares			Exercise Price
Options outstanding at December 31, 2021		5,762,328		$	4.07
Granted		1,734,440			2.00
Exercised		(25,551	)		0.31
Forfeited		(252,612	)		2.78
Options outstanding at September 30, 2022		7,218,605			3.63

Options exercisable at December 31, 2021		3,148,502			4.59

Options exercisable at September 30, 2022		4,369,653			4.28

Restricted Stock Units (RSUs)

Summary of Share-based Compensation Expense

The total share-based compensation expense related to RSUs is reflected in the consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	186	$	194	$	592	$	561
General and administrative		123		190		494		552
Total	$	309	$	384	$	1,086	$	1,113

Summary of the Activity Related to RSUs

The following table summarizes the activity related to RSUs during the nine months ended September 30, 2022:


				Weighted Average
	Number of			Grant Date
	Shares			Fair Value
Non-vested RSUs outstanding at December 31, 2021		1,317,347		$	3.58
Granted		648,460			2.19
Vested		(375,331	)		3.44
Forfeited		(127,544	)		3.04
Non-vested RSUs outstanding at September 30, 2022		1,462,932			3.04

2016 Employee Stock Purchase Plan

Summary of Share-based Compensation Expense

The share-based compensation expense recognized for the 2016 ESPP is reflected in the consolidated statements of operations as follows (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Research and development	$	5	$	12	$	15	$	29
General and administrative		2		4		8		16
Total	$	7	$	16	$	23	$	45

Commitment and Contingencies (Tables)

9 Months Ended

Sep. 30, 2022

Commitments and Contingencies Disclosure [Abstract]

Operating Leases Included on the Balance Sheet

The Company’s operating leases included on the consolidated balance sheet are as follows (in thousands):


	September 30, 2022
Operating lease right-of-use asset	$	226

Liabilities
Current portion of operating lease liabilities	$	407
Operating lease liabilities		—
Total operating lease liabilities	$	407

Future Minimum Commitments Due Under Non-Cancelable Operating Leases

Minimum lease payments were as follows at September 30, 2022 (in thousands):


Year Ending December 31,
2022		103
2023		316
Total minimum lease payments		419
Less imputed interest		(12	)
Total operating lease liabilities	$	407

Net Loss per Share (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Potential Common Stock Equivalents Excluded from Computation of Diluted Net Loss per Share

The Company’s potential common stock equivalents that have been excluded from the computation of diluted net loss per share for all periods presented because of their antidilutive effect consisted of the following:


	Three and Nine Months Ended September 30,
	2022		2021
Outstanding stock options		7,218,605		5,858,739
Non-vested restricted stock units		1,462,932		1,317,347
Stock purchase warrants		29,796		29,796
		8,711,333		7,205,882

The Company - Additional Information (Details) - USD ($) $ in Thousands		9 Months Ended
	Oct. 25, 2021	Sep. 30, 2022	Sep. 30, 2021	Dec. 31, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Entity incorporation date		May 26, 2011
Cash and cash equivalents		$ 53,381	$ 25,217	$ 30,436
Initial payment		32,100
Initial proceeds from royalty purchase and sale agreement		32,500
Proceeds from royalty purchase and sale agreement		(30,638)
Issuance costs		1,862
Royalty Purchase and Sale Agreement
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Proceeds from royalty purchase and sale agreement		30,600
Issuance costs		$ 1,500
Bausch Health Ireland Limited
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Aggregate milestone payments from the licensees	$ 10,000

Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Property Plant And Equipment [Line Items]
Property and Equipment, gross	$ 1,515	$ 1,193
Less: Accumulated depreciation	(1,078)	(955)
Property and equipment, net	437	238
Furniture and Fixtures
Property Plant And Equipment [Line Items]
Property and Equipment, gross	$ 337	337
Estimated Useful Lives (Years)	5 years
Machinery and Equipment
Property Plant And Equipment [Line Items]
Property and Equipment, gross	$ 343	176
Estimated Useful Lives (Years)	5 years
Computer Equipment
Property Plant And Equipment [Line Items]
Property and Equipment, gross	$ 13	13
Estimated Useful Lives (Years)	3 years
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property and Equipment, gross	$ 667	667
Estimated Useful Lives (Years)	Lesser of useful life or remaining lease term
Construction-in-process
Property Plant And Equipment [Line Items]
Property and Equipment, gross	$ 155	$ 0

Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Payables and Accruals [Abstract]
Accrued research and development	$ 1,453	$ 1,083
Accrued employee costs	1,249	1,854
Accrued professional fees	43	30
Accrued expense	200	345
Accrued liabilities, current	$ 2,945	$ 3,312

Royalty Purchase and Sale Agreement - Additional Information (Details) - USD ($) $ in Thousands		9 Months Ended
	Aug. 08, 2022	Sep. 30, 2022	Sep. 30, 2021
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Initial proceeds from royalty purchase and sales agreement		$ 32,500
Purchase and sale agreement description		The Purchase and Sale Agreement will automatically expire, and the payment of Royalties from the Royalty Sub to HCR will cease, when HCR has received payments of the Royalties equal to 2.5 times the aggregate amount of payments made by HCR under the Agreement if the Second Milestone Event is achieved on or prior to December 31, 2024 (the “Initial Cap”). If the Second Milestone Event is not achieved on or prior to December 31, 2024, payment of Royalties from Royalty Sub to HCR will cease when HCR has received Royalties payments equal to 3.4 times the aggregate amount of payments under the Purchase and Sale Agreement (the “Alternative Cap”, and together with the Initial Cap, the “Cap Amount”). In the event of a change in control, acquiror will have the option to make a payment to HCR of the Cap Amount then in effect, less the aggregate amount of Royalty payments made by Royalty Sub to HCR under the Purchase and Sale Agreement as a one-time payment at which time, payment of Royalties to HCR will cease. Alternatively, in the event of a change in control, the acquiror will have the option to make an initial payment of 1.0 times the aggregate amount of payments made by HCR under the Purchase and Sale Agreement as of the date of such change in control, then in that event, payment of Royalties from Royalty Sub to HCR will cease when HCR has received total Royalties payments (including the initial payment) equal to the Alternative Cap. After the Purchase and Sale Agreement expires, all rights to receive the Royalties return to Royalty Sub.
Debt related commitment fees and debt related issuance costs		$ 1,900
Debt Related Commitment Fees and Debt Issuance Costs		1,862
Proceeds from royalty purchase and sale agreement, net of issuance costs		(30,638)
Royalty Purchase and Sale Agreement
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Debt Related Commitment Fees and Debt Issuance Costs		1,500
Proceeds from royalty purchase and sale agreement, net of issuance costs		$ 30,600
Royalty Purchase and Sale Agreement \| Royalty Sub
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Initial proceeds from royalty purchase and sales agreement net of certain expenses	$ 32,100
First Milestone Proceeds From Royalty Purchase And Sale Agreement	12,500
Second Milestone Proceeds From Royalty Purchase And Sale Agreement	20,000
Maximum \| Royalty Purchase and Sale Agreement \| Royalty Sub
Research and Development Arrangement, Contract to Perform for Others [Line Items]
Maximum proceeds from royalty purchase and sale agreement	$ 65,000

Royalty Purchase and Sale Agreement - Schedule of activity of the royalty obligation (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021
Royalty Obligation [Abstract]
Royalty purchased	$ 1,862
Royalty purchase and sale agreement effective August 8, 2022	32,500
Non-cash interest expense	1,297
Balance at September 30, 2022	$ 31,935
Effective interest rate	26.50%

CARES Act Paycheck Protection Program Loan - Additional Information (Details) - PPP Loan - USD ($)		1 Months Ended
	Jan. 11, 2021	Apr. 20, 2020
Short Term Debt [Line Items]
Interest expense on borrowings	$ 7,000
Silicon Valley Bank
Short Term Debt [Line Items]
Aggregate principal amount		$ 1,000,000.0
Interest rate on outstanding principal amount		1.00%
Note, Maturity date		Apr. 30, 2022

Common Stock - Additional Information (Details) - $ / shares	Sep. 30, 2022	Jun. 22, 2022	Dec. 31, 2021
Class of Stock [Line Items]
Common stock, shares authorized	200,000,000	100,000,000	100,000,000
Common stock, par value	$ 0.001		$ 0.001
Common stock, shares outstanding	60,190,731		59,722,930
Maximum
Class of Stock [Line Items]
Common stock, shares authorized		200,000,000

Stock Purchase Warrants - Additional Information (Details) - $ / shares	1 Months Ended	9 Months Ended
	Sep. 30, 2016	Sep. 30, 2022
Maximum
Class Of Warrant Or Right [Line Items]
Number of stock that can be purchased by each warrant	29,796
Convertible Stock Warrant
Class Of Warrant Or Right [Line Items]
Class of warrant Exercise	$ 10.74
Warrants expiration term	2026-09
Weighted average remaining life of warrants		4 years

Share-Based Compensation - Summary of Share-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
2016 Employee Stock Purchase Plan
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 7	$ 16	$ 23	$ 45
2016 Employee Stock Purchase Plan \| Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	5	12	15	29
2016 Employee Stock Purchase Plan \| General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	2	4	8	16
Stock Options \| 2016 Equity Incentive Plan
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	758	916	2,626	2,643
Stock Options \| 2016 Equity Incentive Plan \| Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	431	391	1,245	1,182
Stock Options \| 2016 Equity Incentive Plan \| General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	327	525	1,381	1,461
Restricted Stock Units (RSUs)
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	309	384	1,086	1,113
Restricted Stock Units (RSUs) \| Research and Development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	186	194	592	561
Restricted Stock Units (RSUs) \| General and Administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Share-based compensation expense	$ 123	$ 190	$ 494	$ 552

Share-Based Compensation - Summary of Activity Related to Stock Options (Details) - Stock Options - 2011 Stock Incentive Plan, 2016 Equity Incentive Plan - $ / shares	9 Months Ended
	Sep. 30, 2022	Dec. 31, 2021
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Shares, Options outstanding, Beginning balance	5,762,328
Number of Shares, Granted	1,734,440
Number of Shares, Exercised	(25,551)
Number of Shares, Forfeited	(252,612)
Number of Shares, Options outstanding, Ending balance	7,218,605
Number of Shares, Options exercisable	4,369,653	3,148,502
Weighted Average Exercise Price, Options outstanding, Beginning balance	$ 4.07
Weighted Average Exercise Price, Granted	2.00
Weighted Average Exercise Price, Exercised	0.31
Weighted Average Exercise Price, Forfeited	2.78
Weighted Average Exercise Price, Options outstanding, Ending balance	3.63
Weighted Average Exercise Price, Options exercisable	$ 4.28	$ 4.59

Share-Based Compensation - Additional Information (Details) $ in Millions	9 Months Ended
	Sep. 30, 2022 USD ($) shares
2016 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Issuance of common shares under employee stock purchase plan, shares \| shares	66,919
Stock Options \| 2016 Employee Stock Purchase Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Unrecognized compensation expense related to unvested stock options	$ 5.1
Expected to be recognized over a weighted average period	2 years 6 months
Restricted Stock Units (RSUs)
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected to be recognized over a weighted average period	2 years 6 months
Unrecognized compensation expense related to the RSUs	$ 3.4

Share-Based Compensation - Summary of the Activity Related to RSUs (Details) - Restricted Stock Units (RSUs)	9 Months Ended
	Sep. 30, 2022 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Non-vested units outstanding, Number of Shares, Beginning balance \| shares	1,317,347
Number of Shares, Granted \| shares	648,460
Number of Shares, Vested \| shares	(375,331)
Number of Shares, Forfeited \| shares	(127,544)
Non-vested units outstanding, Number of Shares, Ending balance \| shares	1,462,932
Non-vested units outstanding, Weighted Average Exercise Price, Beginning balance \| $ / shares	$ 3.58
Weighted Average Exercise Price, Granted \| $ / shares	2.19
Weighted Average Exercise Price, Vested \| $ / shares	3.44
Weighted Average Exercise Price, Forfeited \| $ / shares	3.04
Non-vested units outstanding, Weighted Average Exercise Price, Ending balance \| $ / shares	$ 3.04

Commitment and Contingencies - Additional Information (Details)	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 30, 2016 USD ($) ft²	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Commitment And Contingencies [Line Items]
Lessee, operating lease, option to extend, description				The renewal option is not included in the calculation of the right-of-use asset and the lease liabilities as the Company is renewing the current lease on to-be-determined terms.
Incremental borrowing rate		11.00%		11.00%
Operating lease, remaining lease term		1 year		1 year
Operating Lease, Cost		$ 62,000	$ 62,000	$ 185,000	$ 185,000
Variable Lease, Cost		24,000	24,000	71,000	71,000
Short-term Lease, Cost		$ 21,000	$ 2,000	64,000	6,000
Cash payments included in operating activities for operating lease liabilities				$ 305,000	$ 293,000
GEORGIA
Commitment And Contingencies [Line Items]
Area of office leased \| ft²	20,000
Operating lease agreement term	6 years 6 months
Operating lease agreement renewal option term	5 years
Minimum monthly lease payments	$ 35,145
Percentage of increase per year	3.00%

Commitment and Contingencies - Operating Leases Included on the Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]
Operating lease right-of-use asset	$ 226	$ 369
Liabilities
Current portion of operating lease liabilities	407	387
Operating lease liabilities	0	$ 288
Total operating lease liabilities	$ 407

Commitment and Contingencies - Future Minimum Commitments Due Under Non-Cancelable Operating Leases (Details) $ in Thousands	Sep. 30, 2022 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2022	$ 103
2023	316
Operating Leases Future Minimum Payment Due, Total	419
Less imputed interest	(12)
Total operating lease liabilities	$ 407

License and Other Agreements - Additional Information (Detail) - USD ($) $ in Thousands			1 Months Ended		3 Months Ended		9 Months Ended
	Mar. 10, 2020	Oct. 22, 2019	Dec. 31, 2021	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021	Oct. 31, 2021
Research And Development Arrangement Contract To Perform For Others [Line Items]
Deferred revenue					$ 113		$ 113
Revenue					$ 266	$ 3,074	997	$ 3,888
Bausch Health Ireland Limited
Research And Development Arrangement Contract To Perform For Others [Line Items]
Upfront payment		$ 5,000
Bausch Health Ireland Limited \| Upfront Payment
Research And Development Arrangement Contract To Perform For Others [Line Items]
Deferred revenue									$ 5,000
Arctic Vision Limited \| Maximum
Research And Development Arrangement Contract To Perform For Others [Line Items]
Threshold percentage of sales for tiered royalties	12.00%
Arctic Vision Limited \| Minimum
Research And Development Arrangement Contract To Perform For Others [Line Items]
Threshold percentage of sales for tiered royalties	10.00%
XIPERE [Member] \| Bausch Health Ireland Limited
Research And Development Arrangement Contract To Perform For Others [Line Items]
Pre-launch milestone payments			10,000
First cumulative net sales of products							$ 45,000
XIPERE [Member] \| Bausch Health Ireland Limited \| Maximum
Research And Development Arrangement Contract To Perform For Others [Line Items]
Additional milestone payments		$ 55,000
XIPERE [Member] \| Arctic Vision Limited
Research And Development Arrangement Contract To Perform For Others [Line Items]
Milestone Payments			$ 4,000
License Arrangement \| Arctic Vision Limited
Research And Development Arrangement Contract To Perform For Others [Line Items]
Consideration for Territory Expansion Received				$ 3,000
License Arrangement \| Arctic Vision Limited \| Upfront Payment
Research And Development Arrangement Contract To Perform For Others [Line Items]
Upfront payment	$ 4,000
License Arrangement \| Arctic Vision Limited \| Maximum
Research And Development Arrangement Contract To Perform For Others [Line Items]
Development milestone payments	$ 22,500

Fair Value Measurements - Additional Information (Details) - USD ($)	Sep. 30, 2022	Dec. 31, 2021
Fair Value Disclosures [Abstract]
Significant transfers between Levels 1, 2 and 3	$ 0	$ 0

Net Loss Per Share - Potential Common Stock Equivalents Excluded from Computation of Diluted Net Loss per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	8,711,333	7,205,882	8,711,333	7,205,882
Outstanding Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	7,218,605	5,858,739	7,218,605	5,858,739
Non-vested Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	1,462,932	1,317,347	1,462,932	1,317,347
Stock Purchase Warrants
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	29,796	29,796	29,796	29,796