View Filing Data

Document and Entity Information - shares	3 Months Ended
Document and Entity Information - shares	Mar. 31, 2018	May 09, 2018
Document and Entity Information
Entity Registrant Name	BioXcel Therapeutics, Inc.
Entity Central Index Key	0001720893
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		15,645,545
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q1

BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Current assets
Cash	$ 55,465	$ 887
Prepaid expenses and other current assets	808	3
Due from parent	44
Total current assets	56,317	890
Deferred offering expenses		461
Equipment, net	4	4
Total assets	56,321	1,355
Current liabilities
Accounts payable	3,935	444
Accrued expenses	267	1,015
Due to related party	13
Payable to Parent for services		67
Notes payable to Parent		371
Due from Parent		440
Total current liabilities	4,215	2,337
Total liabilities	4,215	2,337
Commitments and contingencies
Stockholders' equity (deficit)
Preferred stock, $0.001 par value, 10,000,000 shares authorized; no shares issued or outstanding
Common stock, $0.001 par value, 50,000,000 shares authorized; 15,645,545 and 9,907,548 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively	16	10
Additional paid-in-capital	60,822	3,458
Accumulated deficit	(8,732)	(4,450)
Total stockholders' equity (deficit)	52,106	(982)
Total liabilities and stockholders' equity (deficit)	$ 56,321	$ 1,355

BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2018	Mar. 12, 2018	Dec. 31, 2017
BALANCE SHEETS
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	10,000,000	10,000,000	10,000,000
Preferred stock, shares issued (in shares)	0		0
Preferred stock, shares outstanding (in shares)	0		0
Common shares, par value (in dollars per share)	$ 0.001		$ 0.001
Common stock, shares authorized (in shares)	50,000,000	50,000,000	50,000,000
Common stock, shares issued (in shares)	15,645,545		9,907,548
Common stock, shares outstanding (in shares)	15,645,545		9,907,548

STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended
STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	Mar. 31, 2018	Mar. 31, 2017
STATEMENTS OF OPERATIONS
Revenues	$ 0	$ 0
Operating costs and expenses
Research and development	2,938	321
General and administrative	1,348	208
Total operating expenses	4,286	529
Loss from operations	(4,286)	(529)
Other income
Interest income, net	4
Net loss	$ (4,282)	$ (529)
Net loss per share attributable to common stockholders/ Parent basic and diluted (in dollars per share)	$ (0.37)	$ (0.06)
Weighted average shares outstanding - basic and diluted (in shares)	11,456,325	9,480,000

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands	Common stock IPO	Common stock	Additional Paid In Capital IPO	Additional Paid In Capital	Accumulated Deficit	IPO	Total
Beginning Balance at Dec. 31, 2017		$ 10		$ 3,458	$ (4,450)		$ (982)
Beginning Balance (in shares) at Dec. 31, 2017		9,907,548					9,907,548
Issuance of common shares	$ 5	$ 1	$ 54,097	1,948		$ 54,102	$ 1,949
Issuance of common shares (in shares)	5,454,545	283,452
Stock-based compensation				1,319			1,319
Net loss					(4,282)		(4,282)
Ending Balance at Mar. 31, 2018		$ 16		$ 60,822	$ (8,732)		$ 52,106
Ending Balance (in shares) at Mar. 31, 2018		15,645,545					15,645,545

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) $ in Thousands	3 Months Ended
	Mar. 31, 2018 USD ($)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
Stock issuance costs	$ 5,898

STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	Jan. 31, 2017	Mar. 31, 2018	Mar. 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$ (4,282)	$ (529)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization			1
Stock-based compensation expense		1,319	107
Changes in operating assets and liabilities:
Prepaid expenses		(805)	1
Accounts payable and accrued expenses		2,743	(11)
Due to related party		13
Net cash used in operating activities		(1,012)	(431)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net	$ 1,950	56,512
Net Parent Investment			431
Payable to Parent for services		(67)
Due to Parent		(484)
Repayment of note payable-Parent		(371)
Net cash provided by financing activities		55,590	431
Net increase in cash		54,578
Cash, beginning of the period	$ 0	887	0
Cash, end of the period		55,465	$ 0
Supplemental disclosure
Interest paid		2
Supplemental disclosure of non-cash Financing Activity :
Deferred issuance costs reclassified to Additional Paid-in-capital upon completion of initial public offering		$ 461

Organization and Principal Activities	3 Months Ended
Organization and Principal Activities	Mar. 31, 2018
Organization and Principal Activities
Organization and Principal Activities	Note 1. Organization and Principal Activities BioXcel Therapeutics, Inc. (the "Company" or "BTI") is a clinical stage biopharmaceutical company focused on novel artificial intelligence-based drug development to identify the next wave of medicines across neuroscience and immuno-oncology. The Company’s drug re-innovation approach leverages existing approved drugs and/or clinically validated product candidates together with big data and proprietary machine learning algorithms to identify new therapeutic indices. The Company is a majority-owned subsidiary of BioXcel Corporation ("BioXcel" or "Parent") and was incorporated under the laws of the State of Delaware on March 29, 2017. The Company’s principal office is in Branford, Connecticut. Unless otherwise indicated or the context requires otherwise, references in this report to "we", "our", "us" and similar expressions refer to BioXcel Therapeutics, Inc. The unaudited financial information for the three months ended March 31, 2018 and 2017, is presented on the same basis as the financial statements included in the Company's registration statement on Form S-1 relating to its initial public offering of its common shares. The Company’s primary activities have been the development of a clinical plan and pre-clinical research and development of two advanced programs: BXCL501, a sublingual thin film formulation of dexmedetomidine designed for acute treatment of agitation resulting from neurological and psychiatric disorders, and BXCL701, an immuno-oncology agent designed for treatment of a rare form of prostate cancer and for treatment of pancreatic cancer. These two programs and two emerging programs BXCL502 and BXCL702 (together, "the BTI Business") have been contributed to the Company from the Parent pursuant to a contribution agreement.

Initial Public Offering	3 Months Ended
Initial Public Offering	Mar. 31, 2018
Initial Public Offering
Initial Public Offering	Note 2. Initial Public Offering On March 7, 2018, the Company’s registration statement on Form S‑1 relating to its initial public offering of its common shares (the “IPO”) was declared effective by the Securities and Exchange Commission (“SEC”). The IPO closed on March 12, 2018 and the Company issued and sold 5,454,545 common shares at a public offering price of $11.00 per share. Gross proceeds totaled $60,000 and net proceeds totaled $54,102 after deducting underwriting discounts and commissions of $4,200 and other offering expenses of approximately $1,698. In connection with and effective upon the completion of its IPO the Company effectuated a 237 to one stock split. Accordingly, all share and per share amounts for all periods presented in the accompanying financial statements have been adjusted retroactively, where applicable, to reflect the stock split. Also, in connection with the completion of its IPO, the Company amended its articles of incorporation to authorize the issuance of up to 50,000,000 shares of common stock with a par value of $.001 each and 10,000,000 shares of preferred stock with a par value of $.001 par value each.

Basis of Presentation and Liquidity	3 Months Ended
Basis of Presentation and Liquidity	Mar. 31, 2018
Basis of Presentation and Liquidity
Basis of Presentation and Liquidity	Note 3. Basis of Presentation and Liquidity Basis of Presentation The financial statements of the Company for the period through June 30, 2017 including the three month period ending March 31, 2017 are derived by carving out the historical results of operations and historical cost basis of the assets and liabilities associated with product candidates BXCL501, BXCL701, BXCL502 and BXCL702 that have been contributed to the Company by BioXcel, from the financial statements of BioXcel. These results reflect amounts specifically attributable to the BTI Business, which include expenses, assets and liabilities of BioXcel relating to the candidates that were contributed to the Company by BioXcel under a contribution agreement, effective June 30, 2017, as amended and restated on November 7, 2017, or the Contribution Agreement, for the period from January 1, 2015 until the formation of the Company on March 29, 2017 and further until June 30, 2017. The Company has also entered into a separation and shared services agreement with BioXcel that took effect on June 30, 2017, as amended and restated on November 7, 2017, or the Services Agreement, pursuant to which BioXcel provides the Company with certain general and administrative and development support services. However, consistent with accounting regulations, it has been assumed that the Company was a separate business since January 1, 2015 and accordingly the assets, liabilities and expenses relating to the BTI Business have been separated from the Parent in the financial statements for periods prior to and post incorporation through June 30, 2017. The financial statements for the three month period ended March 31, 2017 include reasonable allocations for assets and liabilities and expenses attributable to the BTI Business. For the three month period ended March 31, 2018 the results are on a standalone entity basis. All assets and liabilities contributed by BioXcel to the Company have been recorded at historical book value. The balance sheet information as of December 31, 2017 was derived from the audited financial statements which include the accounts of BioXcel Therapeutics Inc. but does not include all disclosures required by accounting principles generally accepted in the United States (“GAAP”). The unaudited financial information should be read in conjunction with the financial statements and notes thereto included in the Company’s S-1. Liquidity and Going Concern In accordance with Accounting Standards Update (“ASU”) 2014‑15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205‑40), management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that the financial statements are issued. Management believes that as a result of the proceeds received in connection with its IPO that it has sufficient liquidity to meet its obligations as they come due for at least twelve months.

Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 4. Summary of Significant Accounting Policies

Use of Estimates

The Company’s financial statements are prepared in accordance with GAAP. The preparation of BioXcel’s financial statements requires the Company to make estimates and assumptions that impact the reported amounts of assets, liabilities and expenses in its financial statements and the accompanying notes. The most significant estimates in the financial statements relate to the fair value of equity awards and valuation allowance related to the Company’s deferred tax assets and liabilities. For the quarter ended March 31, 2017, the most significant estimates include the valuation of the Parent’s common stock, allocation of expenses, assets and liabilities from the Parent. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates.

Unaudited Interim Financial Information

The accompanying unaudited financial statements do not include all of the information and footnotes required by GAAP. The accompanying year-end balance sheet was derived from audited financial statements but does not include all disclosures required by GAAP. The unaudited interim financial statements have been prepared on the same basis as the audited annual financial statements and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s financial position as of March 31, 2018 and the results of its operations for the three months ended March 31, 2018 and 2017 and its cash flows for the three months ended March 31, 2018 and 2017. The results for the three months ended March 31, 2018 are not necessarily indicative of results to be expected for the year ending December 31, 2018, any other interim periods or any future year or period.

Deferred Offering Costs

The Company capitalized certain legal, professional accounting and other third-party fees that were directly associated with in-process equity financings as deferred offering costs until the equity financing was consummated. After consummation of an equity financing, these costs were recorded in shareholders’ equity (deficit) as a reduction of proceeds generated as a result of the offering. As of December 31, 2017, the Company recorded deferred offering costs relating to its IPO of $461. The Company’s IPO was completed in March 2018 and these costs, as well as additional IPO costs including commissions of $4,200 and an additional $1,237 of other expenses incurred in 2018, were recorded as a reduction to shareholders’ equity.

Equipment

Equipment consist of computers that are stated at cost and depreciated using the straight-line method over estimated useful life of 5 years.

The Company follows the guidance provided by FASB ASC Topic 360‑10, Property, Plant, and Equipment. Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to undiscounted future net cash flows expected to be generated. Impairment charges are recognized at the amount by which the carrying amount of an asset exceeds the fair value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or the fair value less costs to sell.

Since its inception the Company has not recognized any impairment or disposition of long lived assets.

Stock-Based Compensation

The Company accounts for stock-based compensation in accordance with ASC 718, "Compensation—Stock Compensation", which requires the measurement and recognition of compensation expense based on estimated fair market values for all share-based awards made to employees and directors, including stock options. The Company’s stock-based compensation plan was adopted and became effective in August 2017. Prior to the Company adopting its stock-based compensation plan the Parent granted stock options to its employees. As a result, related stock-based compensation expense has been allocated to the Company over the required service period over which these BioXcel stock option awards vest in the same manner salary costs of employees have been allocated to the BTI Business in the carve-out process.

Both BioXcel and the Company’s stock option awards are valued at fair value on the date of grant and that fair value is recognized over the requisite service period. The estimated fair value of stock option awards was determined using the Black-Scholes option pricing model on the date of grant. Significant judgment and estimates were used to estimate the fair value of these awards, as they are not publicly traded.

Stock-based awards to non-employees are re-measured at fair value each financial reporting date until performance is complete.

ASC 718 requires companies to estimate the fair value of share-based awards on the date of grant using an option-pricing model. The Black-Scholes option-pricing model was used as its method of determining fair value. This model is affected by the Company’s stock price as well as assumptions regarding a number of subjective variables. These subjective variables include, but are not limited to the expected stock price volatility over the term of the awards, and actual and projected employee stock option exercise behaviors. The value of the award is recognized as an expense in the statement of operations over the requisite service period. The periodic expense is then determined based on the valuation of the options.

The Company adopted FASB ASU 2016-09 as of January 1, 2018 and has elected to account for forfeitures as they occur, by reversing compensation cost when the award is forfeited.

Research and Development Costs

Research and development expenses include wages, benefits, facilities, supplies, external services, clinical study and manufacturing costs and other expenses that are directly related to its research and development activities. At the end of the reporting period, the Company compares payments made to third party service providers to the estimated progress toward completion of the research or development objectives. Such estimates are subject to change as additional information becomes available. Depending on the timing of payments to the service providers and the progress that the Company estimates has been made as a result of the service provided, the Company may record net prepaid or accrued expense relating to these costs. The Company expenses research and development costs as incurred.

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.

Fair Value Measurements

ASC 820 "Fair Value Measurements" defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a fair value hierarchy that distinguishes between (1) market participant assumptions developed based on market data obtained from independent sources (observable inputs) and (2) an entity’s own assumptions about market participant assumptions developed based on the best information available in the circumstances (unobservable inputs). The fair value hierarchy consists of three broad levels, which gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy under ASC 820 are described below:

Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

Level 2—Directly or indirectly observable inputs as of the reporting date through correlation with market data, including quoted prices for similar assets and liabilities in active markets and quoted prices in markets that are not active. Level 2 also includes assets and liabilities that are valued using models or other pricing methodologies that do not require significant judgment since the input assumptions used in the models, such as interest rates and volatility factors, are corroborated by readily observable data from actively quoted markets for substantially the full term of the financial instrument.

Level 3—Unobservable inputs that are supported by little or no market activity and reflect the use of significant management judgment. These values are generally determined using pricing models for which the assumptions utilize management’s estimates of market participant assumptions.

In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.

The carrying amounts of cash, accounts payable and accrued expenses approximate fair value due to the short-term nature of these instruments.

Net Loss per Share

The Company computes basic net loss per share by dividing net loss available to common stockholders by the weighted average number of common shares outstanding for the period and excludes the effects of any potentially dilutive securities. Diluted earnings per share, if presented, would include the dilution that would occur upon the exercise or conversion of all potentially dilutive securities into common stock using the "treasury stock" and/or "if converted" methods as applicable. The potential dilutive securities included outstanding options (for both employees and non-employees) for the three months ended March 31, 2018 and 2017. Such securities have not been included in the loss per share calculation since their impact would be anti-dilutive. There were 2,348,575 shares of options that were excluded from the calculation of the loss per share for the three months ending March 31, 2018. The Company was incorporated on March 29, 2017 and net loss per common share for the three months ending March 31, 2017, was calculated as if the shares to the Parent were issued at formation.

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board, or FASB, issued ASU 2014‑09 Revenue from Contracts with Customers. Under this guidance, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what the entity expects to receive in exchange for the goods or services. This new guidance also requires more detailed disclosures to enable users of the financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. The Company adopted this guidance beginning on January 1, 2018. The guidance allows the selection of one of two methods of adoption, either the full retrospective approach, meaning the guidance would be applied to all periods presented, or modified retrospective approach, meaning the cumulative effect of applying the guidance would be recognized as an adjustment to opening accumulated deficit balance. Since the Company has no revenues to date, the Company does not believe the adoption of ASU‑214‑09 will have a material impact on its financial statements.

In February 2016, the FASB issued ASU 2016‑02 Lease Accounting Topic 842. This ASU requires us to record all leases longer than one year on our balance sheet. Under the new guidance, when the Company records leases on its balance sheet under it will record a liability with a value equal to the present value of payments it will make over the life of the lease and an asset representing the underlying leased asset. The new accounting guidance requires the Company to determine if its leases are operating or financing leases, similar to current accounting guidance. The Company will record expense for operating type leases on a straight-line basis as an operating expense and it will record expense for finance type leases as interest expense. The new lease standard is effective for annual and interim periods beginning after December 15, 2018, with early adoption permitted. The Company must adopt the new standard on a modified retrospective basis, which requires it to reflect its leases on its balance sheet for the earliest comparative period presented. The Company is currently assessing the timing of adoption as well as the effects it will have on its financial statements and disclosures.

The SEC staff issued Staff Accounting Bulletin ("SAB") 118, which provides guidance on accounting for the tax effects of the U.S. tax reform announced on December 22, 2017 by the U.S. Government commonly referred to as the Tax Cuts and Jobs Act. SAB 118 provides a measurement period that should not extend beyond one year from the U.S. tax reform enactment date for companies to complete the accounting under Accounting Standards Codification ("ASC") 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the U.S. tax reform for which the accounting under ASC 740 is complete. Specifically, the Company revalued its U.S. deferred tax assets and liabilities due to the federal income tax rate reduction from 35 percent to 21 percent. Since the Company has provided a full valuation allowance against its deferred tax assets, the revaluation of the deferred tax assets did not have a material impact on any period presented.

Transactions with BioXcel	3 Months Ended
Transactions with BioXcel	Mar. 31, 2018
Transactions with BioXcel
Transactions with BioXcel	Note 5. Transactions with BioXcel The Company has entered into an asset contribution agreement, effective June 30, 2017, with BioXcel, as amended and restated on November 7, 2017, or the Contribution Agreement, pursuant to which BioXcel agreed to contribute BioXcel’s rights, title and interest in BXCL501, BXCL701, BXCL502 and BXCL702, and all of the assets and liabilities associated in consideration for (i) 9,480,000 shares of our common stock, (ii) $1 million upon completion of an initial public offering, (iii) $500 upon the later of the 12 month anniversary of an initial public offering and the first dosing of a patient in the bridging bioavailability/ bioequivalence study for the BXCL501 program, (iv) $500 upon the later of the 12 month anniversary of an initial public offering and the first dosing of a patient in the Phase 2 PoC open label monotherapy or combination trial with Keytruda for the BXCL701 program and (v) a one-time payment of $5,000 within 60 days after the achievement of $50,000 in cumulative net sales of any product or combination of products resulting from the development and commercialization of any one of the Candidates or a product derived therefrom. With the completion of the Company’s IPO in March 2018, $1 million was charged to Research and Development costs and included in accounts payable in connection with (ii) above and was paid on April 5, 2018. The Company has also entered into a separation and shared services agreement with BioXcel that took effect on June 30, 2017, as amended and restated on November 7, 2017, or the Services Agreement, pursuant to which BioXcel will allow the Company to continue to use the office space, equipment, services and leased employees based on the agreed upon terms and conditions for a payment of defined monthly and/or hourly fees. In connection with the Services Agreement, BioXcel had agreed to provide the Company a line of credit, which was capped at $1,000, or the Total Funding Amount, pursuant to the terms of a grid note, or the Grid Note. The Grid Note was payable upon the earlier of (i) the completion of an initial public offering and (ii) December 31, 2018, together with interest on the unpaid balance of each advance made under the Grid Note, which would accrue at a rate per annum equal to the applicable federal rate for short-term loans as of the date hereof, in each case calculated based on a 365‑day year and actual days elapsed. As of December 31, 2017, the Company had drawn down $371 under the Grid Note and was repaid. All amounts due to BioXcel under the line of credit, the Grid Note, and for expenses paid on the Company’s behalf were paid following the completion of the Company’s IPO on March 20, 2018.

Equipment

3 Months Ended

Mar. 31, 2018

Equipment

Equipment

Note 6. Equipment


	(Unaudited)
	March 31,		December 31,
	2018		2017
Computers	$	5	$	5
Accumulated depreciation and amortization		(1)		(1)
	$	4	$	4

Commitments and Contingencies	3 Months Ended
Commitments and Contingencies	Mar. 31, 2018
Commitments and Contingencies
Commitments and Contingencies	Note 7. Commitments and Contingencies The Company is required to pay to BioXcel the amount of $5,000 within 60 days after the achievement of $50,000 in cumulative net sales of any product or combination of products resulting from the development and commercialization of any one of the candidates BXCL501, BXCL701, BXCL502, and BXCL702 or a product derived therefrom. The Company is also required to pay to BioXcel the amount of $2,000 in connection with the IPO, (x) the first $1,000 was charged to Research and Development expenses during the three months ended March 31, 2018 and paid to BioXcel on April 5, 2018 and (y) the second $1,000, (i) $500 of which is payable upon the later of the 12 month anniversary of an offering and the first dosing of a patient in the bridging bioavailability/bioequivalence study for the BXCL501 program and (ii) $500 of which is payable upon the later of the 12 month anniversary of an offering and the first dosing of a patient in the Phase 2 PoC open label monotherapy or combination trial with Keytruda for the BXCL701 program.

Accrued Expenses

3 Months Ended

Mar. 31, 2018

Accrued Expenses

Accrued Expenses

Note 8. Accrued Expenses

Accrued expenses consist of the following:


	(Unaudited)
	March 31,		December 31,
	2018		2017
Accrued salaries and benefits	$	47	$	79
Professional and consultant fees		83		120
Legal expenses		82		413
Drugs and clinical trial expenses		55		403
	$	267	$	1,015

Stockholders' Equity (Deficit)	3 Months Ended
Stockholders' Equity (Deficit)	Mar. 31, 2018
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit)	Note 9. Stockholders’ Equity (Deficit) Authorized Capital The Company is authorized to issue up to 10,000,000 preferred shares with a par value of $0.001 per share. No preferred shares are issued and outstanding. The Company is authorized to issue up to 50,000,000 shares of common stock with a par value of $0.001 per share. The Company had 15,645,545 shares of common stock outstanding as of March 31, 2018. Description of Common Stock Each share of common stock has the right to one vote. The holders of common stock are entitled to dividends when funds are legally available and when declared by the board of directors. Common Stock Issuances On March 7, 2018, the Company’s registration statement on Form S-1 relating to the Company’s IPO was declared effective by the SEC. The IPO closed on March 12, 2018 and we issued and sold 5,454,545 shares of common stock at a public offering price of $11.00 per share, for gross proceeds of $60,000 and net proceeds of $54,102 after deducting underwriting discounts and commissions of $4,200 and other offering expenses of $1,698. In January and February 2018, the Company issued 283,452 shares of common stock with an issuance price of $6.88 per share for gross and net proceeds of $1,950. In October 2017 the Company sold 271,839 shares of common stock with an issuance price of $4.82 per share with gross and net proceeds of $1,311. In September 2017, the Company sold 155,709 shares of common stock with an issuance price of $4.82 per share with gross and net proceeds of $751.

Stock-Based Compensation

3 Months Ended

Mar. 31, 2018

Stock-Based Compensation

Stock-Based Compensation

Note 10. Stock-Based Compensation

Stock Options

The Company’s 2017 Stock Incentive Plan (the "2017 Stock Plan") became effective in August 2017 and will expire in August 2027. Under the 2017 Stock Plan, the Company may grant incentive stock options, non-statutory stock options, restricted stock awards and other stock-based awards.

As of March 31, 2018 there were 3,462,570 shares of the Company’s common stock authorized for issuance under the 2017 Stock Plan. Options granted under the 2017 Stock Plan have a term of ten years with vesting term determined by the board of directors, which is generally four years.

The fair value of options granted during the three months ended March 31, 2018 was estimated using the Black-Scholes option-pricing model with the following assumptions.

Employees


	(Unaudited)
	For the
	Three Months Ended
	March 31, 2018
Exercise price per share	$	11.00		-	$	11.00
Expected stock price volatility		77.38	%	-		77.58
Risk-free rate of interest		2.68	%	-		2.79
Fair value of grants per share	$	6.82		-	$	7.46
Expected Term (years)		5.5		-		7.0

Non-Employees


	(Unaudited)
	For the
	Three Months Ended
	March 31, 2018
Exercise price per share	$	0.14		-	$	11.00
Expected stock price volatility		77.24	%	-		77.36
Risk-free rate of interest		2.73	%	-		2.74
Fair value of grants per share	$	8.18		-	$	10.00
Expected Term (years)		9.4		-		9.95

Since the Company recently completed its IPO, it does not have a history of market prices of its common stock and, as such, volatility was estimated using historical volatilities of similar public companies. The expected life of the employee awards is estimated based on the simplified method, which calculates the expected life based upon the midpoint of the term of the award and the vesting period. The Company uses the simplified method because it does not have sufficient option exercise data to provide a reasonable basis upon which to estimate the expected term. The expected term of non-employee awards represents the awards contractual term. The expected dividend yield is 0% as the Company has no history of paying dividends nor does management expect to pay dividends over the contractual terms of these options. The risk-free interest rates are based on the United States Treasury yield curve in effect at the time of grant, with maturities approximating the expected life of the stock options.

The following table summarizes information about stock option activity during the period the Plan was in effect (in thousands, except share and per share data):

Employee Options


						Weighted Average
		Weighted Average Exercise				Remaining Contractual
	Number of Shares	Price per Share		Total Intrinsic Value		Life (in years)
Outstanding as of January 1, 2018	1,813,524	$	0.65	$	13,894,762	9.7
Employee options granted	143,148	$	11.00	$	—	10.0
Outstanding as of March 31, 2018	1,956,672	$	1.41	$	17,395,705	9.4

Options vested and exercisable as of March 31, 2018	1,369,623	$	0.41	$	13,463,394	9.4

Non-employee Options


						Weighted Average
		Weighted Average Exercise				Remaining Contractual
	Number of Shares	Price per Share		Total Intrinsic Value		Life (in years)
Outstanding as of January 1, 2018	496,515	$	0.41	$	3,922,238	9.6
Non-employee options granted	68,256	$	11.00	$	—	10.0
Non-employee options forfeited	6,162	$	0.41		—	—
Outstanding as of March 31, 2018	558,609	$	1.70	$	4,820,170	9.5

Options vested and exercisable as of March 31, 2018	42,827	$	0.50	$	417,018	9.4

The Company granted 211,404 options to purchase shares of common stock during the three months ended March 31, 2018. No options were exercised during the three months ended March 31, 2018. There were 947,289 shares available for grant as of March 31, 2018.

The Company recognized stock-based compensation expense of $1,196 for the three months ended March 31, 2018. There was no corresponding charge for the period ending March 31, 2017 as the plan did not exist.

The weighted-average grant-date fair value of options was $ 1,016 and $ 572 for employees and non-employees, respectively, for the three months ended March 31, 2018.

Unrecognized compensation expense related to unvested awards as of March 31, 2018 was $3,590 for non-employees and $1,295 for employees and will be recognized over the remaining vesting periods of the underlying awards. The weighted-average period over which such compensation is expected to be recognized is 1.8 years for non-employees and 2.0 years for employees.

BioXcel Charges

BioXcel, has granted stock options to its employees under its own Equity Incentive Plan ("BioXcel Plan"). Stock-based compensation expense from the BioXcel Plan is allocated to the Company over the period over which those stock option awards vest and are based the on the percentage of time spent on Company activities compared to BioXcel activities, which is the same basis used for allocation of salary costs. The BioXcel stock option awards are valued at fair value on the date of grant and that fair value is recognized over the requisite service period. The estimated fair value of these BioXcel stock option awards was determined using the Black Scholes option pricing model on the date of grant. Significant judgment and estimates were used to estimate the fair value of these awards, as they are not publicly traded.

For the three months ended March 31, 2018 and 2017 share-based compensation expense recognized by the Company in its statements of operations related to BioXcel equity awards totaled $123 and $107, respectively.

Total share-based compensation charges for the three months ending March 31, 2018 and 2017 were $1,319 and $107, respectively.

Income Taxes	3 Months Ended
Income Taxes	Mar. 31, 2018
Income Taxes
Income Taxes	Note 11. Income Taxes Deferred income tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial reporting and tax bases of assets and liabilities and are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence, are not expected to be realized. As a result of the Company’s cumulative losses, management has concluded that a full valuation allowance against the Company’s net deferred tax assets is appropriate. No income tax liabilities existed as of March 31, 2018 and December 31, 2017 due to the Company’s continuing operating losses.

Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2018

Summary of Significant Accounting Policies

Use of Estimates

Unaudited Interim Consolidated Financial Information

Unaudited Interim Financial Information

Deferred Offering Costs

Equipment

Equipment consist of computers that are stated at cost and depreciated using the straight-line method over estimated useful life of 5 years.

Since its inception the Company has not recognized any impairment or disposition of long lived assets.

Stock-Based Compensation

Stock-based awards to non-employees are re-measured at fair value each financial reporting date until performance is complete.

The Company adopted FASB ASU 2016-09 as of January 1, 2018 and has elected to account for forfeitures as they occur, by reversing compensation cost when the award is forfeited.

Research and Development Costs

Patent Costs

Costs related to filing and pursuing patent applications are recorded as general and administrative expense and expensed as incurred since recoverability of such expenditures is uncertain.

Fair Value Measurements

Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities. The fair value hierarchy gives the highest priority to Level 1 inputs.

The carrying amounts of cash, accounts payable and accrued expenses approximate fair value due to the short-term nature of these instruments.

Net Loss per Share

Recent Accounting Pronouncements

Equipment (Tables)

3 Months Ended

Mar. 31, 2018

Equipment

Equipment


	(Unaudited)
	March 31,		December 31,
	2018		2017
Computers	$	5	$	5
Accumulated depreciation and amortization		(1)		(1)
	$	4	$	4

Accrued Expenses (Tables)

3 Months Ended

Mar. 31, 2018

Accrued Expenses

Schedule of Accrued Expenses


	(Unaudited)
	March 31,		December 31,
	2018		2017
Accrued salaries and benefits	$	47	$	79
Professional and consultant fees		83		120
Legal expenses		82		413
Drugs and clinical trial expenses		55		403
	$	267	$	1,015

Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2018

Employees

Stock-Based Compensation

Schedule of Valuation Assumptions


	(Unaudited)
	For the
	Three Months Ended
	March 31, 2018
Exercise price per share	$	11.00		-	$	11.00
Expected stock price volatility		77.38	%	-		77.58
Risk-free rate of interest		2.68	%	-		2.79
Fair value of grants per share	$	6.82		-	$	7.46
Expected Term (years)		5.5		-		7.0

Schedule of Stock Option Activity


						Weighted Average
		Weighted Average Exercise				Remaining Contractual
	Number of Shares	Price per Share		Total Intrinsic Value		Life (in years)
Outstanding as of January 1, 2018	1,813,524	$	0.65	$	13,894,762	9.7
Employee options granted	143,148	$	11.00	$	—	10.0
Outstanding as of March 31, 2018	1,956,672	$	1.41	$	17,395,705	9.4

Options vested and exercisable as of March 31, 2018	1,369,623	$	0.41	$	13,463,394	9.4

Non-Employees

Stock-Based Compensation

Schedule of Valuation Assumptions


	(Unaudited)
	For the
	Three Months Ended
	March 31, 2018
Exercise price per share	$	0.14		-	$	11.00
Expected stock price volatility		77.24	%	-		77.36
Risk-free rate of interest		2.73	%	-		2.74
Fair value of grants per share	$	8.18		-	$	10.00
Expected Term (years)		9.4		-		9.95

Schedule of Stock Option Activity


						Weighted Average
		Weighted Average Exercise				Remaining Contractual
	Number of Shares	Price per Share		Total Intrinsic Value		Life (in years)
Outstanding as of January 1, 2018	496,515	$	0.41	$	3,922,238	9.6
Non-employee options granted	68,256	$	11.00	$	—	10.0
Non-employee options forfeited	6,162	$	0.41		—	—
Outstanding as of March 31, 2018	558,609	$	1.70	$	4,820,170	9.5

Options vested and exercisable as of March 31, 2018	42,827	$	0.50	$	417,018	9.4

Organization and Principal Activities (Details)	3 Months Ended
Organization and Principal Activities (Details)	Mar. 31, 2018 item
Organization and Principal Activities
Number of advanced program	2
Number of emerging programs	2

Initial Public Offering (Details) $ / shares in Units, $ in Thousands		1 Months Ended					3 Months Ended
	Mar. 12, 2018 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) $ / shares shares	Oct. 31, 2017 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) $ / shares shares	Feb. 28, 2017 USD ($) $ / shares shares	Jan. 31, 2017 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) $ / shares shares	Dec. 31, 2017 USD ($) $ / shares shares
Number of shares issued \| shares			271,839	155,709	283,452	283,452
Purchase price (in dollar per share) \| $ / shares			$ 4.82	$ 4.82	$ 6.88	$ 6.88
Proceeds from issuance of common stock, net			$ 1,311	$ 751	$ 1,950	$ 1,950	$ 56,512
Underwriting discounts and commissions		$ 4,200
Deferred offering costs								$ 461
Common stock, shares authorized (in shares) \| shares	50,000,000	50,000,000					50,000,000	50,000,000
Common shares, par value (in dollars per share) \| $ / shares		$ 0.001					$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares) \| shares	10,000,000	10,000,000					10,000,000	10,000,000
Preferred stock, par value (in dollars per share) \| $ / shares	$ 0.001	$ 0.001					$ 0.001	$ 0.001
IPO
Number of shares issued \| shares	5,454,545
Purchase price (in dollar per share) \| $ / shares	$ 11.00
Gross proceeds from issuance of common stock	$ 60,000
Proceeds from issuance of common stock, net	54,102
Underwriting discounts and commissions	4,200
Deferred offering costs	$ 1,698
Stock split	237

Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands		1 Months Ended	3 Months Ended
	Dec. 22, 2017	Mar. 31, 2018	Mar. 31, 2018	Dec. 31, 2017
Summary of Significant Accounting Policies
Deferred offering costs				$ 461
Commissions paid		$ 4,200
Other offering expenses		$ 1,237
Anti-dilutive securities (in shares)			2,348,575
Federal income tax rate (as a percent)	35.00%		21.00%
Computer Equipment
Summary of Significant Accounting Policies
Useful life			5 years

Transactions with BioXcel (Details) - USD ($) $ in Thousands			3 Months Ended
	Apr. 05, 2018	Nov. 07, 2017	Mar. 31, 2018	Dec. 31, 2017
Transactions with BioXcel
Common shares, issued			15,645,545	9,907,548
Payment to (received from) related party			$ 13
Notes payable to Parent				$ 371
BioXcel
Transactions with BioXcel
Common shares, issued		9,480,000
Maximum borrowing capacity		$ 1,000
Notes payable to Parent				$ 371
Payment due within 60 days after specified cumulative net sales \| BioXcel
Transactions with BioXcel
Lump sum payment to parent		$ 5,000	$ 5,000
Period specified for payment		60 days	60 days
Cumulative net sales		$ 50,000	$ 50,000
Payments after closing IPO \| BioXcel
Transactions with BioXcel
Lump sum payment to parent			2,000
Payment within thirty days after IPO \| BioXcel
Transactions with BioXcel
Lump sum payment to parent		1,000
Payment to (received from) related party	$ 1,000
Payable upon milestones \| BioXcel
Transactions with BioXcel
Lump sum payment to parent			1,000
Payable upon later 12 months IPO and first dosing for BXCL501 \| BioXcel
Transactions with BioXcel
Lump sum payment to parent		$ 500	$ 500
Period specified for payment		12 months	12 months
Payable upon later of 12 months of IPO and specified milestones \| BioXcel
Transactions with BioXcel
Lump sum payment to parent		$ 500	$ 500
Period specified for payment		12 months	12 months

Equipment (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Equipment
Computers	$ 5	$ 5
Accumulated depreciation and amortization	(1)	(1)
Equipment, net	$ 4	$ 4

Commitments and Contingencies (Details) - USD ($) $ in Thousands			3 Months Ended
	Apr. 05, 2018	Nov. 07, 2017	Mar. 31, 2018
Commitments and Contingencies
Payment to (received from) related party			$ 13
Payment due within 60 days after specified cumulative net sales \| BioXcel
Commitments and Contingencies
Lump sum payment to parent		$ 5,000	$ 5,000
Period specified for payment		60 days	60 days
Cumulative net sales		$ 50,000	$ 50,000
Payments after closing IPO \| BioXcel
Commitments and Contingencies
Lump sum payment to parent			2,000
Payment within thirty days after IPO \| BioXcel
Commitments and Contingencies
Lump sum payment to parent		1,000
Payment to (received from) related party	$ 1,000
Payable upon milestones \| BioXcel
Commitments and Contingencies
Lump sum payment to parent			1,000
Payable upon later 12 months IPO and first dosing for BXCL501 \| BioXcel
Commitments and Contingencies
Lump sum payment to parent		$ 500	$ 500
Period specified for payment		12 months	12 months
Payable upon later of 12 months of IPO and specified milestones \| BioXcel
Commitments and Contingencies
Lump sum payment to parent		$ 500	$ 500
Period specified for payment		12 months	12 months

Accrued Expenses (Details) - USD ($) $ in Thousands	Mar. 31, 2018	Dec. 31, 2017
Accrued Expenses
Accrued salaries and benefits	$ 47	$ 79
Professional and consultant fees	83	120
Legal expenses	82	413
Drugs and clinical trial expenses	55	403
Accrued expenses	$ 267	$ 1,015

Stockholders' Equity (Deficit) - Authorized (Details) - $ / shares	Mar. 31, 2018	Mar. 12, 2018	Dec. 31, 2017
Stockholders' Equity (Deficit)
Preferred shares, authorized	10,000,000	10,000,000	10,000,000
Preferred shares, par value (dollar per share)	$ 0.001	$ 0.001	$ 0.001
Preferred shares, issued	0		0
Preferred shares, outstanding	0		0
Common shares, authorized	50,000,000	50,000,000	50,000,000
Common shares, par value (in dollars per share)	$ 0.001		$ 0.001
Common stock outstanding	15,645,545		9,907,548

Stockholders' Equity (Deficit) - Common Stock (Details) $ / shares in Units, $ in Thousands		1 Months Ended					3 Months Ended
	Mar. 12, 2018 USD ($) $ / shares shares	Mar. 31, 2018 USD ($)	Oct. 31, 2017 USD ($) $ / shares shares	Sep. 30, 2017 USD ($) $ / shares shares	Feb. 28, 2017 USD ($) $ / shares shares	Jan. 31, 2017 USD ($) $ / shares shares	Mar. 31, 2018 USD ($) item	Dec. 31, 2017 USD ($)
Number of vote per common stock \| item							1
Number of shares issued \| shares			271,839	155,709	283,452	283,452
Share Price \| $ / shares			$ 4.82	$ 4.82	$ 6.88	$ 6.88
Proceeds from issuance of common stock, net			$ 1,311	$ 751	$ 1,950	$ 1,950	$ 56,512
Underwriting discounts and commissions		$ 4,200
Deferred offering costs								$ 461
IPO
Number of shares issued \| shares	5,454,545
Share Price \| $ / shares	$ 11.00
Gross proceeds from issuance of common stock	$ 60,000
Proceeds from issuance of common stock, net	54,102
Underwriting discounts and commissions	4,200
Deferred offering costs	$ 1,698

Stock-Based Compensation - Fair value assumptions (Details) - $ / shares	3 Months Ended
	Mar. 31, 2018	Oct. 31, 2017	Sep. 30, 2017	Feb. 28, 2017	Jan. 31, 2017
Stock-Based Compensation
Authorized shares	3,462,570
Fair value of grants per share		$ 4.82	$ 4.82	$ 6.88	$ 6.88
Options
Stock-Based Compensation
Terms of award	ten
Vesting period	4 years
Expected dividend yield (as a percent)	0.00%
Options \| Employees
Stock-Based Compensation
Expected stock price volatility, minimum (as a percent)	77.38%
Expected stock price volatility, maximum (as a percent)	77.58%
Risk-free rate of interest, minimum (as a percent)	2.68%
Risk-free rate of interest, maximum (as a percent)	2.79%
Options \| Employees \| Minimum
Stock-Based Compensation
Exercise price per share (in dollars per share)	$ 11.00
Fair value of grants per share	$ 6.82
Expected Term (years)	5 years 6 months
Options \| Employees \| Maximum
Stock-Based Compensation
Exercise price per share (in dollars per share)	$ 11.00
Fair value of grants per share	$ 7.46
Expected Term (years)	7 years
Options \| Non-Employees
Stock-Based Compensation
Expected stock price volatility, minimum (as a percent)	77.24%
Expected stock price volatility, maximum (as a percent)	77.36%
Risk-free rate of interest, minimum (as a percent)	2.73%
Risk-free rate of interest, maximum (as a percent)	2.74%
Options \| Non-Employees \| Minimum
Stock-Based Compensation
Exercise price per share (in dollars per share)	$ 0.14
Fair value of grants per share	$ 8.18
Expected Term (years)	9 years 4 months 24 days
Options \| Non-Employees \| Maximum
Stock-Based Compensation
Exercise price per share (in dollars per share)	$ 11.00
Fair value of grants per share	$ 10.00
Expected Term (years)	9 years 11 months 12 days

Stock-Based Compensation - Stock Option Activity (Details) - Options - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Number of Shares
Options granted (in shares)	211,404
Employees
Number of Shares
Outstanding, beginning balance (in shares)	1,813,524
Options granted (in shares)	143,148
Outstanding, ending balance (in shares)	1,956,672	1,813,524
Options vested and exercisable (in shares)	1,369,623
Weighted Average Exercise Price per Share
Outstanding, beginning balance (in dollars per shares)	$ 0.65
Options granted (in dollars per share)	11.00
Outstanding, end balance (in dollars per shares)	1.41	$ 0.65
Options vested and exercisable (in dollars per shares)	$ 0.41
Total Intrinsic Value
Outstanding, beginning balance	$ 13,894,762
Outstanding, end balance	17,395,705	$ 13,894,762
Options vested and exercisable	$ 13,463,394
Weighted Average Remaining Contractual Life
Outstanding	9 years 4 months 24 days	9 years 8 months 12 days
Options granted	10 years
Options vested and exercisable	9 years 4 months 24 days
Non-Employees
Number of Shares
Outstanding, beginning balance (in shares)	496,515
Options granted (in shares)	68,256
Options forfeited (in shares)	6,162
Outstanding, ending balance (in shares)	558,609	496,515
Options vested and exercisable (in shares)	42,827
Weighted Average Exercise Price per Share
Outstanding, beginning balance (in dollars per shares)	$ 0.41
Options granted (in dollars per share)	11.00
Options forfeited (in dollars per shares)	0.41
Outstanding, end balance (in dollars per shares)	1.70	$ 0.41
Options vested and exercisable (in dollars per shares)	$ 0.50
Total Intrinsic Value
Outstanding, beginning balance	$ 3,922,238
Outstanding, end balance	4,820,170	$ 3,922,238
Options vested and exercisable	$ 417,018
Weighted Average Remaining Contractual Life
Outstanding	9 years 6 months	9 years 7 months 6 days
Options granted	10 years
Options vested and exercisable	9 years 4 months 24 days

Stock-Based Compensation - Option Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock-Based Compensation
Share-based compensation costs recognized	$ 1,319	$ 107
Options
Stock-Based Compensation
Options exercised (in shares)	0
Available for grant (in shares)	947,289
Share-based compensation costs recognized	$ 1,196	$ 0
Options \| Employees
Stock-Based Compensation
Weighted-average grant-date fair value	1,016
Remaining unamortized expense	$ 1,295
Remaining unamortized expense period	2 years
Options \| Non-Employees
Stock-Based Compensation
Weighted-average grant-date fair value	$ 572
Remaining unamortized expense	$ 3,590
Remaining unamortized expense period	1 year 9 months 18 days

Stock-Based Compensation - BioXcel Charges (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Stock-Based Compensation
Share-based compensation costs recognized	$ 1,319	$ 107
Options
Stock-Based Compensation
Share-based compensation costs recognized	1,196	0
Options \| BioXcel
Stock-Based Compensation
Share-based compensation costs recognized	$ 123	$ 107

Income Taxes - Reconciliation (Details) - USD ($)		3 Months Ended
Income Taxes - Reconciliation (Details) - USD ($)	Dec. 22, 2017	Mar. 31, 2018	Dec. 31, 2017
Income Taxes
Income tax liabilities		$ 0	$ 0
Reconciliation between effective tax rate and federal statutory rate, percent
Federal income tax rate (as a percent)	35.00%	21.00%