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Note 9 - Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2017
Notes to Financial Statements |
Commitments and Contingencies Disclosure [Text Block] | 9. Commitments and Contingencies Office Space Lease Commitment The Company leases office and laboratory facilities in Charlottesville, Virginia. On March 31, 2017, the Company entered into a lease for its office and laboratory facilities at a new location in Charlottesville, Virginia. During the year ended December 31, 2017, the Company capitalized approximately $0.4 million in leasehold improvements as part of the build-out of the new office and laboratory location. Rent expense related to the Company's operating leases for the years ended December 31, 2017 and 2016 was approximately $0.1 million and $66,000, respectively. For the new operating lease, lease payments commenced on May 1, 2017 and expire on April 30, 2022. The Company will continue to recognize rent expense on a straight-line basis over the lease period and will accrue for rent expense incurred but not yet paid. Future minimum rental payments under the Company's new non-cancelable operating lease at December 31, 2017 was as follows:
|  | Rental Commitments |
2018 |  | $ | 112,354 |
2019 |  |  | 114,409 |
2020 |  |  | 116,464 |
2021 |  |  | 118,519 |
2022 |  |  | 39,735 |
Total |  | $ | 501,481 |
Arrangement with Clinical Research Organization On July 5, 2017, the Company entered into a Master Services Agreement ("MSA") with a contract research organization ("CRO") to provide clinical trial services for individual studies and projects by executing individual work orders. The MSA and associated work orders are designed such that quarterly payments are to be made in advance of the work to be performed. The Company recognized research and development expenses related to this MSA of $1.0 million during the year ended December 31, 2017. As of December 31, 2017, there was $0.8 million of prepaid research and development costs that are estimated to be recognized during the first quarter of fiscal 2018. Legal Proceedings On August 7, 2014, a complaint was filed in the Superior Court of Los Angeles County, California by Paul Feller, the Company ’s former Chief Executive Officer under the caption Paul Feller v. RestorGenex Corporation, Pro Sports & Entertainment, Inc., ProElite, Inc. and Stratus Media Group, GmbH (Case No. BC553996 ). The complaint asserts various causes of action, including, among other things, promissory fraud, negligent misrepresentation, breach of contract, breach of employment agreement, breach of the covenant of good faith and fair dealing, violations of the California Labor Code and common counts. The plaintiff is seeking, among other things, compensatory damages in an undetermined amount, punitive damages, accrued interest and an award of attorneys’ fees and costs. On December 30, 2014, the Company filed a petition to compel arbitration and a motion to stay the action. On April 1, 2015, the plaintiff filed a petition in opposition to the Company’s petition to compel arbitration and a motion to stay the action. After a hearing for the petition and motion on April 14, 2015, the Court granted the Company’s petition to compel arbitration and a motion to stay the action. On January 8, 2016, the plaintiff filed an arbitration demand with the American Arbitration Association. No arbitration hearing has yet been scheduled. The Company believes this matter is without merit and intends to defend the arbitration vigorously. Because this matter is in an early stage, the Company is unable to predict its outcome and the possible loss or range of loss, if any, associated with its resolution or any potential effect the matter may have on the Company’s financial position. Depending on the outcome or resolution of this matter, it could have a material effect on the Company’s financial position. On September 21, 2015, David Schmidt, a former member of Diffusion LLC and current stockholder of the Company, filed suit (the “Original Complaint”) in the Circuit Court for Albemarle County, Virginia (Case. No. CL15 - 791, David G. Schmidt v. Diffusion Pharmaceuticals LLC), which Complaint was amended on April 14, 2016 ( the “Amended Complaint”). The Original Complaint alleged that a breach of contract with respect to Mr. Schmidt’s previously converted convertible note, and requested relief of specific performance requiring Diffusion LLC to issue him additional units, representing the additional number of units he would have received had he converted at the renegotiated conversion price. On September 27, 2016, the Company, Diffusion LLC, Mr. Schmidt and the other parties thereto entered into a Settlement Agreement (the “Settlement Agreement”) pursuant to which, among other things, (i) Mr. Schmidt and Diffusion each agreed to submit a consent order to the Court dismissing all claims set forth in the Amended Complaint with prejudice and without an admission of liability by any party, (ii) Mr. Schmidt and Diffusion each released, on behalf of such party and its heirs, assigns, representatives, affiliates and agents, all claims and causes of action of any nature against the other party existing as of the date of the Settlement Agreement and (iii) as consideration therefor, the Company agreed to issue and sell, to Mr. Schmidt and the other parties to the Settlement Agreement, the 2016 Convertible Notes in an aggregate principal amount of $1.9 million and are convertible into shares of Common Stock at an initial conversion price of $3.50 per share. The Company recognized a litigation settlement charge of $2.5 million which represents the difference between the fair value of the 2016 Convertible Notes issued and the cash received from Mr. Schmidt and other parties. The settlement charge was recorded as a component of general and administrative expenses within the Company’s consolidated statement of operations for the year ended December 31, 2016.

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